Geothermal Drill Bits Market Expected to Reach $5.8 Billion by 2031—Allied Market Research

According to a new report published by Allied Market Research, titled, “Geothermal Drill Bits Market," The geothermal drill bits market size was valued at $3.4 billion in 2021, and geothermal drill bits industry is estimated to reach $5.8 billion by 2031, growing at a CAGR of 5.4% from 2022 to 2031.

Drill bits for drilling geothermal wells to extract geothermal energy are known as geothermal drill bits. Dry steam power plants, flash steam power plants, and binary cycle power plants all require geothermal drill bits. Tricone bits, PDC bits, and other types of drill bits are used in geothermal drilling. Polycrystalline diamond materials, for use in polycrystalline diamond compact (PDC) bits, are one of the most important material advances for oil drilling tools in recent years. Fixed-head bits rotate as one piece and contain no separately moving parts. The advantages of PDC bits like less weight and more RPMs. This particularly works well in the HDD industry where most smaller rigs do not have enough weight capability and tend to rotate too fast. PDC bits also tend to run much smoother than hammers and tricones.

The growth of the geothermal drill bits market is expected to be driven by rise in demand for oil resources across the globe. Furthermore, rapid industrialization and urbanization across the globe have driven the demand for the excavation of geothermal resources such as fossil fuels and the construction of geothermal power plants. The increase in the investment of the government and private companies toward the development of renewable geothermal resources has a positive impact on the development of the market. The outbreak of the pandemic has created a lot of awareness among developing countries in regard to national energy security, especially countries such as India and China, which are highly dependent on imports of fossil fuels for economic development. Hence, the governments of India and China have invested huge resources in the exploration of resources in offshore areas.

The above-mentioned factors and investments are expected to have a positive impact on the development of the geothermal drill bits market. The geothermal drill bits market also has certain restraints. These include decline in the fossil fuel resources on the mainland and the government’s stringent regulations over the development of excess oil & gas resources. For instance, in Germany, mining permission, a license under the Water Act, and a building permit are required to build and operate a geothermal power plant. The Federal Mining Act is the central law for the overall approval of geothermal plants.

For the exploration and exploitation of geothermal energy, mining authorization is required. The abovementioned policy acts will have a negative impact on the development of the geothermal industry. In addition, there is a rapid shift in the transportation sector from fossil fuels to electric vehicles or renewable fuels. In addition, the presence of various problems such as high cost, and pollution of the ocean waters in the development of offshore resources has an impact on drilling the geothermal resources, which is expected to restrain the development of the market. The above-mentioned factors are hampering the geothermal drill bits market growth during the forecast period.

The global geothermal drill bits market forecast is segmented on the basis of type, application, and region. Based on type, the market is segmented into PDC bits, tricone roller bits, and others. By application, it is bifurcated into onshore and offshore. Region wise, the market is studied across North America, Europe, Asia-Pacific, and LAMEA. Presently, North America accounts for the largest share of the market, followed by Europe, Asia-Pacific, and LAMEA.

The PDC drill bits segment dominates the global geothermal drill bits market. Tricone bits are primarily used for drilling into varied rock formations ranging from soft, medium to hard. They are especially well suited for a hard rock formation. These bits are very reliable in changing rock conditions. Tri-cone bits can be made with diamond or other metals; however, tungsten carbide is one of the most popular materials. Sintered tungsten carbide cutting tools are highly resistant to abrasion and can withstand higher temperatures than standard high-speed steel tools. They are widely used for drilling through rock, for example when drilling for oil and gas. 

The onshore segment dominates the global geothermal drill bits market. Onshore drilling is done on land and not over water. The rigs are moved in by ground transportation and multiple wells are being drilled from the same site in very close proximity to each other by shifting the rig slightly. Onshore drilling profiles vary from shallow to deep wells. Geothermal drill bits are used in order to drill onshore oil fields and geothermal energy resources.

North America dominated the global geothermal drill bits market. The North American marketplace is flourishing owing to rapid development of new technologies and oil & gas industry growth. Canada’s first commercial geothermal power project, developed by Deep Earth Energy Production in southern Saskatchewan, will be up and running by 2024. In addition, Eavor Technologies and the Little Salmon Carmacks First Nation entered a partnership to develop a 3 MW closed-loop geothermal system the company calls an “Eavor-Loop”.

Key findings of the study

• By region, North America dominated the geothermal drill bits market share in 2021.
• As per geothermal drill bits market analysis, by type, the PDC drill bit segment was the leading segment in 2021.
• By application, the onshore segment was the leading segment in 2021.
• Asia-Pacific is expected to create highest geothermal drill bits market opportunities during the forecast period.

Impact of Covid-19 on Global Geothermal Drill Bits Market

Post-pandemic, there is a significant demand for the geothermal drill bits market mostly due to an increase in the investment of the government for the development of offshore resource exploration and restart related to the construction of the geothermal power plant to produce renewable power. In addition, government policies such as tax rebates, and investment of government toward the generation of power from geothermal energy are expected to provide lucrative opportunities for the development of the market.

Competitive Landscape

The major companies profiled in this report include Baker Hughes Co., America West Drilling Supply Inc., Epiroc AB, Halliburton, Torquato Drilling Accessories, National Oilwell Varco, Varel International Energy Services, Schlumberger Ltd., Blast Hole Bit Co. LLC., and Bit Brokers International Ltd. Increase in awareness among the governments of developing countries such as India and China toward the development of renewable and eco-friendly power generation has boosted geothermal drilling, which has a positive impact on the geothermal drill bits market. The above-mentioned factors are expected to have a positive impact on the demand for the geothermal drill bits market.

Additional growth strategies such as an expansion of storage capacities, acquisition, partnership, and research & innovation in the optimization and improvement of the extraction of offshore resources have led to attaining key developments in the global geothermal drill bits market trends. For instance, in August 2022, Epiroc, a leading productivity and sustainability partner for the mining and infrastructure industries, signed an agreement to acquire AARD Mining Equipment, a South African mining equipment manufacturer in order to achieve increased customer base and global presence.