The global geothermal power market is set for steady growth as governments and businesses look for dependable, low-emission electricity and heat, according to Kings Research. The market was valued at USD 7.90 billion in 2023 and is projected to grow from USD 8.16 billion in 2024 to USD 10.61 billion by 2031, exhibiting a CAGR of 3.81% during the forecast period. Rising demand for renewable energy, growing investment in direct-use geothermal heat, and advances in drilling and resource management are supporting the outlook.
Market Overview
Geothermal power harnesses the Earth’s natural heat to generate electricity and provide heating. As countries reduce their reliance on fossil fuels, they are turning to clean energy sources, and geothermal stands out for delivering constant, low-emission power. Governments and businesses see it as a way to improve energy security, lower long-term costs, and support climate goals while keeping electricity supply steady and dependable.
Key growth factors include government incentives, favorable regulatory frameworks, and the potential for long-term, low-carbon energy across residential, commercial, and industrial applications. Renewable capacity is expanding broadly in major economies. In October 2024, India’s Ministry of New and Renewable Energy reported that the country’s renewable energy capacity reached 203.18 GW, a 13.5% increase in one year.
Key Highlights from the Report
- The market was valued at USD 7.90 billion in 2023 and is projected to grow at a CAGR of 3.81% from 2024 to 2031.
- North America held a 38.12% share in 2023, valued at USD 3.01 billion.
- The flash steam power stations segment generated USD 4.59 billion in revenue in 2023.
- The electricity generation segment is expected to reach USD 7.72 billion by 2031.
- The industrial end-use segment is anticipated to record the fastest CAGR of 5.41% during the forecast period.
- Asia Pacific is anticipated to grow at a CAGR of 4.86% during the forecast period.
Growth Driver: Rising Demand for Renewable Energy
The need to reduce carbon emissions and address climate change is the main force behind geothermal growth. Businesses, governments, and consumers are prioritizing sustainability, and that is encouraging a shift toward clean sources. Demand is also shaped by energy security, cost efficiency, and regulatory pressure, while continuous advances in renewable technology are helping transform the global energy landscape.
The long-term potential is large. According to a December 2024 report from the International Energy Agency, geothermal energy could meet 15% of global electricity demand by 2050, with the potential to deploy 800 GW of capacity, an output comparable to the combined electricity demand of the United States and India.
Market Challenge: Dependence on Specific Geological Conditions
Resource risk and site dependency are the primary challenges. Project viability depends heavily on geological conditions, which limits development to certain regions. Even exploratory efforts may fail to confirm commercially viable heat reservoirs, and inaccurate assessments can cause costly delays and sunk investment in non-productive sites.
To manage this risk, developers are using advanced exploration technologies such as 3D reservoir modeling, seismic imaging, and geophysical surveys, which improve the accuracy of subsurface evaluations and reduce the likelihood of unsuccessful drilling. Collaboration with academic institutions and access to public-sector exploration data have also improved site selection and reduced uncertainty in early project phases.
Market Trend: Capital Flowing into Direct Heat Utilization
Investment is broadening beyond electricity generation to direct-use geothermal heat. District heating, greenhouse farming, and industrial processes increasingly rely on geothermal heat for its reliability and low emissions, and these applications offer steady returns while reducing reliance on fossil fuels. Supportive government frameworks and technological progress are making direct-use projects more commercially viable.
In March 2025, the World Bank approved a project to boost El Salvador’s renewable energy capacity through geothermal development. Implemented by state-owned LaGeo, it includes a 25 MW geothermal plant in the Chinameca Field with potential expansion to 40 MW, along with resource exploration and local employment during construction and operation.
Segmentation Analysis
By technology, the market covers dry steam, flash steam, and binary cycle power stations, with subcategories that include enhanced geothermal systems, single- to triple-flash designs, and Organic Rankine Cycle and Kalina Cycle binary plants. Flash steam stations earned USD 4.59 billion in 2023 because they efficiently harness medium- to high-temperature resources for reliable power generation.
By application, electricity generation held a 73.43% share in 2023 on the back of global demand for renewable power and the scalability of geothermal plants, and it is projected to reach USD 7.72 billion by 2031. By end-use industry, the market covers residential, commercial, industrial, and utility-scale projects. The industrial segment is projected to reach USD 4.8 billion by 2031, driven by energy-intensive industries seeking sustainable, cost-effective energy.
Regional Analysis
North America held a 38.12% share in 2023, valued at USD 3.01 billion. Strong government support, favorable regulation, substantial public and private investment, advanced technology providers, and a highly skilled workforce explain the region’s lead. In June 2024, the U.S. Department of Energy’s Geothermal Technologies Office announced the GRID Funding Opportunity to support regional grid modeling studies. The initiative aims to highlight geothermal’s role in delivering reliable, clean power to over 65 million homes and to develop new valuation metrics and tools that communicate its economic and reliability benefits.
Asia Pacific is projected to grow at a CAGR of 4.86%, reaching USD 2.56 billion by 2031. The region’s abundant geothermal resources, rising energy demand, and a strong push for sustainable energy are key factors. Governments are offering incentives and favorable policies, while advances in exploration and drilling and growing awareness of low-carbon options support expansion. In July 2024, Turboden, part of Mitsubishi Heavy Industries, launched a 28.9 MWe geothermal plant at Energy Development Corporation’s Palayan Bayan expansion in the Philippines, expected to generate 253,000 MWh annually and reduce carbon emissions by 72,200 tons per year.
Regulatory Framework
In the United States, the Bureau of Land Management, part of the Department of the Interior, supervises geothermal development on public lands, managing leases and regulating operations to protect the environment and ensure responsible resource management. In India, the Ministry of New and Renewable Energy is the key authority overseeing geothermal regulations. In Europe, the European Geothermal Energy Council advocates for the industry and works to improve regulatory frameworks that support development.
Competitive Landscape
The market includes a large number of participants, from established corporations to rising organizations. Companies are using mergers and acquisitions and new product launches to strengthen their position, expand technological capabilities, and form strategic partnerships. Enhanced geothermal has drawn particular attention from strategic investors because it offers dispatchable, carbon-free energy that addresses the intermittency of solar and wind, especially for industrial applications.
Major companies profiled include Turboden S.p.A., Ormat, Mitsubishi Heavy Industries, Ltd., Baker Hughes, NIBE Group, SLB, Atlas Copco, Exergy International S.r.l., Toshiba Energy Systems and Solutions Corporation, General Electric, Ansaldo Energia, Siemens, Yokogawa India Ltd., Ethos Energy Group Limited, and Calpine Corporation.
Recent Developments
- In April 2024, Turboden collaborated with Fervo Energy to advance continuous, carbon-free energy generation and innovation in the geothermal sector.
- In February 2024, Mitsubishi Heavy Industries invested in Fervo Energy to integrate its enhanced geothermal solutions with Mitsubishi’s power generation portfolio.
- In January 2024, Ormat acquired 100% equity interest in a portfolio of operating geothermal and solar assets from Enel Green Power North America for USD 271 million, including two geothermal plants, a hybrid geothermal-solar facility totaling 60 MW, two solar projects totaling 40 MW, and two greenfield assets.
- In March 2023, Ecopetrol and Baker Hughes signed a memorandum of understanding to study a 50-100 MW geothermal project in Colombia’s Nereidas Valley, with the potential to supply over 250,000 households.
Strategic Implications for Stakeholders
For utilities and independent power producers, the report suggests that geothermal’s value lies in its reliability. Unlike intermittent sources, geothermal can provide steady output, which makes it a natural complement to solar and wind portfolios. For technology and equipment providers, binary cycle and enhanced geothermal systems open access to resources that were previously difficult to develop, while advanced exploration tools reduce the cost of failure. For industrial users, direct-use heat offers a path to lower emissions in energy-intensive processes. For governments and development institutions, targeted funding, clear leasing frameworks, and public exploration data can lower early-stage risk and attract private capital, as the El Salvador project and the U.S. grid modeling initiative show. Ultimately, geothermal’s role in the energy transition will be determined by how effectively the industry reduces resource risk, lowers development costs, and demonstrates its value as firm, low-carbon capacity.
Outlook
Geothermal’s growth rate of 3.81% is modest compared with some other renewables, but the market’s character is attractive: output is steady, emissions are low, and the resource is available around the clock. The most dynamic opportunities lie in industrial heat and electricity, direct-use applications, and enhanced geothermal systems, backed by strategic investors and government programs. Developers that can lower resource risk through better subsurface modeling, and that secure supportive policy frameworks, are likely to capture the greatest share of new projects through 2031.
The full Kings Research report, released in April 2025 and spanning 160 pages, provides additional detail on technologies, applications, regions, and competitors.
About Kings Research
Kings Research is a market research and consulting firm, part of One Media Group, that delivers data-driven intelligence and strategic guidance to help organizations identify, evaluate, and capitalize on market opportunities across industries. Its reports combine quantitative market sizing with qualitative analysis of drivers, challenges, trends, regulatory frameworks, and competitive landscapes.
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