More federal support could help geothermal energy become commercially viable and add a substantial amount of clean, reliable electricity to the grid.
The heat in the rocks several miles below the surface of the Earth, known as geothermal energy, could meet global energy demand for hundreds of years. The International Energy Agency estimated in 2024 that, with adequate increases in support, the costs associated with next-generation geothermal energy could fall 80 percent by 2035 to about $50 per megawatt-hour. This decrease would make geothermal highly competitive with electricity from solar and wind energy when both wind and solar are paired with battery storage. The development of geothermal energy will likely benefit from technologies and processes honed by the oil and gas industry, as well.
US geothermal companies have launched geothermal projects in Taiwan, Japan, Eastern Europe, and Kenya in addition to several US states. By becoming a world leader in the development and use of geothermal energy, the United States can enhance its domestic energy industry, create export opportunities for US industry, establish employment opportunities for workers, and provide an opportunity for less-developed countries to foster an energy source that produces almost no greenhouse gas emissions.
The amount of geothermal energy that ultimately will be developed is driven by the economics of geothermal electricity production, along with future cost of and constraints on other technologies. The US Department of Energy projects that geothermal energy could comprise 90–100 gigawatts of electricity generation in the United States by 2050, assuming that the agency succeeds in reducing the cost of geothermal electricity to $45 per megawatt-hour by 2035. Geothermal might comprise 130 gigawatts or more if this effort succeeds and other electricity sources face higher costs or constraints on deployment.
Many Benefits and Potentially Fewer Downsides
The development of geothermal energy promises significant advantages and perhaps fewer disadvantages. Advantages of geothermal energy include the following:
- Geothermal energy can continuously supply electricity (whereas solar and wind provide varying amounts of energy throughout the day).
- Not only can geothermal sources provide a continuous energy supply, geothermal plants also can rapidly and inexpensively ramp generation up and down, which means geothermal energy can respond to fluctuations in electricity demand throughout the day and year.
- With sufficient support, the cost of producing electricity with geothermal energy could reach the same range as solar and wind plus battery storage. (Indeed, one US geothermal energy company has undertaken demonstration projects with early results that indicate subsequent projects may, by or before 2035, be competitive with solar and wind plus storage.)
- Geothermal power plants require a significantly smaller land footprint for the same amount of electricity produced by solar or wind energy.
- The technologies necessary to generate electricity from geothermal energy may have a longer operating life relative to solar or wind technologies.
- The emissions associated with geothermal power plants are far lower than the emissions associated with fossil fuel–fired power plants.
- In some cases, lithium can be extracted from the water used in geothermal electricity generation.
- Geothermal energy projects may create more indirect employment than wind or solar energy projects.
Geothermal energy provides other benefits that are less appreciated. These include the inertia of turbines in geothermal power plants, which helps mitigate sudden drops in the electricity supply on the grid, and the ability to start generating electricity without a connection to the grid. The production of electricity from geothermal energy is less dependent on critical minerals than technologies that generate electricity with solar or wind energy and uses less water than power plants that use fossil fuels, nuclear energy, or biomass. Indeed, the needs of most geothermal power plants could be met by brackish water, like the water produced from oil wells.
One concern with geothermal energy is the potential impact on aquifers that supply drinking water. However, because of the depth beneath the Earth’s surface at which geothermal heat is obtained, the likelihood is low that aquifers of drinking water would become contaminated, as long as the wells that transfer this heat to the surface are properly designed and constructed.
A geothermal power plant in Iceland.
Engineering challenges also remain; notably, earthquakes caused by fluid flowing into cracks in the rocks beneath the Earth’s surface during the development of wells. These earthquakes can be mitigated by drilling wells for monitoring purposes, using sensors to detect ground vibrations in the monitor wells, and taking corrective action as needed.
The principal disadvantage of advanced geothermal energy has been the cost. Experience with geothermal energy at scale, which would help drive down the cost of producing electricity with geothermal energy, has not yet occurred. The lack of sufficient data to readily and cheaply locate the most productive geothermal energy resources also leads to higher development costs. With such a small base of existing geothermal power plants, the benefits of learning by doing will take time to be realized. Yet, while the reductions in the average lifetime costs of electricity generated with technologies that use solar and wind energy have slowed, some geothermal developers have achieved dramatic decreases in costs over the past few years. This decrease occurred with comparatively little federal support for geothermal research, development, and demonstration.
Geothermal energy faces regulatory challenges. Geothermal projects currently are subject to multiple permits from multiple agencies, which require significant time and can increase project costs. Federal research, development, and demonstration activities for geothermal energy technologies and permitting reforms can mitigate these significant disadvantages.
Federal Support
Despite the advantages of geothermal energy and the advanced geothermal technologies in development, federal support for geothermal energy research and development has been relatively small: geothermal energy received $1.19 billion in 2010–2023, compared to $18.5 billion for nuclear energy, $5.97 billion for coal, $4.24 billion for solar energy, $1.67 billion for wind energy, and $1.55 billion for hydropower (all in 2023$) over the same time period.
According to a report from the Department of Energy, advances in geothermal electricity generation require large-scale demonstrations. Unfortunately, the Bipartisan Infrastructure Law, which was passed in 2021, provided only $84 million for geothermal research and development, compared to multiple billions of dollars for other clean energy technologies. However, geothermal energy projects became eligible for subsidies in the Inflation Reduction Act in January.
Four areas of federal support for geothermal energy could have significant positive impacts on the industry, if Congress were to decide that the pros and cons of geothermal energy justify further increases in federal support for research, development, and demonstration—and assuming the increase in support lasts for several years.
First, Congress could consider moderately increasing funding for geothermal demonstration projects within the Office of Energy Efficiency and Renewable Energy. Second, Congress could require the Loan Programs Office at the Department of Energy to provide loans for eligible geothermal power plants. Third, Congress also could suggest that the Advanced Research Projects Agency-Energy expand its work on geothermal projects.
Fourth, Congress could provide funding to the US Geological Survey and the Department of Energy to increase the pace and scale of assessments of geothermal energy resources in the United States. This effort could be similar to the Play Fairway Analysis initiative that was administered by the Geothermal Technology Office from 2015 to 2021, but also include some tests of local geological conditions with small-diameter wells. Spending on geological testing and assessing geothermal energy resources is important, because one of the riskiest parts of investments in geothermal energy is whether a given geothermal resource will be profitable if developed into a generation source. Assessments of geothermal resources provide a substantial public good, and private-sector investors are less likely to invest in geothermal energy development without those evaluations.
In summary, modest increases in federal support for geothermal energy development could help make this energy source available faster and at lower cost. Beyond direct funding for research and development, changes in regulatory policy at the federal and state level also could provide greater incentives for geothermal energy. But that is a blog post for another day.
