BlackRock’s GIP Sees ‘Enormous’ Opportunity in Geothermal Energy

Clean energy projects focused on geothermal and nuclear power have the potential to unlock huge returns for investors, according to an executive at BlackRock Inc.’s Global Infrastructure Partners.

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“Geothermal is a part of energy dominance, nuclear is a part of energy dominance,” said Salim Samaha, head of transition fund at the infrastructure investor, which sits inside the world’s largest asset manager. Both are “clean baseload resources” around which there is “enormous, enormous opportunity,” he said on Tuesday at the Hong Kong Green Week.

While the administration of US President Donald Trump has vilified green energy sources including wind and solar, it’s made a point of backing geothermal and nuclear. For geothermal, part of the appeal is that it often relies on the hydraulic fracturing technology that’s used to release shale gas in the US.

Today, geothermal energy provides less than 1% of US generation capacity, but support from tech giants and US Energy Secretary Chris Wright have positioned it for growth.

Source: BloombergNEF, press releases, Bloomberg Terminal, CB Insights, company websites
Note: Projects includes demonstration and commercial projects. Underway defined as construction, such as site construction, has started.

The US government has axed credits for electric vehicles, solar and wind, while supporting incentives for geothermal energy and nuclear. Private backers include Bill Gates, as tech billionaires explore ways to generate enough energy to support the growth of artificial intelligence.

BlackRock’s GIP counts US-based Terra-Gen Power, a renewables power company with geothermal projects, in its portfolio.

It’s also exploring opportunities in nascent, low-carbon fuels such as sustainable aviation fuels, renewable diesel, ammonia and methanol, many of which are “still very expensive, but will scale up,” Samaha said. “In the US today, people seem to be down on energy transition, but when you look at it, biofuels are part of energy dominance and the mandates are getting tighter,” he added.

Samaha said GIP’s areas of interest include carbon capture and sequestration — another rare corner of the green transition backed by the Trump administration — as well as advanced recycling technologies to turn waste into “very useful” chemicals.

For BlackRock’s GIP, there are four main focus themes, namely electrification, clean fuels, circular economy and industrial decarbonization partnerships, Samaha said. And the idea is to “create opportunities by partnering” with industry leaders “because collaboration is very key in enabling the transition,” he said.

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