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Geothermal Energy Market Size, Share & Industry Analysis, By Type (Binary Cycle, Flash, and Dry Steam), By Application (Industrial, Commercial, Residential, and Others), and Regional Forecast, 2024-2032

Last Updated: May 27, 2024 | Format: PDF | Report ID: FBI106341



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The global geothermal energy market size was valued at USD 66.24 billion in 2023 and is projected to grow from USD 70.14 billion in 2024 to USD 117.02 billion by 2032, exhibiting a CAGR of 6.61% during the forecast period. The Asia Pacific dominated the geothermal energy market with a share of 37.14% in 2023.

Geothermal energy is green, low-carbon, recyclable, and renewable energy characterized by large reserve, wide distribution, clean, environmental protection, stability, and reliability. This form of energy uses heat below the ground and can be used for various purposes, including generating electricity, heating, and cooling. With technological advancements, the energy is now being captured at a high volume. Increasing the requirement for clean energy for a range of applications, in turn, increases geothermal power generation across the globe.

The global COVID-19 pandemic has been unprecedented and staggering, with geothermal energy market experiencing higher-than anticipated demand across all regions compared to pre-pandemic levels. Despite the pandemic, the renewable energy market across the globe has shown steady year-on-year growth. According to the IEA report, the geothermal capacity increased by 500 MW in 2020. Although the capacity addition growth was lower than the previous year, the market performance was adequate overall.

Geothermal Energy Market Trends

Advances in Drilling and Power Plant Technologies to Drive the Market

Enhanced Geothermal Systems (EGS) technology allows accessing deeper and hotter resources previously unreachable with traditional drilling methods. This expands the potential geothermal footprint and increases energy output. Improved accuracy and control in drilling direction optimizes well placement, maximizing energy extraction and reducing drilling time and costs. New tools, such as downhole sensors and real-time data monitoring, increase drilling efficiency and safety, contributing to cost reduction.

These newer plants are smaller, modular, and more efficient than traditional flash steam plants, making them suitable for a wider range of geothermal resources and reducing upfront costs. High-temperature and corrosion-resistant materials improve plant efficiency and durability, lowering maintenance costs over the project lifespan. Standardizing plant components allows for prefabrication and faster construction, leading to reduced project timelines and costs. Overall, advancements in drilling and power plant technologies are transforming the geothermal energy market by making it more accessible and economically viable. These advancements, coupled with other favorable trends, pave the way for continued market growth and contribute to a cleaner, more sustainable energy future.

Increase in Clean Electricity Generation Across the Globe to Boost the Market

Globally, the demand for clean electricity is increasing at a steady pace. Countries across the globe have already started focusing on increasing clean electricity generation to meet the growing demand. For instance, electricity demand in Mexico is anticipated to grow by 3.5% over the long-run forecast period. The country generated 86.27 Terawatt hours, which is 26.7% of electricity from clean energy in 2021. Increasing demand potential combined with the government's mandate for 35% electricity generated from non-fossil sources by 2024 opens up the requirement for renewable energy sources. The electricity demand in Mexico is expected to grow by over 12% by 2024, meeting the clean electricity generation target.

The U.S. targets maximum renewable electricity output. The primary focus area would be the Geothermal District Heating (GDH). According to the GeoVision report, the U.S. has the potential for 17,500 Geothermal District Heating (GDH) systems to operate by 2050. Currently, 23 GDH systems are in operation across the U.S. Considering the potential of the geothermal sector and growing renewable power requirements, a considerable place is still vacant across the energy sector in the United States.

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Geothermal Energy Market Growth Factors

Shift toward Renewables to Increase Demand for Geothermal Energy

Globally, geothermal power generation is escalating steadily with the growing demand for renewable energy. Several governments are taking green initiatives globally to overcome greenhouse gas emissions. Generating energy with no or few greenhouse gas emissions will reduce air pollution. Geothermal power is reducing the dependency on the energy generated from fossil fuels. Geothermal power plants emit 99% less carbon dioxide than fossil fuels. Since the energy is one of the most reliable sources of energy, which is cost-effective, sustainable, and environment friendly, the market demand for this renewable source of energy will continually be increasing as the world is looking for renewable solutions to a great extent.

Growing Heating Requirement Across Residential and Commercial Sectors Boosting the Demand for Geothermal Energy

The global population is increasing at a steady pace. With an increase in the global population, the construction sector is also booming. Residential and commercial building construction has been growing significantly due to the steady rise in population. Several heat networks have been built across the globe to fulfill the growing residential and commercial heating requirements such as space heating and water heating. Geothermal power is a convenient source for district heating; a huge part of the energy is being used in residential and commercial buildings globally. So with the increasing building construction and growing heating requirements, the demand for geothermal power is also increasing.


Alternative Renewables Options May Hinder the Market in the Long Run

Although geothermal energy is one of the convenient sources for several residential, commercial, and industrial applications, the availability and accessibility are not at par. The energy is restricted to specific locations and limited to certain areas in terms of energy distribution.

Moreover, geothermal power is considered one of the comprehensive sources due to vast monetary requirements from drilling to setting up a plant. A geothermal plant with a one-megawatt capacity will need USD 2 million - USD 7 million. Other renewable energy sources, such as onshore wind, offshore wind power, and solar photovoltaics, still offer lower costs due to the low cost incurred in the production. So, considering the long-term perspective, other renewable sources are expected to hamper the geothermal energy market share.

Geothermal Energy Market Segmentation Analysis

By Type Analysis

Increasing Requirement for Low-cost Energy Fuels the Demand for Binary Cycle

Based on type, the market is categorized into binary cycle, flash, and dry steam. In the global market, the binary cycle segment holds the maximum share owing to lowest cost and best performance benefits compared to other geothermal types. In a binary cycle geothermal power plant, the water is pumped from the geothermal reservoir via a heat exchanger, where it heats isobutene. Steam or water reservoirs under the earth's surface are never directly in contact with turbines in the binary cycle.

Globally, most geothermal areas contain moderate temperatures (below 400°F). The binary cycle power plants are best suited for the extraction of moderate-temperature geothermal. Hence, the binary cycle geothermal plants' overall installed capacity is much more than other geothermal types. In the long-run, the capacity addition from the binary cycle will be steady and continue its dominating position in the geothermal power sector.

Dry steam is the old type of energy production process developed decades ago. This type always has cost advantages compared to binary cycle as it collects and uses steam to run the turbine directly from the reservoir. The U.S. has the highest capacity for dry steam-powered plants. Most of the U.S. geothermal resources near the earth's surface are close to the western part of the country and Hawaii. California generated most electricity from geothermal power across the nation.

By Application Analysis

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Growing Energy Demand across Commercial Applications Driving the Market

Based on application, the market is segmented into residential, commercial, industrial, and others. The commercial segment holds the majority global market share. Increasing heat pump uses for air-conditioning and cooling down inside the environment when needed provide a controlled climate in the commercial sector, including office buildings, hotels, schools, and hospitals, which is the primary reason behind the geothermal power demand in the commercial sector. Moreover, this type of energy is utilized for heating and cooling purposes in homes. Apart from this, district heating is also one of the primary contributors to geothermal energy in residential buildings.

Industries, such as pulp and paper, cement, food, aquaculture, lumber, and more, use geothermal heat for various applications. The cement industry uses geothermal heat to dry the materials they produce. The growing requirement for renewable energy in industrial applications is primarily to reduce greenhouse emissions conveniently. The industrial application of the energy has shown a nominal year-on-year growth during 2020 and 2021. Although the geothermal energy market growth prospect in terms of geothermal consumption in the industrial sector is higher as the demand for clean energy increases steadily to reduce GHG emissions.


Asia Pacific Geothermal Energy Market Size, 2023 (USD Billion)

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Growing Renewable Requirement Across Asian Nations Increases the Demand for Geothermal Energy

The market has been studied geographically across five main regions, North America, Europe, Asia Pacific, Latin America, and Middle East & Africa. The market in Asia Pacific stood at USD 24.60 billion in 2023 and is anticipated to hold the largest market value share over the forecast period. High growth potential across Asian nations and high volume requirement of geothermal electricity is anticipated to drive the regional market.

North America was the fastest-growing region in terms of geothermal consumption in 2023. The U.S. is anticipated to grow at a CAGR of 7.0% over the forecast period. Dominating commercial and residential applications are the primary reasons behind the growth of the geothermal sector across the U.S. The U.S geothermal companies have 58 active developing prospects and projects across nine states (most located in Nevada). Among all the projects, five are in the phase of immediate preceding completion, two are in California, and three are in Nevada.

Europe is the second-largest market in terms of geothermal consumption. As per the current scenario, only 10 European countries have operating geothermal power plants. Over 20 countries, with geothermal projects, are in the developmental phase across the region. Over the past half-decade, the geothermal market was concentrated across the greater European areas and had an annual growth rate of over 10%. The primary reason for the substantial growth over the past decades across the region was the capacity addition of geothermal in Turkey.

The Latin America market is primarily driven by increasing electrical consumption across the industrial, commercial, and residential sectors. To reduce the dependency on fossil fuel-based electrical energy, the renewable and geothermal industries are diversifying steadily across the region. Mexico is one of the largest resource bases in renewable energy production. The country could attract many investors by showing the potential of renewables into their energy mix targets. Geothermal sector is Mexico's most significant contributor to clean electricity generation.

The Middle East & Africa market is primarily concentrated in the East African Rift region. The region has a great geothermal potential for direct use and electricity production. East Africa is truly focused on developing renewable sources, including geothermal, on meeting the Paris Agreement on sustainable development and climate objectives. Kenya is the leading country in the production and consumption of geothermal across the Middle East & Africa. Over 92% of the electricity generated across Kenya was from renewable sources in 2020. Geothermal sector was the country's major source of generated electricity, accounting for over 48.4% of the total electricity produced in 2020.

List of Key Companies in Geothermal Energy Market

Ormat Technologies Acquired TG Geothermal Portfolio to Increase its Installed Capacity

The market is highly fragmented, with a large number of market players operating across the globe. Leading players are actively operating globally and adopting organic and inorganic growth strategies to strengthen their position in the market. Some players are truly focused on specific regions to cater to the increasing demand for renewable energy in terms of electricity and direct utilization. Capacity expansion and innovation in exploration are the primary purpose for most companies involved in geothermal production.

In May 2021, Ormat Technologies announced the acquisition of Terra-Gen subsidiary TG Geothermal Portfolio. The transaction was for USD 171 million for all its equity interests. Ormat owned and operated two geothermal power plants at Nevada, Beowawe, and Dixie Valley, with a net installed capacity of about 67.5 MW. With the acquisition, Ormat Technologies had a 1,100 MW installed capacity.



  • April 2022 – Ormat Technologies announced a 15-year Power Purchase Agreement (PPA) with Peninsula Clean Energy. This community choice aggregator provides more than 3,500 gigawatt-hours of electricity to the city of Los Banos and San Mateo County. The term of the agreement will be effective from 1st January 2023 and the Community Choice Aggregation (CCA) will be purchasing 26 MW of energy from Ormat's Heber 2 facility.

  • April 2022 – Sacramento Municipal Utility District (SMUD) signed a contract with Calpine Corporation. Under the contract, SMUD agreed to buy electricity from a 100 MW portion of the Geysers field in California. It was a 10-year PPA that will be active from 1st January 2023.

  • March 2022 – Green Era, a Singapore-based renewables investment division of Pangestu, closed the acquisition of a 33.33% stake in Start Energy for USD 440 million in cash. Start Energy owns most of the stakes in Indonesia's geothermal assets, which account for 875 MW. With the acquisition, the company aimed toward clean, sustainable, and profitable growth as the assets had a proven track record.

  • March 2021 –Rock Energy Group agreed to lock up on newly issued shares of Net Trading Group (NTG). The agreement followed the successful closing of the reverse buy-out between companies. The NTG shareholder favored the acquisition of Rock Energy at the General Meeting on April 29, 2021

  • September 2020 – IGas Energy Plc, a U.K.-based oil & gas exploration company, announced the acquisition of GT Energy. With the acquisition, IGas diversified its energy business across the U.K. market. GT energy's ongoing project on geothermal of 14 MW in Etruria Valley is expected to start operation by 2022.


The research report offers an in-depth analysis of the market. It further provides details on the adoption of geothermal energy across several regions. Information on trends, drivers, opportunities, and market restraints can further help stakeholders gain valuable insights into the market. The report offers a detailed competitive landscape by presenting information on key players and their strategies in the market.

An Infographic Representation of Geothermal Energy Market

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Report Scope & Segmentation



Study Period


Base Year


Estimated Year


Forecast Period


Historical Period


Growth Rate

CAGR of 6.61% from 2024 to 2032


Value (USD Billion) and Volume (MW)


By Type

  • Binary Cycle

  • Flash

  • Dry Steam

By Application

  • Residential

  • Commercial

  • Industrial

  • Others

By Geography

  • North America (By Type, By Application, By Country)

    • U.S. (By Type)

  • Europe (By Type, By Application, By Country)

    • Turkey (By Type)

    • Iceland (By Type)

    • Italy (By Type)

    • Rest of Europe (By Type)

  • Asia Pacific (By Type, By Application, By Country)

    • Philippines (By Type)

    • Indonesia (By Type)

    • New Zealand (By Type)

    • Rest of Asia Pacific (By Type)

  • Latin America (By Type, By Application, By Country)

    • Costa Rica (By Type)

    • Mexico (By Type)

    • El Salvador (By Type)

    • Rest of Latin America (By Type)

  • Middle East & Africa (By Type, By Application, By Country)

    • Kenya (By Type)

    • Rest of Middle East & Africa (By Type)

Frequently Asked Questions

Fortune Business Insights estimates that the global market size was USD 66.24 billion in 2023.

Registering a CAGR of 6.61%, the market is projected to exhibit steady growth during the forecast period (2024-2032).

In 2023, the region stood at USD 24.60 billion.

The commercial segment is set to hold the largest share of the market during the forecast period.

Rising concerns about environmental safety and increased demand for clean energy are driving the market growth.

Ormat Technologies Inc., Calpine, Enel Green Power North America Inc., EthosEnergy, and GEG Power are the key players operating in this market.

In terms of cumulative installed capacity, Asia Pacific dominated the market in 2023

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