Geothermal start-ups explore new ways to tap heat beneath the ground
Start-ups are taking fresh approaches to geothermal energy, but will the economics work?
By BBC News
New geothermal energy companies are trying to make underground heat a bigger part of the clean power mix, but high drilling costs and commercial uncertainty remain major challenges.
Start-ups are exploring new ways to use geothermal energy as demand grows for reliable low-carbon power.
Geothermal energy uses heat from beneath the Earth’s surface to produce electricity or provide heating. Unlike wind and solar, it can operate around the clock, making it attractive for industries and power users that need steady supply.
The technology is not new, but it has traditionally been limited to places with the right geology, such as volcanic regions or areas with naturally hot underground water.
A new wave of companies is now trying to change that by using improved drilling techniques, advanced underground mapping, new fluids and closed-loop systems designed to access heat in more locations.
Some of the most closely watched firms in the sector are adapting techniques from the oil and gas industry. That includes horizontal drilling, better subsurface data analysis and systems designed to extract heat from hot rock rather than relying only on naturally occurring hot water.
Enhanced geothermal systems work by creating or improving pathways underground so fluid can circulate through hot rock and bring heat back to the surface.
Closed-loop systems take a different approach, using sealed underground pipes to move fluid without mixing it with the surrounding rock or water.
Both approaches are designed to expand where geothermal can be used, but neither removes the main challenge. Developers still need to drill deep enough, reach the right temperatures and produce enough energy to justify the cost.
Interest has increased as governments, energy firms and large technology companies look for cleaner sources of dependable electricity.
That matters because power demand is rising, partly due to electrification, industrial use and the rapid growth of data centres linked to artificial intelligence.
The US Department of Energy says geothermal could help meet rising data centre demand because it can provide steady power day and night. The International Energy Agency has also said geothermal could meet up to 15% of global electricity demand growth by 2050 if technology improves and project costs fall.
However, the economics remain uncertain. Deep drilling is expensive, projects can take years to approve, and developers face geological risk because underground conditions are not always known until wells are drilled.
That makes geothermal different from some other renewable technologies. Solar and wind projects can often be built more quickly, while geothermal schemes require significant upfront investment before developers know exactly how productive a site will be.
Supporters argue that geothermal could become an important source of clean baseload power, especially for countries trying to reduce reliance on fossil fuels while keeping electricity supplies stable.
Critics warn that the sector still needs to prove it can deliver power at competitive cost and scale.
In the UK, geothermal is more likely to develop first through heat projects rather than major electricity generation.
The British Geological Survey launched a UK Geothermal Platform in 2025 to help councils, planners and developers assess shallow and deep geothermal potential across the country.
That could make geothermal useful for heat networks, hospitals, universities, leisure centres, agriculture and industrial sites, where steady heat demand can make projects more viable.
For Cheshire businesses, the wider trend is worth watching. If geothermal costs fall, opportunities could open up for engineering, drilling, mapping, construction and energy-services firms.
The technology could also become relevant for large power users, including data centres, manufacturers, food producers and logistics operators looking for reliable low-carbon energy.
But geothermal is still a difficult sector. The heat is there, but reaching it cheaply, safely and at scale remains the challenge.
If the latest start-ups can bring down drilling costs and prove their systems commercially, geothermal could move from a niche technology to a more serious part of the global energy mix.
For now, it remains a promising but unproven growth area — one with major potential, but also significant financial and engineering hurdles.