Global geothermal investment is set to grow20% a year to 2030 - Asian Business Review
Published December 05, 2025
Global Geothermal Investment Projected to Increase by 20% Annually Until 2030
The global geothermal energy sector is poised for significant growth, with investments expected to surge by 20% each year through 2030. This forecast highlights the increasing recognition of geothermal energy as a reliable and sustainable source of power. The shift towards renewable energy sources is being driven by the urgent need to combat climate change and reduce greenhouse gas emissions.
According to a recent report from the International Renewable Energy Agency (IRENA), the geothermal energy market is gaining momentum due to its ability to provide baseload power, which is crucial for maintaining grid stability. As countries strive to meet their energy demands while transitioning to cleaner alternatives, geothermal energy presents a viable solution that complements other renewable sources such as wind and solar.
Investment Trends in Geothermal Energy
The geothermal sector has seen a steady increase in investment over the past few years, with the global market valued at approximately $4 billion in 2020. This figure is expected to rise dramatically as more countries recognize the benefits of geothermal energy. The projected annual growth rate of 20% indicates that the market could reach an estimated value of $10 billion by 2030.
Several factors are contributing to this growth. Technological advancements in drilling and exploration techniques have significantly reduced costs and increased the efficiency of geothermal projects. Additionally, government policies and incentives aimed at promoting renewable energy are further encouraging investment in geothermal technologies.
Regional Insights
Geothermal energy investments are not uniform across the globe. Regions such as North America, Europe, and Asia-Pacific are leading the way in geothermal development. The United States remains the largest producer of geothermal energy, with California being the state with the highest installed capacity. The country is home to several large-scale geothermal power plants, and ongoing research and development efforts continue to enhance the technology.
In Europe, countries like Iceland and Italy have been pioneers in utilizing geothermal resources. Iceland, in particular, has harnessed its geothermal potential to provide a significant portion of its electricity and heating needs. The European Union is also actively promoting geothermal energy as part of its broader renewable energy strategy.
Meanwhile, the Asia-Pacific region is emerging as a key player in the geothermal market. Indonesia and the Philippines are among the top countries investing in geothermal energy, with substantial untapped resources available. Both nations are implementing policies to accelerate geothermal development, recognizing its potential to provide clean energy and stimulate economic growth.
Challenges Facing the Geothermal Sector
Despite the promising outlook for geothermal energy, several challenges remain. One of the primary obstacles is the high upfront costs associated with exploration and drilling. Geothermal projects require significant investment in infrastructure and technology, which can deter potential investors. Additionally, the risks associated with resource exploration can lead to uncertainties in project viability.
Another challenge is the need for skilled labor and expertise in geothermal technology. As the sector grows, there is an increasing demand for professionals with specialized knowledge in geothermal systems. Addressing this skills gap will be essential to support the industry's expansion and ensure successful project implementation.
Future Outlook
The future of geothermal energy looks promising, with an increasing number of countries recognizing its potential as a sustainable energy source. As global energy demands rise and the urgency to address climate change intensifies, geothermal energy is likely to play a crucial role in the transition to a low-carbon economy.
Governments and private investors are expected to continue channeling resources into geothermal projects, driven by the need for reliable and renewable energy solutions. Collaborative efforts between the public and private sectors will be vital in overcoming the challenges facing the industry and unlocking the full potential of geothermal energy.
In conclusion, the global geothermal investment landscape is set for robust growth, with an anticipated annual increase of 20% leading up to 2030. As technological advancements and supportive policies pave the way for development, geothermal energy is poised to become a cornerstone of the renewable energy sector, contributing to a more sustainable and resilient energy future.
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