Washington (Platts)--30Oct2009/330 am EDT/730 GMT

The US Department of Energy said Thursday it has awarded $338 million in stimulus funds for geothermal energy research and development.

The grants will support 123 projects in 39 states and will be matched by $353 million in private, state and local cost-share funds, it said.

"The United States is blessed with vast geothermal energy resources, which hold enormous potential to heat our homes and power our economy," Energy Secretary Steven Chu said.

"These investments in America's technological innovation will allow us to capture more of this clean, carbon free energy at a lower cost than ever before. We will create thousands of jobs, boost our economy and help to jumpstart the geothermal industry across the United States," he said.

Of the $338 million, up to $98 million will go towards research into innovative exploration and drilling techniques, while $81.5 million will be allocated for the discovery of new technologies to find and drill into deep hot rock formations, stimulate enhanced geothermal reservoirs and convert the heat into power.

DOE will also provide up to $51 million to support the exploration, drilling and development of enhanced geothermal systems, which generate power from deep hot rock resources.

For the development of new low-temperature geothermal fields, which the DOE called a "vast but currently untapped resource" that includes hundreds of thousands of oil and gas wells, $21 million was awarded.

Up to $25 million will help create a nationwide geothermal resource database, and not more than $62 million will be used for demonstrations of ground source heat pumps for heating and cooling buildings.

--Herman Wang, herman_wang@platts.com