The geothermal power market is advancing in trends by increasing adoption of renewable sources to achieve carbon neutrality goals. Geothermal energy utilizes steam or hot water from deep underground to generate electricity through turbines, offering a reliable baseload renewable source without emitting carbon emissions. It has potential to play an important role in transition towards clean energy future.
Geothermal power plants extract steam or hot water from underground reservoirs to drive turbines that produce electricity. They provide clean, renewable and continuous power as the underground heat source is independent of weather conditions. Geothermal energy production is economically viable with minimal land use compared to other renewable sources. It has been effectively used worldwide for heating purposes and electricity generation. The advantages of continuous output and zero emissions make it an attractive option for utilities and nations aiming for energy independence through indigenous sources.
The Global Geothermal Power Market is estimated to be valued at US$ 5.79 Bn in 2024 and is expected to exhibit a CAGR of 5.4% over the forecast period 2024 to 2031.
Key Takeaways
Key players: Key players operating in the 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.
Growing demand: With global focus increasing on emissions reduction and sustainable sources, demand for geothermal power is growing rapidly especially in Asia Pacific and Latin American countries like Indonesia, Philippines, Mexico. The stable output makes it an ideal option for reliable baseload power.
Global expansion: Major players are expanding geothermal operations globally through partnerships and project investments to tap the vast potential. Countries worldwide are supporting geothermal development through policy incentives to achieve their renewable energy targets.
Market Key Trends
Advanced exploration technologies to boost resources: Improved subsurface mapping technologies are helping discover previously unknown geothermal fields including enhanced geothermal systems. This is increasing accessible resource potential globally. 3D seismic surveys, distributed temperature sensing and machine learning are augmenting traditional exploration efforts.
Hybrid power plant configurations: Combining geothermal systems with renewable or conventional power allows optimizing outputs. Hybrid plants leverage different resources to produce continuous power supply or increase total yields. Novel hybrid models will drive further market adoption in coming years.
Porter's Analysis
Threat of new entrants: Low capital requirements for small geothermal projects make threat higher compared to large utility-scale projects. Bargaining power of buyers: Buyers have moderate bargaining power as there are number of utility companies and IPPs involved in geothermal projects. Bargaining power of suppliers: Suppliers of major equipment like turbines, generators have some bargaining power due to scale of operations and utility companies dependence for technical assistance and maintenance support. Threat of new substitutes: Other renewable sources like solar and wind are improving and offer viable substitute options for utilities in regions with good solar or wind regimes. Competitive rivalry: Intense as geothermal power competes with other renewable sources for policy support and investment.
Geographical Regions
The Asia Pacific region dominates the global geothermal power market in terms of value. Countries like Indonesia, Philippines and Japan are focusing on utilizing their geothermal resources. Indonesia alone has over 28.89 GW of installed geothermal power capacity.
The geothermal power market in Africa region is expected to grow at the fastest rate during the forecast period. Countries including Kenya, Ethiopia, Djibouti have considerable geothermal reserves and are promoting private investments to tap the resources. Ethiopia aims to increase its geothermal capacity from the current 345 MW to around 5 GW by 2030.
