Geothermal Energy: Another Nail In The Coffin Of Wind And Solar Power?

Bonner Russell Cohen

June 23, 2025

As if the resurgence of fossil fuels and the realistic prospect of a renaissance of nuclear energy in the U.S. were not enough, purveyors of intermittent and subsidy-dependent wind and solar power may be facing another challenge, this one emanating from heat stored deep beneath the earth’s surface. 

The global AI arms race, with its extraordinary demands for gobs of electricity to power ever-proliferating data centers, has been a black swan for green energy. Unable to deliver the continuous flow of power demanded by the 21st century’s Industrial Revolution, green energy’s best days appear to be behind it. A bit player at best in the Trump administration’s quest for American energy dominance, wind and solar power may be further marginalized by a new rival: geothermal energy. 

Cited by Energy Secretary Chris Wright as among the “affordable, reliable, and secure energy technologies,” (along with fossil fuels, advanced nuclear, and hydropower), geothermal involves drilling into the earth’s core to harness heat to generate power for on-demand cooling, heating, and electricity. (Wright’s former company, Liberty Energy, invested $10 million in Texas-based geothermal startup Fervo Energy, The Hill reported earlier this year.) 

“As of 2025,” Global Energy Monitor notes, “the United States accounts for 23% of global geothermal capacity and is the leader in global operating capacity with 3.7 GW [gigawatts].” But geothermal still accounts for only about 1% of the nation’s power, and expanding the industry has been slow going. 

The bureaucratic barriers to geothermal development are significant, especially in the West, where the geology is favorable but much of the land is managed by the federal government. 

“Complex and outdated permitting processes slow down projects and create uncertainty for developers. Even when the geology is ideal, it can take years to get a green light to drill,” saysRep. Celeste Maloy, R-Utah. “Developers are forced to navigate the maze of duplicative reviews, unclear timelines, and inconsistent agency coordination,” she added. “This bureaucratic tangle discourages investment and leaves too many high-potential projects stuck in limbo.” 

To unwind the red tape, Maloy has introduced the GEO Act, which would expedite approval procedures by requiring the Interior Department “to process applications for a geothermal drilling permit or other authorization under a valid existing geothermal lease within 60 days,” according to a press release.  

Separate bipartisan and bicameral legislation, known as the STEAM Act, would create permitting parity for geothermal projects by giving them “the same flexibility to explore and develop on previously disturbed or studied public lands that the oil and gas industry has had for nearly two decades,” a Maloy press release explained. 

Establishing permitting parity on federal lands between the oil and gas industry and geothermal energy would underscore something else the two distinct energy sources have in common. The same hydraulic fracturing (fracking) and horizontal drilling that have propelled the shale revolution that made the U.S. the world’s largest producer of oil and natural gas can be used to get at subsurface heat for geothermal energy. Confirming these synergies, some of the largest oil and gas companies, including Chevron, BP, and Devon Energy, are investing directly in geothermal projects and startups.    

These common drilling techniques should enable geothermal developers to reach “hot spots” located deeper below the surface than thought possible just a few years ago. They could also expand the map for geothermal development far beyond the Western states.   

Small wonder that investor interest in geothermal energy has surged in recent years, with more than $1 billion raised since 2022. Tech companies on the hunt for suppliers of baseload electricity to power their data centers see the potential of geothermal energy. Amazon, Google, Microsoft, and Meta – all heavyweights in the booming AI/data center sector – have all inked contracts with geothermal developers.   

While the application of fracking and other extraction technologies may bring down the still high cost of geothermal energy, up-front expenses – exploration, drilling, and plant construction – require substantial capital outlays.  And one tricky problem remains: getting the power to the electric grid.  Electricity generated from geothermal plants must be transmitted to the grid via high-voltage power lines.  Getting permits for long-distance power lines comes with substantial delays, adding to a project’s cost.     

“Overall,” the Department of Energy points out, “the costs of building a geothermal power plant are heavily weighted toward early expenses rather than fuel to keep them running. However, geothermal’s high-capacity factor – its ability to produce electricity 90% of the time or more – means that costs can be recouped more quickly because there is very little downtime once a plant is operational.” 

Geothermal’s potential to join fossil fuels and nuclear energy in powering America’s economy in the years to come far exceeds anything weather-dependent wind and solar could ever match.  With the House version of the budget reconciliation bill accelerating the phase-out of the subsidies that prop them up, these once-coddled industries are scrambling to stay relevant. 

Bonner Russell Cohen, Ph. D., is a senior policy analyst with the Committee for a Constructive Tomorrow (CFACT). 

Source: Issues and Insights Website