Global geothermal investment is set to grow 20% a year to 2030 - Asian Business Review
Published January 05, 2026
Global Geothermal Investment Expected to Increase by 20% Annually Until 2030
Investment in the geothermal energy sector is projected to experience significant growth, with an expected annual increase of 20% leading up to 2030. This expansion is anticipated to be driven by a combination of technological advancements, increasing energy demands, and a global shift towards sustainable energy sources.
According to a recent report, the global geothermal market is estimated to reach approximately $9.57 billion by 2030, up from an estimated $3.57 billion in 2020. This growth trajectory highlights the increasing recognition of geothermal energy as a viable and sustainable alternative to fossil fuels.
The report outlines several factors contributing to this projected growth in geothermal investment. Firstly, advancements in drilling technologies and enhanced geothermal systems (EGS) have made it possible to tap into previously inaccessible geothermal resources. These innovations have significantly reduced the cost of geothermal energy production, making it more competitive with other renewable energy sources.
Furthermore, as nations strive to meet their climate goals and reduce greenhouse gas emissions, geothermal energy is gaining traction as a reliable and consistent energy source. Unlike solar and wind energy, which are dependent on weather conditions, geothermal energy provides a stable and continuous supply of power, making it an attractive option for energy security.
In addition to its reliability, geothermal energy has a relatively low environmental impact compared to traditional fossil fuel sources. The carbon footprint of geothermal energy production is significantly lower, which aligns with global efforts to combat climate change. As governments and corporations increasingly prioritize sustainability, the demand for clean energy solutions like geothermal is expected to rise.
Regional Developments in Geothermal Energy
Geothermal energy development is not uniform across the globe; certain regions are emerging as leaders in this sector. The United States remains the largest producer of geothermal energy, accounting for nearly 40% of the world's total geothermal electricity generation. California, in particular, is home to the largest geothermal power plant in the world, The Geysers, which has a total installed capacity of approximately 1,500 megawatts.
In addition to the United States, countries such as Indonesia and the Philippines are making significant strides in geothermal energy production. Indonesia is home to the largest geothermal reserves in the world and is actively working to expand its capacity. The government aims to increase geothermal energy production to 7,200 megawatts by 2025, up from the current capacity of around 2,000 megawatts.
The Philippines, on the other hand, ranks third globally in geothermal energy production, with an installed capacity of approximately 1,900 megawatts. The country has set ambitious targets to further develop its geothermal resources, aiming for a total capacity of 3,000 megawatts by 2030.
In Europe, countries like Iceland and Italy are also notable players in the geothermal market. Iceland generates approximately 90% of its electricity from renewable sources, with geothermal energy accounting for a substantial portion. Italy, the first country to generate electricity from geothermal energy in the early 20th century, continues to be a leader in geothermal technology and innovation.
Challenges Facing the Geothermal Sector
Despite the promising growth prospects, the geothermal energy sector faces several challenges that could impact its development. One of the primary obstacles is the high upfront costs associated with geothermal power plants. The exploration and drilling phases can be expensive and risky, often requiring significant investment before any energy production begins.
Additionally, regulatory hurdles and permitting processes can delay project development and increase costs. In some regions, the lack of supportive policies and incentives for geothermal energy can hinder investment and slow down the growth of the sector.
Another challenge is the geographical limitations of geothermal resources. While geothermal energy has the potential to provide a consistent power supply, it is not available in all locations. Regions with significant geothermal potential, such as those near tectonic plate boundaries, are limited, which can restrict the widespread adoption of this energy source.
Future Outlook and Opportunities
Looking ahead, the future of geothermal energy appears bright, with numerous opportunities for growth and innovation. As technology continues to advance, the cost of geothermal energy production is expected to decrease, making it more accessible to a wider range of markets.
Furthermore, the integration of geothermal energy with other renewable sources, such as solar and wind, could enhance its viability and reliability. Hybrid energy systems that combine geothermal with other renewables can provide a more stable energy supply, addressing some of the intermittency issues associated with solar and wind power.
Investment in research and development will also play a crucial role in overcoming existing challenges and unlocking new geothermal resources. Enhanced geothermal systems (EGS) and other innovative technologies have the potential to expand the geographic reach of geothermal energy, allowing for greater utilization in regions previously deemed unsuitable.
In conclusion, the global geothermal investment landscape is poised for significant growth, with a projected annual increase of 20% until 2030. As nations and businesses seek sustainable energy solutions, geothermal energy is expected to play an increasingly important role in the global energy mix. By addressing existing challenges and capitalizing on emerging opportunities, the geothermal sector can contribute to a cleaner, more sustainable future.
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