The International Energy Agency (IEA) has published a detailed report on the potential of geothermal energy to supply the world’s growing demand for electricity, and the new technologies, regulatory changes, and the mobilization of the oil and gas industry that will facilitate the realization of this potential.
The report finds that there is potential for the deployment of up to 800 GW of geothermal capacity worldwide, accounting for 15% of the global electricity demand growth between now and 2050. This number currently only stands at 1%, highlighting the challenges of the sector but also its immense growth potential.
The report places a special highlight on “next-generation” geothermal technologies such as Enhanced Geothermal Systems (EGS) and closed-loop Advanced Geothermal Systems (AGS). Such technologies can greatly expand the geographical scope of where geothermal power and heating can be developed. However, early- and growth-stage investment remains a key enabler in allowing these technologies to achieve economies of scale and become cost-competitive.
The report also goes into the role of the oil and gas industry in providing the expertise and technology for the wider deployment of geothermal technologies and reducing the cost of geothermal development. Moreover, diversifying into geothermal also helps oil and gas companies and professionals by providing new business opportunities should there be a decline in oil and gas demand in the future.
The lack of policy support in many territories is cited by the report as one of the major gaps in geothermal development. While more than 100 countries have policies to support solar PV and/or onshore wind, less than 30 countries have implemented policies specifically for geothermal. In this context, the report makes a number of policy recommendations that can help increase the visibility of geothermal, attract more investment, and mitigate the risks of geothermal development with faster permitting and financial schemes.
Studies done for the report benefitted from the outcomes and discussions of a “Future of Geothermal Energy” workshop held by the IEA earlier this year with more than 100 public and private stakeholders from around the world.
