Geothermal electric plants have until recently been built exclusively where high temperature geothermal resources are available near the surface. The development of binary cycle power plants and improvements in drilling and extraction technology may enable enhanced geothermal systems over a much greater geographical range.
The thermal efficiency of geothermal electric plants is low because geothermal fluids are at a low temperature compared with steam from boilers. This low temperature limits the efficiency of heat engines in extracting useful energy during the generation of electricity. The efficiency of the system does not affect operational costs as it would for a coal or other fossil fuel plant, but it does factor into the viability of the plant. Because geothermal power does not rely on variable sources of energy its capacity factor can be quite large.
Estimates of the electricity generating potential of geothermal energy vary from 35 to 2000 Gigawatts (GW). Geothermal power is considered to be sustainable because the heat extraction is small compared with the Earth's heat content. The emission intensity of existing geothermal electric plants is about one-eighth of a conventional coal-fired plant.
In addition to dissolved gases, hot water from geothermal sources may hold in solution trace amounts of toxic chemicals. These chemicals come out of solution as the water cools, and can cause environmental damage if released. The modern practice of injecting geothermal fluids back into the Earth to stimulate production has the side benefit of reducing this environmental risk.
Geothermal power requires no fuel, and is therefore immune to fuel cost fluctuations, but capital costs tend to be high. Drilling accounts for over half the costs, and exploration of deep resources entails significant risks. Geothermal power is highly scalable: a large geothermal plant can power entire cities while a smaller power plant can supply a rural village.