The Future of Geothermal Energy, a new analysis from the International Energy Agency (IEA), highlights the need for new technology, wider regulation application, and potential for improved geothermal energy usage.
The report says geothermal energy now provides around 1% of the world’s electrical needs. However, next-generation geothermal technologies might provide 15% of the growth in global electricity demand by 2050, according to a first-of-its-kind country-level research carried out in partnership with Project InnerSpace. This would involve installing up to 800 gigawatts (GW) of geothermal power globally, producing enough electricity annually to meet both India’s and the United States’ combined electrical needs.
Since up to 80% of the investment needed for geothermal energy involves capacity and skills that may be transferred from existing oil and gas operations, it is important to emphasize that the oil and gas sector can play a significant role in increasing the competitiveness of geothermal energy. For the oil and gas sector, this is a means of protecting against commercial risks associated with the expected future drops in demand for oil and gas, as well as a chance to create new lines of business in the rapidly expanding clean energy economy. As the industry realizes this potential, emerging technologies such as Enhanced Geothermal Systems (EGS) are making geothermal a truly global business with potential benefits for almost every nation.
According to IEA Executive Director Fatih Birol, “New technologies are opening up new horizons for geothermal energy worldwide, offering the possibility of meeting a major portion of the world’s rapidly growing demand for electricity securely and cleanly.” Additionally, geothermal offers a great chance to use the technology and know-how of the oil and gas sector. According to our analysis, by 2035, the expansion of geothermal energy might result in investments totaling $1 trillion USD.
The paper also highlights the need for more comprehensive policies, noting that just 30 nations have geothermal rules in place, compared to over 100 that have policies for solar PV and onshore wind. By combining and expediting the necessary administrative procedures, governments might streamline the permitting process. As an alternative to mineral mining, they might think about specialized geothermal permitting regimes. Geothermal energy can assist lower project risk perception and attract new investment if it is prioritized in national energy proposals.
By 2035, prices might drop by 80% to about $50 USD per megawatt-hour (MWh) under the correct regulatory framework. This would put geothermal on level with current nuclear and hydropower facilities as the least expensive source of dispatchable low-emission electricity. Geothermal would also be very competitive with solar PV and wind combined with battery storage at such pricing points.
According to the estimate, geothermal investment could reach a total of $1 trillion by 2035 and $2.5 trillion by 2050. Employment in the entire industry might double to one million jobs by 2030 if next-generation geothermal grows rapidly in the upcoming years.
Finally, geothermal energy has a lot of promise to power the growing number of massive data centers that support the technology industry. Large technological corporations are already entering into power purchase agreements with new projects because next-generation geothermal offers a reliable and virtually limitless power supply.
