Global Geothermal Power Market – A Global Phenomena
The Global Geothermal Power Market is expected to grow at a compound annual growth rate of 2.81 % over the forecasted period to reach a market size of US$1.740 billion in 2027 from US$1.434 billion in 2020. Geothermal power is a renewable power generation source that has proven to be stable and independent. It generates power by using the warmth and strength of the earth’s magma. Geothermal power plants are operated to rotate turbines by the utilization of steam, produced from hot water found below the surface of the earth. This ultimately helps in operating the generator which then works to produce electricity. As of now, there are three types of geothermal power plants that are operated, namely, flash steam, dry steam and binary cycles. This type of energy is less spread out when compared to other renewable sources owing to the fact that not all regions hold large pockets of heat trapped in their subsoil. However, even though this factor poses as a constraint, it does not hamper the development when it comes to the potential of geothermal energy. According to the statistics reported by the IRENA report (International Renewables Energy Agency)in 2020, the contribution of geothermal energy to the renewable capacity worldwide amounts to about 13 GW.
Factors like government regulations, increasing investments in related projected and the volatile prices and limited availability of fossil fuels have increased the demand for geothermal energy, which is expected to drive growth in the market. However the high investment associated with setup of geothermal power plants and the negative impact of that it has on the environment are expected to restrain the growth of the geothermal power market. The presence of other clean renewable energy alternates, like solar energy, is also expected to pose as an obstacle in the use of geothermal power to generate electricity.
Inclining Investments in Geothermal Energy to Drive Market Growth on a Global Scale
The increasing investments in geothermal energy projects across the globe is attributed to drive the growth of the market during the analysed period. In March 2020, Breakthrough Energy Ventures, an investment firm, made the announcement that it would invest $12.5 million in Baseload Capital, a company that deals in geothermal project development. It is a project investment firm that caters to the development of geothermal power plants by providing capital for the same, with the use of technology that is developed by Climeon, its Swedish parent company. The geothermal company EnergiMiinas, based out of Philippines has been planning to set up two geothermal power plants in Peru by the year 2026 or 2027 with an investment accounting for US$1 billion in each of the project. Further, Thrive Renewables has also lately announced its plans to invest an amount of about £6.5 million in the first geothermal power plant in the UK. With this, it aims to supply about 3 MW of electricity to the National Grid and approximately 12 MW of electricity for local use. Hence, are these factors point towards a brighter future for the geothermal market.
Constant Efforts by Government And Organisations to Promote Renewable Energy to Augment Market Growth
Constant efforts by governments of various countries and global organizations is expected to reduce the dependency on oil regarding domestic energy use. Several initiatives and plans are being implemented to promote the usage of as many renewable energy resources as possible as an alternative to other energy sources. Following the 2015 COP21 (Conference of Parties) conference held in Paris, the United Nations successfully established the Global Geothermal Alliance which aimed at fast tracking of this renewable resource in order to support the energy transition process. Additionally, the Indonesian government has formulated a National Energy Policy, which includes guidelines for the conservation, intensification and the diversification of energy. Thus, all these policies are collectively predicted to drive growth in the global geothermal power market by catalysing the demand for this energy.
North America to Hold a Substantial Share in This Market
North America is expected to hold a significant share in the global geothermal power market in the analysed period due to the rising inclination towards geothermal energy sources in countries like US and Mexico. The US emerged as a global leader in geothermal energy back in 2018, with an installed capacity exceeding 3,500 MW. The country is also home to one the world’s largest geothermal complex geysers, which encapsulate over 20 geothermal plants at its base in California. Mexico was also observed to have a significant geothermal power capacity which is majorly driven by the Cerro Prieto Geothermal Power Station complex, packing a capacity of about 820 MW.
Asia Pacific Region to Witness Promising Growth in the Forecasted Period
The geothermal power market of the Asia Pacific region is expected to witness a substantial growth during the forecast period due to the large-scale production of geothermal energy in countries like the Philippines, Japan and Indonesia. Government initiatives and policies supporting the use of renewable energy sources is predicted to increase the share of geothermal energy in the total renewable energy mix, which is attributed to drive the growth of the geothermal power market in the region. In the Philippines, the development and implementation of geothermal power has been constantly promoted to attain energy security while also boosting the share of renewable energies in the total power mix. Lately, the government of the country has also announced plans to advance a policy recasting, through the Department of Energy. This would allow 100% foreign ownership in renewable energy-associated projects with a focus on geothermal energy to attract foreign investments. In China, a lucrative opportunity for the geothermal energy sector is shown to be created owing to the imposition of even more strict emission rules on power plants that are coal-fired. This is in turn expected to augment the market growth of geothermal energy in the region.
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