Enhanced Geothermal Systems (EGS): Frequently Asked Questions

Enhanced Geothermal Systems (EGS): Frequently Asked Questions

Enhanced Geothermal Systems (EGS):
June 7, 2024
Frequently Asked Questions
Morgan Smith
This report is divided into an introduction and four discussion sections, each of which addresses a
Analyst in Energy Policy
set of questions related to one of four key topics for EGS.

Importance

The first set of questions examines how enhanced geothermal systems (EGS) are different from typical geothermal
technologies and why they are of interest. EGS adapt and use technologies and processes originally developed for the oil and
gas industry to access more and deeper geothermal energy resources. This can enable greater geothermal electricity
production and potentially do so in more locations across the United States. In 2023, federal and industry research and
development (R&D) projects demonstrated key elements required for viable commercial EGS electricity generation.
Technical and Cost Challenges
The second set of questions examines the challenges related to EGS technologies and their development. The primary
challenges are technical and related costs largely associated with adapting the drilling, stimulation, and plant operations
technologies and processes to geothermal working conditions. These challenges include identifying and confirming sufficient
underground geothermal resources; drilling to and through deep, hard rock; operating in high-temperature, reactive
geochemical environments; and maintaining efficient and sustainable electricity generation over decades. Additional
challenges include mitigating, managing, and communicating about potential emissions, seismicity, water use, and impacts
on ground water resulting from geothermal energy development.
Comparisons with Other Energy Resources
The third set of questions examines how EGS and geothermal energy compare to other sources of electricity and how EGS
can benefit from resources in the oil and gas industry in particular. The electricity-generating capacity of wind, solar
photovoltaic, and natural gas has expanded over the last 15 years—partially due to lower costs and greater emissions-related
benefits. The U.S. Department of Energy (DOE) anticipates similar cost reductions from future EGS R&D, which could
enable significant amounts of renewable, low-emission, baseload power generation from EGS. Also, EGS developers could
leverage many resources from the oil and gas industry, including drilling rigs and other equipment, unused or underused
wells, drilling and reservoir management technologies, resource and operational knowledge bases, and workforce skill sets
and expertise.
Development Potential and Supporting Policy Options
The final set of questions examines the overall potential for EGS technology and the potential policy support options for
Congress. DOE’s projections estimate that EGS developments could enable 90 gigawatts of geothermal electricity generation
capacity by 2050—potentially supplying as much as 12% of U.S. electricity demand. If Congress chooses to support
expansion of EGS, it could appropriate funds for specific EGS demonstration projects—a particularly costly element of EGS
development—or it could examine ways in which existing federal incentives (such as tax benefits that reduce development
risks and costs) could be expanded or applied to EGS exploration or development activities.

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Contents
Introduction ..................................................................................................................................... 1
Importance ....................................................................................................................................... 2
Given the small share that geothermal power currently contributes to the U.S. electric
grid, why is there interest in EGS? ........................................................................................ 2
How is EGS technology different from traditional geothermal technology? ............................ 2
Geothermal power has been around for a long time. Why has it been in the news
recently? ................................................................................................................................. 3
Technical and Cost Challenges ........................................................................................................ 3
What are the challenges for EGS technology? .......................................................................... 3
What about other potential concerns, such as emissions, seismicity, water use, or
impacts on ground water? ...................................................................................................... 4
Comparisons with Other Energy Resources .................................................................................... 5
How does EGS technology compare to other fossil fuel, nuclear, or renewable
electricity options? ................................................................................................................. 5
Can EGS benefit from resources from the oil and gas industry? .............................................. 6
Development Potential and Supporting Policy Options .................................................................. 6
How much potential is there for EGS electricity generation? ................................................... 6
If Congress chooses to support expansion of EGS, what are potential policy options? ........... 7

Contacts
Author Information .......................................................................................................................... 8

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Enhanced Geothermal Systems (EGS): Frequently Asked Questions

Introduction1
Geothermal energy—natural heat from deep in the earth—has long been pursued as a source of
renewable energy, but in the United States, development has been geographically limited to
certain areas in western states.2 Recent developments in enhanced geothermal systems (EGS)
have increased the potential for geothermal power to supply more electricity in a larger area of
the United States.3 EGS involve drilling multiple injection and production wells and running
pipelines to each well. Geothermal fluid4 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.5 The injected geothermal fluid, which helps form an underground
reservoir, 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.6
While geothermal energy currently produces only 0.4% of U.S. electricity,7 the United States
produces the largest amount of geothermal electricity worldwide.8 If the United States continues a

1 For more information on enhanced geothermal systems (EGS), see CRS Report R47256, Enhanced Geothermal
Systems: Introduction and Issues for Congress, by Morgan Smith, and CRS Report R47405, Oil and Gas Technology
and Geothermal Energy Development, by Morgan Smith.
2 The United States had 3,722 megawatts (MW) of geothermal power capacity at the end of 2021, out of a worldwide
total of 15,854 MW. The majority of traditional geothermal resources are hydrothermal resources located at the
boundaries between the Earth’s tectonic plates. Alexander Richter, “ThinkGeoEnergy’s Top 10 Geothermal Countries
2021—Installed Power Generation Capacity (MWe),” ThinkGeoEnergy, January 10, 2022,
https://www.thinkgeoenergy.com/thinkgeoenergys-top-10-geothermal-countries-2021-installed-power-generation-
capacity-mwe/; U.S. Energy Information Administration, “Geothermal Explained: Where Geothermal Energy Is
Found,” February 15, 2022, https://www.eia.gov/energyexplained/geothermal/where-geothermal-energy-is-found.php.
3 See U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy, “How an Enhanced Geothermal
System Works,” September 9, 2022, https://www.energy.gov/eere/geothermal/how-enhanced-geothermal-system-
works.
4 A geothermal fluid is typically a mixture of water and other constituents which is circulated through a reservoir and
heated by the earth. It can be extracted for a variety of power generation, heating, or other applications before being
returned to the reservoir. Supercritical carbon dioxide (CO2) is also being explored as a potential fluid for use in
reservoirs with the appropriate characteristics. Y. Sakai, “Advanced Geothermal Steam Turbines,” in Advances in
Steam Turbines for Modern Power Plants, ed. Tadashi Tanuma (Sawston, United Kingdom: Woodhead Publishing,
2016), https://doi.org/10.1016/B978-0-08-100314-5.00019-1; Yu Wu and Pan Li, “The Potential of Coupled Carbon
Storage and Geothermal Extraction in a CO2-Enhanced Geothermal System: A Review,” Geothermal Energy, vol. 8,
article 19 (2020), https://doi.org/10.1186/s40517-020-00173-w.
5 Stimulation for EGS is similar to hydraulic fracturing—fracking—used in extracting fossil fuels, though there are
notable differences in implementation and effects.
6 U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy, “How an Enhanced Geothermal
System Works,” September 9, 2022, https://www.energy.gov/eere/geothermal/how-enhanced-geothermal-system-
works.
7 U.S. Energy Information Administration, Monthly Energy Review: May 2024, 2024, https://www.eia.gov/totalenergy/
data/monthly/pdf/mer.pdf.
8 Alexander Richter, “ThinkGeoEnergy’s Top 10 Geothermal Countries 2021—Installed Power Generation Capacity
(MWe),” ThinkGeoEnergy, January 10, 2022, https://www.thinkgeoenergy.com/thinkgeoenergys-top-10-geothermal-
countries-2021-installed-power-generation-capacity-mwe/; Gerald W. Huttrer, “Geothermal Power Generation in the
World 2015-2020 Update Report,” in Proceedings World Geothermal Congress 2020+1 (Bonn, Germany:
International Geothermal Association, April-October 2021), https://www.geothermal-energy.org/pdf/IGAstandard/
WGC/2020/01017.pdf.
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transition to lower carbon energy sources, new geothermal technologies like EGS could play a
larger part in the electricity system.
Importance
Given the small share that geothermal power currently contributes
to the U.S. electric grid, why is there interest in EGS?
The main reasons for the current interest in EGS technology are that it can access deeper heat
reservoirs and those with less favorable conditions than those accessible by traditional geothermal
technologies. Accessing these reservoirs could increase the amount of geothermal electricity
generation, open the application of geothermal power to more locations across the United States,
and enable more low-carbon, baseload electricity generation to complement the rest of the
nation’s energy mix.
How is EGS technology different from traditional geothermal
technology?
Traditional geothermal technology typically requires a couple of elements to coexist—
underground heat close enough to the surface that developers can access it and sufficient water in
either liquid or steam form to allow for heat extraction. There are more locations in the western
United States than in other parts of the country that meet these geophysical requirements, which
is why all 93 U.S. geothermal power plants identified by the Department of Energy (DOE) in
2021 are located in seven western states.9 Those and other states also have some direct-use
geothermal systems that provide heating for a variety of purposes, including spas, greenhouses,
district heating, and industrial heating and drying applications. However, applications at locations
without these favorable geophysical conditions are more challenging.
This is where developments in EGS technologies may play a role. EGS technologies build on
developments from the oil and gas industries—including directional drilling and fracking (or
stimulation) technologies. Those technologies have enabled the oil and gas industry to access
more hydrocarbon resources and increase domestic production of hydrocarbon fuels over the past
roughly 20 years.10 Now, researchers supported by DOE and industry are working to adapt those
technologies to geothermal conditions and applications.11 Successful development could enable
geothermal electricity generation in more areas of the United States, even if the potential
geothermal source is deep in the earth, trapped within the bedrock, and lacking in water.

9 Doug Blankenship et al., “Pathways to Commercial Liftoff: Next-Generation Geothermal Power,” U.S. Department of
Energy, March 2024, https://liftoff.energy.gov/wp-content/uploads/2024/03/
LIFTOFF_DOE_NextGen_Geothermal_v14.pdf.
10 U.S. Department of Energy, “Economic and National Security Impacts Under a Hydraulic Fracturing Ban,” January
2021, pp. 9-10, https://www.energy.gov/fecm/articles/economic-and-national-security-impacts-under-hydraulic-
fracturing-ban.
11 U.S. Department of Energy, Geothermal Technologies Office, GeoVision: Harnessing the Heat Beneath Our Feet,
May 2019, p. 8, https://www.energy.gov/sites/default/files/2019/06/f63/GeoVision-full-report-opt.pdf.
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Geothermal power has been around for a long time. Why has it
been in the news recently?
DOE’s Utah FORGE project and geothermal industry companies like Fervo Energy have been
working to prove and commercialize EGS technologies.12 Since 2023, both Utah FORGE and
Fervo have announced successful demonstrations of EGS technology, enabling key elements for
geothermal power:13 chiefly, the drilling of injection and production wells, injection of
geothermal fluids and stimulation of subsurface cracks, and circulation of geothermal fluid
through reservoirs sufficient for power generation. Google announced in November 2023 that
Fervo’s “full-scale commercial pilot” plant had become the first operational EGS plant in the
United States. It is a 3.5 megawatt (MW) plant operating in Nevada and developed in concert
with Google to provide power for their data centers. Fervo is working on a larger 400 MW EGS
plant at its test site in Utah. For context, a 400 MW output is roughly equivalent to that of an
average natural-gas-fired generation plant.
Technical and Cost Challenges
What are the challenges for EGS technology?
The primary challenges are technical and related costs. The operating conditions for geothermal
power are more difficult than those for similar oil and gas operations. So, when transitioning the
drilling, stimulation, and operations technologies developed for those industries to geothermal,
they have to be adapted in a number of ways. Geothermal reservoirs are generally hotter, so new
materials for seals, electronics, and sensors have to be developed to withstand the heat. The
geothermal reservoirs being tapped are often deeper and beneath harder rock than what is found
in an oil and gas reservoir, so stronger drill bits and deeper drilling technologies are needed.
Additionally, the stimulation technology—adapted from fracking—needs to be able to stimulate
and maintain sufficient porosity (cracks) in the reservoir to allow the geothermal fluid to circulate
and to extract sufficient heat from the reservoir without allowing chemicals to build up or clog the
reservoir or power plant piping.
Additionally, there is a general lack of knowledge about potential geothermal resources—where
they are located, what the geological and geochemical conditions are—and there is a need to
develop an accurate understanding and models of subsurface conditions to properly create and
maintain reservoir and plant operating conditions. Finally, all of these technology adaptations,
and the challenges associated with drilling wells and optimizing a plant for the appropriate
conditions, are expensive compared to typical oil and gas production activities or to the
development costs for some other renewable energy plants that use technologies such as wind or
solar photovoltaics. Achieving all these technical requirements and generating electricity at a cost
that is competitive with other sources is the challenge for researchers right now.

12 Utah FORGE, “Vision,” 2024, https://utahforge.com/about/vision/; Fervo Energy, “Technology,” 2024,
https://fervoenergy.com/technology/.
13 U.S. Department of Energy, “Utah FORGE’s Literal Breakthrough for the Enhanced Geothermal Systems
Community,” July 10, 2023, https://www.energy.gov/eere/geothermal/articles/utah-forges-literal-breakthrough-
enhanced-geothermal-systems-community; Fervo Energy, “Fervo Energy Announces Technology Breakthrough in
Next-Generation Geothermal,” press release, July 18, 2023, https://fervoenergy.com/fervo-energy-announces-
technology-breakthrough-in-next-generation-geothermal/.
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What about other potential concerns, such as emissions, seismicity,
water use, or impacts on ground water?
Similar to other renewables, geothermal power has few atmospheric emissions. The exact levels
depend on the system configuration and the natural characteristics of the geothermal reservoir,
but closed-loop and binary geothermal systems have practically no emissions.14 Beyond
emissions, other primary environmental concerns include seismicity, water use, and ground water
impacts.
Induced seismicity—earthquakes caused by development activity—is one frequently cited
concern related to EGS technologies.15 Seismic events can occur during well construction, well
stimulation, and power plant operations. In response to induced seismicity from early EGS
activities, Lawrence Berkeley National Laboratory developed a seismicity protocol to reduce this
risk.16 The protocol has been implemented as part of federal environmental reviews of EGS
projects. It serves to inform government agencies and other stakeholders of any seismic risks and
potential mitigation activities.
EGS projects can use as much as 10 million gallons of water for stimulation, and they use water
for operations throughout their lifetime.17 However, geothermal power cycles and cooling cycles
are anticipated to generally use binary, closed-loop dry cooling, so the total amount of water
consumed is expected to be relatively small (compared to the amounts used in alternative power
generation and cooling). And though there have been no known cases of groundwater
contamination from geothermal activities, such considerations are part of the permitting and
regulatory process for geothermal development.

14 In closed-loop systems, the working fluid—water in the case of cooling loops or geothermal fluid in the case of
geothermal power loops—is not exposed to the atmosphere, thus not subjected to evaporation or contamination. In
binary systems, the heat from the geothermal fluid is used to convert a second liquid—generally one with a lower
boiling point than water—to vapor to drive the turbines and generate electricity. A binary fluid allows the system to
generate electricity from a lower temperature geothermal resource. For more information, see CRS Report R47256,
Enhanced Geothermal Systems: Introduction and Issues for Congress, by Morgan Smith.
15 Tharaka Dilanka Rathnaweera et al., “Understanding Injection-Induced Seismicity in Enhanced Geothermal Systems:
From the Coupled Thermo-hydro-mechanical-chemical Process to Anthropogenic Earthquake Prediction,” Earth-
Science Reviews, vol. 205 (June 2020), https://doi.org/10.1016/j.earscirev.2020.103182; Julie Haffner, “Reducing
Human-Induced Earthquake Risk,” Phys.org, January 6, 2020, https://phys.org/news/2020-01-human-induced-
earthquake.html; U.S. Department of Energy, Geothermal Technologies Office, GeoVision: Harnessing the Heat
Beneath Our Feet, May 2019, p. 8, https://www.energy.gov/sites/default/files/2019/06/f63/GeoVision-full-report-
opt.pdf.
16 U.S. Department of Energy, Geothermal Technologies Office, Protocol for Addressing Induced Seismicity
Associated with Enhanced Geothermal Systems, January 2012, https://www.energy.gov/sites/prod/files/2014/02/f7/
geothermal_seismicity_protocol_012012.pdf.
17 Rafał Moska et al., “Hydraulic Fracturing in Enhanced Geothermal Systems—Field, Tectonic and Rock Mechanics
Conditions—A Review,” Energies, vol. 14, no. 18, article 5725 (September 2021), https://doi.org/10.3390/
en14185725; C. E. Clark et al., “Water Use in the Development and Operation of Geothermal Power Plants,” Argonne
National Laboratory, January 2011, https://doi.org/10.2172/1013997.
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Comparisons with Other Energy Resources
How does EGS technology compare to other fossil fuel, nuclear, or
renewable electricity options?
Of the new electric-generating capacity DOE anticipates will be installed in 2024, 71% is
expected to be from solar and wind.18 An additional 23% is expected to be battery storage.19 Wind
and solar have been expanding because research and development (R&D) over the last 15 years
has reduced costs for those technologies by about 90% and because of their environmental,
mainly emissions, benefits.20 Natural gas is expected to provide 4% of new capacity.21 It, too, has
seen recent expansion, largely driven by a combination of low fuel costs from expanded domestic
shale gas production and lower emissions compared to coal-fired power plants.
Currently, natural-gas-fired generation is important to the power grid because it provides baseload
power—it is always available, provided that the plant has sufficient fuel. In contrast, wind and
solar sources are intermittent—they generate power only when the wind is blowing or the sun is
shining.22 This intermittency is one factor driving battery storage deployment, especially where
wind and solar generation are significant suppliers to the power grid—storage works in concert
with these intermittent renewables to save excess electricity for use when needed and effectively
increases the value of these renewable sources.
Geothermal power has a number of potentially desirable characteristics—it is always available,
does not rely on fuel supplies and thus has no fuel costs, and has low emissions comparable to
renewables such as solar and wind. In terms of life cycle emissions, it is estimated to have lower
per-kilowatt-hour emissions than solar photovoltaics.23 An additional benefit of EGS technology,
compared to traditional hydrothermal technology, is that it can be developed in more places
across the United States. EGS technology can access deeper sources of heat, create and maintain
reservoir porosity, and inject water to enhance heat capture and circulation. EGS can be sited
closer to population centers in the central and eastern United States, reducing the amount of
additional long distance electricity transmission capacity needed, decreasing the need for more
natural gas pipelines or natural gas consumption, and supplementing low-carbon electricity
supplies where other renewable resources are not as plentiful.

18 U.S. Energy Information Administration, “Solar and Battery Storage to Make Up 81% of New U.S. Electric-
Generating Capacity in 2024,” February 15, 2024, https://www.eia.gov/todayinenergy/detail.php?id=61424.
19 Ibid.
20 David Feldman et al., “U.S. Solar Photovoltaic System and Energy Storage Cost Benchmark: Q1 2020,” National
Renewable Energy Laboratory, January 2021, https://www.nrel.gov/docs/fy21osti/77324.pdf; Vignesh Ramasamy et
al., “U.S. Solar Photovoltaic System and Energy Storage Cost Benchmarks, with Minimum Sustainable Price Analysis:
Q1 2023,” National Renewable Energy Laboratory, September 2023, https://www.nrel.gov/docs/fy23osti/87303.pdf;
U.S. Energy Information Administration, “Wind, Solar, and Batteries Increasingly Account for More New U.S. Power
Capacity Additions,” March 6, 2023, https://www.eia.gov/todayinenergy/detail.php?id=55719.
21 U.S. Energy Information Administration, “Solar and Battery Storage to Make Up 81% of New U.S. Electric-
Generating Capacity in 2024,” February 15, 2024, https://www.eia.gov/todayinenergy/detail.php?id=61424.
22 For more details, see CRS Report R45764, Maintaining Electric Reliability with Wind and Solar Sources:
Background and Issues for Congress, by Ashley J. Lawson.
23 National Renewable Energy Laboratory, “Life Cycle Greenhouse Gas Emissions from Electricity Generation:
Update,” September 2021, https://www.nrel.gov/docs/fy21osti/80580.pdf.
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Can EGS benefit from resources from the oil and gas industry?
As noted above, the geothermal power and oil and gas industries have in some ways codeveloped,
sharing some technologies, knowledge bases, skill sets, and processes. This means that in
addition to the drilling rigs and drilling, stimulation, and well completion technologies that are
being adapted for geothermal use, EGS development can leverage other oil and gas technologies
and resources.
As they both depend on underground resources, the two sectors can share exploration and data
collection technologies to help find, estimate, test, and confirm geothermal resources. DOE’s
Geothermal Technologies Office has programs to improve underground resource data, to expand
on data from the U.S. Geological Survey and in particular on Hawaii and Alaska resources, and to
improve subsurface depth profiles.24
There is also the potential for EGS to reuse non- or underproductive oil and gas fields. Oil and
gas wells have potential value for geothermal development because they have already been
drilled and completed and because their creation and operation generate associated data on
subsurface conditions—all of which can reduce geothermal development costs and risks in those
locations.
EGS projects and plants can benefit from the oil and gas industry’s workforce. Technicians,
engineers, and scientists can bring years of experience in resource exploration, drilling,
stimulating, well completion, and well and power plant operations. They can also leverage
existing relationships and understanding of project financing and risk management related to
underground resource development gained in the oil and gas industry. This knowledge and
experience may decrease the risks and costs of geothermal energy development.
EGS development may ultimately benefit workers displaced from the oil and gas industries. If the
United States continues to transition to lower carbon energy sources, the oil and gas sector could
contract and the geothermal energy sector could expand. Thus, EGS development could offset
some of the negative impacts the energy transition has on the workers from fossil-fuel-dependent
industries, especially when EGS plants are colocated near non- or underproductive oil and gas
fields.
Development Potential and Supporting Policy
Options
How much potential is there for EGS electricity generation?
If EGS technology continues to demonstrate reduced costs, DOE projects that U.S. geothermal
capacity could increase from the current 16 gigawatts (GW) to 38 GW by 2035 and 90 GW by
2050.25 Because of geothermal energy’s potential to be “always on,” it could generate as much as

24 U.S. Department of Energy, Geothermal Technologies Office, “Data, Modeling, and Analysis,”
https://www.energy.gov/eere/geothermal/data-modeling-and-analysis; Sean Porse et al., “Fiscal Years 2022–2026:
Multi-Year Program Plan,” Government Technologies Office, February 2022, https://www.energy.gov/eere/
geothermal/articles/geothermal-technologies-office-multi-year-program-plan-fy-2022-2026; U.S. Department of
Energy, “National Laboratory Call for Proposals: National Lab Funding for Fiscal Year 2024,”April 18, 2024,
https://www.energy.gov/eere/geothermal/articles/critical-materials-laboratory-call.
25 Chad Augustine et al., “Enhanced Geothermal Shot Analysis for the Geothermal Technologies Office,” National
Renewable Energy Laboratory, January 2023, https://www.nrel.gov/docs/fy23osti/84822.pdf.
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12% of U.S. electricity by 2050.26 These projections are a 50% increase over those from the
Geothermal Technology Office’s GeoVision report from 2019, which provided a technical
analysis of future geothermal deployment opportunities given increased access to geothermal
resources, reduced costs and improved economics for geothermal projects, and improved
education and outreach about geothermal energy.27 This increase has been driven by
demonstrations of increased geothermal fluid flow rates through wells, decreased drilling and
well costs, and anticipated economic efficiencies from increased average power plant sizes—all
results of recent R&D in the sector. DOE estimates the technical potential to be orders of
magnitude higher.
If Congress chooses to support expansion of EGS, what are
potential policy options?
Congress, through DOE, has supported and is supporting R&D for geothermal energy—the
Energy Act of 2020 (Division Z of P.L. 116-260) provided for R&D across the sector. Congress
could expand R&D support, for example in the area of subsurface data collection,
characterization, and modeling.28 Another major area that remains a challenge for geothermal
development is the high cost of demonstration projects. When Congress enacted the Infrastructure
Investment and Jobs Act (IIJA; P.L. 117-58) in 2021, it directed and funded a Clean Energy
Demonstration Program within DOE.29 To date, Congress has not directed funds for that program
specifically for geothermal demonstrations.
Congress could expand some of the tax incentives, currently accessible to the oil and gas industry,
to EGS development where there are similarities in costs, risks, or benefits. Geothermal energy
experiences similar costs and risks related to exploration, well drilling, and production activities
as the oil and gas industry.30 Despite these similar challenges, the geothermal energy industry
does not have access to all of these tax options. Some examples include tax credits for enhanced
oil recovery or credits for production from marginal wells—these credits could be modified to
cover EGS development as it uses some of these same enhancement technologies and can reuse
or extend the use of old oil and gas wells.31
Congress could also consider enabling or enhancing power purchase agreements or other similar
mechanisms within the federal government that would access and demonstrate the full value of
geothermal electricity. Geothermal electricity generation has characteristics that might not be
fully valued in all markets—example characteristics include flexibility, baseload or reserve

26 Ibid.
27 U.S. Department of Energy, Geothermal Technologies Office, GeoVision: Harnessing the Heat Beneath Our Feet,
May 2019, https://www.energy.gov/sites/default/files/2019/06/f63/GeoVision-full-report-opt.pdf.
28 The Geothermal Technologies Office highlights data collection as an R&D focus area affecting many aspects of EGS
development. Sean Porse et al., “Fiscal Years 2022–2026: Multi-Year Program Plan,” February 2022,
https://www.energy.gov/eere/geothermal/articles/geothermal-technologies-office-multi-year-program-plan-fy-2022-
2026.
29 42 U.S.C. §18861. For more information on IIJA programs, see CRS Report R47034, Energy and Minerals
Provisions in the Infrastructure Investment and Jobs Act (P.L. 117-58), coordinated by Brent D. Yacobucci.
30 Bethany Speer et al., “Geothermal Exploration Policy Mechanisms: Lessons for the United States from International
Applications,” National Renewable Energy Laboratory, May 2014, https://www.nrel.gov/docs/fy14osti/61477.pdf.
31 Enhanced oil recovery credit: 26 U.S.C. §43. Credit for producing oil and gas from marginal wells: 26 U.S.C. §45I.
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capacity, insulation from fluctuating fuel prices, and qualities like anticipated plant life or
capacity factor.32

Author Information

Morgan Smith

Analyst in Energy Policy

Disclaimer
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32 Sean Porse et al., “Fiscal Years 2022–2026: Multi-Year Program Plan,” February 2022, https://www.energy.gov/
eere/geothermal/articles/geothermal-technologies-office-multi-year-program-plan-fy-2022-2026.
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