New Mexico is stepping up efforts to turn its underground heat into a reliable source of clean electricity, with four geothermal projects receiving more than $17 million to identify promising sites across the state.
New Mexico has awarded more than $17 million through its Geothermal Projects Development Fund to four projects studying underground heat potential in Socorro County, Las Cruces, Dulce, and San Ildefonso Pueblo. The research, led by New Mexico Tech, New Mexico State University, the Jicarilla Apache Nation, and San Ildefonso Pueblo, aims to determine whether these sites can support commercial geothermal energy development, with results expected by June 2027.
State officials believe existing oil and gas infrastructure, drilling expertise, and workforce could accelerate geothermal development, supporting goals under the Energy Transition Act. Private developer interest is reportedly strong, and additional projects remain on a waiting list for future funding consideration.
The project’s target is a major obstacle to geothermal development, which is limited knowledge of underground conditions that determine whether a location can produce enough heat for commercial energy generation.
The state is betting that better geological data, existing drilling expertise and growing private-sector interest can help accelerate geothermal development as New Mexico works toward its renewable energy targets under the landmark Energy Transition Act.
“All four of these grants are aimed at doing research on the subsurface in four different zones in New Mexico,” said Rebecca “Puck” Stair, director of the state Energy Conservation and Management Division.
The areas are believed to have geothermal potential, she said, and the research will help determine whether they can support future development.
Four projects target potential geothermal hot spots
The grants, awarded through the Geothermal Projects Development Fund established by state lawmakers in 2024, support exploration in four locations.
The New Mexico Institute of Mining and Technology received the largest award, $10 million, to drill a test well in Socorro County.
Other recipients are New Mexico State University, which received $2.85 million to assess geothermal potential around Las Cruces; the Jicarilla Apache Nation, awarded $2 million to survey the area around Dulce; and San Ildefonso Pueblo, which received $2 million for geothermal modeling and exploration.
The combined funding exceeds $16.8 million, or approximately $17 million.
The projects are intended to establish whether the targeted areas have the underground conditions needed to support geothermal infrastructure.
Stair said the state expects to determine the viability of the sites by June 30, 2027. The resulting data will also be made available to the public, potentially helping developers assess where to invest.
Private developers could move quickly
The state sees the research as an important step toward attracting investment in geothermal power.
Once the findings become available, the pace of development will largely depend on private companies willing to finance and build projects.
Stair said developers are already showing considerable interest and are prepared to act when preliminary geological data becomes available.
That interest is helping drive the state’s aggressive research timeline, she said.
The state has already taken steps toward geothermal electricity generation. Public Service Company of New Mexico, the state’s largest electric utility, has tapped geothermal power from a plant in southern New Mexico.
State officials are also examining geothermal energy alongside wind and solar power as New Mexico moves to meet the requirements of its Energy Transition Act, which established targets for shifting the state’s electricity supply toward renewable and carbon-free sources.
A report released in 2025 by Project InnerSpace outlined New Mexico’s potential to become a major player in geothermal energy, adding to the state’s interest in expanding the technology.
Oil and gas workers could help drive the transition
New Mexico’s established oil and gas industry could provide a significant advantage as geothermal projects move from exploration to construction.
Geothermal development requires drilling capabilities, specialized equipment and workers familiar with underground formations — resources already present in the state’s energy sector.
“We already have the workforce here and we already have the equipment,” Stair said, citing drilling rigs and experienced crews.
She described geothermal energy as an opportunity for oil and gas workers to continue using their skills while moving into clean energy.
The transition could help preserve employment opportunities and make use of existing industrial expertise rather than requiring the state to build an entirely new workforce from scratch.
For communities whose economies depend on oil and gas, geothermal development could offer another avenue for energy-sector employment as the electricity system changes.
More projects could follow
The latest grants may not be the state’s last investment in geothermal exploration.
Municipalities, counties, state agencies, public schools, universities and Native American nations, tribes and pueblos are eligible for funding under the Geothermal Projects Development Fund.
Asked whether additional proposals were awaiting approval, Stair in a statement said that there was a waiting list.
The next challenge is establishing which sites can support commercially viable projects. Geological promise alone does not guarantee that a geothermal facility can be built economically; developers must also consider drilling costs, infrastructure requirements and the amount of usable heat available.
Still, the combination of public funding, potential private investment and an existing energy workforce gives New Mexico a foundation for further development.
The results of the four projects, expected by mid-2027, could help determine whether that potential translates into new power plants and a larger role for geothermal energy in the state’s electricity mix.
