Geothermal tech could power next energy boom, says new report

Geothermal energy is still in its infancy but could be on the verge of a major boom thanks to advancements in drilling technologies developed by the oil and gas industries.

A new report by the International Energy Agency says geothermal energy could meet 15 percent of global electricity demand growth between now and 2050 – but achieving this would require costs to come down significantly.

“New technologies are opening new horizons for geothermal energy across the globe, offering the possibility of meeting a significant portion of the world’s rapidly growing demand for electricity securely and cleanly,” says IEA Executive Director Fatih Birol. “What’s more, geothermal is a major opportunity to draw on the technology and expertise of the oil and gas industry. Our analysis shows that the growth of geothermal could generate investment worth $1 trillion by 2035.”

Less than one percent

Geothermal energy harnesses heat from beneath the Earth’s surface to generate electricity and provide heating, offering a renewable and consistent energy source.

Despite its promise, geothermal currently accounts for less than one percent of global electricity generation. So far, it has also been location-specific, with most of today’s output coming from countries with volcanic activity or those located along tectonic fault lines.

However, the IEA says that “new technologies are making the outlook for geothermal truly global, opening up the potential to benefit from it in nearly all countries.”

The IEA's report highlights several techniques that have revolutionised oil and gas extraction, now being adapted to access geothermal resources previously deemed uneconomical.

One such technique is horizontal drilling, which involves creating wells that curve and extend horizontally through underground layers of rock, increasing the area that can be tapped for resources. Another is hydro-fracturing—often called fracking—which involves injecting pressurized fluid into rock formations to create fractures, allowing trapped resources such as oil, gas, or geothermal heat to flow more easily.

Criticised by environmental groups

Although both techniques have been criticised by environmental groups for risks such as groundwater contamination, seismic activity, and high water usage, their impact is generally considered less severe in geothermal energy projects compared to fossil fuel extraction.

With the right investments and regulatory changes, the IEA says the cost of producing geothermal energy could fall by 80 percent by 2035, to around €50 per megawatt hour.

“This would make geothermal the cheapest source of dispatchable low-emissions electricity, on a par with existing hydropower and nuclear installations,” the IEA says. “At such price levels, geothermal would also be highly competitive with solar PV and wind paired with battery storage.”

Investments are already being made to boost the output of geothermal energy in many places around the world. The United Kingdom announced last week that it was contributing €12m to support Grenada’s development of geothermal energy. Estimates suggest the Caribbean country could potentially replace 55 percent of its total electricity generation from diesel with the help of geothermal energy.