Next-Generation Geothermal Is Challenging Gas Power in Europe

Geothermal energy is no longer confined to volcanic regions like Iceland or Tuscany. Thanks to advances in drilling and reservoir engineering, next-generation geothermal can now unlock heat from deep rock formations across much of Europe — making it a serious, scalable alternative to fossil fuels.

According to Ember, enhanced geothermal systems (EGS) could replace up to 42% of the EU’s coal and gas generationat costs below €100/MWh.

Why this matters:

• Cost-competitive – Around $60/MWh for geothermal vs. ~$100/MWh for fossil fuels
• Reliable 24/7 power – Ideal for heavy industry and energy-intensive data centres
• Complements renewables – Can absorb excess wind and solar energy and support grid stability
• Energy security – Reduces exposure to volatile imported fossil fuels

Well costs have fallen by around 40% in the past decade, and modern systems can now generate electricity from deeper, hotter rock formations that were previously inaccessible.

Europe already has strong technical expertise in geothermal — but slow permitting and fragmented policy risk slowing deployment, while North America accelerates investment.

Geothermal is no longer a niche technology. It’s emerging as a credible competitor to gas — and a key piece of Europe’s energy transition.