Geothermal Power Equipment Market - Energy Generation No Longer Reliant on Fossil Fuels or Climate Change

A new research report published by Transparency Market Research (TMR) quantifies the growth trajectory and uncovers insights that point toward a propitious decade for the geothermal power equipment market. There are myriads of reasons to be optimistic about the market; the first being governments’ shift towards cleaner and greener energy, after decades of imprudent use of fossil fuels, and the increasing need for energy conservation. The growing emphasis on the generation and use of renewable energy has led to the introduction of incentives to attract new investors into the renewable energy generation industry.

The sales of geothermal power equipment will gather strength on account of the shift from solar and wind energy to geothermal energy. Technological leaps, and the evolution of exploration and drilling, power generation, steam field, and heating technologies will improve the quality of geothermal power equipment, and, in turn, better the chances of their adoption.

Since a majority of residential, industrial, and commercial operations rely on electricity, geothermal energy will play a pivotal role. Sensing the shift to renewable practices from fossil fuels for energy generation, companies are shrinking their carbon footprints by widening their geothermal footprints, which will act as a crucial lever for the market. However, high upfront investment and a long payback period are likely to act as a throttle as far as attracting new working capital for operating and maintaining power plants is concerned. Overall, the geothermal power equipment will grow at a steady pace, and will arrive at a value of ~US$ 32 billion by the end of 2027.

geothermal power equipment market infographic

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Popularity of Geothermal Energy Outshines Solar and Wind Energy

Though the world is looking at geothermal power plants as contemporary energy generation sources, the 'profitability concern', as seen through a businessman’s lens, is likely to shrink investments. High capital, right from the initial exploration phase to the operational stage, is required to develop geothermal projects, which is being followed by a sharp uptake in the operational and maintenance costs for geothermal power plants. However, effective measures such as support mechanisms in clean energy technology, as initiated by the governments of numerous countries, are likely to offset this challenge.

Yet another challenge for the geothermal sector is the increasing popularity of solar and wind power plants. All green renewable energy sources are better than conventional fossil fuels; solar panels are witnessing a dramatic drop in their prices, which retains their sheen.

However, the crucial requisites for solar panels and windmills to operate efficiently are the sun and wind, which are subjected to climate changes. During peak rainy seasons, solar panels may lose efficiency, and during peak summers, windmills may become irrelevant, which makes geothermal energy favorable for year-round energy requirements, and lends an opportunity to discerning investors to invest in the geothermal power equipment market. The geothermal power equipment market is projected to hold a value of ~US$ 21 billion in 2019, with products and power plants being the key competitive parameters.

Drilling Down the Key Trends

In 2018, energy generated through global geothermal power accounted for a capacity of 14,600 MW, and this is currently being generated in 26 countries. The vital requisite for harnessing geothermal energy is the availability of locations with extreme heat resources, which makes binary cycle power plants suitable for the generation of energy even in regions with low heat. However, speaking of cost, the installation costs for binary cycle power plants tend to be higher than dry steam plants and flash steam plants.

Flash steam plants leverage high-pressure hot water from the Earth’s surface, to convert it into steam, and drive the turbines of generators. In addition, when steam cools down, it condenses into water, which is injected back into the ground for reuse. The sales of geothermal power equipment for flash steam power plants are anticipated to record a value of ~US$ 12 billion in 2019, and are likely to register at a compound annual growth rate of ~6% during the forecast period.

With ongoing developments and technological advancements, the adoption of geothermal power equipment will grow in terms of value, and turbines are likely to remain the top-selling category. The sales of turbines are likely to register a value of ~US$ 5.3 billion in 2019, and will record a compound annual growth rate of ~6 percent during 2019-2027. The high-value growth of turbines can be ascribed to their prowess of converting various types of energy, while other power generation equipment have a role after the energy conversion phase.

geothermal power equipment market segmentation

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Asia Pacific to Hold on to its Leading Position

As the initial investment required for the installation of a geothermal power plant is substantially high, governments’ support mechanism in the form of tax credits, grants, renewable portfolio standards, and feed-in-tariffs play a pivotal role. One such example of a successful feed-in-tariff plan can be taken from Japan. A feed-in-tariff system was launched in Japan, in 2012, for encouraging investments in renewable energy equipment.

Beside Japan, large-scale geothermal energy is produced in the Philippines and Indonesia to meet the electricity needs that were traditionally catered to by fossil fuels. Urban sprawl in China and India that create high demand for electricity, coupled with improving power distribution networks, are likely to drive the shift towards sourcing geothermal energy. The aforementioned influencers are likely to catalyze the growth of the Asian geothermal power equipment market, and move it to a value of ~US$ 12 billion by the end of 2027.

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What Should Market Participants Look At?

In the highly fragmented landscape, competitors contend on the parameters of design and technology, as continuous product-level innovation and upgrades exert their influence on market growth. Mitsubishi Heavy Industries, Ltd. is one such leading company that is focusing on product innovation. The company takes an innovative market approach to integrate solutions for catering to a wide array of industrial requisites. It strongly prioritizes investments in infrastructural development by pioneering new technologies.

Manufacturers of geothermal power equipment can also look at the supply, design, and production of an entire power plant by collaborating with governments of countries, wherein, literature and awareness about this renewable energy generation source is scarce. For instance, Fuji Electric Co. Ltd. was awarded a geothermal power station contract in Kenya. The scope of the contract was to set up a complete geothermal power equipment facility for the Olkaria I Geothermal Power Station in Kenya.

As the energy generation capacity of a geothermal power plant is dependent upon the power equipment, manufacturers can intently focus on harnessing technologies to improve the efficiency of their products. The introduction of new technologies in developing countries of Asia Pacific will remain profitable. All-in-all, manufacturers should look at the geothermal power equipment market moving at a compound annual growth rate of 5.5 percent.

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Geothermal Power Equipment: Description

Geothermal energy is the heat derived from within the sub-surface of the Earth. Depending upon its characteristics, geothermal energy can be used for heating or cooling, and can also be harnessed to generate clean electricity. Geothermal power plants are of three types: dry steam plants, flash steam plants, and binary cycle power plants. Geothermal power equipment is employed to generate and transfer power. Geothermal power equipment includes transformers, turbines, generators, separators, and condensers. Currently, geothermal power is generated in 27 countries. The total installed capacity of geothermal power generation in the world stood at 14,600 MW in 2018.

Geothermal Power Equipment Market: High Investments in Renewable Energy Generation

  • Rise in environment protection regulations across the globe is encouraging the power generation industry to opt for cleaner and eco-friendly energy resources. Major economies across the world are focused on renewable energy generation to reduce their dependence on conventional power. Records indicate that, the worldwide dependence on coal and other fossil fuels is decreasing due to rise in investments in renewable energy sources such as solar, wind, biomass, and geothermal.
  • Geothermal is a major source of renewable energy, and can resolve several global challenges. Its use offers various advantages over conventional sources of energy. Geothermal energy also offers benefits over other renewable energy sources such as solar, wind, and biomass. Hence, most countries are investing significantly in geothermal energy. This, in turn, is expected to drive the global geothermal power equipment market during the forecast period.
  • According to the International Geothermal Association (IGA), the development of around 15,000 MW of power generation capacity is either ongoing or planned. This capacity is anticipated to more than double the current installed capacity in the near future.

Geothermal Power Equipment: High Initial Costs

  • Geothermal power plants are capital intensive, but they incur very low running costs. Development costs have increased over time, due to the rise in EPC and commodity prices and increase in drilling costs. This is in line with the trends in the oil & gas sector.
  • The cost of flash geothermal power generation projects varies between US$ 1,900/kW and US$ 3,800/kW. The installed cost of a typical project of a binary geothermal power plant ranges from US$ 2,250/kW to US$ 5,500/kW. Thus, the high initial investment required for the establishment of a geothermal power plant is hampering the global geothermal power equipment market.

Increase in Demand for Electricity Provides Opportunities to Geothermal Power Equipment Market

  • Significant rise in global population, growth of the industrial sector, and increase in infrastructure development activities are boosting the demand for electricity. The demand for energy has been increasing due to the growth of economies and improvement in the standards of living.
  • Countries across the globe are expanding their electricity generation capacity by installing new plants or increasing the capacity of their existing plants to cater to the rising demand for electricity. Most countries are inclined toward the development of renewable energy generation sources, due to the presence of stringent government regulations regarding greenhouse gas (GHG) emissions. Thus, rise in the demand for power across the globe has boosted the installation of geothermal power plants, thereby propelling the global geothermal power equipment market.

Geothermal Power Equipment Market: Recent Developments, Expansions, Acquisitions, and New Contracts

  • In February 2019, Ethiopian Electric Power (EEP), a state utility firm, signed an agreement with two China-based firms and one Kenya-based firm for a 70-MW geothermal energy project.
  • In August 2018, Fuji Electric Co., Ltd. was awarded a geothermal power station contract in Kenya. The contract is in regard to setting up a complete geothermal power facility for the Olkaria I Geothermal Power Station (Olkaria I) in Kenya. The output of the station is around 70 MW, and the station is likely to be operational by 2021. Kenya Electricity Generating Company (KenGen) is an EPC contractor for the project. This is Fuji Electric Co., Ltd.’s first project in Africa.
  • In 2017, Mitsubishi Hitachi Power Systems (MHPS), along with Mitsubishi Corporation and H. Young & Company (East Africa) Ltd., received an order to supply power generation facilities to Kenya Electricity Generating Company Limited (KenGen). MHPS would be providing steam turbines, generators, condensers, and other key auxiliaries for the geothermal facility, along with EPC services.
  • In 2015, General Electric signed a memorandum of understanding (MoU) with Pertamina Drilling Services, an Indonesia-based company, to develop integrated solutions for oil, gas, and geothermal equipment and services.

Asia Pacific to be a Highly Lucrative Market for Geothermal Power Equipment

  • Asia Pacific dominated the global geothermal power equipment market in 2018. The geothermal power equipment market in the region is anticipated to expand at a fast pace during the forecast period, due to rapid urbanization and industrialization, and growth of the manufacturing sector in developing economies in the region. Also, the growing significance of renewable electricity fuels the global geothermal power equipment market.
  • North America is the second-largest market for geothermal power equipment. In 2017, the U.S. states of California, Nevada, Utah, Alaska, and Hawaii had the maximum installed capacity for geothermal power generation.
  • Currently, California has installed more renewable energy than any other U.S. state, with utility-scale systems of 22,250 MW being operational in the state. A total of 43 geothermal power plants are operating in California currently, with an installed capacity of 2,730 MW. As per the University of Michigan, in the U.S., electricity generated from geothermal power plants is projected to increase to 65.75 billion kWh by 2050 from 15.98 billion kWh in 2017.

Highly Competitive Geothermal Power Equipment with Dominance of Top Players

  • The global geothermal power equipment market is highly fragmented. The presence of a large number of local, regional, and global players makes the geothermal power equipment market this highly fragmented.
  • Key players operating in the global geothermal power equipment market are
    • MITSUBISHI HEAVY INDUSTRIES, LTD,
    • General Electric
    • Toshiba Corporation
    • Fuji Electric Co., Ltd.
    • Ormat Technologies Inc.
    • Boreal Geothermal
    • Loki Geothermal
    • Turboden S.p.A
    • Chevron Corporation 
    • TAS Energy Inc. 
    • Ergil
    • Ansaldo Energia S.p.A.

Geothermal Power Equipment Market - Scope of the Report

A latest research report published by Transparency Market Research (TMR) measures the impact of the crucial levers that drive the growth of the geothermal power equipment market during the forecast period of 2019-2027. This comprehensive report on the global geothermal power equipment market is an in-depth overview of the geothermal power equipment market, covering crucial aspects, segmentation based on various parameters, and the competitive landscape. This exclusive study also sheds light on the research methodologies followed in order to arrive at precise market numbers. This comprehensive study also includes relevant charts and tables so as to enable stakeholders in getting a clear perspective of the geothermal power equipment market.

This statistical research report studies, at length, the key insights culled by this business study. With the help of rare and distinguished insights covered in this research report, stakeholders in the geothermal power equipment market can devise sustainable strategies and gain an upper hand over their competitors. Numerous factors responsible for the geothermal power equipment market’s upward growth trajectory are

isar also studied at length in this comprehensive research report. In addition to this, the report lists down and explains the key drivers, threats, restraints, and opportunities available in the geothermal power equipment market.

This comprehensive study of the global market for geothermal power equipment analyzes the growth drivers as well as restraints at length. This exclusive study of crucial factors can assist market participants in comprehending the challenges present in the geothermal power equipment market during the forecast period of 2019-2027. The research report also gauges the bargaining power of buyers and suppliers, threat from new market entrants and substitutes, and the degree of competition present in the geothermal power equipment market. The influence exerted on the geothermal power equipment market by government policies is also covered in this research report.

Geothermal Power Equipment Market - Segmentation

This exclusive research report encompasses the technological advancements as well as recent trends in order to get a better perspective regarding the growth of the geothermal power equipment market. In order to help market participants have a precise market approach, our analysts have segregated the geothermal power equipment market into key segments - plant, product, and region. This study further offers information regarding the incremental opportunities present in the geothermal power equipment market during the forecast period. Key segments of the geothermal power equipment market are as mentioned below:

Plant

Product

Region

Dry Steam Plants

Transformers

North America

Flash Steam Plants

Turbines

Europe

Binary Cycle Power Plants

Separators

Asia Pacific

 

Generators

Latin America

 

Condensers

Middle East and Africa

 

Others

 

Geothermal Power Equipment Market - Key Questions Answered

This exclusive research report assesses and answers key questions pertaining to the growth of the geothermal power equipment market during the forecast period. Some of the significant questions answered in this research report include:

  • What are the recent developments and crucial market shifts observed in the geothermal power equipment market during the forecast period?
  • What are the crucial strategies followed by market players operating in the geothermal power equipment market?
  • What are some of the recent developments that new market participants should look at?
  • Which product will be the top-selling one in the geothermal power equipment market?

Geothermal Power Equipment Market - Research Methodology

Research conducted by analysts of Transparency Market Research (TMR) comprises a systematic approach, with a view to obtain significant insights into the geothermal power equipment market for the forecast period of 2019-2027. Interviews and discussions conducted with key market participants, opinion leaders, vendors, distributors, and industry experts are also included in this exclusive study. Additionally, an in-depth secondary study of company websites, industry associations, marketing collaterals, and government statistics is also carried out.

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