Geothermal technology extracts the heat found within the subsurface of the earth, which can be used directly for heating and cooling, or converted into electricity. However, to generate electricity, medium- or high-temperature resources are needed. These are usually located close to tectonically active regions where hot water and/or steam is carried to the Earth’s surface or can be accessed at shallow depths.
The main advantages of geothermal energy are its low cost and its ability to operate year-round at high capacity factors. This allows it to provide firm, dispatchable electricity and, if incentivised, ancillary services to the electricity system. As the penetration of solar and wind power grows, these characteristics become more valuable.
The levelised cost of electricity (LCOE) from geothermal power projects averaged between USD 0.049 and USD 0.085 per kWh between 2010 and 2020. As a renewable resource, geothermal covers a significant share of electricity demand in countries such as Iceland, El Salvador, New Zealand, Kenya and the Philippines, and meets more than 90% of heating demand in Iceland.
There are different geothermal technologies with distinct levels of maturity. Technologies for direct use, such as district heating, geothermal heat pumps and heating greenhouses, are widely used and can be considered mature. The technology for electricity generation from hydrothermal reservoirs with naturally high permeability is also mature and reliable, with commercial operations since 1913.
Many of the power plants in operation today are dry steam plants or flash plants, harnessing temperatures higher than 180°C. However, medium-temperature fields are increasingly used for electricity generation or for combined heat and power thanks to the development of binary cycle technology, in which geothermal fluid is used via heat exchangers to heat a process fluid in a closed loop. Additionally, new technologies are being developed such as enhanced geothermal systems, which are at the demonstration stage.
To promote wider geothermal energy development, IRENA co ordinates and facilitates the work of the Global Geothermal Alliance (GGA) – a platform for enhanced dialogue and knowledge sharing for co ordinated action to increase geothermal electricity and heat generation worldwide.