According to new research by Wood Mackenzie, next-gen geothermal tech has the potential to transform the energy sector with its abundant power.
According to the energy analytics company’s technology leaderboard in 2023, next-gen geothermal rose five places, driven by growth in the project coming online and advancements in funding and regulation.
Enhanced Geothermal Systems (EGS) and Advanced Geothermal Systems (AGS) are the most advanced next-gen technologies within the industry. ESG increases permeability in hot, dry rocks, while AGS uses closed-loop systems to repurpose end-of-life wells. Studies have found that both technologies could double the output per well compared to conventional geothermal.
Wood Mackenzie also highlights how the promise of clean baseload power is attracting Big Tech companies to geothermal processes. Meta, Microsoft and Google are already making headway within the geothermal market, having signed significant geothermal power agreements.
Financial barriers are also starting to wane in the eyes of the energy industry as governments across the world are beginning to recognize the potential of geothermal and are increasing financial support. Wood Mackenzie states that more than US$2bn has been allocated to geothermal energy initiatives in 2024.
Gavin Thompson, Vice Chairman or Energy at Wood Mackenzie, stated, “Geothermal is emerging as a promising contender in the energy transition landscape, driven by the data centre sector’s growing demand for clean power. While cost reduction remains a critical hurdle, technological advancements could make geothermal energy production viable almost anywhere.
“As the industry evolves, we expect geothermal to play and increasingly significant role in the global energy mix, offering a reliable, clean alternative to traditional power sources.”
Wood Mackenzie notes that while oil and gas majors are showing an interest in geothermal (with strategic partnerships signed by bp, Equinor and Chevron with project developers), progress may slow due to the demotion of low carbon in capital allocation.