Geothermal
The Earth is hot underneath and always will be. Geothermal is the only renewable that runs day and night, in any weather, forever, and almost nobody talks about it.
The effect compounds within years. Put it in place and it keeps working.
Origins
People have been using the Earth’s heat for as long as there have been people, because in some places it comes to the surface and steams.
The Romans built baths on hot springs. The Japanese have been soaking in onsen for millennia. Iceland, an island sitting directly on a mid-ocean ridge and made almost entirely of volcano, has heated its houses this way for centuries and now runs on it: the overwhelming majority of Icelandic buildings are warmed by hot water pumped from underground, and the country generates a very large share of its electricity the same way. Reykjavik does not burn anything to keep warm.
The first geothermal electricity was generated at Larderello in Tuscany in 1904, using steam vents that had been known since the Etruscans. It is still generating today, which is a remarkable statement about a power plant.
And then, for a hundred years, geothermal was treated as a geographical curiosity — a thing Iceland and New Zealand could do because they happened to be sitting on a volcano, and the rest of us could not.
That assumption is now being challenged, and it is the most interesting thing in energy that most people have never heard of. The heat is everywhere. It is under your feet right now. It is simply deeper in most places, and the entire question is whether we can drill economically enough to reach it — which is a question the oil and gas industry has spent a century learning how to answer.
What it actually is
Geothermal energy is the heat of the Earth itself, produced by the decay of radioactive elements in the mantle and left over from the planet’s formation. It is, for all human purposes, infinite, and it does not care about the weather.
This is the property that makes it strange and valuable. Every other renewable is intermittent: solar stops at night, wind stops when the air is still, hydro depends on rain. Geothermal runs at a steady output, twenty-four hours a day, in any conditions, indefinitely. It is firm power — the thing grid operators say they need and that renewables are accused of not providing.
Conventional geothermal requires a natural hydrothermal reservoir: hot rock, water, and permeability, all in the same place near the surface. These are rare, and they are the reason geothermal has been confined to Iceland, Kenya, the Philippines, Indonesia, Italy, New Zealand and the American West.
Enhanced geothermal systems (EGS) are the interesting part. If you can drill deep enough, you reach hot rock anywhere. Fracture it, circulate water through it, and bring the heat up. This turns geothermal from a geological accident into an engineering problem — and engineering problems get solved and get cheaper.
And here is the delicious irony: the drilling technology that makes this plausible was developed and perfected by the oil and gas industry. Horizontal drilling and fracturing, refined during the shale boom, are precisely what enhanced geothermal needs. The skills, the rigs and the workforce are the same. Geothermal may be the one energy transition that a Texas roughneck can walk straight into without retraining.
The numbers
The firmness. Geothermal runs at very high capacity factors — frequently above 80–90% — against roughly 25% for solar and 35–50% for wind. A megawatt of geothermal delivers several times more electricity per year than a megawatt of solar, which is why the raw cost comparison understates it.
The cost. Conventional geothermal LCOE has been around US$0.06/kWh, competitive but above wind and solar. Enhanced geothermal projects are currently targeting US$40–70/MWh at scale, which would place it squarely in the competitive range while providing something wind and solar cannot: firm, dispatchable, weather-independent power.
The land. Geothermal has a very small surface footprint relative to output — far smaller than solar or wind per unit of energy delivered. This matters more than it is usually credited.
The resource. Conventional hydrothermal is geographically limited. Enhanced geothermal is, in principle, available almost anywhere you can drill deep enough. The distinction between those two sentences is the entire future of the technology.
The problem: capital and risk. You spend an enormous amount of money drilling before you know whether you have a resource. A dry well is a total loss. This exploration risk is the single greatest barrier and it is a financing problem rather than a technical one.
And the induced seismicity. Fracturing hot rock can cause earthquakes. A project in Basel, Switzerland was shut down in 2006 after triggering tremors, and one in Pohang, South Korea, is linked to a damaging 2017 earthquake. This is real, it is manageable through siting and pressure management, and it must not be waved away.
Why it matters
Under your feet, right now, at a depth we already know how to drill, the rock is hot enough to boil water. It has been hot since the planet formed. It will still be hot when every human being now alive is forgotten, and it will still be hot after that.
It does not care whether the sun is shining. It does not care whether the wind is blowing. It does not run out, it cannot be embargoed, no one can shut off the supply, and it is underneath everybody — which is a genuinely unusual property for an energy resource, given that most of human history has been organised around the fact that fuel is somewhere and people are somewhere else.
We think this is the most underrated solution in the entire collection, and the reason is a failure of imagination. For a hundred years we told ourselves geothermal was for Iceland, because Iceland was the place where it stuck out of the ground and was obvious. But the heat is not special to Iceland. Iceland is merely where it is easy. Everywhere else it is simply deeper, and drilling deep is a thing we became extremely good at while looking for oil.
There is a poetic economy in that. The rigs, the crews, the horizontal drilling, the fracturing techniques — the entire industrial apparatus built to extract fossil carbon — turn out to be exactly what you need to reach a heat source that emits none. The same men, the same steel, pointed at the same rock, for the opposite outcome.
Nobody has to lose their job. They just have to drill for something better.
What it actually takes
De-risking the drilling, which is the whole problem. Geothermal’s barrier is not the technology and not the resource; it is that you must spend tens of millions of dollars drilling before you know whether you have a viable well. Oil companies manage this risk by drilling many wells and accepting that most fail. Utilities and infrastructure investors are not structured to do that. Public exploration-risk insurance and cost-sharing for the first wells is the single highest-leverage intervention available, and it has worked wherever it has been tried.
Taking induced seismicity seriously. Fracturing rock causes tremors. Basel and Pohang are not hypothetical. Careful siting away from population centres and faults, real-time monitoring, and traffic-light protocols that stop injection when tremors reach thresholds all work — and an industry that minimises this risk will lose its licence to operate the first time it damages a town.
Bringing the oil industry with us. The rigs, the crews and the expertise are theirs. Geothermal is one of very few climate solutions where the fossil workforce is an asset rather than a casualty, and the politics of that are enormously valuable and almost entirely unexploited.
Not conflating conventional with enhanced. Conventional geothermal works today, in the right places. EGS is promising, early, and unproven at scale. Both are real; they are not the same thing, and honest discussion distinguishes them.
Where it matters most
Iceland is the proof and the exception: an entire country heated and largely powered by the ground beneath it, because it sits directly on a spreading ridge.
The East African Rift is the most exciting geothermal region on Earth and the most underexploited. Kenya already generates a very large share of its electricity from Rift geothermal, and the resource across the Rift is enormous. This is a continent that could leapfrog fossil generation entirely with firm, baseload renewable power — and geothermal, unlike solar, works at night without a battery.
The American West and the Basin and Range sit on the largest untapped conventional and enhanced geothermal potential in the developed world, alongside an oil and gas industry with exactly the right drilling skills.
The Philippines and Indonesia sit on the Pacific Ring of Fire and have some of the best resources in the world, substantially undeveloped.
Japan has world-class geothermal resource and has barely developed it, because the best sites are inside national parks and beneath the hot spring resorts of an industry that has fought it for decades. It is the clearest example anywhere of a non-technical barrier.
How to tell it’s being done well
Is seismicity being monitored and managed? Traffic-light protocols, real-time monitoring, siting away from faults and towns. An operator who is dismissive about this is an operator who will eventually shut the whole industry down.
Is it conventional or enhanced? Conventional works now. EGS is promising and early. Conflating them oversells one and undersells the other.
Who carries the drilling risk? If the developer bears all of it, few projects will happen. Public exploration-risk insurance is the intervention that unlocks this.
What happens to the brine? Geothermal fluids can be laden with dissolved minerals and gases and must be reinjected, not dumped. Done properly this is a closed loop. Done badly it contaminates groundwater.
What you can do
Anyone
- Geothermal is the only renewable that runs day and night in any weather, forever, and almost nobody discusses it. That gap between its importance and its profile is the most striking thing in energy.
- Ground-source heat pumps are geothermal at household scale, and they work anywhere, not just on volcanoes.
Policymakers
- De-risk the exploration drilling. This is the barrier. Public insurance or cost-sharing on the first wells has unlocked geothermal wherever it has been tried.
- Take induced seismicity seriously and regulate it properly. The industry will lose its licence to operate the first time it damages a town.
- Recognise that the oil and gas workforce is the geothermal workforce. This is one of very few transitions where those workers are an asset, and the political value of that is enormous and unexploited.
Business and investors
- Enhanced geothermal is the largest genuinely firm renewable opportunity available and it uses drilling technology that already exists and is already mature.
- The exploration risk profile resembles oil and gas, not infrastructure, which is why oil and gas companies are better placed to develop it than utilities are.
Communities
- Geothermal has a very small surface footprint compared with solar or wind for the same energy, which makes it one of the least visually intrusive options available.
- Ask about seismic monitoring and brine reinjection. Both are manageable and both must be managed.
Who is working on this
We are researching which organizations in our directory of 8,493 actively work on this solution, and we only list an organization once we have verified it. That research is ongoing. In the meantime, search the directory yourself:
Questions
Why is geothermal different from other renewables?
Because it is firm. It runs at a steady output twenty-four hours a day in any weather, indefinitely, with capacity factors frequently above 80 to 90% against roughly 25% for solar. It is the only renewable that provides the round-the-clock baseload power that grid operators say they need, without requiring any storage at all.
Isn't geothermal only possible in places like Iceland?
Conventional geothermal is, because it needs hot rock, water and permeability all together near the surface. But the heat is under everywhere; it is simply deeper in most places. Enhanced geothermal systems drill down to hot rock, fracture it, and circulate water through it, which turns geothermal from a geological accident into an engineering problem.
What does the oil industry have to do with it?
Everything, and this is the most interesting thing about it. The horizontal drilling and fracturing techniques perfected during the shale boom are precisely what enhanced geothermal requires. The rigs, the crews and the expertise are the same. It is one of very few energy transitions where the fossil fuel workforce is an asset rather than a casualty.
Does geothermal cause earthquakes?
It can, and this must not be waved away. Fracturing hot rock induces seismicity. A project in Basel was shut down in 2006 after triggering tremors, and one in Pohang, South Korea is linked to a damaging earthquake in 2017. The risk is manageable through siting away from faults and towns, real-time monitoring, and protocols that halt injection when tremors reach thresholds, but an industry that minimises this will lose its licence to operate.
What is the main barrier?
Money and risk, not technology. You must spend tens of millions drilling before you know whether you have a viable well, and a dry well is a total loss. Oil companies manage this by drilling many wells and accepting failures. Utilities are not structured to do that. Public exploration-risk insurance is the single highest-leverage intervention available.
How does it compare on cost?
Conventional geothermal has run around US$0.06 per kilowatt-hour, above wind and solar. Enhanced geothermal targets US$40-70 per megawatt-hour at scale. But the raw comparison understates it, because geothermal delivers several times more electricity per megawatt installed than solar, and it does so at night and in still weather, without a battery.
Sources
- Project Drawdown - Deploy Geothermal Power (Drawdown Explorer) Framework and classification. Cited, not reproduced.
- IRENA (2025) - Renewable Power Generation Costs in 2024
- IEA - Geothermal
- US Department of Energy - Enhanced Geothermal Systems and the Enhanced Geothermal Shot
- Grigoli et al. (2018), Science - The November 2017 Mw 5.5 Pohang earthquake: a possible case of induced seismicity
The solution taxonomy follows the framework popularised by Project Drawdown. The analysis above is our own; for their carbon modeling and rankings, visit them directly.