Enhanced Geothermal Systems (EGS) are poised to become the next energy transition success story, joining liquefied natural gas (LNG) and grid-scale battery storage in a new golden age of energy innovation. EGS leverages techniques honed in the shale oil and gas revolution, making it a natural diversification path for the oil and gas industry while offering a clean, sustainable energy resource. 2024 marked a pivotal year for EGS, with successful field tests demonstrating its technical viability and scalability. These advancements, coupled with surging demand for clean energy from data centers and other sectors, have ignited widespread enthusiasm for EGS.
The success of EGS can be attributed to the adoption of advanced drilling and fracturing technologies developed for shale oil and gas extraction. By drilling two horizontal wells and creating a network of interconnected fractures within hot granite rock, EGS systems circulate water through the rock, heating it to create steam that drives electricity-generating turbines. The U.S. Department of Energy (DOE) has played a crucial role in supporting EGS development through Project FORGE in Utah, focusing on improving drilling speeds and commercial viability. Private companies like Fervo Energy have also contributed significantly, partnering with Google to develop Project Red, a pilot EGS plant near Las Vegas that has consistently supplied clean energy to the local grid.
Fervo Energy’s success with Project Red stems from achieving a strong fracture connection between the wells, facilitating efficient water circulation, and demonstrating the system’s flexibility in meeting fluctuating energy demands. This success has spurred Fervo to embark on a larger-scale project: the 400 MW Cape Station geothermal plant in Beaver County, Utah. This ambitious undertaking has witnessed significant efficiency improvements, with reduced drilling times and costs, attracting substantial investments from venture capitalists and energy giants like Devon Energy. The project’s phased rollout, with the first 90 MW expected online in 2026, has already secured a major power purchase agreement with Southern California Edison.
Several factors converge to suggest that a golden age for geothermal energy is imminent. The commitment of tech giants like Google and Microsoft to carbon neutrality by 2030, coupled with the exponential growth of data centers and their voracious energy appetite, creates a pressing need for clean, reliable power sources. Electrification across various sectors, from transportation to manufacturing, further intensifies this demand. The familiarity of oil and gas companies with the underlying technologies of EGS positions them to readily adopt and contribute to the sector’s expansion. Moreover, EGS enjoys bipartisan support in the U.S. Congress, offering both environmental and economic benefits.
The DOE’s projection of a 24-fold increase in geothermal electricity generation by 2050, reaching 90 GW, underscores the immense potential of this technology. The International Energy Agency (IEA) further amplifies this outlook, estimating that EGS could provide a staggering 800 GW of clean power globally by 2050. The IEA emphasizes the pivotal role of the oil and gas industry in advancing geothermal energy, highlighting the overlap in required skills and expertise. Collaboration between these sectors is deemed essential for driving down costs and making geothermal energy one of the most competitive sources of dispatchable clean electricity. The IEA also anticipates a significant surge in geothermal-related employment, potentially reaching one million jobs by the end of the decade, signifying a substantial economic opportunity.
The momentum generated by successful EGS projects has spurred further exploration and development. The Bureau of Land Management has initiated lease sales for geothermal development on public lands in Utah, following the successes of FORGE and Fervo. Internationally, collaborations are emerging, exemplified by Schlumberger’s partnership with Star Energy Geothermal in Indonesia, aiming to optimize geothermal site selection and reduce operational costs. These developments reflect a growing global recognition of geothermal energy’s potential as a reliable, sustainable, and economically viable energy source. The inherent advantages of EGS, including its high capacity factor, low carbon emissions, minimal land footprint, and compatibility with intermittent renewables, further solidify its position as a cornerstone of the future energy landscape.
