Global geothermal power capacity is expected to grow by 30 per cent between 2016 and 2026, new analysis has found.
According to a report released this week by consultancy BMI Research, geothermal power is forecast to top 16 GW in 2026, up from 12.5 GW in 2016.
Indonesia is expected to emerge as the largest geothermal market as soon as 2019, as the projects now in its pipeline are gradually commissioned. Over 200 MW in geothermal capacity is expected to come online by the end of this year, and the nation’s installed capacity is expected to grow to over 3 GW by 2026.
The MENA region will show the fastest growth in installed capacity, the report said, increasing by almost 60 per cent and driven primarily by developments in Kenya. The largest current geothermal markets, the US and the Philippines, are set to show “fairly subdued” growth due to unfavourable policy environments.
Overall, the report viewed geothermal power as an “underperforming” technology, noting that in 2026 the technology is expected to make up just 1 per cent of the world’s non-hydro renewable capacity. Factors limiting growth include the technology’s restriction to tectonically active regions, high up-front costs for exploration studies, and the technical challenges involved in drilling.
While these factors tend to deter private investors, the report noted that geothermal power’s minimal operating costs and reliability as a baseload power source tend to encourage governments to exploit their resources and to make favourable policies. Examples of countries looking to geothermal as a means to diversify their energy mixes include Kenya, Indonesia, Mexico and Nicaragua.