Have You Heard About Geothermal Power?

Written by Jennifer Clark
Posted November 13, 2019

In 2017, the global geothermal power generation market was valued at $6.21 billion. That valuation is expected to rise to $14.85 billion by 2026 — a CAGR (compound annual growth rate) of about 10.17%.

Over the past few years, the desire to find and implement energy alternatives has increased, spurring the rise of the geothermal power generation market.

Geothermal energy power plants are similar to those fueled by coal, gas, and nuclear power. It converts heat to electricity. The difference is geothermal energy gets heat from the earth and turns it into electricity. The energy is obtained by drilling water or steam wells — a process similar to drilling for oil.

The interesting thing about geothermal power plants is that many use the same components (turbines, generators, transformers, and other standard power generating equipment) as traditional power plants. 

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There are three types of geothermal power plants: dry steam, flash steam, and binary cycle. 

Dry steam plants use steam right from a geothermal reservoir to turn the generator turbines. 

Flash steam plants use high-pressure hot water from deep inside the earth and then convert it to steam to turn the generator turbines. Once the steam cools, it condenses to water and is injected back into the ground so it can be used again. Flash steam plants account for most of the geothermal plants today.

Binary cycle power plants transfer the heat from geothermal hot water to another liquid. The heat causes the second liquid to turn to steam which turns the generator turbine.

Geothermal Power Gains Global Adoption

Geothermal electricity generation is currently used in 26 countries, while geothermal heating is in use in 70 countries. As of 2015,  worldwide geothermal power capacity accounted for 12.8 gigawatts (GW). 

Global geothermal power capacity is forecasted to reach 14.5–17.6 GW by 2020. Hydropower, geothermal, and wind power generation represents 30% of Turkey’s electricity production. In 2018, U.S. geothermal energy production accounted for 16.7 billion kilowatt hours (kWh). The Philippines was the second-largest geothermal electricity producer after the U.S., producing around 11 billion kWh of electricity. That’s about 13% of the Philippines’ total electricity generation.

The Geothermal Energy Association (GEA) has estimated that only 6.9% of total global potential has been tapped. Geothermal power is unique because it's constantly available, unlike wind and solar power which rely on favorable weather conditions. 

The increase in demand for geothermal energy is due to a few factors, like:

  • The increasing energy demand from heating and cooling systems, including ground source heat pump and district heating.
  • Favorable legislation to reduce greenhouse gas emissions. 
  • The European Union's introduction of action plans and frameworks, such as the Paris Climate Agreement and the 2030 climate and energy framework. These plans aim to reduce emissions to 47% from the 1990 level. 

The use of geothermal power will increase. With that in mind, here are two companies you should keep on your radar.

Calpine Corporation is America’s largest generator of electricity from natural gas and geothermal resources. It is also one of the largest retail providers of power. The company is headquartered in Houston, Texas and serves 23 American states, Canada, and Mexico. Calpine reported $485 million in net income for its third-quarter fiscal year 2019 results. That’s compared to the $272 million in the prior-year period.

Climeon is a Swedish company that provides heat power systems in Sweden, Europe, Asia, and the U.S. Climeon has been able to produce carbon-free electricity, something that didn’t exist a decade ago. The company is valued at around $450 million. It aims to make geothermal power as accessible as wind and solar, especially with its technology which can make use of low-temperature heat. 

The global geothermal power market is heating up. It’s time you start paying attention.

Until next time, 

Jennifer Clark
Pro Trader Today

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