Environmental Impact of Geothermal Energy
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How Many Geothermal Power Plants in Texas?
Analysis of geothermal development in Texas through 2025. From pilot projects to legislative trends and future potential.
3 minute read • Last update August 2025
According to the U.S. Energy Information Administration, Texas has zero operating geothermal power plants. Pilot projects are expected to shift this status in the mid-2020s, but large-scale commercial capacity has not yet materialized.
Why doesn’t Texas have geothermal power plants?
Texas has a wealth of geothermal energy resources underground, but does not yet have any operational geothermal power plants.
Geothermal power plants have not taken off in the state yet for a couple of main reasons:
- Drilling wells to reach the geothermal resources can be expensive
- Many of the resources are very deep underground
However, the tide is slowly turning as legislative bodies and corporations are becoming more and more interested in geothermal power.
Operational projects and pilot initiatives
As of 2025, Texas does not yet have a utility-scale geothermal power plant in full operation. The most notable initiative is Austin Energy’s 5 MW geothermal pilot near Nacogdoches, scheduled to begin operation in 2025. This project represents the first significant test case for geothermal electricity production in the state.
While not tied directly to grid-scale electricity generation, geothermal heating and cooling systems are already being deployed in real estate developments such as Whisper Valley, an Austin-area community where geothermal HVAC networks provide residents with efficient, low-carbon temperature control. These applications highlight geothermal’s versatility but also underscore the distinction between direct-use heating/cooling and power generation.
Drivers of geothermal development in Texas
Resource potential and industry strengths
Texas possesses exceptional geothermal potential due to its deep subsurface heat reservoirs. The state’s mature oil and gas workforce brings decades of expertise in drilling, reservoir management, and subsurface mapping—all transferable skills for geothermal deployment.
The Future of Geothermal in Texas report, produced by researchers at the University of Texas at Austin, underscores this opportunity. It identifies both the scientific potential and strategic pathways needed to scale geothermal energy in the state.
Legislative and regulatory momentum
Texas lawmakers have begun creating the financial and regulatory framework to advance geothermal energy:
- HB 4370 (2025): Allows geothermal thermal energy networks to be financed with public bonds.
- HB 3778 (2025): Expands the Texas Energy Fund (TEF) to support geothermal generation or conservation facilities of 10 MW or greater.
- SB 1762 (2025): Clarifies that geothermal qualifies for TEF funding and is distinct from battery storage systems.
These measures signal growing bipartisan recognition of geothermal’s long-term value for Texas’s grid.
Strategic significance of geothermal in Texas’s energy mix
Baseload reliability advantages
Unlike solar or wind, geothermal can provide constant, around-the-clock output. Capacity factors for geothermal plants average ~92%, surpassing coal and natural gas and approaching nuclear-level reliability. This makes geothermal one of the few renewable sources capable of serving as true baseload power.
Grid diversification and clean-energy policy alignment
By adding dispatchable, low-carbon generation, geothermal can stabilize ERCOT’s grid while complementing intermittent renewables. Similar to natural gas, this makes it an important candidate in Texas’s clean-energy transition, especially as policymakers seek to balance grid reliability with decarbonization goals.
Prospects and challenges
Pathway from pilots to commercial scale
The near-term future of geothermal in Texas will hinge on the success of pilot projects like Austin Energy’s Nacogdoches facility. Demonstrating technical feasibility and cost competitiveness will be critical to unlocking broader financing through the Texas Energy Fund and private capital markets.
However, geothermal development remains capital-intensive, requiring high upfront investment for drilling and reservoir testing. Public-private partnerships will be essential to overcome these cost barriers and accelerate adoption.
Competitive positioning
To secure investor confidence, geothermal must prove that it can compete with or complement existing resources such as solar, wind, and battery storage. Its main advantage lies in dispatchability and reliability, which could make geothermal an attractive hedge against renewable intermittency—provided it demonstrates economic viability at scale.
Geothermal’s 2025 strategic profile in Texas
Key observations
- As of 2025, Texas has no fully operational geothermal power plants, though pilot initiatives are active
- Legislative actions, including HB 4370, HB 3778, and SB 1762, have established a clear policy pathway for geothermal financing and deployment
- Geothermal is transitioning from a theoretical resource into a practical option for Texas’s energy mix
The future of Geothermal energy in Texas
Texas’s geothermal trajectory will depend on:
- The performance of early pilots (e.g., Austin Energy’s project)
- The effectiveness of policy and funding frameworks under the Texas Energy Fund
- The ability to demonstrate a cost-competitive, scalable deployment that fits within Texas’s deregulated energy market
If successful, geothermal could evolve into a cornerstone of Texas’s clean baseload capacity, complementing the state’s dominance in wind, solar, and natural gas.
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