The Geothermal Power Market is estimated to be valued at US$ 5.78 Bn in 2023 and is expected to exhibit a CAGR of 5.3% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.
Market Overview:
Geothermal power is a renewable and sustainable source of energy that leverages hot water or steam found below the Earth's surface to generate electricity with near-zero emissions. Geothermal power plants extract this thermal energy and use it to drive steam turbines that produce electricity. The market is driven by the increasing demand for clean and renewable energy sources to curb rising greenhouse gas emissions from conventional power sources.
Market key trends:
One of the key trends driving growth in the Geothermal Power Market Size is rising investment in geothermal exploration activities. Geothermal resources are location-specific and require extensive surface and subsurface exploration to locate suitable reservoirs for power generation. Companies are investing heavily in new exploration technologies such as seismic surveys, resistivity testing, borehole testing, and reservoir modeling to discover additional geothermal fields. For example, in 2022, Ormat Technologies invested over $90 million in geothermal exploration and drilling to expand its portfolio of development projects in the U.S. and other countries. Such rising exploration expenditures are expected to unlock new opportunities in under-explored regions, thereby supporting market growth over the forecast period.
Porter's Analysis
The threat of new entrants in the geothermal power market is moderate. Due to high upfront capital requirements for resource exploration, drilling wells and power plant construction, substantial entry barriers exist. Bargaining power of buyers is moderate as geothermal power suppliers have control over resource-rich locations and production facilities. Bargaining power of suppliers is high due to the natural monopoly of resource-rich land locations and equipment suppliers. The threat of new substitutes is moderate with advancements in renewable technologies like solar and wind. Competitive rivalry is intense among existing players to increase market share.
SWOT Analysis
Strengths: Abundant renewable resource availability and base load power generation capabilities. Low operations & maintenance costs with a plant lifetime of around 60 years.
Weaknesses: High upfront capital costs for exploration & resource verification. Location constraints due to geothermal resource availability.
Opportunities: Rising global energy demand and shift towards clean energy sources presents market opportunities. Government policies and incentives supporting renewable energy adoption can boost growth.
Threats: Dependency on resource-rich land availability. Difficult permitting & licensing procedures for new projects pose threats.
Key Takeaways
The global geothermal power market is expected to witness high growth, exhibiting CAGR of 5.3% over the forecast period, due to increasing focus on renewable energy adoption. The favorable government policies supporting renewable power generation and carbon emission reduction targets drive the market.
Regionally, North America dominated the geothermal power market share in 2023 due to presence of abundant geothermal resources in the United States. The Asia Pacific region is expected to grow at the fastest rate due to increasing energy demand in densely populated countries like China and India.
Key players operating in the geothermal power market are 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. The major players are focusing on technological advancements to reduce drilling costs and efficient resource utilization.
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