• Analysis and Studies
• The Global Market for Geothermal Energy

Geothermal Energy Market: an insight

Together with other renewable energy sources, geothermal energy will undoubtedly play a significant part in the transition to clean energy. Sedimentary basins and regions with volcanic activity both have abundant geothermal resources. Geothermal energy can help with the stabilization of electrical networks and the green transition that is taking place in many nations, especially with the recent acceleration of the deployment of variable power from wind and solar photovoltaic. In addition, geothermal energy technology has expanded beyond its initial emphasis on the power industry to include a wider range of energy-related applications, such as sustainable heating and cooling. Geothermal energy is a cost-effective and weather-independent source of renewable energy because of these characteristics. Several government initiatives that aim to encourage the market for renewable energies can be credited for the market expansion. Geothermal energy is regarded as a practical and inclement weather-resistant source of clean energy.

The global geothermal market was valued at 6.6 billion of dollars in 2021, and its industry is expected to reach $9.4 billion by 2027. Indeed, its CAGR (Compound annual growth rate) is estimated at 5.9% from 2022 to 2027. The main driver factors for the growth in the geothermal market are: the growing demand for sustainable and green energy and the increasing demand for constant power supply.

Moreover, in the last years, many governments around the world have started to implement initiatives to reduce greenhouse emissions and invest in renewable energy. However, the high growth of other renewable resources, such as wind, solar, and gas is expected to hinder the market. Nonetheless, the geothermal market is expected to offer many lucrative opportunities for investors and market players in the next years.

There are some countries that are the precursor for the geothermal energy market. For instance, Italy was the first country to build to generate electrical power from geothermal energy. Indeed, in 1904, Italy opened the Larderello field in the Tuscany region. Nowadays, Italy is still within the first ten countries that produce the most megawatts of geothermal energy worldwide. However, it does not produce as much as it could. Other countries are the United States (3,794 MW), Indonesia (2,356 MW), Philippines (1,935 MW), Turkey (1,682), New Zealand (1,037 MW), Mexico (962 MW), Kenya and Italy (944 MW), Iceland (754 MW), and finally Japan (621 MW).

Iceland is considered as the main producer of geothermal energy per capita worldwide. Indeed, between the years 1990 and 2014, Iceland's geothermal electricity production grew by 1700%. Furthermore, over 85% of all houses in Iceland are heated with renewable energy sources, with geothermal energy accounting for 66% of the renewables.

Asia and the Pacific are expected to be the largest regional market in the near future. Indeed, China and Indonesia have increased their investments in geothermal projects.