UK sets new benchmark for geothermal energy costs with landmark review

Commissioned by the Department for Energy Security and Net Zero (DESNZ) and delivered by professional services firm Arup, the report provides the country’s first published levelised cost of heat estimates for geothermal energy and updates the levelised cost of power figures for the first time since 2016.

Alongside cost assessments, the review includes a detailed evaluation of geothermal energy’s carbon intensity, offering a critical reference point for policymakers and industry stakeholders.

The findings confirm that shallow geothermal systems are technically viable across much of the UK and could serve as a low-carbon alternative for local heat networks. Meanwhile, deep geothermal was identified as most cost-effective in regions where high temperatures are accessible at relatively shallow depths, with Cornwall’s granite formations highlighted as a key opportunity.

Although geothermal energy remains more expensive than established renewables like wind and solar, the report anticipates falling costs over time, driven by technological advances, market growth, and increasing global investment. While the published figures serve as national benchmarks, DESNZ emphasises that actual project costs will depend on local geological and engineering conditions.

Jon Gluyas, Board Member of the National Geothermal Centre (NGC), said:

“This review provides a much-needed evidence base for the UK, offering clear direction to both industry and policymakers as we work to scale up geothermal energy.

“The NGC welcomes its publication and sees it as a significant step forward for the UK’s emerging geothermal sector.”

The full ‘UK geothermal energy review and cost estimations’ document is available from DESNZ.