Global Geothermal Power Market

Abstract

The heat stored within the continental earth crust, volcanic/magmatic areas and geopressured basins correspond to ca 10.500, 400 and 70 times the world total fossil fuel reserves respectively. Until recently, geothermal power plants were limited to hot water bearing subsurface formations of sufficient temperature and permeability, allowing commercially attractive flow rates from production wells. Such conditions are encountered at hydrothermal systems at the lithosphere plate boundaries, where the bulk of world power generation is located today. Electricity generation from hydrothermal systems with wells down to 2-4 km is a mature technology, from enhanced geothermal systems (EGS) at 3-6 km depth is a new technology the feasibility of which was proven by the EU funded project at Soultz and from supercritical systems at 5-10 km depth will be a future technology. Depending on what production wells yield at the surface, geothermal power plant technology used is dry steam plants, flash plants and binary plants for wells yielding dry steam, two phase fluid and liquid water respectively. Binary plants can be combined with flash plants in cases of two phase fluids, in order to maximize electricity output. Global installed geothermal power was 11,5 GWe in 2012, a figure expected to double by 2020, when considering all projects under development or announced, corresponding to 6,9 GWe flash, 2,9 GWe dry steam and 1,3 GWe binary respectively. Average plant capacity corresponds to 45 MWe dry steam, 30 MWe flash and 5 MWe binary and maximum one to 130 MWe flash. Six major turbine manufacturers control 95% of the market, and one of them 90% of binary market. Investment costs per MWe of new geothermal power plants amount at 2,3 – 3,6 million € for flash plants, 3,1 – 6,5 million € for binary and 6,2 – 11,6 million € for EGS. Total market size amounts at ca 7,2 billion € electricity value and 4,4 billion € annual investments in new field development projects. Market barriers to geothermal deployment are lengthy permitting procedures, lack of regulations, high exploration risk and associated finance availability, and competent personnel availability. In USA, geothermal development is driven by federal and state incentives available to energy producers, manufacturers and utilities, which include renewable portfolio standards, tax exemptions, investment subsidies and access to grid. In EU and other developed countries the geothermal market is supported by feed in tariffs and premiums. Global geothermal market development is done by ambitious new market entering companies, most of which are either geothermal focused, or power utilities, or dedicated power producers, while a few of them come originate from the oil and gas industry or from the trade and investment sector.