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By Ryan Poppe
While geothermal may sometimes be overlooked by mainstream media when discussing renewable energy, those in and around the industry know of its value, importance, and potential. Its growth and progress may be seen as slow, but it has also been persistent. Recent reports and events suggest this industry is gaining steam, not only in the United States but worldwide. Recent statistics and projections are very encouraging for those involved or interested in geothermal energy, and they demonstrate the short and long-term growth potential for this renewable resource.
The World's Biggest Players in Geothermal
While the United States produces the most geothermal energy in the world, Iceland is the most reliant upon it. About 90 percent of the people in Iceland depend on the resource for heating but it is also used in multiple other applications such as warming fisheries, melting snow/ice, etc. Iceland now produces about 27 percent of its electricity from geothermal power.
Five other countries join Iceland in producing more than 15 percent of their electric power from geothermal power. They include El Salvador, Kenya, the Philippines, New Zealand, and Costa Rica. Following the United States in overall production, Indonesia is now second, followed by the Philippines, Turkey, New Zealand, and Mexico. These countries are focusing on weaning themselves off of non-renewable energy resources, especially oil and gas.
In the United States, most geothermal energy is produced in just four states, including California, Nevada, Hawaii, and Utah—however, residential applications have found success across many different states. Overall, only seven total states have geothermal plants in the U.S. The world's largest geothermal field, known as the Geysers, is located about 70 miles north of San Francisco, California. The Geysers have over 350 wells that produce steam in the Mayacamas Mountains for some 22 geothermal plants.
While less than 1 percent of the energy produced in the U.S. is from geothermal resources, reports indicate that may be changing in the not too distant future. In fact, the geothermal landscape is predicted to change fairly significantly in the next half-decade. In the U.S. that use may be fueled by technology that makes geothermal much more available is a wider area of the nation.
Predicted Growth
The International Energy Agency (IEA) is making some bold predictions for significant growth in the production of geothermal power generation capacity by 2023. The IEA predicts growth of 3,600 MW to 4,500 MW in that time. That's close to 5 percent annual growth. They predict geothermal power generation capacity is to grow by some 28 percent or approximately 4GW. Countries expected to lead the growth by 2023 include Kenya, the Philippines, Turkey, and Indonesia. Even in Japan, where nuclear power is a national strategy and produces between 30 and 40 percent of electricity, geothermal is expected to grow by 8 percent by 2024.
While growth of geothermal has been sluggish in the United States in the recent past, optimism is growing. In the United States, the outlook for geothermal production and capacity is improving. The Department of Energy (DOE) believes the U.S. has a minimum potential of 100,000 megawatts of capacity, enough to rival nuclear production in the nation. In 2018 the DOE issued some $16 million in research grants and now believes commercially viable technology could be ready by 2030. Technology could make geothermal much more available across wider areas of the United States.
Increasing Investment in Geothermal
Perhaps the most powerful indication of the strength and potential of geothermal is those who are investing in it. Berkshire Hathaway Energy, for example, has an interest in more than a dozen facilities across the United States that harness or produce geothermal power. Recently a Jeff Bezos and Bill Gates-backed group invested $12.5 million in a geothermal development company. The company is a project investment firm that provides capital to develop geothermal energy power plants using technology that was developed by its parent company. Oil and gas companies are making investments in geothermal, having already developed much of the technology and supply chains needed to tap into the renewable energy source. Some areas are seeing increased interest in geothermal for residential properties—especially after the relatively-recent reinstatement of an expired tax credit. Given the same treatment as other environmentally-friendly home upgrades (via tax credits), more households are able to reliably project a positive ROI from geothermal and are subsequently more likely to install make the investment.
Geothermal currently falls behind wind, solar and hydro in renewable energy production. It is poised, however, to make significant strides in the United States and countries across the globe. As technology improves to increase its availability, especially in the U.S., the opportunities will continue to increase. It is efficient, clean, safe and renewable. It is proven and much of the basic infrastructure is in place. While progress may not happen overnight, professionals who work with or service geothermal systems—both residential and commercial—may find themselves in greater demand over the coming years.
Ryan Poppe is a licensed RE/MAX REALTOR© with Colorado Property Group.