California could cut 2045 electricity costs by up to $44 billion a year by investing in next-generation geothermal, finds new CATF report
A new report from Clean Air Task Force (CATF) finds that next-generation geothermal energy could dramatically reduce the cost of achieving California’s clean energy goals, but only if the state acts now to remove critical development barriers. The report, “Build Here: How Targeted State Investment in Geothermal Can Fil California’s Clean Firm Gap,” calls on California to fund an in-field testbed program to explore and map the subsurface across high-potential geologic regions, generating the data needed to unlock large-scale private investment in next-generation geothermal development.
California has ambitious clean energy targets to reach 100% clean electricity by 2045, and its own grid planning processes have identified a need for 5 to10 gigawatts of new geothermal capacity. Despite the state’s exceptional geothermal resource potential, relatively few next-generation geothermal projects have advanced in California. One reason is that developers lack the subsurface data needed to identify promising locations for early projects, and exploration is difficult to finance through the private market because costs are incurred before projects are proven viable.
“California is effectively paying to develop geothermal in other states,” said Terra Rogers, Senior Director, Superhot Rock Geothermal at CATF. “Ratepayer money is flowing, but the jobs, the tax revenue, and the long-term energy security are going to states like Utah and Nevada, where the subsurface is better understood. A targeted state investment in next-generation geothermal exploration in California could help reverse that trend.”
The report points to a proven model for unlocking next-gen development: the U.S. Department of Energy’s Utah FORGE testbed drilled a series of wells in rural Utah and publicly released the resulting subsurface data. Billions of dollars in private investment followed, including the world’s first commercial-scale enhanced geothermal systems facility, Fervo Energy’s Cape Station project, located directly adjacent to the Utah FORGE site. California now imports that zero-emission power to satisfy its own electricity demand but does not receive the economic advantages. California has the opportunity, and the geology, to direct development inside the state.
If California does unlock its geothermal potential, the benefits to residents and ratepayers could be enormous. The report presents new electricity system modeling using GenX, an open-source capacity expansion model developed at MIT and Princeton, designed to replicate the structure of California’s most recent SB100 Joint Agency Report. Key findings include:
- Access to clean firm power like next-generation geothermal reduces California’s annual electricity supply costs in 2045 by $10 to $44 billion (i.e., 23-52%), compared to scenarios where it is unavailable due to development barriers.
- In-state development produces an additional $3.5 to $5.5 billion in annual savings compared to scenarios where it is only sourced from out of state.
- Interregional transmission expansion needs are substantially reduced when clean firm power like next-generation geothermal can be developed in California, addressing one of the most persistent infrastructure bottlenecks in the state’s clean energy build-out.
- In-state deployment could allow California to meet its 2045 targets while maintaining its current pace of solar installation, roughly 3 GW per year.
Beyond cost savings, the report highlights the workforce and economic benefits of in-state development of geothermal energy. Next-generation geothermal draws heavily on oil and gas drilling skills, offering a direct transition pathway for those workers. Existing geothermal operations in California like Calpine’s Geysers facility are already among the largest taxpayers in their counties.
“California has done this before,” said Wilson Ricks, Program Manager for the Electricity Program at CATF and report co-author. “Solar rooftops, electric vehicles, grid-scale batteries — in each case, targeted early-stage support helped bring a promising technology to commercial scale. Next-generation geothermal is poised to deploy with the same help.”
Read the full report here.
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About Clean Air Task Force
Clean Air Task Force (CATF) is a global nonprofit organisation working to safeguard against the worst impacts of climate change by catalysing the rapid development and deployment of low-carbon energy and other climate-protecting technologies. With 30 years of internationally recognised expertise on climate policy and a fierce commitment to exploring all potential solutions, CATF is a pragmatic, non-ideological advocacy group with the bold ideas needed to address climate change. CATF has offices in Boston, Washington D.C., and Brussels, with staff working virtually around the world. Visit catf.us and follow @cleanaircatf.
