IEA predicts global geothermal energy investment of $2.5T by 2050

Total investment in global geothermal energy may reach $1 trillion by 2035 and $2.5 trillion by 2050, according to the International Energy Agency (IEA) report “The Future of Geothermal Energy,” Report informs.

"Governments, oil and gas companies and utilities are among those looking for investment opportunities in geothermal. If deep cost reductions for next-generation geothermal can be delivered, total investment in geothermal could reach $1 trillion cumulatively by 2035 and $2.5 trillion by 2050. At its peak, geothermal investment could reach $140 billion per year, which is higher than current investment in onshore wind power globally. As a dispatchable source of clean power, geothermal is also attracting interest from stakeholders beyond the energy industry, including technology companies looking to meet the fast-growing demand for electricity in data centers," reads the report.

Advances in technology are opening new horizons for geothermal, promising to make it an attractive option for countries and companies all around the world. These techniques include horizontal drilling and hydraulic fracturing honed through oil and gas developments in North America. If geothermal can follow in the footsteps of innovation success stories such as solar PV, wind, EVs and batteries, it can become a cornerstone of tomorrow’s electricity and heat systems as a dispatchable and clean source of energy. For the moment, geothermal meets less than 1% of global energy demand and its use is concentrated in a few countries with easily accessible and high-quality resources, including the United States, Iceland, Indonesia, Türkiye, Kenya and Italy.

"With continued technology improvements and reductions in project costs, geothermal could meet up to 15% of global electricity demand growth to 2050. This would mean the cost-effective deployment of as much as 800 GW of geothermal power capacity worldwide, producing almost 6,000 terawatt-hours per year, equivalent to the current electricity demand today of the United States and India combined.

Geothermal can provide around-the-clock electricity generation, heat production and storage. As the energy source is continuous, geothermal power plants can operate at their maximum capacity throughout the day and year. On average, global geothermal capacity had a utilization rate over 75% in 2023, compared with less than 30% for wind power and less than 15% for solar PV. In addition, geothermal power plants can operate flexibly in ways that contribute to the stability of electricity grids, ensuring demand can be met at all times and supporting the integration of variable renewables such as solar PV and wind," the report noted.