The uses of geothermal energy for industrial purposes can be divided into those associated with electrical power generation and those exploited for direct heat applications. Generally, this division is based on the temperature and deliverability of the available resources. In Europe, each category is related to specific geological conditions. Only four European countries are currently using geothermal resources for power generation: Italy (504 MWe), Turkey (20 MWe), Portugal (Azores, 3 MWe) and Greece (Milos, 2 MWe). All these projects are in areas of major tectonic activity. A variety of geochemical and geotechnical factors influence the nature and size of the resources. Direct use geothermal schemes in Europe are based on a very wide range of geological environments and use temperatures from 15°C upwards. The geological setting of these developments is generally simpler. There is scope for greater development once an improved understanding is gained of the characteristics of fractured formations. This aspect is also central to the Hot Dry Rock problem, and in presenting some results from this work, emphasis is placed on the need to understand stress anisotropy and in situ fluid pressures, and to interpret borehole observations throughout Europe in terms of fracture distributions and connectivity at depths of 4–6 km.