Is this Geothermal’s Tesla Moment?

Geothermal is attracting more investor interest in 2025-26 than at any point in its 120 years of existence. The question is whether this is geothermal’s “Tesla Moment”.[^1]

The focus is on disruptive new geothermal technologies such as Enhanced Geothermal Systems, or EGS, and Closed-Loop Advanced Geothermal Systems, or AGS. EGS, AGS and related hybrid technologies are referred to here collectively as new era geothermal.

Why new era geothermal suddenly matters

New era geothermal technologies are becoming one of the most closely watched areas of clean energy technology because they potentially promise:

• baseload, 24/7 carbon-free, emissions-free electricity at competitive LCOE
• exceptionally high utilization rates
• industrial and residential heat from the same resource used to generate power
• grid stability and support for intermittent renewables
• low impact on land, communities and ecosystems

The key change over the last few years is that geothermal is increasingly borrowing technology, expertise and commercial principles from the US shale oil and gas industry, including:

• directional drilling techniques
• reservoir stimulation, including hydraulic stimulation or “fracking”
• reservoir engineering that can create, rather than explore for, good reservoir character
• robust high-temperature materials
• subsurface imaging and fibre-optic sensing
• drilling automation
• AI-assisted subsurface modelling and well planning
• oil and gas industry supply chain and contracting methodologies

This has the potential to transform geothermal from a niche energy source into something investors increasingly see as repetitive, scalable and bankable. Potentially, it becomes more akin to a low-risk manufacturing enterprise than the high-capital, high-risk upstream E&P play that has characterised traditional geothermal.

New era geothermal will benefit from decades of oil and gas learning instead of starting from scratch.

Geographically, places such as Iceland, Kenya, Indonesia, the United States and Australia could become disproportionately important in a geothermal-heavy future.

The sector is no longer just a few US startups or an Australian pilot or two. A genuinely global race is underway. Different countries, while saying they are not trying to pick winners, are specialising in different geothermal approaches.

Further viewing: Geothermal Energy’s Massive Leap Forward. The Economist

The United States and Canada are the current centre of gravity

North America currently leads the global advanced geothermal and EGS market, driven mainly by robust government initiatives and strategic investments in the United States.

The region benefits from United States Department of Energy funding, which supports critical demonstration projects such as the Frontier Observatory for Research in Geothermal Energy, or FORGE, in Utah. Strong regulatory backing and funding are designed to mitigate technology development risk, attract private capital and foster innovation.

It is also pertinent that the US is the repository of key skills because it is the global leader in tight and hot rock technologies developed in its transformative shale gas industry.

US market leadership is driven by:

• world-leading geothermal and shale drilling expertise that resides in-country
• a long history of R&D in relevant segments of extractive resources industries
• deep, sophisticated capital markets
• DOE and state-level funding designed to promote innovation in the sector
• rapidly growing electricity demand from AI and data centres
• public concern about energy security
• the potential contribution of Direct Lithium Extraction, or DLE, to US critical minerals catchup[^2]

The US Department of Energy has invested hundreds of millions of dollars into:

• EGS, and to a lesser extent AGS, R&D
• pilot plants
• FORGE

FORGE has effectively become the world’s main laboratory and experimental proving ground for next-generation geothermal.

Major US new era geothermal companies are emerging

Fervo Energy

Houston-based Fervo is probably the flagship company of the sector. It is adapting drilling and completion techniques developed in US hydrocarbon shale basins to produce low-cost geothermal.

The company drills pairs of wells that extend down thousands of metres into the hot dry rocks that underlie all continents and some islands. It then uses controlled explosions and high-pressure fluids to create a network of fractures between the wells. Finally, it injects cold water into one of the wells so that it moves through the fractures, heats up to 150oC or more, and returns to the surface as steam in the other well.

Fervo has developed or purchased its own IP for:

• horizontal drilling
• shale-style reservoir stimulation
• distributed downhole fibre optic sensing
• modern drilling automation
• focused AI agents
• contracting and commercial systems

Its core business thesis is:

“…beginning now, geothermal can scale like shale oil did 15 years ago”

Fervo’s Cape Station project in Utah aims to become the world’s largest next-generation geothermal development. It will begin sending the first phase of power, from what ultimately will be a 500 MWe plant, to the grid in the second half of 2026. The surrounding areas leased by Fervo have potential to deliver an estimated 40 GWe of total generation capacity.

At Winnemucca in Nevada, Fervo and Google have produced sustainable geothermal electricity from their Project Red 3.5 MWe pilot plant, commissioned in 2023. They will now develop a commercial scale 115 MWe plant called Project Corsac Station. Fervo has signed an SPA for the full 115 MW plant capacity with NV Energy under Nevada’s Clean Transition Tariff regime.[^3] Google then signed a 115 MW PPA with NV Energy to purchase all of the output from Corsac Station to supply its Nevada data centres.

Fervo’s IPO on May 13th, 2026, as “NASDAQ FRVO”, tapped into a wave of investor enthusiasm about the technology’s potential to transform the energy market and satisfy rapidly growing demand for clean energy from data centre developers. The IPO raised US$ 1.9 billion and established a market cap of US$ 10.4 billion at the end of Fervo’s first day of trading, up from an initial US$7.4 billion valuation at launch. That made it the most valuable publicly listed geothermal play in the US.

May 2026 will be widely viewed as a turning point for the industry because the Fervo IPO validated geothermal as a serious target for infrastructure investors.

Success for Fervo, and others like it, will be directly related to their ability to reduce costs. The first electricity from Cape Station will cost ca. US$ 7,000/kW, which is cheaper than new generation nuclear but more expensive than gas-fired plants and conventional geothermal. The market is betting that those costs will fall to parity with natural gas plants within 5 to 10 years.

Further viewing:

• Fervo Energy: We Are Now in the Geothermal Decade
• Google’s INSANE Plan to Power the Future with Geothermal Energy

Quaise Energy

Quaise is one of the most speculative but potentially revolutionary US geothermal companies.

It is refining and deploying proprietary Millimetre-WaveTM drilling technology, or MMW, developed at MIT. This is a contact-free drilling method that directs electromagnetic energy with a wavelength of 1 to 10 mm down a borehole through a metallic pipe called a waveguide. When the waves hit the rock face, the immense energy heats, melts and vaporizes the rock, leaving a residue of fine ash that is flushed from the hole by a flow of pressurised gas.

The waves are generated by a gyrotron, a machine derived from fusion research, which generates continuous beams of high-frequency EM waves. Conventional drill bits fail in the extreme heat, above 400oC, and pressure at the depths that Quaise is targeting. Because MMW involves no physical contact with rock, it can drill far deeper than conventional equipment and can operate reliably in temperatures of more than 500oC.

The intense heat generated by MMW drilling melts all of the rock surrounding the well bore and creates a vitrified, solid glass lining to the well as it is drilled. This stabilizes the well naturally, preventing collapse without the need for hanging steel casing to line the well. The process allows access to deep and ultra-deep geothermal heat at depths of as much as 20km without complex downhole equipment, casing or cement.

In Central Oregon, Quaise is developing a phased 250 MW superhot geothermal power plant called Project Obsidian, the first 50 MW of which is expected to be commissioned in 2030.

The long-term Quaise vision is to drill adjacent to fossil fuel-fired plants and factories around the world, repurposing them to run entirely on geothermal steam. Its business approach is to use the established workforce, assets, supply chains and regulatory frameworks of the oil and gas industry, leveraging 100 years of accumulated experience. The goal is to access extremely deep, superhot rock almost anywhere on Earth.

If successful, the Quaise method could radically expand geothermal potential globally.

Further viewing:

• MMW Drilling: The Superhot Blueprint
• Quaise Energy: Project Obsidian

Sage Geosystems

Houston-based Sage focuses on the energy storage potential of geothermal.

Using its proprietary Pressure TechnologyTM, Sage will fracture hot, dry rocks to become deep containers for water that act as a natural battery, allowing the operator to react to short-term changes in electricity demand. When demand is low, Sage will pump water from the surface into its subsurface fracture storage. When demand is high, it will reverse flow and bring steam and hot water to the surface to generate electricity.

The system is also designed to be co-located with solar and wind generation to provide virtually instantaneous backup for their intermittency.

Sage’s technology development and business planning are focused on integrated, cost-competitive geothermal systems that combine:

• geothermal energy
• pressure storage
• grid balancing
• load management
• rapid response to daily variations in demand and market arbitrage opportunities

The aim is replication in almost any geographical and geological setting.

While also speculative, Sage is interesting because it is basically an energy storage system designed to integrate geothermal into renewable-heavy electricity grids with wide daily and seasonal variations in load. That was a role previously thought to be reserved for natural gas. The business model is designed to have global application, with market potential outside the US as large as that within.

Sage has developed a 3 MW test and demonstration facility to provide the basis of design for a full-scale commercial pilot plant at Christine, Texas. It is partnering with Ormat to develop Pressure Technology plants adjacent to existing Ormat binary geothermal plants, leveraging Ormat’s existing infrastructure, grid connections and offtake agreements.

In January 2026, Sage raised US$ 97 million from a Series B funding round to support the work with Ormat. Independently of its joint venture with Ormat, the company has an active project pipeline that includes three projects, at Ellington Field Joint Reserve Base in Houston, at Fort Bliss, and at the Naval Air Station in Corpus Christie. These are being executed under a series of R&D and sales contracts with the US Department of Defence. Sage has also signed a term sheet with Microsoft to supply data centres east of the Rockies from a captive 150 MW Pressure Technology plant.

Further viewing: How Sage’s Pressure Geothermal Technology Powers the Future, Everywhere

Controlled Thermal Resources

Controlled Thermal Resources, or CTR, is developing a geothermal plant at Hell’s Kitchen near the Salton Sea in Baja California, where the brines are particularly mineral-rich.

CTR will locate data centres adjacent to its planned 650 MW power plant. It will create a second revenue stream by extracting critical minerals from its feedstock brines: up to 100,000 T/yr of Lithium Carbonate, 450,000 T/yr of polymetallic zinc and manganese, and 3 million T/yr of potash.

The company is planning to IPO in Q4 2026.

Further viewing: CTR Hell’s Kitchen Lithium and Power

Canada and Europe are the closed-loop champions

Eavor

As of 2026, Calgary-based, private VC-backed company Eavor is probably the most important non-US new era geothermal company. Chevron and bp are amongst its major shareholders.

Eavor’s approach differs from classic EGS in that it:

• uses a closed-loop system, branded as Eavor-LoopTM
• circulates fluid through sealed wellbores
• minimizes water loss
• potentially reduces induced seismicity risks
• can drastically reduce well completion costs
• is highly scalable and dispatchable

The Eavor Loop system effectively consists of a large, closed-loop, underground pipe through which water is circulated to absorb heat from the surrounding rocks, akin to the piping in a thermal fluid radiator. It eliminates the need for naturally occurring aquifers or volcanic heat sources. That also eliminates the need for costly, high-risk exploration for porous reservoirs, which has hampered the growth of traditional geothermal power.

From 2019-24, Eavor operated a successful demonstration facility near Rocky Mountain House, Alberta. In December 2025, it became the first organisation to dispatch closed-loop geothermal electricity to a commercial grid from its Geretsried pilot project in Bavaria.

Further viewing: Geothermal Will Change Our World, For Eavor

Germany

Germany is becoming a major geothermal development centre because:

• it urgently needs alternatives to Russian gas
• district heating demand and economics are strong
• firm low-carbon energy is a political imperative
• the government strongly supports the industry through incentivising policies and grant funding to private sector projects

Eavor’s recently commissioned Geretsried Eavor LoopTM geothermal project near Munich is currently the world’s most critical and closely watched commercial geothermal pilot. The plant has thermal capacity of 64 MWth of thermal output allocated to a local district heating system, and electrical generation capacity of 8.2 MWe.

Development CAPEX of EU 268 million was raised through a combination of public grants and subsidies, including a EU 92 million grant from the European Commission, a EU 130 million green loan from a consortium of banks led by the European Investment Bank, and equity funding from Chubu Electric Power Co and Enex Power Germany GmbH. Pre-project development was funded through a C$ 320 million equity round that included Microsoft Climate Innovation Fund, Temasek, bp Ventures and the Canada Growth Fund.

The plant generates power by routing extracted heat through an Organic Rankine Cycle, or ORC, system. At full operational capacity it will supply clean heat and power to 35,000 households, saving 44,000 T/yr of CO2 compared to the gas-fired power that it is displacing.

If Geretsried is a commercial success, it will establish a base from which Europe is planning to become the largest commercial geothermal heating market in the world.

Eavor is not the only, or even the largest, new era geothermal player in Germany. For example, in December 2025 ASX listed Vulcan Energy Resources finalized a €2.2 billion financing package to fund its US$ 3.9 billion Lionheart project in the Rhine Valley. The project integrates utility-scale geothermal energy generation with commercial-scale direct lithium extraction from the geothermal brines used to generate power.

The Lionheart project, consisting of deep subsurface brine extraction from enhanced reservoirs, a geothermal power plant and a lithium chemical plant, has initial annual production targets of:

• 560 GWh of district heating
• 275 GWh of electricity
• 24,000 tonnes of battery quality, zero-carbon, lithium hydroxide monohydrate, or LHM

Further viewing:

• Eavor’s First Commercial Project, Geretsried
• Vulcan Energy, Zero Carbon Electricity
• Vulcan Starts Building US$ 3.9 billion Lionheart lithium plant in Frankfurt

Indonesia has geothermal superpower potential

By virtue of its location on the Pacific Rim of Fire and its massive resource base, Indonesia is already one of the world’s dominant geothermal producers. Its 2,745 MWe of currently installed geothermal power generation capacity trails only the US.

Given its abundant conventional geothermal resource potential of more than 25 GWe, and an obvious lack of a market for heat pumps and district heating, Indonesia’s vision has to date not included EGS or AGS. It is not a first mover in new era geothermal.

But geothermal has an important role to play in Indonesia’s national energy strategy. The government is keeping a close eye on the technical and economic performance of the new era projects described above, particularly those that plan to extract lithium. The country’s skill base and project experience position it well to adopt new era technologies successfully as and when their feasibility is proven, while avoiding the high risks and costs of being a technology pioneer.

The key Indonesian geothermal player is Pertamina Geothermal Energy, or PGE, a subsidiary of the national oil company. PGE has 723 MWe of wholly owned assets and a further 1,205 MWe through joint ventures with other developers.

Indonesia is very hot geologically, and this geographic good fortune gives it the potential to remain in the group of leading geothermal producers in the world.

Further viewing: How Indonesia Became a Geothermal Powerhouse

Turkey is an overlooked geothermal heavyweight

Turkey already has one of the world’s larger geothermal electricity sectors, particularly in western Anatolia.

Important Turkish geothermal firms include:

• Zorlu Enerji
• Gürmat

Like Indonesia, and for similar reasons, Turkey is currently focused mainly on conventional geothermal rather than frontier EGS.

However, its long history of oil and gas production, drilling expertise, operational experience, geothermal competencies and infrastructure, and enthusiastic government support position it well to be a new era technology adopter as EGS economics improve.

Australia has potentially enormous long-term opportunity

Australia is one of the most interesting long-term geothermal opportunities because it has:

• vast hot-rock resources
• world-class mining and drilling expertise
• remote industrial energy demand
• a strong need for reliable 24/7 renewable power to displace its current reliance on fossil fuels

Australia was an early pioneer in hot dry rock geothermal, especially in the Cooper and Sydney Basins. The early projects failed because drilling costs were too high, and because pre-shale drilling technologies were not able to withstand the high temperatures and difficult geology encountered.

Mining giant BHP also looked carefully at the possibility of using conventional geothermal power to displace expensive diesel at its Olympic Dam mine site in South Australia in the 1990s. With the state of technology at the time, it found this to be infeasibly expensive.

Now the sector is gearing up for a second chance. Utilities, grid operators and remote area mining companies are all watching the new era geothermal saga closely as it unfolds.

Companies to watch that are associated with Australian geothermal efforts include:

• Petratherm
• Panax Geothermal
• Santos

Australia’s biggest opportunity may not just be geothermal electricity generation, but also the fit for geothermal with:

• mining operations
• minerals processing
• hydrogen production
• remote industrial hybrid heat and power applications
• AI/data centres

Three major geothermal models are emerging globally

The industry is increasingly splitting into three broad technological pathways:

Different regions will favour different approaches:

• US: shale-style EGS
• Europe: closed-loop plus district heating
• Indonesia and Turkey: conventional geothermal expansion, but with new era potential in deeper horizons below existing reservoirs and in remote locations currently serviced unsustainably by diesel or LNG
• Australia: industrial hot-rock geothermal and mining sector synergies

Why investors are suddenly paying attention

Geothermal is no longer viewed purely as a niche renewable technology.

Major participants now include:

• oilfield service companies
• infrastructure funds
• sovereign wealth funds
• venture capital
• hyperscalers and data-centre operators
• industrial estates, and in Indonesia, Special Economic Zones
• utilities

The core investment thesis is:

…if drilling costs keep falling, geothermal could attract sufficient capital to become one of the world’s most scalable forms of firm, clean energy.

[^1]: A Tesla Moment is a business term describing the tipping point when an emerging, tech-driven disrupter introduces a revolutionary product or service that forces legacy companies to rapidly pivot or face obsolescence. It marks the shift from a new technology being regarded as immature to becoming the industry standard.

[^2]: DLE is fundamentally altering new era geothermal market economics by enabling the co-production of battery-grade minerals alongside geothermal heat. This model monetizes the mineral content of geothermal brines, creating a dual revenue stream that offsets high exploration costs and supports domestic supply chains for critical minerals. By utilizing adsorption technologies, operators can selectively isolate lithium from working fluids without disrupting power generation cycles, effectively turning geothermal plants into critical mineral assets.

[^3]: NV Energy has also recently concluded another big tech supply deal to sell 100 MW of captive geothermal power, commencing in 2030, to Amazon for its Nevada data centres. In that case the power supplier to NV Energy is Zanskar Geothermal & Minerals Inc, the country’s first self-proclaimed “AI native” geothermal explorer. Backed by major funding rounds, including a recent US$ 115 million Series C raising, Zanskar has proven that its AI-driven exploration model works at a number of sites in Nevada, Big Blind and Pumpernickel discoveries, and New Mexico, Lightning Dock discovery, and is now transitioning into building its own power plants, underpinned by the Amazon deal.