My Lords, I have a sense of déjà vu about this amendment. With every energy Bill in which I have been involved since I was honoured to become a Member of the House in 2006, I have tried something similar. Each time I refine it slightly more until I think that it is perfect, but of course perfection is no use if there is no application. However, we will see.
I thank the Minister for the support that the department has given geothermal energy recently. It has been slow and difficult but it is getting on to the agenda, particularly in terms of the industrial renewable heat initiative and the contracts-for-difference strike prices. It is starting to appear far more regularly than previously without prompting, which is very good. Geothermal is a technology that works and I will not take a long time describing it because I am sure that Members are all well aware of it. Globally, it is a very important source of energy for hot water, direct heating and electricity generation. As we mentioned in a previous sitting of this Grand Committee, there have been discussions between Britain and Iceland over the use of geothermal energy from that area.
However, it is a lot easier when hot water comes to the surface of its own accord, as it does in many parts of the world, such as New Zealand and Iceland. It is different when one has to drill down five kilometres, 10 kilometres and sometimes a very long way in order to circulate it and bring it up. In the UK, there are examples of shallow geothermal energy but not much deep geothermal energy yet. This technology is credible and possible. It is a source of renewable heat that has a small footprint and acts as a base load rather than being intermittent, which is why it can be particularly attractive. Again, there is a choice between hot water and heating or electricity generation.
Why is this amendment necessary? It is because this issue is a bit like the oil industry. There are noble Lords here who know far more about the petroleum industry than me. However, basically, when you have put a major investment into drilling, as soon as you make your strike on a viable geothermal hot water well, you do not want someone 100 yards along buying the plot next door, extracting the water and then leaving you with all the exploration costs and only half the benefit. That is why a credible regulation infrastructure includes having a licensing regime over a suitable area of land. I particularly emphasise that this does not of its own right mean that there would be planning permission or surface access. That would all have to be sorted out by the exploration companies.
This is a major area where Britain, particularly the south-west but other areas of the UK as well, could benefit by building up its renewable energy resources of heat and electricity. For that to move forward, we must have a licensing system. I do not believe that there will be a great cost to producing this. It has already happened in Ireland and other parts of the world. In the past, we have had positive discussions with Ministers about this but they have never got far—hence this amendment. In due course, I look forward to hearing the Government’s thinking on this from the Minister. In the mean time, I beg to move.