Geothermal power, a clean and renewable source of energy, has gained significant attention in recent years due to its potential to reduce greenhouse gas emissions and its reliability as a source of energy. By 2030, it is anticipated to reach around US$ 7.1 billion, expanding at a CAGR of 5% from 2022 to 2030.

What is Geothermal Power?

Geothermal power is a type of renewable energy that utilizes the natural heat of the earth to generate electricity. This heat can be found in the form of hot water or steam beneath the earth's surface, and it can be harnessed through various technologies such as binary cycle, flash steam, and dry steam.

The geothermal power market is currently experiencing significant growth, driven by the increasing demand for clean energy sources and the decreasing cost of geothermal power generation. The market is also being influenced by government policies and initiatives aimed at promoting the adoption of renewable energy sources. For example, the Renewable Portfolio Standard (RPS) mandates in several countries require utilities to generate a certain percentage of their electricity from renewable sources, including geothermal.

Market Overview

The global geothermal power market size was estimated at US$ 5.3 billion in 2021 and it is expected to hit around US$ 7.1 billion by 2030, growing at a registered CAGR of 5% during the forecast period 2022 to 2030.

In terms of geography, the Asia-Pacific region is expected to dominate the geothermal power market during the forecast period, due to the high potential for geothermal energy in countries such as Indonesia, the Philippines, and Japan. North America is also expected to be a significant market, driven by the increasing adoption of geothermal power in the United States.

The geothermal power market is also witnessing several trends, including technological advancements, the increasing focus on geothermal heating and cooling, and the emergence of new business models. For example, the development of enhanced geothermal systems (EGS) is expected to increase the availability of geothermal resources and reduce the cost of geothermal power generation.

In addition, there is a growing interest in using geothermal energy for heating and cooling purposes, as it is a highly efficient and cost-effective alternative to traditional HVAC systems. This trend is expected to drive the growth of the geothermal heating and cooling market in the coming years.

Furthermore, new business models such as power purchase agreements (PPAs) and shared ownership models are making geothermal power more accessible to a wider range of customers, including residential and commercial customers.

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Impact of the coronavirus pandemic

The outburst of the deadly virus has disrupted lives and businesses. The stringent regulations imposed by the government of the countries has led to the shutting down of processing units that further declined the energy demand. Moreover, the decline in energy demand due to the pause in manufacturing and construction activities also negatively impacted the market demand.

Market Drivers

Government efforts are proliferating the market growth

Increasing environmental concerns along with climate change due to stringent regulations imposed by the government of various economies is shifting the demand toward sustainable sources of energy. Surging levels of pollution due to the increasing usage of fossil fuels are one of the major factors propelling the growth of the industry. Moreover, many governments across the world are providing incentives to promote geothermal power technology.

Rising demand for clean energy is also creating lucrative opportunities

The surging population along with the rising demand for energy triggers the potential growth of the industry. Moreover, the rising development of infrastructure, and increasing research and development in the power sector are adding to the market demand. Additionally, geothermal power has proven to be the most reliable and sustainable source of power.

Technological Advancements:

Advances in drilling and exploration technologies have made it easier and cheaper to extract geothermal energy, which has boosted the industry's growth. Growing advancement of technology and growing research and development are anticipated to propel the development of the industry.

Cost Competitiveness:

The cost of generating electricity from geothermal sources has been declining, making it more competitive with other forms of energy such as fossil fuels.

Energy Security:

Geothermal power is a domestic resource that can provide energy security and reduce dependence on foreign oil.

Environmental Benefits:

Geothermal power generation has a minimal impact on the environment, producing almost no greenhouse gas emissions or other pollutants.

The availability of alternative renewable power is restraining the market growth

Geothermal power is one of the most reliable and sustainable sources of power. However, the energy is still restricted to limited locations. The high cost associated with the generation of geothermal power as compared to other renewable sources is expected to restrain the market demand.

The lack of techniques is hindering the market demand

Drilling, constructing, and operating wells in harsh environments need an advanced technique for drilling water or oil. Slow enhancement in drilling efficiency which is further restraining the market growth. Companies are working towards advancing high-temperature geothermal drilling.

Key Market Trends

Based on application, Geothermal power is widely used in the commercial segment. The growth of the segment is attributed to the usage of geothermal power in space and water heating.

Asia Pacific accounted significant share during 2021 on account of rising penetration towards reaching zero carbon emission and surging demand for energy.

Based on temperature, low-temperature geothermal resources are extensively used for direct application.  An ease in the availability of geothermal through geysers is expected to contribute to the segment's growth.

North America leads the market growth

The United States leads the regional and worldwide markets in terms of installed capacity, making North America one of the world's top regions for geothermal energy. Around 17 billion kilowatt-hours (kWh), or 0.4% of the US utility-scale energy generation in 2020, were generated by geothermal power plants.

The majority of the country's geothermal power facilities are located in western states and Hawaii, an island state with nearby geothermal energy resources. California generates the most electricity from geothermal energy, whereas the Geysers dry steam reservoir in Northern California is the largest known dry steam field in the world.

The Energy Information Administration (EIA) estimates that as of 2020, California accounted for 91% of the nation's steam-powered capacity, and Nevada accounted for 65% of its binary-cycle capacity.

Geothermal power is generated primarily in California and Nevada. For example, in 2020, 11,345 gigawatt-hours (GWh) of electricity was generated from geothermal power in California. On the other side, Nevada had 235 MWe gross (196 MWe net) installed capacity in 2020. Power plants in Alaska, Hawaii, Idaho, New Mexico, Oregon, and Utah provide the majority of the nation's remaining geothermal energy.

Additionally, there are new projects scheduled for the area, which is anticipated to support market expansion there. For instance, the Clarke Lake Geothermal Development Project will receive an expenditure of USD 40.5 million from the Minister of Natural Resources of Canada in March 2021. One of the first geothermal electricity production facilities in Canada that is commercially viable is expected to be developed because of the initiative.

The market for geothermal energy is therefore anticipated to be dominated by North America during the forecast period based on the reasons.

Market Share Insight

Key players operating in the global geothermal power industry are Enel Green Power S.p.A., Ormat Technologies Inc., Kenya Pertamina Geothermal Energy, Electricity Generating Company PLC, Calpine Corporation, Aboitiz Power Corporation, Energy Development Corporation, Fuji Electric Co. Ltd., Toshiba Energy Systems & Solutions Corporation, Mitsubishi Gas Chemical Company Inc., and others.

Conclusion

In conclusion, the geothermal power market is expected to continue its growth trajectory in the coming years, driven by the increasing demand for clean and renewable energy sources, government policies, and technological advancements. The market is also witnessing several trends that are expected to shape its future, including the increasing focus on geothermal heating and cooling, technological advancements, and the emergence of new business models.

Latest Development

The first Geothermal Field Development Project will likely be executed by Oil and Natural Gas Corporation (ONGC) in Ladakh, India. On February 6, 2021, the ONGC Energy Centre (OEC) and the Ladakh Autonomous Hill Development Council, Leh, inked a Memorandum of Understanding (MoU).

After it was announced in July 2021 that a "proof of concept power plant" in Cornwall had begun to generate geothermal steam, the United Kingdom's developing geothermal energy industry achieved a new milestone. The project is anticipated to start producing energy in 2022.

Segments Covered in the Report

By Plant Type

• Binary Cycle Power Plants


• Flash Steam Plants


• Dry Steam Plants

By End User

• Residential


• Industrial


• Commercial


• Others

By Power Output

• Up to 5 MW


• Above 5 MW

By Geography

• North America
  
  • U.S.
  
  
  • Canada


• Europe
  
  • U.K.
  
  
  • Germany
  
  
  • France


• Asia-Pacific
  
  • China
  
  
  • India
  
  
  • Japan
  
  
  • South Korea
  
  
  • Malaysia
  
  
  • Philippines


• Latin America
  
  • Brazil
  
  
  • Rest of Latin America


• Middle East & Africa (MEA)
  
  • GCC
  
  
  • North Africa
  
  
  • South Africa
  
  
  • Rest of the Middle East & Africa

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