The geothermal power industry is set for steady growth as the global energy sector shifts toward reliable and sustainable power sources. Rising clean energy demand, energy security needs, and geothermal innovations are driving global market growth.

According to a new report published by Allied Market Research, the global geothermal power industry size was valued at $7.4 billion in 2024 and is projected to reach $14.5 billion by 2034, growing at a CAGR of 7% from 2025 to 2034. This steady growth reflects the rising global focus on reliable, low-carbon, and sustainable energy solutions.

Introduction to Geothermal Power

Geothermal power refers to electricity generation using the Earth’s internal heat, which is naturally stored beneath the planet’s surface. This heat originates from radioactive decay and residual heat from Earth’s formation. By drilling wells into underground geothermal reservoirs containing hot water and steam, energy developers can access this heat and convert it into electricity through turbines and generators.

Unlike solar or wind energy, geothermal power operates continuously and provides baseload electricity with minimal greenhouse gas emissions. These characteristics make geothermal energy a critical component of the global renewable energy mix, especially as countries aim to reduce carbon footprints while ensuring energy reliability.

Regional Analysis

Region-wise, the geothermal power market is analyzed across North America, Europe, Asia-Pacific, and LAMEA. The Asia-Pacific region is anticipated to grow at the fastest CAGR of 7.3% during the forecast period. Strong government support, rising electricity demand, and abundant geothermal resources in countries such as Indonesia, the Philippines, and New Zealand are driving regional market expansion.

Geothermal Power Market Dynamics

The growing demand for renewable and sustainable energy sources is the primary driver of the geothermal power market. Governments and industries worldwide are accelerating the transition away from fossil fuels in response to climate change, rising energy consumption, and stricter environmental regulations. Geothermal power stands out due to its reliability, low emissions, and ability to operate independently of weather conditions.

Global sustainability commitments and net-zero emission targets are further boosting investments in geothermal energy projects. Policymakers are implementing renewable energy mandates, offering tax incentives, subsidies, and long-term power purchase agreements to encourage clean energy adoption.
Geothermal power aligns seamlessly with these initiatives by delivering both electricity and thermal energy while maintaining a small land footprint and long operational lifespans.

Energy security concerns are also supporting geothermal power market growth. Regions with high geothermal potential—such as Asia-Pacific, East Africa, North America, and parts of Europe—are increasingly using geothermal resources to reduce reliance on imported fossil fuels. Local geothermal generation helps stabilize energy supply, lower price volatility, and support regional economic development.

Technological advancements, particularly in enhanced geothermal systems (EGS) and deep-drilling techniques, are expanding geothermal opportunities beyond traditionally resource-rich areas. These innovations enable access to geothermal heat in regions previously considered unsuitable, further accelerating market adoption.

Challenges Limiting Market Growth

Despite its advantages, high upfront capital investment remains a major challenge for the geothermal power market. Exploration and drilling phases require extensive geological surveys, seismic analysis, and test wells, all of which involve significant financial risk. Unlike solar or wind projects, geothermal development does not guarantee resource availability, making early-stage investments uncertain.

Drilling costs can reach several million dollars per well, depending on depth and geological conditions. Additionally, constructing geothermal power plants and steam gathering systems increases overall project costs and extends payback periods. These financial barriers often discourage private investors seeking faster returns, thereby limiting large-scale geothermal deployment in certain regions.

Emerging Opportunities in the Geothermal Power Market

Rising investments in clean energy infrastructure are creating strong growth opportunities for the geothermal power market. Governments, international financial institutions, and private investors are increasing funding for renewable projects to build resilient, low-carbon energy systems. Financial mechanisms such as green bonds, climate funds, and public-private partnerships are helping reduce investment risks associated with geothermal exploration.

These funding initiatives are enabling countries with strong geothermal potential to accelerate project development and adopt advanced technologies. Increased capital flow is also supporting research into improved drilling efficiency, reservoir management, and enhanced geothermal systems, making geothermal power more accessible and economically viable.

Market Segmentation Overview

The geothermal power market is segmented based on power station type, end-use, and region.
By power station type, the market is categorized into dry steam, flash steam, and binary cycle power stations. Among these, the flash steam power stations segment is expected to grow at the fastest CAGR of 7.7% during the forecast period. This growth is attributed to the widespread availability of high-temperature geothermal reservoirs and higher conversion efficiency compared to dry steam systems.

Based on end-use, the market is divided into residential, commercial, industrial, and others. The industrial segment is projected to grow at a CAGR of 6.9%, driven by increasing use of geothermal energy for process heating, district heating systems, and manufacturing operations. Industries are adopting geothermal solutions to lower operational costs, improve energy efficiency, and meet sustainability goals.

Competitive Landscape

The geothermal power market features several prominent players focusing on technology innovation, strategic partnerships, and capacity expansion. Key companies operating in the market include Yokogawa Electric Corporation, Enel SpA, ABB Ltd, Toshiba Corporation, General Electric, Korea Electric Power Corporation, Siemens AG, Tata Power Company Limited, Mitsubishi Heavy Industries Ltd, and Ormat Technologies, Inc.

These players are investing in advanced geothermal technologies and expanding their global presence to strengthen market positioning.