Geothermal energy – Costs, installed capacity and current issues

Geothermal energy sector has plenty of room to grow, but geothermal energy is in most countries overshadowed by other renewable energy sources, most notably solar and wind. The only real exceptions to this rule are Iceland and Philippines, where geothermal energy belongs to most important energy sources in the country.

The United States still leads the world in totally installed geothermal capacity, with 3.1 GW, and is followed by the Philippines (1.9 GW), Indonesia (1.2 GW) and Mexico (1 GW).

The latest Worldwatch Institute study reports that only 136 MW of new geothermal power capacity was installed in 2011, with the vast majority coming from two major geothermal energy projects: a 90 MW facility in Iceland and a 42 MW plant in Costa Rica. In other countries, geothermal energy sector has been pretty much stagnating because solar and wind are sectors that are receiving lion's share of total renewable energy investments because many countries offer favorable incentives for new solar and wind projects, which often isn't the case with geothermal projects.

It has been said that the average geothermal generation costs are around 5.7-10.7 cents per kilowatt-hour. The thing that drives investors away from new geothermal energy projects is high upfront costs, which are primarily connected with the cost of drilling geothermal wells and the long lead time for project development. New geothermal technologies are yet to be fully developed meaning that new geothermal projects still remain highly location specific.

Many of 24 countries that currently harness geothermal energy resources have been exploiting it for power generation for over a century, with significant capacity being developed since the 1950s. Despite not being the most popular renewable energy source, geothermal energy sector is still moving forward. One of the main reasons for this is the fact that geothermal energy is very reliable source of energy, and doesn't suffer from intermittency like solar and wind do. The lack of intermittency means that geothermal energy provides reliable baseload power.