EU hypes enhanced geothermal systems as 43 GW under €100/MWh

The EU’s latest energy salvation story comes with an old European twist: if you can’t permit entrepreneurship, subsidize it and call it “innovation.” Enhanced geothermal systems (EGS)—geothermal power produced by drilling deep into hot, solid rock and engineering a reservoir—are being pitched as the next scalable, firm, low-carbon electricity source across the continent.

Euronews reports on a new analysis by energy think tank Ember claiming the EU could develop 43 GW of EGS capacity for under €100 per megawatt-hour, producing about 301 TWh annually—roughly 42% of the EU’s coal- and gas-fired generation in 2025. Globally, Ember argues geothermal could meet up to 15% of electricity-demand growth by 2050.

Technically, EGS is not magic; it’s drilling and rock mechanics. Unlike conventional geothermal—limited to volcanic or plate-boundary regions such as Iceland—EGS involves drilling as deep as eight kilometers, injecting fluid to open fractures, and circulating the heated fluid back to the surface to generate electricity. It borrows key elements of the shale revolution, including high-risk subsurface work and a political fight over induced seismicity.

Ember’s map of “techno-economic potential” is geographically lopsided. Hungary alone is said to hold about 28 GW of potential, followed by Türkiye at 6 GW, with Poland, Germany and France at around 4 GW each. Yet the report warns the EU may lose its early lead to North America, where projects are scaling faster. The reason is not that Europeans forgot how to drill; it’s that Europe is exceptionally good at making permission a scarce resource.

Euronews notes that EGS pilots launched in France, Germany and Switzerland in the 2000s, but commercial deployment has been slowed by lengthy permitting and inconsistent national support. Ember’s policy prescription is telling: the challenge is no longer whether the resource exists, but whether “policies that enable scale and reduce early-stage risk” can be put in place.

That phrase—reduce early-stage risk—usually means shifting it. In competitive markets, exploration risk is borne by investors who can win big or go bankrupt. In European energy policy, risk reduction typically arrives as loan guarantees, contracts-for-difference, and other state-backed mechanisms that let private capital participate without fully pricing the downside.

EGS may well become a valuable technology. But Brussels’ preferred route—financial derisking plus regulatory throttling—tries to recreate shale-style risk-taking while systematically removing the two things that made shale happen: fast permitting and clear property rights. Europeans may end up with geothermal power, but they will also get what they always get: a subsidy architecture that survives even if the wells don’t.