The US should adhere to President Donald Trump’s call to ‘drill baby, drill’ – but for geothermal energy, rather than traditional fossil fuels, an ING analyst has said.
Coco Zhang, ESG research analyst, noted that the US currently leads the world in installed conventional geothermal capacity – at about 4GW – while the sector attracted $1.7 billion in public investment in the first quarter of this year.
“Conventional geothermal’s geographic limitations have spurred the development of advanced technologies like Enhanced Geothermal Systems (EGS) and Closed-Loop Geothermal Systems (CLGS),” she commented. “The US is well-positioned to scale EGS, leveraging transferable skills from fracking in the oil and gas industry.”
Zhang pointed to a project already underway by EGS developer Fervo – using ex-oil industry professionals – on a 400 MW site in Utah that is set to be completed by 20208. This follows a previous pilot project that was completed in Nevada two years ago.
In terms of CLGS, meanwhile, she added that XGS Energy recently completed 3,000 hours of field-testing, “paving the way for commercial construction”.
Cost competitive
While geothermal faces competition for land leases, with the average price for public land leases rising by 282% this year, as well as infrastructure concerns, Zhang noted that costs are set to “substantially decline” in the future “driven by technological advancements and supportive policies.”
In addition, “geothermal continues to enjoy strong bipartisan support and holds significant potential to meet the growing energy demands of the US,” she noted.
Accelerating energy projects
Since taking office, the Trump administration has introduced measures to expand the production of fossil fuels, accelerate energy projects, and scale back environmental regulations.
While fossil fuels have remained a central focus of the new administration, it has also included nuclear and geothermal in its energy strategy. Congress passed the One Big Beautiful Bill Act, reducing tax incentives for wind, solar, electric vehicles, and hydrogen, narrowing the field of support for renewable energies.
A key driver of Trump’s vision for energy dominance is the ambition to win the AI race, with energy demand from data centres set to rise from 4% of total national electricity use today to more than 10% by 2030.
“To meet this demand, the US needs to pragmatically leverage all available energy sources,” Zhang commented, adding that fossil fuels alone “cannot do the job due to supply chain constraints, rising equipment costs, and, in some cases, unfavourable economics”. Read more here.
