Geothermal Energy Continues to Make Strides

A new report from the National Laboratory of the Rockies outlines the progress being made in deploying geothermal energy in the U.S.

Installed geothermal capacity increased by 8% between 2020 and 2024, reaching 3,969 megawatts (MW) of power. The 2025 U.S. Geothermal Market Report, which updates a previous 2021 version, also shows that that developers are showing interest in the emerging renewable technology, as more than $1.5 billion in private capital has been invested in next-generation geothermal companies since 2021.

Geothermal energy taps the heat from deep within the earth by drilling deep wells in areas with hot subsurface temperatures and using steam to spin turbines that produce electricity. Geothermal has the advantage of being a continuous clean energy source. Technology has been rapidly advancing in recent years, with the development of enhanced, closed-loop systems that circulate fluid through these deep wells and back to the surface to produce power, which could allow for more widespread adoption.

Since 2021, 26 new geothermal power-purchase agreements have been signed for more than 1,000 MW of capacity that is under development, almost tripling the nine signed between 2015 and 2019. Several of those PPAs are to power AI data centers. At the same time, a Department of Energy demonstration project in Utah has made great strides in reducing drilling time and improving efficiency. This has resulted in reductions in cost for enhanced geothermal system energy.

To date, geothermal power plants are almost exclusively located in western U.S. states because of their hot subsurface temperatures. California has the 53 of the 99 operating geothermal plants, followed by Nevada, Oregon, and Utah.

However, that may be changing as improved technologies show the potential to unlock geothermal energy in states with lower-temperature geography, including Pennsylvania. A recent Project Innerspace report, to which the W&J Center for Energy Policy and Management contributed, outlines the state’s potential.  The report found that if Pennsylvania takes steps now to fully access the geothermal heat that exists underground, the Commonwealth could generate enough energy to meet 100% of its electricity, heating and low- and medium-temperature industrial process needs in as few as 10 years.

In addition, Pennsylvania’s history of coal mining and oil and gas development provide it with advantages in developing geothermal systems. Drilling technology used in unconventional gas well development can also be used for geothermal wells, and the wells themselves could be repurposed for geothermal use after they are no longer producing gas. In addition, the state has workers familiar with this technology.

Bipartisan bills were recently introduced in the state House and Senate to establish a regulatory network for geothermal development, similar to legislation that has been approved in other states, including West Virginia and Texas.

The bills, S.B. 1311 and H.B. 2076, would give the state Department of Environmental Protection the authority to permit and regulate geothermal injection wells, establish subsurface rights for geothermal resources, and allow abandoned oil and gas wells to be repurposed as geothermal wells.

“A thriving, growing, job-creating economy is not built on yesterday's technologies. It's built on innovation and bold investments,” said state Sen. Nick Pisciottano, who is sponsoring the bill.  “Geothermal energy is a potentially limitless, always-on power source that could provide clean, locally sourced heat and electricity to millions of Pennsylvania residents and businesses.”