Concerns over rising carbon emission levels and a shift to clean and sustainable energy sources will shape the future of geothermal energy market. As a clean, reliable, consistent, and carbon-free energy source, geothermal energy is one of the preferred renewable sources gaining widespread recognition across the globe. Derived from hot water and/or steam generated at the sub-surface of the earth, this heat energy can be utilized for power generation or in heating/cooling applications.
Traditionally, geothermal energy is used with district heating systems to heat building spaces in colder regions like Iceland. This energy harnessed from hot reservoirs is completely renewable while its power output can easily be calculated given to lack of fluctuation as seen with solar and wind energy. However, for effective electricity generation, the geothermal site is expected to have high or medium temperature resources, which are usually sited close to tectonically active regions. Apart from this, harnessing geothermal energy can also pose certain environmental impacts like release of certain gases that are stored under the Earth’s surface during digging. However, these emissions are far too less compared to those associated with fossil fuels.
The market for geothermal energy holds lucrative prospects, with ongoing research and development activities expected to streamline the cost of setting up geothermal plants. Estimates indicate that geothermal power plants could generate between 0.0035 and 2 terawatts of power. With new technologies being developed to improve energy generation, the geothermal energy industry will gain noteworthy traction favored by large number of exploration activities worldwide. Take for instance, in 2021, India’s Oil and Natural Gas Corporation (ONGC) announced implementation of the country’s maiden geothermal field development project in Ladakh that will utilize heat harnessed from geothermal sources to generate clean energy.
A report published by Global Market Insights, Inc., projects that global geothermal energy market is estimated to be valued at $50.04 billion by 2027. Installation of geothermal plants is expected to be huge across regions that witness irregular solar and wind patterns. Countries across North America and Asia are taking benefit from geothermal energy to meet their electricity demand. According to Energy Information Administration (EIA) report, the US is one of the largest generators of geothermal electricity. In 2020, geothermal power plants in seven US states produced about 17 billion kilowatthours (kWh) of electricity, accounting for 0.4% of total U.S. utility-scale power generation.
In industrial applications, geothermal energy is utilized in food dehydration (drying), milk pasteurizing and gold mining. Demand for geothermal heat pumps (GHPs) is also gaining momentum as they consume 25%–50% less electricity in comparison to conventional heating and cooling systems. This reduction in energy consumption can result in 44% decrease in greenhouse gas emissions in contrast to air-source heat pumps.
However, electricity generation from geothermal energy sources also come with certain challenges like high drilling costs, exploration risk, permit issues and low public awareness. These factors could impact the expansion of geothermal energy industry outlook.
Is geothermal energy available worldwide?
Geothermal energy is currently been harnessed by over twenty five countries across the globe. It is helping nations like El Salvador, Iceland, Kenya, New Zealand, and Philippines to meet their heating and electricity requirements. As per a report, Iceland is satisfying more than 90% of its household heating demand using geothermal energy. The country has long been working with the UNEP (United Nations Environment Program) to spark a similar interest on energy use in Eastern Africa by financing exploration projects and training future geothermal engineers.
It is estimated that Eastern Africa could become a major revenue pocket for geothermal energy firms. The region holds a potential to generate around 20 gigawatts of electricity from geothermal energy. That is significant as 25% to 89% of the East Africa’s population was reported to lack access to electricity in the year 2018. Geothermal power plants are one of the ideal options for energy generation across such territories as they can supply baseload electricity and are not depended on weather conditions that mostly impact the performance of solar and wind energy generation systems.
Which countries produces the most geothermal energy?
The EIA report mentions that in the year 2018, around 27 countries across the globe, including the US, generated a total of 83 billion kWh of power from geothermal energy. The U.S. reportedly topped the charts in terms of geothermal energy generation followed by Indonesia which generated nearly 14 billion kWh of electricity, equaling to about 5% of its electricity generation capacity. Meanwhile, Kenya is emerging as a promising market for geothermal electricity produced.
New investments to set up geothermal power plants in the region could reinforce the regional market outlook in the ensuing years. In 2021, Kenya’s Geothermal Development Company (GDC ) received a $5 million grant to increase work on geothermal exploration in Eastern Africa. With an overall potential of around 3,000 MW, GDC aims at developing up to 300 MW in capacity at the geothermal fields of Korosi, Paka, and Silali by 2030.
Geothermal power plants are currently being operated in numerous countries worldwide. With ongoing technological development and spreading awareness, an additional 50 countries could shift their focus towards harnessing the potential of geothermal power generation in their energy mix. While key markets in North America, Africa and Asia will help boost global geothermal energy generation capacity across the next 15-20 years.