DOE Puts $99 Million Behind the Next U.S. Geothermal Frontier

Twenty-one projects will take advanced geothermal technology from underground models to real-world drilling sites across the United States — testing whether heat beneath ordinary rock can become a much larger source of round-the-clock electricity.

The United States is preparing to drill deeper into one of its largest—and still largely undeveloped—domestic energy resources.

On September 21, 2026, the U.S. Department of Energy announced the selection of 21 geothermal projects for up to roughly $99 million in funding for their first budget period.

The projects span enhanced geothermal systems, conventional hydrothermal resources, high-temperature reservoirs and exploratory drilling programs across much of the American West and Alaska.

The initiative is less about building 21 new power plants immediately than solving one of geothermal energy's fundamental problems: uncertainty.

Unlike a solar or wind developer, which can measure the resource above ground before committing most of its capital, a geothermal developer often has to spend millions of dollars drilling into the Earth before knowing precisely what is underground.

DOE's latest program is designed to attack that risk directly.

Five projects will conduct field-scale tests of enhanced geothermal systems, or EGS, at temperatures and depths relevant to commercial electricity production. Another 16 will drill exploratory or confirmation wells intended to establish whether promising underground resources are actually suitable for larger-scale development.

The resulting data will not simply remain with the companies receiving the awards. DOE says information generated through the projects will be made publicly available through its Geothermal Data Repository, allowing researchers and other developers to learn from wells they did not have to finance themselves.

That makes the program partly an energy-development initiative and partly a national subsurface-data project.

And the timing matters.

The U.S. currently gets only a small fraction of its electricity from geothermal energy.

According to the Energy Information Administration, geothermal plants produced roughly 16 billion kilowatt-hours in 2025, representing about 0.4% of U.S. utility-scale electricity generation. Most of that production was concentrated in California and Nevada.

Yet geothermal's potential could extend far beyond the volcanic and hydrothermal regions where the industry has historically operated.

Advanced drilling, horizontal wells, reservoir stimulation, closed-loop systems, high-temperature materials and techniques adapted from the oil and gas industry are beginning to challenge an assumption that has constrained geothermal for decades: that power plants have to be built only where nature has already provided the right combination of heat, underground fluids and permeable rock.

That is the assumption these 21 projects are attempting to break.

From Finding Hot Water to Engineering a Geothermal Reservoir

Traditional geothermal development generally depends on finding three things underground: heat, fluid and permeability.

The heat provides the energy. The fluid carries it toward the surface. And permeability—the ability of water to move through fractures and pores in the rock—allows a geothermal reservoir to circulate that fluid.

Much of the Earth has more than enough heat at depth. What is frequently missing is the combination of naturally occurring water and rock permeability required for a conventional geothermal power plant.

Enhanced geothermal systems attempt to manufacture part of that reservoir.

Developers drill into sufficiently hot rock and create or improve underground pathways through which fluid can circulate. The fluid absorbs heat before returning toward the surface, where that thermal energy can be converted into electricity.

The concept has been researched for decades.

What has changed is the technology surrounding it.

Horizontal drilling, directional drilling, sophisticated well completions, seismic imaging, fiber-optic sensing, reservoir modeling and stimulation techniques have advanced dramatically—many of them because of the U.S. oil and gas industry's shale revolution.

Modern geothermal companies are now attempting to apply that industrial tool kit to heat instead of hydrocarbons.

DOE's latest selections show just how broad that experimentation has become.

Five Projects Will Test EGS at Field Scale

The most technically ambitious portion of the new portfolio consists of five projects designed to operate at depths and temperatures relevant to commercial geothermal development.

Fervo Energy — Elmore County, Idaho

Fervo Energy will drill, complete and stimulate EGS wells in Elmore County, Idaho.

The project is particularly notable for its planned deployment of what DOE describes as the first high-temperature, three-component geophone array operating at temperatures of at least 200 degrees Celsius.

Geophones are essentially underground seismic sensors. In an EGS development, they can help engineers understand how rock fractures respond as a reservoir is created or operated.

Fervo will combine that monitoring system with seismic and geochemical analysis conducted with national laboratory partners.

The project is representative of a broader shift in geothermal engineering: developers are increasingly treating the subsurface as something that can be measured, monitored and engineered continuously rather than simply discovered through exploratory wells.

Zanskar Geothermal & Minerals — Lightning Dock, New Mexico

Zanskar will test a different concept at the Lightning Dock geothermal field in Hidalgo County, New Mexico.

Instead of developing an entirely isolated reservoir, the company plans to drill and stimulate a short-lateral horizontal injection well designed to provide engineered pressure support to an existing hydrothermal reservoir.

The project will attempt to capture additional heat from impermeable hot rock surrounding the existing system.

Lightning Dock is already an important geothermal laboratory.

Zanskar says a production well there has operated for a full year without measurable thermal decline while flowing more than 4,000 gallons per minute. Historical and operational information covering dozens of wells at Lightning Dock has also been assembled in DOE's geothermal data infrastructure.

The new DOE project could therefore help test a particularly interesting commercial model: using EGS techniques not just to create entirely new geothermal fields, but to expand or improve existing ones.

AlterG Resources — Nevada

AlterG Resources will test EGS technology in Pershing and Churchill counties, Nevada.

The company plans to use a deep horizontal well pair and compare two completion strategies—plug-and-perforation and sliding-sleeve systems.

Both approaches are familiar to engineers working in unconventional oil and gas production.

Testing them side by side in geothermal conditions could provide valuable information about which completion methods create the most effective underground heat-exchange systems.

University of Utah — Dixie Valley West, Nevada

The University of Utah will develop an EGS doublet at the Dixie Valley West geothermal field.

A geothermal doublet typically consists of an injection well and a production well. Water is sent underground through one well, moves through the heated reservoir and returns through the other.

Researchers intend to determine whether an engineered reservoir built next to an existing hydrothermal system can maintain sustained fluid circulation, sufficient permeability and commercially useful thermal output.

The project is important because future geothermal development may not fall neatly into "conventional" or "enhanced" categories.

Hybrid projects could increasingly combine naturally occurring geothermal systems with engineered extensions around them.

Quaise Energy — Newberry Volcano, Oregon

One of the most extreme experiments in the portfolio will take place on the southern flank of Newberry Volcano in Oregon.

Quaise Energy plans a field-scale EGS demonstration targeting bottom-hole temperatures between approximately 265°C and 365°C.

Those conditions are significantly hotter than the environments in which most conventional geothermal tools and materials have historically been validated.

Newberry has served as an advanced-geothermal testing ground for years. DOE previously supported an AltaRock Energy EGS demonstration there, while additional superhot geothermal research has continued in the region.

Quaise adds another technology pathway.

The MIT-linked company is developing millimeter-wave drilling technology designed eventually to access extremely hot rock that conventional mechanical drilling struggles to reach economically.

Quaise has also been working with oilfield drilling company Nabors Industries to integrate conventional drilling equipment with its millimeter-wave system. In August 2026, Quaise announced that Nabors was investing $35 million as part of a financing and strategic relationship around the company's superhot geothermal development strategy. Quaise's broader Series B reached $180 million, according to MIT's Energy Initiative.

That makes the Newberry selection particularly significant.

DOE is not funding an isolated laboratory experiment. It is supporting field validation around a technology company that is simultaneously trying to build a commercial geothermal platform.

Sixteen More Projects Will Drill to Reduce Exploration Risk

The remaining 16 projects address a different problem.

Before geothermal developers can finance large power plants, they need confidence about what lies underground.

Temperature matters. So does permeability. Reservoir size, rock chemistry, fractures, pressure and the ability to circulate fluids can determine whether a project becomes a power plant or an expensive dry hole.

DOE is therefore funding exploration, characterization and confirmation drilling across a geographically diverse group of resources.

DAVINCI EP — Brawley, California

DAVINCI EP plans to drill and test two paired horizontal wells in California's Brawley Known Geothermal Resource Area.

The project will investigate a naturally enhanced hydrothermal reservoir without using stimulation and develop information that could eventually support commercial-scale development.

DOE also sees the approach as potentially replicable in other naturally fractured geothermal basins.

University of Utah — Cove Fort, Utah

A second University of Utah selection targets a large thermal anomaly at the Cove Fort geothermal field.

Researchers will combine targeted drilling, logging and modern subsurface data integration to better understand how heat and fluid move through carbonate formations.

Zanskar — Basin and Range

Zanskar's second selection focuses on geothermal discovery itself.

The company plans to test a method using directionally drilled deep wells from a single pad, logging while drilling and near-real-time updates to probabilistic subsurface models.

The objective is to shorten the time between identifying a geothermal anomaly and determining whether that anomaly represents a commercially viable resource.

If successful, approaches like this could matter well beyond one project. Exploration failure remains one of the fundamental financial risks in geothermal development.

Fervo Energy — Humboldt County, Nevada

Fervo's second project will conduct an appraisal campaign at an EGS prospect in Humboldt County, Nevada.

The company intends to drill specifically to verify reservoir temperatures of approximately 200°C to 220°C.

It is a straightforward but critical stage in geothermal development: proving that modeled underground heat actually exists at the temperature and location required for a commercial project.

San Ildefonso Services — New Mexico

One of the portfolio's more distinctive projects will be developed by San Ildefonso Services, a company wholly owned by the Pueblo de San Ildefonso.

The team plans to drill an exploratory geothermal well on Pueblo land along the eastern edge of the Jemez Mountains volcanic field and Rio Grande Rift.

The well will collect basement rock core along with injection-test and logging data.

Documents issued by San Ildefonso Services during development of its DOE application provide additional insight into the project's scale.

The organization sought an operational partner for a well expected to reach approximately 3,000 to 5,000 meters, with the longer-term objective of evaluating resource potential for a roughly 40 MW geothermal development. Its technical team included scientists from Los Alamos National Laboratory and Geothermal Energy Advisors.

That makes the project not only a geothermal exploration effort but also a potentially important example of tribally controlled energy development.

GeoAlaska — Mount Augustine, Alaska

GeoAlaska will investigate one of the portfolio's most dramatic geological locations: the southern flank of Mount Augustine, an active volcanic island in Alaska's lower Cook Inlet.

The company plans to drill, core, log and test a geothermal confirmation well.

DOE describes plans for a shallower target above 150°C and a deeper target potentially exceeding 350°C.

If confirmed, resources at those temperatures could represent substantial thermal energy.

Hexagon Energy — Wind River Valley, Washington

Hexagon Energy will drill in Washington's Wind River Valley, targeting temperatures above 150°C.

The company intends to publish sufficient downhole information to help design a commercial-scale geothermal drilling and power-generation program.

Again, the public-data component is important: even an exploration program that does not immediately become a power plant may improve industry's understanding of an entire region.

GreenFire Energy — Sierra Army Depot, California

GreenFire Energy will investigate deep geothermal potential beneath the Sierra Army Depot in California.

The project will drill a vertical well targeting approximately 204°C and combine the results with existing geological data, geophysical surveys, reservoir testing and modeling.

The location also illustrates another possible future for geothermal: supplying firm electricity at large government, military and industrial sites where resilient local power can carry additional value.

TLS Geothermics — Nevada

TLS Geothermics plans to drill a Nevada confirmation well targeting temperatures above 204°C.

The company will use polycrystalline diamond compact drilling technology in faulted crystalline rock and develop a three-dimensional model connecting magnetotelluric measurements with underground temperature and permeability.

Magnetotellurics uses naturally occurring variations in Earth's electromagnetic field to infer underground electrical conductivity, which can help identify geological structures and fluids before expensive drilling takes place.

LiPower Geothermal — Brawley, California

LiPower Geothermal plans to construct two wells—a production well and a reinjection well—in California's South Brawley/New River area.

The resulting information is intended to support a definitive feasibility study on an under-explored geothermal resource.

INTEK — Pisgah Crater, California

INTEK will drill two reservoir-depth wells at Pisgah Crater in California.

The goal is to characterize and confirm the geothermal resource, determine its power-generation potential and establish whether development can advance toward commercial scale.

Oriah Geothermal — Eastern Oregon

Oriah Geothermal will take a staged approach to a next-generation geothermal prospect in eastern Oregon.

The company will begin with thermal-gradient wells designed to narrow down the underground heat regime before committing to a deeper reservoir exploration well.

Advanced diagnostics and integrated reservoir modeling will follow.

This staged strategy directly addresses geothermal's capital-risk problem: gather progressively better information before committing to the most expensive drilling.

XGS Energy — Socorro County, New Mexico

XGS Energy will drill a deep vertical appraisal well in Socorro County, New Mexico.

DOE says the project will collect temperature measurements, well logs, rock core and continuous electronic drilling records to validate existing subsurface information and refine thermal and geological models.

The selection becomes more significant when viewed alongside XGS's wider commercial strategy.

XGS and Meta announced an agreement in 2025 supporting development of 150 MW of advanced geothermal generation in New Mexico. The electricity is expected to enter the Public Service Company of New Mexico grid and support Meta's data-center operations.

In March 2026, XGS and Baker Hughes announced a strategic collaboration around that development, bringing Baker Hughes' subsurface engineering, well-construction and power-system capabilities into the project.

XGS has also entered a strategic supply-chain partnership with Vallourec for tubular products as the company pursues a multi-gigawatt western U.S. project pipeline.

New Mexico regulators have separately published an application from XGS subsidiary South Baldy Energy for a geothermal exploration well in Socorro County with a maximum planned depth of 7,500 feet.

Taken together, those developments show how federal exploration support, energy-technology suppliers, utilities and large electricity buyers are beginning to converge around geothermal projects.

Raser Power Systems — Utah

Raser Power Systems will investigate whether more electricity could be generated from the existing Thermo No. 1 geothermal plant in Utah's Escalante Desert.

The company plans an exploratory well in a southern fault-intersection zone and will monitor interactions between that well and an existing well.

This represents another theme within the portfolio: extracting additional energy from geothermal areas that have already been discovered.

400C Energy — Beaver County, Utah

400C Energy will re-enter and deepen an existing geothermal well in Utah's Beaver County.

The company is investigating whether the Salt Cove area contains either an extension of the Roosevelt Hot Springs hydrothermal system or a high-temperature resource within hot crystalline rock.

Utah public records show that 400C previously secured geothermal exploration rights and proposed drilling on state trust lands in Beaver and Millard counties. Those documents also identify Energy Impact Partners as a source of company funding.

Invenergy Geothermal Development — Grand View, Idaho

Finally, Invenergy will drill near Grand View, Idaho, to investigate what DOE describes as hybrid hydrothermal-EGS potential.

The company will drill a deep temperature-confirmation well, evaluate indicators of permeability and collect detailed geological and geophysical information.

Like several other selections, the project sits between two traditional geothermal categories: finding a naturally productive reservoir and engineering one from scratch.

A $171.5 Million Program Produces Its First Major Selection Round

The September announcement originates from a larger DOE funding opportunity unveiled in February.

The Office of Geothermal initially announced up to $171.5 million for next-generation geothermal field tests and resource-characterization drilling.

For the first application round, DOE opened two of six planned areas: up to $100 million for EGS field testing and up to $71.5 million for exploration, characterization and confirmation drilling. The original solicitation anticipated as many as 28 awards, with individual projects potentially ranging from roughly $4 million to $25 million.

The 21 projects announced September 21 therefore represent the first major portfolio emerging from that process.

Importantly, the headline figure should not be interpreted as 21 fully executed checks totaling $99 million.

DOE says the projects have been selected for award negotiations and could receive up to approximately $99 million during their first budget period. Additional funding is dependent on congressional appropriations and projects successfully meeting negotiated milestones and performance requirements.

DOE also explicitly notes that selection does not guarantee an eventual award; negotiations can be canceled before funds are issued.

That distinction matters for investors and industry observers tracking the projects.

Why Geothermal Is Suddenly Attracting More Attention

Geothermal energy has existed commercially for decades.

What is new is the convergence of several technologies and economic pressures.

Electricity demand is rising, including from data centers, manufacturing and electrification. At the same time, utilities and major electricity consumers increasingly value sources capable of producing power regardless of weather or time of day.

Geothermal fits that requirement particularly well because underground heat can support continuous generation rather than depending on sunlight or wind.

The difficulty has always been geography and cost.

Conventional geothermal electricity has remained concentrated in a handful of western states. EIA data show that in 2025, California accounted for roughly 69% of U.S. geothermal electricity generation and Nevada nearly 25%. Together, the two states produced more than nine-tenths of the national total.

Advanced geothermal seeks to expand that map.

DOE's Enhanced Geothermal Systems research has modeled a dramatically larger opportunity if drilling costs fall and engineered reservoirs become repeatable. A February 2026 DOE funding announcement said the United States currently has about 4 GW of geothermal electricity capacity but cited analysis suggesting advanced geothermal could eventually support hundreds of gigawatts of U.S. capacity by mid-century.

Those figures remain scenarios—not forecasts of what will necessarily be built.

But even partial success would represent a large change from today's market.

The Oil-and-Gas Connection Is Becoming Hard to Ignore

One of the most important features of the advanced-geothermal industry is that much of the technology required to scale it does not have to be invented from zero.

The United States already possesses an enormous ecosystem of drilling engineers, subsurface geologists, directional-drilling equipment, well-completion technology, seismic analysis and service companies.

Those capabilities were largely built around oil and natural gas.

They are increasingly being redirected toward geothermal.

Quaise's partnership with Nabors is perhaps the clearest example. XGS is working with Baker Hughes and Vallourec. Several DOE projects involve horizontal wells, directional drilling, advanced completion technologies and reservoir-stimulation techniques with obvious roots in oilfield engineering.

That crossover could ultimately become one of geothermal's greatest advantages.

Rather than creating an entirely new industrial workforce and supply chain, next-generation geothermal may be able to repurpose portions of one of the most sophisticated underground-engineering industries in the world.

AI and Data Centers Are Becoming Part of the Geothermal Story

The XGS-Meta project also points toward another important development: advanced geothermal and artificial intelligence infrastructure are beginning to intersect.

Data centers require enormous quantities of electricity and typically operate continuously.

For hyperscale technology companies, securing new electricity supply therefore involves more than purchasing enough annual renewable-energy credits to offset consumption.

Increasingly, the challenge is finding power that can actually be delivered at the locations and hours when computing infrastructure needs it.

Geothermal's ability to operate around the clock makes it attractive within that environment.

XGS's planned 150 MW New Mexico project is specifically intended to support Meta's operations through the PNM grid.

This does not mean every advanced-geothermal project will serve a data center.

But it creates a potentially powerful commercial model.

Large technology companies can provide long-duration electricity demand and creditworthy counterparties. Geothermal companies provide firm generation. Utilities provide grid integration. Oilfield-service companies provide drilling and engineering capabilities. Government programs absorb some of the earliest technological and exploration risk.

What previously looked like a collection of experimental geothermal startups is gradually developing the characteristics of an industrial ecosystem.

Public Data May Be One of the Most Valuable Outputs

One easily overlooked provision of the DOE announcement could prove unusually important.

The project's subsurface data will be placed in the Geothermal Data Repository.

Geothermal exploration is expensive partly because underground information is scarce.

Every new temperature log, rock core, seismic survey, drilling record, permeability measurement and reservoir test can improve geological models for surrounding areas or analogous formations elsewhere.

That means the government may obtain value even from projects that ultimately fail to become commercial power plants.

A well that proves a reservoir is unsuitable for commercial development still answers a question.

A well that identifies unexpected geology can improve future exploration methods.

A stimulation experiment that underperforms can eliminate an ineffective completion strategy.

And a successful test can provide the technical evidence necessary for private investors to finance the next project without equivalent government support.

In that sense, DOE is funding 21 projects—but potentially creating a dataset useful to far more than 21 developers.

What Still Has to Be Proven

The geothermal opportunity is significant, but so are the remaining engineering and economic questions.

Deep wells are expensive.

High temperatures are punishing to drilling equipment, electronics, cement, seals and downhole sensors.

Engineered reservoirs must maintain sufficient circulation without losing unacceptable volumes of fluid.

Developers must understand and manage induced seismicity associated with changing underground pressures.

Reservoirs need to produce economically useful quantities of heat for years or decades—not simply perform well during short demonstrations.

Transmission access, permitting, project financing, interconnection and power-purchase agreements remain important even after a successful resource is discovered.

And ultimately, geothermal must compete economically against other forms of firm generation and combinations of renewable generation, storage and transmission.

That is why the distinction between laboratory research and field-scale testing matters.

The 21 DOE projects move many of these questions out of computer simulations and controlled research environments and into actual rock.

The Bigger Picture: Geothermal Is Becoming an Engineering Problem

For most of geothermal's commercial history, the industry has been governed primarily by geology.

Developers searched for the rare places where nature put sufficient heat, water and permeability relatively close to the surface.

Next-generation geothermal is attempting something fundamentally different.

Instead of asking only:

"Where did nature create a geothermal reservoir?"

developers are increasingly asking:

"Where is the heat—and can we engineer a system capable of extracting it?"

The distinction could determine whether geothermal remains a geographically concentrated contributor to the U.S. grid or develops into a much larger national power source.

DOE's $99 million selection does not answer that question.

But the projects reveal the technologies now being tested to answer it: horizontal wells in Idaho and Nevada, reservoir pressure support in New Mexico, superhot formations beneath an Oregon volcano, exploratory drilling on Pueblo lands, confirmation wells in Alaska, California and Washington, and new attempts to understand resources already sitting beneath existing geothermal fields.

The diversity may be the most important feature of the entire program.

There is no single advanced-geothermal technology being crowned the winner.

Fervo is pursuing engineered horizontal reservoirs.

Zanskar is combining advanced exploration with existing hydrothermal systems.

Quaise is moving toward extreme-temperature geothermal and eventually millimeter-wave drilling.

XGS is developing a water-independent system supported by industrial partners and a major technology-sector electricity buyer.

Universities, tribal enterprises, independent developers and established power companies are testing still other approaches.

Some projects will almost certainly encounter difficult geology.

Some may never become commercial power plants.

But that is partly the point.

For geothermal to move from roughly 0.4% of U.S. utility-scale electricity generation into a materially larger role, developers need something the industry has historically lacked:

repeated, field-scale evidence showing what works, what fails, what it costs and how reliably underground heat can be converted into electricity.

Twenty-one new projects are about to produce considerably more of that evidence.

And beneath the headline about $99 million in federal funding is a larger experiment: whether technologies developed for America's drilling industry can transform the heat beneath the country into a new class of domestic, continuously available power.

Key Numbers

21 projects selected

Up to roughly $99 million for the initial budget period

5 field-scale enhanced geothermal system projects

16 exploration, characterization and confirmation drilling projects

Approximately 4 GW of current U.S. geothermal electricity capacity cited by DOE

About 0.4% of U.S. utility-scale electricity generation came from geothermal in 2025

8+ western states and Alaska represented across the selected drilling locations

Public project data will be released through DOE's Geothermal Data Repository

Primary Sources and Further Reading

U.S. Department of Energy — September 21, 2026 announcement

DOE's official announcement of the 21 selections and approximately $99 million first-budget-period funding. Energy Department Announces $99 Million for 21 Projects

DOE Office of Geothermal — Complete project descriptions

Detailed descriptions of the five EGS field tests and 16 exploration-drilling projects. 21 Geothermal Pilots and Demonstrations

DOE — Original $171.5 Million Funding Opportunity

Background on the broader funding program from which the September selections emerged.

U.S. Energy Information Administration — Geothermal Electricity

Current U.S. geothermal electricity production and state-level generation statistics.

DOE — Enhanced Geothermal Systems

Technical background on engineered geothermal reservoirs and DOE's EGS research programs.

XGS Energy / Meta — 150 MW New Mexico Project

Background on the agreement supporting geothermal electricity for Meta's New Mexico operations.

XGS Energy / Baker Hughes — Strategic Geothermal Collaboration

Details on the engineering and exploration partnership surrounding XGS's New Mexico development.

MIT Energy Initiative — Quaise Series B and Project Obsidian

Background on Quaise's $180 million financing and commercial superhot-geothermal project near Newberry Volcano.

DOE Geothermal Center of Excellence

DOE separately established a Geothermal Center of Excellence in September 2026, led by the National Laboratory of the Rockies with support from NETL, providing additional national-laboratory infrastructure for geothermal technology development.