Geothermal Power Market: Infrastructure Development and Grid Integration
Geothermal Power Market is Estimated to Witness High Growth Owing to Increasing Demand for Clean Energy Sources
Geothermal power generation utilizes the Earth's natural underground heat to produce renewable energy in a sustainable manner. Geothermal power plants make use of geo-thermal reservoirs of hot water or steam found a few miles below the earth's surface to drive steam turbines for power generation. The clean, continuous, and base-load electricity produced from geothermal resources helps to reduce dependence on fossil fuels and decarbonize power grids across the globe.
The Global Geothermal Power Market is estimated to be valued at US$ 5.79 Bn in 2024 and is expected to exhibit a CAGR of 5.4% over the forecast period from 2024 to 2031. Geothermal power provides reliable and cost-competitive renewable energy by tapping into the Earth's natural heat reserves through advanced drilling and extraction techniques. Geothermal electricity production has minimal greenhouse gas emissions and land use footprint compared to other renewable technologies. The long-term stability and dispatchability of the geothermal resource assures energy security and grid stability as more intermittent renewables are added to power systems.
Key Takeaways
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. These companies are investing heavily in expanding geothermal project development, plant construction, equipment manufacturing, and technology innovation worldwide to capitalize on growing industry opportunities.
Geothermal power capacity addition is expected to accelerate globally driven by supportive policies and incentives. Countries and regions aiming for higher renewable energy targets and decarbonization goals are focusing on developing untapped geothermal reserves to meet rising clean baseload electricity demand. Environmental regulations mandating reduction of GHG emissions from conventional power plants are also propelling the increased adoption of geothermal power solutions.
Geothermal resource potential has been identified in over 80 countries worldwide. To meet development targets, leading geothermal companies are expanding their international project footprint and global partnerships. Increased international financing and combined heat and power applications are further broadening commercialization prospects for geothermal projects globally.
Market key trends
A major trend gaining traction in the geothermal power market is the integration of binary cycle power plants. These advanced systems allow electricity generation from lower temperature geothermal resources of 100-180°C by using a secondary working fluid with a lower boiling point than water. This has significantly expanded viable geothermal reserves and spurred the development of projects worldwide. With continuous innovation, binary technology Cycle's role in unlocking more geothermal markets globally will continue to grow.
Geothermal power generation utilizes the Earth's natural underground heat to produce renewable energy in a sustainable manner. Geothermal power plants make use of geo-thermal reservoirs of hot water or steam found a few miles below the earth's surface to drive steam turbines for power generation. The clean, continuous, and base-load electricity produced from geothermal resources helps to reduce dependence on fossil fuels and decarbonize power grids across the globe.
The Global Geothermal Power Market is estimated to be valued at US$ 5.79 Bn in 2024 and is expected to exhibit a CAGR of 5.4% over the forecast period from 2024 to 2031. Geothermal power provides reliable and cost-competitive renewable energy by tapping into the Earth's natural heat reserves through advanced drilling and extraction techniques. Geothermal electricity production has minimal greenhouse gas emissions and land use footprint compared to other renewable technologies. The long-term stability and dispatchability of the geothermal resource assures energy security and grid stability as more intermittent renewables are added to power systems.
Key Takeaways
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. These companies are investing heavily in expanding geothermal project development, plant construction, equipment manufacturing, and technology innovation worldwide to capitalize on growing industry opportunities.
Geothermal power capacity addition is expected to accelerate globally driven by supportive policies and incentives. Countries and regions aiming for higher renewable energy targets and decarbonization goals are focusing on developing untapped geothermal reserves to meet rising clean baseload electricity demand. Environmental regulations mandating reduction of GHG emissions from conventional power plants are also propelling the increased adoption of geothermal power solutions.
Geothermal resource potential has been identified in over 80 countries worldwide. To meet development targets, leading geothermal companies are expanding their international project footprint and global partnerships. Increased international financing and combined heat and power applications are further broadening commercialization prospects for geothermal projects globally.
Market key trends
A major trend gaining traction in the geothermal power market is the integration of binary cycle power plants. These advanced systems allow electricity generation from lower temperature geothermal resources of 100-180°C by using a secondary working fluid with a lower boiling point than water. This has significantly expanded viable geothermal reserves and spurred the development of projects worldwide. With continuous innovation, binary technology Cycle's role in unlocking more geothermal markets globally will continue to grow.
Porter’s Analysis
Threat of new entrants: High capital requirement for setting up geothermal projects poses barrier for new companies. Bargaining power of buyers: The market is moderately fragmented with presence of both large utilities and IPPs reducing buyer power. Bargaining power of suppliers: Specialized equipment suppliers have significant influence on projects. Threat of new substitutes: Alternate renewable sources like solar and wind offer competitive threat to geothermal demand. Competitive rivalry: Major companies focus on expanding their existing geothermal capacity and geographic reach intensifying competition in the market.
Geographical Regions
North America holds the largest share of the overall geothermal power market in terms of value, where the US alone accounts for over 80% of the country's geothermal capacity. Countries like Indonesia, the Philippines, Mexico, Italy, and New Zealand are also major geothermal power producers currently.
The Asia Pacific region excluding Japan is poised to witness the fastest growth during the forecast period owing to ongoing projects in countries such as Indonesia, the Philippines, and India. This can be attributed to the vast untapped geothermal reserves in these countries and growing investments to boost renewable-based power capacities.
Threat of new entrants: High capital requirement for setting up geothermal projects poses barrier for new companies. Bargaining power of buyers: The market is moderately fragmented with presence of both large utilities and IPPs reducing buyer power. Bargaining power of suppliers: Specialized equipment suppliers have significant influence on projects. Threat of new substitutes: Alternate renewable sources like solar and wind offer competitive threat to geothermal demand. Competitive rivalry: Major companies focus on expanding their existing geothermal capacity and geographic reach intensifying competition in the market.
Geographical Regions
North America holds the largest share of the overall geothermal power market in terms of value, where the US alone accounts for over 80% of the country's geothermal capacity. Countries like Indonesia, the Philippines, Mexico, Italy, and New Zealand are also major geothermal power producers currently.
The Asia Pacific region excluding Japan is poised to witness the fastest growth during the forecast period owing to ongoing projects in countries such as Indonesia, the Philippines, and India. This can be attributed to the vast untapped geothermal reserves in these countries and growing investments to boost renewable-based power capacities.
