Advances in geothermal energy technology could pave the way for a cleaner energy future, with the potential to meet 15 percent of the world’s growing electricity demand by 2050, according to the International Energy Agency.
With the right investments and policy support, geothermal capacity could rise to 800 gigawatts globally, equivalent to the combined electricity consumption of the US and India.
New Horizons for Geothermal Energy
“New technologies are opening new horizons for geothermal energy across the globe, offering the possibility of meeting a significant portion of the world’s rapidly growing demand for electricity securely and cleanly,” said IEA Executive Director Fatih Birol in the agency’s latest report on the future of geothermal energy.
“Our analysis shows that the growth of geothermal could generate investment worth $1 trillion by 2035.”
The report further stated that these “next-generation” technologies, such as horizontal drilling and enhanced geothermal systems, will likely expand the renewable energy source far beyond volcanic regions and tectonic fault lines.
Countries that previously lacked access to geothermal resources could tap into deep underground heat reserves, transforming geothermal from a niche player to a global powerhouse.
Investment Boom on the Horizon
The report highlights an enormous investment opportunity, forecasting cumulative geothermal investments of $2.5 trillion by 2050. At its peak, annual geothermal investments could surpass $140 billion, outpacing current spending on onshore wind projects.
This growth is expected to create up to 1 million jobs in the geothermal sector by 2030, a sixfold increase from today’s 145,000 jobs. The IEA stresses that much of this opportunity hinges on reducing the cost of geothermal projects.
While costs currently range from $40 to $240 per megawatt hour, new drilling techniques and risk-mitigation strategies could reduce this to just $50/MWh by 2035, making geothermal one of the most cost-competitive sources of low-emissions dispatchable power, on par with hydropower and nuclear.
Oil and Gas Sector Plays a Key Role
The oil and gas sector is a crucial partner in geothermal expansion. Up to 80 percent of the investment needed for geothermal overlaps with oil and gas industry expertise—from subsurface exploration to drilling technology.
For oil and gas companies, geothermal presents a vital opportunity to diversify their business models as demand for fossil fuels declines.
“Geothermal provides oil and gas firms with a natural hedge against future declines in demand for oil and gas products while simultaneously positioning them as leaders in the clean energy economy,” the report notes.
Global Market Expansion
While the US, Iceland, and Indonesia have traditionally led the geothermal industry, new technologies are democratizing access.
Tapping resources at depths of 3 km or more makes geothermal energy feasible for nearly all countries. The IEA estimates that by 2050, China, the US, and India could account for three-quarters of next-generation geothermal electricity capacity.
Today, geothermal accounts for just 1 percent of global electricity production. However, with 100 countries currently supporting policies for solar and wind and only 30 with geothermal-friendly policies, the report calls on governments to elevate geothermal energy in their clean energy agendas.
Policy Changes Needed
The IEA urges governments to streamline permitting processes, which delay geothermal projects by up to a decade. Separate permitting regimes for geothermal—distinct from mining—could significantly accelerate development.
Policies should also reduce risks during early exploration phases by offering grants, public insurance schemes, and state-led exploration support.
A Flexible, Clean Energy Source
Geothermal’s ability to generate electricity 24/7 is a valuable complement to intermittent renewables like wind and solar.
It also has applications beyond power generation. Sedimentary aquifers at depths of 3 km can provide low-temperature heat for district heating and industrial use.
Large tech firms have already begun signing power purchase agreements with geothermal plants to power energy-hungry data centers.
“Geothermal’s technical potential could meet global electricity demand 140 times over,” the report states, highlighting the vast untapped potential of this renewable resource.
What’s Next?
The IEA’s call to action is clear: governments and industry must integrate geothermal into national energy strategies swiftly.
Doing so could transform an underutilized resource into a significant pillar of the world’s clean energy future.
With rising electricity demand driven by electric vehicles and AI-driven data centers, the timing for geothermal’s breakthrough has never been more critical.
As the IEA’s report concludes, “With the right support, geothermal could become one of the world’s cheapest and most versatile clean energy sources, helping to stabilize grids and power the digital economy of the future.”
