Europe’s Deep Heat: What It Takes to Make Enhanced Geothermal Systems Competitive

Deep beneath the European continent lies a vast reservoir of energy that never stops flowing. Unlike solar panels that sleep at night or wind turbines that stall in calm weather, geothermal heat from Earth’s interior can deliver electricity and warmth around the clock, whatever the sky is doing. A new study published in Nature Communications by Lukas Franken of the University of Edinburgh and Technische Universität Berlin, together with Elisabeth Zeyen and Tom Brown of TU Berlin, Orestis Angelidis of the University of Glasgow, and Daniel Friedrich of Edinburgh, has now mapped out in unprecedented detail how this resource could be woven into a carbon-neutral European energy system — and the answer turns out to hinge on a single number: the cost of drilling.

The technology in question is the enhanced geothermal system, or EGS. Conventional geothermal power plants tap naturally occurring reservoirs of hot water and steam, which limits them to geologically privileged regions such as Iceland or parts of Italy. EGS takes a different approach: engineers drill deep boreholes into hot but dry rock, inject water under pressure to create an artificial network of fractures, and then circulate fluid through that network to harvest heat. Because hot rock exists essentially everywhere at sufficient depth, EGS promises firm, dispatchable, low-emission energy with a footprint far smaller than wind or solar farms. The catch has always been economics — drilling kilometers into crystalline basement rock is expensive, and the learning curve that has slashed the price of solar modules and batteries has yet to materialize for deep wells.

To find out where and when EGS might actually pay off, the research team built a model of the entire European energy system spanning electricity, heating, and other sectors, and ran it through a series of scenarios for a net-zero future. The model co-optimizes investment and operation across technologies, meaning it does not simply ask whether EGS is technically feasible but whether a cost-minimizing, climate-compliant energy system would choose to build it at all, and where. Geological potential for EGS was mapped spatially across the continent, alongside the potential for wind, solar, and other renewables, so the model could weigh geothermal against its competitors region by region.

The headline finding is sobering but encouraging. If EGS plants remain at their current cost levels, a carbon-neutral Europe would still deploy roughly 20 to 30 gigawatts of thermal capacity from heat-generating or combined heat-and-power geothermal plants. That deployment is driven overwhelmingly by one customer: district heating networks. Cities across northern and eastern Europe rely on centralized heat distribution, and geothermal heat — which can be extracted at moderate depths without the extreme drilling costs of power generation — slots naturally into that market. In other words, the first wave of EGS expansion in Europe will likely warm buildings rather than light them.

Electricity is a different story. When the researchers modeled what happens if drilling costs fall by approximately 60 percent relative to 2020 levels, the picture changed dramatically. At that threshold, geothermal plants become competitive in electricity markets, bidding alongside wind, solar, and nuclear to supply the grid. The appeal is obvious: as Europe’s power system approaches 100 percent renewables, the value of firm capacity — generation that can be counted on during wind droughts and dark, still winter weeks — rises sharply. EGS offers exactly that, with capacity factors and flexibility that no battery fleet can match at scale.

But the spatial analysis reveals a structural constraint that no cost reduction can fully erase. The regions with the highest geological potential for EGS — areas where drilling is cheapest and rock temperatures are favorable — largely overlap with regions that also have excellent potential for wind and solar power. Where the sun shines and the wind blows, cheap renewables crowd out geothermal electricity. The places where EGS would be most valuable as a grid resource — regions with poor wind and solar resources — are precisely where its geological potential is weakest. This confined overlap of high geological potential with low renewable potential means the electricity market opportunity for EGS, while real, is geographically narrower than enthusiasts might hope.

Herein lies the central dilemma the study identifies. The bulk of Europe’s EGS market potential — the district heating segment — is spatially dispersed, scattered across hundreds of cities and towns rather than concentrated in a few geological sweet spots. Dispersed deployment means small projects, limited economies of scale, and slow learning. Yet the study shows that meaningful cost reductions of around 60 percent depend on exactly that: cumulative deployment and pan-European technology learning. The majority of the market therefore depends on cost reductions that only widespread adoption can deliver, while widespread adoption depends on those same cost reductions. It is a chicken-and-egg problem, and the authors’ conclusion is unambiguous: coordination is crucial. Without deliberate, pan-European stakeholder efforts — shared drilling campaigns, standardized well designs, coordinated learning across national industries — the learning curve may never steepen enough to unlock the electricity market.

The implications reach well beyond geology. For policymakers, the study suggests that support schemes for EGS should be designed around heat markets first, where the technology is already competitive at current costs, using district heating deployment as the training ground that drives drilling costs down. For investors, the 60 percent cost threshold provides a concrete benchmark: until drilling economics approach that level, geothermal electricity will remain a niche player in most of Europe, however attractive its firm-power profile. And for the broader energy transition, the work adds a crucial piece to the puzzle of clean firm power — the elusive category of always-available, zero-carbon generation that models increasingly show is essential once renewables dominate.

There are caveats, as with any scenario study. The analysis is based on cost and performance assumptions that carry uncertainty, and the authors note that their findings emphasize the importance of coordination precisely because the outcome is sensitive to how learning unfolds. The team also acknowledges collaboration with Project InnerSpace on North American EGS potential, though that work began after the analysis presented here was completed. Funding came from the UK Engineering and Physical Sciences Research Council through the INTEGRATE and DISPATCH projects, and the underlying model builds on open energy system modeling tools developed in the group of Tom Brown at TU Berlin, whose PyPSA framework has become a standard for continental-scale energy system analysis.

What makes the study resonate beyond the technical community is the clarity of its message. Europe does not need to wait for a geothermal miracle to start harvesting its deep heat — district heating can carry the technology forward today, at current costs, to the tune of tens of gigawatts. But if Europe wants geothermal to become a pillar of its electricity supply, providing firm clean power in the places wind and solar cannot reach, it must treat drilling cost reduction as a collective industrial project, not a collection of isolated ventures. The heat is there. The question the study poses is whether Europe’s fragmented energy markets can organize themselves to drill toward it.

Subject of Research: Market integration pathways and cost-reduction scenarios for enhanced geothermal systems in a carbon-neutral European energy system

Article Title: Market Integration Pathways for Enhanced Geothermal Systems in Europe

Article References: Franken, L., Zeyen, E., Angelidis, O., Brown, T., & Friedrich, D. (2026). Market Integration Pathways for Enhanced Geothermal Systems in Europe. Nature Communications. https://doi.org/10.1038/s41467-026-77893-3

Image Credits: AI Generated

DOI: 10.1038/s41467-026-77893-3

Keywords: enhanced geothermal systems, geothermal energy, district heating, net-zero Europe, drilling costs, clean firm power, energy system modeling, renewable energy, technology learning, energy transition, Nature Communications, European energy markets