Regionally, the global geothermal energy market is segmented into five major regions including North America, Europe, Asia Pacific, Latin America and Middle East & Africa region. The market in Europe region is estimated to witness highest CAGR over the forecast period on the back of presence of various geothermal reservoirs in the countries, such as, Iceland, Italy and Turkey, among others. Moreover, government initiatives to promote the use of geothermal energy is anticipated to boost the regional market growth.
The market in the North America region is estimated to hold the largest share over the forecast period owing to the presence of large number of geothermal power plants in the United States and Canada, backed by the favorable climatic conditions in the region. According to the report of the U.S. Energy Information Administration (EIA), in 2020, seven states of US have geothermal power plants, generating more than 17 billion kilowatt per hours (kWh) energy, which amounted to 0.4% of the total U.S. utility-scale electricity generation.
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The global geothermal energy market is further classified on the basis of region as follows:
In 2018, the world’s total energy supply was 14282 Mtoe, wherein the highest share in terms of source was captured by oil, accounting for 31.6%, followed by coal (26.9%), natural gas (22.8%), biofuels and waste (9.3%), nuclear (4.9%), hydro (2.5%), and other (2.0%). Where there was an increase in energy demand in 2018, the year 2019 witnessed slow growth as the energy efficiency improved owing to decline in the demand for cooling and heating. However, in 2020, the electricity demand decreased by 2.5% in the first quarter of 2020 due to the outbreak of Coronavirus resulting in government imposed shutdowns in order to limit the spread of the virus, which was further followed by shutdown of numerous business operations impacting their growth. This also resulted in decline of 5.8% in the worldwide CO2 emissions which was recorded to be five times larger than the one recorded during the global financial crisis in 2009. However, in 2021, the demand for oil, gas and coal is estimated to witness growth, which is further projected to create opportunities for market growth. Moreover, rising environment degradation and awareness related to climate change is motivating many key players to employ sustainable energy strategies and invest significantly in environment-friendly power generation technologies with an aim to promote sustainable development among various nations around the world. Such factors are anticipated to promote the growth of the market in upcoming years.
Our in-depth analysis of the global geothermal energy market includes the following segments:
By Plant Type
By End User
May 2021: Ormat Technologies Inc. announced a 15-year power purchase agreement for geothermal power with Clean Power Alliance, the fifth largest power provider in California.
In 2023, market players might incur losses due to huge gap in currency translation followed by contracting revenues, shrinking profit margins & cost pressure on logistics and supply chain.
Controlling Inflation has become the first priority for global economies from last quarter of 2022 and to be followed in 2023. With skewed economic situations, rise in interest rate by governments to control spending and inflation, spiked oil and gas prices, high inflation, geo-political issues including U.S. & China trade war, Russia-Ukraine conflict to intensify the global economic issues.
The interest rates in the U.S. may be less sensitive in 2023 as compared to 2022; sigh of relief for businesses. Positive business sentiments, healthy business balance sheets, growth in construction spending (private construction value in 2022 stood at $1,429.2 billion, 11.7 percent (±1.0 percent) above the $1,279.5 billion spent in 2021, Residential construction in 2022 was $899.1 billion, up by 13.3 percent (±2.1 percent) from $793.7 billion in 2021, non-residential construction touched $530.1 billion, 9.1 percent (±1.0 percent) above the $485.8 billion in 2021.) showcases minimal impact of recession in the country.
Similarly, spiked spending in the European and major Asia economics including, India, China & Japan to showcase less impact on the global demand.
Author Credits: Payel Roy, Dhruv Bhatia
Ans: Rising demand for renewable energy and stable nature of geothermal sources are the key factors driving market growth.
Ans: The market is anticipated to attain a ~4% CAGR over the forecast period, i.e., 2022-2030.
Ans: High capital investment is the major challenge that is estimated to hamper the market growth.
Ans: The market in the North America region will provide ample growth opportunities owing to the increasing number of geothermal powerplants and favorable landscape in the region.
Ans: The major players dominating the geothermal energy market are Siemens AG, GE group, KEPCO Group, ABB Ltd, Mitsubishi Power, Ltd., Engie SA, First Gen Corporation, and others.
Ans: The company profiles are selected on the basis of revenues generated from the product segment, geographical presence of the company which determine the revenue generating capacity as well as the new products being launched into the market by the company.
Ans: The market is segmented by plant type, end-user, and by region.
Ans: The binary cycle power plants segment is anticipated to hold the largest market share owing to its feature of operating even in a low-temperature reservoir.