The problems of the state and prospects of geothermal energy use in the Republic of Dagestan, including the resource base, technology and investment projects are considered. It is shown that in the North Caucasus Federal District, Dagestan has the greatest explored reserves of geothermal water and the most favorable set of geological and geothermal conditions for their large-scale use in the energy sector and in the urban economy. The geological and geothermal conditions in Northern Dagestan and adjacent areas of the Stavropol Territory and the Chechen Republic were studied according to the data of drilling and development of oil and gas fields. Dozens of fields of interest to create geothermal binary cycle power plants (GPP) based on groundwater circulation systems (GCS) are identified. The features of the structure and fractured zones for deposits with carbonate water bearing rocks (limestone and dolomite) opening at depths of 4100-4800 m. The reservoir temperature is 175 0C, permeability is more than 1 darcy, overpressure is 65 bar, mineralization of the brine is 118 g/l. In the other regions of Dagestan there are no conditions for the development of competitive industrial geothermal power plants and therefore geothermal system of heat supply with intermediate heat exchangers are wide spread. The new introduced systems are usually upgraded to electro- and thermo generating facilities operating in the cogeneration mode. The maximum production rates are 3000 m3/day, the formation temperatures – 105-110 0C. The productive horizons are represented by Caragan and Chokrak sandstones occuring at depths up to 3000 m. Re-use of depleted oil fields for the secondary appointment will create in Northern Dagestan unparalleled geothermal cluster and will give impetus to the development of geothermal production, industrial and tax potential of the Republic. Oilmen of Dagestan have already begun to collect and analyze data to evaluate the potential from introducing the binary technology in Northern Dagestan. Previously the capacity of binary geothermal power plants is estimated to 300-500 MW with annual output of 2,1-3,5 billion kWh of electric power, which would be a substantial reserve to cover the deficit of the Dagestan power grid in winter.

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