States Seek to Unlock Geothermal Potential in the Western US

Western states in the US are taking steps to support the development of next-generation geothermal energy, which has the potential to provide hundreds of gigawatts of clean electricity around the clock.

## A New Era for Geothermal Energy

Unlike traditional geothermal plants, next-generation projects use innovative underground techniques to produce power wherever rocks are sufficiently hot. This makes it possible to harness heat in more locations, increasing the potential for geothermal energy production.

## State-Level Support for Geothermal Development

Several western states are increasing their support for the industry, using tools like direct investment and permitting reform. For example, California has adopted a procurement order calling on utilities to add at least 1 GW of "clean firm resources," such as geothermal, to meet the state's long-term climate goals and grid reliability requirements.

### State-by-State Efforts

| State | Policy Changes | Investments | | --- | --- | --- | | California | Procurement order for 1 GW of clean firm resources | | | Colorado | Requires investor-owned utilities to solicit proposals for large geothermal projects | $494,000 to Fervo to evaluate geothermal potential | | New Mexico | Backing commercial deployment of a novel geothermal system through its sovereign wealth fund | | | North Dakota | Scanned and digitized historic geologic data and provides it to academics and companies | | | Arizona | Invested $1 million in the state's geological survey to integrate historic subsurface data with new information | | | Washington | Passed a bipartisan law to create a public database of subsurface information and grant programs for deep exploratory drilling | | | Nevada | Clarified agency jurisdiction over drilling and operating geothermal wells | | | Texas | Passed a law to clarify who owned geothermal resources on a given property | |

## Overcoming Economic Barriers

Despite state-level support, next-generation geothermal energy still faces significant economic barriers. These include high upfront drilling costs, slow investment returns, and uncertainty around project development. To overcome these challenges, states need to adopt more sweeping and coordinated policies to help companies secure large-scale financing.

## The Role of States in Scaling Geothermal Energy

While states have made some progress in supporting geothermal development, more needs to be done to scale up the industry. States can create demand for utility-scale geothermal, make geological records more readily available, and clarify permitting processes to reduce project risks. By working together, states can help unlock the full potential of geothermal energy in the western US.