Arizona, Colorado, New Mexico, and Utah are joining forces to accelerate deployment of clean, around-the-clock geothermal energy in the region.

America’s ambitions to harness geothermal energy just keep getting bigger.

On Wednesday, a bipartisan group of Mountain West governors unveiled an initiative to unlock an estimated 200 gigawatts of clean, always-on energy by tapping into the region’s underground heat. That much power would represent a 50-fold increase in the nation’s current ability to generate geothermal electricity.

Arizona, Colorado, New Mexico, and Utah launched the Mountain West Geothermal Consortium a week after the geothermal startup Fervo Energy went public and its valuation rose to over $10 billion. Fervo alone estimates that it has the potential to develop over 42 GW in total geothermal capacity across the nearly 600,000 acres it’s leasing in Western states.

Geothermal energy is gaining traction on both sides of the aisle at a time when data centers, factories, and increasingly electrified cars and buildings are pushing the country’s power grids to the brink.

Yet Fervo and other geothermal firms have many hurdles to clear before they can turn those hypothetical gigawatts into real-world projects. By teaming up, the four states aim to ease some of the financial, permitting, and logistical challenges that stand in the way of widespread geothermal deployment.

“The idea that we can unleash clean, affordable, dispatchable power … that’s kind of the Holy Grail, what we’ve all been chasing. And yet it’s a reality now in ways that it’s never been before,” Utah Gov. Spencer Cox, a Republican, said during the Wednesday news conference.

Utah in particular has become a hot spot for developing the next generation of geothermal technologies, which promise to sidestep the limitations of conventional systems. Existing geothermal plants rely on naturally occurring reservoirs of hot water and steam to spin turbines that produce electricity. But new drilling techniques and tools are enabling companies to access heat in more places, and at greater depths, than was previously possible.

The federally backed Utah Forge project in Beaver County helped develop and test ​“enhanced geothermal systems,” which use horizontal drilling and fracking to create artificial reservoirs underground. Now, Fervo is commercializing the technology at a nearby site. The first phase of Fervo’s 500-megawatt Cape Station project will start sending power to the grid this fall.

“The Mountain West region has an opportunity to lead the world,” Cox said.

Utah is currently home to four conventional geothermal power plants totaling 88 MW in capacity. New Mexico has a single, 14-MW facility, while Arizona and Colorado don’t have any.

The new consortium is led by the Center for Public Enterprise, a New York–based think tank, and the nonprofit organization Constructive, with geothermal companies, investors, and potential customers serving as advisers to the states. The effort was inspired by CPE’s April 2025 report calling on policymakers to ​“deliberately build the legal, financial, and market infrastructures” to accelerate enhanced geothermal projects.

As part of the effort, the four participating states will work to coordinate their permitting processes to speed up approvals and have agreed to share data needed to find and build new geothermal plants. They will also work to improve regional grid interconnections for the projects and to create financing mechanisms that encourage both public and private investment.

Among the biggest barriers to scaling geothermal is what CPE has called ​“a vicious cycle” in project financing.

In order to get money to build projects, developers must first spend millions of dollars to drill exploration and test wells to prove their systems can produce sufficient amounts of energy over time, while also showing they can bring down drilling costs. ​“However, providing this evidence requires additional drilling and larger operational datasets, which require capital the sector does not possess,” CPE said in a separate 2025 report.

To break that bottleneck, states could work with the federal government to replicate projects like the Utah Forge site across the region and take on much of that risky, expensive early work, according to CPE. They could also provide short-term public loans and create prepayment structures that help boost the cash flow and creditworthiness of projects to attract private investors.

At this week’s launch event, Ben Serrurier, Fervo’s director of government affairs and policy, said his firm is excited to work with the states ​“on the financing solutions that can have us be drilling more wells in new places, bringing down costs faster … and finding where we can do projects we never thought projects were possible.”

Cox said a key goal of the Mountain West consortium will be to bring ​“some heft” to Washington, D.C., to advocate for federal funding and policies that support a geothermal expansion. Over 90% of identified U.S. geothermal resources are on federally managed lands, and federal permitting processes can be slow and cumbersome — though recent reforms by the Bureau of Land Management and bipartisan bills in Congress all aim to streamline permitting for geothermal projects.

“If it’s just one state going it alone, that’s great, but you don’t get the attention, the capital, the investment that you need,” Cox said.

Colorado Gov. Jared Polis, a Democrat, agreed. ​“The more that we can work to harmonize and de-risk investments in geothermal … we can really support geothermal nationally,” he said.

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Grouping wind, solar, and batteries together can already be more affordable than building a coal or gas plant in prime locations, new report finds.

One of the biggest knocks against renewables — their intermittency — could soon be defanged.

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As technology prices fall and industry prowess compounds, a new type of clean megaproject is starting to look not only possible but also economically attractive. These projects would load up the sunniest and windiest places on Earth with enough solar panels, wind turbines, and batteries to deliver ​“firm power” 24 hours a day.

Such firm renewable projects could already compete with the cost of building a new coal- or gas-fired power plant in many regions, according to a new report from the International Renewable Energy Agency. It may sound fanciful to American ears, but projects resembling what IRENA describes are already getting built elsewhere in the world.

Wind and solar have for years competed extremely well on the basic cost per unit of generation, often calculated as the levelized cost of energy; they can generate electricity cheaper than anything that must burn fuel. Last year, onshore wind and fixed-axis solar tied for the lowest levelized cost, at around $40 per megawatt-hour globally, per BloombergNEF, compared with $100 per megawatt-hour for new combined-cycle gas plants.

But that energy cost metric doesn’t tell the full story, because solar and wind famously can’t generate electricity all the time. Utilities and grid operators have to pay extra for firm energy that can fill the gaps between renewable production and demand — and usually that comes from fossil-fueled power plants.

This dynamic has limited the transformational potential of cheap renewables so far. California, for example, floods the wires with cheap solar at noon, but even with its massive fleet of lithium-ion batteries, it still needs gas power plants to keep the system running through the night.

Breakthrough technologies could someday solve the problem of cost-effective, around-the-clock clean power. While enhanced geothermal is making progress, batteries that run for days on end and nuclear fusion are further off. But in the meantime, lithium-ion batteries, which tend to run for just four or five hours at a time, continue to get cheaper and better — making it conceivable to firm up renewables by overbuilding them alongside stacks of conventional energy storage.

IRENA’s report, then, asks how far you can push the clean energy technologies that are available right now.

To answer that, the analysts tapped their database of global renewable project costs and geographical profiles of solar and wind resources ​“to assess what it actually costs to deliver firm, round-the-clock electricity from a hybrid renewable system at a given site, under realistic technology and financing assumptions.”

The results IRENA found are startling: ​“In high-quality resource regions, firm renewable electricity has crossed the threshold of cost competitiveness with new fossil fuel generation,” the authors write. ​“The central question is no longer whether firm renewables can compete on cost, but how quickly the structural conditions needed to realise their potential can be put in place across the diversity of markets and institutional contexts prevailing globally.”

China sets the bar with its shockingly low cost of firm renewables today.

IRENA looked at 252 solar projects that went online there in 2024 and found that many of them could be augmented with extra solar capacity and batteries to deliver power cheaper than the $100-per-megawatt-hour benchmark for new gas-fired plants. Almost all the modeled solar-battery plants could beat that cost for firm clean power 90% of the time; even at the higher reliability threshold of 99%, nearly half the projects remained competitive, and the lowest cost was $46 per megawatt-hour.

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The region is finalizing its first-in-the-nation rule to limit the sale of polluting gas water heaters, which will take effect next year.

In 2023, the San Francisco Bay Area’s air district passed first-in-the-nation rules setting zero-emissions limits on home heating systems and water heaters. Now, the agency is working to address affordability concerns ahead of the water-heater rule’s finalization this year — and defuse calls from some regulators to scrap the policy altogether.

In their current form, the regulations would effectively prohibit the sale of gas appliances, beginning with water heaters in 2027 and then furnaces in 2029. Gas appliances spew noxious compounds, including nitrogen oxides (NO_x) that contribute to the region’s smog. Pollution from furnaces and water heaters leads to as many as 85 early deaths in the community each year, the air district estimates. Those deaths, combined with illnesses and hospital visits, take a financial toll of up to $890 million annually.

But clean alternatives — zero-emissions heat pumps and heat-pump water heaters — are typically more expensive up front, even if they can save thousands of dollars on energy bills over time. From the beginning, Bay Area regulators, the majority of whom are elected city and county officials, vowed to institute the groundbreaking requirements with care.

The air district is now hammering out the details for implementing the water-heater rule, including a plan to offer one-time exemptions to low-income households and those with space and electrical constraints. Staff members, who are separate from the voting board and developed the proposal, estimate that the exemptions could apply to 38% of water-heater installations. They’ve also proposed delaying implementation by nine months, from January 2027 to October 2027, to set up the exemption system.

Several members of the agency’s board are seeking more drastic changes.

Eight of the 18 board directors in attendance at the body’s May 13 meeting expressed a desire to further delay the policy’s implementation date — or roll it back and make adoption of electric equipment voluntary instead. The board has a total of 24 directors.

“I just think it’s the wrong time to do this. … What’s the top-of-mind issue right now? It’s affordability,” said Alameda County Supervisor David Haubert, a board member in favor of loosening the rules. ​“It’s affordability of food, it’s affordability of electricity, it’s affordability of gas.”

Bay Area regulators have tightened NO_x-emissions standards for water and space heaters for over 30 years. The municipalities of Berkeley, Emeryville, Los Altos Hills, Oakland, and San Francisco have passed local resolutions in favor of the latest appliance rules.

A majority of the board voiced their continued support for the water-heater standard, given gas-fired equipment’s insidious threats to public health.

“When we talk about affordability, let’s talk about the affordability of asthma,” said chair Lynda Hopkins, supervisor of Sonoma County, who supports the standards with the exemptions.

“Let’s talk about the affordability of premature death and heart disease, missed work, missed sports practices, missed school … [which also has] social and emotional costs,” she noted. ​“We have communities who are essentially living with generational trauma because they experience disproportionate health impacts.”

The board is expected to vote on the finalized rule language this October.

Its decision could inform state-level regulations taking shape in California and Maryland. Both are actively considering clean-heater rules, while eight other states have committed to exploring zero-emissions standards in the future: Connecticut, Hawaii, Massachusetts, New York, Oregon, Pennsylvania, Rhode Island, and Washington. Last year, after a flood of opposition speculated to be fake, Southern California’s air district decided to hold off on adopting similar zero-emissions appliance rules of its own.

“The Bay Area will set an example for other air districts,” said Joseph Wachunas, senior project manager at decarbonization nonprofit New Buildings Institute.

According to the district’s analysis, heat-pump water heater installation costs $7,000 on average, or twice as much as putting in gas equipment. Local and state incentives are available to help close the $3,500 gap — or, in some cases, install zero-emissions water heaters for free.

For a substantial minority of households, switching to a heat-pump water heater could still be cost-prohibitive for myriad reasons. These appliances are typically larger than gas options and may not fit in tight spaces. Because heat-pump devices harvest thermal energy from the air, they typically need at least 700 cubic feet, which not all properties are ready to accommodate. And while evidence suggests that most households can electrify on 100 amps, a fraction might need an electrical service upgrade that could add $2,000 to $30,000 to the installation cost.

When these circumstances make heat-pump water heaters unaffordable, the air district’s staff members have proposed making exceptions.

“If you have to move a wall, you’re going to be able to get that exemption. If you have to upgrade your panel, you’re going to get that exemption,” said Greg Nudd, deputy executive officer of policy at the district. After installing a gas water heater, ​“you would have the lifetime of that piece of equipment to address those problems.”

The tech is also becoming more accessible. ​“When we started this process several years ago, there were no 120-volt heat-pump water heaters,” said board director John Gioia, supervisor of Contra Costa County. ​“There are now two on the market” that plug into standard outlets.

Clean air advocates called the exemption approach reasonable.

“The Bay Area Air District has done a good job at addressing the real-world concerns that people have brought up,” said Tony Sirna, deputy policy director for buildings at climate advocacy group Evergreen Action. ​“We want to reduce pollution, but we know that that’s not going to be successful if the rule doesn’t work for the people of the Bay Area.”

More than 60% of homes in the region will still be required to adhere to the standard, ​“which will drastically reduce pollution and put us on track to transitioning to clean air and clean energy,” Sirna said.

Even though some regulators would suspend the appliance rules outright, Sirna said he’s confident that the majority will carry the water-heater standard across the finish line this fall. ​“The flexibility exemptions that are being proposed,” he noted, ​“really address all the concerns that were being raised.”

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