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Home » Report: Global Market for Geothermal Heats Up
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Power & IndustrialProjects

Report: Global Market for Geothermal Heats Up

October 22, 2013
Jim Parsons
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Activity in the global geothermal market continues to pick up steam, with more than 670 geothermal projects under way in 70 countries, according to new report from the Washington, D.C.-based Geothermal Energy Association.

The report, "2013 Geothermal Power: International Market Overview," found that more than 11,700 megawatts of new geothermal capacity, equal to that currently available from existing geothermal systems, are in the early stages of development or under construction, with the U.S., East Africa and Southeast Asia among the hottest markets.

Geothermal Energy Association (GEA) Executive Director Karl Gawell says the findings, compared with previous studies, indicate a “maturing” of the geothermal market, with many countries moving from interest in projects to actual development.

“There’s a broader recognition that they can take advantage of their own geothermal resources to support economic growth and get away from fossil resources,” Gawell says. “Developing countries are also getting help from multi-lateral agencies, which are helping them deal with the financial risks of development.”

East Africa is the geothermal industry’s most explosive area, according to the study. With nearly 300 megawatts of geothermal capacity currently under construction and another 700 megawatts under development, Kenya is well positioned to become the continent’s hub for geothermal technology. Rwanda, Uganda and Tanzania also may have their first geothermal projects on line within the next few years.

On the other hand, says GEA industry analyst and report author Ben Matek, many of these governments have yet to fully define laws and regulations for geothermal development, which could present obstacles to projects moving forward.

“Uganda, for example, is using its oil and gas regulations as a guide, which results in confusion among developers,” Matek says.

Similarly, regulatory issues have limited development in geothermal-rich Indonesia, which nevertheless has 57 projects in some phase of development. And while Japan’s interest in geothermal systems has increased significantly since the 2011 disaster at the Fukushima Daichi nuclear powerplant, many of its most developable resources are located in natural parks. Costa Rica faces a similar environmental-energy conundrum.

As for the U.S.—the world leader in geothermal energy, with more than 3,380 MW on line and another 182 projects in the pipeline—weak economic growth and the absence of a clearly defined energy policy has slowed many projects and stagnated others.

The U.S. market has traditionally been driven by California, which has more installed capacity than several countries, notes Matek.

“Because the economy has been down in California, there hasn’t been a demand for new powerplants,” Matek says. Cheap natural-gas prices and renewable technologies such as wind and solar also have played a role and tend to have lower start-up costs.

Still, Gawell feels that geothermal energy’s prospects for growth in the U.S. remain good, even if activity accelerates elsewhere. “We have a healthy, dynamic world market that is pushing the development of geothermal technology,” he says. “That can only help the U.S. as its market comes back.”

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