Geothermal Power Market Expected to Reach $14.5 Billion by 2034

According to a new report published by Allied Market Research, titled, “Geothermal Power Market," The geothermal power market size was valued at $7.4 billion in 2024, and is estimated to reach $14.5 billion by 2034, growing at a CAGR of 7% from 2025 to 2034.

Introduction

Geothermal power refers to the process of generating electricity by harnessing the natural heat stored within the Earth’s crust. This heat originates primarily from the planet’s core, where temperatures reach thousands of degrees Celsius due to the decay of radioactive materials and residual heat from the Earth’s formation. Geothermal energy is accessed through wells drilled into geothermal reservoirs underground zones containing hot water and steam trapped in porous rocks. This steam or hot water is then brought to the surface and used to drive turbines connected to electricity generators, producing reliable and renewable power with minimal greenhouse gas emissions.

Market Dynamics

The growing demand for renewable and sustainable energy sources is the most significant drivers of the geothermal power market. Governments, industries, and consumers are increasingly focused on transitioning away from fossil fuels toward cleaner alternatives as global energy consumption continues to rise. Geothermal power stands out in this transition because it provides a renewable, stable, and low-carbon source of electricity that are operate continuously, as compared to intermittent sources such as solar or wind. This makes geothermal energy a reliable option for meeting baseload power demand while also aligning with climate change mitigation goals.

Sustainability commitments and net-zero emission targets across regions are further fueling investment in geothermal projects. Countries are setting ambitious renewable energy mandates, while international organizations and financial institutions are offering incentives to accelerate green energy adoption. Geothermal power, with its ability to generate electricity and heat while reducing greenhouse gas emissions, fits seamlessly into these strategies. Moreover, its minimal land footprint and long plant lifespans enhance its appeal as a sustainable solution. In addition, rising energy security concerns are encouraging diversification of energy portfolios.

Many regions rich in geothermal potential, such as East Africa, Southeast Asia, and parts of North America and Europe, are leveraging this resource to reduce dependence on imported fuels. By providing a steady and local source of energy, geothermal helps stabilize energy supplies while supporting economic development. With advancements in enhanced geothermal systems (EGS) and drilling technologies, new opportunities are opening up even in regions with limited conventional geothermal resources, further accelerating the global push toward sustainable energy adoption. All these factors are expected to drive the demand for the geothermal power market growth during the forecast period.

High initial capital investment is the key challenge hampering the growth of the geothermal power industry. As compared to solar and wind projects, which have relatively lower upfront costs and shorter development timelines, geothermal projects require significant financial resources during the exploration and drilling stages. Identifying viable geothermal reservoirs involves extensive geological surveys, seismic studies, and test drilling, all of which are costly and time-consuming. In many cases, exploration does not guarantee success, and the risk of non-productive wells further discourages private investors from committing to large-scale geothermal development.

The cost of drilling, which can reach several million dollars per well depending on depth and geological condition, contributes heavily to the initial capital burden. In addition, building power plants and the necessary infrastructure for steam gathering and transmission adds further financial strain. These expenses often result in longer payback periods compared to other renewable energy technologies, that makes them geothermal projects less attractive to investors who are looking for quicker returns. All these factors are expected to hamper the geothermal power market forecast growth.

Rising investments in clean energy infrastructure are creating significant opportunities for the geothermal power market. As governments, private investors, and international financial institutions channel more funds into renewable energy projects, geothermal is gaining attention as a reliable and sustainable option to diversify the global energy mix. Large-scale funding for clean energy helps to finance costly exploration and drilling activities are reduces investment risks associated with geothermal development.

Moreover, initiatives such as green bonds, climate funds, and public–private partnerships are making capital more accessible, enabling countries with strong geothermal potential to accelerate project deployment. With a growing emphasis on building resilient, low-carbon energy systems, these rising investments are unlocking new geothermal projects, supporting technological innovations such as enhanced geothermal systems, and expanding opportunities for both established players and emerging markets. All these factors are anticipated to offer geothermal power market opportunities during the forecast period.

Segments Overview

The geothermal power market is segmented into power station type, end-use, and region. On the basis of power stations type, the market is divided into dry steam power stations, flash steam power stations, binary cycle power stations. On the basis of end-use, the market is classified into residential, commercial, industrial, and others. Based on region, the market is analyzed across North America, Europe, Asia-Pacific, Latin America, the Middle East, and Africa.

On the basis of power station type, market is segmented into dry steam power stations, flash steam power stations, binary cycle power stations. The flash steam power stations segment is anticipated to grow at the fastest CAGR of 7.7% during the forecast period. The growth of the segment is primarily driven by the widespread availability of high-temperature geothermal reservoirs suitable for flash steam technology and its higher efficiency in converting geothermal energy into electricity compared to dry steam systems.

On the basis of end-use, the geothermal power market is classified into residential, commercial, industrial, and others. The industrial segment is anticipated to grow at the fastest CAGR of 6.9% during the forecast period, driven by the increasing adoption of geothermal power for process heating, district energy systems, and manufacturing operations. Industries are leveraging geothermal energy to reduce dependence on fossil fuels, lower operational costs, and meet sustainability goals. The rising emphasis on energy efficiency, coupled with supportive government policies promoting renewable energy integration in industrial applications, is further accelerating the growth of this segment.

This report further highlights key areas of investment. In addition, it includes Porter’s five forces analysis to understand the competitive scenario of the industry and the role of each stakeholder. Value chain analysis for this industry, which includes R&D, components manufacturers, assembly, programming & testing, marketing & sales, customers, and post-sales services, is explained. The report features strategies adopted by key market players to maintain their foothold in the market. Furthermore, it highlights the competitive landscape of the key players to increase their market share and sustain intense competition in the industry.

The major prominent players operating in geothermal power market include Yokogawa Electric Corporation, Enel Spa, ABB Ltd, Toshiba Corporation, General Electric, Korea Electric Power Corporation, Siemens AG, Tata Power Company Limited, Mitsubishi Heavy Industries Ltd, and Ormat Technologies, Inc.

Regional Analysis

Region-wise, the geothermal power market is analyzed across North America, Europe, Asia-Pacific, and LAMEA. The Asia-Pacific region is anticipated to grow at the fastest CAGR of 7.3% during the forecast period.

The geothermal power market share is segmented into power station type, end-use, and region. On the basis of power station type, the market is divided into dry steam power stations, flash steam power stations, binary cycle power stations. On the basis of end-use, the market is classified into residential, commercial, industrial, and others. Region wise, the market is analyzed across North America, Europe, Asia-Pacific, and LAMEA.

Key Market Insights

• On the basis of power station type, market is segmented into dry steam power stations, flash steam power stations, binary cycle power stations. The flash steam power stations segment is anticipated to grow at the fastest CAGR of 7.7% during the forecast period.         
• On the basis of end-use, the geothermal power market analysis is classified into residential, commercial, industrial, and others. The commercial segment is anticipated to grow at the fastest CAGR of 7.4% during the forecast period.
• Region-wise, the geothermal power market trends is analyzed across North America, Europe, Asia-Pacific, and LAMEA. The Asia-Pacific region is anticipated to grow at the fastest CAGR of 7.3% during the forecast period.