Geothermal Energy: Opportunities and Challenges for the Next Decade

Season’s Greetings, everyone!  

Merry Christmas and Happy New Year! I hope this holiday season finds you in great spirits, surrounded by loved ones, and recharged for the year ahead. Whether you’re taking a well-deserved break or catching up on long-postponed plans, I wish you a restful and joyful time.  

The holidays offer a rare chance to step back from day-to-day operations and reflect on the bigger picture. It’s also the perfect time to update our knowledge and reassess strategies for the year ahead. For those interested in energy markets and renewable technologies, I highly recommend the latest IEA report, “The Future of Geothermal Energy.” It outlines the current state of geothermal power, its potential role in the energy transition, and how technologies from the oil and gas industry could accelerate its growth.  

tl/dr - Key Findings from the Report  

The IEA highlights geothermal energy as a “versatile and underutilized” renewable resource, emphasizing its potential to supply up to 8% of global energy needs by 2050. The report forecasts significant cost reductions, with electricity generation costs potentially dropping to $50/MWh by 2035, positioning geothermal as a competitive alternative to solar, wind, and even nuclear power.  

Crucially, the report identifies expertise from the oil and gas sector, particularly in drilling and reservoir management,  as a catalyst for scaling geothermal projects. With projected investments exceeding $1 trillion by 2035, the IEA paints an [over]optimistic picture of geothermal energy’s role in decarbonization.  

My thoughts or (Sarcastic Perspectives on Geothermal Growth)  

While the IEA report is ambitious and paints geothermal as a cornerstone of the energy transition, I believe a closer look raises some important questions:  

1. Cost and scalability projections. The forecasted 80% reduction in costs over the next decade mirrors earlier success stories in solar and wind. However, geothermal projects are fundamentally different, they depend heavily on local geology, making scalability far less straightforward. (Earlier this year, Dr. Ring, President of Sage Geosystems, gave me some great insights on this topic!) Unlike solar panels, geothermal wells cannot be mass-produced. The timeline and costs for drilling and infrastructure could be far less predictable than the IEA suggests.  

2. Technology transfer from Oil & Gas sector. The report rightly points out that the oil and gas sector’s expertise in horizontal drilling and reservoir management is valuable. Yet, adapting these technologies to high-temperature, corrosive geothermal conditions is not without hurdles. Corrosion-resistant materials and specialized equipment come at a premium, and their long-term performance remains untested at scale.  

3. Environmental and regulatory risks. Obviously, geothermal energy will offer stable baseload power, but it’s not without risks. Water usage, induced seismicity, and potential contamination of groundwater require tight monitoring and mitigation strategies. Moreover, the permitting process for geothermal wells, often taking up to 10 years, can be a bottleneck for growth unless regulations are streamlined.

4. Market Positioning. Unlike wind and solar, geothermal generation will compete in the baseload category, where it faces established technologies like hydropower, nuclear and natural gas CCGT (in USA). To succeed, it must not only match these competitors on cost but also overcome its higher upfront investment and development risks. Geothermal may thrive as a niche solution, but its path to dominance remains, I'll be frank, unclear to me.  

Looking Ahead

The IEA report is a valuable resource for understanding geothermal energy’s promise and pitfalls. It also reinforces the broader theme that the energy transition is not a one-size-fits-all process. For those of us in the industry, it’s a reminder to stay flexible, critically evaluate emerging trends, and remain open to hybrid solutions, be it geothermal, CCUS, or advanced battery technologies. 

Looking much further ahead, the challenges we face today in harnessing geothermal energy on Earth may well mirror those we encounter in future space exploration. From drilling through permafrost to tapping into deep thermal reservoirs, the technologies we develop now could become the foundation for sustaining life and enabling scientific discovery on distant worlds.

Exploring subsurface oceans on icy moons like Europa, Enceladus, Ganymede, and Callisto, where geothermal-like processes may exist beneath their frozen crusts, presents an exciting parallel to our work here on Earth. Similarly, volcanic activity on Io and evidence of internal heat on Titan and Triton raise intriguing possibilities. Perhaps one day, geothermal systems could provide both energy and access to water, becoming essential tools for survival and research in extraterrestrial environments.

So, as you settle into the holidays, I encourage you to give this report a read. It’s an excellent starting point for thinking strategically about where our industry is headed and how we can be part of shaping its future.  

Happy Holidays and see you in 2025! ;-) Nick Sakharov here - over and out.

(Again: the link for a IEA report, “The Future of Geothermal Energy.”)