Bloomberg predicts that by 2030, capacity will grow to 40 GW, representing 270% capacity growth over the next eighteen years. Even with that massive growth, the percentage of power generated from geothermal would still be less than half a percent. The reason for the growth is the base-load potential of the source, meaning that it has a long-life potential (~30 years) and is cost competitive with coal and gas.
As costs of renewable energy generation continues to come down and when factoring in ancillary costs of CO2-emitting power generation, we think states will continue to raise renewable standards and goals towards at least 50%. Depending on the location, geothermal will likely be an important part of that renewables portfolio.
While the market seems to cater towards the solar and wind companies, we think the geothermal space is actually superior to the economics of those two alternative energy segments. We think that the long-term trends within the space are very strong.
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