Charging and contractual advice for mine water heat schemes
Mine water heat from disused coal mines can provide a home grown, secure and low carbon solution for heating and hot water in Great Britain. We know that understanding the licences, agreements and finances of setting up a mine water heat scheme can seem overwhelming, so we’ve broken down the key information below and provided clear charging and contractual advice for mine water heat schemes.
Key documents required for a mine water heat scheme
Heads of Terms agreement
A preliminary agreement that sets out the commercial framework for collaboration between the Mining Remediation Authority and the scheme developer. It includes expected charges, heat availability, commercial parameters and initiates the pathway to detailed agreements.
Mine Water Access Agreement (MWAA)
A binding agreement giving long‑term rights to access mine water for heat extraction. It includes a Mining Remediation Authority commitment to pump water for the agreed term (typically 25–40 years) and incorporates water‑flow guarantees aimed at minimizing disruption to supply.
Property agreements (wayleaves / easements / LTAF)
Required for installation of infrastructure (pipework, valves, energy centre or other assets) on Mining Remediation Authority land. May include minor rent or capital contributions where relevant.
Site Investigation Licence
A licence enabling intrusive or non‑intrusive works necessary to design or confirm scheme feasibility on Mining Remediation Authority property.
Regulatory consents and licences
Developers must secure all statutory approvals, such as planning permission, environmental permit variations (to authorise heat extraction as a secondary activity), and future Ofgem heat‑network regulatory requirements.
Charging Framework
Cost‑recovery charging structure
The Mining Remediation Authority applies a minimum charge calculated on a cost‑recovery basis to support the full lifecycle of the project — technical oversight, administration, planning and operational interfaces.
Access charge
Mine water access is currently charged at 0.5pkWh of water used. Charges may be adjusted periodically and are escalated in line with the Consumer Price Index (CPI).
Additional costs (usually minor)
Other costs may include permit variation fees, business rates, wayleave agreements or above‑baseline operational costs. These are normally insignificant in comparison to the overall scheme cost.
Income and liability
Income to the Mining Remediation Authority is limited to cost recovery; most project revenues accrue to the scheme operator or energy centre. Mining Remediation Authority liability is capped at the value of income received for that scheme.
Operational considerations
Mine water access and pumping
Heat is taken from water conveyed through the existing shaft pump infrastructure. Pumping rates may vary to accommodate scheduled maintenance and to maintain water levels across the mining block.
Water flow and temperature limitations
Mine water temperature and flow rates are governed by natural processes (geological heat, rainfall, climate change). The Mining Remediation Authority cannot guarantee these. Flow constraints differ between gravity‑fed and pumped schemes.
Interaction with other schemes
Heat extraction schemes within the same hydrogeological block must be coordinated to avoid adverse interactions or unintended impacts on mine‑water management.
Environmental commitments
The Mining Remediation Authority must prioritise mine‑water treatment obligations and environmental protection, including safeguarding reed beds and surface watercourses.
Commercial and risk considerations
Long-term commitment
Typical agreements run for 25–40 years, providing long‑term access but requiring continued operational alignment between the heat network operator and the Mining Remediation Authority.
Insurance
The Mining Remediation Authority does not provide insurance cover for water quality, temperature, third‑party liabilities or operational risk. Insurance must be secured by the scheme operator.
Internal approval processes
The Mining Remediation Authority internal approvals involve several departments, and their capacity varies. Developers should allow for this in project timelines.
To recap
What documents are required?
To establish a mine‑water‑heat network, developers must enter into:
- a Heads of Terms Agreement
- a Water Access Agreement
- any appropriate Property and Site Investigation Licences.
- Additional statutory consents (planning, environmental permit variations, future heat‑network regulation) must also be secured.
How is access to mine water charged?
The Mining Remediation Authority provides mine water on a cost‑recovery basis, currently 0.5p kWh, with CPI-linked escalation. Charges cover long‑term technical and administrative support. Minor additional costs (permits, wayleaves) may apply.
What are the key operational constraints?
Mine‑water temperature and flow are naturally variable and cannot be guaranteed. Pumping infrastructure supports heat extraction, but flow adjustments are required for maintenance and mine‑water management. Interaction with other nearby heat schemes must be carefully controlled.
What are the main commercial considerations?
Agreements typically run for 25–40 years. Mining Remediation Authority liabilities are capped at the income received from the scheme. Developers must provide insurance and factor in internal approval timelines when planning.
Get in touch
If you have any further questions on any of the charging and contractual advice for mine water heat schemes covered above, or if you’d like to talk through your proposal, please get in touch with us by email.
If you have any questions about the potential of mine water heat recovery in your area, explore our articles or get in touch by emailing us to see how we could support you.