Still to be drilled are the two wells that would suck the pressurized, superheated water out of the cracks and up to the surface to create steam for driving a turbine and generating electricity. The water, having cooled to around 340 degrees, would heat hospitals, public buildings and homes before being pumped back into the ground for another waste-free, gas-free cycle.

The rival project near the southern Australian town of Innamincka faces more benign geological conditions and less population. Its target date for operations is now two years ahead of Basel's, aiming to produce 40 megawatts of electricity by the end of 2010, enough to supply over 30,000 households.

Experts say hot rock geothermal energy can operate 24 hours a day and doesn't depend on sun or wind. But it's decades away from serious rivalry with existing energy sources.

Susan Petty, one of the 18 co-authors of the MIT study, works for Black Mountain Technology, a company promoting hot rock energy. She predicts that 10 percent of the world's power could come from geothermal sources in the next 50 years, from the current 0.3 percent, rising to half in around 100 years.

Promoters of the technology say that while geothermal drilling is costly, it's cheaper to run once it's in place. The MIT study said it could provide electricity at competitive prices. Price comparisons indicate it could be cheaper than other forms of renewable energy, including biomass and solar power. "The outlook is very good that we can do it," said Karl Gawell, executive director of the Washington D.C.-based Geothermal Energy Association.

But others are waiting for proof that it's worth the expenditure.

"This technology sounds very promising," said Nick Nuttall, chief-spokesman of the U.N. Environment Program, "but let's wait and see."

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Contributing: Researcher Judith Ausuebel