GeoGrid: Quantifying the £3 billion national value of geothermal long duration heat storage

GeoGrid is an innovation project exploring how geothermal long-duration energy storage (LDES) can support the UK’s transition to low carbon heat. The project brought academic insight from the University of Leeds together with industry expertise from Northern Powergrid, LCP Delta, E.ON Next, Leeds City Council, Geosolutions Leeds and Star Refrigeration to test how geothermal storage could cut costs, reduce carbon, and strengthen the flexibility of heat networks. 

The client challenge: Making heat networks more flexible and affordable

Heat networks are central to the UK’s plan to decarbonise heating, with a national target for 20% of homes to be connected by 2050. But they face three major challenges:

1. Seasonal mismatch between low-cost renewable electricity and high winter heat demand.

2. Rising network pressures driven by electrification.

3. Limited options for affordable long-duration heat storage at scale.

GeoGrid set out to test whether geothermal storage could bridge this gap by storing low-cost heat in summer for use in winter. The core question was not simply can heat be stored but how much system and commercial value this storage could unlock for heat network operators, local authorities, and the wider electricity system.

Our approach: Proving system and commercial value

LCP Delta led the business model development and market modelling, focusing on where geothermal storage creates measurable value.

1. System and market modelling

Using our EnVision modelling suite, we quantified:

• Operational value for heat network developers and owners.

• Flexibility value created for electricity networks.

• Seasonal efficiency gains from inter-seasonal storage.

We adapted our battery optimisation model to reflect the unique behaviour of geothermal thermal storage, including seasonal charging patterns and heat pump efficiency changes.

2. Business model design

We assessed ownership, operational structures, and incentives. Our analysis showed:

• The heat network sponsor should own the geothermal asset to enable full co-optimisation.

• New flexibility-aligned energy contracts are required to unlock full value.

3. Performance and risk analysis

In partnership with the University of Leeds, we assessed key risks including aquifer stability and temperature variability, and mapped mitigation strategies for investors and operators.

Impact: What GeoGrid delivered

1. Validated: Geothermal storage can play a critical role in future heat networks

GeoGrid demonstrated that inter-seasonal geothermal storage can:

• Decrease peak electricity demand.

• Improve resilience during winter.

• Unlock new flexibility value streams.

• Reduce lifetime system costs.

2. Quantified: Up to £3 billion national value

Our modelling shows that national uptake of geothermal storage could deliver:

• £3 billion in whole-system value, including flexibility revenue, reduced connection requests, operational savings, and avoided emissions.

• Nearly 350,000 tonnes of carbon savings.

• 290 MW of peak electricity demand reduction by 2050.

• 10 TWh of inter-seasonal heat storage capacity.

3. Proven for developers: Strong returns where GSHPs already make sense

For individual heat networks where GSHPs and boreholes are already planned:

• The adaptation for storage delivers £350k–£585k lifetime net benefit per MW.

• Payback periods are estimated at 7–11 years, depending on energy price sensitivity.

Where GSHPs are not already justified, borehole costs remain the biggest barrier, meaning local conditions and site constraints matter significantly.

Key learnings and strategic insights

1. Whole system value is not yet monetised

Current market mechanisms do not reward long-duration storage for its peak-shaving benefits. Reform to baselining and flexibility contracts could unlock significant new value.

2. Commercialisation requires a multi-element pathway

Scaling geothermal storage will require:

• Enhanced characterisation of subsurface resources.

• Updated aquifer regulation.

• Funding mechanisms to de-risk early-stage surveying.

• Flexibility market access through reforms such as BSC P415 and P444.

3. Intelligent energy trading is essential

At the system level, achieving full value depends on smart use of:

• Time-of-use tariffs.

• Pay-as-produced PPAs.

• Flexibility services (eg. Quick Reserve).

• Wholesale market participation via aggregators