The global geothermal power market is estimated to be valued at US$5.49 billion in 2022 and is expected to exhibit a CAGR of 5.3% over the forecast period 2023-2030, as highlighted in a new report published by Coherent Market Insights.
Geothermal power is a renewable energy source that harnesses heat from the Earth’s core to generate electricity. This clean and sustainable energy solution has gained significant traction due to its environmental benefits and the increasing global focus on reducing carbon emissions. Geothermal power offers advantages such as low greenhouse gas emissions, operating flexibility, and continuous power generation. The growing need to transition towards greener alternatives and reduce dependence on fossil fuels is driving the demand for geothermal power.
Market Key Trends:
One key trend in the geothermal power market is the increasing adoption of enhanced geothermal systems (EGS). EGS involves creating artificial reservoirs by fracturing rocks and injecting water to access and utilize geothermal resources at greater depths. This technology enables the exploitation of geothermal energy in areas that were previously considered uneconomical. The adoption of EGS is expected to expand the geothermal power market’s reach and capacity, opening up new opportunities for industry growth.
Threat of New Entrants: The geothermal power market is characterized by high entry barriers due to the significant upfront investment required for geothermal power plant construction and the need for specialized technical expertise. The scale and complexity of geothermal projects also act as deterrents for new entrants, making it difficult for them to compete with established players. Hence, the threat of new entrants is relatively low.
Bargaining Power of Buyers: The bargaining power of buyers in the geothermal power market is moderate. Buyers, including utilities and industries, have limited options when it comes to sources of renewable energy. Geothermal power offers a reliable and consistent source of energy, which makes it less substitutable for buyers. However, buyers with large energy demands may have some leverage to negotiate prices and contract terms.
Bargaining Power of Suppliers: The bargaining power of suppliers in the geothermal power market is low. The key input for geothermal power generation is underground heat, which is a natural resource and not subject to supplier constraints. Moreover, the number of suppliers in the market is limited, and they rely on utilities and developers to buy their energy. This limits their bargaining power and ensures a relatively stable supply chain.
Threat of New Substitutes: The threat of new substitutes for geothermal power is relatively low. Geothermal power is a clean and renewable source of energy, which makes it highly desirable in the transition towards sustainable energy systems. While there are alternative renewable energy sources such as solar and wind power, geothermal power offers unique advantages, including its availability as a baseload power source and its minimal environmental impact.
Competitive Rivalry: The geothermal power market is characterized by intense competitive rivalry. The market is dominated by a few major players who have established their capabilities in geothermal project development and operation. These key players, such as ABB, EDF, Enel SPA, and General Electric, have a strong market presence and significant experience in the industry. However, the market is also witnessing the entry of new players, increasing competition and driving innovation.
The global geothermal power market is expected to witness high growth, exhibiting a CAGR of 5.3% over the forecast period of 2023-2030, due to the increasing focus on sustainable energy solutions and the growing demand for renewable energy sources. Geothermal power offers a reliable and constant source of energy, which is essential for meeting the rising energy demands of various sectors, including residential, commercial, and industrial.
In terms of regional analysis, Asia Pacific is expected to be the fastest-growing and dominating region in the geothermal power market. The region is witnessing rapid economic growth, increasing urbanization, and a shift towards clean and sustainable energy systems. Countries like Indonesia, the Philippines, and Japan have significant geothermal resources and are investing in the development of geothermal power projects.
Key players operating in the geothermal power market include ABB, EDF, Enel SPA, General Electric, The Tata Power Company Limited, Mitsubishi Hitachi Power Systems Inc., Toshiba Corporation, Korea Electric Power Corporation, Siemens AG, and Yokogawa Electric Corporation. These companies have established their market position and are actively involved in geothermal project development and operation. Their expertise, experience, and technological advancements contribute to the growth and competitiveness of the geothermal power market.
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it