Suncor’s Geothermal Strategy 2025: A Missed Opportunity in Canada’s Energy Transition?

Industry Adoption: Suncor’s Strategic Sideline in the Geothermal Sector

Between 2021 and 2024, Suncor Energy’s engagement with geothermal energy was best described as peripheral and conceptual. As a founding member of the Pathways Alliance, Suncor participated in high-level discussions where geothermal was tabled as a potential technology to reduce steam requirements in oil sands operations. However, the company’s concrete actions pointed in a different direction. A strategic pivot was signaled in October 2022 with the C$730 million divestment of its wind and solar assets to sharpen focus on hydrogen and renewable fuels. This move, coupled with investments in projects like a C$1.4 billion cogeneration unit, established that Suncor’s decarbonization strategy was centered on optimizing its core business, with geothermal remaining a low-priority, long-term option rather than an active pursuit.

By 2025, Suncor’s position has solidified from passive observer to strategic non-participant in the burgeoning Canadian geothermal sector. Analysis of its activities reveals no direct, quantifiable commercial involvement, investments, or partnerships in geothermal. While the industry discussion has advanced to concrete opportunities, such as repurposing mature oil and gas assets for geothermal generation, Suncor’s tangible actions remain anchored in its legacy business. The company is committing $1 billion to refurbish its oldest oil sands upgrader and advancing projects like the Lewis SAGD development. This contrasts sharply with the broader market, where companies like DEEP Earth Energy Production Corp. are actively developing Canada’s first geothermal power plant. This divergence marks a critical inflection point: as the Canadian geothermal market moves from concept to commercialization, Suncor is doubling down on its oil sands assets, creating a widening gap between its stated energy transition goals and its capital allocation in the geothermal space.

Suncor’s Capital Allocation: Prioritizing Oil Sands and Hydrogen Over Geothermal

An examination of Suncor’s investment decisions reveals a clear and consistent capital strategy that prioritizes the decarbonization of its core oil sands operations and investments in hydrogen, while explicitly avoiding direct investment in geothermal energy. Despite the technical synergies between its subsurface expertise and geothermal development, there is no public record of any capital or operational expenditure dedicated to geothermal projects. Instead, major financial commitments underscore a focus on enhancing and extending the life of its fossil fuel assets and exploring adjacent low-carbon technologies like CCUS and hydrogen. The following table details the key capital decisions that illustrate Suncor’s strategic priorities, highlighting a pattern of investment that has left geothermal on the sidelines.

Table: Suncor Energy’s Key Capital Decisions (2021-2025)

Partnership Landscape: Collaborative Efforts Point Away from Geothermal

Suncor’s collaborative strategy mirrors its investment thesis: a focus on broad, industry-wide initiatives to decarbonize oil sands rather than specific ventures into new renewable sectors like geothermal. The company’s most significant partnership is its role within the Pathways Alliance, a consortium of oil sands producers. While geothermal is mentioned within the Alliance’s technology roadmap, it is one of many potential long-term options, and Suncor has not entered into any specific joint ventures or MoUs to advance it. In 2025, the lack of geothermal-specific partnerships is stark, especially when contrasted with competitors in the space who are actively forming alliances to build out projects. Suncor’s partnerships remain focused on CCUS and, previously, hydrogen, indicating that its collaborative capital and expertise are not being directed toward the geothermal sector.

Table: Suncor Energy’s Strategic Partnerships (2021-Present)

Geography: Suncor’s Inaction Contrasts with Alberta’s Geothermal Potential

Between 2021 and 2024, the geographic nexus for geothermal potential was clearly Suncor’s home province of Alberta, which possesses favorable geology and supportive policy, including the passage of the Geothermal Resource Development Act in 2021. Suncor’s engagement, however, was confined to industry discussions in Calgary through the Pathways Alliance. The opportunity was regional, but the company’s actions were not.

From 2025 to today, this geographic disconnect has become more defined. While Alberta’s government advances strategies for repurposing mature assets for geothermal use and the provincial grid braces for 11 GW of new demand, Suncor’s activities remain geographically tied to its oil sands leases for fossil fuel production. The center of gravity for active Canadian geothermal development has meanwhile shifted to Saskatchewan, where DEEP Earth Energy Production Corp. is advancing Canada’s first power plant. Suncor is geographically well-positioned to be a leader in Alberta’s energy transition but is ceding the ground to more agile players in adjacent regions, highlighting a failure to translate regional opportunity into tangible local projects.

Technology Maturity: Suncor’s Expertise Remains Untapped in Geothermal

In the 2021–2024 period, Suncor viewed geothermal as a technologically immature or distant option. Its focus was on commercially ready technologies like natural gas cogeneration and developing large-scale “blue” hydrogen and CCUS infrastructure. While the broader industry recognized the potential of leveraging oil and gas drilling technologies for Enhanced Geothermal Systems (EGS), Suncor did not publicly pursue or pilot these applications, keeping its technological development squarely focused on its core operations.

By 2025, it is clear that Suncor possesses mature, directly transferable technological capabilities for geothermal development, including subsurface engineering, drilling expertise, and proprietary AI systems trained on vast geological datasets. However, these powerful tools are being deployed exclusively to optimize oil and gas recovery. This represents a significant strategic choice. While Canadian green tech startups are securing millions in funding (e.g., $40 million for innovative geothermal technology) and DEEP has partnered with service giant Schlumberger to commercialize its project, Suncor’s relevant technologies remain siloed. The technology for Canadian geothermal is moving from pilot to commercial scale, validated by major partnerships and funding, but Suncor’s advanced in-house tech remains a spectator.

SWOT Analysis: Suncor Energy’s Position on Geothermal (2021-2025)

This analysis tracks the evolution of Suncor’s strategic position relative to the geothermal sector, revealing a shift from passive observation to a more defined—and potentially risky—stance of non-participation as the market matures around it.

Table: SWOT Analysis of Suncor’s Geothermal Strategy

2025 Forward Look: Will Suncor Remain a Geothermal Follower or Become a Leader?

The data from 2025 paints a clear picture: Suncor Energy is firmly on a path that prioritizes the decarbonization of its existing fossil fuel operations over diversification into adjacent renewable sectors like geothermal. The company’s strategic narrative is about making its core business more sustainable, not building a new one. For the year ahead, we should expect this trend to continue. Suncor’s massive capital-intensive assets in the oil sands command its full attention and financial resources, making a significant pivot into a new energy vertical unlikely without a major external catalyst.

Market actors should watch for three key signals that could indicate a change in strategy. First, any pilot project announcement related to repurposing Suncor’s mature wells for geothermal heat or power, as outlined in Alberta’s provincial strategy. Second, a strategic partnership with a dedicated geothermal technology company, which would signal a first, serious step into the sector. Finally, any venture capital-style investments in emerging geothermal startups would indicate exploratory interest. Absent these signals, the market should assume Suncor will remain a follower, ceding leadership in a high-potential, baseload renewable energy sector to more focused and agile competitors.

Frequently Asked Questions

Is Suncor currently investing in geothermal energy?
No. According to the analysis, as of 2025, Suncor has no direct, quantifiable commercial involvement, investments, or partnerships in the geothermal sector. It is described as a “strategic non-participant,” choosing to focus its capital on its core oil sands business.

If Suncor isn’t pursuing geothermal, what is its main energy transition strategy?
Suncor’s strategy focuses on decarbonizing its core oil sands operations. Key investments include a C$1.4 billion cogeneration unit, exploring Carbon Capture, Utilization, and Storage (CCUS) through the Pathways Alliance, and a $1 billion refurbishment of its oil sands upgrader. The company divested its wind and solar assets to concentrate on hydrogen and renewable fuels, although it has since withdrawn from a major hydrogen partnership.

Why is Suncor’s lack of geothermal investment considered a missed opportunity?
It’s considered a missed opportunity because Suncor possesses directly transferable expertise in subsurface engineering, drilling, and geological data analysis. These are core competencies for geothermal development. While competitors are commercializing geothermal projects, Suncor is not applying its significant technical advantages to this growing renewable energy sector in its home province of Alberta.

Who are the key players moving forward with geothermal in Canada?
The article highlights DEEP Earth Energy Production Corp. (DEEP) as a leader in the Canadian geothermal space. DEEP is actively developing Canada’s first geothermal power plant in Saskatchewan and has formed a partnership with energy service giant Schlumberger to commercialize the project.

What should we watch for to see if Suncor’s geothermal strategy changes?
The article suggests watching for three key signals: 1) Any announcement of a pilot project to repurpose mature wells for geothermal heat or power. 2) A strategic partnership with a dedicated geothermal technology company. 3) Venture capital-style investments in emerging geothermal startups. Absent these indicators, Suncor is expected to remain a follower in the sector.