Geothermal power is electricity generated from heat stored naturally beneath the Earth’s surface. The planet’s interior stays hot from the slow decay of radioactive elements and residual heat from its formation, and that thermal energy can be tapped through wells drilled into underground reservoirs of steam or hot water. Once brought to the surface, the heated fluid spins turbines to produce electricity, then gets pumped back underground to be reheated.
How the Earth Provides the Heat
Underground temperatures rise by roughly 25°C for every kilometer of depth. In most places, that gradient is too gentle to be useful near the surface, but in geologically active regions (near tectonic plate boundaries, volcanic zones, or hot spots) temperatures climb much faster. These areas concentrate hot water and steam in permeable rock formations that act as natural reservoirs.
Commercial geothermal wells range widely in depth depending on the local geology. Some plants in Nevada and California tap fluid below 200°C from wells only about 330 meters deep. The Geysers field in Northern California, the world’s largest dry steam resource, draws from wells typically 2,500 to 3,000 meters deep, where temperatures exceed 240°C. The hotter the resource, the more electricity each well can produce.
Three Types of Geothermal Power Plants
All geothermal plants follow the same basic principle: use underground heat to create vapor, spin a turbine, generate electricity. The differences come down to how hot the fluid is and how the vapor gets made.
- Dry steam plants are the simplest. They tap reservoirs that already produce steam rather than liquid water. The steam flows directly from the well to a turbine. The Geysers operates this way, and these resources are rare.
- Flash steam plants handle fluids hotter than 182°C (360°F). The water arrives at the surface under high pressure, then enters a low-pressure tank where the sudden pressure drop causes it to “flash” into vapor. That vapor drives the turbine. Flash plants are the most common type worldwide.
- Binary cycle plants work with lower-temperature fluids, below 182°C. Instead of flashing geothermal water into steam, the hot water passes through a heat exchanger and warms a secondary fluid that has a much lower boiling point than water. That secondary fluid vaporizes and drives the turbine. Because the geothermal water never contacts the turbine directly and stays in a closed loop, binary plants release virtually no emissions at the plant site.
Binary cycle technology has expanded where geothermal power can operate, since moderate-temperature resources are far more common than the high-temperature reservoirs that flash and dry steam plants require. One binary plant at Chena Hot Springs in Alaska generates electricity from fluid at just 73°C, though at very low efficiency.
Efficiency Compared to Other Power Sources
Geothermal plants convert a smaller share of their thermal energy into electricity than coal, gas, or nuclear plants do. The worldwide average conversion efficiency is about 12%, and the best-performing plant on record, the Darajat facility in Indonesia (a dry steam system), reaches roughly 21%. By contrast, modern natural gas plants often exceed 40%.
The reason is thermodynamics. The efficiency of any heat engine depends on the temperature difference between the heat source and the environment. Geothermal fluids top out around 240 to 300°C, while fossil fuel combustion produces temperatures above 1,000°C. A lower starting temperature means less of the energy can be converted to electricity. That 12% average sounds low, but it doesn’t reflect a design flaw. It reflects a physical limit set by the resource temperature itself. The tradeoff is that the “fuel” is free and essentially inexhaustible.
Emissions and Environmental Footprint
Geothermal power produces far less carbon dioxide than fossil fuels, though it isn’t zero-emission. Underground reservoirs contain dissolved gases, primarily CO₂ and smaller amounts of methane and hydrogen sulfide, that get released when fluid reaches the surface. The global weighted average is about 122 grams of CO₂ per kilowatt-hour. That’s roughly a quarter of what natural gas plants emit (around 450 g/kWh) and about a tenth of coal (1,120 g/kWh).
Emissions vary enormously by location. Geothermal plants in Iceland average just 34 g/kWh, while Italy’s fleet averages 330 g/kWh because of the particular chemistry of Italian reservoirs. Binary cycle plants, which keep geothermal fluid in a sealed loop, release the least. And because all geothermal plants reinject their fluid back underground, the resource is continually replenished rather than consumed.
Water use is comparable to other thermal power plants. Closed-loop cooling systems evaporate water to dissipate waste heat, requiring makeup water to replace what’s lost. The U.S. average for thermoelectric plants overall is about 1.8 liters evaporated per kilowatt-hour.
Where Geothermal Power Operates Today
Global geothermal capacity reached 15.1 gigawatts at the end of 2024, after adding roughly 400 megawatts of new capacity during the year. For perspective, that’s enough to power several million homes, but it represents a small fraction of total global electricity. The top five countries by installed capacity are the United States, Indonesia, the Philippines, Türkiye, and New Zealand, followed by Mexico, Kenya, Italy, Iceland, and Japan.
Most of these countries sit along the Pacific Ring of Fire or other volcanic zones where high-temperature reservoirs are accessible at reasonable drilling depths. Iceland is a special case: sitting on the Mid-Atlantic Ridge, it generates about a quarter of its electricity from geothermal sources and heats roughly 90% of its buildings with geothermal hot water. Kenya gets a significant share of its electricity from geothermal plants in the East African Rift Valley.
What Geothermal Power Costs
The economics of geothermal energy are front-loaded. Exploration and well drilling account for a large share of total project costs, and there’s always some risk that a well won’t produce as expected. But once a plant is running, fuel costs are zero, and operating expenses are low.
Recent power purchase agreements in the U.S. have priced geothermal electricity between roughly $67 and $99 per megawatt-hour, with most clustering around $68 to $75/MWh. That’s competitive with many other clean energy sources, though generally more expensive than utility-scale solar or onshore wind in favorable locations. The advantage geothermal holds over solar and wind is that it runs around the clock regardless of weather, providing steady baseload power without batteries or backup.
Direct Uses Beyond Electricity
Electricity generation gets the most attention, but geothermal energy is also used directly as heat, often more efficiently than converting it to power. Hot water from underground can heat buildings, warm greenhouses, melt snow on roads and sidewalks, supply hot water to swimming pools, and provide process heat for industrial applications.
District heating systems pipe geothermal hot water to multiple buildings across a city. Reykjavik’s district heating network is the most famous example, but systems also operate in Boise, Idaho and in parts of France, China, and Türkiye. Geothermal heat pumps take a different approach entirely: they exploit the stable temperature a few meters below the surface (typically 10 to 16°C year-round) to heat buildings in winter and cool them in summer. These systems work practically anywhere, not just in volcanic regions, and are one of the most energy-efficient ways to climate-control a building.