The Global Geothermal Energy Market Size Was Valued At USD 59.40 Billion In 2021. The Market Is Projected To Grow From USD 62.65 Billion In 2022 To USD 95.82 Billion By 2030, Exhibiting A CAGR Of 6.3% During The Forecast Period.

Geothermal Energy Market Overview:

The COVID-19 pandemic has been unexpected and shocking, and demand for geothermal energy has exceeded expectations in all locations compared to pre-pandemic levels. According to our data, the global market showed a 1.1% increase in 2020 compared to 2019.

Geothermal energy is clean, environmentally friendly, recyclable, abundant, and has a big supply. It is also dependable, stable, and has a minimal carbon footprint. This type of energy draws heat from below the surface and can be applied to a variety of tasks, such as the production of electricity and the provision of heating and cooling. With the development of technology, a large amount of energy is currently being captured. Geothermal power generation increases globally as the need for clean energy for a variety of uses rises.

Market Dynamics:

Latest Trends:

An increase in the production of clean electricity will help the market.

The demand for clean electricity is steadily rising on a global scale. To satisfy the rising demand, nations all over the world have already begun concentrating on boosting the production of clean electricity. For instance, over the long-term forecast period, it is projected that Mexico's demand for energy will increase by 3.5%. In 2021, the nation produced 86.27 Terawatt hours, or 26.7% of its total electricity. The government's requirement that 35% of electricity be produced from non-fossil sources by 2024, along with rising demand potential, creates a need for renewable energy sources. By 2024, Mexico's electricity demand is anticipated to increase by more than 12%, enabling the country to reach its goal of producing clean electricity.

Maximum output of renewable electricity is the U.S. goal. Geothermal District Heating would be the main area of concentration (GDH). The GeoVision report estimates that by 2050, 17,500 geothermal district heating (GDH) systems might be operational in the United States. There are currently 23 GDH systems running all over the United States. Given the potential of the geothermal industry and the rising demand for renewable energy, there is still a sizable gap in the American energy sector.

Driving Factors:

Demand for geothermal energy will rise as we move toward renewable sources.

With the rising need for renewable energy, geothermal power generation is steadily rising on a global scale. Globally, a number of governments are implementing green measures to reduce greenhouse gas emissions. Air pollution will be decreased by generating electricity with minimal or no greenhouse gas emissions. Geothermal energy is lowering reliance on energy produced by burning fossil fuels. Compared to fossil fuels, geothermal power facilities emit 99% less carbon dioxide. The market demand for this renewable source of energy will continue to rise because it is one of the most dependable sources of energy and is also economical, sustainable, and environmentally beneficial. This is because the world is actively seeking out renewable alternatives.

Increasing Need for Heating in the Residential and Commercial Sectors Increasing Interest in Geothermal Energy

The population of the world is growing steadily. Global population growth has led to a boom in the construction industry. The continual increase in population has resulted in a major increase in the development of residential and commercial buildings. Around the world, a number of heat networks have been constructed to meet the expanding needs of homes and businesses for space and water heating. A significant portion of the energy produced by geothermal energy is used worldwide in residential and commercial buildings, making it a useful source for district heating. Thus, the demand for geothermal energy is rising along with the rate of new development and the rise in heating needs.

Restraining Factors:

Alternative renewable energy options could eventually hurt the market.

Although there are many household, commercial, and industrial applications for geothermal energy, the accessibility and availability are not on par. Regarding the distribution of energy, it is constrained to particular areas and places.

In addition, geothermal energy is regarded as one of the most expensive sources due to the high costs associated with drilling and plant construction. A geothermal plant with a capacity of one megawatt will cost between $2 million and $7 million. Due to the low cost of production, other renewable energy sources including solar photovoltaics, onshore wind, and offshore wind power still have lower costs. Therefore, over the long term, other renewable sources are predicted to reduce the market share of geothermal energy.

Segmentation Analysis:

By Type Analysis:

The market is divided into binary cycle, flash, and dry steam categories based on kind. The binary cycle sector dominates the global market due to its superior performance and lowest cost characteristics as compared to other geothermal varieties. In a binary cycle geothermal power plant, isobutene is heated by the water that is pumped from the geothermal reservoir through a heat exchanger. In the binary cycle, reservoirs of steam or water are never in direct contact with the turbines.

Most geothermal regions on the planet have mild temperatures (below 400°F). The geothermal energy that can be extracted from moderate temperatures is best suited for binary cycle power plants. Therefore, compared to other geothermal types, the installed capacity of binary cycle geothermal facilities is significantly higher. The binary cycle will continue to dominate the geothermal power industry in the long run thanks to constant capacity increase.

The traditional method of producing energy, developed many years ago, uses dry steam. Compared to binary cycle, this type is always less expensive because it collects and uses steam from the reservoir to power the turbine. The most dry steam-powered plants can be found in the United States. Near the surface of the planet, Hawaii and the western part of the United States are home to the majority of geothermal resources. In the entire country, California produced the most electricity using geothermal energy.

By Application Analysis:

The market is divided into residential, commercial, industrial, and other segments based on application. The majority of the worldwide market share belongs to the business sector. The main driver of the demand for geothermal energy in the commercial sector is the growing use of heat pumps for air conditioning and cooling down inside the environment when necessary, which maintains a controlled climate in the commercial sector, including office buildings, hotels, schools, and hospitals. Additionally, this kind of energy is used in homes for heating and cooling needs. In addition, one of the major sources of geothermal energy in residential structures is district heating.

Geothermal heat is used in a variety of industries, including pulp and paper, cement, food, aquaculture, lumber, and more. Geothermal heat is used by the cement industry to dry the materials it produces. The growing need for renewable energy in industrial applications is primarily driven by the practical need to minimise carbon emissions. In 2020 and 2021, the energy's industrial applications demonstrated a negligible yearly rise. Despite the fact that the industrial sector has a bigger potential for geothermal energy market expansion due to the constantly rising need for clean energy to reduce greenhouse gas emissions.

Regional Insights:

Five major geographical study areas were used to analyse the market: North America, Europe, Asia-Pacific, Latin America, and the Middle East and Africa. The market in Asia Pacific, which had a 2021 value of USD 21.80 billion, is predicted to command the greatest market value share. Significant volume demand for geothermal electricity and high expansion potential across Asian countries are expected to drive the regional industry.

In terms of geothermal energy usage, North America experienced the fastest growth in 2021. Over the course of the forecast period, the U.S. is expected to increase at a CAGR of 7.0%. The dominant use of geothermal energy in commercial and residential applications is the main driver of the sector's expansion in the United States. The 58 projects and possibilities that the US geothermal businesses are actively pursuing are spread throughout nine states (most located in Nevada). Five of the projects—two in California and three in Nevada—are in the stage immediately before completion.

In terms of consumption, Europe is the second-largest market for geothermal energy. Only 10 European nations now have operational geothermal power facilities, according to the current situation. In the region, there are currently geothermal projects in development in over 20 nations. The bigger European regions have accounted for a majority of the geothermal market's concentration over the last five years, which has had over 10% annual growth. The expansion of geothermal in Turkey was the main driver of the region's significant growth during the past few decades.

The rise in electrical demand in the commercial, industrial, and residential sectors is the main factor driving the Latin American market. The geothermal and renewable energy sectors are steadily diversifying throughout the region in an effort to lessen reliance on fossil fuel-based electrical energy. One of the biggest resource bases for the development of renewable energy is Mexico. By demonstrating the potential of renewables in their desired energy mix, the nation might draw in a lot of investors. Mexico's largest contributor to the production of clean electricity is the geothermal sector.

The East African Rift is where the majority of the Middle East and Africa market is centred. The area has excellent geothermal potential for both producing power and using it directly. In order to achieve the goals of the Paris Agreement on sustainable development and climate change, East Africa is seriously focused on the development of renewable sources, particularly geothermal energy. In the Middle East and Africa, Kenya is the top country for geothermal energy production and use. In Kenya, renewable energy produced more than 92% of the country's electricity in 2020. In 2020, the country's primary source of electricity generation—which accounted for more than 48.4% of all electricity produced—was the geothermal sector.

Scope Analysis

Recent Development:

• April 2022 – Ormat Technologies announced a 15-year Power Purchase Agreement (PPA) with Peninsula Clean Energy. This community choice aggregator provides more than 3,500 gigawatts of electricity to the City of Los Banos and San Mateo County. The contract term is effective from 1 January 2023 and Community Choice Aggregation (CCA) will purchase 26 MW of energy from Ormat's Heber 2 facility.
• April 2022 – The Sacramento Municipal Utility District (SMUD) signs a contract with Calpine Corporation. Under the agreement, SMUD has agreed to purchase electricity from a 100 MW portion of Geysers Field in California. It was a 10-year PPA with an activation date of January 1, 2023.
• March 2022 - Singapore-based Pangestu's renewable energy investment arm, Green Era, acquired a 33.33% stake in Start Energy for $440 million in cash. Start Energy owns a majority stake in Indonesia's 875 MW geothermal assets. With the acquisition, the company has targeted clean, sustainable and profitable growth as the assets have a proven track record.
• March 2021 – Rock Energy Group has agreed to lock up newly issued shares in Net Trading Group (NTG). The agreement came after a successful reverse buy-out between the companies. NTG shareholders voted in favor of the acquisition of Rock Energy at a general meeting on April 29, 2021.
• September 2020 – IGas Energy Plc, a UK-based oil and gas exploration company, announced the acquisition of GT Energy. Through the acquisition, IGas has diversified its energy business in the UK market. GT Energy's ongoing 14 MW geothermal project in the Etruria Valley is expected to start operating by 2022.

Market Segmentation

By Type:

• Binary Cycle
• Flash
• Dry Steam
• Others

By Application:

• Residential
• Commercial
• Industrial
• Others

By Companies:

• Ormat Technologies Inc. (U.S.)
• Calpine (U.S.)
• Mitsubishi Corporation (Japan)
• Enel Green Power North America Inc. (U.S.)
• EthosEnergy (U.S.)
• GEG Power (Iceland)
• ElectraTherm (U.S.)
• Toshiba International Corporation (Japan)
• First Gen Corporation (Philippines)
• Berkshire Hathaway Energy (U.S.)
• Turboden S.p.A. (Italy)
• Reykjavik Geothermal (Iceland)
• Others