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Geothermal is a lesser-known type of renewable energy that uses heat from the Earth’s molten core to produce electricity. While this unique feature gives it key benefits over solar and wind, geothermal also suffers from high costs and geographic restrictions. Because of this, few countries have managed to produce geothermal energy at scale.
Geothermal energy is produced by accessing reservoirs of hot water that are found several miles below the Earth’s surface. In certain parts of the planet, this water naturally breaks through the surface, creating what’s known as a “hot spring” (or, in some cases, a geyser). When accessed via a well, this pressurized water rises and rapidly expands into steam. That steam is used to spin a turbine, which then drives an electric generator.
Further along the process, excess steam is condensed back into water as it passes through a cooling tower. Finally, an injection well pumps this water back into the Earth to ensure sustainability.
As of 2021, global geothermal power generation amounted to 16 gigawatts (GW). Only a handful of countries have surpassed the 1 GW milestone. To give these numbers context, consider the following datapoints:
- America’s 3.7 GW capacity is split across 61 geothermal plants.
- The world’s largest solar plant, the Bhadla Solar Park, has a maximum output of 2.2 GW.
- The world’s largest hydroelectric plant, the Three Gorges Dam, can produce up to 22.5 GW.
While geothermal plants produce less power, they have benefits over other types of renewables. For example, geothermal energy is not impacted by day/night cycles, weather conditions or seasons.
One reason for the slow adoption of geothermal energy is that it can only be built in regions that have suitable geological features, such as places where there is volcanic activity. Fitch Solutions believes the majority of new geothermal capacity will be installed in Asia over the next decade. On the flipside, investment in North America and Western Europe is expected to decrease.
The top markets for geothermal are expected to be Indonesia, the Philippines and New Zealand, which all lie along the Pacific Ring of Fire. The so-called Ring of Fire is a path along the Pacific Ocean where most volcanic activity occurs.
Excerpted from a report by Visual Capitalist. The complete report is available here.