Geothermal Energy Grows Most Since 1997 as U.S. Market Declines

Apr 22, 2014 3:02 pm ET

April 22 (Bloomberg) -- Geothermal power producers added the most capacity since 1997 last year as developing nations in Asia and other regions seek alternative energy sources, while installation declined in the U.S., according to the Geothermal Energy Association.

The industry added 530 megawatts of new power plants and total installed capacity now exceeds 12 gigawatts worldwide, the Washington-based trade group said today in its annual report. Geothermal power is growing at 4 percent to 5 percent annually.

New U.S. capacity fell 43 percent from 2012 to 85 megawatts as low prices for natural gas and inadequate transmission infrastructure helped curb demand for geothermal power. With more than 3.4 gigawatts in operation, the U.S. is the biggest market, and it’s bucking the global trend. Almost 700 geothermal power plants are under development in 76 countries, often in developing nations seeking to exploit clean sources of power to drive economic growth.

“The U.S. is in a very different position than many of these other countries that are developing,” Karl Gawell, the group’s executive director, said today during a conference call.

Demand is highest in developing African and Asian nations that need utility-scale power, Gawell said. The Philippines is the No. 2 geothermal market with 1.9 gigawatts, and Indonesia is third with 1.3 gigawatts. Geothermal power plants tap underground pockets of steam, which is piped to the surface where it drives turbines to produce electricity.

The U.S. market is dominated by states including California that are seeking to curb their reliance on fossil fuels. About 80 percent of U.S. capacity is in California.

Global capacity may reach 13.5 gigawatts by 2017, according to the report.