Beyond Wind and Solar, Next-Generation Geothermal for Clean Firm Power
Blogpost by Dr. Marlène Siméon (marlene.simeon@fcarchitects.org), Director of Policy, and Dr. Antoine Koen (antoine.koen@fcarchitects.org), Cleantech Analyst – Lead Energy Systems.
Europe urgently needs more solar panels and wind turbines. But more renewable capacity alone will not deliver a resilient energy system. As Europe’s electricity mix becomes increasingly dominated by wind and solar, a structural question emerges: what provides stability when the wind is not blowing, and the sun does not shine?
Today, the answer is still too often fossil fuels. Since Europe is committed to energy sovereignty, industrial competitiveness, and decarbonization, that answer must change.
This is where next-generation geothermal energy becomes strategically important as a source of clean firm power. Alongside wind and solar, geothermal could become a core pillar of a European energy system that delivers clean, affordable, and reliable power.
Clean Firm Power and Heat
Geothermal heat can support both households and industry, particularly industrial heat applications below 200–400°C, covering a significant share of Europe’s final energy demand.
It can also provide firm electricity for large, continuous loads, such as data centers that require reliable clean power.
Countries such as France, Germany, Hungary, Italy, and Poland hold significant untapped geothermal potential.
Beyond depths of around 5 km, geothermal electricity becomes viable across much of Europe.
Combined heat and power systems create additional efficiency and revenue opportunities, while underground thermal energy storage could further improve flexibility and dispatchability across the wider energy system.
Geothermal’s Value Goes Beyond Cost
Cost remains a challenge for now. In particular, drilling is time-consuming and capital-intensive.
But geothermal should not be evaluated against wind and solar on its current levelized cost of electricity alone. Unlike wind and solar, geothermal provides clean firm power and heat, reducing the need for backup generation, long duration energy storage, and additional grid reinforcement.
In that sense, its value lies not only in the electricity it produces, but in the resilience and stability it brings to the wider energy system. It is not just about how many electrons it can produce, but also when those are produced: power during a Dunkelflaute (a sustained period with little sunlight and wind) is much more valuable than at noon during the summer when the grid is overflowing with solar and prices go negative.
Costs may also decline over time as deployment scales, technologies mature, and subsurface knowledge improves. Every well drilled improves geological knowledge, reduces uncertainty, and helps build industrial capabilities across the sector.
This could create a natural sequencing strategy for the EU. Geothermal heat may scale first, helping de-risk drilling technologies and supply chains before enabling geothermal electricity generation at greater depths.
Markets are already beginning to recognize this. Data centers and industrial players are increasingly signing long-term power purchase agreements for clean firm power, sometimes at a premium.
Europe Should Lead in Geothermal Energy
The continent is the historical birthplace of geothermal electricity, with the first commercial plant developed in the early 20th century in Tuscany.
Europe also possesses world-class subsurface expertise built through decades of oil and gas activity, alongside strong financial capacity, industrial capabilities, and ambitious climate targets.
And yet deployment remains slow.
Four barriers are holding geothermal back
- Exploration risk: Early-stage drilling remains expensive and uncertain, making projects highly capital-intensive from the outset.
- Fragmented subsurface data: Geological information is often siloed across national and private systems, increasing uncertainty and duplication.
- Financing: Geothermal projects are heavily dependent on upfront capital expenditure, while high interest rates and perceived technological risks continue to deter investment.
- Permitting: Across Europe, drilling approvals can take years, with fragmented regulatory frameworks across member states slowing deployment and undermining scale.
That is why we joined nearly 70 businesses, investors, think tanks, and civil society organizations in a letter to the European Commission, ahead of its upcoming Geothermal Action Plan. Its success will be measured not only in setting targets, but in creating the conditions necessary for deployment at scale.
First, Europe needs a dedicated geothermal de-risking facility. In its recent recommendations, AccelerateEU called for stronger European support mechanisms to reduce exploration and drilling risks for geothermal projects, including public guarantees and risk-sharing instruments for early-stage development. This is critical, as exploration and drilling can represent half of the project’s capital cost.
The Geothermal Action Plan should go further by also establishing an EU-wide geothermal de-risking mechanism capable of supporting preliminary studies, exploration, and providing guarantees for early-stage drilling. Existing national models in France, Germany, and the Netherlands provide useful foundations.
The Action Plan should also help mobilize private capital, particularly from the oil and gas sector – essential to scaling next-generation geothermal technologies.
Second, Europe should rely on a shared and granular subsurface database mapping temperatures, depths, and geological formations across member states, building on initiatives such as Project InnerSpace or EuroGeoSurveys. Better data would reduce uncertainty before drilling begins.
Third, policymakers should create long-term revenue stability mechanisms, including contracts for difference, feed-in tariffs, and long-term PPAs for both electricity and heat. These frameworks should reflect geothermal energy’s strategic system value as a source of clean firm power and will help to reduce financial risk to attract private investment.
Finally, Europe must accelerate permitting. Without speed, there will be no scale. And without scale, costs will not fall. Some member states are already demonstrating what is possible: Croatia, for example, has permitting timelines of just four to seven months.
Europe is currently lagging in geothermal deployment. But if the EU is serious about energy security, industrial competitiveness, and decarbonization, geothermal must move from the margins to the mainstream of European energy policy.