What Makes Geothermal Energy So Special?

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The new “American Energy Dominance” policy became the law of the land earlier this year, with the aim of supporting US fossil energy production along with nuclear, while stuffing the wind and solar genies back in the bottle. Now along comes geothermal energy to throw a honking big monkey wrench into the works, competing against both nuclear and conventional fuel for a generous slice of the baseload power generation market.

The Geothermal Energy Advantage

If you’re wondering why a renewable resource like geothermal energy is poised to compete for baseload power within the constraints of today’s federal energy policy, that’s a good question. If you know the answer, drop a note in the comment thread. Nevertheless, the American Energy Dominance plan excludes wind and solar from federal support, but it does embrace geothermal energy.

The magic word is baseload. Geothermal energy can compete directly against coal and gas for baseload power generation, delivering a reliable stream of electricity on a 24/7 basis regardless of the weather.

For that matter, the American Energy Dominance plan also embraces two other renewable resources, biomass and hydropower, under the baseload umbrella. However, on closer inspection neither of those options offers a broad opportunity to knock coal and gas power plants out of the box. Sites for new biomass plants are limited by supply and storage challenges, and hydropower depends on suitable geographic and water resource elements.

Site selection has also dogged the geothermal energy industry. Under a conventional technology scenario, geothermal power plants are economical only where nature provides an optimal combination of heat, water, and rock. In the US, that means a handful of sites scattered around several Western states.

Now the script has flipped. Geothermal stakeholders are deploying techniques borrowed from oil and gas drillers to create their own enhanced geothermal systems (EGS) and deep-rock, advanced closed-loop systems (ACLs). These new innovators also have the advantage of advanced underground mapping tools in their pocket. In the tri-state Great Basin region alone, for example, US Geological Survey researchers recently assessed that 135 gigawatts of potential geothermal resources are potentially recoverable with next-generation geothermal technology (see more geothermal background here).

For the here and now, the Department of Energy has estimated that 90 gigawatts of geothermal-sourced electricity could be tapped across multiple states by 2050 with next-generation technology. That estimate includes states east of the Mississippi River, far afield from the nation’s current fleet of geothermal power plants.

US Geothermal Energy Policy In Action

Issuing a new policy by Executive Order from the White House is one thing. Getting Congress and federal agencies to follow through is another kettle of fish. Initial versions of the new tax bill, for example, indicate that leadership in Congress did not get the hydropower memo. Under the new law, the industry would have faced new restrictions and tight deadlines virtually impossible to meet. Industry stakeholders mounted a vigorous campaign to restore their status as a preferred baseload resource under the American Energy Dominance plan in the final version of the tax bill (the “OBBA”). For the most part they were satisfied with the final result.

Geothermal energy stakeholders also had a nail-biting moment or two as the bill wound its way through Congress in June. When the dust settled, the industry escaped the dreaded tax credit clawback, though the tariff situation could raise the expense of systems equipment.

White House tariff policy aside, multiple federal agencies have also continued to support expansion of the US geothermal industry:

The US Geological Survey released the results of the Great Basin assessment in May.

Also in May, the Department of the Interior announced fast-track status for geothermal projects on federal lands.

On June 26 the National Renewable Energy Laboratory updated its geothermal resources pages, including a batch of information and resources covering market acceleration.

The US Department of Defense continues to host a suite of geothermal power plant demonstration projects at its facilities.

Next Generation Geothermal Systems: Follow The Money

As indicated by the state of DOD’s involvement, next-generation geothermal systems are still largely in the demonstration phase. However, McKinsey is among the market analysts anticipating that a mass market breakthrough is in view.

“Our analysis suggests that declining costs, the ability to scale quickly, and established supply chains and workforce may be aligning with increasing energy demand to establish geothermal as an important piece of the United States energy mix,” the firm posted on July 17.

“Our analysis suggests next-generation geothermal energy could supply up to 100 gigawatts of power in the United States by 2050, with approximately 40 gigawatts by 2035,” McKinsey added, which loosely aligns with the Energy Department’s analysis.

That’s a sharp contrast with the existing state of affairs. As described by McKinsey, the US currently has less than 3 gigawatts of geothermal power plants in operation. That could expand under a conventional technology scenario, but it will hit a ceiling of less than 40 gigawatts due to the limited availability of suitable natural conditions.

Citing a 2024 US Department of Energy report, McKinsey puts the next-generation geothermal potential at 5,500 gigawatts nationwide, including ESG and ACL systems. That helps explain why investors have put up $900 million in private capital in support of next-generation projects, according to McKinsey’s calculations. “Anticipated cost decreases and the urgent need for additional power supply may draw even more attention to the sector in coming years,” the firm concludes.

Faster, Cheaper, Better

One key difference between today’s geothermal technology and that of yore is drilling speed. Faster drilling saves time, a crucial point for an energy-sucking nation on the prowl for more electricity. The revved-up timetable also frees up equipment and workforce to move on to the next project.

The ability to upgrade existing geothermal energy resources can also help speed things along. A case in point is the Utah-based company Zanskar Geothermal & Minerals. Zanskar is among those selected to demonstrate new technology for the Defense Department.

To put its system to the test, Zanskar acquired the existing Lightning Dock geothermal power plant in Hidalgo County, New Mexico, in May of 2024. The facility sits on a geothermal anomaly identified in 1974, making it the easternmost geothermal power plant in the US. Before the plant was built, hot water from the field was used to heat greenhouses and aquaculture operations. The electricity generation didn’t follow until 2013, when Cyrq Energy brought a 4-megawatt power plant online with plans for expansion to 10 megawatts.

In May of this year, just 12 months after the acquisition, Zanskar described its Lightning Dock project as “the most productive pumped geothermal well in the U.S. and quite possibly the world.”

“With just one well, we’re now powering the entire 15 MW plant and setting a new bar for conventional geothermal in the U.S.,” Zanskar reported in May this year, citing  35% faster drilling than the fastest drill ever used on the same geothermal field, a 75% reduction in surface infrastructure costs, triple the net output, and record-breaking flow rates and heat content compared to other geothermal power plants in the US.

Image: The arrows denote flow paths and the colored planes denote constant temperature isotherms in this visual representation of the Lightning Dock geothermal energy reservoir. This is one of thousands of simulations of the Lightning Dock geothermal reservoir that “honors the geologic and well field data,” as described by Zanskar.