More Next-Generation Projects Than Anywhere Else
Over the past several years, Project InnerSpace, the Texas Geothermal Energy Alliance (TxGEA), and InnerSpace Action have built the research base, engaged the Legislature, and laid the regulatory groundwork that has made Texas a national model for next-generation geothermal development. The results speak for themselves: Texas now has more next-generation geothermal projects in the pipeline than any other place in the world.
How did that come to be?
A Partnership Driving Policy
That leadership did not happen by accident and is the result of sustained partnership between. Project InnerSpace, TxGEA, and InnerSpace Action. The partnership began with the Future of Geothermal in Texas, a landmark 2022 study authored by researchers from five Texas universities, the University Lands Office, and the International Energy Agency. The report was built around a clear thesis: Texas’s oil and gas expertise, workforce, and subsurface infrastructure positioned the state to lead the country in next-generation geothermal development.
It identified the specific legal and regulatory gaps standing in the way and laid out a chapter-by-chapter roadmap for closing them, covering heat ownership law, permitting reform, Railroad Commission jurisdiction, grid integration, the startup ecosystem, and more. It suggested how to fill those gaps. TxGEA took that roadmap into the Capitol and has systematically been filling these gaps.
What Two Sessions Have Built
The Legislature acted with speed and near-unanimous bipartisan support on geothermal. The 2023 bills passed nearly without opposition: two unanimously, the third with just one no vote across 181 legislators. The 2025 session extended that progress further.
2023 legislation:
- SB 785 established the Railroad Commission as the lead regulatory authority for geothermal energy, routing the industry through the same institution that governs oil and gas rather than creating a new bureaucratic structure from scratch.
- SB 786 clarified heat ownership under Texas law, resolving a longstanding legal ambiguity that had created uncertainty for developers and investors about who owns geothermal resources beneath a given parcel.
- SB 1210 created a co-production pathway allowing geothermal energy to be developed through existing oil and gas wells, enabling producers to leverage infrastructure already in the ground.
2025 legislation:
- HB 4370 (effective September 1, 2025) expanded the definition of eligible public improvement projects to include geothermal water conveyance systems, giving local districts a clearer financing pathway for shared thermal infrastructure through frameworks already on the books.
Texas Energy Fund eligibility:
The Texas Energy Fund (TEF) is a state program, administered by the Public Utility Commission, that provides low-interest loans and completion bonus grants to support the construction of new dispatchable generation capacity on the ERCOT grid. With up to $10 billion available, it is one of the most significant state-level energy financing tools in the country, and eligibility matters enormously for any technology seeking to compete in Texas’s power market.
TxGEA and InnerSpace Action secured a landmark win to ensure geothermal has a place at that table. Two questions had clouded geothermal’s eligibility under the TEF: whether geothermal qualified as dispatchable (it does, being controllable and available 24/7), and whether geothermal storage fell under the statute’s prohibition on battery storage facilities (it does not). Through direct PUC engagement and testimony before the Senate Business and Commerce Committee, TxGEA and InnerSpace Action secured written confirmation on both points. SB 1762 moved forward to reinforce the statutory language.
Geothermal projects are now firmly eligible for TEF’s completion bonus grant program: $120,000 per MW for projects interconnected before June 1, 2026, and $80,000 per MW through June 1, 2029. For a technology still working toward its first large-scale commercial projects in Texas, that grant eligibility provides meaningful financial support and a clear signal that the state considers geothermal a serious part of its power portfolio.
Why Texas Is Positioned to Lead
The regulatory environment is now among the most favorable in the world. The Texas Railroad Commission issues geothermal permits in as few as 30 to 60 days. ERCOT offers some of the fastest grid interconnection timelines in the country. A developer coming to Texas today faces a recognizable environment with clear ownership, a designated lead agency, and financing tools available through existing district powers.
That is not the norm. In most states, geothermal development stalls not because of geology but because of regulatory ambiguity. Texas, through the InnerSpace–TxGEA partnership, has systematically eliminated those barriers.
What Comes Next
The timing could not be better. ERCOT’s 2025 Long-Term Load Forecast projects peak demand to more than double by 2031, driven largely by data center growth. Texas is the second-largest data center market in the country, and those facilities require firm, around-the-clock power that variable resources cannot reliably provide on their own. Geothermal is uniquely suited to meet that need: it delivers baseload power on demand, without weather dependency, at the scale and reliability that large data center operators require.
The foundation has been built. The next phase is deployment: first projects, early data, and demonstrated performance on the Texas grid. InnerSpace Action and TxGEA will continue working together to advance research, advocacy, education, and on-the-ground development to ensure Texas’s policy leadership translates into real energy capacity, and that the state remains at the front of the national geothermal conversation.
That is how durable energy policy gets made: rigorous research, sustained advocacy, and organizations willing to work together across the full arc from analysis to action.
The Texas Geothermal Energy Alliance (TxGEA) is the state’s leading geothermal advocacy organization.