Introduction

Geothermal energy—natural heat from deep in the earth—has long been pursued as a source of renewable energy but in the United States has been geographically limited to certain areas in western states.¹ Recent developments in enhanced geothermal systems (EGS) have increased the potential for geothermal power to supply more electricity and in a larger area of the United States.² EGS involve drilling multiple injection and production wells and running pipelines to each well. Geothermal fluid³ is injected into the subsurface to create or widen existing fractures or cracks in the bedrock to allow greater access to geothermal heat at depth—a process called stimulation.⁴ The injected geothermal fluid is heated by contact with the bedrock and extracted via the production wells. This hot, extracted fluid can then be used directly for heating or to generate steam to drive turbines to produce electricity. After use, the now-cooled and condensed geothermal fluid is reinjected into the ground—with the goal of maintaining fluid levels and geochemistry in the reservoir—where it can absorb more heat from the reservoir. The extraction/reinjection cycle helps sustain heat extraction from the reservoir and electricity generation in the plant.⁵

While geothermal energy currently produces only 0.4% of U.S. electricity,⁶ the United States produces the largest amount of geothermal electricity worldwide⁷ and the U.S. Department of Energy (DOE) projects that EGS could provide 60 gigawatts (GW) of electricity by 2050 (8.5% of U.S. generation capacity).⁸

EGS leverage the technology developments that have expanded U.S. fossil energy production particularly of shale oil and natural gas. The oil and gas (O&G) industry has a history of boom and bust cycles,⁹ and the energy sector and energy markets are transitioning away from some fossil fuels and toward low-carbon energy sources.¹⁰ If these two trends continue, expanded development of EGS could use many of the technologies, equipment, tools, and infrastructure the fossil fuel industry has already developed or is developing (e.g., well drilling equipment, support equipment like down-well sensors, installation and stimulation technology, power plant systems, pipelines, old wells, well right-of-ways, and offshore drilling platforms),¹¹ while also potentially leveraging the knowledgeable and experienced workforce from the legacy fossil energy subsectors.¹² With some retraining or refocusing, EGS industry could use workers with experience in areas such as underground resource identification, well drilling and completion, infrastructure installation, and power plant operation.

Technical and non-technical obstacles to greater EGS deployment remain. These include difficulties in confirming geothermal resources (e.g., time and costs for drilling exploration wells), challenges in reservoir¹³ management, and considerations for environmental impacts like induced seismicity,¹⁴ water needs, and waste management. There are also non-technical challenges like tax incentives that have varied over time, permitting barriers, and other regulatory requirements that may result in longer project development timelines and higher costs.

The opportunities for and challenges facing EGS are of interest to Congress. The 117^th Congress enacted two pieces of legislation that address some of these issues. The Infrastructure Investment and Jobs Act (IIJA; P.L. 117-58) became law in November 2021 and appropriated funds for additional geothermal energy demonstration projects. The Inflation Reduction Act (P.L. 117-169) became law in August 2022 and addresses tax incentives for geothermal projects. Other legislative proposals in the 117^th Congress, such as S. 2824 and H.R. 5350, would address some of the challenges that prolong geothermal project development timelines.¹⁵ Still, challenges remain which could be mitigated by federal legislation.

Scope of Report

Geothermal resources can be used for power generation, heating and cooling, and direct-use applications¹⁶ and are being explored for other applications like thermal energy storage and carbon sequestration and storage. This report focuses on geothermal power for utility-scale electricity generation¹⁷ and specifically on EGS because of the potential for significant implementation across the United States. Following convention, geothermal power is considered a renewable power technology.¹⁸ This report introduces geothermal power, reviews areas of potential interest to Congress, and briefly discusses the benefits of EGS and challenges to its commercialization. Cogeneration opportunities and minerals recovery opportunities are also discussed briefly.

Ground-source heat pumps are not a power generation technology but an energy efficiency technology and are not covered in this report outside of the occasional comparison with other geothermal technologies.¹⁹ This report also does not cover leasing on federal lands,²⁰ district heating, carbon sequestration and storage,²¹ or advanced energy storage opportunities.²²

Geothermal Power

Geothermal technologies harness heat from the earth for direct use²³ or to convert it to electricity. Geothermal power is considered a renewable energy resource and is derived by capturing heat from an underground reservoir using liquid (largely water but with other constituents) or naturally generated steam under high-pressure. There are three primary types of geothermal power systems in use: dry steam, flash, and binary. In a dry steam configuration, there is sufficient steam present in the reservoir to power the system. In a flash configuration, the high-temperature liquid in the reservoir is converted into steam via a flash tank. In a binary configuration, the heat from the steam and liquid from the reservoir is used to convert a secondary liquid—generally one with a lower boiling point than water—to vapor. In all configurations, the vapor is either passed through a turbine to generate electrical power or used directly for heating. The vapor is condensed back into liquid and reinjected into the ground; for a binary plant the binary fluid is condensed for reuse in the plant, and the geothermal fluid is reinjected into the ground. Figure 1 has diagrams of the basic elements of a geothermal power system, in this case using a flash steam system and an open cooling loop.²⁴ Figure 2 shows the three primary types of geothermal power plants.

Figure 1. Diagram of the Basic Elements of a Geothermal Power System

Source: CRS publications. Notes: Hot, high-pressure geothermal fluid is extracted through production wells. Depending on the reservoir conditions, the power plant can have a variety of equipment and configurations. In this example, the fluid is passed through a flash tank [5] which allows for conversion of some of the water into steam. The steam expands to drive a turbine [3] to run a generator [2] and the resulting electricity is transmitted to the grid to supply the load [1]. After the steam expands through the turbine, it is passed through a condenser [6] where it is cooled and condensed back to liquid through the use of heat exchange via a cooling tower [4]. The cooler and denser fluid is then typically pumped underground via an injection well; ideally the fluid is returned to the reservoir to a location where it can capture heat as it flows toward the production well to repeat the cycle.

Figure 2. Three Primary Types of Geothermal Power Plants

Source: CRS publications. Notes: Binary power plants use a secondary fluid in the power production cycle to access lower-temperature geothermal resources and isolate the power production equipment from the reactive geothermal fluid. Dry steam plants use sufficient levels of steam available in the reservoir to directly drive power production. Flash steam plants convert the geothermal fluid to steam to drive the power production.

Geothermal power is renewable as long as fluid flow through the reservoir is maintained and energy is extracted at a sustainable rate, which is dependent on the conditions of the reservoir.²⁵ Figure 3 is a diagram of the sustainable energy flows of a geothermal reservoir. The energy inputs to the reservoir include heat from the earth²⁶ (labeled 'X' in the diagram) and heat from geothermal fluids reinjected via the injection wells ("Y"). Energy exports from the reservoir include the energy converted to electricity in the power plant or used for direct heating ("A"), waste heat lost during those uses ("B"), and the now-lower energy content of the geothermal fluid after it has passed through the power plant ("C"), some of which is lost to the surrounding earth once it is reinjected ("D"). The reservoir conditions and power generation levels can be sustainably maintained as long as the exports (A+B+C) do not exceed the imports (X+Y).

Figure 3. Diagram of Sustainable Heat Flows for a Geothermal Reservoir

Source: CRS Publications. Notes: A geothermal reservoir has a sustainable heat flow rate that is dependent on the combined heat inputs and heat outputs of the reservoir. The energy outputs (A+B+C) must be less than or equal to the inputs to the reservoir (X+Y) to maintain sustainable energy production. Some of the flow rates are dependent on physical characteristics of the system and are largely not variable: rates 'X' and 'D' are dependent on the thermodynamic properties of the reservoir and those can be affected by stimulation activities; 'Y' is dependent on the thermodynamics of the geothermal fluid and the physics of the energy conversion of the power plant; 'B' is dependent on the total amount and efficiency of the power production and cooling activities; the rate 'A' of heat conversion for power production or direct use is the major variable that can be adjusted and affects the sustainability of the reservoir's heat flow.

Classes of Geothermal Technologies

Conventional Hydrothermal

Conventional hydrothermal technologies access geothermal heat resources from underground hot water and steam for either direct use (from just above ambient temperature up to about 150°C/300°F) or to generate electricity (above 150°C to 375°C/300°F to 700°F).²⁷ These resources are generally geographically limited to areas with the right geological conditions including sufficient subsurface water, gaps in the rock for fluid flow, and subsurface temperature. These hydrothermal conditions are mostly limited to locations in the western United States, including Alaska and Hawaii, as depicted in Figure 4.²⁸ Most hydrothermal resources²⁹ are only accessible through drilling technology.

Figure 4. Hydrothermal Resources Identified in the United States

Source: NREL, "Geothermal Resources of the United States—Identified Hydrothermal Sites and Favorability of Deep Enhanced Geothermal Systems," 2018. Notes: Hydrothermal resources are identified by yellow dots; colored fields (i.e. red, orange, yellow) indicate favorability levels for EGS down to a depth of 10 kilometers (km)/6.2 miles (mi). Legend from the original NREL image: "About the Data: Map does not include shallow EGS resources located near hydrothermal sites or USGS assessment of undiscovered hydrothermal resources. Source data for deep EGS includes temperature at depth from 3 to 10 km [1.9 to 6.2 mi] provided by Southern Methodist University Geothermal Laboratory ([ ... ]2009) and analyses (for regions with temperatures greater than or equal to 150°C[/300°F]) performed by NREL (2009). Source data for identified hydrothermal sites from USGS Assessment of Moderate- and High-Temperature Geothermal Resources of the United States ([ ... ]2008). 'N/A' regions have temperatures less than 150°C[/300°F] at 10 km [6.2 mi] depth and were not assessed for deep EGS potential. Temperature at depth data for deep EGS in Alaska and Hawaii not available."

Enhanced Geothermal Systems

DOE supported the development of EGS technologies starting in the 1970s. The ongoing development of advanced drilling technologies in the O&G sector has further improved the technical viability of EGS and increased the potential for geothermal energy to contribute to U.S. energy production. The key technologies include drilling technologies (like directional drilling)³⁰ and supporting technologies and processes such as stimulation and hydraulic fracturing.³¹ The modern version of these technologies, developed starting in the 1990s, enabled the expansion of O&G production from previously inaccessible resources and has enabled EGS to potentially access more geothermal resources across a larger portion of the United States.³²

EGS technology uses advanced drilling equipment and the injection of geothermal fluids into the subsurface to access geothermal resources that are not naturally located in reservoirs with the characteristics sufficient for conventional hydrothermal energy production. The development of EGS allows access to much more of the relatively low-temperature heat (from 150°C to 375°C/300°F to 700°F) available throughout the United States than is possible with hydrothermal technologies. Like hydrothermal resources, EGS resources are generally only accessible through drilling technology (as far down as 10 kilometers (km) or 6.2 miles (mi)).³³ The colored fields in Figure 4 correspond to areas of EGS resource favorability. EGS were not generally recognized as viable, with significant energy potential and presence throughout the United States, until the mid-2000s.³⁴ This makes it a relatively new power technology within the industry. Thirty-six of the 48 contiguous states have some moderate EGS resource favorability above 150°C (300°F) at 7 km (4.3 mi) and all 48 have some moderate favorability at 10 km (6.2 mi).

Extracting Other Resources

Depending on the subsurface geology of a geothermal site, valuable minerals can potentially be extracted from the geothermal fluid while generating power. These valuable minerals—for example, lithium or other rare earth minerals—are in high concentration in some geothermal reservoirs.³⁵

There are also geopressured or coproduced geothermal systems.³⁶ Geopressured systems include both geothermal energy and methane present in reservoirs which can be extracted and used as fuel. In coproduced systems, oil and/or natural gas are extracted for fuel, but there is sufficient coproduced water at high enough temperature that it can be used to generate electricity.

Geothermal power also offers benefits for other energy production technologies via hybridization. Hybridization can improve the energy efficiency of the other technologies or can provide other, related cogeneration benefits (see "Resource Benefits" for details).

U.S. Geothermal Resources

Given the challenges associated with identifying and assessing subsurface resources, it is difficult to determine the total amount of domestic geothermal resources available, but estimates have been made based on models and existing geological data sets.

Table 1 provides estimates from DOE of the electrical and thermal potential of geothermal resources in the United States.³⁷ As a point of comparison, according to the Energy Information Administration (EIA), EGS have the potential to provide about 450% of the 1,140 GW total installed utility-scale electricity generation capacity the United States had in 2021.³⁸ The United States also used 286,000 GWh of district energy annually as of 2018³⁹—about 1/50,000^th of the thermal potential of EGS.

Commercial Potential

EGS are potentially viable more widely than conventional hydrothermal technology, but their development costs are higher. Because of its wider availability, nearness to electricity demand and colocation with existing infrastructure (e.g., transmission lines) will contribute to cost savings and improved viability for EGS installations. Table 2 summarizes levelized costs of electricity (LCOE) and levelized capital costs for select electricity generation technologies.⁴⁰

Estimates of current and potential EGS LCOE values range widely because few plants are currently operating. Analyses estimate values of $54 per megawatt-hour (MWh),⁴¹ $70/MWh,⁴² $150/MWh,⁴³ or as high as $100,000–300,000/MWh for some installations.⁴⁴ The costs vary depending on the site geology, difficulty in drilling and confirming the geothermal resources, and technology and operational costs. Drilling and well completion costs can account for 50% or more of the total capital costs for a geothermal power project.⁴⁵ But like other energy technology developments, these costs are likely to trend downward as the technologies are more widely implemented. Expanded tax credits in the Inflation Reduction Act may also help lower the cost of EGS relative to other electricity sources.

Federal Support for EGS Development and Deployment

While the commercial deployment of EGS is limited by technical challenges and high development costs, the federal government will likely continue to play a role in supporting EGS development and deployment. According to EIA, the EGS market is expected to grow as technologies and processes improve.⁴⁶ The number of EGS power plants may also increase as markets demand more low-carbon energy and place more value on the other grid benefits of geothermal power and as more governments and other entities seek to achieve power sector emissions-cutting targets.

Only a few commercial EGS systems are operating worldwide,⁴⁷ but several other demonstration projects have been successfully operated producing single-digit megawatts of electricity (for example, the Desert Peak II EGS plant in Nevada).⁴⁸

As for ongoing development of EGS technologies and resources, DOE's Geothermal Technologies Office (GTO) is supporting a number of technology demonstration projects.⁴⁹ These projects are designed to prove the technical viability of EGS in a variety of geologies and reservoir conditions and to demonstrate and refine individual EGS processes and technologies.

• Ormat Technologies project at Desert Peak, NV, increased power output by 38% within an operating geothermal field.
• Altarock Energy project at the Newberry Volcano in Oregon demonstrated the creation of three separate zones of fluid flow from a single well where no flow had been before—a "greenfield" site.⁵⁰
• Calpine Corporation project at the Geysers in California demonstrated stimulation of an abandoned well on the margin of a geothermal field (i.e., "near field").
• University of Utah's Raft River project reworked a well and prepared it for thermal and hydraulic stimulation.
• Ormat Technologies project at Brady's Field in Nevada demonstrated improved well injectivity to commercial levels.

Additionally, DOE is supporting the Frontier Observatory for Research in Geothermal Energy (FORGE) program to develop and test multiple EGS technologies in a working, permitted, and drilled test field.⁵¹ The end goal of FORGE is to create technical solutions enabling reproducible EGS methodology for renewable energy. The project explored several potential FORGE sites before selecting the final site at Utah FORGE. That site has progressed to drilling and subsurface characterization, including having successfully concluded a large-scale, 10-day stimulation test in 2022.⁵² The current phase of the project is anticipated to conclude in mid-2024. The project is focused on drilling, stimulation, and injection-production technologies as well as subsurface imaging technologies with the goal to improve fluid flow and energy transfer from EGS reservoirs.

Potential Benefits and Challenges

Supporters and opponents have claimed a number of benefits and challenges associated with geothermal power technology. Some of these are relative to other renewable power technologies, fossil fuel power technologies, and other thermal power technologies like nuclear. Some are technical; some are economic, health and safety, or environmental; and some are related to how EGS integrates with the power grid. Table 3 lists a selection of these potential benefits and challenges.

Supporters of geothermal power generation note its benefits in supporting the grid and power supplies, that it has the potential to synergize with other technologies or contribute to non-power-generation-related goals and needs, and that it is relatively safe and has environmental benefits. Critics of geothermal power generation note the challenges in accessing and managing geothermal resources compared to other renewables, challenges in commercialization, and challenges involving safety and environmental issues.⁵³ In the sections below this selected set of issues is examined, highlighting potential benefits or challenges raised by supporters or critics of geothermal power.

Grid Benefits

Supporters identify a number of properties of EGS that may provide benefits to the power grid. EGS provide baseload power which can complement other variable renewable energy (VRE) sources like wind and solar in the grid.⁵⁴ Geothermal power has a high capacity factor—up to 95% for modern plants⁵⁵—so it can potentially provide continuous power on an "around-the-clock" basis. The EIA reports that in 2021, at utility-scale, geothermal power's overall annual capacity factor (71.0%) was second only to nuclear power (92.7%) and ahead of biomass (63.5%), combined cycle natural gas (54.4%), coal (49.3%), wind (34.6%), and solar (24.6%).⁵⁶

Supporters note that geothermal electricity production is dispatchable, meaning it can be started or stopped as needed, to support power grid reliability and flexibility.⁵⁷ Geothermal generation can also be started (or restarted) without an external supply of electricity to initiate startup ("black start"), if, for example, there is a large-scale power outage requiring a restart of the grid. Geothermal power, as a renewable energy source, requires no input fuels to operate, so its operational costs are low and not subject to fluctuations in fuel prices; it is reliable; and it is available domestically.⁵⁸

Resource Benefits

Supporters of EGS note the potential for simultaneous cogeneration of process heat and electric power which can be used for greenhouse heating, water heating, and industrial or commercial heating and drying.⁵⁹ EGS also has the potential to hybridize with other renewables technologies (like solar) to either improve the overall efficiency of the geothermal plant or provide other operational or efficiency benefits for both sources.⁶⁰ EGS can also be combined with geopressured resources, such as methane which when present within a geothermal reservoir can be extracted for use as a fuel. EGS can also be coproduced with O&G—when geothermal fluid at sufficient pressure and temperature is present at an O&G extraction site, it can be used for simultaneous geothermal power production.⁶¹

Hybridization with hydrogen production is another opportunity noted by supporters. Because geothermal power operates steadily, when the demand for electricity is lower than the grid's generation potential, the excess power generation capacity of the geothermal plant can be used for green hydrogen production via electrolysis.⁶² Hydrogen production could also be an alternative for geothermal plants installed where electricity transmission infrastructure is unavailable, limited, or too costly to expand.⁶³

Supporters note that valuable mineral recovery processes could provide additional economic benefits for geothermal plants as well as access to critical materials for industry. Geothermal fluids in some locations like the Salton Sea contain valuable minerals, for example lithium carbonate, in sufficient concentrations that they could be economically extracted while cycling the fluid through the plant for power generation.⁶⁴

Supporters of geothermal power claim it has a lower land use footprint than other power technologies. The land footprint that utility-scale geothermal electricity production requires is important because it affects how much total energy can likely be generated (at either a single installation or nationwide), where installations can be sited, and the likely total impact on the local environment. One analysis determined that geothermal power has a smaller land footprint (404 square meters per GWh) compared to wind (1,335), solar photovoltaic (3,237), solar thermal (3,561), and coal (3,642). The analysis considered total land used for fuel sourcing, generation, and maintenance. This is also less than the 620 m² per GWh for natural-gas-fired generation (from similar life cycle land use calculations).⁶⁵

Supporters also claim that geothermal power is amenable to colocation with other power sources or colocation alongside or with other land uses such as livestock grazing or other agricultural purposes.⁶⁶ Due to the broad potential geographic availability of EGS, new geothermal plants could be colocated with VRE sources and could share use of any new transmission lines—maximizing the productivity of those lines and the investments made to construct them. The relative low impact of the geothermal plant itself—minimal visual impact, limited emissions or waste products, and no fuel imports—means it can be potentially sited close to other installations and uses including urban, scenic, recreational, or wildlife areas.

Safety and Environmental Benefits

Supporters note that because geothermal power does not need input fuels (unlike fossil fuel or nuclear power plants) it doesn't have costs and risks associated with fuel transportation and storage.⁶⁷ Also, depending on the plant configuration, geothermal energy can generate minimal waste.⁶⁸

Supporters note that EGS have overall safety risk levels similar to offshore wind (in the worst case scenario) or better than solar photovoltaic (in the best case scenario) and, in general, better than fossil, hydropower, hydrogen, and biogas energy.⁶⁹

Similar to other renewables, geothermal power has few atmospheric emissions. The exact levels of emissions depend on the system configuration and the natural characteristics of the geothermal reservoir. For example, closed-loop and binary systems have practically no emissions, whereas flash steam systems have relatively small emissions from the steam cycle when the hydrothermal fluid is exposed to the atmosphere during cooling.⁷⁰ Mitigation measures—for example, at The Geysers plants in California—have been able to remove more than 99% of these emissions.

Resource Access and Management Challenges

Critics of geothermal power note that it has some of the same challenges as the O&G industry in identifying and accessing resources and operating wells.⁷¹ Critics also note additional challenges related to the high temperatures and reactive chemistry of the geothermal resources. High temperatures and high salinity of the geothermal fluids cause faster wear of well drilling equipment, make it challenging to operate sensors and related equipment down in the wells, and cause faster wear and corrosion of the well casings and the power plant systems during operation. The materials used in constructing geothermal wells and plants are designed to be resistant to the temperature and chemistry of the reservoir and are designed for long-term operation, which increases capital costs. For EGS, these systems must also accommodate any chemical additives used for well stimulation and maintenance. Particular challenges include a greater potential for scaling,⁷² dealing with non-compressible gases in the geothermal fluid,⁷³ and the precipitation of chemicals at bottom of the well and within the narrow fractures in the rock leading to the well. These chemical reactions can affect the circulation within the reservoir and well and can impact operation of the power plant systems and limit efficiency.

Critics note reservoir management is a challenge for the development of geothermal power overall.⁷⁴ Management challenges include understanding, controlling, and adjusting the chemistry of the reservoir; understanding the physical structure of the reservoir; and understanding and managing the heat flow, fluid levels, and fluid flow to maximize and sustain power generation and prevent drying out of sections of the fracture network and/or collapse of those fractures.⁷⁵ Management activities include adjusting power plant operations to maintain production and reservoir conditions.

Commercialization Challenges

Critics of geothermal power have noted that implementation of EGS is limited. While hydrothermal electricity generation has existed for more than 100 years,⁷⁶ and ground-source heat pumps have been commercially available since the 1940s,⁷⁷ market acceptance for EGS technologies and installations is still a challenge.⁷⁸ There are a number of successful demonstration projects proving viability of the individual elements. Other projects are helping to develop more effective EGS technologies or processes⁷⁹ but only a few commercial EGS power plants are currently operating (e.g., in Soultz-sous-Forêts and Rittershoffen, France, and in Insheim, Germany).

Compared to other renewable power technologies like solar and wind, geothermal has a more challenging project development path. The challenges relating to identifying, accessing, developing, and managing geothermal resources make project timelines longer and costlier, and involve more regulatory oversight (e.g., resource access rights laws, environmental impact reviews, and permitting steps).

For federal projects or projects on federal lands or supported by federal funds,⁸⁰ a variety of factors contribute to longer geothermal development timelines which, in turn, increase direct development costs, administrative costs, and related financing costs due to the longer time before a potential return on investment. Limitations on the availability of federal oversight resources is one such factor. Federal agencies and offices, such as the Bureau of Land Management and individual U.S. Forest Service offices, are integral to processing leasing applications and permits. Staffing limitations have been identified as an issue that can delay the advancement of a geothermal project.⁸¹ Additionally, federal regulations can require as many as six National Environmental Policy Act (NEPA)/environmental impact reviews during development of a geothermal project.⁸² Ultimately, federal permitting review for geothermal projects can take three times as long as equivalent O&G project reviews.⁸³ Categorical exclusions are one option to decrease project development times.⁸⁴ Similar O&G activities have existing categorical exclusions that have been used extensively to speed up project development.⁸⁵

State laws apply on state and private lands but can also apply to federal lands, potentially adding an additional layer of compliance. Relevant laws include state permitting and environmental impact assessments. Western states in particular have water access regulations and rights laws that can potentially impact geothermal development, and 12 western states have regulations addressing geothermal projects specifically.⁸⁶ The remaining states do not have specific geothermal regulations but federal lands within would be covered by federal law (particularly the Geothermal Steam Act of 1970, P.L. 91-581).⁸⁷ The expansion of EGS in these states could experience challenges from existing state regulations (or lack thereof), regulatory processes, and interactions or combinations of federal and state regulations.

The longer project development timelines for geothermal projects previously made some federal tax incentives (e.g., the Investment Tax Credit (ITC), 26 U.S.C. §48 and the Production Tax Credit (PTC), 26 U.S.C. §45) less effective than they were for other renewables like solar and wind.⁸⁸ These incentives had historically been authorized in increments of less than 5 years at a time, while geothermal projects can take as long as 10 years, making it more difficult for geothermal project planners to estimate project costs and secure project financing. The Inflation Reduction Act substantially modified the PTC and ITC, which may affect EGS commercialization going forward.

Safety and Environmental Challenges

Induced Seismicity

Induced seismicity is one of the most common concerns expressed related to EGS technologies. Seismic events can occur during well construction, well stimulation, and power plant operations; with the stimulation-related events being of most concern by critics of the technology. This type of induced seismicity is the result of subsurface injections or extractions of fluids.⁸⁹ These fluids can lead to movement in the earth's crust along pre-existing faults resulting in seismic activity. In the case of geothermal stimulation, this activity is often small enough that it is undetectable without seismic equipment but it can also be significant.⁹⁰ A stimulation project in Basel, Switzerland, was halted after significant induced seismic activity, and other geothermal stimulation projects in California, Oregon, and Nevada have been studied to help minimize the impacts of induced seismicity.⁹¹ A complete understanding of the dependencies, risk levels, and severity levels for induced seismicity from EGS stimulation is not known due to the newness of the technology and the limited number of operational EGS sites.⁹²

In an effort to address concerns about induced seismicity from EGS projects, Lawrence Berkeley National Laboratory (LBNL) developed a seismicity protocol to reduce the risk to project developers and the general public from induced seismicity associated with EGS.⁹³ The protocol has been implemented as part of NEPA reviews of EGS projects⁹⁴ and in addition to helping reduce or mitigate the impacts of seismicity, it helps inform agencies and stakeholders of any seismic events and potential mitigation activities.

Emissions and Waste

Critics note that emissions are an issue associated with geothermal power plants. In geothermal power systems employing open-loop cooling, the geothermal fluid is cooled and condensed via exposure to cooler, circulated water. The process involves evaporation and exposes the geothermal fluid to the atmosphere.⁹⁵ Emissions from open-loop geothermal systems can include hydrogen sulfide, carbon dioxide, ammonia, methane, and boron.⁹⁶ In closed-loop systems (which are often used in binary EGS plants, illustrated in Figure 1),⁹⁷ the geothermal fluid is not exposed to the atmosphere and thus the systems have practically zero emissions. Compared to other renewable power plants, such as solar or wind, open-loop geothermal power has higher emissions, but it has lower emissions compared to similarly-sized fossil fuel plants.⁹⁸

While geothermal power does not generate the amounts of solid wastes of coal mining⁹⁹ or the solid waste byproducts from burning fossil fuels (e.g., fly ash, bottom ash, boiler slag and particulates removed from flue gas),¹⁰⁰ it does generate solid waste from both well drilling operations (e.g., drill cutting, scale, domestic waste, silica sludge, and organic waste)¹⁰¹ and wastes from power plant operations (e.g., scale, flash tank solids, precipitated solids from brine treatment, hydrogen sulfide, and cooling-tower-related waste).¹⁰² These wastes need to be contained and treated or disposed of.¹⁰³ Additional sources of solid waste related to plant management or resource extraction may also exist. These include chemical additives used for reservoir or power plant management; waste associated with the precipitation of metals, sulfides, and naturally occurring radioactive materials; and by-product gases, solids, and salts associated with valuable minerals recovery.

Other Safety and Environmental Challenges

Critics note that EGS projects can use as much as 9.8 million gallons of water for stimulation, and lifetime water use for EGS operations could be as high as 10 billion gallons (as high as 0.72 gallons per kilo-watthour (kWh) produced).¹⁰⁴ Make-up water for cooling towers is an additional water need, but since the majority of EGS plants are anticipated to use binary, closed-loop dry cooling, this amount is expect to be relatively small. Like any other thermal power plant, a geothermal power plant that uses open-loop evaporative cooling would have higher cooling makeup water needs.¹⁰⁵ Though there have been no known cases of contamination of groundwater from geothermal activities,¹⁰⁶ the management of water supply, treatment of water or wastewater, and disposal of wastewater is an issue affecting the steam-electric power generation sector broadly.

Similar to the O&G sector, well blow-outs are a risk due to high-pressure, high-temperature geothermal fluids, and most countries have strict regulations to ensure safety.¹⁰⁷

Issues for Congress

Congress has established laws on accessing, leasing, and regulating geothermal resources and on related project elements including funding for RD&D. There are additional areas that Congress may wish to consider that could impact the development and deployment of EGS. The major areas of consideration are outlined below.

Federal Tax Incentives

Investment in geothermal technologies is currently supported by federal tax incentives. Incentives supporting clean electricity, including geothermal energy, were extended and expanded in the Inflation Reduction Act of 2022 (IRA; P.L. 117-169).¹⁰⁸ Geothermal energy facilities that begin construction by December 31, 2024, may be eligible for the production tax credit (PTC). The PTC is a per kilowatt hour tax credit that can be claimed for the production and sale of electricity produced using a qualifying renewable energy resource. Taxpayers can claim the PTC for the first 10 years of projection from a qualifying facility. Starting in 2023, only projects that pay prevailing wages and meet registered apprenticeship requirements will receive the full PTC amount (the PTC amount that was available before the PTC's most recent expiration). Bonus credits will be available for projects located in energy communities and projects that meet domestic content requirements.¹⁰⁹ Taxpayers can elect to claim a 30% investment tax credit (ITC) in lieu of the PTC. After 2024, the PTC and ITC will be superseded by technology-neutral tax credits that can be claimed for zero-emissions electricity generation from any resource.¹¹⁰

The IRA also provided that tax-exempt entities, including state and local governments and electric cooperatives, can receive tax credit amounts as payments from the Treasury ("direct pay"). Receiving the credit as direct pay is contingent on meeting domestic content requirements. The IRA also provided that taxpayers who are not tax-exempt entities, and ineligible for direct pay, are allowed a one-time transfer of the ITC and PTC, including the zero-emissions credits available after 2024. Thus, taxpayers effectively have the option of selling tax credits they cannot claim against their own tax liability.

Taxpayers are also allowed a five-year cost recovery period for investments in geothermal energy property. Most electricity-generating property is depreciated over 20 years; thus, five-year cost recovery benefits taxpayers by allowing investments costs to be recovered more quickly.

Improving Coordination for Federal Leasing and Permitting Processes and Regulatory Requirements

There are opportunities where Congress could establish or otherwise support communication and coordination between multiple federal, state, local, and tribal entities and nongovernmental entities for geothermal projects. This could include addressing common definitions and qualifications for renewable energy projects, portfolio standards, or renewable electricity standards.¹¹¹ It could also include coordinating subsurface resource access rights across or between states, and coordinating partnerships including federally-supported research institutes, public-private-partnerships, and others.

Congress established and has updated the qualifications and regulations regarding leasing of resources on federal lands, and as EGS technologies enable access to more resources in more locations these regulations will likely need to be revisited to accommodate new developments. The Mineral Leasing Act of 1920 (P.L. 66-146) established the federal regulations relating to leasing federal land for minerals, including hydrocarbons. The Geothermal Steam Act of 1970 (P.L. 91-581) expanded these regulations to cover geothermal energy, and since then these acts have been updated to expand and refine the definitions and regulations to include further developments such as EGS and resource extraction from geothermal brines.¹¹²

In the 117^th Congress, several bills, including the Enhancing Geothermal Production on Federal Lands Act of 2021 (S. 2824, H.R. 5350), have sought to address categorical exclusions. Current categorical exclusions under NEPA attempt to decrease the review time needed for some geothermal power development projects by reducing the number of environmental impact reviews required.¹¹³ The current exclusions are not as effective as similar exclusions available to O&G,¹¹⁴ so geothermal projects—when compared to similar O&G projects—require additional drilling permits and environmental impact assessments. Revising these categorical exclusions could reduce the length of the geothermal project development lifecycle. Alternatively, Congress could consider narrowing the exclusions to ensure that the impacts of geothermal projects are considered.

Congress could consider various amendments to federal leasing and permitting processes. Federal agencies, such as DOE GTO, and industry organizations, such as the Atlantic Council, have identified a need for dedicated funding for agencies which process geothermal leasing and permitting applications (e.g., Bureau of Land Management and Forest Service offices) to address bottlenecks in those processes.¹¹⁵

Congress could consider establishing or expanding frameworks for memoranda of understanding (MOU). MOUs explain how two or more agencies (including state authorities) interact when their authorities or responsibilities overlap. They can reduce duplication of effort when entities seek to meet multiple regulatory requirements, can reduce conflicts between regulatory requirements, and can coordinate data collection or other actions supporting regulatory oversight to speed up permitting and other development activities.¹¹⁶

Supporting Technology Transitions and Adaptations from Fossil Fuel Sectors

O&G assets often become stranded when wells, plant infrastructure, or other equipment with remaining service lifetimes are no longer economically viable to operate. Similarly, in these circumstances jobs in these sectors can be lost, and the skilled and experienced workforce is idled or gets other jobs that do not use its energy production knowledge. EGS can potentially make use of some of the technologies, equipment, tools, and infrastructure the fossil fuel industry has already developed or is developing (e.g., well drilling equipment, support equipment like down-well sensors, installation and stimulation technology, power plant systems, pipelines, old wells, well right-of-ways, and offshore drilling platforms), while also potentially leveraging the knowledgeable and experienced workforce from the legacy fossil energy sectors. With some retraining or refocusing, EGS could use workers with experience in areas such as underground resource identification, well drilling and completion, infrastructure installation, and power plant operation. Congress could consider laws supporting and encouraging technology transfer and adaptation from fossil fuel sectors, including reuse of idled assets, retraining of skilled workforce, and RD&D to adapt technologies for use in geothermal energy conditions. One current law that supports this kind of transition is the Inflation Reduction Act of 2022 (P.L. 117-169), which includes an extension of the Renewable Electricity Production Tax Credit (Section 45) and adds a 10% bonus for renewable energy facilities in "energy communities"—brownfield sites or fossil fuel communities.

Federal Support for Geothermal Technologies via RD&D

Congress has provided funding for RD&D of geothermal energy technologies via many federal agencies and programs. As EGS are a relatively new technology, they will require considerable additional investment to develop, adapt, and prove new technologies to enable greater deployment and to mitigate potential negative impacts of implementation. The major technology RD&D areas for EGS include

• resource discovery/detection, sensing, characterization, and measurement;
• advanced drilling technologies, like new bit materials, high-temperature motors, and alternative drilling technologies;¹¹⁷
• data-driven drilling optimization methods;
• reservoir modeling, simulations, and management tools;
• advanced stimulation strategies and processes; and
• critical materials extraction/recovery technologies.

The IIJA (P.L. 117-58) included some provisions relating to geothermal power.¹¹⁸ It provided $84 million for EGS pilot demonstration projects. DOE has since issued a request for information to support EGS pilot demonstration project funding.¹¹⁹ The IIJA also included broader programs and funding support for building long-distance electric power transmission lines which could support more geothermal development. It also established the DOE Office of Clean Energy Demonstrations (Section 41201), which can include geothermal projects (as well as other projects in renewables, nuclear, and carbon capture and storage). The IIJA appropriated $21.456 billion for this new office, though none of the current funds are specifically dedicated to geothermal projects. The number and extent of EGS demonstration projects are currently limited by their relatively high costs compared to other energy demonstration projects.

Funding for other DOE offices and other federal agencies also supports geothermal technology development, workforce training, and deployment. The Consolidated Appropriations Act, 2022 (P.L. 117-103, Division D) provided funding for DOE's Office of Energy Efficiency and Renewable Energy (EERE) totaling $3.20 billion for FY2022.¹²⁰ The joint explanatory statement recommended that of the total funding for EERE, $109.5 million be directed to geothermal technologies. For FY2023, the budget request for GTO is $202 million.¹²¹

Congress could consider coordinating geothermal power RD&D projects with other federal activities like carbon capture and storage, carbon capture and utilization, or subsurface energy storage projects.¹²² These other projects could benefit from the subsurface data collection, sensing technologies, or subsurface management technologies (such as geochemical modeling and control) critical to geothermal projects. This could include dedicated research funding for geothermal projects coordinating with other RD&D programs like those within DOE's Office of Fossil Energy and Carbon Management (formerly the Office of Fossil Energy).