Following several months of integrated technical, geological, and economic analysis, a consortium comprising SwissDGS, EAPOSYS, Well Engineering Partners, and Prof. Pierre Perrochet (Université de Neuchâtel) has completed an 80-page assessment demonstrating how closed-loop Advanced Geothermal Systems (AGS) can already deliver reliable baseload heat for Swiss district heating networks (DHN).

The study shows that, through system engineering and conservative design assumptions, geological uncertainty can be largely shifted from an exploration risk to a manageable engineering variable, positioning AGS as a viable long-lived heat infrastructure solution.

Market context

A national screening of heat demand clusters conducted by SIG (Quiquerez, 2020) identifies more than 700 addressable Swiss demand nodes, each ranging between 3 and 20 GWh/y. These clusters are well aligned with the output scale of first-generation AGS installations and represent a substantial near-term market for non-intermittent, fossil-free heat.

Technology readiness

Current-generation two-leg closed-loop AGS can be deployed using existing drilling, completion, and well integrity technologies derived from oil & gas and deep geothermal practice. The systems are designed for:

fully closed-loop operation (no reservoir stimulation),
predictable thermal performance,
minimized subsurface and induced seismic risk,
high operational availability.

This positions AGS as a low-risk option compared to open-loop deep geothermal developments.

Kick-starter system scale

The reference Swiss kick-starter configuration evaluated in the study consists of:

~5 km true vertical depth,
~1–2 km lateral section,
~2 MWth thermal output.

Heat extraction relies on robust thermosiphon-driven self-circulation, enabling continuous baseload operation over several decades with very low operating expenditure and minimal surface complexity.

Economics through an infrastructure lens

While AGS systems are capital-intensive by design, with upfront investments on the order of €16–23 million per MWth, their economic profile becomes attractive when assessed as long-lived infrastructure assets rather than short-cycle energy projects.

Under institutional financing assumptions (low WACC, extended asset life), AGS aligns well with district heating ownership and financing structures.

Cost and value of heat

For a conservative reference case (5% WACC, 30-year lifetime, current drilling costs, ~5,500 full-load hours/year), the resulting levelized cost of heat (LCOH) is approximately:

~250 €/MWhth.

Under infrastructure-style scenarios with lower WACC, extended lifetimes (≥60 years) and declining drilling costs, LCOH drops below:

70 €/MWhth, assuming unchanged baseload operation.

Beyond LCOH metrics, AGS should be understood as a long-lived, underground-protected heat infrastructure asset, offering:

non-volatile, fuel-free heat pricing,
insulation from fuel market and geopolitical shocks,
high security of supply,
long-term price predictability for DHN operators and municipalities.

Path to competitiveness

Cost reductions are driven primarily by:

multi-leg scalability from a single surface site, and
drilling learning curves, with achievable costs trending toward ~1,000–2,000 €/m.

These effects materially compress LCOH over time, shifting AGS from “infrastructure-affordable” to fully competitive with incumbent and alternative low-carbon heat sources.

Outlook

Closed-loop deep geothermal systems have the potential to become a foundational pillar of Switzerland’s decarbonized heat supply, combining long-term availability, predictable economics, and declining costs as deployment scale increases, system engineering matures, and regional drilling experience accumulates.

The authors acknowledge the financial support of the SIG Fonds Vitale Innovation, which enabled the completion of this milestone study.