Geothermal energy could be a key to helping the United States decarbonize its energy sector. The August 25th report from the Senate Democrats’ Select Committee on the Climate Crisis argued that geothermal — along with long-term storage, advanced nuclear energy, and carbon capture — could be a valuable tool to balance variable renewables and drive emissions down to zero. At the same time, US and global expectations for geothermal technology are quite modest today, in part because it’s use has been limited to where geothermal energy can be easily accessed — in the western US and in geologically active countries like Iceland and Indonesia.
That could be changing thanks to recent advances in “Enhanced” Geothermal Systems (EGS). This new technology gives reason to think geothermal's potential in the US and worldwide is much higher than typically assumed.
But that potential is not a given. If a future with high geothermal capacity is to be realized, EGS requires smart innovation policy to accelerate its deployment and bring down costs.
Geothermal has never truly been a priority for clean energy development in the US. The “forgotten renewable” generated only 0.4% of US electricity in 2019, which accounts for a whopping 20% of geothermal’s entire global electricity production. Outside of a few plants in California and four other western states, there are no existing US geothermal power plants. Despite its unique benefits and lack of emissions, it is relatively expensive and there is scant mention of it as a linchpin of proposed decarbonization plans.
A seminal 2019 Department of Energy report on geothermal, GeoVision: Harnessing the Heat Beneath our Feet, suggests there might be as much as 120 gigawatts of US geothermal electricity potential by 2050 in a best-case scenario — certainly major growth over today’s ~2.5GW, but far short of technologies like nuclear or solar on a ~1500GW and growing grid.
But this modest estimate fails to consider just how large the potential is for EGS costs to decline. Thanks mostly to the shale revolution’s breakthroughs on drilling with diamond drill bits and directional drilling, we have gotten much better at drilling deep holes cheaply, making geothermal more widely feasible for development. (Ironically, those breakthroughs in the natural gas sector were first discovered from early geothermal research.) One estimate quantifies the increase in access at around 1300 times what used to be available only using conventional geothermal extraction techniques. In the United States, most of this energy is west of the Rocky Mountains (shown below).
Several EGS demonstration projects in the US and around the world have proven the concept works, some going back to the 1980s. Recent projects have generally been getting more successful, including actually producing energy at Desert Peak, Nevada (2013), Raft River, Idaho (2011) and Soultz-sous-Forets, France (2010). Building on prior successes has often been difficult, however, as geothermal funding has been inconsistent — tending to dry up after a single project’s completion or being the target of several attempts to eliminate altogether from the federal budget.
The most recent effort to actually build and understand EGS is the DOE’s Frontier Observatory for Research in Geothermal Energy (FORGE) program. FORGE is intended to conduct research for later EGS projects to build on with an ARPA-E like focus on achieving technological and operational breakthroughs. After a Utah FORGE site met the DOE’s strict metrics of success, it became the first to be approved to move into its next phase of research preparation and will receive nearly $200M between 2020 and 2024.
Given new technological advances and inconsistent progress, we don’t really know what the upper limit of deployed geothermal in 2050 could be. Many studies report fairly low central predictions of global geothermal energy but have upper estimates orders of magnitude higher. A 2008 paper on geothermal predicts 140GW of global geothermal capacity in 2050, but states: “The potential may be estimated orders of magnitude higher based on enhanced geothermal systems (EGS)-technology” — as much as 2,000 GW. A 2010 IPCC paper estimates between 50 and 200 GW of geothermal electricity in 2050, but states that between 2,000 and 4,000 GW is possible depending on “economics, demand, material constraints, and social factors.”
In other words, geothermal energy isn’t limited by the potential resources, but by the cost of the technology to retrieve it.
EGS technology might now be in the same place that solar or unconventional natural gas was in 1990. Neither became affordable by accident, but rather from decades of sustained government support. The concept of EGS has been proven, the background research and seismic mapping done, and the first test wells drilled. The challenge now is not to build the first EGS plant, but the 10th.
Few studies have analyzed the potential for deeper geothermal cost reductions from learning by doing. That means little work has been conducted to assess how costs could fall if experiential learning occurs at the scale it did for solar or unconventional natural gas. One analysis by a Princeton student modeled what would happen if similar learning rates occurred for geothermal.Fan, Melissa. “Digging Deeper Into Enhanced Geothermal Systems: Techno-Economic Simulation of EGS Electricity Generation Development.” Princeton University, 2020.In her model, cost reductions from experience curves could drive several 100s of gigawatts of EGS electricity in the US alone. The model suggests a compelling point — if actual geothermal costs fall with deployment in a manner consistent with experiential learning, cost reductions will be much greater than current estimates suggest, leading to even further geothermal deployment.
Cost-competitive geothermal could be coming sooner than we think. A 2006 study from MIT looked at the problem differently — what needs to happen to create 100GW of geothermal electricity capacity? Their recommendations were simple, and easily achievable: invest $1B over 15 years in research, development, and demonstration (RD&D) with an emphasis on demonstration, and to treat geothermal in the same regulatory manner as a typical oil and gas drilling company.
In fact, we are not too far behind on meeting the conditions laid out in the MIT study. As the figure below shows, there has been more than $500M in EGS RD&D investment since 2006 — a large portion of which came in the 2009 American Recovery and Reinvestment Act. Though well below the recommended amount, EGS funding has been increasing over time and has still yielded several breakthroughs and successful demonstrations.
Given the MIT benchmarks, sustained bipartisan support for innovation funding generally, and the likelihood of some level of future clean-energy-friendly policy, 100GW begins to appear closer to a central, or even low end, estimate of geothermal’s potential. Even GeoVision’s optimistic 120GW scenario, perhaps reflecting the Trump administration’s visceral opposition to anything resembling climate policy, leaves out the possibility of climate policies like a national clean energy standard or a price on carbon, either of which would likely lead to higher levels of geothermal.
If geothermal is going to surpass these expectations, it will depend on investment and policy support from governments, states, and industry being shifted to reflect the new challenges that come with actually building something.
Three policy actions are necessary to align the US policy regime to do this: strengthen and focus EGS research, development, and demonstration (RD&D) support, strengthening geothermal’s deployment incentive regime, and streamlining the geothermal regulatory process. Recommendations from the Geothermal Resources Council outline the low hanging fruit to act in these areas. One of these recommendations — passing the bipartisan AGILE Act in the Senate — would be the first step to fixing policy gaps from permitting to increasing R&D funding. While these recommendations are a good start, the United States should go even further in bringing geothermal to market.
The first and most important step policymakers can take is to better and more consistently fund EGS RD&D. Geothermal has not been able to capitalize on previous EGS successes or the significant innovations in drilling from the shale sector because of inconsistent and poor public funding. Public spending on other energy technologies far exceeds the investment in geothermal — even private R&D spending from oil and gas companies is estimated to be hundreds of millions per single year. While some of this spending will likely benefit geothermal through cross-sectoral innovation, it is no substitute for dedicated and consistent public funding for the geothermal sector that stimulates further private investment. To make geothermal energy cheap, we need 5 or 10 FORGE projects to sufficiently build on technological developments and to fail, innovate, succeed, and demonstrate — bringing down costs along the way.
The next step policymakers should take is to strengthen the suite of deployment incentives for both conventional and enhanced geothermal. Geothermal energy is currently eligible for a 10% renewable investment tax credit and the full 2.5 cents per kilowatt-hour renewable production tax credit. But this support has been erratic, often retroactively approved and renewed for a single year — making financing and private investment decisions difficult. To encourage commercialization and cost reduction, these incentives should be expanded to EGS technologies and sustained, if not permanently, then for a predictable amount of time to help an emerging industry achieve learning and economies of scale in addition to giving private investment policy certainty.
Finally, the entire geothermal permitting regime should be streamlined and amended so it is able to benefit from the same regulatory-related categorical exclusions incentivizing fossil fuel drilling. Favorable federal regulation is particularly important because the best resources are in the American west, where 47% of land is managed by the Federal government. Today, delays in the already lengthy and underfunded Federal land permitting process are a major barrier to geothermal development.
This process also should be simplified to simply treat a geothermal drilling project like any typical oil & gas drilling project. A 2019 ClearPath analysis showed how geothermal is subject to regulatory hurdles the fossil fuel industry is exempt from. If drilling to produce energy from geothermal is treated by the permitting agencies in the same manner as drilling for oil, it could lead to 7GW more of conventional geothermal over business as usual and likely much more enhanced geothermal.
As we’ve argued before, streamlining most environmental permitting in a manner respectful of the cultural or environmental importance of land will benefit numerous aspects of the clean energy transition, geothermal energy included. Considering these points, prioritizing suitable areas on federal land for clean energy development is a common-sense reform that will benefit geothermal too, bringing in more revenue than other renewable energy sources and sidestepping the threat of reducing conservation funding from oil and gas leases as we begin transitioning away from oil and gas.
It’s time to take geothermal energy seriously. That means implementing these recommendations quickly and effectively and giving EGS the best chance to be as impactful on the global energy system as natural gas has been and solar will be. The Senate report made a critical point — we don’t yet know how close different technologies will take us to full decarbonization. EGS might only be a minor part of the transition away from fossil fuels, or it might also end up being a major pillar of the clean energy economy. No matter its ultimate role, the outstanding need for scalable, affordable, and firm clean energy technology makes geothermal worth the investment to find out which it will be.
Acknowledgements: The author wishes to acknowledge Tim Latimer, Melissa Fan, Dr. Joseph Moore, and Doug Hollett for their valuable feedback on earlier versions of this article.