For a country with some of the world’s most active geothermal resources, the auction mechanism has become the real bottleneck. Geothermal can provide dispatchable clean power, but it is capital-intensive and long-cycle. Developers must secure land rights, permits, drilling, grid access, and financing before generating revenue. If the government auction formula offers a price that does not compensate for those risks, even strong projects can look unbankable. That makes pricing design central to whether private developers will commit to new capacity.
This matters because geothermal sits at the intersection of energy security, cost management, and climate policy. It can reduce reliance on imported fuels, which are exposed to global price swings and currency moves. For manufacturers, logistics firms, data centers, and other power-hungry businesses, a more predictable renewable supply can support long-term planning and competitiveness. For households, a healthier auction process may eventually help keep tariffs from being propped up by costlier or riskier alternatives, while also strengthening the grid’s ability to handle higher electricity demand.
The debate is not simply about raising prices. It is about how risk is allocated: who bears drilling uncertainty, permitting delays, grid congestion, currency exposure, and inflation over a project’s life. A better mechanism may include clearer offtake terms, transparent evaluation criteria, realistic development timelines, and provisions that protect both investors and ratepayers. The goal should be an auction that attracts serious bidders without turning geothermal into a subsidy for end users.
What to watch next is whether the Department of Energy and industry can agree on pricing principles before the next solicitation, and how quickly any revised rules can be operationalized. Delay would weaken investor confidence and could push the country toward other power sources that may be less efficient or more exposed to fuel-market volatility.