Global energy demand continues to rise, driven by population growth, rapid urbanization, and expanding industrial activity. Today, energy systems remain heavily dependent on fossil fuels accelerating climate change.
Renewables such as solar and wind are scaling rapidly, yet their intermittency highlights the need for alternative sources of clean, reliable, 24/7 power. This is where geothermal energy stands apart.Â
Despite the fact that next-generation geothermal systems could meet global electricity demand more than 100 times over, geothermal today accounts for less than 0.5% of global energy. Hence, unlocking geothermal resources effectively could transform it from a niche contributor into a critical pillar of the Net Zero energy system.
This article introduces the concept of geothermal energy, explores the challenges to scaling it, and outlines why this resource is indispensable to achieving sustainable, low-carbon energy for the future.
What is geothermal energy?
Geothermal energy is the thermal energy stored within the Earth’s interior. It originates from the planet’s natural heat and is continuously replenished, making it a renewable, clean, and effectively inexhaustible resource. This energy is present everywhere, but only harnessable under specific geological conditions. In certain environments, it manifests at the surface through hot springs, geysers, or volcanic activity; elsewhere, it can be accessed by drilling wells into reservoirs of steam or hot water.
A geothermal system consists of three elements:
- Heat source – thermal energy from the Earth’s crust or mantle.
- Reservoir – porous rock formations or fractures that store heat and fluids.
- Geothermal fluid – water or steam that transports heat to the surface.
Shallow vs. deep applications
Geothermal utilization falls broadly into two categories. Shallow geothermal systems, most commonly ground-source heat pumps, use near-surface temperatures to deliver efficient heating and cooling for buildings. Deep geothermal systems exploit higher-temperature resources for power generation, district heating, and industrial process heat.
Conventional vs. enhanced geothermal energy
Conventional hydrothermal systems rely on naturally occurring reservoirs of steam or hot water. Their deployment is therefore limited to geographies with the right combination of heat, water, and permeability.Â
Enhanced Geothermal Systems (EGS) expand this potential by engineering subsurface reservoirs. Through techniques such as hydraulic stimulation, EGS can create new pathways for fluid circulation, unlocking heat from otherwise inaccessible geologies. This innovation broadens geothermal’s geographic reach and positions it as a scalable option well beyond traditional hotspots.
Some of the advantages of geothermal energy are:
- Unlike solar and wind energy which are intermittent, geothermal delivers stable, dispatchable power suitable for replacing coal and gas plants while supporting grid reliability.
- Geothermal power plants typically operate at 90% or higher capacity factors, similar to nuclear and large hydro. By comparison, wind averages 30–40% and solar 15–25%, depending on the site. This consistency allows geothermal to complement intermittent renewables and reduce balancing costs.
- From a full lifecycle emissions perspective, geothermal has one of the lowest carbon footprints among firm power sources. Emissions are estimated at 6–79 gCO₂eq/kWh, largely from drilling and construction, compared with 675–1,689 gCO₂eq/kWh for coal and 510–1,170 for oil.
Uses of Geothermal Energy by Temperature Class
- Low temperature (<100 °C): Primarily used for direct heat. Applications include district heating and cooling, industrial processes such as food processing and aquaculture, greenhouse heating, snow melting, concrete curing, spas, and domestic hot water.
- Medium temperature (100–150 °C): Suited for both thermal and limited power generation. Industrial uses include pulp and paper, textiles, timber drying, cement and aggregate processing, refrigeration, and dehydration of agricultural products. Binary cycle plants can also generate electricity from these resources.
- High temperature (>150 °C): Best suited for large-scale electricity generation, where steam directly powers turbines. High-temperature resources can also serve energy-intensive industries such as ethanol or biofuel production.
Challenges in adoption and scaling geothermal energy
Geothermal energy holds significant promise, but its widespread adoption depends on overcoming persistent financial, technical, and environmental challenges.
High upfront costs
Developing geothermal plants requires significant capital investment in drilling and infrastructure. Exploration and testing of underground reservoirs are costly, and the risk of unproductive wells deters early-stage investors.
Exploration and technical risk
Identifying suitable sites demands extensive geological surveys and exploratory drilling, with uncertain outcomes. Technical hurdles in accessing deep heat sources and variability in long-term performance increase project risk profiles.
Induced seismicity
Conventional drilling carries some seismic risk, while Enhanced Geothermal Systems (EGS) heighten concerns by injecting fluids into rock formations. Although mitigation strategies exist, the potential for local earthquakes remains a public acceptance barrier.
Emissions and fluid management
Geothermal plants can release gases such as COâ‚‚, hydrogen sulfide, and methane, albeit in far smaller quantities than fossil fuels. Managing geothermal fluids with dissolved minerals and contaminants adds further environmental and cost considerations.
Site specificity and infrastructure needs
Geothermal resources are geographically constrained, often located in tectonically active regions. This site dependence, combined with the high cost of connecting remote plants to transmission grids, limits scalability relative to wind and solar.
Competitive landscape
Geothermal competes with renewables that benefit from lower costs, broader deployment potential, and established infrastructure. Without targeted policies or risk-sharing mechanisms, it remains at a disadvantage in many markets.
Geothermal’s role in the Net Zero economy
Geothermal energy is a critical yet underutilized lever in the transition to a clean energy economy. Unlocking its full potential requires addressing financial, technical, and environmental barriers. Despite these challenges, geothermal has the capacity to significantly influence the global energy landscape. Annual investment could reach up to USD 140 billion, surpassing current global spending on onshore wind if key hurdles are overcome.
Interest is extending beyond the energy sector, with technology companies exploring geothermal as a solution to meet the growing power demands of data centres.Â
Geothermal represents both a reliable energy source and a long-term growth opportunity. Its role in the Net Zero economy will be shaped by innovation and strong investments. As solutions advance, geothermal has the potential to move from a niche technology to the mainstream.
The next article will examine the Climate Tech innovation pathways driving the development and adoption of geothermal energy.
