The global energy landscape is on the cusp of a transformative shift with the emergence of next-generation geothermal energy, poised to unlock ubiquitous clean power and heat from the Earth’s crust. Driven by drilling advancements stemming from the American fracking revolution, this technology is rapidly approaching first-of-a-kind commercial scale, promising significant cost reductions and a novel, sustainable solution for the energy sector. A recent paper by the Carnegie Endowment for International Peace, leveraging data from Project InnerSpace’s GeoMap™, highlights this potential, identifying 30 countries optimally positioned to scale these systems, including traditional geothermal leaders like Indonesia and Kenya, alongside new entrants such as Australia and Colombia.

Historically, geothermal power, primarily from hydrothermal reservoirs, has constituted a small fraction of the global electricity mix, with approximately 16 gigawatts installed by 2022. While early adoption spread across the U.S., New Zealand, and Japan, and later to countries like Mexico, the Philippines, and notably Kenya—a success story in know-how transfer from Iceland—growth has largely stagnated since the 1990s due to competition from cheaper natural gas, wind, and solar. However, the advent of next-generation technologies is changing this trajectory.

The core of this revolution lies in accessing "hot dry rock" resources, which possess heat but lack the fluid necessary for conventional geothermal. Early experiments in the 1970s at Los Alamos National Laboratory pioneered Enhanced Geothermal Systems (EGS), aiming to create artificial reservoirs through rock fracturing. While initial attempts faced technical complexities and seismic activity concerns, renewed U.S. government support and expertise from the shale revolution have helped overcome these challenges. Concurrently, Advanced Geothermal Systems (AGS), or closed-loop systems, emerged in the late 2010s, circulating heat without external water or fracturing, offering another promising pathway.

Both EGS and closed-loop systems are on track for commercial operation by 2026. While EGS currently estimates range from $100 to $240 per megawatt-hour, projections indicate a potential drop to $80/MWh by the decade's end and $50/MWh by 2035, nearing parity with thermal power. This aggressive cost reduction is supported by impressive learning rates of 35% observed in early EGS drilling, surpassing those of lithium-ion batteries and solar. Although closed-loop costs are less clear, estimates suggest a range of $105 to $321/MWh, with potential reductions to $64-$160/MWh once professionalized. Crucially, next-generation geothermal provides system-wide benefits, offering flexible, dispatchable 24/7 power, a critical advantage over intermittent renewables not captured by levelized cost metrics alone. Furthermore, closed-loop systems show particular promise for district heating applications, which can reduce project costs by 30-50% by eliminating the need for turbines.