US Allocates $99 Million to 21 Geothermal Projects

The US Department of Energy (DOE) selected 21 projects on September 21, 2026, to negotiate up to $99 million for field testing of enhanced geothermal systems (EGS) and exploratory drilling for conventional and next-generation geothermal resources, according to the DOE's official announcement. Of the total, five projects involve EGS field testing and 16 involve exploratory drilling, JPT/SPE detailed.

The amount covers the first budget period and is subject to Congressional appropriations and the achievement of milestones. The DOE specified that selection for negotiation does not constitute a commitment to award support: the agency may cancel the negotiation and rescind the selection. Project data will be published in the DOE's Geothermal Data Repository.

Among the selected projects, Fervo Energy received two projects worth about $20 million, in Idaho and Nevada, and Quaise Energy up to $25 million for Project Obsidian in Oregon, a three-well configuration that seeks reservoir temperatures above 300 °C and more than 25 MW of gross electrical capacity. The University of Utah leads two projects at Dixie Valley West and Cove Fort, for up to $25 million and $9.7 million. XGS Energy and GeoAlaska complete the list of cases with public detail.

The package is relevant for the region because it addresses the point the geothermal industry identifies as the sector's bottleneck: early-stage risk, where the cost of drilling without certainty about the resource slows development. In Mexico, where geothermal energy is concentrated in Cerro Prieto, Los Azufres and Los Humeros, an instrument of this type would finance subsurface characterization before committing investment capital.

What's next: the negotiation between the DOE and the 21 selected projects, on which the conversion of the amounts into firm awards depends, and the publication of drilling and stimulation data in the federal repository.

This article was drafted with artificial intelligence assistance from verified sources and reviewed by a human editor before publication.