Countries continue the uptake of geothermal energy
Geothermal Energy is Slowly Growing
According to a report by the Earth Policy Institute, geothermal capacity increased by 3 percent in 2013. Although this might seem low compared to other renewable sources like solar (53 percent) and wind (25 percent), geothermal recorded its highest rise since 2007. The slower growth is most probably due to the high initial cost for testing for a viable site. In some cases the developer may have to pay up to 15 percent of the whole project just to find out that the site is not feasible for building a geothermal power plant.
Another reason for the slow growth is the mismatch of geothermal resources and available funds for financing the projects, since the biggest geothermal sites are in developing countries. Countries like Philippines, Ecuador, Ethiopia, Kenya, Peru and Indonesia have enough local geothermal power to meet all their electricity needs. But since they are all developing countries, they don’t have the necessary funds to capitalize on their geothermal resources. In order to address that discrepancy, the World Bank created a Global Geothermal Development Plan, aimed at raising money for test drilling to find viable geothermal sites in developing countries.
Through those projects, valuable experience has been gained, which may lead to lower costs in the geothermal industry. This is critical because after the initial investment for a geothermal plant, it generates electricity 24 hours a day. There is also very little maintenance and running costs, and the electricity generated is cost competitive to electricity from other sources like fossils or nuclear plants.
Top Countries in Geothermal Energy
Currently, the top three countries in terms of installed geothermal capacity are USA, Indonesia and Philippines. They also combine for more than half of the total world capacity. Although the States have the biggest geothermal capacity, only 1 percent of its electricity comes from geothermal energy. Philippians, on the other hand, generate 15 percent of its electricity using geothermal energy.
Indonesia has installed 150MW of geothermal power but is determined to do more in the future and has set a goal to reach 10,000MW capacity by 2025. It is an ambitious goal, but policy makers are trying to steer the industry in the right direction by passing stimulating laws. They increased the guaranteed price per unit for geothermal producers and removed geothermal exploitation from the mining classifications. This is critical since most of the geothermal resources are in forest areas where mining is illegal.
China also has massive untapped geothermal resources. The country has only 27MW of installed capacity but has realized the importance of developing that sector and has set a goal for reaching 100MW of installation by the end of 2015. Sinopec Star Petroleum is the biggest geothermal energy producer in China. It has entered into a collaboration with an Icelandic geothermal energy developer in order to make progress in technology development. The collaboration may lead to a huge boost in China’s geothermal sector since Iceland has years of experience and know how in the Geothermal energy industry.