The International Energy Agency (IEA) has released a report titled The Future of Geothermal Energy, which outlines the significant potential of geothermal energy to contribute to global electricity needs.
The report indicates that geothermal energy could meet 15% of the projected growth in global electricity demand between now and 2050, contingent upon ongoing reductions in project costs. This would require the deployment of up to 800 gigawatts of geothermal capacity worldwide, generating an annual output equivalent to the current electricity consumption of both the United States and India combined.
Currently, geothermal energy accounts for approximately 1% of global electricity demand. However, the IEA’s analysis, conducted in collaboration with Project InnerSpace, reveals that next-generation geothermal technologies possess the technical potential to satisfy global electricity and heat demands significantly. The report emphasizes that geothermal energy’s flexibility allows it to support variable renewable technologies such as wind and solar while complementing other low-emission sources like nuclear power.
The report highlights that geothermal energy can leverage existing drilling techniques and equipment from the oil and gas industries to access deeper underground resources. IEA Executive Director Fatih Birol stated, “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.” He noted that this growth could generate investments worth $1 trillion by 2035.
Despite its potential, conventional geothermal remains a niche technology primarily located in regions with volcanic activity or tectonic fault lines. Current leaders in geothermal energy production include the United States, Iceland, Indonesia, Türkiye, Kenya, and Italy. However, advancements in technology are expected to make geothermal energy accessible in nearly all countries.
The report also points out that while over 100 countries have policies supporting solar PV and onshore wind, only 30 countries have established policies for geothermal energy. To enhance investment in geothermal projects, governments need to prioritize geothermal energy in national agendas and provide clear regulatory frameworks. The IEA suggests that costs could decrease by 80% by 2035, potentially bringing costs down to around $50 per megawatt hour (MWh), making geothermal competitive with existing hydropower and nuclear installations.
Furthermore, if next-generation geothermal technologies are adopted widely, employment in the sector could increase sixfold to reach 1 million jobs by 2030. The oil and gas industry is positioned to play a crucial role in this transition, as up to 80% of investments required for geothermal projects involve skills and capacities transferable from existing operations.
Geothermal energy also presents opportunities for powering large data centers essential for the growing digital economy. As major technology companies sign power purchase agreements with new geothermal projects, the sector is poised for significant growth.
