Global Investments Brighten Outlook For Geothermal Energy

Despite all the attention deservedly being paid to more traditional renewable energies, 2010 may be the breakout year for geothermal energy. 

Long overshadowed by wind and solar, geothermal is now experiencing strong growth globally.  Investments in geothermal grew more than in any other energy source in 2009 – up 149% over 2007 levels to $2.2 billion - and President Obama’s proposed 2011 federal budget includes a 25% increase in funding for geothermal technology.

Geothermal energy is particularly attractive because of its consistency – it generates energy 24 hours a day, 7 days a week.  Because of this reliability, it pairs well with solar and wind, serving as a stable source of baseload capacity, while wind and solar contribute intermittently.  Geothermal also requires less land than wind and solar.  These advantages are driving growth in this rapidly evolving sector.  Technological advances are making geothermal possible in more places than ever before.

Another marker of growth and volatility is that smaller companies are merging in order to access the capital needed to take projects to scale.  Geothermal requires large up-front investments in drilling and equipment, but once the projects are up and running they require little maintenance.

All this growth and volatility is not without its setbacks.  In Colorado, the U.S. Bureau of Land Management (BLM) recently cancelled what would have been the first geothermal lease sale in the state’s history, citing the need to conduct an environmental analysis.  Plans to develop Chile’s El Tatio geysers for geothermal have also stalled for environmental reasons, as the Chilean Senate has attempted to declare the geysers natural monuments to prevent geothermal development there.  However, the Chilean government continues to demonstrate its support for geothermal energy, awarding 17 geothermal exploration licenses less than a week after the Senate’s move to hinder geothermal development at El Tatio.

Emerging Energy Research, a firm that studies renewable energy potential, forecasts that the global geothermal industry will more than triple by 2020, driven largely by volatile energy prices and carbon policy in the US and Southeast Asia.

Investors have historically shied away from geothermal because it takes years to see a return on investment, but they are now seeing more opportunities in the sector.  Stay tuned to EnergyBoom.com for the latest news in the exciting field of geothermal energy.