by The Geothermal Power Market is estimated to be valued at US$ 5.78 Bn in 2023 and is expected to exhibit a CAGR of 5.3% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.
Market Overview:
Geothermal power plants make use of underground hot water or steam reservoirs to generate electricity. These reservoirs are created by rainwater seeping into underground rocks and being heated within the earth’s crust. Geothermal powerplants capture hot water or steam from geothermal reservoirs through deep wells and use it to spin turbines that generate electricity. Geothermal power is considered a sustainable and renewable source of energy as the underground reservoirs are replenished through natural processes. Major types of geothermal power plants include dry steam plants, flash steam plants, and binary cycle power plants. Countries such as Indonesia, Philippines, Iceland, Kenya actively utilize geothermal energy resources for electricity generation.
Market Dynamics:
Rising focus on cleaner sources of energy coupled with stable power output from geothermal plants are driving the market growth. Geothermal power plants have high plant load factors of over 90% compared to other variable renewable sources like solar and wind power. They provide stable baseload power throughout the year independent of weather conditions. Additionally, developing technologies such as enhanced geothermal systems (EGS) enable extraction of geothermal energy from reservoirs with insufficient natural permeability or water content. EGS artificially increases the permeability of underground heat reservoirs to extract thermal energy. Such technological advancements are expected to lower the overall costs of geothermal projects and boost the adoption of geothermal power worldwide over the forecast period.
However, high upfront development costs for exploration and drilling of geothermal wells pose challenges for market growth. Also, geographical constraints limit availability of suitable geothermal reservoirs
Segment Analysis
The global Geothermal Power Market Size is dominated by the dry steam segment. Dry steam projects generate power directly from geothermal steam resources, which can be harnessed efficiently through modern renewable energy technology without additional equipment or infrastructure required. This makes dry steam resources easier and more economical to develop compared to other geothermal project types. As a result, dry steam currently accounts for around 30% of the total installed geothermal power capacity globally.
PEST Analysis
Political: Governments across major markets are supporting the growth of renewable energy through favorable policies and subsidies. For instance, the U.S. extends an investment tax credit for geothermal projects.
Economic: High fossil fuel prices and cost competitiveness of geothermal power are driving increased investments. The levelized cost of energy from geothermal is competitive with other renewable sources.
Social: Geothermal power presents a sustainable option for baseload power generation. It helps increase energy access while reducing dependence on imported fuels.
Technological: Advancements in exploration technology have enabled accessing geothermal resources worldwide. Drilling innovations allow tapping reservoirs in deeper horizons.
Key Takeaways
The global geothermal power market is expected to witness high growth, exhibiting a CAGR of 5.3% over the forecast period, due to increasing investments in renewable sources of energy to meet sustainability goals. The market size for geothermal power was valued at US$ 5.78 Bn in 2023.
Regional analysis
Asia Pacific region accounts for the largest share in the global geothermal power market, supported by countries like Indonesia, Japan and the Philippines. Indonesia is the largest producer of geothermal power globally owing to ample geothermal resources.
Key players
Key players operating in the geothermal power market are ABB, EDF, Enel SPA (Enel), General Electric (GE), The Tata Power Company Limited, Mitsubishi Hitachi Power Systems Inc., Toshiba Corporation, Korea Electric Power Corporation, Siemens AG, and Yokogawa Electric Corporation. Enel is a leading player in geothermal power generation with a presence across key markets.
*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it
