Advanced geothermal energy—long hailed as a “sleeping giant” of renewable power— is finally stepping into the spotlight, with a new wave of startups securing major funding, forging industry partnerships, and making breakthroughs that could turn this once-niche technology into a cornerstone of global decarbonization. Unlike traditional geothermal (which relies on rare naturally occurring hot springs or geysers), advanced geothermal systems (AGS) can tap into the Earth’s consistent subsurface heat almost anywhere on the planet—unlocking a 24/7, emissions-free energy source that complements intermittent renewables like wind and solar.

After years of slow progress, the sector is now accelerating: in the first half of 2025 alone, advanced geothermal startups raised over $800 million in venture capital, more than double the total funding for all of 2024, according to data from Crunchbase. Key players like Fervo Energy, Eavor Technologies, and Sage Geosystems are leading the charge, backed by investors including Breakthrough Energy Ventures, Khosla Ventures, and even oil and gas giants like Chevron and ExxonMobil—who see geothermal as a way to diversify their portfolios amid the energy transition.

The Tech That’s Changing the Game

Advanced geothermal’s rise hinges on innovations that solve the biggest limitations of traditional geothermal. Traditional plants require specific geological conditions (high temperatures close to the surface, paired with water reservoirs) to generate steam for turbines—a constraint that limits them to less than 1% of the Earth’s landmass. AGS startups, by contrast, use two game-changing technologies:

• Directional Drilling: Borrowed from the oil and gas industry, this technique allows companies to drill miles underground at horizontal angles, reaching hot rock formations that were previously inaccessible.
• Enhanced Geothermal Systems (EGS): By injecting water into these hot rock formations at high pressure, startups create artificial fractures (a process called “stimulation”) that allow heat to transfer to the water, turning it into steam that drives turbines at the surface.

Fervo Energy, for example, made headlines in early 2025 when it completed a pilot project in Utah that generated 5 MW of electricity—enough to power 3,000 homes—using EGS and directional drilling. The project proved that AGS could operate consistently (with a 98% uptime rate, far higher than solar’s ~25% or wind’s ~40%) and at scale. “This isn’t just a lab experiment anymore,” said Tim Latimer, Fervo’s CEO, in a recent interview. “We’ve shown that advanced geothermal can be a reliable, baseload power source—and we’re just getting started.”

Why Now? Policy, Partnerships, and Climate Urgency

A confluence of factors is fueling the sector’s growth. First, governments worldwide are ramping up support: the U.S. Inflation Reduction Act (IRA) offers tax credits of up to $20 per megawatt-hour for geothermal projects, while the EU’s Net-Zero Industry Act classifies geothermal as a “strategic net-zero technology” eligible for fast-track permitting. These policies have reduced investor risk and made AGS projects more financially viable.

Second, partnerships with oil and gas firms are providing startups with critical resources. Chevron, for instance, invested $150 million in Eavor Technologies in 2024 and is sharing its drilling expertise and existing infrastructure (like idle oil wells that can be repurposed for geothermal) to cut costs. “Oil and gas has spent decades mastering subsurface engineering—skills that are directly transferable to geothermal,” said Eavor’s COO, Jennifer Ruch. “These partnerships aren’t just about funding; they’re about accelerating deployment.”

Finally, the urgency of climate change is pushing utilities to seek reliable clean energy. As grids add more wind and solar, they need “firm” power sources that can generate electricity day and night, regardless of weather. Advanced geothermal fits the bill: it has zero carbon emissions, a small land footprint (100x less than solar farms per MW generated), and can provide heat for industrial processes (like manufacturing or hydrogen production) in addition to electricity.

Challenges That Remain

Despite the momentum, hurdles persist. Drilling deep underground is still expensive—AGS projects currently cost $4–$6 million per MW, compared to $1–$2 million for solar. Startups are working to bring costs down by optimizing drilling techniques and scaling production, but industry analysts say it could take 5–7 years for AGS to reach price parity with other renewables.

Regulatory hurdles also slow progress. Permitting for geothermal projects can take 3–5 years in the U.S. and EU, due to concerns about seismic activity (though EGS has been shown to cause only minor, imperceptible tremors) and environmental impact. “We need faster, more streamlined permitting to compete with other renewables,” said Sage Geosystems’ founder, Ryan Hickman. “Every year we wait is a year we’re still burning fossil fuels.”

The Road Ahead

Even with these challenges, the future looks bright. The International Energy Agency (IEA) projects that advanced geothermal could meet 3% of global electricity demand by 2040—up from less than 0.1% today—if deployment accelerates. Startups are already scaling: Fervo plans to build a 40 MW commercial plant in Nevada by 2027, while Eavor is developing projects in Canada and Australia.

For investors and climate advocates, advanced geothermal represents a rare opportunity: a clean energy source that’s both reliable and scalable, with the potential to fill the gaps left by other renewables. “This isn’t a ‘maybe’ technology anymore,” said Breakthrough Energy Ventures’ partner, Carmichael Roberts. “Advanced geothermal startups have proven they can deliver—now it’s time to help them grow. The world needs this energy, and it’s finally within reach.”

As the sector heats up, one thing is clear: advanced geothermal is no longer a “future” energy source. It’s a present-day solution—one that’s just starting to realize its potential to reshape the global energy landscape.