New drilling technology has unlocked geothermal energy in Europe at a scale that could displace 42% of the continent’s electricity from coal and gas at competitive prices.
Geothermal energy in Europe is no longer just an Icelandic curiosity. For most of its history, this power source required rare geological conditions: underground rock that was both extremely hot and naturally porous enough to let water flow through it. That limited large-scale use to places like Iceland, parts of Italy, and Türkiye. New technology has changed that picture entirely.
The world’s first geothermal electricity plant began operating in Larderello, Italy, in 1904 and is still in operation today. As of 2024, Europe had 147 geothermal power plants in operation, with 21 generating electricity for more than 25 years. Together, those plants produced about 20 terawatt-hours (TWh) of electricity in 2024 from just over 3.5 gigawatts (GW) of installed capacity. One TWh is roughly enough electricity to power 90,000 US homes for a year.
Despite that long track record, geothermal energy in Europe has barely scratched the surface of what lies beneath the ground. An analysis from the independent energy think tank Ember estimates that around 43 GW of new-generation capacity in the EU could be developed at a cost below €100 per megawatt-hour (MWh). That price sits within the same range as coal and gas electricity, which fluctuated between €90 and €150/MWh in 2025.
The key development driving this shift is Enhanced Geothermal Systems (EGS), which works by drilling deep into hot rock and artificially creating pathways for water to flow through it. Engineers borrowed these techniques from oil and gas drilling, and they now allow access to heat-bearing rock far below the three-kilometer depths that conventional plants could reach. EGS projects can drill down to depths of up to 8 kilometers, opening much more of the continent to development.
If the 43 GW of identified capacity were fully deployed, it could generate roughly 301 TWh of clean electricity each year. That equals about 42% of all electricity generated from coal and gas in the EU in 2025. Replacing that share with geothermal energy in Europe would sharply cut carbon dioxide emissions and reduce costly dependence on imported fossil fuels.
Hungary leads the EU by a wide margin, with an estimated 28 GW of untapped geothermal capacity at competitive prices. Türkiye follows with around 6 GW, while Poland, Germany, and France each hold roughly 4 GW. This spread matters because it means multiple countries across central and western Europe could benefit, not just those sitting on volcanic zones.
Geothermal also offers something that wind and solar cannot: it runs around the clock regardless of the weather. This characteristic is called dispatchability, meaning power can be delivered on demand. That reliability makes it particularly attractive to facilities that need constant power. Global electricity demand from data centers is projected to roughly double by the early 2030s, and geothermal could cost-effectively meet up to 64% of that growth.
Costs have improved dramatically over the past decade. Advances drawn from the oil and gas sector have made deep drilling far more affordable. Because geothermal plants carry no ongoing fuel costs, they are also protected from price swings that regularly hit gas-fired electricity, offering long-term financial stability for utilities and governments.
Policy is beginning to keep pace. Several EU member states, including Austria, Croatia, France, Hungary, Ireland, and Poland, have developed national geothermal road maps. In 2024, both the EU Council and the European Parliament formally backed plans to accelerate geothermal development and proposed establishing a European Geothermal Alliance. The European Commission is expected to follow with a dedicated Geothermal Action Plan to set EU-wide targets and streamline project approvals.
Permitting processes remain slow in many countries, and projects can wait years before receiving approval to drill. Early-stage drilling carries financial exposure that private investors often struggle to absorb without government support. The US and Canada are already scaling EGS projects with targeted incentives, and Europe risks falling behind despite its early role in testing these methods.
The energy security case is equally compelling. Europe’s gas import bill reached €32 billion in 2025, up 16% from the year before. Every TWh generated from domestic geothermal sources is a TWh that does not require importing fuel. Geothermal energy in Europe has spent more than a century on the margins of the continent’s power system. The resource is proven, the costs are competitive, and the policy framework is taking shape. What determines whether this potential is realized is how quickly institutions and member states move from strategy documents to on-the-ground drills.
