Next-generation geothermal energy is attracting rare bipartisan support in the US Congress and private investment from major tech companies, but high upfront costs and technical challenges remain obstacles to widespread deployment, industry officials and analysts said. The technology uses advanced drilling methods — including hydraulic fracturing and millimetre-wave vaporisation — to access heat deep underground, potentially providing always-on renewable power in locations far from traditional geothermal hotspots.
In April, senators from both parties introduced the Next-Generation Geothermal Research and Development Act, which would direct the Department of Energy to support the development and commercialisation of next-generation geothermal energy systems. The legislation reflects a rare area of bipartisan agreement on energy policy: low greenhouse gas emissions appeal to Democrats, while energy independence and the use of familiar oil-and-gas drilling technology appeal to Republicans.
One emerging type is enhanced geothermal systems (EGS), in which underground rock is fractured hydraulically. Pressurised fluid is pumped into one well, and steam or hot water is collected from another — the same technique known as fracking that has been controversial in the oil and gas industry. “It’s the same techniques and up to a point it’s the same industry as well,” said Gernot Wagner, a climate economist at Columbia Business School. Wagner said the climate difference between geothermal and fossil fuels is substantial, with geothermal producing minimal greenhouse gas emissions compared with burning natural gas or coal for power.
Wagner said the risk of seismic activity from creating underground cracks is outweighed by the benefits of a renewable, always-on, large-capacity energy source. “Based on where we are, moving much faster, much bigger in the direction of using much more geothermal, frankly, is all good news,” he said.
To reach hotter rock at greater depths, companies are developing advanced drilling technologies. Quaise, a company with roots at the Massachusetts Institute of Technology, uses millimetre-wave drilling — sending electromagnetic waves in the microwave spectrum to melt and vaporise rock. “Millimetre wave drilling really enables you to access super-hot geothermal just about anywhere in the world,” said Harry Kelso, Quaise’s communications manager. He said conventional drill bits break down quickly in hard rock, but millimetre-wave drilling does not use a physical bit. Quaise plans to use some conventional drilling at a project site in Oregon, with the aim of full operations by 2030.
The economics of geothermal remain challenging. “Geothermal today is still more expensive because you are not getting as much power out of the well as you would if you were using that well for fossil fuel,” Kelso said. Quaise hopes that targeting temperatures between 300°C and 500°C will allow 10 times more energy per well, improving economics.
In May, Fervo Energy became the first next-generation geothermal company to go public on the Nasdaq, with an initial valuation of about $7.7bn. Shares traded up roughly 18% from the IPO price. Fervo quotes a construction cost of $7,000 per kilowatt of electricity for its Utah plant, comparable to traditional nuclear power. The company noted in its IPO filing that, unlike fossil fuel plants, it has no ongoing fuel costs. “Over time, our goal is to achieve scale and drive down prices such that we’re able to outcompete gas,” the company said.
Fervo signed a deal in 2021 to sell power to Google, which needs vast electricity for its data centres, and has backing from Breakthrough Energy, a venture founded by Microsoft co-founder Bill Gates. Despite such investment, the International Energy Agency has said that datacentre projects alone will not be enough to move the needle, and the climate solutions organisation Project Drawdown noted that early projects carry significant risk of cost overruns.
Wagner emphasised that geothermal energy is fundamentally different from fossil fuels. Oil, gas and coal are commodities vulnerable to political disruption, he said, but “geothermal is a technology” and more secure. He said geothermal energy has now achieved liftoff and will only get better and cheaper over time.