What’s Driving the US Electricity Price Hike and What Can We Do About It?

Electricity prices can’t keep going up and up something’s got to give: A hybrid supply-demand response would minimize the economic pain of high electricity prices while putting the country on a more sustainable path.

An aerial view of a 33 megawatt data center with closed-loop cooling system is seen on October 20, 2025 in Vernon, California.
(Photo by Mario Tama/Getty Images)

Richard Heinberg
Nov 29, 2025

Common Dreams


Using current economic trends to predict the future can be misleading, since all trends are subject to limits and countertrends. In this article, I’ll apply that truism to a trend that a lot of people are talking about—soaring electricity prices in the United States.

Across the US, electricity prices are rising more than twice as fast as the overall cost of living. The main driver of costs is the enormous electricity demand of over 1,000 new data centers, built mostly for artificial intelligence (AI) applications. Each data center, depending on its size, requires anywhere from a few kilowatts up to 100 megawatts of power (enough to power a medium-sized city). Installations of new data centers are growing at more than 10% annually; at that rate, the total number of data centers will double in less than seven years. Indeed, the International Energy Agency expects global electricity demand from data centers to double by the end of this decade, when it will total more than the entire electricity demand of Japan. Goldman Sachs Research predicts that 60% of this increased demand will be met by fossil fuel sources.
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Understanding why rising electricity demand from data centers is a serious problem requires more than a glance at your latest utility bill. Energy isn’t just one of many inputs into the economy; in effect, it is the economy, since doing anything requires it. Of all the energy used in the US and globally, only a little over 20% is in the form of electricity; the rest entails the direct burning of fossil fuels (most electricity is generated also by burning fossil fuels; in the US, 60% of electricity comes from fossil fuel sources—mostly natural gas). Electricity is not a direct source of energy; it’s an energy carrier. But, for households and industries alike, it is an extremely useful way of conveying energy to end users. Just flip a switch or push a button, and electricity makes something happen. It does many things for us, but its role in enabling communications and data processing gives electricity a pivotal importance in the overall energy mix of modern society.

Energy usage for data processing and communications doesn’t tend to rise and fall in response to short-term changes in power prices; economists call it “inelastic.” So, when electricity prices soar, households and businesses must adjust. For households, that typically means buying fewer discretionary consumer products; for businesses, it means raising prices for services or goods. The whole economy grinds slower. We have a storied history of recessions in 1973, 1979, and 2008 that were related to rising fossil fuel prices impacting the entire economy (see photos of gasoline lines and shortages from 1973). What happened with fossil fuels could happen with electricity: As electricity assumes a central role in our energy system, future price spikes could conceivably be as crippling as the OPEC oil embargoes of the 1970s.

A bursting AI bubble could at least temporarily halt electricity price increases tied to new data centers. But it might be a dreadful “solution,” especially for people who are neither wealthy nor politically connected.

Growing electricity demand for data centers is also a problem because of climate change. Almost all of society’s “progress” in reducing emissions has been in the electricity generation sector (e.g., using solar panels instead of coal to generate electricity). But if electricity demand grows fast, that makes it harder to continue increasing renewables’ share of electricity generation: Demand spikes put utility companies in panic mode, so they deploy any new generating capacity they can quickly obtain—and, so far, they’re resorting to new natural gas turbines more often than new wind projects or solar arrays.

Data centers may be a largely unforeseen disruption to an enormous project that energy planners call the energy transition. As society moves away from fossil fuels, more of its energy usage will occur via electricity—which is the energy output of solar panels, wind turbines, and hydroelectric dams. The transition depends on an ongoing electrification of the economy, starting with electric vehicles. With data centers sucking up so much electricity, it becomes all the harder to deploy electricity to other uses and sectors, which is what planners had been counting on.

Electricity prices can’t keep going up and up. Something’s got to give. Let’s first explore the more obvious solutions to the electricity price dilemma, and then the systemic limits and countervailing trends that will determine which of those solutions is more feasible and likely. I’ll finish by proposing a hybrid supply-demand response that would minimize the economic pain of high electricity prices while putting the country on a more sustainable path.

More Electricity Demand? Just Increase Supply!

The obvious solution to rising electricity prices is to meet new demand with new supply. Just generate more power. What energy sources are available for that purpose?


(US electricity generation by energy source, US Department of Energy. The Trump DoE may have stopped updating its data, as its website features no graph carrying these trendlines forward to 2024.)

Natural gas is currently the main energy source for electricity generation in the US, and its share of total generation has grown sharply in recent years. Also, the US is the world’s biggest gas producer. Further, natural gas is the cleanest-burning fossil fuel, though it still produces carbon emissions. These factors together make natural gas the obvious solution for most utility companies. But there are some caveats regarding the future of natural gas, which we’ll unpack in the next section when we explore limits and countertrends.Nuclear power has been stagnant in the US for the past three decades: 12 commercial reactors were retired between 2013 and 2021, and two new ones (in Georgia) were recently put into service. The average age of US nuclear plants is 42 years. The nuclear industry, eager for a comeback, has proposed construction of small modular reactors (SMRs) that would allegedly be cheaper and safer than existing nuclear plants, which typically have been slow and costly to build and have been targeted by citizen opposition due to safety concerns. However, the industry’s rosy claims for SMRs are disputed. In the meantime, Microsoft has partnered with the owners of the Three Mile Island nuclear facility, site of the worst nuclear disaster in US history.Renewables consist mostly of solar, wind, hydro, and geothermal. Power generation in this sector is expanding quickly, but likely not enough to avert supply shortages or price spikes if AI keeps growing at its current pace. The Trump administration is doing all it can to stall the further expansion of renewables, which continues despite these headwinds. President Donald Trump’s opposition to renewables appears to be political rather than economic, perhaps aimed to repay campaign donations from fossil fuel companies. The oil industry’s drilling technology could be used for deep geothermal electricity generation, the potential scale of which is enormous. The first commercial plants are now under construction; upfront costs are projected to be high, with low and stable operational costs. However, scaling up deep geothermal production to a significant fraction of the nation’s electricity supply might take decades.Coal has seen a dramatic and relentless fall in its share of overall power generation in the US (though not in China or India). This is due not just to the pollution and climate policies of previous federal administrations. Fuel supply issues (most of America’s higher-quality coal is already largely depleted), together with cheaper natural gas, have persuaded most electric utility companies that coal is a fuel of the past. The Trump administration is calling for a return to coal, but few utility companies appear to be listening. That’s likely because the federal push for new coal power plants seems driven more by an appeal to voters in mining states like West Virginia, Kentucky, Ohio, and Wyoming than by economics.

None of those supply solutions seems ideal. Moreover, before we try to choose a candidate and say, “Problem solved,” it’s essential that we examine limits and countertrends that could cause the current electricity price trajectory to shift.
Why the Electricity Price Trend Could Change

US electricity prices could rise even faster, or the current trend could go into reverse and electricity could get cheaper. What are the foreseeable limits or countertrends that could lead to either of those outcomes?

One factor is natural gas prices, which have been relatively low and stable for the past couple of decades; indeed, adjusted for inflation, they have declined significantly. This has been due to rising North American shale gas supplies released by fracking. Cheap natural gas, in turn, has kept US electricity prices relatively stable until recently. Now, however, two factors are contributing to a likely increase in natural gas prices.

The first is the growth of the US liquefied natural gas (LNG) industry. Currently Europe is, for political and security reasons, phasing out Russian natural gas delivered by pipeline. Instead, Europeans are buying more LNG imported by tanker, a costly substitute. Gas producers in the US, flush with shale gas, are eager to serve these new customers, who are willing to pay much more for natural gas than Americans do currently. So, new LNG export terminals are springing up on the US Gulf Coast, with some already shipping their first cargoes. With a growing share of US natural gas being exported (projected to be over 10% of total production by 2030), domestic prices for the fuel will likely rise, forcing gas-burning utility companies to hike up electricity prices further and faster.

When the people own the means of generation, they can collectively decide to promote renewables over fossil fuels as a source of power.

Meanwhile, America’s shale gas miracle may soon start to peter out. As I noted in a recent article, shale gas fields suffer from rapid depletion of individual wells and thus require high rates of drilling. Most US shale gas regions have already passed their peak of production and are in their plateau or decline phase of extraction. One prominent resource analytics firm forecasts that total US shale gas production will peak between 2027 and 2030. If natural gas production falls, it may be difficult for other electricity sources to grow fast enough to avert power supply problems or rate hikes.

A factor that could conceivably slow electricity price increases, or perhaps even cause prices to fall, is investors’ potential unwillingness to further finance the build-out of AI. In recent months, many Wall Street analysts have expressed dismay at the expanding gap between AI spending—projected to hit $1.5 trillion this year—and actual revenues for companies developing and using AI. Many investors now believe AI stocks are a financial bubble whose bursting could cause a recession or depression for the entire US economy, even the global economy.

A bursting AI bubble could at least temporarily halt electricity price increases tied to new data centers. But it might be a dreadful “solution,” especially for people who are neither wealthy nor politically connected. Past financial crises have been stanched with bailouts for banks and investors, thereby transferring wealth from the public to risk-taking entrepreneurs, while ordinary folks deal with job losses and vanishing retirement nest eggs.
A Better Solution to Unaffordable Electricity

Any realistic solution to soaring electricity prices must address both supply and demand.

Supply: Of the sources of energy for electricity generation, renewables make the most sense, even though they are subject to their own limits and drawbacks, including unsustainable requirements for scarce raw materials and major concerns about environmental, social, health, and security impacts.

Demand: Since materials limits mean that electricity generation from renewables cannot be scaled up indefinitely, it is essential that planners identify ways to reduce electricity demand over the long-term.

Investor-owned utilities have an incentive to sell more product so as to generate more profits and returns for investors. Investor ownership is therefore an impediment to stabilizing electricity supply at a sustainable scale over the long run. Fortunately, there are two other ownership models: electric cooperatives and publicly owned utilities. These kinds of power producers currently supply almost 30% of all US electricity, and typically charge their customers less for power.

When the people own the means of generation, they can collectively decide to promote renewables over fossil fuels as a source of power, as my own local provider, Sonoma Clean Power (SCP), already does.

Community-owned power companies can also promote the reduction of electricity demand. For example, SCP incentivizes the purchase of energy-efficient electric appliances, rooftop solar, and EVs. States can also help with demand reduction; for example, the State of California provides rebates for home efficiency measures.

Here’s another demand reduction strategy, one that’s tailored to the specifics of our current dilemma: States and counties could refuse to grant building permits for new data centers. Failing that, they could wall off AI’s rising electricity demand from electricity markets by requiring data center builders to provide dedicated power plants not connected to the grid. Some data center operators are already doing this, though only a tiny minority so far; most of the off-grid generators rely on natural gas.

This strategy will likely face pushback. The Trump administration is working on ways to keep individual states from regulating AI. Further, even if these efforts fail, AI companies can be expected to hire expensive lawyers and lobbying firms to oppose regulations such as a requirement for off-grid power.

But suppose all new data centers do supply their own off-grid generators. If those generators use natural gas, then competition for fuel with grid-tied power plants could raise natural gas prices, again likely causing electricity prices to soar. The best work-around would be to require data centers to build only renewable-energy generators (including deep geothermal). Again, expect pushback.

Altogether, it’s hard to see any of this happening without a broad base of public support, which would in turn require the public to be better informed on energy issues. It would also require leadership from grassroots activists and politicians. It’s a big ask, when there are already plenty of other priorities for problem solvers. However, unless more electric utilities come to be publicly owned, and a large majority of data centers start generating their own off-grid power from renewable sources, electricity price hikes for households and businesses are likely to continue until the AI financial bubble bursts or electricity prices rise enough to cripple the economy.

Electricity is our energy future, but the details of that future are still sketchy. Right now, the picture is being drawn by billionaire investors, but it looks dark and dystopian. Surely more imaginative artists could do better.


Our work is licensed under Creative Commons (CC BY-NC-ND 3.0). Feel free to republish and share widely.


Richard Heinberg
Richard Heinberg is a senior fellow at the Post Carbon Institute and the author of fourteen books, including his most recent: "Power: Limits and Prospects for Human Survival" (2021). Previous books include: "Our Renewable Future: Laying the Path for One Hundred Percent Clean Energy" (2016), "Afterburn: Society Beyond Fossil Fuels" (2015), and "Peak Everything: Waking Up to the Century of Declines" (2010).
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Global Geothermal Investment Enters New High-Growth Era

By Rystad Energy - Nov 28, 2025

• Global geothermal spending is rising sharply, with capex expected to grow 20% annually through 2030 and consistent cost structures across regions.
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• Different markets emphasize different uses: Europe focuses on district heating, while Asia and North America prioritize power generation and emerging enhanced geothermal systems.
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• Costs for heating projects are roughly half those of geothermal power due to simpler surface infrastructure, guiding investment and policy decisions.

Global geothermal investment is entering a period of accelerated growth, with capital expenditure (capex) expected to climb about 20% annually through 2030, according to Rystad Energy’s latest geothermal economics model. This momentum comes as geothermal energy, produced by tapping heat from deep within the earth, is no longer defined only by mature hubs in Southeast Asia and the US. Interest in regions such as Africa and Europe has been building at a measured pace, contributing to a steady broadening of activity worldwide. Meanwhile, the distribution of spending remains relatively stable across development categories due to consistent cost structures in drilling, surface facilities and steamfield infrastructure.

Currently, just over half of total spending goes toward surface facilities, while an estimated 47% is directed to subsurface work and about 2% is allocated to pre-final investment decision (FID) activities. This distribution is broadly consistent across most markets, making this cost structure a defining aspect of geothermal development. Even the relatively small share devoted to pre-FID work can represent a significant risk, as early exploration determines whether a project advances or is halted altogether. The distribution of costs helps explain why project timelines and financing needs remain relatively uniform  across regions, even as overall activity grows.

Global investment in geothermal energy is gaining momentum as more projects move toward FID. Our research shows that geothermal energy is increasingly being tailored to regional needs, reflecting its dual role as a source of clean, reliable power and a provider of heat. In the US, growth is being driven by the expansion of enhanced geothermal systems (EGS) and rising demand for baseload power from data centers. Europe, on the other hand, is focusing on decarbonizing heat, while Southeast Asia is turning to geothermal to meet growing electricity demand. The sector’s longer-term potential in cooling applications is growing as well, a market set to expand alongside global data center activity that’s less considered, 

Alexandra Gerken, Vice President, New Energies Analysis, Rystad Energy

Learn more with Rystad Energy’s Geothermal Solution.

When comparing geothermal deployment across continents, Europe stands out as a market dominated by district heating, driven by ambitious decarbonization targets and extensive municipal heating networks. In contrast, Asia, particularly Indonesia, and North America focus primarily on electricity-generating geothermal projects, reflecting strong baseload power needs and abundant geological resources. This divergence shapes both installed capacity and investment patterns. Europe relies more on subsurface development for heating despite lower surface infrastructure costs, while Asia and North America exhibit a more balanced demand between drilling and surface power facilities.

Beyond regional deployment differences, geothermal energy’s role as a clean, reliable source of baseload power is gaining importance. EGS reduces site dependence by requiring only hot rock rather than aquifers, unlocking additional clean power potential and providing stable baseload heat. The technology also shows long-term promise in cooling applications. Pilot projects in the Middle East are exploring its use for data centers, including the UAE’s first geothermal cooling plant, the G2COOL project.

Further research from Rystad Energy, using a bottom-up approach, examines each geothermal asset and its individual cost components, including drilling operations, equipment, and surface infrastructure, rather than focusing solely on total project costs or subsurface development. Geothermal projects are primarily used for district heating systems or power generation, and the resource stands out as one of the few energy sources capable of providing clean baseload power, meaning it can deliver a steady and reliable energy supply.

Costs are often expressed in “dollars per watt,” which indicates the investment required to produce one watt of energy. On this basis, district heating projects generally require about half the investment of geothermal power plants. This difference arises because heating systems do not require expensive turbine sets or complex surface infrastructure, which are essential for electricity generation. In contrast, geothermal power projects involve more extensive facilities and intricate designs, resulting in roughly $6 per watt for power versus around $3 per watt for district heating.

These cost differences are important for policymakers, investors, and developers when assessing project feasibility, choosing technologies, and planning long-term geothermal development. Understanding these relative costs helps guide decisions on which projects to prioritize and how to maximize the value of geothermal resources.

By Rystad Energy

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The AI Boom Is Driving a Massive Geothermal Energy Revival

By Haley Zaremba - Nov 15, 2025

• Enhanced geothermal energy, a reliable, zero-carbon source, is attracting significant investment from Big Tech and high-powered investors to meet the massive energy demand spurred by the AI boom.
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• By borrowing advanced drilling technologies from the oil and gas industry, enhanced geothermal aims to make the energy source abundant and financially feasible in virtually any location on Earth, not just geologically active areas.
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• Both US public and international energy forecasts predict a dramatic increase in geothermal's share of the global energy mix, with potential growth of up to 300 gigawatts in the US by 2050 and over 800 gigawatts globally.
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Geothermal energy is becoming Big Tech’s newest darling. Silicon Valley is upending its deep pockets into enhanced geothermal startups in a bid to stay one step ahead of the massive energy demand growth trend being spurred by the AI boom. Geothermal boasts key advantages over leading clean energy technologies, most notably the fact that it’s a constant, baseload clean energy source and that it’s one of vanishingly few zero-carbon alternatives with broad bipartisan support in the United States. As a result, this relatively niche and nascent technology may finally be ready for its close-up.

Until very recently, geothermal energy was only viable in geologically anomalous places where heat from the Earth’s core naturally made its way up to the Earth’s crust – such as through hot springs and geysers. As such, thermally active countries like Iceland were able to meaningfully integrate geothermal energy into their national energy mixes, but very few other countries and regions could. As such, geothermal accounts for less than 1% of the world’s energy mix today, and just 0.4% of the United States’ utility-scale energy generation. 

But all of that is changing as ‘enhanced geothermal’ exits theoretical modelling and enters the real world. Enhanced geothermal borrows drilling technologies from the oil and gas industry’s hydraulic fracturing sector, and is even exploring borrowing tech from nuclear fusion to essentially melt away layers of rock to reach greater and greater depths. The idea is that if we can dig deeply and cost-effectively enough, geothermal energy could be available, abundant, and financially feasible practically anywhere on Earth. 

As a result, enhanced geothermal energy startups are currently generating a lot of buzz. One such venture, Houston-based Fervo Energy, is backed by Bill Gates and Google, among other high-powered investors. Fervo has already secured the largest-ever commercial contract for geothermal power, having inked an agreement to provide 320 megawatts of power to Southern California Edison utility.

The firm has proven the efficacy of its enhanced approach at a pilot plant in Nevada, and is now “dramatically” scaling up its operations at a Utah plant and readying itself for commercial operations in 2026, all while showing a “70% reduction in drilling time year on year (see chart) while achieving high temperatures and flow rates” according to a recent report from The Economist, which proclaims that “geothermal energy looks set to go from niche to necessary.”

The United States’ public sector seems to be just as bullish as the private sector. The Trump administration has backed the sector’s development and refrained from slashing funding for geothermal in the same ways it has for other clean energy technologies. “His administration is embracing geothermal energy, which is primed for a very American boom,” the Atlantic reported earlier this year.

The Department of Energy recently revised its outlook to increase geothermal’s projected share of the national energy mix, predicting that by 2050, geothermal technologies could provide up to 300 gigawatts of energy. That’s a huge figure, clocking in at more than three times the current output of the nation’s nuclear power sector – the most productive nuclear power sector in the world. The scale of that projected growth is hard to overstate – today, geothermal produces less than four gigawatts in the United States. 

Global geothermal numbers are also set to rise in a dramatic fashion. The International Energy Agency, too, has revised its long-term forecast to give geothermal a larger slice of the pie, reporting that the technology’s global potential is over 800 gigawatts by 2050, up from 15 gigawatts today. This kind of growth would make a genuine impact in global energy and emissions trends, and could be pivotal to avoiding an AI-driven global energy crunch. A report released earlier this year by New York-based research firm the Rhodium Group estimates that “geothermal could economically meet up to 64% of expected demand growth by the early 2030s.”

By Michael Kern for Oilprice.com 

 

The UK Is Transforming Coal Mines Into Geothermal Hubs

By Felicity Bradstock - Nov 15, 2025

• Flooded coal mines across the U.K. are being converted into geothermal heat sources capable of supplying clean district heating.
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• Early projects in Wales and County Durham show promise but require regulatory reform and government incentives to scale.
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• Supporters say mine-water geothermal could cut emissions, lower heating costs, and revive former mining communities with new energy jobs.
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Coal mines are finding a second life as companies invest in repurposing huge, disused coal sites into geothermal power projects. In the U.K., the government and energy companies have been discussing the idea for several years, and it seems to be gaining momentum with the launch of the first geothermal mine projects this year. 

Energy companies have realised the potential of flooding abandoned coal mines to provide vast quantities of geothermal power, as water in coal mines can reach a temperature of up to 20 degrees Celsius. Mine water geothermal heat (MWGH) systems use the water from flooded coal mines, which is heated through a natural process, to supply clean heat to houses and businesses in the surrounding area. This works by using heat exchangers and pumps to recover the heat and distribute it to buildings via district heating networks.

Heating currently contributes around 40 percent of energy use in the U.K. The country’s building heating is a major contributor to emissions, accounting for between 17 and 18 percent of total greenhouse gases, primarily from burning natural gas. Therefore, developing cleaner heat production methods is key to decarbonising the U.K. in line with government climate targets.

A recent report suggests that around a quarter of U.K. homes sit on top of sites where MWGH could be used to provide low-cost, low-carbon heat. “With the right support in place, MWGH could be built out at scale within five years. It’s not technologically complex, relatively speaking, but it takes some governance and social organisation,” Simone Abram, the co-author of the report, explained. Abram used Denmark as an example of where the technology has already been successfully rolled out.

In addition to providing clean energy, the redevelopment of coal mines could bring energy jobs back to former mining areas, with the need for specialists in drilling, engineering, and operations. This could help reinvigorate struggling economies across the country. The authors of the report also highlight the importance of community consultation to gain support for development. Community engagement will help demonstrate how MWGH projects can bring economic growth back to disadvantaged towns and cities, as well as provide clean heating and new job opportunities.

Despite the ongoing discussion between energy companies and the U.K. government about the potential for MWGH, the U.K. has been slow to develop its first geothermal projects of this type. This is largely due to the high set-up cost and the complex regulatory environment. To support development, the U.K. government must update its energy regulations to allow companies to develop this type of geothermal project. The provision of grants and low-interest loans by the state could also help to encourage higher levels of private investment in the sector.

Earlier in the year, the Mining Remediation Authority (MRA), formerly known as the Coal Authority, launched the U.K.’s first MWGH project near Ammanford in Wales. The project uses floodwater from an abandoned mine as a renewable source of heating for a warehouse. Roughly 25 litres of water per second is pumped from the Lindsay pit each day, before being treated and filtered through natural waterways.

The MRA hopes to develop several other MWGH projects in south and north-east Wales to develop it into a geothermal energy hub. However, some projects have been hard to get off the ground due to the lack of familiarity with the energy source. For example, a similar heat scheme was halted by Bridgend council in 2021 over concerns of rising costs. However, the Welsh government has acknowledged the “significant role mine water heat can play in our journey to net zero.”

The MRA also commenced construction works in March on the Dawdon mine in County Durham, in the north of England. The MWGH project is expected to provide heating for a new housing development, a new primary school, a village centre, and innovation hubs once complete. Vital Energi has been appointed to design, build, and operate the system, which is expected to provide clean heat for the next 40 years.

The authority also launched the Gateshead Mine Water Heat Living Laboratory this year to study thermal and hydrogeological behaviour across operational MWGH projects. It is thought to be the first project of its kind globally. 

Fiona Todd from the MRA explained, “Our Living Laboratory will provide invaluable insights into the behaviour of mine water heat systems and help us understand how multiple schemes co-exist within the same region… This research is crucial for maximising the opportunity presented by mine water heat and supporting its development as a reliable, low-carbon heat source across the U.K.”

The U.K. sees significant potential in the repurposing of coal mines to develop geothermal energy projects, to provide clean heating for up to 25 percent of the country’s population. However, to accelerate the growth of the sector, the government must revise its energy regulations to simplify the framework for developing such projects. The introduction of financial incentives from the state could also help to attract more private investment to the sector. 

By Felicity Bradstock for Oilprice.com

Geothermal Power Emerges as Trump’s Favorite Clean Energy

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By Felicity Bradstock - Oct 12, 2025

• Geothermal energy remains one of the few renewable sources still supported by the Trump administration, benefiting from Biden-era incentives and bipartisan backing.
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• Innovative firms like Fervo Energy and Sage Geothermal are pioneering advanced extraction methods that boost efficiency and expand geothermal access beyond traditional hotspots.
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• Major collaborations and endorsements - from Ormat and Baker Hughes to Bill Gates - are propelling geothermal toward large-scale commercialization across the U.S.
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One of the few renewable energy sources that the Trump administration has not yet criticised is geothermal power, as companies across the United States continue to develop innovative geothermal projects with financial support from Biden-era policies. The sweeping budget legislation that President Trump signed in July preserved most key tax credits for geothermal power. Bipartisan support has encouraged several energy companies and startups to invest heavily in research and development into advanced geothermal operations in recent years, with promising results, giving hope for future clean energy production.

People have been tapping into geothermal energy from natural heat sources worldwide for centuries. Over the last fifty years, energy companies have tapped into geothermal sources using machinery to access harder-to-reach reserves. To achieve this, companies drill a borehole up to several kilometres deep, where the rocks are around 200°C, and inject water and sand at high pressure. This creates fractures in the rocks, which increases their permeability and produces a reservoir of hot water that can be extracted via a second borehole for the water to be used to generate electricity.

Geothermal energy contributes just 0.4 percent of the U.S. energy mix, largely due to technological and geographical constraints to accessing geothermal reservoirs. Existing plants depend on naturally occurring reservoirs of hot water and steam, in regions such as Northern California and Nevada, to power turbines and generate power. However, companies are now exploring new ways to access geothermal resources using techniques developed for oil fracking and innovative new methods to reach harder-to-access reservoirs in unconventional regions.

Sage Geothermal is now using heat and pressure to generate more power than conventional extraction methods through its cycle-based heat recovery approach. The company’s CEO, Cindy Taff, told Forbes, “By using the natural elasticity of the rock, we can bring hot water to the surface without pumps. Unlike traditional approaches, we maintain pressure in the system rather than venting it at the surface, and we hold open fractures with pressure instead of adding bridging materials like sand or proppant. These innovations reduce friction and energy losses, boosting net power output by 25 to 50 percent compared to other next-generation geothermal technologies.”

In August, Sage announced it was partnering with the international geothermal energy developer Ormat Technologies to roll out its next-generation technology at an Ormat facility in either Nevada or Utah. This is expected to help Sage speed up the development of its first commercial power-generation facility by around two years. Taff said, “For us, the ability to scale faster with Ormat is huge… But it’s also a great opportunity for Ormat to reach a deeper [geothermal] resource than what they’re targeting now.”

Related: Don’t Mess with Texas: Organized Oilfield Theft Triggers Statewide Response

In September, Sage signed an agreement with the geothermal startup Fervo Energy to advance their geothermal activities. The two companies have both invested heavily in research and development into alternative geothermal extraction methods and could work together to advance this work. Fervo recently signed a deal with tech giant Google to provide it with clean power, while Sage has completed an agreement with Meta.

Houston-headquartered Fervo Energy was approved to deploy 2 GW of geothermal power in Beaver County, Utah, by the Department of the Interior last year, with its facility set to begin generating power in 2026. The company uses an Enhanced Geothermal Systems (ESG) proprietary technology to drill horizontally into geothermal reservoirs, allowing it to access multiple wells from a single location and showing promise for greater unconventional geothermal energy generation.

In September, the energy technology company Baker Hughes was contracted by Fervo Energy to supply equipment for five of its power plants in the Cape Station project in Utah. The plants are expected to produce 300 MW of electricity once fully operational, enough to power about 180,000 homes. Baker Hughes will supply engineering and manufacturing equipment as well as turboexpanders and the BRUSH Power Generation generator.

The firm’s CEO, Lorenzo Simonelli, said, “Geothermal power is one of several renewable energy sources expanding globally and proving to be a vital contributor to advancing sustainable energy development. “By working with a leader like Fervo Energy and leveraging our comprehensive portfolio of technology solutions, we are supporting the scaling of lower-carbon power solutions that are integral to meet growing global energy demand.”

In September, Bill Gates visited Fervo Energy’s Cape Station project alongside Senator John Curtis. He described the company’s horizontal drilling method as a “truly innovative approach” and discussed the role companies like Fervo will play in maintaining America’s energy independence. The founder of tech giant Microsoft said, “Geothermal is one of the most promising ways to deliver clean energy that’s reliable and affordable.”

As the outlook for renewable energy in the United States becomes more uncertain, following the Trump administration's attacks on solar and wind power, the geothermal energy sector appears to have maintained the backing of the government as several companies continue to expand operations. Investments in innovative geothermal extraction technologies show great promise for the commercial rollout of new operations across the country. 

By Felicity Bradstock for Oilprice.com

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The Great Geothermal Talent Shortage

By Haley Zaremba - Jul 31, 2025

• Geothermal energy is emerging as a scalable, carbon-free solution thanks to new drilling technologies adapted from oil and gas.

• The sector faces a major workforce challenge, as it lacks enough geologists, engineers, and specialists to meet projected growth.

• With AI and data centers driving new energy demand, geothermal could meet up to 64% of that growth by the early 2030s if workforce and technology barriers are overcome.

Geothermal energy is poised for a breakthrough in the United States. One of the vanishingly few clean energy forms that made it through the Trump administration’s One Big Beautiful Bill unscathed, the time is right for the carbon-free energy source to take center stage. With a positive policy environment and rapid advancements in technology, there’s only one critical hurdle in geothermal energy’s way – an exceedingly shallow talent pool.

The geothermal revolution will need a whole lot of geologists – but a huge number of those qualified are already (quite gainfully) employed in the oil and gas sector or the mining industry. It will also need drilling engineers, pressure control specialists, and data scientists, among other specialized roles. “Geothermal needs more than geologists—this is an all-hands-on-deck moment,” Marcus Oesterberg, chief operating officer of geothermal company Ignis H2 Energy, recently told the Wall Street Journal.

“This is no longer a niche, backroom segment of energy,” Oesterberg continued. “It’s stepping into the spotlight as a viable, front-line solution in the global energy transition. And to meet that moment, we need to expand our thinking around talent.”

As geothermal energy gains traction, it will likely need to borrow or poach talent from the oil and gas industry, since the knowledge and experience those workers have is extremely applicable in this new context. But experts say that geologists and other would-be geothermal employees simply aren’t aware of the opportunities. Class sizes for geothermal-specific college courses remain small compared to classes oriented toward oil and gas – but there is hope that this can change with some awareness-raising. 

“If we can figure out a way to educate the younger generation that you can actually have a career that you can be proud of and help solve a problem the world is facing, but also work in the extractive industry, I think that could go a long way,” says Jeanine Vany, executive vice president of corporate affairs for Canadian geothermal firm Eavor.

Today, geothermal energy is still a small and nascent sector, providing just 0.4 percent of U.S. utility-scale electricity generation as of 2023. But recent breakthroughs in advanced geothermal indicate that it could soon take up a significantly larger share of the U.S. energy mix. Until now, geothermal energy has only been feasible in places where the heat from the Earth’s core naturally reaches the Earth’s surface, like in geysers and hot springs. 

But scientists have been making major headway on drilling ever deeper into the ground to access geothermal heat from virtually anywhere on Earth. Borrowing hydraulic fracturing technology from the oil and gas sector, companies have been making major headway digging to new depths. Some researchers are even playing around with technology from nuclear fusion to essentially melt through rock to dig deeper and faster. 

“The most audacious vision for geothermal is to drill six miles or more underground where temperatures exceed 750 degrees Fahrenheit,” the New York Times reported in 2023. “At that point, water goes supercritical and can hold five to 10 times as much energy as normal steam.” This ‘superhot’ form of geothermal “could provide cheap, abundant clean energy anywhere.” 

While we’re not quite there yet, we’re getting closer at a rapid clip – and advanced geothermal could not come at a more opportune time. Energy demand in the United States is growing for the first time in a decade, driven by power-hungry artificial intelligence and the rapid spread of data centers. Meeting this growing need is critical to national energy security, and geothermal could go a long way to satisfying it without compromising climate goals. A recent report from the Rhodium Group found that “geothermal could economically meet up to 64% of expected demand growth by the early 2030s” as long as their baseline assumptions prove accurate.

By Haley Zaremba for Oilprice.com