With global electricity demand set to grow strongly, new technologies are opening up the massive potential of geothermal energy to provide around-the-clock clean power in almost all countries around the world, according to a new report by International Energy Agency (IEA).
The report, The Future of Geothermal Energy, finds that geothermal energy could meet 15% of global electricity demand growth between now and 2050 if project costs continue to decline.
This would mean the deployment of as much as 800 gigawatts of geothermal capacity worldwide, delivering annual output equivalent to the current electricity demand of the United States and India combined.
Today, geothermal meets about 1% of global electricity demand.
However, based on a new first-of-its-kind country-level analysis, conducted in collaboration with Project InnerSpace, the IEA report shows that next-generation geothermal technologies have the technical potential to meet global electricity and heat demand many times over.
"New technologies are opening new horizons for geothermal energy across the globe, offering the possibility of meeting a significant portion of the world’s rapidly growing demand for electricity securely and cleanly," remarked IEA Executive Director Fatih Birol.
"What’s more, geothermal is a major opportunity to draw on the technology and expertise of the oil and gas industry. Our analysis shows that the growth of geothermal could generate investment worth $1 trillion by 2035," he stated.
The report highlights that more than 100 countries have policies in place for solar PV and onshore wind, but only 30 have such policies for geothermal.
Moving geothermal up national energy agendas with specific goals, backed support for innovation and technology development, can go a long way to reducing project risk perception and unlocking new investment.
Clear, long-term regulatory visibility for investors will help mitigate risks in early-stage development and provide visibility on investment returns, which in turn will improve the cost competitiveness of geothermal projects.
By doing so, the report finds that costs could fall by 80% by 2035 to around $50 per megawatt hour (MWh). The report finds that the total investment in geothermal could reach $1 trillion by 2035 and $2.5 trillion by 2050.
If next-generation geothermal grows strongly in the coming years, employment in the overall geothermal sector could increase sixfold to 1 million jobs by 2030, according to the report.
The oil and gas industry can play a key role in making geothermal more competitive. Up to 80% of the investment required in geothermal involves capacity and skills that are transferrable from existing oil and gas operations.
The oil and gas industry can also benefit from tapping the potential of geothermal energy. Not only is it an opportunity to develop new business lines in the fast-growing clean energy economy, but it can also serve as a hedge against commercial risks related to projected future declines in oil and gas demand.