The geothermal power industry continues to grow by leaps and bounds, according to research firm Frost & Sullivan.
Its Global Geothermal Power Market research indicates that the worldwide market earned revenues of more than $1.16 billion in 2010 and estimates this to grow to $5.89 billion in 2017.
Factors contributing to geothermal’s expansion include rising energy prices, volatile fuel costs and government incentives on renewable energy.
In most cases, energy from geothermal sources is cheaper than solar, wind and biomass power, Frost & Sullivan asserted.
The firm’s research showed that all regions are expected to grow; by the end of 2010 almost 41.1 percent of total geothermal capacity was installed in the Asia Pacific region. Europe, Germany and Spain—already leaders in solar and wind energy markets—have passed feed-in tariffs, payments to anyone who owns a renewable energy system, as well as other incentives as part of the Intelligent Energy Europe (IEE) program.
Some governments have begun to offer drilling insurance risk programs to encourage additional investment in geothermal projects, Frost & Sullivan said. Europe and the rest of the world are predicted to be the fastest-growing regions, with a compound annual growth rate of 9.8 percent and 13.3 percent, respectively.
There are some negative factors affecting the market. It can be difficult to identify geothermal resources in a specific area, and without precise information, the drilling risks for geothermal plants is high. Geothermal plants also have higher initial costs than other renewable energy sources. The average investment cost for a plant depends both on the type of technology installed and the number of wells drilled. The research shows that advances in low-grade resources, improved drilling techniques and more geothermal installations will help reduce costs.
According to the Geothermal Energy Association‘s (GEA) annual update, the U.S. geothermal industry added close to 91 megawatts (MW) of newly installed capacity in the past year. The Annual U.S. Geothermal Power Production and Development Report show the industry has 3,187 MW of installed capacity, more than any other country in the world. Eight U.S. states—Alaska, California, Hawaii, Idaho, Nevada, Oregon, Utah and Wyoming–currently generate geothermal electric power, and seven more states are developing geothermal capacity.
New technologies have enabled the geothermal industry to develop lower-temperature resources, helping it to expand beyond California.
In a statement, GEA executive director, Karl Gawell, said, “Demonstrating the abilities of geothermal systems to produce power from lower-temperature systems, such as oil and gas, co-produced geothermal, is pushing out the boundaries for geothermal power to encompass over a third of the U.S. We’ve seen slow but steady growth for geothermal, even in a challenging economy. The drivers for that growth have been state renewable portfolio standards, federal tax credits, DOE demonstration project support and the fact that utility-scale geothermal energy offers clean base-load energy that’s competitive with other clean-energy technologies.”