Technoeconomic Analysis of Geothermal Energy Storage: European Benchmarks and U.S. Opportunities

Abstract

Geothermal energy storage (GeoTES) is one of the few large-scale, long-duration storage options capable of supporting renewable integration into heating and cooling systems. Europe has long experience with Reservoir Thermal Energy Storage (RTES), Underground Thermal Energy Storage (UTES), and Aquifer Thermal Energy Storage (ATES), However, the United States lacks a comparable technoeconomic roadmap. This paper asks, what lessons from European deployment can inform a U.S. strategy for geothermal energy storage?
Drawing on case studies from the Netherlands, Germany, Sweden, France, and the United Kingdom, we assess capital and operating expenditure (CAPEX and OPEX) structures, levelized cost of heat (LCOH), and regulatory frameworks. Evidence suggests that European projects have reached competitive LCOH levels of $2–9/MWhth (U.S. dollars per megawatt-hour of thermal energy delivered), with wells and subsurface infrastructure accounting for up to 50% of total CAPEX. Seasonal efficiencies above 60% have been achieved when storage is hybridized with solar thermal.
In contrast, U.S. conditions are shaped by higher drilling costs and fragmented regulation. Opportunities exist to lower CAPEX by repurposing oil and gas wells and to improve viability through hybridization with solar thermal and heat pumps. Based on these findings, the paper proposes a U.S. deployment playbook that combines technical strategies, policy improvement and financial incentives. This includes clear permitting procedures for groundwater use and developing financial tools to de-risk early projects. The technoeconomic comparative analysis indicate that geothermal storage can achieve cost competitiveness in the U.S. if supported by targeted policy and structured financing in line with successful projects in Europe.