A Critical Analysis of Geothermal Industry in China: a Diamond Model Study

Abstract

Geothermal energy is a clean energy to mitigate greenhouse gas (GHG) emissions as its use can lead to lower mitigation cost. With massive resource potential and commercial prospects, the development of Chinese geothermal industry is exceeding expectations. However, research on incentive policies of geothermal industry is scarce. This paper describes the effect of the geothermal industry in China. We adopt a diamond model in this study to analyze factors that have significant impacts on the development of China’s geothermal industry. These factors include: factor conditions, demand conditions, chance, firm strategy, structure and rivalry, related and support industry and government. Each factor identified in the model affects the competitiveness of geothermal industry from different angle. Therefore, factors should be enhanced for the long-term development of geothermal industry.