Geothermal Energy market size was USD 7.46billion in 2023 and the market is projected to touch USD 9.73billion by 2032, at a CAGR of 3.1% during the forecast period. The increasing demand for geothermal energy is the consequence of a few reasons. Rising demand for power generation through sustainable energy in a variety of industries, as well as the need for a continuous power supply for the commercial, industrial, and residential sectors, are some of the primary factors. The source of geothermal energy is hot water reservoirs located beneath the surface of the Earth.
In order to meet the global goal of reducing carbon emissions, more geothermal energy use could reduce the consumption of fossil fuels and the resulting greenhouse gas emissions. Numerous economic sectors can benefit from the use of geothermal energy. With many countries working to reduce their dependency on fossil fuels, geothermal energy is showing promise as a means of reducing greenhouse gas emissions and supplying the world's growing energy demands. The United States is one of the first countries to use renewable energy in the power generation sector because of the government's Energy Act, which has made clean energy solutions more important. These programs have produced guidelines, such as the Infrastructure Investment and Jobs Act and the Inflation Reduction Act (IRA) of 2022, for the use of renewable energy sources in the energy generation industry. End consumers are anticipated to migrate to geothermal energy sources due to rising distribution prices, main grid failures that result in blackouts, and government incentive programs. This is anticipated to increase market demand.
The U.S. Department of Energy announced USD 165 million in funding in August 2022 to support the nation's growing use of geothermal energy. The expansion of the industry is also expected to be significantly impacted by government measures to use renewable energy sources to meet the rising demand for power. Since governments are determined to reduce carbon emissions and extract as much energy as possible from renewable sources, the market for renewable energy is likely to grow at a rapid pace.
Geothermal Energy report scope and segmentation.
Report Attribute |
Details |
Base Year |
2023 |
Forecast Years |
2024 – 2032 |
Estimated Market Value (2023) |
USD 7.46Billion |
Projected Market Value (2032) |
USD 9.73Billion |
Segments Covered |
By Technology, By Power, By Application, By & By Region. |
Forecast Units |
Value (USD Million or Billion) |
Quantitative Units |
Revenue in USD million/billion and CAGR from 2024 to 2032. |
Regions Covered |
North America, Europe, Asia PUpto 5MWific, Latin America, and Middle East & Africa. |
Countries Covered |
U.S., Canada, Mexico, U.K., Germany, France, Italy, Spain, China, India, Japan, South Korea, Australia, Brazil, Argentina, GCC Countries, and South Africa, among. |
Geothermal Energy dynamics
One of the main drivers of growth is the growing availability of integrated monitoring technologies, such as smartphones and connected networks. The desire for renewable energy is driving a steady increase in geothermal power generation worldwide. To cut greenhouse gas emissions, some governments throughout the world are putting green policies into place. There will be less air pollution if energy is generated with little or no greenhouse gas emissions. Reliance on energy generation from fossil fuels is decreasing with the usage of geothermal energy. Compared to fossil fuels, geothermal power facilities emit 99% less carbon dioxide. Since it is one of the most dependable, economical, sustainable, and environmentally friendly energy sources, the market demand for this renewable energy source will only grow as more people around the world search for renewable alternatives.
Geothermal Energy drivers
Growing Demand for Sustainable and Renewable Energy Sources
A reliable, low-emission renewable energy source, geothermal energy helps countries reduce their carbon emissions and transition away from fossil fuels. Geothermal energy, in contrast to solar and wind, is weather-independent and offers steady base-load power, which can help maintain the energy grid's stability. Geothermal energy is gaining popularity among governments and businesses due to its reliable generation capabilities and minimal environmental impact. This stimulates investments in geothermal projects worldwide. The market expansion for geothermal solutions and technology providers is further accelerated by this push for sustainability.
Government Incentives and Policies Favoring Renewable Energy
Numerous nations offer grants, tax breaks, and subsidies for renewable energy projects, including geothermal, in an effort to encourage the expansion of green energy infrastructure. By making geothermal projects financially feasible for energy firms, policies like as feed-in tariffs, advantageous lending programs, and renewable portfolio standards (RPS) encourage the growth of geothermal energy. The growth and profitability of geothermal energy in the worldwide market are being propelled by nations with significant geothermal potential, such as the Philippines, Kenya, and the United States, which are establishing favorable legislative frameworks that draw both public and private investments.
Restraints:
High Initial Capital Costs and Long Payback Periods
The costs of drilling, exploration, and infrastructure development drive up the initial costs of geothermal projects. Drilling alone can account for a significant amount of the budget because accessing geothermal reserves frequently necessitates going to great depths. Moreover, project return on investment may be extended especially in regions that access to geothermal resources is limited. Businesses and investors may be deterred by this cost burden, particularly in places lacking financial incentives or subsidies, that could limit the growth of the geothermal industry.
Environmental and Geological Constraints
To prevent any environmental hazards such induced seismic activity and water contamination, geothermal projects need to be properly controlled. Monitoring and reducing these risks can make geothermal projects more complicated and expensive. Moreover, only in areas with readily available geothermal resources which are frequently found close to tectonic plate borders is geothermal energy generation practical. This geographic restriction limits the market's expansion to those areas with promising geothermal potential and prevents the broad use of geothermal energy.
Increased Demand for Renewable Energy Sources
The need for clean and renewable energy sources is rising as nations throughout the world work to lower their carbon emissions. Geothermal energy is becoming more popular as a fossil fuel substitute since it generates less greenhouse gas emissions and offers a steady power source. Geothermal growth is encouraged by this move toward renewable energy sources, which is bolstered by government subsidies and net-zero legislation, particularly in areas with abundant geothermal potential.
By Technology, The Geothermal Energy market is segmented into Flash Steam, Dry Steam, and binary cycle power plants. In 2023, the market leader with the most revenue share of 30.5% was the binary cycle power plants sector. Utilizing lower temperature geothermal resources, which are more plentiful worldwide than high temperature resources, binary cycle power plants are the most practical choice for areas with moderate to low geothermal heat potential in order to broaden the geographic scope for the development of geothermal energy.
Due to the effectiveness of using natural steam generated in subterranean reservoirs and turning it straight into electrical power, the flash steam category is projected to develop at the quickest CAGR throughout the projection period. Flash steam geothermal energy facilities are appealing choices for nations looking to diversify their energy mix since they provide dependable, environmentally friendly energy sources. The need for these power plants has also been fueled by developments in flash steam technology, such as better drilling methods and better geothermal reservoir management, which have increased efficiency and cost-effectiveness. The demand for geothermal energy is predicted to rise sharply in the upcoming years as nations all over the world switch to sustainable energy sources for power generation.
By Power, The Geothermal Energy market is segmented into upto 5MW and above 5 MW. Due to the growing need for large-scale power plants that can produce huge amounts of electricity for commercial and industrial uses, the above 5 MW category led the market in 2023 with the biggest revenue share of 56.4%. The demand for geothermal power plants larger than 5 MW is further fueled by the growing importance of geothermal energy as a dependable and sustainable baseload power source. Geothermal power plants with a maximum capacity of 5 MW, however, are also in high demand since they provide a balance between cost-effectiveness, efficiency, and scalability, making them a desirable choice for both established and developing nations. Over the course of the projection period, there will likely be a greater need for up to 5MW geothermal power plants as nations around the world prioritize the switch to clean energy sources for residential applications.
Geothermal Energy Overview by Region
The North American geothermal energy market is anticipated to expand at a noteworthy compound annual growth rate (CAGR) over the forecast period. North America's economy is the biggest and most resilient in the world, and it is expanding significantly because of its nations' industrial dynamics and quantity of commodities. Among the region's major and intricate economic systems are the United States, Mexico, and Canada.
Asia Pacific held a substantial 34.7% revenue share in 2023, dominating the geothermal energy market, and is anticipated to develop at the quickest compound annual growth rate (CAGR) over the forecast period. This can be linked to the residential sector's increasing demand for geothermal heat pumps for space heating and cooling. Moreover, the presence of one of the greatest industrial sectors, improved economic conditions, and population growth are all expected to have a beneficial impact on the region's market growth.
Geothermal Energy market competitive landscape
Leading companies such as Turboden S.p.A., Alterra Power Corporation, TAS Energy, Atlas Copco Group, Exergy, Toshiba Corporation, Mitsubishi Heavy Industries, General Electric, Ansaldo Energia, and Ormat Technologies. There are several market participants operating worldwide, and the market is quite fragmented. Leading companies are aggressively expanding their businesses throughout the world and using both inorganic and organic growth tactics to solidify their market positions. Certain players are genuinely concentrated on particular areas to meet the growing demand for renewable energy in terms of direct usage and power. Most geothermal producing businesses have capacity expansion and exploration innovation as their main goals.
Scope of Geothermal Energy report
Geothermal Energy report segmentation
ATTRIBUTE |
DETAILS |
By Technology |
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By Power |
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By Application |
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Customization Scope |
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Table of Contents
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