A new Ember report finds that next-generation geothermal could replace a significant share of Europe’s fossil fuel generation at competitive costs.
Next-generation geothermal could cut Europe’s gas and coal reliance
Next-generation geothermal could help Europe break free from its dependence on gas and coal, and do so at costs comparable to fossil fuels. This is the conclusion of a new report published today by independent think tank Ember, titled Hot Stuff: Geothermal Energy in Europe, which assesses the potential and challenges of the most innovative geothermal technologies.
The label covers several recent advances in the sector, from Enhanced Geothermal Systems (EGS) to closed-loop and advanced systems, as well as geothermal batteries.
In recent years, the sector has refined soil analysis and drilling technologies, alongside improvements in heat extraction. Part of this progress builds on the fossil fuel industry’s drilling expertise, while artificial intelligence is now used to analyse seismic and geological data, optimising site selection and overall operational performance.
These advances allow for a reassessment of Europe’s geothermal potential, moving beyond traditional geographical limits.
What next-generation geothermal includes
High-enthalpy geothermal has long been confined to regions with naturally permeable and hot rocks, typically accessible at depths of up to 2,000 metres. Recent innovations have not only expanded drilling depth, with commercial exploitation now possible at 4,000 to 5,000 metres and ambitions reaching 7,000 metres, but also enabled the artificial creation of permeability.
This is the case with Enhanced Geothermal Systems, which use controlled fluid injection to widen natural micro-fractures and create channels through which the heat-transfer fluid can circulate.
Closed-loop systems can also extend subsurface exploitation to large parts of Europe previously considered unsuitable. These plants use sealed underground heat exchangers, with the working fluid circulating within closed pipes, never coming into direct contact with rock or natural underground fluids.
Both systems have already been tested on European soil. From early EGS pilot projects launched in France, Germany and Switzerland in the 2000s, Europe is now moving from demonstration to large-scale development. Advanced geothermal systems are also gaining ground: Italy has included them in its auctions for innovative renewables, while in Germany the first grid-connected closed-loop plant is operational.
The costs of next-generation geothermal
On paper, a vast share of potential remains untapped. For this reason, the report’s authors highlight how next-generation geothermal could already provide large-scale energy at competitive costs in Europe.
“Focusing on projects with estimated costs below €100/MWh (LCOE), in line with prices set by coal and gas generation in European power markets, and taking into account reservoir behaviour, plant performance and drilling depth, the techno-economic potential of geothermal energy in continental Europe reaches around 50 GW,” the report states.
When narrowing the scope to the European Union alone, the calculated potential stands at 43 GW, capable of generating approximately 301 TWh of electricity per year. In other words, next-generation geothermal could replace 42% of coal and gas generation recorded in the bloc last year.
Additional technical resources fall within an LCOE range of €100–200/MWh, depending on drilling depth and site characteristics.
Where the greatest potential lies
Considering developable geothermal capacity, the ranking of countries by low-cost potential is as follows.
Below €100/MWh, competitive with coal and gas:
- Hungary holds the largest share overall, with around 28 GW of low-cost potential.
- Türkiye follows with nearly 6 GW.
- Poland, Germany and France each show around 4 GW of potential.
Up to €200/MWh:
- France presents the highest total technical potential in Europe, exceeding 50 GW overall.
- Hungary ranks second with around 40 GW total potential.
- Poland follows with over 30 GW.
- Germany reaches approximately 15 GW in total.
“Europe has far more geothermal potential than commonly assumed,” said Jenna Hill of Ember. “Next-generation geothermal strengthens the European heating sector and extends its impact on clean, secure and reliable electricity generation across much of the continent. Continued investment in innovation and supportive policies can turn this resource into a cornerstone of the EU’s clean energy system.”
