Geothermal energy: harnessing the Earth’s heat as a renewable source

In today’s energy landscape, renewable sources such as solar, wind and hydro power tend to dominate public attention. However, there is a less familiar yet equally promising alternative: geothermal energy. This technology taps into the heat stored within the Earth to provide a steady and sustainable source of power for electricity generation and climate control systems.

Geothermal energy is derived from the natural heat beneath the Earth’s surface, which warms rock formations and underground water reservoirs. As water seeps into the subsoil and encounters areas of elevated temperature, it is converted into steam, which can then be channelled either to produce electricity or to provide heating and cooling in an efficient manner. This is a virtually inexhaustible resource, present across the globe, although its commercial viability depends on the geological conditions of each region.

How is geothermal energy harnessed?

There are several methods for harnessing geothermal energy, depending on the temperature of the resource; or, in technical terms, its enthalpy (the amount of thermal energy available):

High enthalpy (>150 °C): mostly used for electricity generation.

Medium enthalpy (90–150 °C): suitable for power generation through binary cycles or for industrial heat applications.

Low enthalpy (<90 °C): used for direct thermal purposes, such as district heating or heat pumps.

In recent years, the geothermal sector has seen growing momentum, supported by the adoption of new techniques, the integration of oil & gas technologies, and increasing demand for competitive, non-intermittent and low-risk decarbonisation solutions.

The advantages of geothermal energy

Geothermal power is not only a renewable and continuous source of energy, it also delivers multiple strategic benefits in the context of the energy transition. Its features enable the optimisation of local resources, reduction of emissions and energy cost savings, making it a key contributor to the decarbonisation of the global economy:

Stable availability: A predictable and steady source of energy, unaffected by daily or seasonal fluctuations, unlike solar or wind.

Minimal environmental impact: Its exploitation involves limited land disruption, allowing for alternative surface use above the plant.

Efficiency and cost-effectiveness: Although upfront investment can be significant, geothermal systems offer a long operational life, 24/7 resource availability and low maintenance requirements, translating into long-term energy and financial savings.

Lower emissions: Geothermal plants generate a fraction of the emissions produced by conventional thermal power stations.

BBVA CIB’s commitment to emerging energy solutions

BBVA Corporate & Investment Banking (CIB) supports its clients’ decarbonisation strategies through a wide range of cleantech solutions, advising and financing projects linked to green hydrogen, BESS systems, carbon capture technologies (CCUS) and geothermal energy.

With a global footprint, strong local presence and a sector-specialised business model, BBVA CIB positions itself as a strategic partner for large corporations and institutions navigating the path toward a low-carbon economy and a more sustainable future.