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Credit: Cyril Ruoso/Minden Pictures/National Geographic Creative

Electricity Generation


Iceland’s Svartsengi (“Black Meadow”) geothermal power plant, located on the Reykjanes Peninsula in Iceland, was the first geothermal plant designed to both create electricity and provide hot water for district heating. With six different plants, it generates 75 megawatts of electricity, enough to supply 25,000 homes. Its “waste” hot water is piped to the Blue Lagoon Geothermal Spa, visited by 400,000 guests annually.

The heat energy contained below the earth’s surface is about 100 billion times more than current world energy consumption. Geothermal power—literally “earth heat”—taps into underground reservoirs of steamy hot water, which can be piped to the surface to drive turbines that produce electricity. That feat was first accomplished in Larderello, Italy, on July 15, 1904.

Prime geothermal conditions are found on less than 10 percent of the planet, but new technologies dramatically expand production potential. One new approach targets deep underground cavities and adds water to create hydrothermal pools where they do not currently exist. Care must be taken, as the means to access these cavities can create micro-earthquakes.

With subterranean resources flowing 24-7, without interlude, geothermal production can take place at all hours and under almost any weather conditions. Geothermal is reliable, abundant, and efficient. While drilling is expensive, the heat source itself is free. According to the Geothermal Energy Association, 39 countries could supply 100 percent of their electricity needs from geothermal energy, yet only 6 to 7 percent of the world’s potential geothermal power has been tapped.


earth’s internal heat…energy generated: Fridleifsson, I.B., R. Bertani, E. Huenges, J. W. Lund, A. Ragnarsson, and L. Rybach. “The Possible Role and Contribution of Geothermal Energy to the Mitigation of Climate Change.” In IPCC Scoping Meeting on Renewable Energy Sources, Proceedings, edited by O. Hohmeyer and T. Trittin, 59-80. Luebeck, Germany, January 20-25, 2008.

Larderello, Italy…Piero Ginori Conti: Dipippo, Ronald. Geothermal Power Plants: Principles, Applications, Case Studies and Environmental Impact. Burlington: Elsevier Science, 2012.

[global] geothermal electricity generation: REN21. Renewables 2016 Global Status Report. Paris: REN21 Secretariat, 2016; Matek, Benjamin. 2016 Annual U.S. & Global Geothermal Power Production Report. Washington, D.C.: Geothermal Energy Association, 2016.

direct geothermal supplies heat: REN21, Renewables 2016; Matek, Geothermal.

prime geothermal conditions: Duffield, Wendell A., and J. H. Sass. Geothermal Energy: Clean Power from the Earth’s Heat. Menlo Park, CA: U.S. Geological Survey, 2003.

Iceland’s Blue Lagoon: Gipe, Paul. “Iceland: High Penetration of Renewables in the Modern Era.” Renewable Energy World. November 7, 2012.

emissions [vs.] a coal plant: Duffield and Sass, Geothermal Energy.

twenty-four countries [with] geothermal power: Matek, Geothermal.

El Salvador and the Philippines: World Bank. “Geothermal Energy: Expansion Well Underway in Developing Countries.” The World Bank. December 3, 2014.

Kenya…Great Rift Valley: World Bank. “Kenya’s Geothermal Investments Contribute to Green Energy Growth, Competitiveness and Shared Prosperity.” The World Bank. February 23, 2015.

U.S. geothermal plants: Matek, Geothermal.

39 countries could supply 100 percent: Gawell, Karl, Marshall Reed, and P. Michael Wright. Preliminary Report: Geothermal Energy, The Potential for Clean Power from the Earth. Washington, D.C.: Geothermal Energy Association, 1999.

6 to 7 percent of the world’s potential…tapped: Matek, Geothermal.

projections [of] undiscovered geothermal resources: Fridleifsson et al, “Possible.”

view all book references

Technical Summary


Project Drawdown defines geothermal as: geothermal systems for electricity generation, combining both mature technologies and future expectations for enhanced geothermal. This solution replaces conventional electricity-generating technologies such as coal, oil, and natural gas power plants.

There are three main geothermal technologies: dry steam, flash steam, and binary cycle power plants. Flash plants are the most common type of geothermal, and make up around 70 percent of total global installed geothermal capacity. Binary plants are the most recently developed geothermal technology, and are able to tap into lower temperature reservoirs than flash plants. The selection of which technology to use for geothermal power generation depends on a number of factors, including the characterization of the geothermal resource and the economic feasibility of the project.

Geothermal energy has the potential to make a much more significant contribution on the global scale through the development of enhanced geothermal systems, particularly those exploiting “hot rock.” Given the costs and limited full-scale system research to date, enhanced geothermal systems remains in their infancy, with only research and pilot projects existing around the world and no commercial-scale enhanced geothermal system plants to date.


This analysis models geothermal systems for electricity generation, combining both mature technologies and future expectations for enhanced geothermal systems adoption.

Total Addressable Market [1]

The total addressable market for geothermal is based on projected global electricity generation in terawatt-hours from 2020-2050, with current adoption estimated at 0.33 percent of generation (i.e. 74,195 terawatt-hours) (IRENA, 2016).

Adoption Scenarios [2]

Impacts of increased adoption of geothermal from 2020-2050 were generated based on three growth scenarios, which were assessed in comparison to a Reference Scenario where the solution’s market share was fixed at the current levels.

  • Plausible Scenario: Based on the evaluation of ambitious scenarios from four global energy systems models, [3] this scenario follows a high growth trajectory of the adoption cases, capturing 4.91 percent of the electricity generation market share in 2050.
  • Drawdown Scenario: Aligned with the Greenpeace Advanced Energy [R]evolution Scenario, [4] this scenario results in an 8.4 percent share of the market in 2050.
  • Optimum Scenario: Following the most aggressive adoption pathways aligned with the Greenpeace Advanced Energy [R]evolution Scenario, this scenario results in an 8.8 percent share of the market in 2050.

Financial Model

The financial inputs used in the model consider an average installation cost for the combination of flash, binary cycle, and enhanced geothermal plants of US$3,643 per kilowatt. [5] It is acknowledged that the experimental nature of enhanced geothermal systems technology makes it difficult to evaluate the costs of a commercial-scale enhanced geothermal systems power plant. An average learning rate of 14 percent was used (Hayward and Graham, 2013), trying to capture both the future costs for mature technologies such as flash and binary—which could see reduced installation costs in the near future—and the uncertainties in the development of enhanced geothermal systems. In 2030, the investment costs are reduced to US$3,373 per kilowatt, and to close to US$1,880 per kilowatt in 2050. An average capacity factor of 85 percent was used for geothermal systems for electricity generation, compared to 55 percent for conventional technologies such as coal, natural gas, and oil power plants. Variable operation and maintenance costs of US$0.025 per kilowatt-hour and of US$236.94.0 per kilowatt for fixed costs are considered for geothermal systems, compared to US$0.005 and US$33.0, respectively, for the conventional technologies. When fuel costs are considered, geothermal plants are shown to have significantly lower operational and maintenance costs than coal and natural gas plants.

Integration [6]

Through the process of integrating geothermal technologies with other solutions, the total addressable market for electricity generation technologies was adjusted to account for reduced demand resulting from the growth of more energy-efficient technologies, [7] as well as increased electrification from other solutions like electric vehicles and high-speed rail. Grid emissions factors were calculated based on the annual mix of different electricity generating technologies over time. Emissions factors for each technology were determined through a meta-analysis of multiple sources, accounting for direct and indirect emissions.


Compared to the Reference Scenario, the financial results for the Plausible Scenario of adoption show that the net first costs would result in savings of US$155.48 billion from 2020-50, with over US$1 trillion in savings over the same period. Under the Plausible Scenario, the adoption of geothermal technologies for electricity generation could avoid 16.6 gigatons of carbon dioxide-equivalent greenhouse gas emissions from 2020-2050, compared to a Reference Scenario where the solution is not adopted.

Both the Drawdown and Optimum Scenarios are more ambitious in the growth of these technologies, with impacts on greenhouse gas emission reductions over 2020-2050 of 28.1 and 25.18 gigatons of carbon dioxide-equivalent, respectively, for both scenarios. Geothermal could act as a form of baseload power and peaking power, helping to support the increased grid integration of other forms of renewable electricity to further bring down emissions.


There exists a vast and untapped technical potential for geothermal energy. Much of the initial development could take place in areas with lots of conventional, high-temperature hydrothermal resources that have yet to be developed, such as Indonesia, the Philippines, Central and South America, and East Africa.

Large upfront costs  and the high risk of investing in geothermal power plants are two of the biggest barriers to the expansion of geothermal electricity. Drilling rig rates and associated costs often make up the largest cost component of geothermal plants, and there is a significantly high chance of failure in exploratory stages. Thus, many governments are setting targets for the development of high-temperature hydrothermal resources. These goals could be aided through: renewable portfolio standards requiring a certain amount of renewable energy use; a price on carbon; and guaranteed power purchase agreements or feed-in tariffs for developers to reliably recover development costs. A publicly accessible and continuously updated database of geothermal resources could also aid in exploration and cut down on production costs. There is also the need for technology research, development, and demonstration concerning enhanced geothermal systems power plants.

[1] For more about the Total Addressable Market for the Energy Sector, click the Sector Summary: Energy link below.

[2] To learn more about Project Drawdown’s three growth scenarios, click the Scenarios link below. For information on Energy Sector-specific scenarios, click the Sector Summary: Energy link.

[3] MESSAGE-Macro 450 scenario; GCAM 450 scenario (AMPERE, 2014); IEA ETP 2°C Scenario (2016); and Greenpeace Energy [R]evolution Scenario (2015).

[4] The Advanced Energy [R]evolution Scenario represents an ambitious pathway towards a fully decarbonized energy system in 2050, with significant additional efforts compared to the Energy [R]evolution Scenario. The Advanced Energy [R]evolution Scenario needs strong efforts to migrate the energy systems of all world regions towards a 100 percent renewable energy supply.

[5] All monetary values are presented in US2014$.

[6] For more on Project Drawdown’s Energy Sector integration model, click the Sector Summary: Energy link below.

[7] For example: LED lighting, heat pumps.

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