In the foothills of the Alps in southern Germany, a clearing in the evergreen forest presents a strange tableau. The derricks of two drilling rigs jut toward the gray winter sky. Scattered around them are stainless steel tanks, stacks of pipe and toothy attachments for boring into the ground below.
This drilling operation, near Geretsried outside Munich, is using people and equipment from the oil and gas industry, but it aims to harvest heat, not fossil fuels.
Tapping into geothermal energy from deep in the earth is not new, but this effort differs from others because it does not aim to tap into a reservoir of hot water that’s often close to the surface.
Instead, the Geretsried plant will pump its own water through wells or loops around three miles deep with long prongs that resemble giant rakes. The idea is for the fluid to pick up the heat through contact with the rocks deep underground and then bring it to the surface.
Analysts say that this approach, known as “closed-loop” geothermal, has promise because building what resembles an enormous radiator could be done almost anywhere.
“If this technology is proven and commercially viable, it’s a complete game-changer everywhere in the world,” said Heymi Bahar, a senior analyst at the International Energy Agency in Paris.
The growing demand for electric power to feed data centers appears likely to boost interest in geothermal energy as a steady, low-carbon source of energy, analysts say.
North America in particular “is on the precipice of a massive boost in capacity,” Shruti Raghuram, a geothermal analyst at Rystad Energy, a consulting firm, said during a webinar on Thursday.
In December, a power plant on the site began using the energy from the first completed loop to generate electricity, which is flowing into the country’s grid. The project’s sponsors hope to pipe hot water to nearby Geretsried, a relatively new town, for heating.
Wolfratshausen, another municipality nearby whose buildings are decorated with murals of beer brewing and drinking and other Bavarian scenes, might also become a customer.
The geothermal energy produced by the wells has advantages over other renewable energy sources like wind and solar.
“Neither of those technologies can directly produce heat,” said Chris Cheng, comanaging director for Germany at Eavor, the Canadian company behind the project.
Many European municipalities, he said, have district heating systems powered by fossil fuel plants that could be replaced relatively easily with another source of heat. “That’s a low-hanging fruit for us,” he added.
Mr. Cheng said that Europe was attractive for Eavor because the prices of electricity and heat were much higher there than in Canada. Germany also subsidizes geothermal energy with a high guaranteed electricity price.
Germany is known for its strict regulations, but Mr. Cheng said that can be an asset. There are many boxes to tick, he said, but if you check them off, “you know you’re going to get your project approved, regardless of whether or not you’re German.”
A low-cost approach that can be widely used is required in order for geothermal projects to become more than a niche low-carbon energy form, analysts say. Another so-called enhanced geothermal technology being pursued in the United States uses fracking, which many countries oppose.
But Mr. Bahar, the industry analyst, said that questions remain about whether the closed-loop effort being used in Germany can lower costs enough to be commercially viable.
Certainly, the initial work has proved tough.
Drilling such long and complex wells and joining them up underground was “challenging,” said Michael Klingbeil, a driller at the site. He added that the work was more complicated than what drillers usually encounter, especially in Europe.
Completing the first of four planned loops at the site required two years. The company also reduced the scope of its first loop to quickly begin selling power to the grid, Mr. Cheng said.
He added that the company planned to begin drilling again in the second half of 2026 but moving ahead would be “dependent on our fund-raising.”
The project, which will cost up to an estimated 300 million euros, or about $354 million, has received a 91.6 million euro grant from the European Union’s Innovation Fund.
Stanley Reed reports on energy, the environment and the Middle East for The Times from London. He has been a journalist for more than four decades.
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