Geothermal is gaining importance against a backdrop of rising electricity demand, driven by the increasing need for clean baseload power. In this evolving landscape, it stands out for its combination of continuous generation, low emissions, and raising technological viability.
Recent advances, particularly in drilling and well stimulation techniques, suggest that the road to widespread adoption of next-generation geothermal developments may be far shorter than the industry initially thought. This expansion of geothermal potential beyond traditional geographies, combined with early indications of cost reduction, suggests a more competitive future. As a result, many companies in the technology, energy, and finance sectors are beginning to explore their role in the future energy mix.
For TechEnergy Ventures, geothermal projects represent a significant sector and a strategic opportunity, whose focus aligns with the Techint Group's industrial and energy strategy.
Tomás Rauch, Energy Transition Investment Expert at TechEnergy Ventures ("TEV"), explains that "Geothermal wasn't even in the conversation in 2021. Today, the International Energy Agency (IEA) forecasts it could meet up to 15% of global electricity demand growth by 2050. That's not evolution: that would be a revolution”.
What makes it so valuable for the transition is its ability to provide clean baseload power, meaning it has the capacity to generate electricity that is always available and with a reduced emissions footprint. Not only that, but geothermal energy, once it optimizes its processes at scale, could also supply energy at highly competitive prices.
"Today, geothermal energy represents less than 1% of global installed capacity and electricity generation. However, according to the IEA, advances in next-generation technologies, combined with broader geographic applicability and falling costs, could significantly accelerate its development," points out Rauch.
"By 2050, installed capacity for conventional and next-generation geothermal power could reach 800 gigawatts, up from just 15 gigawatts today. This 50-fold increase has the potential to supply around 8% of global electricity capacity. As a reference, according to estimates from the U.S. Department of Energy, developing this industry over the next 25 years in their country would require drilling more than 100,000 geothermal wells— approximately 25 times the number of operational wells in Vaca Muerta as of October 2024.”
“In an era of rising energy demand—driven in part by hyperscalers, whose operations in the US could account for an estimated 9% of the country's electricity consumption—geothermal offers a highly compelling proposition for delivering clean, reliable baseload energy to support large-scale computing infrastructure."
New technologies, such as Enhanced Geothermal Systems (EGS) and Advanced Geothermal Systems (AGS), paired with horizontal drilling and complex fracturing systems capabilities derived from the oil and gas (O&G) legacy industry, could enable developers to tap geothermal developments even in non-volcanic areas.
Meanwhile, drilling and fracturing have become more accurate and repeatable thanks to technological advances and the execution of some projects at scale. As a result, developers are drilling faster, cheaper, and with greater success. "We have the example of Fervo, a company working on EGS projects in Nevada, which in less than two years, through execution, continuous improvement, and process iteration, has managed to reduce drilling times by 70% and costs per well by almost 60%," says Rauch.
Despite this favorable context and growing interest, geothermal energy still faces significant challenges. As Rauch notes, there are four key areas that developers and investors must navigate:
While these challenges are real, they're not insurmountable. A growing recognition of geothermal's unique strengths is helping to offset these barriers.
How to mitigate and overcome these risks? At a high level, industry and governments will need to work closely together. Several approaches are already underway, such as public risk-reduction programs and government-backed guarantees for exploratory geothermal drilling in certain countries. For example, the U.S. government continues supporting the industry, including $60 million allocated by the Department of Energy in 2024 to fund eight EGS pilot projects and help offset upfront costs, as well as the reaffirmation of industry support in the Trump administration’s new legislative proposal, known as the “Big Beautiful Bill” (which stands in contrast to its stance on solar and batteries).
From a technical perspective, the experience of the oil & gas sector in shale demonstrates that through industrial consolidation, learning curves, and supportive regulatory frameworks, risks can be reduced and costs can fall dramatically. The geothermal industry is now at this critical transition stage, moving from laboratory-scale innovation to commercial deployment, with new startups tackling specific industry challenges.
For TechEnergy Ventures and the Techint Group, supporting the sector through this phase means actively investing in and partnering with disruptive technology companies focused on overcoming these challenges.
Within this evolving context, the Techint Group combines capabilities across exploration, drilling, project development, infrastructure, operations, and energy use. It's an integrated approach that creates opportunities to participate in multiple stages of the energy value chain. Furthermore, the geographies where the Group operates—such as Argentina, Mexico, and Ecuador—offer strong potential that creates a compelling strategic case for its fully-owned energy company Tecpetrol.
"Oil majors might have the exploration and drilling capabilities," Rauch explains, "but we also have the construction crews, the steel tube manufacturers, the ability to build major infrastructure energy projects, the electricity demand, and the energy sourcing skills. That creates powerful internal synergies, which position us as a synergistic partner in the eyes of a startup.”
Since its inception, TechEnergy Ventures has partnered with leading geothermal startups as part of its strategy to stay at the forefront of innovation while creating real industrial value. As Rauch notes: “In the venture capital space where we operate, we’re seeing a steady increase in interest and capital deployment in the sector. Since 2022, the year TEV made its first investment in this space, global investment in geothermal technologies has at least doubled. Some companies have already raised more than USD 170 million for their projects, and oil majors that had previously stayed on the sidelines, such as Devon, BP, Chevron, and Shell, are now becoming active participants.”
TechEnergy Ventures sees these investments in technologies as essential to unlocking geothermal’s full potential and as a scalable clean baseload energy source.
"We've decided to invest in three areas to support technologies that can create step changes in the levelized cost of geothermal: drill deeper, improve heat harvesting from the rock, and better convert heat to power. The combining effect of these three levers can deliver highly competitive energy anywhere. And we're backing them not just with capital but with long-term industrial partnerships."
TechEnergy Ventures began investing three years ago in Quaise Energy, which is developing millimeter-wave drilling technology to access ultra-deep, supercritical resources cost-effectively. A year later, they invested in Eden GeoPower, which offers electro-hydraulic fracturing technology to improve reservoir permeability and mitigate fluid short-circuiting challenges in EGS. Finally, their last investment in the space was Luminescent, now known as Lava Power, which is developing a high-efficiency quasi-isothermal heat engine that significantly outperforms traditional Organic Rankine Cycles, thereby enhancing the viability of both existing and new geothermal projects.
Together, these alliances provide TEV with early access to disruptive technologies, real-time learning from global pilot projects, and the industrial synergies necessary to deploy them at scale across the Techint Group's diverse operations.
"Geothermal is no longer something far off in the future. Despite there still being technical gaps that need to be closed, it's happening now. And we are already involved in it. This path of technological innovation, we believe, does not stop here. We continue to evaluate technologies that can go beyond the current limits of geothermal energy and make this type of energy generation a reality", remarked Rauch.