Of the many challenges that the clean energy transition faces, the need for zero-emission, always-available so-called “firm” resources from which to generate electricity is particularly thorny. Fossil fuels such as natural gas and coal are considered firm resources, meaning they generate electricity at a consistent rate in all seasons and weather conditions.
In the past several years, geothermal has emerged as a clean, firm resource with the potential to be scalable and cost-effective.
In geothermal electricity generation, fluid flows up through fractures in Earth’s crust, reaching the surface at such hot temperatures that it vaporizes and drives a turbine that produces electricity. This combination of heat, fluid, and permeability in Earth’s crust is very rare, which has limited the development of conventional geothermal plants.
Only about 4 gigawatts (GW) of geothermal generating capacity are currently on the grid in the United States, largely in California and Nevada. Next generation technologies, which have been in development since the 1970s but have taken off in the last decade, present an opportunity to increase the amount of geothermal available for electricity generation by artificially creating the permeability and fluid required to capture the energy.
A 2024 report Department of Energy (DOE) report proposes that next-generation geothermal power—including enhanced geothermal, closed-loop systems, and superhot geothermal—could provide 90-300 GW of power in the U.S. by 2050, depending on technology and market factors. Figure 1 shows the potential across the U.S. from low (white or yellow) to high (red) with locations of current geothermal plants represented as black dots.
Clean energy goals and forecasts of growing electrical loads have created opportunities for geothermal. The DOE’s price target is $45/MWh by 2035, roughly half the $70-$100/MWh seen in today’s power purchase agreements, which would be achieved by improving and scaling new technologies. For example, fewer exploration wells are required as more data and expertise are developed. Increased speed from drilling technology advancements will also decrease costs.
In 2024, the DOE awarded $60 million from the Bipartisan Infrastructure Law to enhanced geothermal companies to complete pilot demonstrations. It also funds Utah FORGE, a test site for geothermal technologies.
Geothermal has potential for bipartisan cooperation. Democrats appreciate its low emissions, Republicans like its use of technology and expertise from the oil and natural gas industry—and development in red states. Chris Wright, the DOE secretary, has investments in an enhanced geothermal startup.
According to the U.S. Energy Information Administration (EIA), seven U.S. states—all in the western U.S.—have geothermal power plants, including Idaho and Oregon in the Northwest. Geothermal resources are generally found near tectonic plate boundaries, and the Pacific Ocean’s Ring of Fire is one of the most active geothermal areas in the world.
There are three major categories of next generation geothermal technology, each with its own challenges to solve and startup companies racing to commercialize and scale up their technologies.
Enhanced geothermal uses horizontal drilling and fracturing techniques, like those used in oil and gas extraction. This creates permeability and provides the fluid needed for geothermal, which massively expands the land area where it can be accessed.
Houston-based Fervo is a leader in developing enhanced geothermal technology, with a successful demonstration project in Nevada that began providing 3.5 MW of capacity to Nevada’s major utility in November 2023. The company is now building a project in Utah on track to deliver 90 MW of capacity in 2026 and a total of 400 MW starting in 2028. Southern California Edison and community choice aggregators in California have subscribed for the full capacity of the project.
Closed-loop geothermal is similar to enhanced geothermal in that it also uses modern oil and gas technology to create permeability and can be applied in many more areas than conventional geothermal.
However, closed loop systems make a U-shape or a similar well through which fluid flows to bring heat to the surface. That heat can power a turbine to generate electricity or directly provide heating or cooling. Based in Calgary, Canadian startup Eavor is currently working on a closed-loop project in Germany that will generate 64 MW of heat and 8.2 MW of electrical power by 2027.
Superhot or super-deep geothermal also uses some of the same technologies as enhanced geothermal but focuses on going deeper to reach extremely high temperatures under the Earth’s surface. The additional depth is considerable—starting at 33,000 feet as opposed to 8,000 to 10,000 feet in other types of geothermal, but the additional accessible heat is also considerable—700 degrees Fahrenheit as opposed to 200 or 300 degrees.
Higher temperatures mean more efficient conversion to electricity, which can bring down the costs per well. But reaching that deep into the Earth is complicated. A Massachusetts-based startup called Quaise is attempting to develop superhot geothermal by effectively vaporizing rock instead of drilling it, using a gyrotron to power extremely high frequency radiation waves that create a hole. A Texas-based company that operates in the Northwest—Mazama Energy—is developing a 200 MW superhot project at the Newberry volcano in central Oregon.
These next-generation technologies could revolutionize our use of geothermal power, if they can successfully scale. Geothermal start-ups are raising money for very capital-intensive technology development and commercialization. They are also partnering with tech companies who have ambitious clean energy goals and the money to fund new clean energy projects.
Beyond its potential as an electricity-generating resource, geothermal could also directly heat and cool buildings through thermal energy networks (TENs). These use a network of underground pipes to heat water to 55 degrees and cycle it to heat pumps that can extract heat or cold from the water to warm or cool a building. TENs have gained attention as a path for existing natural gas companies to pursue while decarbonizing heating at a neighborhood scale, because some of their existing skills and equipment—such as operating networks of underground pipes—could be re-purposed.
Geothermal technologies that provide clean, firm power generation have huge potential to support the clean energy transition. However, further development, massive investment, and a thorough understanding of the trade-offs between technologies are needed before they are fully scaled.
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