Geothermal is attracting more attention than at any point in recent decades. Fervo’s IPO brought public-market attention to enhanced geothermal systems, and Quaise’s recent $134 million Series B first close showed continued investor appetite for superhot geothermal and millimeter-wave drilling. Developers are improving drilling performance, stimulation design, reservoir modeling, subsurface monitoring, and project execution. Oil and gas capabilities in drilling, completions, subsurface characterization, and reservoir management are also moving into geothermal.
The entrepreneurs building these businesses deserve credit. Geothermal is among the most technically demanding areas of the energy industry. Projects require solutions across deep drilling, high-temperature operations, fracture design, fluid circulation, heat recovery, grid interconnection, and long-term commercial delivery.
ADI has followed geothermal for more than a decade through market studies, technology assessments, lifecycle economic evaluations of engineered geothermal systems, and strategy work across the geothermal value chain. The resource opportunity remains significant. Geothermal can support firm power, industrial heat, subsurface energy applications, and adjacent opportunities including lithium extraction and thermal storage. Commercial success will depend on whether developers can demonstrate repeatable field performance across a larger project base. Investors should focus on six indicators (see Exhibit 1).
Exhibit 1. Key indicators and corresponding metrics to assess geothermal’s commercial growth.
Well deliverability will show whether wells can maintain commercial flow. Drilling economics will show whether cost reductions translate into lower delivered cost per MW. Reservoir architecture will show whether fracture networks can be created and managed repeatedly. Heat and water management will show whether production can be sustained over the life of a project. Commercial performance will show whether PPAs can be served on time and at contracted availability. Resource quality will show whether large heat-in-place estimates can become bankable capacity.
We expand on each of these below.
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