China has established itself as the frontrunner in the global clean energy race, having outspent every other nation for years and secured control over critical supply chains. Over the same period, the United States has retreated from clean energy priorities under the Trump administration, further widening Beijing's advantage. However, two emerging technologies that continue to garner bipartisan support — enhanced geothermal systems and next-generation nuclear power — may offer the United States a distinctive opportunity to level the competitive landscape.

Between 2019 and 2025, China invested more than $500 billion in clean energy, exceeding the combined spending of the rest of the world. By comparison, the United States attracted approximately $236 billion in clean energy investment over the same timeframe, with only 40 percent originating from domestic companies. An Atlas Public Policy report published earlier this year noted that this dynamic "shows the US dependence on foreign direct investment for its manufacturing sector."

The conflict involving the United States and Israel in Iran has further tilted the balance in China's favor. Persistent volatility in global fossil fuel markets is accelerating the worldwide clean energy transition, as nations move to reduce reliance on imported oil and gas and expand domestic solar and wind capacity. Chinese firms, which dominate production of affordable clean energy components — including solar panels, wind turbines, and battery energy storage systems — are positioned to reap significant gains from this shift.

While China has built a commanding lead in solar and wind technologies that the United States has limited prospects of closing, Washington has carved out narrow advantages in several cutting-edge clean energy domains. Most notably, the United States holds leads in enhanced geothermal energy and select next-generation nuclear technologies. The Trump administration has rolled back Biden-era clean energy legislation across a broad range of sectors, yet it has prioritized these two technologies as central pillars of its strategy for energy security and independence, driven by surging electricity demand from data center hyperscalers and the artificial intelligence boom. Both geothermal and nuclear supply firm, round-the-clock power — a requirement for data centers that intermittent solar and wind cannot meet on their own without large-scale storage.

Enhanced geothermal energy, which employs advanced drilling techniques to access geothermal heat from virtually any location on the planet's surface, is attracting growing interest from both public and private sectors. The technology has maintained uncommon bipartisan support across multiple U.S. administrations, aided by the fact that it leverages directional drilling and subsurface engineering expertise already developed by the domestic oil and gas industry. Backed by substantial federal investments — including the Department of Energy's Enhanced Geothermal Shot initiative, which targets a 90 percent cost reduction by 2035 — as well as funding from major technology companies, the United States is rapidly emerging as the global leader in the geothermal sector. The U.S. Department of Energy projects that enhanced geothermal systems could deliver approximately 90 gigawatts of carbon-free electricity in the United States by 2050 — enough to power at least 65 million homes. Today, conventional geothermal accounts for less than half a percent of U.S. electricity generation, concentrated almost entirely in California, Nevada, and Utah, underscoring both the scale of the opportunity and the distance yet to travel.

Advanced nuclear technologies are generating comparable enthusiasm. Nuclear power currently supplies roughly 19 percent of U.S. electricity through a fleet of conventional reactors, and next-generation designs promise to extend that contribution with smaller, more flexible units. The Trump administration has directed significant resources through the U.S. Department of Energy's Reactor Pilot Program to accelerate the testing and commercialization of technologies including small modular reactors, molten salt reactors, and nuclear fusion. Simultaneously, both Wall Street and Silicon Valley are backing advanced nuclear startups in an effort to address the escalating energy demands of the AI industry. China, for its part, is not standing still: it has more reactors under construction than any other country and is developing its own next-generation designs, meaning the U.S. advantage is one of pace and private-sector dynamism rather than absence of competition.

"China may lead in solar and wind power and in battery manufacturing, but the United States has the upper hand in two other essential technologies: enhanced geothermal and new nuclear energy," Foreign Affairs reported in an article titled "America's Surprising Energy Advantage". The article elaborated: "These may indeed be more valuable than solar and wind power because they draw from clean energy sources that do not depend on the weather. Washington, however, will have to coordinate with large technology firms and its many foreign partners if it wants to export its geothermal and nuclear capabilities to the wider world — or indeed power its own AI sector. Otherwise, Beijing will keep pulling ahead."

By Haley Zaremba for Oilprice.com