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Haukur Hardarson

July 11, 2025 23:29

A general view shows PT Geo Dipa Energi's geothermal power plant, a 55 MW power plant as one of the government's National Strategic Projects (PSN) for electricity infrastructure, in Banjarnegara, Central Java on September 16, 2024.

As �������� makes progress on Vision 2030, a defining opportunity is emerging: to transform how its cities are powered, cooled and sustained through one of the most promising yet underutilized renewable resources — geothermal energy.

By tapping into the natural heat beneath our feet, the Kingdom can unlock a greener, healthier and more resilient future — one that not only reduces emissions but also supports thriving, livable urban environments.

The global shift toward clean energy is well underway. Today, renewable resources generate nearly 30 percent of electricity worldwide — a share expected to exceed 50 percent by 2040.

Geothermal energy, with its round-the-clock reliability and minimal land footprint, is gaining recognition as a vital part of the transition.

More than 16 gigawatts of geothermal capacity — roughly equal to the electricity demand of the Netherlands or the Philippines — is already in operation globally. With the right policies and investment, this figure could grow fiftyfold by mid-century.

Unlike solar or wind, geothermal is a baseload energy source, producing constant, steady output day and night, regardless of the weather. This makes it especially valuable in the Gulf, where high electricity demand, particularly for cooling, coincides with high outdoor temperatures and energy-intensive urban growth.

In ��������, cooling can account for up to 70 percent of daily electricity consumption, most of it currently met by natural gas. Geothermal-powered district cooling offers a clean, efficient and cost-effective solution to ease pressure on gas supplies, lower emissions and improve long-term energy security.

This is not an abstract concept. In China, Arctic Green Energy’s joint venture with Sinopec — Sinopec Green Energy — has built the world’s largest geothermal heating and cooling network, covering 85 million sq. meters of residential area and serving more than 3 million people.

The company manages 40 percent of the world’s deep geothermal wells and has shown that geothermal can be scaled up profitably, providing affordable energy while delivering substantial environmental benefits.

With expertise in drilling, subsurface engineering, and energy infrastructure, the Kingdom holds a strong foundation for geothermal development.

Haukur Hardarson

The model has proven particularly effective in high-density urban areas — similar to those rapidly expanding across the Gulf.

�������� is now well positioned to replicate and localize this success. With expertise in drilling, subsurface engineering and energy infrastructure, the Kingdom has a strong foundation for geothermal development.

Up to 80 percent of geothermal project investment overlaps with technologies and skills already standard in the oil and gas sector, offering a natural pathway for industry diversification and workforce transition. Existing infrastructure can be repurposed to reduce both cost and time to deployment.

But the opportunity goes beyond cities and utilities. In regions like AlUla and NEOM, geothermal energy can support unique, place-based developments aligned with the Kingdom’s tourism and sustainability goals.

In AlUla, for example, geothermal-powered wellness sanctuaries could create low-impact luxury destinations that draw on both ancient healing traditions and modern design — similar to the geothermal spas that have become key attractions in Iceland for both visitors and locals.

In NEOM, geothermal systems could serve as a backbone for integrated clean energy infrastructure — delivering not only cooling and heating, but also desalinated water, electricity and support for data hosting centers.

Similar systems are already being deployed in China, where a single geothermal well can now support multiple outputs, including heat, power and helium extraction, creating diversified revenue streams and maximizing asset value.

To realize this potential, continued collaboration will be essential. A supportive regulatory framework, access to project finance and targeted investment in building local capacity will help scale geothermal across the Kingdom and beyond.

Geothermal energy offers more than an environmental solution. It offers a commercial, scalable and regionally adapted path to economic diversification, industrial innovation and energy resilience — pillars at the heart of Vision 2030.

As the Kingdom looks to chart a sustainable and prosperous future, geothermal should play a central role in that story.

• Haukur Hardarson is the founder and chairman of Arctic Green Energy.