Executive summary
The global energy transition demands clean, abundant, and reliable alternatives to fossil fuels. Geothermal power the heat of the earth meets these criteria. Yet its widespread adoption has been hindered by technical and financial barriers, particularly in accessing geothermal resources deep within the earth.
In February 2014, the Department of Energy (DOE) announced a plan to create an unusual new institution, called the Frontier Observatory for Research in Geothermal Energy (FORGE). FORGE is a $218 million field laboratory to conduct hands-on research into "enhanced geothermal systems," or EGS, a promising form of geothermal power. Using advanced drilling techniques from the shale industry, EGS engineers create underground fractures where water, pumped down from the surface, can gather heat before being drawn back up.
Despite its promise, EGS has yet to achieve broad commercial viability. High initial costs and technical challenges have historically deterred private sector investment, leaving geothermal underfunded compared to other next-generation energy technologies.
FORGE was designed to mitigate the challenges of geothermal by de-risking research and attracting private capital. By providing a publicly funded research environment, the initiative has enabled high-risk experimentation and open-access knowledge sharing. This approach mirrors successful government interventions in the American shale revolution, where strategic public investment catalyzed industry-wide transformation.
It is now ten years since FORGE was founded. In October of last year, DOE signed a new agreement with FORGE extending the program for four years with at least $80 million in additional funding. That means that the project can continue without plugging and abandoning its wells.
FORGE has demonstrated the effectiveness of government-backed field research in unlocking new energy technologies. Its success suggests that similar de-risking models could be applied to other sectors facing market failures, such as rare earth mineral extraction and space-based manufacturing. Moving forward, expanding the FORGE model could position the US as a global leader in geothermal energy and contribute significantly to achieving clean energy abundance.
IFP's research into the value of FORGE encompassed interviews with geothermal analysts, academics, engineers, and CEOs.
