A new report from BCC Research says geothermal energy is expected to grow rapidly around the world 2015 to 2020.
Geothermal energy is generated from within the Earth, including from underground stores of molten magma, shallow grounds and hot rocks and hot water found beneath and at our planet’s surface.
Globally, in 2015, geothermal energy had a total installed capacity of 12.2 GW in 2014, with a market value of 12.9 billion. North America leads the way with 41.8 per cent of the global market, or 5.1 GW, followed by Asia-Pacific with 38.5 percent and Europe with 17.5 per cent.
The BCC study finds geothermal energy will grow at a compound annual growth rate from 2015 to 2020 of 10 percent, meaning the value of geothermal energy globally will reach nearly $20.8 billion in 2020.
“In the long term, increasing demand for renewable energy production and infrastructure development in developing regions along with the increasing demand for power transmission across long distances and increasing investments in geothermal energy generation, smart grids and power infrastructure will be key drivers of this market,” BCC Research analyst Aneesh Kumar was quoted as saying in American Energy News.
Receives Government Support
Like other sources of renewable energy, geothermal energy production has large capital investment costs, but unlike wind and solar power, it does not require large amounts of space, indeed, it can often be constructed beneath the structures it provides power to and it produces consistent, not intermittent power. Still geothermal exploration and drilling is risky, not always yield profitable results. As a result, much of the geothermal industry relies on government support to overcome these costs and risks.
A recent study by the Institute of Political Economy (IPE) at Utah State University, “Reliability Of Renewable Energy: Geothermal,” notes the most important subsidy for geothermal energy came in the 2004 American New Jobs Creation Act, which gave geothermal energy producers a production tax credit of 2.3 cents per kilowatt hour.
By comparison to other forms of energy, geothermal producers received relatively little in subsidies. Of the $13.2 billion in energy subsidies provided to energy producers in fiscal year 2013, wind power received $5.4 billion and solar power received to $5.3 billion in subsidies. Solar power was by far the largest recipient of subsidies on the basis of the amount of energy produce per dollar invested.
In 2013, the geothermal industry received $345 million in government subsidies. The IPE study reports, if the subsidies are left out of the cost benefit analysis, geothermal plants are a cost efficient way to produce electricity because of its low fuel, operations and maintenance costs, and because it is physically reliable and can easily accommodate changes in electricity demand.