· 10 min read
Recent surges in electricity prices across Sweden have ignited widespread public frustration, pushing the government to issue bold statements about its ambitious plans for energy infrastructure investments. Among these, nuclear power has taken center stage as a long-term solution to achieving net-zero emission.
Yet, the challenges faced by high-profile industrial projects, such as Northvolt’s battery factories, highlight the urgency of ensuring a reliable and diversified energy supply. Wind power, a vital component of Sweden's energy strategy, has encountered economic and regulatory obstacles, further complicating the transition. Addressing these issues while advancing climate goals and energy security demands a far more balanced strategy that incorporates immediate and scalable solutions. Geothermal energy – a reliable, renewable, and largely untapped resource – stands out as a critical addition to Sweden’s energy mix. This article focuses primarily in the following key areas.
- Global growth: Geothermal energy is expanding as a key renewable source,
thanks to enhanced systems enabling new applications. - Sweden’s potential: Geological and strategic conditions combined with new
technology make Sweden well-positioned to begin leverage geothermal for
energy security and sustainability. - Lessons from global leaders: Insights from the U.S., Iceland, and Germany
highlight the diverse applications and transformative potential of geothermal
energy.
The energy transition: current investments and challenges
Sweden’s government has committed to building up to ten new nuclear reactors by 2045, with the goal of adding at least 2,500 MW of nuclear capacity by 2035. This strategy, while significant, faces steep challenges in cost and timing. Nuclear power projects often take decades to complete and require billions in state-backed funding, with limited impact on short-term energy needs.
Meanwhile, the country’s wind power sector has faced its own set of hurdles, exposing the challenges of relying too heavily on a single energy source. Despite substantial investments, Sweden’s wind industry has struggled with financial viability. A 2024 study by Christian Sandström and Christian Steinbeck revealed that between 2017 and 2023, the sector reported consistent economic losses, with a total loss of SEK 4.6 billion (€410 million) in 2023 alone. Subsidies such as Guarantees of Origin accounted for 11% of total revenues, preventing even deeper losses. Without these subsidies, the total loss would have increased to SEK 5.9 billion (€525 million), with 71% of wind power facilities operating at a loss. This reliance on external support underscores the precarious financial position of wind power in Sweden and highlights the need for a diversified energy strategy to ensure long-term stability.
Adding insult to injury, defense-related restrictions have further complicated the expansion of offshore wind farms. As reported by Mia Jankowicz of the Business Insider on Nov 4, 2024, the Swedish government denied permits for several offshore wind projects in the Baltic Sea, citing concerns raised by the Armed Forces. These projects (OX2's Aurora and Neptunus, Eolus's Arkona and Skibladner, Ørsted's Skåne Offshore Wind Park, and RWE's Södra Victoria) were deemed a potential threat to national security, with risks of interference to radar systems and submarine detection capabilities, especially given their proximity to strategic areas like Russia’s Kaliningrad region.
These economic and strategic challenges demonstrate the limitations of wind power as a cornerstone of Sweden’s energy strategy. While wind remains a vital part of the renewable energy mix, its vulnerabilities highlight the critical need for a diversified approach that incorporates other stable and scalable sources to secure Sweden’s long-term energy resilience and independence. Geothermal energy, with its unique advantages as a baseload power source, does not compete with other renewables but instead offers a complementary solution to these challenges.
Geothermal energy: a reliable and untapped resource
Geothermal energy harnesses the Earth’s internal heat, providing stable and consistent power generation. Unlike fossil fuels, which emit significant greenhouse gases, geothermal systems operate as a carbon-neutral source of energy. Traditional geothermal solutions rely on either natural hot water reservoirs or enhanced geothermal systems (EGS). EGS methods, which may include but are not limited to processes inspired by hydraulic fracturing (fracking). However, these techniques often face criticism for their potential environmental impacts, as noted by Brad Plumer in his October 3, 2022, article in The New York Times.
In his piece titled “Big Tech Sees Geothermal Energy as a Missing Piece of the Green Puzzle”, Plumer examines how companies like Sage Geosystems are adopting fracking-inspired methods to access geothermal heat. These techniques enhance the permeability of underground rock formations, enabling the extraction of geothermal energy in regions lacking natural reservoirs. While Plumer highlights the promise of this innovative approach for expanding geothermal energy’s geographic potential, he also underscores environmental concerns reminiscent of traditional fracking, including induced seismicity, groundwater contamination, and land use impacts.
Unlike wind and solar, which rely on weather conditions, geothermal - without fracking - offers a 24/7 energy source that remains unaffected by external factors, making it an ideal candidate for baseload power essential to maintaining grid stability. Unlike nuclear power, geothermal energy produces no waste and operates with zero emissions, further enhancing its appeal as a clean and sustainable energy solution.
Despite its potential, geothermal remains both unknown and under-invested globally, including in Sweden. Historically, geothermal development has been concentrated in regions with natural hot springs or volcanic activity. However, advancements in enhanced geothermal systems (EGS) now allow for energy extraction from deep underground, even in geologically stable regions like Sweden.
Global momentum for geothermal energy
Today, geothermal energy only accounts for approximately 0.5% of the world's electricity production, generating about 95 TWh annually as of the latest estimates. While this is a relatively small share and the general knowledge is extremely low, the potential for growth is significant, particularly with the development of enhanced geothermal systems (EGS) that can unlock geothermal resources in non-traditional regions and that extend its reach beyond traditional hotspots.
- United States: Tech giants like Meta and Google are investing in large-scale geothermal projects (150 MW and 400 MW respectively), showcasing its reliability and potential to power critical infrastructure such as data centers. The U.S. Air Force is deploying geothermal for energy resilience at military bases, reflecting its dual utility in civilian and defense applications
- Iceland: A global leader in geothermal integration, over 90% of homes are heated with geothermal energy, and it accounts for 25% of electricity production. This strategy has drastically reduced fossil fuel dependency while creating exportable expertise and technology
- Germany: Geothermal complements wind and solar within the Energiewende policy. Southern regions have embraced it for district heating, underlining its potential as a stable, renewable base load power source
- Sweden: Opportunities abound for geothermal energy development, both for electricity and heating. With Sweden’s NATO membership and military base expansions, geothermal energy could enhance energy security and sustainability for critical infrastructure
This momentum underscores geothermal’s role as a reliable, resilient, and renewable energy source suitable for diverse applications, from civilian uses to strategic military operations.
The Swedish opportunity: heat beneath the surface
In southern Sweden, subsurface temperatures has potential to reach 300-450°C at depths of 5-7 kilometres, creating optimal conditions for high-efficiency electricity generation. Even at lower temperatures exceeding 100°C, geothermal resources can produce steam and pressure adequate for electricity generation when using advanced technologies like binary cycle power plants. However, achieving higher temperatures generally leads to greater efficiency per invested dollar due to reduced equipment complexity. This adaptability underscores geothermal energy’s viability for both high- and moderate-temperature resources across Sweden.
Leveraging advanced drilling techniques from the oil and gas industry, geothermal energy could provide a scalable solution to meet Sweden’s rising energy demands, driven by industrial electrification and urbanization.
Image source: jordkraft.com
In addition to electricity, geothermal energy is highly effective for district heating systems, a critical need in Sweden's colder climate. By integrating geothermal into existing heating networks, Sweden could reduce reliance on imported fossil fuels while simultaneously stabilizing heating costs for households.
Environmental, economic and social advantages
The environmental benefits of geothermal energy are profound and multifaceted. Unlike fossil fuels, geothermal energy operates as a carbon-neutral source of power, emitting little to no greenhouse gases during its operation. This makes it a crucial resource in the fight against climate change, providing a sustainable alternative to traditional energy sources. Geothermal plants also require significantly less land compared to solar or wind farms, minimizing their ecological footprint. Additionally, modern geothermal systems utilize closed-loop processes, which ensure that no water or chemical waste is generated. This guarantees that geothermal energy production remains environmentally clean and sustainable over the long term.
From an economic perspective, geothermal energy offers long-term stability and reliability. As a baseload source, it provides consistent energy output, reducing the need for expensive grid-balancing measures often required for intermittent sources like wind and solar. It also reduces the need for battery storage systems, as its 24/7/365 availability ensures a continuous power supply without relying on backup energy sources. This reliability translates into lower operational costs over time, making geothermal energy a cost-effective option for stabilizing energy grids and supporting industrial and residential demands.
Although initial investments in geothermal infrastructure can be significant due to exploration and drilling costs, these are offset by decades of low operational expenses and limited maintenance. This economic predictability makes geothermal an attractive option for countries looking to stabilize energy prices while ensuring a reliable power supply. Together, these environmental and economic advantages position geothermal energy as a cornerstone of a sustainable and resilient energy future.
Enhanced Geothermal Systems (EGS) have the potential to contribute significantly to achieving the United Nations Sustainable Development Goals (SDGs), particularly in the Global South. By leveraging advanced geothermal technologies to extract clean energy from previously inaccessible rock formations, EGS offers an alternative to the extraction of natural resources like oil and gas, which have historically been sources of displacement, suffering, and armed conflict. Unlike fossil fuels, geothermal energy is renewable, locally sourced, and less prone to the geopolitical tensions and environmental degradation associated with traditional resource extraction. By providing a stable, affordable energy supply, EGS can support economic growth, reduce energy poverty, and create local jobs, fostering sustainable development while breaking cycles of inequality and exploitation. This transformative potential positions EGS as a cornerstone for achieving SDG targets related to affordable energy (SDG 7), climate action (SDG 13), and peace and justice (SDG 16).
Challenges to overcome
Despite its promise, Sweden’s energy transition continues to face significant challenges. Large-scale high profile industrial projects, such as Northvolt’s battery factories, illustrate the pressures of growing energy demand. Northvolt has encountered delays and production challenges, partly due to grid strain, insufficient energy planning, and too much reliance on equipment and expertise from Chinese suppliers.
Integrating geothermal energy as a stable baseload power source could alleviate such pressures, ensuring reliable power for industrial growth – without overburdening the grid.
High initial costs for deep drilling and exploration remain a significant hurdle, though technological advancements are steadily reducing these expenses. Another obstacle is limited political and public awareness, as geothermal energy is far less familiar than nuclear, wind, or solar power. Educational campaigns and clear communication of geothermal’s benefits are essential to build public support. While Sweden's regulatory framework is generally efficient, pioneering geothermal projects may encounter challenges due to uncertainties in permitting and approval processes. Streamlining these procedures could accelerate implementation, foster innovation in the renewable energy sector, and ensure that such advancements align with environmentally friendly and accountable frameworks.
Addressing these challenges will require coordinated efforts from government, academia, and private industry. National and regional investment, policy and tax incentives, research funding, and public-private partnerships can and should play pivotal roles in accelerating geothermal development.
A balanced approach to Sweden’s energy mix
Geothermal energy should never be seen as a replacement for nuclear, wind or solar power, but as a complementary resource. By diversifying its energy mix, Sweden can stabilize electricity prices through reliable baseload power, meet growing energy demands from industries, data centers, and households, and reduce excessive energy exports driven by energy shortfalls abroad – most recently in Germany during periods of low wind generation.
Integrating geothermal energy into Sweden’s energy strategy aligns with broader goals under the Paris Agreement and the United Nations Sustainable Development Goals (SDGs). As mentioned, among its many advantages, geothermal energy directly supports more than half of the 17 SDGs, including: SDG 7, by providing access to affordable and clean energy through scalable, renewable power generation; SDG 12, by promoting responsible consumption through minimizing resource use and avoiding waste generation; and SDG 13, by contributing to climate action through the reduction of greenhouse gas emissions and offering a zero-emission energy source.
Conclusion
Sweden stands at a critical juncture in its energy transition. While investments in nuclear and wind power are vital, they must be balanced with immediate, scalable solutions like geothermal energy. With its unique geological conditions and advanced technology, Sweden has the opportunity to lead the way in developing this underutilized resource. By tapping into the heat beneath our feet, Sweden can create a resilient, sustainable, and diversified energy future.
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