Asia-Pacific Geothermal Energy Market- Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The Asia-Pacific geothermal energy market is expected to grow with a CAGR of around 7% during the forecast period. The COVID-19 pandemic affected the market adversely as many geothermal drilling projects as well as power plant projects got delayed or halted due to the movement restrictions. As an example, the East Nusa Tenggara geothermal plant in Indonesia was expected to get commissioned in February 2020, but the developers had to shift the completion time to 2021 due to the delays. The Asia-Pacific geothermal energy market is expected to grow in the coming years due to the stability in the geothermal power supply, which is more than other renewables, and the technological advancements happening in the recent picture for its better commercialization. However, the higher exploration cost for geothermal exploration for various applications is expected to impede the market growth in the near future.

Key Highlights

• Binary geothermal power plants are expected to have significant growth during the forecast period due to better performance as compared to other power plant types.
• Many countries in the region conduct frequent conferences to negotiate ideas for geothermal market development, which creates ample opportunities for the market growth. As an example, for the last seven years, the Indonesian Geothermal Association (INAGA), the premier association for the Geothermal industry in Indonesia, has been hosting the Indonesia International Geothermal Convention & Exhibition (IIGCE) in Jakarta Convention Center. and now, the eighth convention is all set to take place in September 2022.
• Indonesia is likely to grow at a faster pace in the regional geothermal energy market during the forecast period due to the various plans fabricated for new geothermal power plants in the country.

Key Market Trends

Binary Plants Expected to Witness Significant Growth

• In binary geothermal power plants, the hot geothermal fluid extracted from the reservoir is directed to a heat exchanger where a secondary fluid with a low boiling point is already circulating. The heat exchange process takes place between the two fluids, and the secondary fluid vaporizes. The vapor formed is used to run the turbine to produce electricity. These types of power plants are recommended as they render advantages like reservoir sustainability, high reliability in their plant performance, and better resource exploitation.
• In the Asia-pacific region, the countries which are at the forefront of the geothermal market are Indonesia, the Philippines, and Japan. In the Philippines, around 10% of the electricity generation is based on geothermal energy. The country is expected to have more share of geothermal power in the near future as many new geothermal power projects are planned in the country,
• Most of the upcoming power plants are binary systems. As an example, in June 2021, the country's Energy Development Corporation (EDC) started the construction of the Palayan binary power plant unit at the Bacman geothermal power generation facility. The new unit will add up to around 28.9MW of power to the already existing two units, Bacman I and II, with a total capacity of 140MW. The commissioning is expected by the end of 2022.
• Furthermore, Japan is anticipating having a new binary geothermal power plant in the Hokkaido province. The Minami-Kayabe Geothermal Power Plant, with a power generation capacity of 6.5MW, is currently under construction and is believed to be the largest upcoming power plant in the country. It is expected to be in service by January 2023.
• Such developments are expected to expand the share of binary geothermal power plants in the region in the evolving scene.

Indonesia Expected to Witness Significant Growth

• Indonesia holds the second position in the global geothermal power industry in the current scenario, with around 4186GWh of geothermal power plant electricity production, as of 2020. The high private investments in the geothermal exploration industry and the government efforts to upscale renewable power generation has led to the success of the geothermal energy sector in the country.
• The on-grid geothermal power plant installed capacity in the country was around 2130MW in the year 2020, an uptrend in the last five years. The country has set a goal to achieve around 7GW of geothermal power by 2025 and 9.3GW by 2035. Thus, many geothermal power projects have been queued to be added to the power generation portfolio in the country.
• In the current scenario, there are about 20 geothermal power projects running in the country, out of which the major two are the Baturaden geothermal power project and the WKP Gunning Ciremai power project. The Baturaden project was in the resource exploration phase in the year 2021 and is expected to generate around 220MW of power when the power plant is in service by 2024.
• In November 2021, the Guning Ciremai geothermal power project, a 110MW power plant project, was planned by PT Pertamina in West Java, Indonesia, and in collaboration with the Indonesia Ministry of Energy and Mineral resources. The project is expected to start the construction phase in 2023 and is likely to get commissioned in 2024.
• Such kind of developments is likely to accelerate the growth of geothermal energy market in Indonesia in the coming years.

Competitive Landscape

The Asia-Pacific geothermal energy market is fragmanted. Some of the major players in the market are Energy Development Corporation, Pertamina Geothermal Energy PT, Toshiba Corp., Mercury NZ Ltd., and PT Supreme Energy.

Additional Benefits:

• The market estimate (ME) sheet in Excel format
• 3 months of analyst support

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