The geothermal power market involves the generation of electricity from geothermal energy or thermal energy generated and stored in the earth. Geothermal power plants tap into underground reservoirs of hot water or steam found close to the earth's surface. This hot water or steam then drives turbines that power electrical generators to produce clean electricity with no direct emissions or pollution. Geothermal energy is a renewable source of energy that generates power 24/7 as it is not dependent on climate or weather changes.

The Global Geothermal Power Market is estimated to be valued at US$ 6.09 Billion in 2024 and is expected to exhibit a CAGR of 5.3% over the forecast period from 2024 to 2031.

Key Takeaways

Key players operating in the Geothermal Power Market Companies include 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. These players are focusing on partnerships, new projects development and capacity expansions to strengthen their foothold in the market.

Key opportunities in the geothermal power market: Increasing investments in renewable energy sources along with supportive government policies aimed at reducing carbon emissions presents significant growth opportunities for players in the geothermal power market. Additionally, rapid technological advancements enabling geothermal power generation from previously untapped reservoirs also creates new avenues for market expansion.

Global expansion of the geothermal power market: Countries worldwide are recognizing the economic and environmental benefits of geothermal power and actively supporting its development and integration. Nations with high geothermal potential such as Indonesia, Philippines, East African countries, Mexico and Chile are seeing substantial foreign investments and global collaborations driving the large-scale growth of their domestic geothermal power industries.

Market drivers

The rising demand for clean and renewable energy sources is a key driver propelling the Geothermal Power Market Growth. With the pressing need to reduce dependence on fossil fuels and curb environmental pollution, many countries are progressively adding geothermal energy to their energy mix. Geothermal power presents a reliable base-load renewable option that perfectly complements intermittent power sources like solar and wind. Additionally, supportive government policies and incentives encouraging renewable capacity additions along with improving project economics are also boosting the adoption of geothermal power worldwide.

PEST Analysis

Political: Governments across various countries are supporting the development of clean and renewable energy sources to reduce dependency on fossil fuels and mitigate climate change. Many governments provide subsidies and tax incentives to geothermal power projects.

Economic: Geothermal power generation is a cost-effective source of baseload renewable power. Compared to other renewable sources, geothermal power has low generation costs due to continuous power output. However, high initial development costs are a challenge.

Social: Geothermal power has high public acceptance levels as it is a clean source of energy with minimal environmental and social impacts. However, concerns about induced seismicity associated with some enhanced geothermal systems (EGS) projects exist.

Technological: Technologies for identifying suitable geothermal reservoir sites and extracting geothermal resources continue to improve. Binary cycle power plants and enhanced geothermal systems (EGS) now allow geothermal energy to be harnessed from more sites worldwide compared to conventional hydrothermal resources alone.

Regions of concentration

The market is concentrated in regions with high geothermal potential such as the western United States, Central and South America, East Africa, and Southeast Asia and the Pacific. Countries like the US, Indonesia, the Philippines, New Zealand, Mexico, and Iceland collectively account for over 65% of the global geothermal power capacity.

Fastest growing region

Central and Eastern Europe is projected to be the fastest growing regional market during the forecast period. Countries like Turkey, Romania, Hungary, and Serbia are increasingly adopting geothermal energy backed by supportive regulatory frameworks and renewable energy targets. Significant untapped geothermal resources and growing energy demands in the region are driving the market.

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