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2020

Geothermal Power Market

Geothermal Power Market Size, Share, Competitive Landscape and Trend Analysis Report by Power Station Type (Dry Steam Power Stations, Flash Steam Power Stations, and Binary Cycle Power Stations) and End Use (Residential, Commercial, Industrial, and Others): Global Opportunity Analysis and Industry Forecast, 2019-2026

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Author's: Ayushi Choudhary | Eswara Prasad
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Geothermal Power Market Outlook - 2026

The global geothermal power market was valued at $4.6 billion in 2018, and is projected to reach $6.8 billion by 2026, growing at a CAGR of 5.0% from 2019 to 2026. Geothermal power is a stable and independent power generation system, which uses warm vitality of the earth's magma to produce power. Geothermal power plants utilize the steam that is produced from hot water found around a mile or more below the earth's surface to rotate turbines that start a generator, which further produces electricity. 

In geothermal power plants steam is used to turn large turbines, which run electrical generators. The steam comes from reservoirs of hot water found a few miles or more below the earth's surface. At a geothermal power plant location, wells are drilled 1 or 2 miles deep into the Earth to pump steam or hot water to the surface. Geothermal power is considered a clean and environmentally friendly energy source. It produces minimal greenhouse gas emissions, has a small land footprint, and does not require water for cooling like traditional power plants. The environmental benefits of geothermal power, including air pollution reduction and water conservation.

Three types of geothermal power plants are operating presently, which include binary cycle, dry steam, and flash steam. Government organizations are putting in efforts to reduce the dependency on oil for domestic energy use. To do so, several activities are explored and exploited to use renewable energy resources as an alternative energy source. For achieving this goal, the Government of Indonesia formulated a National Energy Policy, which involves guidelines for intensification, conservation, and diversification of energy.  

Geothermal Power Market

Source: AMR analysis

The global shift towards renewable energy sources is a significant driver for the demand for geothermal power. As countries and regions strive to reduce their dependence on fossil fuels and mitigate climate change. Developing countries are actively seeking clean and sustainable energy alternatives. Geothermal power is a renewable energy source, which offers a reliable and constant supply of electricity without greenhouse gas emissions, making it an attractive option for achieving renewable energy targets.

Countries with significant geothermal resources often prioritize the development of geothermal power to enhance energy security and reduce vulnerability to fluctuations in fossil fuel prices and geopolitical tensions. Geothermal power can provide a stable and long-term energy supply, contributing to energy independence and reducing dependence on external energy sources.

Geothermal power plants offer a level of energy independence to industrial facilities. By utilizing local geothermal resources, industries can reduce their dependence on external energy sources. Geothermal power provides a domestic and indigenous energy supply, reducing risks associated with energy supply disruptions which rise up the Geothermal power plants market share in near future.

The global geothermal power market growth is driven by implementation of stringent government regulations related to climate change in developing and developed economies. In addition, factors such as volatile fossil fuel prices, limited presence of fossil fuels, rise in greenhouse gas emission, high capacity of geothermal power, cost-effectiveness of geothermal energy, reduction in pollution by geothermal power plants, and increase in demand for energy are driving the growth of the global geothermal power market. However, huge investment required for geothermal power plants and negative impact of geothermal energy on the environment are major growth barrier for this market. Moreover, the growing market of wind & solar energy restrains the growth of this market. On the contrary, increase in government financing and continuous developing technologies in the renewable energy sector are expected to offer lucrative opportunity for marker expansion over the next five years.

The cost of geothermal power generation has become increasingly competitive compared to other forms of renewable and conventional energy sources. Advances in geothermal technology, such as improved drilling techniques and resource assessment methods, have led to cost reductions and improved efficiency of geothermal power generation. As a result, geothermal power is becoming more economically viable, attracting investments for its development in coming years.

Geothermal Power Market
By Power Station Type
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Flash Steam Power Stations is projected as the fastest growing segment.

The impact of government regulation on the global geothermal power market is positive. These regulations encourage the use of geothermal power for meeting the needs of electricity. National Renewable Energy Act 2015 was passed in India, which aims to promote the generation of energy by reducing emissions of greenhouse gases such as CO2. Law No. 4411960 was passed in Indonesia that covers mining rights, which mandate that oil and natural gas undertakings shall only be carried out by state enterprise under government registration. This is to ensure that development of every resources is carried out to full benefit of Indonesia as mentioned in Article 33 of the Constitution year of 1945. 

According to geothermal power market analysis, Supportive government policies and incentives play a crucial role in driving the demand for geothermal power. Governments often implement feed-in tariffs, tax credits, grants, and other financial incentives to promote the development of geothermal projects. Policy frameworks that prioritize renewable energy deployment, carbon reduction goals, and clean energy targets can create a favorable environment for geothermal power growth.

The availability and accessibility of geothermal resources are significant drivers for the demand for geothermal power. Regions with abundant geothermal resources, such as geologically active areas, volcanic regions, or areas with high heat flow, are more likely to prioritize geothermal power development. The resource potential and feasibility of harnessing geothermal energy in a particular area play a crucial role to drive demand for geothermal power market.

Ongoing research and development efforts are focused on improving geothermal exploration techniques, drilling technologies, reservoir modeling, and power plant efficiency. Advancements in Enhanced Geothermal Systems (EGS) and other innovative geothermal technologies hold the potential to unlock previously untapped geothermal resources, which creates geothermal power market opportunities in coming years.

Geothermal power requires access to suitable geothermal resources, typically in areas with high heat flow, geothermal reservoirs, or volcanic activity. However, not all regions have accessible or commercially viable geothermal resources. The availability of geothermal resources can be limited geographically, which can restrain the potential locations for geothermal power market growth development.

The exploration and assessment of geothermal resources can be complex and expensive. The process involves drilling and testing wells to determine the temperature, flow rate, and sustainability of the geothermal reservoir. The uncertainty associated with resource estimation and long-term reservoir performance can pose challenges for project developers and investors related to project risks and costs.

By power station type, the market is classified into dry steam power station, flash steam power station and binary cycle power station. In 2022, binary cycle power station held the maximum market share as binary cycle power station enables the development of geothermal projects in a wider range of locations, expanding the utilization of geothermal resources and increasing the overall capacity for geothermal power generation. Binary cycle power stations can utilize lower temperature geothermal resources effectively and efficiently.

Geothermal Power Market
By End-use
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Industrial segment dominate the Geothermal Power Market.

The global geothermal power market is segmented into power station type, end use, and region. By power station type, the market is divided into dry steam power stations, flash steam power stations, and binary cycle power stations. On the basis of end use, it is segregated into residential, commercial, industrial, and others.

The geothermal power market analysis is done region-wise across North America, Europe, Asia-Pacific, and LAMEA. Among these regions, the Asia-Pacific region is expected to witness boom during the forecast period, owing to factors such as electrification of low-income & rural communities. India is one of the key players in the renewable energy market. India reiterated its commitment toward clean energy and reduced carbon emissions. Moreover, India’s increased focus on renewable energy is outlined in the national budget that aims on increasing share of renewable energy in the total energy production. The target is to increase production to 175 GW by 2022, which is anticipated to boost the growth of the geothermal power in the Asia-Pacific region. 

By end use, it is segregated into residential, commercial, industrial, and others. In 2022, industrial dominate the market as geothermal power plants have higher energy conversion efficiency compared to many other forms of power generation. Geothermal power can achieve high thermal efficiency by utilizing the heat energy from the geothermal fluid directly to generate electricity for industrial application.By region, the market is classified into North America, Europe, Asia-Pacific and LAMEA

Geothermal Power Market
By Region
2026
Asia-pacific 
North America
Europe
LAMEA

Asia-Pacific would exhibit CAGR of 5.8% during 2019-2026.

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. 

These players have acquired various strategies such as acquisitions, partnerships, collaboration, joint ventures, agreements, expansions, and new product launches to gain strong consumer base and increase their geothermal power market share globally. In an instance, Japanese utility Electric Power Development Co., Ltd. announced the beginning of commercial operations at a 46.2-MW geothermal power plant in Japan’s Akita region. J-Power, Mitsubishi Materials Corporation, and Mitsubishi Gas Chemical Company Inc. partnered to build Wasabizawa Geothermal Power Plant. 

Key Benefits for Stakeholders:

  • Porter’s five forces analysis helps to analyze the potential of buyers & suppliers and the competitive scenario of the industry for building strategies. 
  • It outlines the current trends and future scenario of the geothermal power market size from 2018 to 2026 to understand the prevailing opportunities and potential investment pockets.
  • Major countries involved in Geothermal power market forecast are North America, Asia-Pacific, Europe, and LAMEA. These countries have been mapped according to their individual revenue contribution in the market analysis at regional and country-level.
  • The geothermal power market trends such as drivers, restraints, and opportunities and their detailed impact analyses are elucidated in the study.

Key Strategies:

  • The profiles of key players along with their contribution in market growth are enlisted in the report. 
  • On August 2019, Enel Green Power and ENAP decided to enter into joint venture to build a third generation unit of 33 MW at the geothermal power plant Cerro Pabellón. The overall geothermal plant will be able to generate 600 GWh per year, avoiding the emission of around 468,000 tons of CO2 into the atmosphere. This development helped the company to fulfil the increase in demand for power.
  • On November 2021, Pertamina Geothermal Energy (PGE) has planned to expand its installed geothermal power plant capacity in order to provide greater contribution to the reduction of greenhouse gas emissions in Indonesia, and support achieving the sustainable development goals (SDGs) on climate action, through implementing Environmental, Social, & Governance (ESG) based programs.
The impact of Russia and Ukraine on the geothermal power market size is relatively limited. Both countries have significant fossil fuel resources, particularly natural gas, and their energy sectors are predominantly focused on conventional sources. Geothermal power development in Russia and Ukraine has been relatively modest compared to other regions. However, geopolitical tensions or changes in energy policies in these countries could potentially impact the growth of geothermal power. Geothermal power markets are more influenced by factors such as renewable energy targets, resource potential and technological advancements.
The slowdown of economies can have both positive and negative impacts on the geothermal power market. Economic downturns may lead to reduced energy demand and investment, which could temporarily slow down the development of geothermal projects. Financial constraints and uncertainty make it challenging to secure funding for new ventures.

Geothermal Power Market Report Highlights

Aspects Details
Geothermal Power Market By Power Station Type
By Power Station Type
  • Dry Steam Power Stations
  • Flash Steam Power Stations
  • Binary Cycle Power Stations
Geothermal Power Market By End Use
By End Use
  • Residential
  • Commercial
  • Industrial
  • Others
Geothermal Power Market By Region
By Region
  • North America  (U.S., Canada)
  • Europe  (France, Germany, Iceland, Italy, Portugal, Rest of Europe)
  • Asia-Pacific  (Indonesia, Japan, Philippines, Rest of Asia-Pacific)
  • LAMEA  (Chile, Turkey, Kenya, Rest of LAMEA)
Key Market Players
Key Market Players

Siemens AG, Korea Electric Power Corporation, TOSHIBA CORPORATION, EDF, THE TATA POWER COMPANY LIMITED (TATA POWER), ENEL SPA, ABB, Mitsubishi Hitachi Power Systems Inc., GENERAL ELECTRIC, Yokogawa Electric Corporation

Analyst Review

Advancements in geothermal power market are expected to offer growth opportunities to the market. In the U.S., geothermal energy holds about 3.5% share in renewable energy generation. Moreover, several new geothermal plants and small power units are opening in nine states, including Alaska, Nevada, Hawaii, Idaho, California, New Mexico, Oregon, Utah, and Wyoming. California has over 2,700 MW of installed geothermal capacity, which is more than any other U.S. state or country. Enhanced geothermal systems (EGS) technology is one of the latest geothermal technologies incorporated in California, and all across the globe. In EGS, heat is extracted from engineered reservoirs through fluid injection into deeper hotter rock. This technology is anticipated to offer lucrative opportunity for market expansion during the forecast period. Several government organizations are investing into this technology, which further boosts the market growth. For instance, the U.S. Department of Energy invested around $37.5 million into EGS projects after the American Recovery and Investment Act of 2009.

Furthermore, several research and developments are ongoing in the geothermal power market. Collaborative research between UT Austin Bureau of Economic Geology and SMU Geothermal Laboratory aided in generating geothermal power within the Texas oil and gas fields.

Author Name(s) : Ayushi Choudhary | Eswara Prasad
Frequently Asked Questions?

The global geothermal power market is projected to grow at a rate of 5.0% by 2026

The binary cycle power stations segment was the highest contributor to the market, with $2,242.8 million in 2018.

To get latest version of geothermal power market report

The geothermal power market growth is driven by rise in investment in renewable energy projects in the region. Moreover, significant increase in energy demand due to rapid industrialization and rise in population in countries such as China and India are expected to boost the market growth.

The global geothermal power market was valued at $4.6 billion in 2018, and is projected to reach $6.8 billion by 2026, growing at a CAGR of 5.0% from 2019 to 2026.

The top ten market players are selected based on two key attributes - competitive strength and market positioning

The dominance of the companies in global geothermal market is characterized by their vast product portfolio of geothermal power, high investment in R&D activities for geothermal power, revenue, capital expenditure, employee strength, and geographical presence of companies.

Governments of various developing and developed countries have focused on promoting renewable energy sources to generate electricity, promote less pollution, and achieve low maintenance costs of energy generation. This factor has effect global geothermal market in a positive way.

Partnership is one of the key strategy adopted by market players in the geothermal power market. J-Power, Mitsubishi Materials Corporation, and Mitsubishi Gas Chemical Company Inc. partnered to build Wasabizawa Geothermal Power Plant.

Geothermal energy is generated for various applications such as cooking, bathing, space heating, electrical power generation, and others.

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Geothermal Power Market

Global Opportunity Analysis and Industry Forecast, 2019-2026