BAKU, Azerbaijan, November 28. Global investment in geothermal energy is poised for strong growth, with capital expenditures expected to rise around 20% annually through 2030, according to recent research from Rystad Energy, Trend reports.
The sector is expanding beyond its traditional hubs in Southeast Asia and the US, with growing interest in Europe and Africa, contributing to a more globally diversified market.
Rystad’s analysis shows that spending remains relatively consistent across development categories: just over half goes to surface facilities, about 47% to subsurface work, and roughly 2% to pre-final investment decision (FID) activities. While the pre-FID share is small, it carries high risk as early exploration determines whether projects move forward. This stable cost structure keeps financing needs and project timelines fairly uniform across regions.
Geothermal deployment varies by region. In Europe, the focus is on district heating and decarbonizing heat, driven by municipal heating networks and climate targets. In Asia, particularly Indonesia, and North America, geothermal is mainly used for electricity generation, reflecting strong baseload power demand and abundant geological resources. Enhanced geothermal systems (EGS), which tap hot rock rather than aquifers, are helping reduce site dependence and unlock additional clean power potential.
The technology’s long-term potential in cooling applications is also emerging. Pilot projects, including the UAE’s G2COOL plant, are exploring geothermal solutions for data centers. Rystad notes that district heating systems generally require about $3 per watt, roughly half the cost of power-focused geothermal plants at $6 per watt, due to the need for turbines and complex surface infrastructure in electricity projects.
Alexandra Gerken, Rystad Energy’s Vice President of New Energies Analysis, said the research highlights geothermal’s dual role as a source of clean baseload power and heat, increasingly tailored to regional needs. Policymakers, investors, and developers can use these insights to assess project feasibility and prioritize investments as the sector grows globally.