Global backing and local support fuel the rise of geothermal energy

No wonder an increasing number of experts, entrepreneurs, and policymakers see 2025 as a key year for geothermal energy. What many call the “underground revolution” is gaining unprecedented pace due to a confluence of benefits that position this underutilized source as a frontrunner in the transition.

Why does the future for geothermal look bright? According to the latest projections by the International Energy Agency (IEA), with proper backing, the costs for advanced geothermal could fall by 80% by 2035, reaching $50 per megawatt-hour, a level competitive with all other renewable energy sources.

“I am surprised that geothermal has not gotten greater traction already,” Marc Ostwald, London-based strategist at ADM Investor Services, told Energy Connects. The heat extracted from deep within the Earth has “a huge advantage over wind and solar given that it is not ‘intermittent’ and the footprint of production is much smaller than fields of turbines or panels,” he said.

I am surprised that geothermal has not gotten greater traction already. The heat extracted from deep within the Earth has a huge advantage over wind and solar given that it is not intermittent and the footprint of production is much smaller than fields of turbines or panels.
- Marc Ostwald, London-based strategist at ADM Investor Services

The pros of geothermal are extensive. Its plants need no fuel and, thanks to water reinjection in the same reservoir and closed-loop systems, their GHG emissions are negligible. Unlike solar farms or wind installations, they require very little land and deliver consistent power regardless of whether it is sunny, windy, or rainy.

But what sets geothermal apart from other renewables is its transformative impact on communities—an added value in an often-polarised energy debate. Geothermal output provides a valuable byproduct: waste heat that can warm nearby buildings virtually for free. This explains why, rather than encountering the typical “Not in My Backyard” resistance, such plants often receive residents’ support.

“In 25 years in the industry, I have seen geothermal project acceptance many times,” Federico Micheli, a renewable-energy expert and a former executive at industry firms in Italy and Japan, told Energy Connects. “When people realise they can heat their homes and offices using waste heat, the conversation shifts from 'Why here?' to 'When can we start?' It's a remarkable transformation in public attitude and an example of business practices uplifting local communities,” he adds.

If 2025 will be a watershed year for geothermal, it is also due to political dynamics shifting in its favour – regardless of whether the powers that be embrace the energy transition or even admit it is underway.

When people realise they can heat their homes and offices using waste heat, the conversation shifts from 'Why here?' to 'When can we start?' It's a remarkable transformation in public attitude and an example of business practices uplifting local communities.
- Federico Micheli; renewable-energy expert and a former executive at industry firms in Italy and Japan

In the United States, synergies with the oil and gas sector might explain the support geothermal enjoys in current leadership – and could facilitate its growth. US Energy Secretary Chris Wright looks set to push geothermal in line with President Donald Trump’s popular 'Drill, baby, drill!' slogan.

While known for his advocacy of fossil fuels as Chief Executive Officer of Liberty Energy, Wright has shown commitment to geothermal innovation through a $10 million investment in Houston-based Fervo Energy, a startup with active projects in Nevada and Utah that has secured groundbreaking power agreements with California utilities while attracting backing from tech giants like Google.

Untapped resource

However, despite its bipartisan appeal in the world’s largest economy and its many advantages, as of today geothermal energy remains largely untapped.

In its report this month, the Paris-based International Energy Agency (IEA) stated that with continued technological advancements and cost reductions, geothermal could supply up to 15% of electricity-demand growth worldwide by 2050. That translates to 800 GW of power capacity globally and 6,000 terawatt-hours annually – matching the current combined electricity consumption of the United States and India.

“More than 100 countries have policies in place for solar PV and/or onshore wind, but less than 30 have implemented policies for geothermal,” the IEA said, calling on governments “to move it up the national clean energy policy agenda with specific goals and roadmaps.”

Iceland's success in geothermal resources is largely attributable to high collaboration between public and private entities... Community engagement also helps to create a positive business environment and promotes the long-term sustainability of the project.
- Rósbjörg Jónsdóttir, Managing Director, Renewable Energy Cluster of Iceland

Iceland provides a compelling blueprint for an economy partly based on geothermal energy.

The so-called Land of Fire and Ice "has demonstrated the possibilities of utilizing geothermal resources efficiently and sustainably," says Rósbjörg Jónsdóttir, managing director of the Renewable Energy Cluster of Iceland. The nation’s success on this front “is largely attributable to high collaboration between public and private entities,” she explains, adding that “community engagement also helps to create a positive business environment and promotes the long-term sustainability of the project.”

According to Jónsdóttir, "to replicate the Icelandic model, it's essential to develop know-how and build technology in geothermal engineering.” She says that “effective financing options and a favorable regulatory environment are mandatory to support the initiation and operation of geothermal plants,” emphasizing that “governments need to invest in research and development while creating stable regulatory frameworks.”

Is it time for geothermal to be deployed globally?

Yes, says ADM’s Ostwald – but “far more efficient permitting processes and massive upscaling projects” are needed. “This must above all deal with the greatest obstacle to mass electrification: a huge upgrade to power grids which in pretty much all countries are simply not ‘fit for purpose.’"