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REMIPEG Report: Part 3 - After a major dive, geothermal power is growing rapidly


Martin Kaltschmitt and Sebastian Janczik

The World-Market Status special report – Although still relatively small, the geothermal market has shown strong growth in 2015, and some favorable condition may soon give it a boost. The pacific “ring of fire” countries are the sole manufacturers of geothermal power, with the US leading as the biggest single producer of electricity from geothermal energy.

More than 600 MW in geothermal power capacity has been newly installed by the end of 2014. New power plants have been built in Kenia (340 MW), Turkey (110 MW), Indonesia (60 MW) and the Philippines (50 MW). Globally, an electrical capacity of around 12.6 GW has been installed in geothermal power plants and CHP plants by the end of 2014.

Around 70% of the globally installed geothermal power is installed in five countries, which have promising geological conditions in the countries located around the pacific “ring of fire”. The US continues the recent trend with more than 27% (3.5 GW) of the globally installed geothermal capacity, and is still the biggest single producer of electricity from geothermal energy.

With around 1.9 GW (9.6 TWh), the Philippines is still the second largest producer of geothermal energy worldwide. Indonesia, Mexico and New Zealand contribute 15% (1.3 GW; 9.6 TWh), 8% (1.0 GW; 6.1 TWh) and 8% (1.0 GW; 7.0 TWh) respectively. Italy follows with (0.9 GW, 5.7 TWh), Island (0.7 GW, 5.2 TWh) and Japan (0.5 GW, 2.7 TWh). Altogether, these geothermal power and CHP plants generated 73.6 TWh in 2014 – a share of 0.3% in the globally generated electricity. 

At least 630 geothermal power projects in more than 80 countries are under development or under construction. These are the following market trends identified:

  • The installed electrical capacity in geothermal conversion plants in Africa is close to 0.6 GW (5% of the worldwide geothermal capacity, 2.9 TWh). By the end of 2014, the biggest part of this capacity is located in Kenia (0.6 GW, 2.8 TWh), where more than 340 MW have been newly built and gone into operation during the last year (Olkaria I Unit 4/5 (140 MW), Olkaria II Unit 3 (36 MW)).

In Comparison, the installed capacity in Ethiopia is very small with 7 MW under operation (0.01 TWh (2014). Additionally, various other African countries located within the same geothermal active zone (East African Rift Valley) have plans to increase or install new capacities in geothermal power plants; Ruanda wants to build geothermal power plants with more than 0.7 GW in the near future. Uganda and Tanzania have a number of geothermal power plant projects on the way at varying stages of development.

  • More than 4.2 GW of electrical capacity in geothermally operated power plants is located on the Asian continent, with 34% of the worldwide geothermal capacity (25.6 TWh). The biggest capacities are installed in the Philippines (1.9 GW, 9.6 TWh) and in Indonesia (1.3 GW, 9.6 TWh). By contrast, Japan (0.5 GW, 2.7 TWh), Turkey (0.4 GW, 3.1 TWh) and Russia (82 MW, 0.4 TWh) are significantly behind.

The Asian market for geothermal power production is characterized by a clear growth tendency. For example, in Turkey, the Philippines and Indonesia many projects develop new geothermal power plants for covering the strongly growing demand for electrical energy. As a result, the electrical capacity newly installed in 2014 in Turkey, the Philippines and Indonesia was 110 MW, 50 MW and 60 MW, respectively. In addition, more than 60 projects are in various stages of development in Indonesia, and will probably go into operation in the coming years.

  • In Europe the installed power plants driven by geothermal energy is near to 1.7 GW by the end of 2014 (13% of the worldwide geothermal capacity, 11.3 TWh). The biggest single producers in Europe are Italy and Island with 0.9 GW and 0.7 GW (5.7 and 5.2 TWh) respectively. Geothermal power plants are also installed and operated in Germany (33 MW, 0.1 TWh), Portugal (29 MW, 0.2 TWh) and France (16 MW, 0.1 TWh). In Europe it is expected that the geothermal power production will increase in the years to come. Currently, 13 European countries have projects under development or construction.

North and Central America show an electrical capacity of 5.1 GW (40% of the worldwide geothermal capacity, 26.3 TWh). Within the US, 3.5 GW are under operation alone (16.6 TWh). Additionally, geothermal power plants are located in Mexico (1 GW, 6.1 TWh), El Salvador (205 MW, 1.4 TWh), Costa Rica (207 MW, 1.5 TWh), Nicaragua (160 MW, 0.5 TWh) and Guatemala (52 MW, 0.2 TWh (2014)).

In 2014 the development of new geothermal power plants was slow in North and Central America; only two ORC geothermal power plants have been built in the US. Reasons for this low activity were political insecurity on a local or regional level (Central America), a low demand for new electrical capacities, and legislative insecurities regarding the promotion of renewable energies in the US (Production Tax Credit and Investment Tax Credit). Nevertheless it is expected that in the years to come new geothermal power plants will be built in the US and other countries in this region; e.g. in the USA more than 1.3 GW of geothermally driven electrical capacity are under development or construction, boosting the use of this source of energy in the years to come.

  • Along the Pacific Ring of Fire (on the Pacific side of the Andes), South America is characterized by very promising geothermal reservoirs which are easily accessible. Nevertheless, no geothermal power plant has been built in the region yet. The main reasons are the high investment costs for exploration and drilling in the starting phases, political instabilities or legal uncertainties, and risks associated with the establishment of the first power plant of its kind in the country.
  • At the end of 2014, close to 1.1 GW of geothermal capacities were under operation in Oceania (7.4 TWh). In the region, the biggest single users of geothermal power are New Zealand and Papua New Guinea. More than 1 GW of electrical capacities installed in geothermal power plants are located in New Zealand, followed by Papua New Guinea with around 50 MW (0.4 TWh). Although no new geothermal power plant was developed last year, it is expected that new capacities will be installed in the coming years.

 

Region

Cumulated installed capacity 2014

Installed capacity 2014 

Estimated electricity generation 2014

 

[GW]

 [GW]

[TWh/y]

North American

5.1

0.004

26.4

South American

0.0

0.00

0.0

Europe

1.7

0.04

11.3

Asia

4.1

0.22

25.7

Oceania

1.1

0.00

7.4

Africa

0.6

0.34

2.9

World total

12.6

0.61

74

Largest national market

USA | 3.5

Kenya | 0.34

USA | 16.6


Figure 1. Summary of global geothermal power market in 2014.

Future outlook is business as usual

Summing up, the worldwide installed electrical capacity available in geothermal power plants has increased in 2014. In parallel, the amount of projects under development has shown a strong growth. By the end of 2014, more than 630 projects in roughly 80 countries were in various stages of development or construction. Nevertheless, compared with other options of renewable sources of energy, these activities are still on a lower level worldwide.

It can be expected that the geothermal power market will increase in the years to come, especially as demand for electrical energy will increase on a global scale, thereby preparing the way for additional electrical capacities. Furthermore, under specific circumstances, the use of high enthalpy geothermal resources could be a cost efficient renewable source for electricity generation.

ABOUT THE AUTHORS
 

Prof. Dr. Martin Kaltschmitt is Managing Director of Deutsches Biomasseforschungszentrum in Leipzig and Head of Institute of Energy and Process Engineering at TU Hamburg-Harburg

Dr.-Ing. Sebastian Janczik is Geothermal Expert at Institute of Environmental Technology and Energy Economics (IUE), Hamburg University of Technology (TUHH)

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