The Untapped Power Beneath Us: Geothermal’s Rise in U.S. Policy

Geothermal energy, harnessing the Earth’s internal heat for power generation, has long been underutilized. Historically contributing to less than 0.3% of global electricity generation (in 2023), technological and economic challenges have overshadowed geothermal’s potential. However, recent policy shifts and technological advancements position geothermal energy as a pivotal component of the nation’s energy strategy.

The Trump Administration’s Embrace of Geothermal Energy

In his first executive order, Trump excluded solar and wind energy in a notable policy shift, but included geothermal energy. His administration has begun to champion geothermal energy as part of its broader “all of the above’ energy strategy, emphasizing the expansion of domestic energy resources. Energy Secretary Chris Wright has highlighted geothermal’s potential, referring to it as “just an awesome resource that’s under our feet.”  He wants to ease regulatory burden and support innovation in this space. This endorsement aligns with the Department of Energy’s projection that geothermal could supply up to 8% of the nation’s electricity by 2050, surpassing the current contributions of wind or solar energy.

Secretary Wright, a fracking CEO, emphasized the synergies between geothermal energy and the oil and gas sector. Techniques refined during the shale revolution, such as fracking, hydraulic fracturing, and horizontal drilling, are being repurposed to access previously inaccessible geothermal resources. This crossover leverages existing industry expertise and offers a pathway for fossil fuel companies to diversify into renewable energy markets. By doing all of this, the administration hopes that geothermal energy can provide more electricity by 2050 than solar and wind have provided so far, as shown in the chart below.

Technological Innovations Unlocking Geothermal Potential

The International Energy Agency (IEA) highlights the transformative impact of technological advancements on the viability of geothermal energy. In its report, “The Future of Geothermal Energy,” the IEA notes that new drilling technologies enable access to deeper geothermal resources, expanding the potential for geothermal deployment globally. The report estimates that with continued innovation and cost reductions, geothermal could meet up to 15% of global electricity demand growth by 2050, equating to approximately 800 gigawatts of installed capacity.

These next-generation geothermal systems benefit significantly from oil and gas industry practices. The subsurface evaluation, well drilling, and reservoir management expertise directly applies to geothermal project development. This collaboration accelerates geothermal deployment and provides a transition pathway for oil and gas professionals into the renewable energy sector.

Policy Recommendations and Industry Implications

To fully realize geothermal energy’s potential, the IEA recommends several policy measures:

• Elevate Geothermal in Energy Planning: Prominently incorporate geothermal energy into national energy strategies and establish dedicated goals and technology roadmaps.
• Mitigate Early-Stage Development Risks: Design risk mitigation schemes, potentially in collaboration with financial institutions, to support early-stage geothermal projects.
• Streamline Permitting Processes: Simplify and expedite permitting procedures by consolidating administrative steps and considering dedicated geothermal permitting regimes separate from those for mineral mining.

The Trump administration’s support for geothermal energy reflects a strategic move to diversify the U.S. energy portfolio while leveraging existing oil and gas infrastructure and expertise. By fostering an environment conducive to geothermal development through supportive policies and risk mitigation strategies, the administration aims to position geothermal as a significant contributor to the nation’s energy mix.

Conclusion

The convergence of political support, technological innovation, and industry collaboration propels geothermal energy to the forefront of the clean energy conversation. Geothermal energy has one significant advantage over solar and wind: it does not fluctuate depending on time of day or nature’s unpredictability. It is an “always on” baseload power source, and we need more of that as demand is expected to rise due to AI processing needs in data centers.

While continuing to support solar and wind remains essential, the Trump administration’s initiatives and the IEA’s insights highlight just how much untapped potential geothermal energy offers. With its stable, round-the-clock output, geothermal deserves this stronger position alongside other renewables in the national energy mix.

Capgemini has done various strategy and financial feasibility studies for clients in this domain. Please feel free to DM me if you want to explore the possibilities of producing geothermal energy.