Geothermal Energy

Geothermal heat exchange and energy generation has existed in theory and small-scale practice for centuries. Yet in the last few years ground-breaking efforts have made geothermal energy a viable and valuable addition to the world’s clean energy portfolio.

Renewable energy accounted for ~20% of US energy use (solar and wind as 14%) in 2022 and 28% globally in 2021. Regions with significant wind and solar power assets, such as the state of California and regions in Europe, increasingly experience risk of grid inefficiency or instability due to intermittent energy supply and insufficient energy storage. On a pinnacle day during 2023, CAISO’s energy grid load briefly sunk net negative, before reverting back to net demand of 20 GW by nightfall (i.e. the “duck curve” challenge). CAISO and other power grid operators rely heavily on fossil-fuel generation to compensate for intermittency.

Geothermal energy can provide clean, “baseload” energy (i.e. near continuous supply) to strengthen and stabilize energy grids. Unlike nuclear energy or hydropower, geothermal energy seems poised to scale quickly–and certain geothermal wells have demonstrated the capability to provide energy storage of 4-24+ hours, surpassing many leading commercial batteries. Thus grid operators and clean energy-interested customers should have significant interest to integrate geothermal energy into their portfolios. Furthermore, geothermal energy facilities occupy far less surface land than solar and wind assets.

Potential short-comings for geothermal energy include higher costs than alternative renewable energies, geographic limitations, and longer development timelines. For the time being, geographic limitations remain a consideration. In the US, attention and investment into connecting and enhancing nationwide transmission could somewhat mitigate this concern. In the US, geothermal energy already shares near cost equivalence with wind and solar for power generation. The US Inflation Reduction Act 2022 enabled tax credits for clean energy generating facilities, including geothermal, driving down costs. Moreover, startups, companies, and developers of geothermal energy are accelerating down learning curves which could translate into a cost advantage.

During 2022, worldwide geothermal energy generation totaled 16.1 GW. In the US, facilities generated 3.8 GW, of which 70% occurred in California, 25% in Nevada, 3% in Utah, etc. Various energy scientists, government research offices, and industry analysts have assessed the potential for geothermal energy in the US and worldwide. MIT and Stanford research groups assessed 58B GW of energy through “enhanced geothermal systems” worldwide and ten quintillion GW of thermal energy in the earth’s crust. Nearer term estimates include NREL's Enhanced GeoShot for 90.5 GW by 2050 in the US, outpaced by Fervo Energy’s view for geothermal to supply more than 20% of total US energy (>200 GW) before 2050. Globally, the US, Europe, Indonesia, and African nations such as Kenya are leading in policy and deployment of geothermal assets.

Leading geothermal energy startups, such as Fervo Energy and Eavor, are pioneering various geothermal energy formats through adapted oil and gas techniques–with oil & gas conglomerates keenly attuned (and in various cases partnering or investing) to their progress. MIT-founded Quaise is innovating laser drilling, in efforts to drill far deeper geothermal wells and enable geothermal anywhere worldwide. Google recently partnered with Project Innerspace, a leading consortium for the geothermal industry, to scale up efforts for mapping the world’s subsurface data for geothermal developments. Finally, the US Air Force has begun developing geothermal energy facilities at four bases–with interest in geothermal energy’s natural protection from surface attack and its baseload, non-emitting, and grid-independent power generation.

Link to supporting slide deck

Image Credit: Fervo Energy