Asia Pacific’s geothermal energy power generation is in an upswing, cementing the region’s status as the global leader in geothermal energy power generation.

This comes at a time when a surge in renewable energy demand and intensifying energy security concerns have directed international attention towards geothermal energy. Current global geothermal energy generation is now at about 11,000 MW and estimates suggest that this number will more than double in the next 10 years – amounting to an investment of some USD40 billion.

The following factors are fueling this geothermal growth:

  • economic progress, especially in developing markets
  • increasing concerns over energy security and its impact on economic security
  • electrification of low-income and rural communities
  • emergence of low-cost and efficient technologies
  • rising environmental awareness

The bulk of growth is happening in countries with vast and untapped geothermal resources, many of which are found within the Asia Pacific region. The development and utilization of these resources are expected to multiply as more countries recognize the economic value of their geothermal resources.[1] 

Asia Pacific's untapped potential

Asia Pacific's largely untouched, high-grade geothermal resources have made it a prime contributor to international geothermal growth. Add to it the region's generally friendly policy environment, it is now a hotbed for advanced-stage geothermal projects continuously gaining the notice of geothermal developers and project financiers.

The geothermal potential of the region is extensive. Asia Pacific is home to three of the top 10 geothermal locations in the world – the Philippines, Indonesia and Japan – with a combined installed capacity of 3,637 MW.[2] Reports show that Indonesia alone has up to 27,510 MW of potential hydrothermal geothermal resources.

The Philippines leads the region in geothermal production, with geothermal power accounting for nearly 18% of the country's total energy output. With the Philippines' more developed and tapped geothermal resources, analysts now anticipate that Indonesia will have the region's highest average growth rate year-on-year until 2020.

A boom in investments

A recent emphasis on emissions reduction and renewable power generation has led many countries in the region to invest heavily in harnessing their geothermal resources.

The region's top producers are seeing increased investments as Governments view the resource as an attractive 'quick fix' in terms of short-medium term capacity expansion in energy production.

Couple this with the escalating costs for generating power from conventional sources, geothermal energy is appearing more and more attractive to developers. Since geothermal power-generating units are base load plants that produce cheap power, they make for viable replacements for other power sources.

The region is also facing a rise in demand for electricity due to surging populations. This is expected to boost the utilization of both conventional and renewable energy models.

These positive prospects have resulted in increased foreign investments, presenting healthy cross-border opportunities in the region.

Regional policy developments

Energy and economic security remain to be the prime drivers for the implementation of regulations promoting geothermal development.

Similar to the case of Solar Energy, friendly national policies will propel geothermal growth in the region, while inconsistent government regulatory policies will create uncertainty for long-term investment initiatives.

The region is seeing increasingly positive regulatory environments.