Geothermal energy could play a crucial role in the energy transition as a source of clean firm power and a significant contributor to heat markets wherever it is available. Only about 16 gigawatts - electric (GWe) of geothermal power capacity is currently operational globally, only a fraction compared to installed wind and solar capacity. Several new technologies could unlock the global potential for geothermal energy, helping to mitigate its greatest constraint to expansion, the site-specific nature of its implementation historically.

New technologies could remove the location constraint, adding to potential scale, and thereby drastically reducing costs while also lowering the risk related to the availability and quality of the geothermal resource. Backed by new finance, technology developers are making progress toward first commercial scale projects.

These technologies promise to overcome limitations of the current hydrothermal systems and boost global geothermal power capacity, which is expected to grow from 16 GW today to nearly 54 GW in 2050, at a compound annual growth rate (CAGR) of 13%. The Asia-Pacific will dominate the global additions, US will be the second largest market owing to investments in new technology and a flurry of R&D.

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Posted 12 July 2022 by Francesco d'Avack, Principal Analyst, Global Power and Renewables, Climate & Sustainability, S&P Global Commodity Insights

This article was published by S&P Global Commodity Insights and not by S&P Global Ratings, which is a separately managed division of S&P Global.