This blog is part of a series exploring and explaining the science behind next-generation geothermal energy, with a special focus on superhot rock geothermal, through a curated tour of influential technical and academic papers. This edition highlights key features of the International Energy Agency’s report, The Future of Geothermal Energy. 

Geothermal was used to meet less than 1% of global energy demand in 2024, with all of it coming from just a few countries that have naturally heated reservoirs of water near the surface. The International Energy Agency’s (IEA) 2024 report (IEA Report),The Future of Geothermal Energy, however, found that geothermal has the potential to cost-effectively meet up to 15% of global electricity demand growth through 2050, with continued technology improvements and reductions in project costs. 

And while geothermal’s slice of the overall pie remains small, it is growing. The IEA Report highlights that, while the U.S. still leads in installed geothermal power capacity (inclusive of conventional and next-generation), global geothermal power capacity increased nearly 40% to nearly 15 gigawatts (GW) between 2013 and 2023. Several countries, including Indonesia, the Philippines, and Turkey have also set ambitious targets to expand their geothermal capacity by more than 30%. In 2023 alone, investments in geothermal exceeded $45 billion, representing over 5% of total spending on renewable energy projects, with China contributing more than 70% of that total.  

So, what will it take to make good on those ambitions? Sustained country-wide investment is critical, as is investment in geothermal expansion beyond conventional geothermal – which is critical to unlocking  superhot rock geothermal (SHR)—a form of next-generation geothermal technology that can harness subsurface temperatures exceeding 400 °C— and paving the way for even lower costs and further growth of geothermal capacity. 

This blog takes a deep dive into the IEA’s findings, exploring the current state of geothermal energy, key trends in global deployment, and the opportunities ahead for scaling geothermal as a major clean energy source. 

Advancements from the oil and gas sector, especially in directional drilling and well insulation, are driving innovation in geothermal development. New technologies like enhanced geothermal systems (EGS) and closed-loop geothermal systems (CLGS) are expanding geothermal to be accessible in regions without conventional geothermal resources.  

Since the first EGS pilot project (Fenton Hill), which was led by the U.S. Department of Energy in Los Alamos, New Mexico in 1974, over 30 experimental EGS projects have been operated in countries around the world, including Australia, Finland, France, Germany, Japan, the United Kingdom, Switzerland, and South Korea. Recent EGS breakthroughs in the use of horizontal drilling and multistage stimulation techniques were demonstrated at Fervo’s Project Red in Nevada.  

Although CLGS development has progressed more slowly, notable projects include the 2019 Eavor-Lite^TM demonstration in Alberta, Canada and the ongoing Eavor commercial heat and power plant project in Geretsried, Germany. 

Technology improvements that enable drilling deeper at lower costs are essential to the advancement of next-generation geothermal because geothermal energy potential increases as hotter resources are accessed. The improved energy potential at depth is one of the key qualities of SHR, which is capable of generating 5-10 times the megawatt (MW) output of a typical commercial geothermal well. Efficient, low-cost drilling is crucial for next-generation geothermal development, and significant progress is being made. The U.S. National Renewable Energy Lab (NREL) recently updated estimated drilling costs from the U.S. Department of Energy’s (DOE’s) 2019 GeoVision analysis, showing reductions of up to  24% for vertical wells and 26% for horizontal wells.  

According to the IEA Report, only a few countries can effectively harness next-generation geothermal for electricity generation at a depth of 2 km. However, at 5 km, there is an estimated technical potential of 42 terawatt (TW) of power capacity over 20 years of generation. Beyond 7 km, nearly every region around the world has technically suitable resources. At 8 km, EGS could provide nearly 600 TW of power globally at costs below $300 per megawatt-hour (MWh) – 2,000 times the potential of conventional geothermal. 

These estimates don’t include temperatures above 250 °C for EGS – meaning the potential of SHR is even greater. A recent study conducted by CATF, in collaboration with the University of Twente, shows that just 1% of the world’s superhot rock geothermal potential could generate 63 TW of power. Additionally, a recent analysis by CATF shows that Nth-of-a-kind SHR projects are expected to be cost competitive at $20-$35 per MWh. 

When applying the 250 °C temperature cap, the IEA Report estimates that geothermal has the second-largest potential for electricity-generating capacity when compared with other sources of renewable power generation, with almost three times that of onshore wind and more than five times that of offshore wind. With geothermal’s ability to operate 24×7, 365 days per year, it has a technical potential of 4,000 petawatt-hours (PWh; 1,000 TWh) for annual generation, which is about 150 times the current global annual electricity demand. 

Nearly 20% of the EGS power potential is in Africa and tapping less than 1% of this potential would meet the region’s projected 2050 electricity demand.  

According to the subsurface heat models detailed in the IEA Report, the U.S. has the largest technical potential of any country, holding 12% of the global total—and at 5 km depth its potential is seven times the country’s current installed power capacity.  The immense potential is also highlighted in the U.S. Department of Energy’s report on the pathway to commercial liftoff for next-generation geothermal power.  

With its large land mass, China also ranks highly in its EGS potential, accounting for nearly 8% of the world’s potential. Although the potential is lower in Europe than some other regions, the region’s technical potential accounts for 35 times Europe’s current total installed electricity capacity. 

The IEA Report documents that investments in next-generation geothermal technology have increased from negligible amounts in 2017 to over $420 million in 2023, with most investments coming from venture capital firms, the public sector, and corporations. Many of these investments have been concentrated around a few companies such as Fervo Energy and Eavor, who, combined, have raised more than $700 million since 2021 (as of the December 2024 publication of the IEA Report). Due to the need for drilling expertise in next-generation geothermal projects, oil and gas companies have invested nearly $140 million in the technology’s development.  

The IEA Report’s analysis of market opportunities suggests that regions with strong innovation and development support could have a combined next-generation geothermal market potential of over 800 GW of electricity capacity by 2050, with China, the U.S., and India accounting for nearly 75% of that global market potential.  

Achieving this buildout of next-generation geothermal will require significant global investments of around $700 billion by 2035 and over $2 trillion by 2050. With this investment, next-generation geothermal could provide up to 8% of the global electricity supply by 2050 and up to 15% of the total electricity generation growth to 2050, in addition to the 1% met by conventional geothermal. Based on the IEA’s Announced Pledges Scenario, the growth of next-generation geothermal could result in significantly smaller overall land use requirements due to the decreased need for buildout of clean energy sources like solar and wind. 

As is indicated in the IEA Report, strong, sustained support for next-generation geothermal innovation could cut construction costs by up to 80%. If realized, next-generation geothermal costs would be similar to or lower than other clean dispatchable technologies by 2035 including natural gas with carbon capture, hydroelectric, nuclear, coal with carbon capture, bioenergy, concentrating solar power, and hydrogen. The high capacity factor of next-generation geothermal could also make it competitive with solar and wind by 2035 in regions such as the U.S. and Europe. 

The IEA Report details support needed, in addition to financial support, to boost the growth of next-generation geothermal as one of the only low-emission baseload technologies: 

• Publicly Available Data: Open, standardized geothermal data repositories are essential for scaling next-generation geothermal. 

• Permitting: Geothermal projects can take up to 20 years to permit, often requiring approvals from multiple agencies. Streamlining administrative processes and improving agency expertise could accelerate approvals while maintaining safeguards. 

• Social Acceptance: Community opposition can delay or cancel projects. Strong community engagement, environmental safeguards, and benefit-sharing policies improve project success. 

• Standardization: Standardized modular equipment enhance efficiency, reduce costs, minimize failures, and extend equipment lifespan. 

• Research & Development: Limited research and development funding is a major barrier. The IEA Report highlights the need for specialized testing facilities for high-temperature, high-pressure equipment. 

Countries are increasingly recognizing geothermal as a reliable source of clean baseload, or clean firm power. Nations like Iceland, Japan, New Zealand, the Philippines, Indonesia, and Kenya have integrated geothermal as key parts of their energy plans,  while the European Union has developed a geothermal-specific implementation plan and  included geothermal in the Net-Zero Industry Act.  

SHR projects build on today’s efforts. The IEA Report highlights the potential of next-generation geothermal to provide 150 times the current global annual electricity demand. With 5-10 times the MW output of a typical commercial geothermal well, SHR could provide even more energy with fewer wells – leading to smaller land use requirements and even lower costs.  

Stay tuned for more from CATF as we continue pushing forward with bold research and initiatives to strengthen the next-generation geothermal industry and scale SHR to its full potential as a reliable source of clean electricity. 

This blog is part of a series exploring and explaining the science behind next-generation geothermal energy, with a special focus on superhot rock geothermal:

Through a curated tour of influential technical and academic papers, the series aims to provide a fresh perspective from a geoscientist entering the geothermal industry. The goal is to share my learning journey and encourage collaboration around these groundbreaking solutions, which are critical to achieving a clean energy future. Whether you’re new to geothermal or looking to deepen your knowledge, I hope this series offers valuable insights into this fast-evolving field.