The global enhanced geothermal system market is experiencing growth due to an increasing concern about climate change, high consumption of electricity and the need to reduce greenhouse gas emissions.
WILMINGTON, Del., Oct. 25, 2023 /PRNewswire/ -- Allied Market Research published a report, titled, "Enhanced Geothermal System Market by Resource Type (Hot Dry Rock, Sedimentary Basin, Radiogenic, Molten Magma), by Depth (Shallow, Deep), by Simulation Method (Hydraulic, Chemical, Thermal), by End Use (Residential, Commercial) Global Opportunity Analysis and Industry Forecast, 2023-2032 ". According to the report, The Enhanced Geothermal System Market was valued at $2.0 billion in 2022 and is estimated to reach $3.3 billion by 2032, exhibiting a CAGR of 5.2% from 2023 to 2032.
An Enhanced Geothermal System (EGS) is a geothermal energy technology that harnesses the Earth's core heat to generate power. EGS involves creating an artificial geothermal reservoir by injecting water into deep, hot, and dry rock formations located beneath the Earth's crust. This is different from conventional geothermal systems, which rely on naturally occurring pockets of steam and hot water. The injected water is heated by the surrounding rocks and then brought back to the surface where it condenses into steam, which is utilized to drive turbines for electricity generation.
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Prime determinants of growth
The global enhanced geothermal system market is experiencing growth due to an increasing concern about climate change, high consumption of electricity and the need to reduce greenhouse gas emissions. However, high investment cost and competing energy sources hinder the market growth to some extent. Nevertheless, growth in residential and commercial construction will provide ample growth opportunities in the future.
Report coverage & details:
Report Coverage |
Details |
Forecast Period |
2023–2032 |
Base Year |
2022 |
Market Size in 2022 |
$2.0 billion |
Market Size in 2032 |
$3.3 billion |
CAGR |
5.2 % |
No. of Pages in Report |
380 |
Segments covered |
Resource Type, Depth, Simulation Method, End Use, Region. |
Drivers |
Surge in demand for clean energy |
High consumption of electricity |
|
Technological advancements |
|
Opportunities |
Growth in residential and commercial construction. |
Restraints |
High investment cost |
Competing energy sources |
The commercial segment to maintain its leadership status throughout the forecast period.
Based on end-use, commercial held the highest market share in terms of revenue in 2022, accounting for nearly four-fifths of the global market and is projected to maintain its dominant share in terms of revenue in 2032. One significant trend is the increase in adoption of EGS for heating and cooling purposes in commercial buildings. Businesses may tap into the geothermal heat reservoirs of the Erath to provide year-round temperature control, reducing energy bills and carbon footprints with EGS. This trend aligns with the growth in demand for energy-efficient solutions in the commercial sector, where sustainability is a top priority. However, the residential segment is projected to grow at the highest CAGR of 5.3% from 2023 to 2032. One of the most compelling trends is the increase in global focus on renewable energy sources. EGS, harnessing the natural heat of the Earth, aligns perfectly with this trend. Residential consumers have increasingly inclined to adopt cleaner energy solutions as awareness of climate change grew.
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The hot dry rock segment to maintain its leadership status throughout the forecast period.
Based on resource type, hot dry rock held the highest market share in terms of revenue in 2022, accounting for nearly half of the global market, and is projected to maintain its dominant share in terms of revenue in 2032. Advancements in drilling and reservoir stimulation techniques have been pivotal in the growth of EGS. Improved drilling technologies, such as directional drilling and advanced materials, have made it easier to access hot rock resources deep within the crust of the earth. Enhanced reservoir stimulation methods, including hydraulic fracturing and thermal stimulation, have made it possible to create and sustain geothermal reservoirs in previously untapped areas. However, molten magma segment is projected to grow at the highest CAGR of 5.7% from 2023 to 2032. The increase in global demand for clean energy sources amid growing environmental concerns has spurred interest in EGS. EGS offers a reliable alternative that may produce electricity continuously, regardless of weather conditions or time of day as traditional fossil fuels become less economically and environmentally viable. This reliability makes EGS a crucial component in the transition to a low-carbon energy future.
The deep segment to maintain its leadership status throughout the forecast period.
Based on depth, the deep segment held the highest market share in terms of revenue in 2022, accounting for nearly 90% of the global market, and is projected to maintain its dominant share in terms of revenue in 2032. Enhanced Geothermal Systems (EGS) represent a promising frontier in the field of renewable energy, tapping into the vast reservoirs of geothermal heat of the Erath at deeper depths. First and foremost, the growth in global demand for clean and sustainable energy sources is a major driver. However, the shallow segment is projected to grow at the highest CAGR of 5.4% from 2023 to 2032. Enhanced Geothermal Systems (EGS) at shallow depths have experienced a resurgence of interest and innovation as the world seeks sustainable and clean energy sources. Several key drivers and trends have shaped the development and deployment of EGS technology in shallow geothermal reservoirs.
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The hydraulic segment to maintain its leadership status throughout the forecast period.
Based on simulation method, hydraulic held the highest market share in terms of revenue in 2022, accounting for more than three-fourths of the global market and is projected to maintain its dominant share in terms of revenue in 2032. The increase in demand for renewable energy sources has spurred a growth interest in EGS, making it essential to optimize reservoir performance. Hydraulic simulation allows for the prediction of reservoir behavior under various operating conditions, enabling operators to fine-tune injection and extraction rates, monitor pressure and temperature changes, and mitigate potential risks such as induced seismicity. These capabilities are crucial for maximizing energy production while minimizing environmental impacts. However, the thermal segment is projected to grow at the highest CAGR of 5.6% from 2023 to 2032. One of the primary drivers for employing thermal simulation methods in EGS is the need for efficient and sustainable energy sources. EGS offers a clean and virtually limitless source of energy as the world grapples with the challenges of climate change and the depletion of traditional fossil fuel resources. Thermal simulations play a crucial role in understanding the subsurface thermal behavior, aiding in the design and optimization of EGS projects.
Europe to maintain its dominance by 2032
Based on region, Europe held the highest market share in terms of revenue in 2022, accounting for more than two-fifths of the global market and is projected to maintain its dominant share in terms of revenue in 2032. The geological diversity of Europe plays a crucial role in driving EGS advancements. The continent boasts a wide range of geological formations suitable for geothermal energy extraction. This diversity offers multiple opportunities for EGS projects, making it adaptable to various regional contexts. However, the Asia-Pacific region is projected to grow at the highest CAGR of 5.5% from 2023 to 2032. Technological advancements and research initiatives have played a pivotal role. Collaborations between governments, research institutions, and the private sector have accelerated EGS development, making the technology more efficient and cost-effective.
Leading Market Players: -
- ABOITIZ POWER CORPORATION
- ALTAROCK ENERGY, INC.
- CALPINE
- ENEL SPA
- FIRST GEN
- FUJI ELECTRIC CO., LTD.
- MITSUBISHI HEAVY INDUSTRIES, LTD.
- ORMAT
- TOSHIBA CORPORATION
- YOKOGAWA ELECTRIC CORPORATION
The report provides a detailed analysis of these key players in the global Enhanced Geothermal System Market. 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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