The global Geothermal Energy Market is expected to grow from an estimated USD 7.0 billion in 2022 to USD 9.4 billion in 2027, at a CAGR of 5.9% according to a new report by MarketsandMarkets™. Increasing use of geothermal energy for power generation, Favourable government policy, and increasing demand for ground source geothermal heat pumps due to the increase in heating costs are the major driving factor for the geothermal energy market.
Geothermal energy technology captures the heat beneath the ground by harnessing steam or hot water from the earth to power electricity-generating turbines. The production of geothermal energy requires no fossil fuels, and the water can be injected back into the ground for reuse. Also, geothermal energy is not dependent on the weather, season, or time of day. It can be produced around the clock, all year long. Geothermal energy, while currently being only a marginal component of global energy utilization, will be indispensable in the fight against climate change. Geothermal energy can support deep decarbonization by providing clean baseload power and efficient means to heat and cool buildings, campuses, and cities. It also supports a host of agricultural and industrial applications.
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According to the IEA world energy outlook for 2022, geothermal power generation is expected to reach ~28 GW in 2030 under the stated policy scenario. Similarly, the total estimated installed capacity for geothermal direct use in 2019 was 107.7 gigawatts-thermal, representing a 52% increase over the 2015 data. Investments in direct-use geothermal projects are increasing, driven mainly by the energy savings associated with using geothermal energy. Countries such as the US, Turkey, Indonesia, and the Philippines are actively developing new geothermal projects to achieve their policy of net zero emissions.
Investments in geothermal power generation projects are set to boom in the coming years across different technologies. The US Department of Energy Geothermal Technologies Office’s (GTO) GeoVision analysis found that geothermal electricity generation has the potential to increase at least 26-fold by 2050. Producing more geothermal electricity online by using existing oil and gas wells is a critical step to meeting the nation’s goals of a carbon-free electric grid by 2035 and net-zero emissions economy-wide by 2050. Several private companies across the world are increasing their investments in developing new geothermal technologies.
Asia Pacific is expected to be the largest region in the geothermal energy market.
Asia Pacific accounted for a 43.8% share of the global geothermal energy market in 2021 and is the fastest-growing region in the market. In Asia Pacific, various countries are currently focused on geothermal energy to meet the increasing demand for electricity and to achieve the net zero emission of CO2 goal. For these factors, huge investments are going on from both government and private companies.
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Geothermal resources are abundant in Asia Pacific countries such as Indonesia and New Zealand and can be utilized as climate-friendly energy sources in all weather. Currently, China is the largest user of geothermal heat pumps. China uses geothermal energy majorly for district heating and space heating applications. Indonesia has commissioned many geothermal power plants in the past decade which has enabled the country to meet its energy needs. Indonesia was the second-largest geothermal electricity producer after USA, at nearly 14 billion kWh of electricity, which was equal to about 5% of Indonesia’s total electricity generation.
The leading players in the global Geothermal Energy Market include Ormat (US), Mitsubishi Heavy Industries (Japan), Baker Hughes Company (US), NIBE Group (Sweden), and SLB (US).
