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Geothermal - the hidden renewable energy resource

17 June 2019

Recent research from the EU Joint Research Council and the International Energy Agency have shed some light on the development of geothermal as a fully renewable energy resource around the world. In this article, Hazardex editor Alan Franck looks at recent progress in this often-overlooked renewable sector, developments in key countries and likely trends for the future.  

Dieng geothermal plant, Indonesia - Shutterstock
Dieng geothermal plant, Indonesia - Shutterstock

Geothermal energy can provide heating, cooling and base-load power generation from high-temperature hydrothermal resources, aquifer systems with low and medium temperatures, and hot rock resources. Each geothermal source is unique in its location, temperature and pool depth, and various geothermal technologies have been developed to maximise returns from specific resources. Flash steam, dry steam, binary and enhanced geothermal systems (EGS) are the leading geothermal technologies for power generation.

International Energy Agency (IEA) statistics show that geothermal power plants provide stable production output, unaffected by climatic variations, resulting in high capacity factors (ranging from 60% to 90%) and making the technology suitable for baseload production. This is particularly common in countries that have high-temperature geothermal resources.

In 2017, the IEA’s Renewables 2018 report estimated that global geothermal power generation stood at 84.8 terawatt hours (TWh), while the cumulative capacity reached 14 gigawatts (GW). Global geothermal power capacity is expected to rise to just over 17 GW by 2023, the agency forecast, with the biggest capacity additions expected in Indonesia, Kenya, Philippines and Turkey.

Only a limited number of countries use geothermal energy directly for heat production, with China and Turkey alone accounting for 80% of consumption in 2017. Over 2012-17, global consumption almost doubled, mostly due to rapid growth in China. Over the outlook period (2018-23), growth is expected to be lower at 24% but to remain important in a number of countries and sectors.

While most geothermal heat is used for bathing (45%) and space heating (34%), agriculture (primarily for heating greenhouses) has long been an important end-use sector in some countries. Over recent years, the energy-intensive greenhouse sector in the Netherlands has expanded geothermal use due to strong policy support, and the country has become the fourth-largest user of geothermal heat in the agriculture sector after China, Turkey and Japan.

Elsewhere, new geothermal heat developments have focused mainly on district heating. In the European Union, nine plants were put into operation in 2017, with 75 megawatt thermal (MWth) of new capacity in France, Italy and the Netherlands.

The EU has the fourth-largest geothermal power capacity in the world – just over 1GW, which is enough to power about 2 million homes. Italy has by far the largest capacity in the EU (915 megawatts (MW), followed by Germany (38 MW) and Portugal (30 MW).

These figures come from the global geothermal energy dataset the EU JRC has been updating since 2014, and which was made available in February 2019.

In 2016, geothermal energy contributed to around 3% of total primary production of renewable energy in the EU, although that has risen in the last two years.

Before 2000, installations were traditionally dominated by large flash turbines. The dataset shows how smaller power plants of the organic Rankine cycle and Kalina type are now gaining market shares.

These new types of plant are able to produce energy at lower water temperatures. They are also more environmentally friendly - geothermal water and the working fluid are kept separated during the whole process, so there are little or no air emissions.

The units can also be produced in very small sizes, meaning minimal disruption to the environment.

Two major advantages of geothermal energy are the reliability of its supply and its nearly unlimited availability. The main disadvantage is the large upfront costs related to exploration and drilling. 


The EU’s geothermal leader has clouds on the horizon.

In December 2018 the General Confederation of Italian Industry (Confindustria) published a white paper on Renewable Energy Resources in Italy to 2030 which opposes the Italian Ministry for Economic Development’s plans to withdraw subsidies from existing renewable plant to concentrate on new installations, particularly in the wind sector.

The country’s existing geothermal power plants require subsidies for refurbishment if they are to increase their output to the full potential of up to 1.1 TWh/year, the paper says.

Confindustria claims that, in terms of overall production costs, geothermal is very much competitive with other renewable sources, particularly wind and photovoltaic. It says continued uncertainty over the subsidy regime will stall any expansion of the sector and compromise the country’s carbon reduction commitments.


Due to the geological location of Iceland over a rift in the Mid-Atlantic between continental plates, the high concentration of subsurface volcanic activity makes the country one of the foremost users of geothermal energy worldwide.

This energy is used in many different ways, including being harnessed for heating and the production of electricity. The energy is inexpensive and in winter major sidewalks in the main cities of Reykjavík and Akureyri are heated and kept free of snow.

Geothermal power plants produce around 30% of the country's electricity. In addition, geothermal heating meets the heating and hot water requirements of around 87% of the nation´s housing. Some of the plants listed below produce both electricity and hot-water for heating purposes; others only electricity.

Nesjavellir is a combined heat and power plant and is situated on top of the most powerful geothermal well in the world. It supplies 1,100 litres a second of 82-85°C heated water through a 27 km long pipeline to the Greater Reykjavik Area. Each of 13 boreholes provides 50 MW of usable warmth and the deepest borehole is 2,265 m (1.4 miles).

Krafla Power Plant is situated in the north-east corner of Iceland, near Lake Mývatn and the volcano Krafla, from which it gets its name. It produces 60 MW of electricity, with an expansion to 90 MW planned.

Svartsengi Power Plant is situated near the International Airport at Keflavik on the Reykjanes peninsula and produces 75 MW of electricity and about 475 litres per second of water at 90°C. It is also used to heat up the pools at the nearby Blue Lagoon bathing area and tourist attraction.

Reykjanes Power Plant, also located on the Reykjanes peninsula, produces 100 MW, 850 GWh/year, using steam from a reservoir at 290-320ºC. This is the first time that geothermal steam at such a high temperature has been used to generate electricity on a large scale.

Reykjanes geothermal plant, Iceland - Shutterstock
Reykjanes geothermal plant, Iceland - Shutterstock

The Netherlands

Geothermal energy utilisation in The Netherlands has been experiencing rapid growth in recent years partially thanks to government-led policies that have tackled potential barriers such as geological uncertainty and the difficulty in ensuring adequate financing.

In a recent interview on the European Geothermal Energy Council (EGEC) website, Frank Schoof, Chairman of Stichting Platform Geothermie, discussed the reasons behind this success and future directions and opportunities.

The geothermal sector in The Netherlands grew mainly thanks to entrepreneurs in the greenhouse sector, Schoof said. Sub-surface data is publicly available, which is crucial to determine the subsurface risk and thereby the financing. The role of the government was also important, with the adoption of a risk-guarantee fund and feed-in tariff for heat.

In the near-future, state-owned oil and gas company EBN should start investing in geothermal projects as a non-operating participant. Although greenhouses remain important customers, the attention is shifting more and more towards the built environment and, in the future, to low temperature industry.

The ‘Geothermal Masterplan’ released in May last year, developed by the geothermal sector in co-operation with EBN and the district heating sector, emphasised the importance of district heating networks for the energy transition.

Schoof thinks the main challenge for the future will be to grow responsibly. Although gas is being phased out in the Netherlands as a heating-source, the price-level of (cheap) gas is the norm. The government is looking at ways to make gas less attractive, while at the same time stabilising the overall cost of living. For geothermal operators we envisage a combination of costs going down and revenues going up which will enable some 400 wells to be used.

The main trend in the Netherlands is a changeover from what has been historically an oil and gas producing country to one where geothermal will be an important part of the renewable mix.


Indonesia is now the second largest geothermal energy producer worldwide, after the United States, having overtaken the Philippines in 2018.

The installed power generation capacity in the country reached 1,924 MW in the first quarter of 2018, the website quoted an Indonesian Energy Ministry report as saying total capacity would reach over 2,000 MW at the end of the year.

Indonesia currently has geothermal reserves of 17,506 MW, with current usage about 11% of reserves.

Director General of Renewable Energy and Energy Conservation (EBTKE) Rida Mulyana told reporters in April 2018 that three new geothermal plants producing 226 MW came on stream in the first half of 2018, with another four producing 110 MW opening in the second half.

The Indonesian Government provides fiscal and non-fiscal incentives to developers of geothermal plant and said it would continue to do so in the future.


The United States leads the world in the amount of electricity generated with geothermal energy. In 2017, US geothermal power plants produced about 16 million MWh, or 0.4% of total US utility-scale electricity generation. In 2017, seven states had geothermal power plants, with California providing 73% and Nevada 21% of total output.

The largest dry steam field in the world is the Geysers, 116 km north of San Francisco. This has 1,517 MW active installed capacity with an average capacity factor of 63%.

Calpine Corporation owns 15 of the 18 active plants in the Geysers and is currently the United States' largest producer of geothermal energy.

The Geysers is now recharged by injecting treated sewage effluent from the City of Santa Rosa and the Lake County sewage treatment plant. This sewage effluent used to be dumped into rivers and streams and is now piped to the geothermal field where it replenishes the steam produced for power generation.

Another major geothermal area is located in south central California, on the southeast side of the Salton Sea, near the cities of Niland and Calipatria, California. In this area there are 15 geothermal plants producing electricity, with CalEnergy owning about half. Combined, the plants have a capacity of about 570 MW.


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