Geothermal Energy Market Size, Share Global Analysis Report, 2024 – 2032

Industry Insights

[229+ Pages Report] According to Facts & Factors, the global geothermal energy market size was valued at USD 7.63 billion in 2023 and is predicted to surpass USD 13.68 billion by the end of 2032. The geothermal energy industry is expected to grow by a CAGR of 6.70% between 2024 and 2032.

Market Overview

Geothermal energy refers to the heat coming from the earth's core. It is a renewal energy which is more sustainable in nature. Geothermal energy is used for a wide range of applications like direct heating, electricity generation, and cooling. Different geothermal resources include hydrothermal, hot & dry rocks, and many others. It helps in generating electricity via three main types of geothermal plants, namely binary cycle plants, flash steam plants, and dry steam plants. It is also used for geothermal heat pumps and direct-use applications.

Key Insights

• As per the analysis shared by our research analyst, the global geothermal energy market size is estimated to grow annually at a CAGR of around 6.70% over the forecast period (2024-2032).
• In terms of revenue, the global geothermal energy market size was valued at around USD 7.63 billion in 2023 and is projected to reach USD 13.68 billion by 2032.
• Expanding applications of geothermal energy are driving the growth of the global geothermal energy market.          
• Based on the applications, the commercial heating and cooling segment is growing at a high rate and is projected to dominate the global market.
• Based on the temperature, the low-temperature segment is projected to swipe the largest market share.
• Based on technology, the binary cycle plants segment is expected to dominate the global market.
• Based on region, North America is expected to dominate the global market during the forecast period.

Growth Drivers

• Expanding applications of geothermal energy are driving the growth of the global market.

Geothermal energy is widely used for diverse applications like industrial processes, greenhouse heating, district heating, and many others. However, its scope of utilization is far more than utility power generation. Geothermal heat pumps are also used for residential and commercial heating and cooling purposes as they work at low operational cost with high efficiency.

Developments in Enhanced Geothermal System (EGS) technology are further expected to widen the scope of the global geothermal energy market. Advancements in drilling technology are also likely to lower the cost of geothermal exploration and development activities. Supportive government rules and regulations are anticipated to promote the growth of geothermal energy in the market.

For instance, Calpine Corporation and Sacramento Municipal Utility District entered into an agreement to buy electricity from a 100MW section of California Geysers field. The agreement is a 10-year plan that came into action from January 2023.

Restraints

• High initial cost is expected to hamper the growth of the global market.

The cost of setting up a geothermal plant is very high. Such high investment is a barrier for many companies. Also, finding financing options that could lend such a huge amount for geothermal projects is very difficult. Therefore, all these factors are expected to hamper the growth of the geothermal energy industry in the coming years.

Opportunities

• Rising demand for renewable energy is expected to foster growth opportunities in the global market.

The rising energy needs because of the growing global population is driving the demand for sustainable and renewable energy sources like geothermal energy. Moreover, many organizations are also focusing on lowering their overall greenhouse emissions to mitigate climate change issues. Geothermal energy has a low carbon footprint and, therefore, is much in demand in the market.

Also, geothermal energy is expected to help countries lower their dependence on fossil fuels, which in turn is also expected to foster energy independence among the end users. Moreover, increasing awareness among people regarding the benefits of renewable energy and growing climate change issues is further expected to foster the adoption of cleaner energy sources like geothermal.

All these factors are contributing to the growth of the global geothermal energy market. For instance, Peninsula Clean Energy and Ormat Technologies got the 15-year Power Purchase Agreement in 2022. However, as a result, San Mateo and Los Banos will receive 3,500 gigawatt hours of electricity with this project.

Challenges

• Geological limitations are a big challenge in the global market.

Geothermal resources are located in different geolocations like tectonic plates or volcanic regions. Therefore, it limits the availability of ideal sites for geothermal project development. Moreover, installing geothermal projects in such locations is quite difficult in terms of infrastructure and resources, which in turn is further expected to slow down the growth of the industry.

Additionally, complex regulations regarding the approval of geothermal projects can also lead to delays and added costs. Therefore, such a landscape is a big challenge in the geothermal energy industry.

Segmentation Analysis

The global geothermal energy market can be segmented into applications, temperature, technology, and region.

On the basis of application, the market can be segmented into commercial heating and cooling, residential heating and cooling, and power generation. Commercial heating and cooling segment accounts for the largest share of the geothermal energy industry during the period. The commercial heating and cooling segment finds a wide range of applications in schools, hotels, shopping centers, and offices.

The growth of the segment is driven by the sustainability and efficiency of these geothermal systems as compared to traditional heating and cooling techniques. The system aligns well with the environmental regulations and sustainability goals, which further fosters growth in the segment. These systems have a lower carbon footprint and are also ideal for green building standards.

The government is offering incentives and rebates for the installation of renewable energy systems like geothermal heating and cooling. The systems are highly efficient and have lower energy consumption, thereby resulting in lower operational costs for commercial buildings. Therefore, all these factors are expected to foster growth opportunities in the segment.

On the basis of temperature, the market can be segmented into high-temperature, medium-temperature, and low-temperature. Low-temperature segment is likely to swipe the largest market share in the coming years. Low-temperature geothermal is gaining attraction among end users because of its high versatility and cost-effectiveness.

They are ideal for a large range of applications like industrial processes, greenhouse heating, and district heating. The systems are widely used in applications where there is a need to offer heating and cooling solutions for commercial and residential buildings. They are an energy efficient system and need less investment which further makes it an attractive option.

Also, there is a rising demand for sustainable heating solutions in both commercial and residential sectors as an alternative to conventional heating methods which is also expected to positively impact the growth of the segment. Growing government initiatives like subsidies and other financial incentives for the adoption of renewal technologies like low-temperature thermal systems are also expected to foster growth opportunities in the segment.

On the basis of technology, the market can be segmented into direct system ground, ground source heat pumps, dry steam plants, binary cycle plants, and others. Binary cycle plants are the fastest-growing segment in the geothermal energy industry. Binary cycle plants are geothermal power plants that work on low temperature resources to produce power. Also, they function by passing the heat to the secondary fluid that further evaporates in a dry turbine connected to a generator.

One of the major advantages of binary cycle plants is that they can operate on lower-temperature resources. They can efficiently operate with geothermal resources that seem to be very cold or dry for traditional steam plants. Also, the improvements in binary cycle technology, like the development of secondary fluids and many others, are expected to revolutionize the market. These advancements are making these binary cycle plants more efficient.

Moreover, these plants are quite environmentally friendly and thereby offer less impact on the environment. These have lower emission levels because they utilize a closed loop system. These are more attractive than high-temperature geothermal plants because of their ability to use lower-temperature resources at lower operational costs.

Report Scope

Regional Analysis

• North America to dominate the global market.

North America will account for the largest share of the global geothermal energy market during the forecast period. The US is the leading market in the region because of the substantial geothermal resources in Utah, Oregon, Nevada, and California. Moreover, the federal government in the region is also offering financial incentives to promote geothermal energy projects. The region has a mix of different geothermal power plants which is also expected to foster growth opportunities in the region.

Canada is also another leading country with high potential geothermal resources, particularly in Alberta, Yukon, and British Columbia. The Canadian government is also working in favor of renewable energy development, which in turn is also expected to promote geothermal energy in the region. Companies in the region are investing heavily in research and development activities that focus on exploring the country's potential for geothermal resources and projects.

North America is expected to see growth in the coming years because of the presence of major giant companies working on geothermal energy projects, from exploration to development. Technological advancements in North America are another major factor expected to expand the region's potential in geothermal energy.

Asia Pacific is another largest growing market because of its location alongside the Pacific Ring of Fire. Its geographical position is a strong foundation factor in the industry. Indonesia is the largest contributor of geothermal resources in the world which in turn is expected to revolutionize the market in APAC.

The ongoing investments in Indonesia for geothermal energy projects are expected to positively impact the growth of the market. The Philippines is also the largest producer of geothermal energy in APAC. Governments in the region are coming up with more favorable government initiatives to support geothermal energy projects. Japan is also exploring ways to increase its geothermal capacity which in turn is expected to foster growth opportunities in APAC.

Additionally, Australia also has great geothermal potential because of its geographical location. The government is funding renewable energy projects in the region that also include geothermal energy projects. All these factors are expected to contribute immensely towards the growth of the regional market in the coming years. For instance, EXERGY constructed a Mindanao-3 binary power plant in 2022 in the Philippines. However, the team completed the entire construction work within one year.

Competitive Analysis

The key players in the global geothermal energy market include:

• Ormat Technologies
• Ansaldo Energia
• General Electric
• Mitsubishi Heavy Industries
• Toshiba Corporation
• Exergy
• Atlas Copco Group
• TAS Energy
• Alterra Power Corporation
• Turboden S.p.A.

For instance, Green Era successfully acquired Start Energy in 2022 for a 33.3% stake with USD 440 million in cash. Start Energy owns a major stake in the geothermal assets of Indonesia. After the acquisition, the company is expected to grow profitably in the coming years.

The global geothermal energy market is segmented as follows:

By Applications Segment Analysis

• Commercial Heating And Cooling
• Residential Heating And Cooling
• Power Generation

By Temperature Segment Analysis

• High-Temperature
• Medium-Temperature
• Low-Temperature

By Technology Segment Analysis

• Direct System Ground
• Ground Source Heat Pumps
• Dry Steam Plants
• Binary Cycle Plants
• Others

By Regional Segment Analysis

• North America
  • The U.S.
  • Canada
  • Mexico
• Europe
  • France
  • The UK
  • Spain
  • Germany
  • Italy
  • Rest of Europe
• Asia Pacific
  • China
  • Japan
  • India
  • Australia
  • Southeast Asia
  • Rest of Asia Pacific
• The Middle East & Africa
  • Saudi Arabia
  • UAE
  • Egypt
  • Kuwait
  • South Africa
  • Rest of the Middle East & Africa
• Latin America
  • Brazil
  • Argentina
  • Rest of Latin America