Philippines is 3rd largest geothermal market globally: Fitch - Asian Power
Published December 14, 2025
Philippines Ranks as the Third Largest Geothermal Market Worldwide: Fitch
The Philippines has been identified as the third largest geothermal energy market globally, according to a recent report by Fitch Solutions. This ranking highlights the country's significant role in the production and utilization of geothermal energy, a renewable resource that is increasingly recognized for its potential in addressing energy needs while minimizing environmental impact.
The report indicates that the Philippines has a geothermal installed capacity of approximately 1,900 megawatts (MW), which positions it behind the United States and Indonesia in the global geothermal landscape. The country's geothermal energy capacity accounts for about 18% of its total installed power generation capacity, showcasing its commitment to harnessing renewable energy sources.
Geothermal Energy in the Philippines
Geothermal energy has been a crucial component of the Philippines' energy mix for several decades. The country’s unique geological features, particularly its location along the Pacific Ring of Fire, provide ideal conditions for geothermal energy development. As a result, the Philippines has been able to tap into this resource effectively, making it a leader in geothermal energy production in Asia.
The country’s geothermal plants are primarily located in regions with volcanic activity, such as Luzon and the Visayas. These facilities not only contribute to the national grid but also support local economies by providing jobs and stimulating growth in surrounding communities.
Future Prospects for Geothermal Energy
Fitch Solutions forecasts that the Philippines will continue to expand its geothermal capacity in the coming years. The report emphasizes that the government’s supportive policies and regulatory framework are essential for attracting investments in this sector. The Philippine government has been proactive in promoting renewable energy through various initiatives, including the Renewable Energy Act of 2008, which aims to increase the share of renewable sources in the energy mix.
According to the Department of Energy (DOE), the Philippines has the potential to increase its geothermal capacity to over 3,000 MW by 2030. This projection is based on ongoing exploration activities and the development of new geothermal projects. The government is encouraging both local and foreign investments to achieve this target, which would further solidify the country’s position as a geothermal powerhouse.
Investment Opportunities and Challenges
Despite the promising outlook for geothermal energy in the Philippines, several challenges remain. Investors face hurdles such as high upfront costs, regulatory complexities, and the need for advanced technology in exploration and drilling. However, the potential returns on investment in the geothermal sector are substantial, given the rising demand for clean energy solutions.
Fitch Solutions notes that the global shift towards renewable energy and the increasing emphasis on sustainability are driving interest in geothermal projects. As countries strive to meet their carbon reduction commitments, geothermal energy presents a viable option due to its low emissions and reliability as a baseload power source.
Global Geothermal Market Overview
Globally, the geothermal energy market is witnessing significant growth. The United States remains the largest producer of geothermal energy, with an installed capacity of approximately 3,700 MW. Indonesia follows closely with around 2,100 MW. The increasing focus on renewable energy sources, coupled with technological advancements, is expected to propel the growth of the geothermal sector worldwide.
Fitch Solutions anticipates that the global geothermal market will expand at a compound annual growth rate (CAGR) of 5.6% from 2021 to 2030. This growth is attributed to the rising awareness of climate change, the need for energy security, and the growing demand for clean energy alternatives.
Conclusion
The Philippines’ recognition as the third largest geothermal market globally underscores its potential to lead in renewable energy production. With continued investment and supportive policies, the country is well-positioned to enhance its geothermal capacity, contributing to both national energy security and global sustainability efforts. As the world moves towards a greener future, the role of geothermal energy in the Philippines will be crucial in meeting the energy demands of the present and future generations.
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