Geothermal spending forecast to grow 20% annually through 2030, Rystad says

By Romel S. Gurky

Global investment in geothermal energy is set to rise sharply, with capital expenditure expected to grow about 20% per year through 2030, according to new analysis from Rystad Energy released on Thursday.

The research shows geothermal is expanding beyond long-established markets in Southeast Asia and the United States, with interest building in Africa and Europe as countries seek clean and reliable power and heat. The distribution of spending across project components remains stable: slightly more than half goes to surface facilities, about 47% to drilling and subsurface work, and roughly 2% to pre-final investment decision (FID) activity.

Rystad said the relatively small share of early-stage spending can represent a significant risk because exploration determines whether a project advances. Even so, the cost structure makes project timelines and financing needs broadly consistent across regions.

Read also : Rystad Energy: Southeast Asia’s onshore wind capacity set to reach 26 GW by 2030

The growth drivers vary by market. In the US, rising demand for baseload power from data centers and the expansion of enhanced geothermal systems (EGS) are accelerating development. Europe is investing heavily in geothermal for district heating to meet decarbonization targets, while Southeast Asia—particularly Indonesia—is using geothermal to meet growing electricity demand.

Alexandra Gerken, Vice President for New Energies Analysis at Rystad, said geothermal is increasingly being tailored to regional needs, including potential uses in cooling systems as data center activity expands. Pilot projects in the Middle East, including the UAE’s first geothermal cooling plant, are advancing this trend.

Europe’s geothermal sector is dominated by heating projects supported by municipal heating networks, while Asia and North America are focused on electricity generation. The result is different investment patterns: district heating typically requires about US$3 per watt of installed capacity, while power projects cost roughly US$6 per watt because they require turbine systems and more complex surface infrastructure.

Rystad noted that geothermal remains one of the few energy sources capable of delivering clean baseload power, with EGS offering long-term potential to unlock geothermal resources in locations without natural aquifers.

Editing by Alexander Ginting