You’re out of free articles.
Log in
To continue reading, log in to your account.
Create a Free Account
To unlock more free articles, please create a free account.
Sign In or Create an Account.
By continuing, you agree to the Terms of Service and acknowledge our Privacy Policy
Welcome to Heatmap
Thank you for registering with Heatmap. Climate change is one of the greatest challenges of our lives, a force reshaping our economy, our politics, and our culture. We hope to be your trusted, friendly, and insightful guide to that transformation. Please enjoy your free articles. You can check your profile here .
subscribe to get Unlimited access
Offer for a Heatmap News Unlimited Access subscription; please note that your subscription will renew automatically unless you cancel prior to renewal. Cancellation takes effect at the end of your current billing period. We will let you know in advance of any price changes. Taxes may apply. Offer terms are subject to change.
Subscribe to get unlimited Access
Hey, you are out of free articles but you are only a few clicks away from full access. Subscribe below and take advantage of our introductory offer.
subscribe to get Unlimited access
Offer for a Heatmap News Unlimited Access subscription; please note that your subscription will renew automatically unless you cancel prior to renewal. Cancellation takes effect at the end of your current billing period. We will let you know in advance of any price changes. Taxes may apply. Offer terms are subject to change.
Create Your Account
Please Enter Your Password
Forgot your password?
Please enter the email address you use for your account so we can send you a link to reset your password:
Where there’s heat — like, say, the molten core of the Earth — there’s energy.
Could the answer to our energy demand conundrums lie beneath our feet? And no, I’m not talking about oil, coal, or natural gas. I’m referring to the fundamental stuff of energy itself: heat. Geothermal power is having something of a moment as a non-carbon-emitting source of electricity that everyone seems to like — including climate activists, the oil and gas industry, technology companies, and even the Trump White House and Republican-controlled Congress.
Geothermal energy has been in use for decades, but has seemingly faced fundamental geological and physical restrictions in how much of a resource it could ever be. Now, however, thanks to new technological and process developments, including some borrowed from the oil and gas industry, geothermal could become a pillar of the energy system, potentially making up as much as 90 gigawatts of capacity by the middle of the century, roughly equal to nuclear power today.
But I’m getting ahead of myself — let’s start with the basics.
At its most fundamental, geothermal energy is the heat from the Earth’s core made usable up here on top of the crust. The International Energy Agency estimates that the Earth holds 45 terawatts of continuous heat flow, thanks to a mixture of energy left over from the planet’s formation and the radioactive decay of isotopes in its core and mantle of layers, where the temperature is probably around 5,000 degrees Celsius. In general, temperatures go up around 25 degrees per kilometer you go beneath the Earth’s crust.
Any geothermal system needs three things: heat, fluid, and permeability. The energy comes from heat, which is transferred through fluid, and the fluid has to move through permeable rocks to reach the surface. Traditional geothermal involves finding fluid — typically water or steam — that can be brought to the surface and used to spin turbines that generate electricity. Sometimes this happens directly with underground steam; in other cases, extremely hot water under high pressure is converted to steam as it’s brought to the surface; in still other cases, geothermal heat is used to heat another liquid, which is then vaporized to spin a turbine.
Traditional geothermal is inherently limited, however — there’s only so much hot water already under the Earth’s surface that can be economically tapped. “It’s a great solution, but only in a handful of places on Earth where those conditions are met,” Drew Nelson, vice president of programs, policy, and strategy at Project InnerSpace, a geothermal nonprofit, told me. Iceland, Kenya, Indonesia, certain parts of the American Southwest have the ideal mix, but that still leaves a lot of untapped energy. “It’s hot everywhere underground,” Nelson said.
The number of hot rocks through which fluid can be pumped is far, far greater than the amount of naturally occurring hot steam or water. Enhanced geothermal systems bring fluid to already hot rocks, in a sense creating a reservoir that otherwise you’d have to rely on nature to supply. This is done using techniques borrowed from the oil and gas industry, including horizontal drilling and hydraulic fracturing, to run fluid through the hot rocks before bringing it back up to the surface.
A related technology, closed-loop geothermal (sometimes called “advanced geothermal”), runs fluid through underground pipes that harvest heat from rocks, instead of turning the rock themselves into a reservoir for hot fluid.
The United States is the once and perhaps future champion of geothermal power. We still have the world’s largest installed base of geothermal generation — but it’s largely from projects that were built between 1980 and 1995, according to the International Energy Association. About half of the United States’ roughly 4 gigawatts of geothermal capacity came online in the 1980s alone, according to Energy Information Administration data. Most of this is in California and Nevada.
The Department of Energy has estimated that geothermal could provide at least 90 gigawatts of power, or around 4% of total U.S. generation capacity, by 2050. In practice, however, geothermal could be more valuable on the grid than other more plentiful energy sources because it’s not weather dependent, meaning that much more of that capacity is consistently available.
Either way, the geothermal industry by 2050 will look very different from the one today. Recent growth has been concentrated in California, where utility regulators and the state legislature have instituted aggressive mandates for geothermal procurement, seeing it as a round-the-clock source of non-carbon-emitting power. Future growth, however, has started throughout the American West, and could, thanks to new technologies, flourish all over the world.
As with any source of power, especially if it can be used 24/7, the answer is likely technology companies. The Rhodium Group estimated that geothermal could supply “up to 64%” of future data center demand.
Last year, Meta signed a deal for 150 megawatts of geothermal power from Sage Geosystems, a Texas-based next-generation geothermal startup that specializes in long-duration power generation, and specifically energy storage. That would likely come online in 2027.
One of the leading enhanced geothermal companies, Fervo, has been providing power from a site in Nevada since 2023, and is developing a substantially larger, 500-megawatt project in Beaver County, Utah, near an existing Department of Energy research facility. That should be online by 2026. More recently, Fervo has inked deals with the likes of Google and Nevada utility NV Energy, and is working with the Department of Energy to expand its drilling and bring down costs.
The company has also hinted that it has a megadeal in the works, but even without that, Fervo has achieved impressive scale and results. The company has reported steadily decreasing drilling costs, falling from over $9 million per well to under $5 million from 2022 to 2024, and raised hundreds of millions of dollars from investors including Breakthrough Energy Ventures, DCVC, and Devon Energy.
What has made geothermal distinctive among the array of non-emitting energy sources is that Republicans like it, too. Tax credits accessible to geothermal developers were largely spared in the One Big Beautiful Bill Act, which featured deep cuts to wind and solar incentives. A gaggle of Republican lawmakers have visited Fervo’s Utah site, and Fervo Chief Executive Tim Latimer recently spoke alongside fossil energy executives with the American Energy Dominance Caucus, a bipartisan House caucus. Past bills to streamline permitting for geothermal exploration have had Republican and Democratic sponsors, often from Mountain West states.
Even Trump likes geothermal. The White House’s new AI Action Plan, released in July, calls on policymakers to “prioritize the interconnection of reliable, dispatchable power sources as quickly as possible and embrace new energy generation sources at the technological frontier,” including, by name, “enhanced geothermal.”
One major near-term risk for the geothermal buildout is Trump’s tariff regime, which will likely mean higher input costs for geothermal producers on materials like steel. Another is the new restrictions on tax credits established in the One Big Beautiful Bill Act, which penalize companies with supply chain or financial connections to so-called “foreign entities of concern,” a list of countries that includes North Korea, Iran, Russia, and most importantly in this context, China.
While the exact nexus between China and geothermal is not entirely clear, “there are parts of geothermal technologies, such as pressure valves and drill casings and well casings and the like, that are not unique to geothermal that are very much part of the fracking industry that could be exposed to Chinese investment or Chinese supply contracts,” Advait Arun, senior associate for energy finance at the Center for Public Enterprise, told me.
There’s also the issue of getting next-generation geothermal projects financed. While geothermal companies themselves are able to raise money from investors — Sage Geosystems raised a $17 million series A round last year, for instance, while XGS, a closed-loop geothermal startup, raised $13 million — getting normal project financing from banks and other traditional entities is more of a challenge compared to mature technologies like fracking for oil and gas.
“There was and remains an inherent risk in traditional hydrothermal that the financial community has been very aware of,” Project InnerSpace’s Nelson told me — that is, the scarcity of existing underground water resources. Next-generation geothermal could hopefully see less risk, though, because developers aren’t not searching for a particular reservoir of steam or fluid.
“Getting the financial community to understand that there’s far less risk there is an important piece of it,” Nelson added.
Industry estimates put conventional geothermal’s levelized cost between $64 and $106 per megawatt-hour, while the DOE has estimated that first of a kind of enhanced geothermal comes in at around $200 per megawatt-hour. Compare that to between $38 and $78 for solar, the fastest-growing source of new zero-carbon energy, and between $48 and $107 for natural gas, and you’ll see a challenge to be overcome.
The Biden administration’s goal was to drive next-generation geothermal costs down to $45 per megawatt-hour by 2035. Project InnerSpace projects that “enhanced geothermal can achieve an $88 per megawatt-hour levelized cost of energy” using first of a kind technology, assuming the project can access the investment tax credit and assuming some technologies of scale and efficiencies, which would make it competitive with many other non-carbon power sources. Those costs could come down to “between $50 and $60 per megawatt-hour” by 2035.
At that level, according to the IEA, geothermal would be “one of the cheapest dispatchable sources of low-emissions electricity, on a par or below hydro, nuclear and bioenergy,” and “would also be highly competitive with solar PV and wind paired with battery storage.”
Yes, so it would seem. As Carnegie Endowment researchers have pointed out, these levelized cost projections may not reflect the true value of geothermal. Key to geothermal’s appeal is its dispatchability, not dependent on the weather, and can be turned on or off or ramped up and down as needed.
Log in
To continue reading, log in to your account.
Create a Free Account
To unlock more free articles, please create a free account.
Current conditions: In the Atlantic, the tropical storm that could, as it develops, take the name Jerry is making its way westward toward the U.S. • In the Pacific, Hurricane Priscilla strengthened into a Category 2 storm en route to Arizona and the Southwest • China broke an October temperature record with thermometers surging near 104 degrees Fahrenheit in the southeastern province of Fujian.
The Department of Energy appears poised to revoke awards to two major Direct Air Capture Hubs funded by the Infrastructure Investment and Jobs Act in Louisiana and Texas, Heatmap’s Emily Pontecorvo reported Tuesday. She got her hands on an internal agency project list that designated nearly $24 billion worth of grants as “terminated,” including Occidental Petroleum’s South Texas DAC Hub and Louisiana's Project Cypress, a joint venture between the DAC startups Heirloom and Climeworks. An Energy Department spokesperson told Emily that he was “unable to verify” the list of canceled grants and said that “no further determinations have been made at this time other than those previously announced,”referring to the canceled grants the department announced last week. Christoph Gebald, the CEO of Climeworks, acknowledged “market rumors” in an email, but said that the company is “prepared for all scenarios.” Heirloom’s head of policy, Vikrum Aiyer, said the company wasn’t aware of any decision the Energy Department had yet made.
While the list floated last week showed the Trump administration’s plans to cancel the two regional hydrogen hubs on the West Coast, the new list indicated that the Energy Department planned to rescind grants for all seven hubs, Emily reported. “If the program is dismantled, it could undermine the development of the domestic hydrogen industry,” Rachel Starr, the senior U.S. policy manager for hydrogen and transportation at Clean Air Task Force told her. “The U.S. will risk its leadership position on the global stage, both in terms of exporting a variety of transportation fuels that rely on hydrogen as a feedstock and in terms of technological development as other countries continue to fund and make progress on a variety of hydrogen production pathways and end uses.”
Remember the Tesla announcement I teased in yesterday’s newsletter? The predictions proved half right: The electric automaker did, indeed, release a cheaper version of its midsize SUV, the Model Y, with a starting price just $10 shy of $40,000. Rather than a new Roadster or potential vacuum cleaner, as the cryptic videos the company posted on CEO Elon Musk’s social media site hinted, the second announcement was a cheaper version of the Model 3, already the lower-end sedan offering. Starting at $36,990, InsideEVs called it “one of the most affordable cars Tesla has ever sold, and the cheapest in 2025.” But it’s still a far cry from Musk’s erstwhile promise to roll out a Tesla for less than $30,000.
That may be part of why the company is losing market share. As Heatmap’s Matthew Zeitlin reported, Tesla’s slice of the U.S. electric vehicle sales sank to its lowest-ever level in August despite Americans’ record scramble to use the federal tax credits before the September 30 deadline President Donald Trump’s new tax law set. General Motors, which sold more electric vehicles in the third quarter of this year than in all of 2024, offers the cheapest battery-powered passenger vehicle on the market today, the Chevrolet Equinox, which starts at $35,100.
Get Heatmap AM directly in your inbox every morning:
Trump’s pledge to revive the United States’ declining coal industry was always a gamble — even though, as Matthew reported in July, global coal demand is rising. Three separate stories published Tuesday show just how stacked the odds are against a major resurgence:
As you may recall from two consecutive newsletters last month, Secretary of Energy Chris Wright said “permitting reform” was “the biggest remaining thing” in the administration’s agenda. Yet Republican leaders in Congress expressed skepticism about tacking energy policy into the next reconciliation bill. This week, however, Utah Senator Mike Lee, the chairman of the Senate Committee on Energy and Natural Resources, called for a legislative overhaul of the National Environmental Policy Act. On Monday, the pro-development social media account Yimbyland — short for Yes In My Back Yard — posted on X: “Reminder that we built the Golden Gate Bridge in 4.5 years. Today, we wouldn’t even be able to finish the environmental review in 4.5 years.” In response, Lee said: “It’s time for NEPA reform. And permitting reform more broadly.”
Last month, a bipartisan permitting reform bill got a hearing in the House of Representatives. But that was before the government shutdown. And sources familiar with Democrats’ thinking have in recent months suggested to me that the administration’s gutting of so many clean energy policies has left Republicans with little to bargain with ahead of next year’s midterm elections.
Soon-to-be Japanese prime minister Sanae Takaichi.Yuichi Yamazaki - Pool/Getty Images
On Saturday, Japan’s long-ruling Liberal Democratic Party elected its former economic minister, Sanae Takaichi, as its new leader, putting her one step away from becoming the country’s first woman prime minister. Under previous administrations, Japan was already on track to restart the reactors idled after the 2011 Fukushima disaster. But Takaichi, a hardline conservative and nationalist who also vowed to re-militarize the nation, has pushed to speed up deployment of new reactors and technologies such as fusion in hopes of making the country 100% self-sufficient on energy.
“She wants energy security over climate ambition, nuclear over renewables, and national industry over global corporations,” Mika Ohbayashi, director at the pro-clean-energy Renewable Energy Institute, told Bloomberg. Shares of nuclear reactor operators surged by nearly 7% on Monday on the Tokyo Stock Exchange, while renewable energy developers’ stock prices dropped by as much as 15%
Researchers at the United Arab Emirates’ University of Sharjah just outlined a new method to transform spent coffee grounds and a commonly used type of plastic used in packaging into a form of activated carbon that can be used for chemical engineering, food processing, and water and air treatments. By repurposing the waste, it avoids carbon emitting from landfills into the atmosphere and reduces the need for new sources of carbon for industrial processes. “What begins with a Starbucks coffee cup and a discarded plastic water bottle can become a powerful tool in the fight against climate change through the production of activated carbon,” Dr. Haif Aljomard, lead inventor of the newly patented technology, said in a press release.
Last week’s Energy Department grant cancellations included funding for a backup energy system at Valley Children’s Hospital in Madera, California
When the Department of Energy canceled more than 321 grants in an act of apparent retribution against Democrats over the government shutdown, Russ Vought, President Trump’s budget czar, declared that the money represented “Green New Scam funding to fuel the Left's climate agenda.”
At least one of the grants zeroed out last week, however, was supposed to help keep the lights on at a children’s hospital.
The $29 million grant was intended to build a 3.3-megawatt long-duration energy storage system at Valley Children’s Hospital, a large pediatric hospital in Madera, California. The system would “power critical hospital operations during outage events,” such as when the California grid shuts down to avoid starting wildfires, according to project documents.
“The U.S. Department of Energy’s cancellation of funding for [the] long-duration energy storage demonstration grant is disappointing,” Zara Arboleda, a spokesperson for the hospital, told me.
Valley Children’s Hospital is a 358-bed hospital that says it serves more than 1.3 million children across California’s Central Valley. It has 116 neonatal intensive care unit beds and nationally ranked specialties in pediatric neurology, orthopedics, and lung surgery, among others.
Energy Secretary Chris Wright has characterized the more than $7.5 billion in grants canceled last week as part of an ongoing review of financial awards made by the Biden administration. But the timing of the cancellations — and Vought’s gleeful tweets about them — suggests a more vindictive purpose. Republican lawmakers and President Trump himself threatened to unleash Vought as a kind of rogue budget cutter before the federal government shut down last week.
“We don’t control what he’s going to do,” Senator John Thune told Politico last week. “I have a meeting today with Russ Vought, he of PROJECT 2025 Fame, to determine which of the many Democrat Agencies, most of which are a political SCAM, he recommends to be cut,” Trump posted on the same day.
Up until this year, canceling funding that is already under contract with a private party would have been thought to be straightforwardly illegal under federal law. But the Supreme Court’s conservative majority has allowed the Trump administration to act with previously unimaginable freedom while it considers ruling on similar cases.
Faraday Microgrids, the contractor that was due to receive the funding, is already building a microgrid for the hospital. The proposed backup power system — which the grant stipulated should be “non-lithium-ion” — was supposed to be funded by the Energy Department’s Office of Clean Energy Demonstrations, with the goal of finding new ways of storing electricity without using lithium-ion batteries, and was meant to work in concert with that new microgrid and snap on in times of high stress.
That microgrid project is still moving forward, Arboleda, the hospital’s spokesperson, told me. “Valley Children’s Hospital continues to build and soon will operate its microgrid announced in 2023 to ensure our facilities have access to reliable and sustainable energy every minute of every day for our patients and our care providers,” she added. That grid will contain some storage, but not the long-term storage system discussed in the official plan.
Faraday Microgrids, formerly known as Charge Bliss, didn’t respond to a request for comment, but its website touts its ability to secure grants and other government funding for energy projects.
In a statement, a spokesman for the Energy Department said that the grant was canceled because the project wasn’t feasible. “Following an in-depth review of the financial award, it was determined, among other reasons, that the viability of the project was not adequate to warrant further disbursements,” Ben Dietderich, a spokesman for the Energy Department, told me.
The children’s hospital, at least, is in good company. On Tuesday, a Trump administration document obtained by Heatmap News suggested the Energy Department is moving to kill bipartisan-backed funding for two direct air capture hubs in Texas and Louisiana. And although California has lost the most grants of any state, the Energy Department has also sought to terminate funding for new factories and industrial facilities across Republican-governed states.
Editor’s note: This story initially misstated the number of neonatal intensive care unit beds at Valley Children’s Hospital. It has been corrected.
Rob and Jesse break down China’s electricity generation with UC San Diego’s Michael Davidson.
China announced a new climate commitment under the Paris Agreement at last month’s United Nations General Assembly meeting, pledging to cut its emissions by 7% to 10% by 2035. Many observers were disappointed by the promise, which may not go far enough to forestall 2 degrees Celsius of warming. But the pledge’s conservatism reveals the delicate and shifting politics of China’s grid — and how the country’s central government and its provinces fight over keeping the lights on.
On this week’s episode of Shift Key, Rob and Jesse talk to Michael Davidson, an expert on Chinese electricity and climate policy. He is a professor at the University of California, San Diego, where he holds a joint faculty appointment at the School of Global Policy and Strategy and the Jacobs School of Engineering. He is also a senior associate at the Center for Strategic and International Studies, and he was previously the U.S.-China policy coordinator for the Natural Resources Defense Council.
Shift Key is hosted by Robinson Meyer, the founding executive editor of Heatmap, and Jesse Jenkins, a professor of energy systems engineering at Princeton University.
Subscribe to “Shift Key” and find this episode on Apple Podcasts, Spotify, Amazon, YouTube, or wherever you get your podcasts.
You can also add the show’s RSS feed to your podcast app to follow us directly.
Here is an excerpt from our conversation:
Robinson Meyer: Your research and other people’s research has revealed that basically, when China started making capacity payments to coal plants, in some cases, it didn’t have the effect on the bottom line of these plants that was hoped for, and also we didn’t really see coal generation go down or change in the year that it happened. It wasn’t like they were paying these plants to stick around and not run. They were basically paying these plants, it seems like, to do the exact same thing they did the year before, but now they also got paid. And maybe that was needed for their economics, we can talk about it.
Why did coal get those payments and not, say, batteries or other sources of spare capacity, like pumped hydro storage, like nuclear? Why did coal, specifically, get payments for capacity? And does it have to do with spinning reserve? Or does it have to do with the political economy of coal in China?
Michael Davidson: When it came out, we said exactly the same thing. We said, okay, this should be a technology neutral payment scheme, and it should be a market, not a payment, right? But China’s building these things up little by little. Over time we’ve seen, historically, actually, a number of systems internationally started with payments before they move to markets because they realize that you could get a lot more competitive pressure with markets.
The capacity payment scheme for coal is extremely simple, right? It says, okay, for each province, we’re going to say what percentage of our benchmark coal investment costs are we going to subsidize. It’s extremely simple. It does not account for how much you’re using it at a plant by plant level. It does not account for other factors, renewables, etc. It’s a very coarse metric. But I wouldn’t say that it had had some, you know, perverse negative effect on the outcome of what coal generation is. Probably more likely is that these payments were seen, for some, as extra support. But then for some that are really hurting, they’re saying, okay, well then we will maybe put up less obstacles to market reforms.
But then on top of that, you have to put in the hourly energy demand growth story and say, okay, well you have all these renewables, but you don’t have enough storage to shift to evening peaks. You are going to rely on coal to meet that given the current rigid dispatch system. And so you’re dispatching them kind of regardless of whether or not you have the payment schemes.
I will say that I was a skeptic, right? Because when people told me that China should put in place a capacity market, I said, China has overcapacity. So if you have an overcapacity situation, you put in place a market, the prices should be zero. So what’s the point? But actually, when you’re looking out ahead with all of this surplus coal capacity that you’re trying to push down, you’re trying to push those capacity factors of those coal plans from 50%, 60%, down to 20% or even lower, they need to have other revenue schemes if you’re not going to dramatically open up your spot markets, which China is very hesitant to do — very risk averse when it comes to the openness of spot markets, in terms of price gaps. So that’s a necessary part of this transition. But it can be done more efficiently, and it should done technology neutral.
And by the way that is happening in certain places. That’s a national scheme, but we actually see that the implementation — for example, Shaanxi province, we have a technology neutral scheme that would include other resources, not just coal.
Mentioned:
China’s new pledge to cut its emissions by 2035
What an ‘ambitious’ 2035 electricity target looks like for China
China’s Clean Energy Pledge is Clouded by Coal, The Wire China
Jesse’s upshift; Rob’s upshift.
This episode of Shift Key is sponsored by …
Hydrostor is building the future of energy with Advanced Compressed Air Energy Storage. Delivering clean, reliable power with 500-megawatt facilities sited on 100 acres, Hydrostor’s energy storage projects are transforming the grid and creating thousands of American jobs. Learn more at hydrostor.ca.
A warmer world is here. Now what? Listen to Shocked, from the University of Chicago’s Institute for Climate and Sustainable Growth, and hear journalist Amy Harder and economist Michael Greenstone share new ways of thinking about climate change and cutting-edge solutions. Find it here.
Music for Shift Key is by Adam Kromelow.