Geothermal energy Industry Size to Hit USD 117.02 billion by 2032

The global geothermal energy industry size was valued at USD 66.24 billion in 2023 and is projected to grow from USD 70.14 billion in 2024 to USD 117.02 billion by 2032, exhibiting a CAGR of 6.61% during the forecast period. Asia-Pacific dominated the geothermal energy market with a market share of 37.14% in 2023.

Geothermal energy is green, low-carbon, recyclable, and renewable energy characterized by large reserves, wide distribution, clean, environmental protection, stability, and reliability. This form of energy uses heat below the ground and can be used for various purposes, including generating electricity, heating, and cooling. With technological advancements, the energy is now being captured at a high volume, increasing geothermal power generation globally.

Despite the global COVID-19 pandemic, the geothermal energy market saw higher-than-anticipated demand across all regions compared to pre-pandemic levels. According to the IEA report, geothermal capacity increased by 500 MW in 2020. Although capacity addition growth was lower than the previous year, the overall market performance was adequate.

Market Size and Forecasts:

1. 2023: The global geothermal energy market was valued at USD 66.24 billion.

2. 2024: The geothermal energy market size is expected to grow to USD 70.14 billion.

3. 2032: The geothermal energy market is projected to reach USD 117.02 billion.

4. CAGR (2024-2032): The geothermal energy market is anticipated to grow at a CAGR of 6.61% during the forecast period.

5. Asia-Pacific Market Share (2023): Asia-Pacific held a dominant market share of 37.14% in 2023.

Latest Trends in Geothermal Energy Market:

1. Advances in Drilling and Power Plant Technologies:
   Enhanced Geothermal Systems (EGS) technology allows accessing deeper and hotter resources, expanding the potential geothermal footprint and increasing energy output. New tools, such as downhole sensors and real-time data monitoring, improve drilling efficiency and safety, reducing costs.

2. Increase in Clean Electricity Generation:
   The global demand for clean electricity is growing steadily. For example, Mexico aims to generate 35% of its electricity from non-fossil sources by 2024, driving renewable energy adoption. The U.S. targets geothermal district heating (GDH), with potential for 17,500 GDH systems by 2050.

Geothermal Energy Market Growth Drivers:

1. Shift Toward Renewables:
   Geothermal power generation is increasing due to growing demand for renewable energy, as governments focus on green initiatives to reduce greenhouse gas emissions. Geothermal power plants emit 99% less carbon dioxide than fossil fuels.

2. Growing Heating Requirements:
   Rising global populations and increasing residential and commercial building construction are driving the demand for geothermal heating. Geothermal is increasingly used for district heating in buildings.

Restraining Factors:

1. Alternative Renewable Options:
   Although geothermal energy is a convenient source, it is restricted to specific geographic locations, limiting its accessibility. Additionally, geothermal plants incur significant capital costs compared to other renewable sources, such as wind or solar, which are generally cheaper to install.

Geothermal Energy Market Segmentation:

1. By Type Analysis:

   • Binary Cycle: The binary cycle segment holds the maximum market share due to its lower cost and efficiency compared to other geothermal types.

   • Flash and Dry Steam: Flash steam plants are older and cost-effective, used primarily in high-temperature geothermal regions like the U.S.

2. By Application Analysis:

   • Commercial Applications: Geothermal energy is in high demand for heating and cooling in commercial sectors, including offices, hotels, and hospitals.

   • Industrial Applications: Industries such as cement, food, and paper are increasingly adopting geothermal energy to reduce emissions.

Regional Insights:

1. Asia Pacific:
   The geothermal energy market in Asia Pacific was valued at USD 24.60 billion in 2023. The region is expected to maintain the largest market share due to high demand for renewable energy.

2. North America:
   The U.S. is the fastest-growing region, with geothermal projects spread across nine states, especially Nevada.

3. Europe:
   Europe is the second-largest market, with geothermal projects growing steadily, particularly in Turkey.

4. Latin America:
   Mexico is one of the largest contributors to geothermal energy in the region.

5. Middle East & Africa:
   The East African Rift region holds significant geothermal potential, with Kenya leading the production of geothermal electricity.

Competitive Landscape:

The geothermal energy market is highly fragmented. Key players include Ormat Technologies, Calpine, Mitsubishi Corporation, and Enel Green Power North America. Companies are expanding their capacity and innovating in exploration techniques.

Key Industry Developments:

1. Ormat Technologies (May 2021):
   Acquired Terra-Gen’s TG Geothermal Portfolio, increasing installed capacity to 1,100 MW.

2. Calpine (April 2022):
   Signed a 10-year power purchase agreement with Sacramento Municipal Utility District to supply 100 MW of electricity.

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