Geothermal on the Rise in US

By Amy McLellan

A geothermal revolution is heating up the U.S. and creating potentially massive opportunities for logistics. How should LSPs, EPCs and project owners position themselves to win?

From Issue 5, 2025 of Breakbulk Magazine

(5-minute read)

For centuries, people around the world soaked in hot springs and marveled at the earth’s natural heat. Today, that same geothermal energy is being engineered to power entire grids — clean, constant and carbon-free.

Despite its long history, geothermal still accounts for only about 1% of global electricity, according to the International Energy Agency (IEA). Its growth has been constrained by geology: conventional systems rely on natural heat sources, fractures that let water circulate, and pathways to move heat upward through the earth’s crust.

It’s a trifecta that only exists in certain places, with most of today’s installed capacity found in countries that have either volcanic activity or straddle tectonic fault lines, such as the U.S. West Coast, Iceland, Indonesia, Türkiye, Kenya and Italy.

A growing number of investors, however, are betting big that new technologies will overcome these geological limitations and unlock an abundance of 24/7 carbon-free energy across the planet. For Thomas von Koch, a former CEO at Swedish investment fund EQT Group, geothermal is “the only game in town.”

The idea that the earth is a huge natural battery that could power our world with no emissions and no intermittency is certainly appealing.

“The amount of energy currently being produced from conventional geothermal systems worldwide (16,000 MWe) is trivial when compared to the energy available in the earth’s crust,” says Dr. Joseph Moore, managing principal investigator of Utah FORGE, a U.S. Department of Energy research project to demonstrate the commercial feasibility of Enhanced Geothermal Systems (EGS), which use drilling technologies to create fractures in low permeability hot rocks and then circulate water through them to create geothermal reservoirs where none exist naturally.

The U.S. is at the forefront of this geothermal revolution. A 2019 report from the DOE set a goal of increasing the amount of geothermally generated electricity from 3,900 MW to 60,000 MWe by 2050. Currently, electricity from geothermal resources is only generated in California, Nevada, Utah, Hawaii and Idaho. With EGS, however, all states have potential for geothermally generated electricity.

“EGS technologies will allow electricity generation virtually anywhere in the country,” says Dr. Moore. “Imagine powering San Francisco, Memphis or New York City just from the earth’s heat. EGS can also be used for direct applications, such as heating buildings, aquaculture and agriculture.”

There’s a real strategic drive to make this work as the U.S. faces surging demand for baseload energy, driven by electric vehicles, grid resilience and the hyperscale data centers that power AI models.

"Since EGS allows for electricity to be generated almost anywhere in the world, theoretically, a plant can be located in a close proximity to a data center,” notes Dr. Moore.

Forging a New Energy Future

The Utah FORGE site is about 210 miles southwest of Salt Lake City in rural Beaver County. It was selected because it met key criteria: temperatures of 350°F at a depth of one mile, a low permeability granite reservoir, low potential for felt induced seismicity, and a site with low environmental impact. The challenge for EGS is the price tag: drilling through hot granite is much more expensive than oil and gas drilling, and the hard rocks chew through traditional tricone drill bits.

Utah FORGE, however, has unlocked insights and innovation that can now be used by private developers to accelerate other EGS projects, says Dr. Moore, pointing out all of its data is publicly available.

“Working with NOV ReedHycalog, Utah FORGE developed drill bits that enabled drilling rates to be increased from 10-13 feet an hour to over 120 feet per hour,” he says. “Since then, we’ve been able to drill as much as 2,000 feet on a single bit run.”

The new bit designs, which are now being used widely in the geothermal industry, dramatically decrease the time it takes to drill a geothermal well by nearly 50% and reduce the cost of drilling by close to 30%.

Expensive Energy, for Now

This matters because cost is a major barrier to deployment. “It is expensive,” acknowledges Shruti Raghuram, lead U.S. geothermal analyst, new energies research at Rystad Energy. “Traditional geothermal might cost US$60-80 per MWh, but with EGS the levelized cost of electricity is about four times higher, at US$240-350 per MWh, so it couldn’t become commercial until very recently.”

The factor that has made the difference is a pivot of shale oil and gas expertise to the hot rocks of geothermal. Fervo Energy, which boasts ex-Hess, Chevron, BHP and NOV hires in its top team, has already proven EGS is commercially viable at its 500 MW Cape Station project in Utah, which will begin delivering clean energy to the grid in 2026.

It already has Power Purchase Agreements (PPAs) in place to deliver 24/7 carbon-free geothermal power to customers, including Shell Energy and Southern California Edison. It is applying its oil and gas knowhow to this new industry to improve efficiencies and drive down costs, by increasing casing diameter, optimizing well spacing using fiber optic sensing and implementing staggered bench development. For example, the company was able to expand the capacity of the project by 100 MW to 500 MW without any additional drilling.

In June, Fervo Energy completed its hottest and deepest well to date, drilling the Sugarloaf appraisal well to a true vertical depth of 15,765 feet in just 16 days (a 79% reduction in drilling time compared to the U.S. DOE baseline for ultradeep geothermal wells).

“They are bringing their expertise from the shale oil and gas industry and applying that to enhanced geothermal, managing to reduce drilling time by 70%, which significantly lowers the cost per well,” says Raghuram.

“They have seen some wells achieve productivity of 10 MW per well and they now expect that by 2030 their costs will come down to about US$60 per MWh, which is the same price as traditional geothermal.”

She points out that the DOE has set a target of US$45/MWh by 2035, which is around the same as global levelized cost of electricity as solar and wind, but with the benefit of being a baseload energy with a lower land footprint, which makes it more deployable.

“Over the last year or so, we have seen a flurry of PPAs between big tech and geothermal and nuclear providers, in order to supply power for AI data centers that’s compatible with carbon neutral or no carbon goals,” she says.

“Google, for example, wants to be entirely carbon free across its operations by 2030, but how is it going to do that in the next five years? It has to be nuclear or geothermal because even with solar and wind across their entire campus, it’s still intermittent and requires investment in battery storage solutions.”

Drilling Innovation

With next-generation geothermal offering a stable and essentially inexhaustible power source, it’s no wonder the technology is attracting the attention of big tech and clean energy investors.

MIT spinout Quaise Energy is advancing its proprietary millimeter wave technology at its field site in Central Texas. The technology harnesses a powerful gyrotron to ablate rock for the first time without any downhole hardware, allowing drilling to access to superhot rock (752°F) typically found deep within the earth’s subsurface.

The company now plans to build on this achievement with an upcoming gyrotron using ten times more power and complete a pilot power plant in the Western U.S. as early as 2028. Carlos Araque, CEO and president of Quaise, said progress in 2025 had “exceeded all expectations.”

Investment funds are taking note of the potential of these new technologies to unlock what backers call “a new energy frontier.” Underground Ventures, a Copenhagen-based investor in early-stage technology companies targeting enhanced geothermal, was among the backers of last year’s US$15 million financing by GA Drilling, the Slovakia-based company that has also secured investment from Nabors.

Igor Kocis, co-founder and CEO of GA Drilling, says the demand for its plasma drilling technology, which is the result of more than ten years of R&D and over 25 registered patents, has “picked up at an incredible rate.”

Project Cargo: On the Radar

For the project cargo sector, EGS is one to watch for the future. According to the IEA, geothermal energy could meet 15% of global electricity demand growth between now and 2050 if project costs continue to fall. This suggests the deployment of as much as 800 gigawatts of geothermal capacity worldwide, delivering annual output equivalent to the current electricity demand of the U.S. and India combined, generating investment worth US$1 trillion by 2035.

There’s a huge gap to close, however, to make this a reality. On the regulatory front, more than 100 countries have policies in place for solar PV and onshore wind, but only 30 have such policies for geothermal. Costs are still high, and while companies like Fervo Energy are showing the art of the commercially possible, this remains an industry that is very much early-stage and unlikely to generate order flows to compete with traditional oil and gas and established renewable energy projects.

However, as data centers continue to create huge demand for baseload energy, the impetus to make EGS work means this is certainly an industry to put on the radar.

Chevron, BHP, NOV, Shell Energy and Nabors are members of the Breakbulk Global Shipper Network, a worldwide network of companies involved in the engineering, manufacturing and production of project cargo.  The next in-person meet-up for BGSN members will be at Breakbulk Americas 2025.

Top photo: Utah FORGE