The future of geothermal energy: Renewable power from deep underground

Among renewable energy options, geothermal stands out because it doesn’t depend on sunshine or wind. It taps the Earth’s internal heat — either to produce electricity or, just as importantly, to provide clean heat for buildings, industry, and agriculture. As Europe accelerates its move away from fossil heating, geothermal is gaining renewed attention, especially for district heating and large-scale heat pump deployment.

How geothermal energy can be used

Geothermal energy comes in two main “flavours.”

The first is high-temperature geothermal, typically found in volcanically active regions. Here, underground fluids and rocks can reach temperatures high enough to generate steam and drive turbines for electricity production.

The second is low-temperature geothermal, which uses the stable temperatures of shallow ground (or groundwater) as a heat source in winter and a heat sink in summer. This is the domain of ground-source heat pumps, which can supply heating (and cooling) efficiently even in colder climates — a big reason the technology is so relevant for the EU.

High-temperature geothermal: electricity and large-scale heat

In high-enthalpy geothermal areas, power plants draw hot water or steam from underground reservoirs and convert that heat into electricity. In its simplest form, a well brings hot fluid to the surface; steam (or heat transferred via a heat exchanger) drives a turbine; the cooled water is then commonly reinjected back into the reservoir to help sustain pressure and long-term performance.

Globally, geothermal electricity remains a relatively small slice of total power generation, but it is valuable because it can provide firm, dispatchable renewable energy. According to IRENA, total installed geothermal power capacity reached about 15.4 GW by the end of 2024. 

Some of the best-known examples include:

• Iceland, where geothermal heat is used at scale for buildings and public infrastructure, and geothermal electricity contributes meaningfully to the grid; at least 90% of homes are heated with geothermal energy.

• Italy, with long-standing geothermal power in Tuscany.

• Kenya, where geothermal has become a major pillar of power-sector decarbonisation.

• The United States, where California’s The Geysers is the world’s largest developed geothermal field (a major complex of power plants drawing steam from hundreds of wells).

Geothermal well in Iceland (Photo: Yomangani / Wikipedia)

High-temperature geothermal can also support combined heat and power and direct heat uses (where local conditions allow): district heating networks, greenhouses, industrial heat, and thermal processes that benefit from steady heat supply.

Low-temperature geothermal: Heat pumps and the decarbonisation of buildings

Not every country has volcanoes — but every country has shallow ground temperatures that are relatively stable year-round. This is why ground-source heat pumps are often the most broadly applicable geothermal technology for Europe.

A heat pump does not “create” heat; it moves it. In winter, it extracts low-grade heat from the ground (or groundwater) and upgrades it to useful temperatures for space heating and hot water. In summer, many systems can reverse operation and provide cooling, using the ground as a heat sink.

Technically, this is enabled by a closed-loop or open-loop system:

• In a closed-loop setup, a fluid circulates through buried pipes (horizontal loops or vertical boreholes) and absorbs heat from the ground.

• In an open-loop setup, groundwater is pumped, passes through a heat exchanger, and is reinjected.

Because heat pumps leverage ambient heat, they can deliver several units of heat per unit of electricity consumed — especially when paired with low-temperature heating systems (underfloor heating, large radiators, or modern district heating). In the European context, heat pumps are increasingly framed as a cornerstone technology for clean heating, even though sales have fluctuated with energy prices and policy stability. 

Business and agriculture: Where geothermal already proves its value (EU and US examples)

Geothermal is not only about electricity — in many places, its strongest economics come from direct heat.

A widely cited European example is the Paris Basin, where geothermal district heating expanded from the late 1970s onward, using deep aquifers to provide heat for urban areas. These systems became a pragmatic response to oil-price shocks and a way to reduce dependence on imported fuels — a story that feels very current again in today’s European energy security debate. 

In the United States, Boise, Idaho is one of the most famous geothermal heating stories: a geothermal district heating system dates back to the 1890s, and the city remains a reference case for direct-use geothermal in an urban setting. 

Sonoma Calpine 3 Geothermal Power Plant at the Geysers in California, USA (Photo: Stepheng3 / Wikipedia)

Agriculture is another strong match. Geothermal heat can maintain stable temperatures for greenhouses, extend growing seasons, and support food production with lower fossil heat demand — something Iceland has done extensively, alongside other direct uses like aquaculture and snow melting.

Economics: What makes geothermal hard — and what makes it worth it

The biggest barrier to geothermal projects is usually not the turbine or the heat exchanger. It’s the subsurface risk and upfront capital cost, especially drilling and exploration. Developers may need multiple wells before confirming resource quality, flow rates, temperature, and long-term sustainability. This is why de-risking instruments (insurance, public guarantees, concessional finance) often play a decisive role.

For heat pumps, the economics are different but still upfront-heavy: installation requires boreholes or ground loops, and the business case depends on electricity prices, building efficiency, and whether the heating system can run at lower temperatures.

Despite this, geothermal has a unique appeal: once wells and infrastructure are in place, it can deliver energy with high availability and predictable output — and it supports local energy independence.

The environmental trade-offs: “Clean,” but not automatically impact-free

Geothermal is often low-carbon, but it isn’t impact-free.

Some geothermal reservoirs contain dissolved gases that can lead to emissions (though generally far lower than fossil fuels). Projects also need careful management of water chemistry to prevent scaling and corrosion, and robust reinjection strategies to protect reservoirs. For enhanced geothermal systems (EGS) — where permeability is engineered — there is also the issue of induced seismicity, which must be managed with monitoring and operational controls.

These are solvable challenges, but they require strong regulation, transparent monitoring, and community trust — particularly relevant for densely populated parts of Europe.

The next frontier: Enhanced geothermal systems and “superhot” resources

The most exciting growth pathway may be enhanced geothermal systems (EGS). EGS aims to expand geothermal beyond naturally permeable hot reservoirs by using advanced drilling and reservoir engineering — essentially bringing oil-and-gas-style subsurface expertise into clean energy.

In the United States, the Department of Energy’s FORGE initiative in Utah is designed as a field site to accelerate EGS breakthroughs and reduce costs.

The International Energy Agency argues that, with sustained innovation and cost reductions, geothermal could scale dramatically over the long term — potentially meeting a meaningful share of future electricity demand growth by mid-century.

What geothermal’s future could look like in the EU (and why it matters)

For an EU audience, geothermal’s most immediate relevance is often heat — not only power. District heating decarbonisation, industrial low-to-medium temperature heat, and building retrofits create a large demand pool where geothermal (especially heat pumps and deep geothermal heat networks) can play a durable role.

The likely future is not one single geothermal technology, but a portfolio:

• Deep geothermal heat feeding district heating in suitable basins and regions

• Ground-source heat pumps as a scalable solution for buildings, campuses, and commercial sites

• Geothermal electricity where high-temperature resources exist — plus EGS as a longer-term expansion path

Geothermal will not replace wind and solar — but it can complement them with something the clean energy system increasingly values: reliability, locality, and heat at scale.

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