The role of geothermal energy in the industrial energy transition: A multi-technology solution

Geothermal energy harnesses heat from the earth’s subsurface to generate electricity and provide direct heat for industrial processes. Its ability to deliver continuous power with a capacity factor often exceeding 90 per cent makes it a viable alternative to fossil-fuel baseload sources like coal or natural gas.

According to the International Energy Agency, geothermal could meet up to 15 per cent of global electricity demand by 2050, with technological advances and cost reductions. Its compact footprint, requiring less land per gigawatt-hour than coal, wind, or solar, also makes it attractive for industrial sites or densely populated areas where space is limited.

Geothermal energy is already supporting industrial operations worldwide:

• United States (Salton Sea, California): geothermal plants contribute just under 6 per cent of the state’s electricity whilst powering industrial facilities and demonstrating scalability.
• United Kingdom (Cornwall): the United Downs project developed by Geothermal Engineering Ltd extracts hot water from 5 kilometres underground at more than 180 degrees Celsius. Once commissioned, in 2025, it will generate electricity and provide heat for greenhouses and district heating.
• Italy (Larderello): one of the world’s oldest geothermal fields, generating more than 800 MW to support industrial and grid-scale power needs.
• Kenya (Olkaria): generates more than 800 MW and supplies nearly half the country’s electricity, with further potential for agro-industrial use.
• New Zealand (Wairakei): supplies electricity and industrial steam to pulp and paper facilities.
• Indonesia (Wayang Windu): produces 227 MW, with national plans to double capacity to 7.2 GW by 2030.
• United Kingdom (Southampton) extracts water at 76 degrees Celsius from a single borehole, 1.8 kilometres in depth. The water is used as a feedstock for generating the electrical power for the port of Southampton, with the aid of biofuel, and for heating Southampton Hospital, Solent University, WestQuay shopping centre, Southampton Civic Centre and local housing. 

These examples reflect geothermal’s reliability and flexible industrial relevance across diverse geographic contexts.

Whilst geothermal offers consistent output, integrating it with battery storage expands its flexibility and value in a multi-technology energy system. Batteries allow geothermal power to be stored and released when needed, useful for industrial users with variable loads, such as data centres and manufacturing facilities.

This integration also complements variable renewable sources by supporting stable supply during production peaks and outages, improving energy reliability during fuel transitions, and strengthening grid stability and decarbonisation efforts.

Storage integration could further optimise industrial delivery in regions like New Zealand, where geothermal already supplies 17 per cent of electricity. In Kenya, battery systems could improve energy access in remote industrial zones. Additionally, battery storage can help developing countries leapfrog the reliance on fossil fuels altogether, leading to a greater reduction in CO2 emissions, whilst helping to fulfil the World Health Organization’s Sustainable Development Goals.

The synergy becomes even more compelling when paired with mineral co-production. Lithium, essential to battery manufacturing, can be extracted from geothermal brines, creating a hybrid system that contributes both energy and exportable resources.

Lithium extraction: A co-benefit of geothermal energy

Geothermal brines can contain lithium, a critical component in battery manufacturing. This creates an opportunity to co-produce lithium alongside power, enhancing project economics and reducing reliance on conventional mining.

Examples include the following:

• Cornwall (United Downs): is currently investigating lithium extraction at 40 degrees Celsius post-power generation, with potential to produce 15,000 tonnes of battery-grade lithium annually, about a quarter of the UK’s demand.
• Salton Sea (USA): producing lithium-rich brines capable of yielding 127,000 tonnes of lithium carbonate per year, enough for more than 3 million EV batteries.

Other regions, including New Zealand and Chile’s Atacama region, are exploring similar opportunities by leveraging existing geothermal infrastructure. This co-production can diversify project revenue streams, strengthen the battery supply chain, and make geothermal more financially attractive for investors.

We contribute to geothermal development through a combination of geoscience, engineering, and economic modelling. Drawing from experience in oil, gas, and renewables, our teams support clients from early-stage characterisation through to development and integration.

Our support includes the following:

Subsurface characterisation and resource assessment

• Seismic and electromagnetic imaging to assess geothermal reservoirs
• Modelling heat flow and optimal drilling locations
• Advising energy clients on development options to aid the reduction of methane emissions from existing fossil fuel projects using geothermal.

Reservoir management and optimisation

• Monitoring fluid flow, temperature, and pressure to prevent issues such as scaling or cooling
• Applying subsurface insights to reduce costs and improve efficiency

Construction and planning

•  Licencing and permitting 
• Engineering support with development and decommissioning

De-risking projects

• Applying feasibility studies and evidence-based assessments to reduce technical and financial uncertainty
• Drawing from broader energy transition projects to support investment cases
• Collaborating with clients as the Operator’ Engineer on new geothermal technology

Stakeholder engagement

• Addressing concerns such as induced seismicity or groundwater impact
• Collaborating with communities and research institutions to build project support

Challenges and opportunities

Whilst geothermal presents clear benefits, challenges remain, particularly in regions with limited geological data or high upfront costs. In the UK, stakeholders are calling for more streamlined permitting. In Indonesia, regulatory process is ongoing.

Still, the opportunities are significant. Advances in drilling technology (e.g. horizontal drilling, hydraulic fracturing) and increased government support are improving feasibility. Key developments include the European Union’s Net-Zero Industry Act, US funding for lithium recovery, Indonesia’s geothermal roadmap, aiming to grow the workforce from 145,000 to 1 million people by 2030 and Germany’s draft law giving geothermal projects ‘over-riding public interest’ status, which puts them on par with wind and solar and helps top stream line project approval, reduces regulatory red tape and offer financial guarantees for drilling risks.

Key takeaways

Geothermal energy is re-emerging as a practical solution for industrial decarbonisation, particularly when paired with battery storage and mineral co-production. As the energy transition accelerates, geothermal’s consistent output, low carbon footprint, and ability to support multiple technologies make it increasingly relevant.

To support the growth of geothermal energy in industrial applications, stakeholders and project teams should do the following:

• Consider geothermal’s value as baseload power and as a flexible asset when integrated with a storage
• Explore co-production opportunities, such as lithium extraction, to enhance project economics and resilience
• Invest in subsurface characterisation and reservoir modelling to optimise siting and performance
• Address financial and regulatory barriers through clear stakeholder engagement and evidence-based feasibility assessments
• Leverage multidisciplinary technical support to de-risk projects and broaden their appeal to investors

With a thoughtful and integrated approach, geothermal energy can support a cleaner, more resilient industrial energy future.