Next-Generation Geothermal poster

Geothermal technology—deriving energy from the naturally occurring heat beneath the earth’s surface—is nothing new in the United States. In fact, the United States leads the world in geothermal power production, with more than 65 power plants in operation at total nameplate capacity of just over 4,000 megawatts (MW). However, conventional geothermal power production has limited growth potential due to its requirements for specific subsurface conditions (i.e., heat, fluid, and permeability). Two major technological advancements can help geothermal play a larger role in achieving U.S. decarbonization goals: Enhanced Geothermal Systems (EGS) and closed loop geothermal systems (sometimes referred to as Advanced Geothermal Systems or AGS). The U.S. Department of Energy’s (DOE’s) Loan Programs Office (LPO) is prepared to help drive the industry’s commercial deployment of next-generation geothermal technologies to help meet the Biden-Harris Administration goal of a carbon-free electric sector by 2035.

LPO finances next-generation U.S. energy infrastructure, serving as a bridge to bankability for breakthrough projects and technologies and de-risking them at early stages of investment so they can be deployed at commercial scale.


Conventional geothermal power plants already play a vital role in helping the country reach the Biden Administration’s goal of establishing a 100% clean energy economy by 2050, but—as noted—opportunities for new hydrothermal plants are limited.

The existing U.S. fleet of geothermal power plants uses conventional, or “hydrothermal,” resources that rely on existing subsurface heat, fluid or water, and permeability (the ability for that fluid to flow). Hydrothermal projects involve a production well, which draws hot water or fluid to the surface; a surface generator, which converts the hot fluid into steam to power a turbine; and an injection well, which re-injects the cooled fluid back into the ground. These types of geothermal projects require naturally occurring subsurface conditions to enable the fluid to permeate across to the production well, getting re-heated as it travels. According to DOE’s GeoVision analysis, improving techniques, tools, and methodologies can help discover and develop more hydrothermal resources. Of an estimated 40 gigawatts (GW) of hydrothermal energy production potential, only about 9 GW has been identified. Using innovative designs in new plants can also help the United States fully tap this abundant source of renewable energy.

By contrast, next-generation geothermal technologies use engineering to access ubiquitous underground heat, creating geothermal power resources where they would not otherwise exist. Directional drilling and hydraulic fracturing advances allow water to flow through hot rock where no fractures naturally occurred. Because there is no unique geologic constraint, next-generation geothermal technologies have effectively limitless potential. DOE’s 2023 Enhanced Geothermal Shot™ analysis confirms the potential for as much as 90 GW of installed EGS capacity by 2050, and forthcoming DOE analysis shows upside of over 300 GW in certain economic scenarios. However, there are an estimated 5,500 GW of heat resources available throughout the United States alone. Advancing next-generation geothermal could enable the country to tap more of those resources nationwide. In addition to heat resources throughout the U.S. West, there are also hundreds of GW of potential next-generation geothermal resources in the Eastern United States.


Hydrothermal image
Enhanced geothermal image


Two approaches to next-generation geothermal, EGS and closed loop geothermal systems, have both completed successful pilot projects, and EGS is already producing electricity on the U.S. grid. EGS use injection and fracture technologies to create humanmade reservoirs that facilitate capture of subsurface heat. Closed loop geothermal systems drill ultra-deep well loops that allow continual fluid circulation through the bedrock without creating fractures.

In September 2022, DOE launched the Enhanced Geothermal Shot™, which aims to decrease the cost of EGS power by 90% to $45 per megawatt-hour by 2035. This effort includes developing better mapping and modeling, faster and more efficient drilling, and improved fluid control. DOE’s Geothermal Technologies Office (GTO) is also conducting research, development, and demonstration to advance geothermal power production, including three new EGS demonstration projects funded by President Biden’s Bipartisan Infrastructure Law. 

As state and federal clean energy goals get more aggressive, and intermittent solar and wind power plants scale up, the value of clean, firm geothermal power to the grid increases significantly. In 2021, the California Public Utilities Commission mandated the procurement of 1 GW of clean, firm power by 2026; geothermal power is poised to help the state reach this goal. Corporations that have 24/7 clean energy targets are now beginning to invest in geothermal projects to help meet their climate goals. Industry is taking notice of the opportunities to create more geothermal power production, too, with multiple companies raising equity capital to develop next-generation geothermal approaches and demonstrate pilot plants.

To learn more about the opportunities and challenges to accelerating our domestic energy through this scalable technology, check out DOE’s recently published Next-Generation Geothermal Power Liftoff Report.


DOE’s GeoVision analysis estimates that, with technology improvements, geothermal electricity generation has the potential to increase 26-fold in the United States by 2050. The Enhanced Geothermal Shot™ analysis confirms this, highlighting the potential for 90 GW of EGS installed nationwide in the same time period, with significant upside of over 300 GW in certain economic scenarios, according to forthcoming DOE analysis. LPO can provide debt financing for commercially ready, innovative geothermal projects in order to help them cross the bridge to bankability. Once these projects demonstrate their technology functions on a pilot scale, LPO can finance the first commercial deployments through the Title 17 Clean Energy Financing Program, which was expanded by President Biden’s Inflation Reduction Act (IRA).

LPO can play a key role in enabling these technologies to prove their commercial and technical viability to private debt markets. With a full technical team on staff, backed by the scientists and engineers across DOE and the national labs, LPO is uniquely positioned to de-risk next-generation geothermal technology.


LPO can finance next-generation geothermal energy projects through several avenues:

Next-generation geothermal energy is vital to the clean energy transition and achieving the nation’s climate goals. Let LPO partner with you to make your project a reality.


To learn more about how LPO could support your next-generation geothermal project, please request a no-cost pre-application consultation. During the consultation, LPO will work with you to determine whether the project is eligible for financing.

To learn more about how DOE supports next-generation geothermal energy projects across the research, development, demonstration, and deployment continuum, visit GTO.



Contributors: Charles Gertler, Jatin Khanna, Michael O’Connor, Coryne Tasca, and Jonah Ury


Michael Reed
Mr. Michael Reed is the Director of the Technical and Environmental Division (TED) and Chief Engineer for the Department of Energy’s Loan Programs Office (LPO).
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