The global geothermal power market is set to experience robust growth over the forecast period 2024–2031, driven by rising global demand for clean and sustainable energy solutions. As governments and industries move aggressively toward decarbonization, geothermal energy has emerged as a pivotal player in achieving long-term renewable energy goals. With its ability to provide consistent baseload power, unlike intermittent sources such as solar and wind, geothermal energy is increasingly being integrated into national and regional energy strategies.
The global geothermal power market size was valued at USD 7.90 billion in 2023 and is projected to grow from USD 8.16 billion in 2024 to USD 10.61 billion by 2031, exhibiting a CAGR of 3.81% during the forecast period.
Geothermal Energy: A Reliable and Eco-Friendly Solution
Geothermal power is derived from heat stored beneath the earth’s surface and has long been recognized for its low carbon footprint and long-term reliability. The market for geothermal power has matured in several developed regions and is now expanding rapidly in emerging markets due to improved accessibility of technologies and strong policy frameworks supporting clean energy deployment. The market is expected to grow significantly in terms of installed capacity, revenue generation, and technological innovation during the forecast period.
Key Market Trends
One of the key trends shaping the geothermal power market is the increased focus on sustainable infrastructure and net-zero emission targets adopted by countries worldwide. As climate change remains a pressing global issue, energy producers and utilities are investing heavily in renewable energy technologies, with geothermal emerging as a reliable and eco-friendly option. The transition from conventional to renewable power generation has opened up new opportunities for geothermal project development, particularly in countries with active tectonic regions and volcanic activity.
Growing Demand Across Applications
The demand for geothermal energy is also driven by its ability to provide both electricity and direct-use heating applications. This dual functionality is especially valuable in colder regions, where geothermal energy can be harnessed for district heating, greenhouse operations, and industrial processes. As urban areas expand and the demand for efficient energy infrastructure increases, geothermal energy is expected to play a critical role in addressing energy needs sustainably.
Market Dynamics and Technological Advancements
Market dynamics continue to evolve with the rapid development of advanced drilling techniques, improved subsurface imaging technologies, and more efficient binary cycle power plants. Enhanced Geothermal Systems (EGS), in particular, have opened new frontiers for tapping into geothermal resources in areas previously considered inaccessible. These systems create artificial reservoirs by fracturing hot dry rocks, enabling the extraction of geothermal energy from regions lacking traditional hydrothermal reservoirs.
The geothermal power market is also witnessing strong financial backing from both public and private investors. Governments across North America, Europe, and the Asia-Pacific region are introducing favorable policy incentives, including feed-in tariffs, renewable portfolio standards, and tax credits, to promote the development of geothermal projects. In addition, international climate finance institutions are offering grants and concessional loans to support geothermal exploration and project execution in developing nations.
Future Outlook
Looking ahead, the market outlook remains bullish with projections indicating a sustained compound annual growth rate (CAGR) through 2031. Emerging markets such as Indonesia, Kenya, the Philippines, and Turkey are expected to be among the fastest-growing regions due to favorable geology and rising energy demand. These countries have initiated large-scale geothermal development plans backed by international cooperation, technology transfer, and funding from development banks.
Key Players in the Geothermal Power Market
Prominent players operating in the geothermal power market continue to invest in research and development to enhance energy output, optimize plant operations, and reduce overall production costs. Leading companies are expanding their project portfolios, entering into public-private partnerships, and leveraging digital technologies such as AI-based predictive maintenance and real-time monitoring systems to maximize efficiency and reliability.
Major companies in the global geothermal power market include:
Ormat Technologies Inc.
Mitsubishi Power, Ltd.
Toshiba Energy Systems & Solutions Corporation
General Electric
Enel Green Power
Reykjavik Geothermal
Fuji Electric Co. Ltd.
Calpine Corporation
Exergy S.p.A.
Cyrq Energy
These organizations are investing in geographic expansion, vertical integration, and cross-border collaborations to maintain their competitive edge.
Market Segmentation
From a segmentation standpoint, the geothermal power market is categorized based on technology and application.
By Technology:
Dry Steam – Utilizes steam directly from geothermal reservoirs to drive turbines.
Flash Steam – Converts high-pressure hot water into steam to generate electricity.
Binary Cycle – Uses heat exchangers to vaporize a secondary fluid with a lower boiling point, increasingly adopted for low-temperature geothermal applications.
By Application:
Residential – Geothermal heat pumps for space heating and cooling.
Commercial – Utilization in office buildings, hotels, shopping centers, and hospitals.
Industrial – High-energy-consuming sectors such as food processing, mining, and pulp and paper production.
The industrial segment holds the largest share, while the residential sector is growing steadily due to interest in sustainable home energy solutions.
Recent Developments
Recent developments in the geothermal power market further underscore the sector’s dynamic nature. Multiple pilot projects have successfully demonstrated the feasibility of using horizontal drilling and closed-loop geothermal systems. These innovations promise to significantly expand the geographical applicability of geothermal energy, enabling power generation even in regions with limited hydrothermal activity.
In addition, there is growing interest in repurposing oil and gas infrastructure for geothermal use. This approach leverages existing wells and expertise, reducing exploration risk and capital investment requirements while accelerating project timelines.
Regional Analysis
North America
North America remains a dominant player, particularly the United States, which boasts mature infrastructure and leading firms in geothermal technology. States like California and Nevada are at the forefront, with ambitious plans to integrate geothermal energy into broader renewable portfolios.
Asia-Pacific
The Asia-Pacific region is forecast to register the highest growth during 2024–2031. Countries like Indonesia and the Philippines are making substantial investments to tap their massive geothermal potential. Indonesia, in particular, holds some of the world’s largest untapped geothermal reserves and is aggressively pursuing capacity expansion.
Europe
European countries such as Iceland, Italy, and Germany are leaders in geothermal adoption. Iceland continues to set a global benchmark, deriving nearly 100% of its heating and over 25% of its electricity from geothermal sources. Germany is deploying deep geothermal systems for district heating and aligning geothermal development with its national climate goals.
Africa
Africa is fast emerging as a promising frontier, with the East African Rift Valley (including Kenya, Ethiopia, Tanzania, and Uganda) showing vast geothermal potential. Kenya leads the way with well-developed infrastructure and government-backed expansion plans. These developments are expected to improve energy access and stability across the continent.
Latin America
In Latin America, Mexico and Chile are harnessing geothermal energy to diversify their energy mix. With favorable geological conditions and proactive government policies, both countries are advancing their geothermal ambitions through international partnerships and private sector engagement.
Challenges and Opportunities
Despite its advantages, the geothermal power sector still faces several barriers:
High initial capital costs for drilling and exploration
Long payback periods
Geological risks and resource uncertainty
Regulatory delays and land access issues
However, ongoing innovation in Enhanced Geothermal Systems (EGS), digital monitoring, and hybrid renewable integration is steadily overcoming these limitations. Government-backed insurance mechanisms, exploration risk guarantees, and concessional financing are also mitigating risk and improving investor confidence.
Conclusion
As countries strive to meet net-zero targets and build resilient energy infrastructures, geothermal power is positioned to play an increasingly important role. With its capability to deliver reliable, sustainable, and round-the-clock energy, geothermal stands out as a core component of the global clean energy transition.
The global geothermal power market is entering a transformative phase marked by innovation, geographic expansion, and strategic collaborations. As the forecast period unfolds, the market is expected to witness accelerating adoption, technological advancements, and policy support—firmly establishing geothermal power as a critical driver of the global energy transition through 2031 and beyond.
Get Full Detailed PDF Report- https://www.kingsresearch.com/geothermal-power-market-1886
Browse To Related Article-
Top 10 Renewable Energy Companies Leading Japan’s Green Tech (2025)
Japan Leads Sustainable Living with Home Energy Innovation
Green Cloud Computing: The Future of Sustainable Digital Infrastructure
