The global geothermal power market size was valued at US$ 5.49 Billion in 2022 and is anticipated to witness a compound annual growth rate (CAGR) of 5.3% from 2023 to 2030. Geothermal power market has witnessed a significant growth over the past few years on account of increasing demand for renewable energy sources. Geothermal power is a type of renewable energy, which is generated from thermal heat found inside the earth's crust. The thermal heat can be used to generate electricity and provides a clean, reliable and cost-effective alternative to traditional fossil fuels such as coal and natural gas.
Global Geothermal Power Market: Regional Insights
Based on geography, the global geothermal power market is segmented into North America, Europe, Asia Pacific, Latin America, and Middle East & Africa.
Regionally, North America is expected to be the largest market in the global geothermal power sector over the forecast period due to a presence of large number of geothermal projects in this region. This is primarily owing to the availability of abundant and cheap geothermal resources in this country.
Asia pacific region is also expected to witness significant growth over the forecast period due to the growing automobile production. Geothermal energy is also used in the production of automotive engines. The demand for these engines is increasing, especially in Asia Pacific, due to growing vehicle production and the need for high-performance engines. Furthermore, increased investment in the construction of geothermal energy plants in the region and growing demand for green energy from China and India are further projected to fuel regional market growth.
Figure 1. Global Geothermal Power Market, By Region, 2023
Global Geothermal Power Market Drivers:
Rising demand for renewable energy worldwide to augment market growth
Geothermal power is an efficient renewable energy source that can help minimize greenhouse gas emissions by replacing conventional sources. Governments in many countries are promoting green energy production to curb the alarming rate of pollution across the world. As a result, there is a high focus on the need for alternative power generation methods such as geothermal.
Increasing electricity consumption to propel market growth
The electricity consumption in the recent years has increased due to growing use of electronics products for commercial and domestic purpose that require electricity. According to the Coherent Market Insights analysis, the global GDP projection is projected to achieve $83 trillion mark by 2022, thereby increasing the demand for electricity generation to cater to the spiraling demand for electricity in the industrial and consumer electronics sectors.
Global Geothermal Power Market Opportunities:
Increasing adoption of renewable energy technologies in the industrial sector is projected to provide significant growth opportunities in geothermal power market globally. This is primarily due to its advantages such as zero carbon emissions and cost efficiency. Moreover, the technology is easy to incorporate into existing power infrastructure. Moreover, this energy source is abundant and can be harnessed from a wide range of locations, which makes it a scalable and reliable option for energy supply.
The geothermal power market is undergoing a number of technological advancements that will help in improving its performance and reduce costs. In addition, the increasing number of projects in this field is further projected to propel the market growth over the next few years. According to the Coherent Market Insights analysis, the geothermal power market for industrial sector accounted for $1,679.3 million in 2018, and is projected to reach $ 2,465.1 million by 2026, growing at a CAGR of 5.0% from 2019 to 2026.
|Base Year:||2022||Market Size in 2022:||US$ 5.49 Bn|
|Historical Data for:||2018 to 2021||Forecast Period:||2023 to 2030|
|Forecast Period 2023 to 2030 CAGR:||5.3%||2030 Value Projection:||US$ 8.30 Bn|
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
|Restraints & Challenges:||
Global Geothermal Power Market Trends:
Growing government support in the form of tax benefits and incentives
Geothermal power is a clean, sustainable and renewable energy source that can generate electricity. It is one of the most reliable and cost effective energy sources. It emits very little or no greenhouse gas emissions and thus is considered eco- friendly. Governments of various nations are promoting the use of geothermal energy by providing financial benefits and tax refunds. There is a huge demand for this form of energy worldwide and it is projected to continue growing during the forecast period.
Strict regulations regarding fossil fuel
Various strict regulations that have been implemented by governments and fossil fuel scarcity are some of the major factors creating demand for geothermal power. On September 23, 2021, EPA issued a final rule that will phase down the U.S. production and consumption of Hydrofluorocarbons by 85% over the next 15 years, as mandated by the AIM Act. A global phasedown of HFCs is expected to avoid up to 0.5°C of global warming by 2100.
Global Geothermal Power Market Restraints:
High cost required for establishing infrastructure to hamper market growth
One of the major disadvantage of geothermal energy is that it is expensive to set up and run. However, the upfront costs of geothermal energy plants are projected to pay for themselves within 5-10 years, saving money on energy bills in the long run.
Limited availability of geothermal energy to hinder market growth
Geothermal energy is limited in availability because the suitable places for geothermal energy are located far away from cities and towns. As a result, many people do not have access to this type of clean energy. This is again hampering market growth.
Figure 2. Global Geothermal Power Market, By Power Station Type, 2022
Global Geothermal Power Market Segmentation:
The global geothermal power market report is segmented into power station type, end use, and region
Based on Power Station Type, the market is segmented into Dry Steam Power Stations, Flash Steam Power Stations, and Binary Cycle Power Stations. Out of which, Binary Cycle Power Stations is expected to dominate the global market over the forecast period. This is mainly due to the fact that these plants can be used in artificial lakes with lower temperatures. Moreover, these plants have the ability to provide heat directly without the need for additional cooling systems.
Flash Steam Power Stations segment is also expected to witness significant growth in the near future. The flash steam power stations market accounted for $1,839.7 million in 2018, and is projected to reach $2,908.0 million by 2026, growing at a CAGR of 6.0% from 2019 to 2026. Asia-Pacific was the highest contributor with $639.5 million in 2018, and is anticipated to reach $1,070.5 million by 2026, registering a CAGR of 6.8%.
Based on End Use, the market is segmented into Residential, Commercial, Industrial, and Others. Out of which, the commercial sector is the largest consumer of geothermal energy. This is because it is useful in heating and cooling systems. Furthermore, the use of geothermal power in industries such as gold mining, milk pasteurization and food dehydration is further likely to drive segment growth.
Residential segment is also expected to witness significant growth in the near future and this is owing to the growing focus of consumer on reducing electricity bills and to follow eco-friendly practices for electricity generation.
Global Geothermal Power Market: Key Developments
In March 2018, Tata Power has commissioned a 1-MW geothermal pilot plant in Australia in association with Geodynamics. Geodynamics is an industry major in enhanced geothermal systems. It has geothermal exploration interests in three Australian states, including a licence to explore 2,000 sq.km in the Cooper Basin
In December 2022, Mitsubishi Power, a power solutions brand of Mitsubishi Heavy Industries, Ltd. (MHI), has received an order from PT Pertamina Geothermal Energy (PGE), the geothermal energy subsidiary of Indonesia's state-owned oil and natural gas corporation PT Pertamina (Persero), for a 55 MW power generating unit comprising a steam turbine, generator, and related equipment for the Lumut Balai Unit 2 geothermal power plant.
In January 2023, State-owned Korea Electric Power Corporation (KEPCO) sold its thermal assets in the Philippines, primarily its equity in a power generation facility in Cebu province. KEPCO will also be selling its interest in its partnership with SPC Power Corporation.
Global Geothermal Power Market: Key Companies Insights
The global geothermal power market is highly competitive. This is attributed to continuous launch of new technologies due to ongoing R &D and efforts by value chain participants. Moreover, key players are adopting various business growth strategies in order to expand their presence on regional as well as global basis. Some of the key players in the global 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
*Definition: Geothermal power is a renewable resource that can be used to generate heat and electricity. It is considered to be a clean form of power because there are no emissions involved with the production and use of the energy. It also does not depend on weather conditions like solar or wind, which means that it can be produced and used all the time.