Geothermal Power Market to Reach $14.5 billion, Globally, by 2034 at 7.0% CAGR: Allied Market Research

WILMINGTON, Del., Nov. 20, 2025 /PRNewswire/ -- The demand for the geothermal power market is driven by its growing application in electricity generation, direct heating, and industrial processes, offering a renewable, reliable, and cost-effective energy solution. Advancements in exploration and drilling technologies, such as enhanced geothermal systems (EGS), improved reservoir management, and advanced heat extraction methods, have significantly boosted efficiency, reduced operational costs, and expanded the accessibility of geothermal resources. These innovations position geothermal power as a sustainable and high-performance alternative to conventional fossil fuels, supporting the global transition toward clean, resilient, and environmentally responsible energy systems.

Allied Market Research published a report, titled 'Geothermal Power Market by Power Station Type (Dry Steam Power Stations, Flash Steam Power Stations, and Binary Cycle Power Stations) and End-Use (Residential, Commercial, Industrial, and Others): Global Opportunity Analysis and Industry Forecast, 2025-2034'. According to the report, the geothermal power market was valued at $7.4 billion in 2024, and is estimated to reach $14.5 billion by 2034, growing at a CAGR of 7.0% from 2025 to 2034.

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Challenges and Management Strategies 

High initial capital investment is the key challenge hampering the growth of the geothermal power market. As. compared to solar and wind projects, which have relatively lower upfront costs and shorter development timelines, geothermal projects require significant financial resources during the exploration and drilling stages. Identifying viable geothermal reservoirs involves extensive geological surveys, seismic studies, and test drilling, all of which are costly and time-consuming. In many cases, exploration does not guarantee success, and the risk of non-productive wells further discourages private investors from committing to large-scale geothermal development. The cost of drilling, which can reach several million dollars per well depending on depth and geological conditions, contributes heavily to the initial capital burden. In addition, building power plants and the necessary infrastructure for steam gathering and transmission adds further financial strain. These expenses often result in longer payback periods compared to other renewable energy technologies, which makes geothermal projects less attractive to investors who are looking for quicker returns. All these factors are expected to hamper the geothermal power market growth. 

Report coverage & details:

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Governing Policies and Regulatory Impacts

• Energy Efficiency Regulations

European Union: The Renewable Energy Directive (EU) 2018/2001 sets binding targets for renewable energy use, encouraging the adoption of geothermal power within the EU's overall energy mix. The Energy Efficiency Directive (2012/27/EU) also emphasizes efficient use of renewable energy sources, including geothermal, to meet energy-saving goals. U.S.: The U.S. Department of Energy (DOE) regulates energy efficiency and provides guidelines for renewable power generation, such as geothermal. Under the Energy Policy Act and related programs, geothermal projects are promoted as part of efficiency and sustainability mandates.

• Environmental Regulations Emissions and Land Use:

Geothermal plants are subject to environmental regulations concerning emissions, water usage, and land disturbance. In the U.S., the Environmental Protection Agency (EPA) requires compliance with the Clean Air Act, Clean Water Act, and the National Environmental Policy Act (NEPA) for geothermal projects. European Union: EU environmental directives, such as the Environmental Impact Assessment (EIA) Directive 2011/92/EU, mandate impact studies for geothermal projects to minimize environmental harm.

• Safety Standards

ISO Standards:

The International Organization for Standardization (ISO) provides standards for geothermal systems, such as ISO 13664 for geothermal drilling and ISO 16923 for operational safety of energy facilities.

National Standards: In the U.S., the Occupational Safety and Health Administration (OSHA) and the American Petroleum Institute (API) provide guidelines for safe drilling operations, well design, and workplace safety during geothermal power plant construction and operation.

• Building Codes and Standards

International Building Code (IBC): In the U.S., the IBC and local building codes apply to the construction of geothermal power plants and related infrastructure, ensuring safety, structural integrity, and efficiency.

•  ASHRAE & IEEE Standards:

 Standards from ASHRAE and the Institute of Electrical and Electronics Engineers (IEEE) guide energy-efficient system design, electrical safety, and performance integration for geothermal facilities.

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Growth Opportunities & Future Outlook

Rising investments in clean energy infrastructure are creating significant opportunities for the geothermal power market. As governments, private investors, and international financial institutions channel more funds into renewable energy projects, geothermal is gaining attention as a reliable and sustainable option to diversify the global energy mix. Large-scale funding for clean energy helps to finance costly exploration and drilling activities, which reduce investment risks associated with geothermal development. Moreover, initiatives such as green bonds, climate funds, and public–private partnerships are making capital more accessible, enabling countries with strong geothermal potential to accelerate project deployment. With a growing emphasis on building resilient, low-carbon energy systems, these rising investments are unlocking new geothermal projects, supporting technological innovations such as enhanced geothermal systems, and expanding opportunities for both established players and emerging markets. All these factors are anticipated to offer new growth opportunities for the geothermal power market during the forecast period.

Key Developments

• In August 2022, Yokogawa Electric Corporation announced that it has completed installation of an IoT system for the Kenya Electricity Generating Company PLC that utilizes mobile communications and other technologies to perform integrated remote performance management at geothermal power stations I additional Unit (AU), II, IV, and V of the Olkaria geothermal complex.

Leading Market Players: -

• Yokogawa Electric Corporation
• Enel Spa
• ABB Ltd
• Toshiba Corporation
• General Electric
• Korea Electric Power Corporation
• Siemens AG
• Tata Power Company Limited
• Mitsubishi Electric Corporation
• Ormat Technologies, Inc

The report provides a detailed analysis of these key players in the global geothermal power industry. These players have adopted different strategies, such as new product launches, collaborations, expansion, joint ventures, agreements, and others, to increase their market share and maintain dominant shares in different regions. The report is valuable in highlighting business performance, operating segments, product portfolio, and strategic moves of market players to showcase the competitive scenario.

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