A new assessment from the Treasury has quietly recognised what geologists have long known: the United Kingdom sits on a vast, largely untapped reservoir of geothermal energy. The heat beneath our feet could, in theory, provide a baseline power supply for centuries. Yet the key constraint remains cost. Drilling deep enough to reach commercially viable temperatures requires capital outlays that make current natural gas extraction look inexpensive.
The report, commissioned by the Department for Business, Energy and Industrial Strategy, evaluates the feasibility of deep geothermal systems. These involve drilling wells up to five kilometres into the Earth’s crust, circulating water through hot rock, and extracting steam to drive turbines. The potential is enormous. Granite batholiths under Cornwall, hot sedimentary aquifers in the Cheshire Basin, and the radiogenic heat of the Weardale granite could collectively deliver more than 100 gigawatts of thermal power, according to British Geological Survey estimates. That is roughly twice the country’s total electricity demand.
But converting thermal energy to electricity is inefficient. Even at 200 degrees Celsius, which requires drilling into hot dry rock, conversion rates hover around 15 to 20 per cent. That means a 5 megawatt electrical plant would need steam flows equivalent to 25 megawatts of thermal energy. The upfront drilling costs for a single well pair can exceed £50 million. For a power plant to break even, it must run nearly continuously for decades. This is not impossible. Iceland and the Philippines have done it. But they sit atop volcanic hotspots where geothermal gradients are extreme. In Britain, the gradient is moderate, averaging 25 to 30 degrees Celsius per kilometre. To reach economically viable temperatures, you must drill deeper, which multiplies cost.
The Treasury’s interest signals a strategic shift. The government has committed to net zero emissions by 2050. Intermittent renewables like wind and solar require low-carbon baseload backup. Nuclear is one option, but new reactors are expensive and slow to build. Geothermal offers a steady, weather-independent supply with a small physical footprint. The report suggests that if early-stage risks are shared through public investment, the levelled cost of electricity could fall to £80 per megawatt hour by 2035. That would be competitive with new nuclear and offshore wind with storage.
Yet the private sector remains cautious. Several pilot projects have stalled. A 2019 attempt in Cornwall by Geothermal Engineering Ltd faced drilling delays. Another project in Newcastle upon Tyne failed due to geological complexity. The risks are real: encountering unforeseen rock formations, losing drilling equipment, or finding insufficient permeability. But with each failure comes data. The Treasury’s involvement could de-risk future ventures by funding exploratory drilling and guaranteeing a minimum electricity price for early projects.
The environmental case is strong. Geothermal plants emit negligible greenhouse gases. Their land use is minimal, as the bulk of infrastructure is underground. Water usage is high, but it is recycled through a closed loop. Induced seismicity, a concern raised by opponents, is typically less than magnitude 2 and poses no structural threat.
There is also a social dimension. Geothermal plants can be sited near population centres, reducing transmission losses and providing local jobs in drilling, engineering, and maintenance. Cornwall, with its high unemployment and mining heritage, could become a testbed for a new deep-energy economy.
But the question remains: will the Treasury commit the hundreds of millions needed to kickstart an industry? The report stops short of a definitive recommendation. It calls for a staged approach: first, fund a series of deep boreholes to map the thermal resource; then, back two or three pilot plants; finally, offer contracts for difference to early commercial projects. The total public investment over ten years would be in the region of £2 billion. That is roughly the cost of one new nuclear reactor or two years of subsidies for biomass.
The calculus is straightforward. The energy is there, abundant and carbon-free. The technology works. The barrier is financial. If the Treasury considers the long-term cost of inaction, including continued reliance on imported gas and escalating climate damages, then geothermal looks increasingly like a prudent investment. If it looks only at the immediate budget line, the status quo will persist.
The planet is warming. Every tonne of carbon dioxide we avoid counts. Deep geothermal will not solve climate change alone, but it can provide a reliable complement to intermittent renewables. The rock under Britain holds the heat. Now the Treasury must decide whether to unlock it.
