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Welcome to our energy sources, come from New York.
Federal Reserve Chairman Jay Powell said Donald Trump’s tariffs could cause higher inflation and slower growth, complicating efforts to tame inflation with the US Central Bank’s close financial policy.
The oil market has remained volatile as high inflation rates in the world’s largest economy and fears slow growth. Goldman Sachs, HSBC and JPMorgan trimmed all of their oil price forecasts this year and for the upcoming period.
My colleagues Ian Johnston and Tom Wilson report that Total Energy avoided the fate of their rivals as BP and Shell cut their investments in renewables. The French group is investing $4 billion a year in the integrated electricity sector, increasing oil and gas production by 3% each year. It focuses on the production and supply of electricity through wind farms, solar farms and gas-fired power plants.
My colleague Amanda Chu reported that the US has stopped a $5 billion offshore wind project developed by Norwegian Equiners. The Trump administration’s move shows a positive new push towards the clean energy initiative. However, not all renewable energy sources are treated equally.
Today’s energy sources gain support from Big Technology as a promising way to power data centers, so we take a closer look at geothermal, a renewable energy resource that is quietly gaining traction. Despite the Trump administration’s skepticism over the clean energy industry, particularly the wind and solar, they have defended geothermal.
Thank you for reading, Alexandra
Geothermal: Trump administration’s renewable energy beloved
When Donald Trump pursues his “drill, babe, drill” agenda, one renewable source may unexpectedly benefit from his breeding fuel fuel attitude.
Geothermal energy, which uses the heat of the earth to generate electricity, is quietly gaining popularity in the United States because new technological advances can reduce power sources for 24 hours.
Traditional geothermal plants that generate electricity by moving liquids along hot rocks should be located near natural hot water reservoirs that exist beneath the surface of the earth. However, technological advances can utilize technology from the oil and gas industry to drill wells that can generate energy from artificial reservoirs that can be located anywhere.
“The same skill set used to drill oil and gas allows the next generation of geothermal to move forward,” said Drew Nelson, vice-chairman of programs, policies and strategies at Project Innerspace, a nonprofit focused on the advancement of the geothermal industry.
Next-generation geothermal is already gathering support from leading technology companies, including Google, who are seeking clean energy in their data centers. Also supported by the White House. Energy secretary Chris Wright, a former investor at geothermal startup Fervo Energy, has appointed power as an area of interest at his confirmation hearing.
Last year may have been a time of nuclear glow, but some analysts believe geothermal energy can steal the spotlight in 2025, as they benefit from support from the Trump administration and Big Technology.
Google has already partnered with Fervo Energy to power data centers in Nevada. Another geothermal startup, Sage Geosystems, has agreed to supply Meta with 150MW of capabilities to strengthen its data centers from 2027.
“The need for power from the AI sector only heightened overall interest in geothermal,” said Cindy Taff, CEO of Sage Geosystems, adding that there was “great interest” from other hyperscalers in energy sources.
The International Energy Agency reports that geothermal meets less than 1% of global energy demand, but estimates that continuous project costs reductions and technology improvements could meet up to 15% of global electricity demand growth by 2050.
Geothermal also fits the Trump administration’s “drill baby drill” mantra, as it can leverage fracking and drilling skills in the oil and gas industry. Wood Mackenzie estimates that if geothermal growth from 50GW to 250GW by 2050, the industry will need to drill 35,000 new wells.
Despite the excitement, experts warn that the technology still has a long way to go.
The Department of Energy said in a report last year that “commercial lift-offs” are expected to be achievable in 2030, but that “a set of market conditions can be achieved regarding costs, demonstrations, values and community engagement.”
Richard Hood, senior research manager for Wood Mackenzie’s underground team, said many of the next-generation geothermal projects are pilot projects that have not yet been proven, primarily on a full commercial scale.
It is also very expensive to drill. Gregory Keolian, director of the University of Michigan School of Environment and Sustainability, said in certain parts of the United States, hotlocks close to the surface force producers to dig deeper.
Wood Mackenzie estimates the current leveled electricity costs for geothermal range from $100/mwh to $200/mwh.
“The US has a large nuclear drive that runs in parallel with this geothermal drive, but the nucleus is much more established and is considered cheap,” Hood said.
Still, as technology becomes more sophisticated, it could potentially reduce costs. Last year, Fervo Energy announced it had shown that it had reduced excavation times for the Cape Station project by 70%. The project was converted to a cost of $9.4 million to $4.8 million per well.
“As more oil and gas expertise is being brought into the sector, costs are already lower,” said Nelson of Project Innerspace. “As more and more projects rise from the ground, technology improves.” (Alexandra White)
Job movements
Encore Energy has appointed Nathan Tewald to the board of directors.
John Donaleski has joined White & Case as a partner in the Global Project Development and Financial Practice and Global Energy Industry Group.
Petronet LNG has appointed Saurav Mitra as finance director and chief financial officer.
Kaveh Rouhi has been appointed Chief Financial Officer of SMA Solar.
power point
The European Commission is studying legal options that allow businesses to break long-term Russian gas contracts without penalties.
UK regulators say UK households could face different electricity rates depending on their income.
The Mali government threatened to take control of Barrick Gold’s assets in the country as tensions between Canadian mining companies and the junta.
The energy source has been written and edited by Jamie Smith, Miles McCormick, Amanda Chew, Tom Wilson and Malcolm Moore, with the support of FT’s global team of reporters. Contact us at Energy.source@ft.com and follow us on X at @ftenergy. Check out previous editions of our newsletter here.
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