Enhanced Geothermal System (EGS) Market Size, Share, Analysis, Growth, Forecasts, 2032

Enhanced Geothermal System (EGS) Industry Prospective:

The global enhanced geothermal system (EGS) market size was worth around USD 2,145.36 million in 2023 and is predicted to grow to around USD 3,014.11 million by 2032 with a compound annual growth rate (CAGR) of roughly 3.85% between 2024 and 2032.

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Enhanced Geothermal System (EGS) Market: Overview

An enhanced geothermal system (EGS) is a man-made version of a naturally occurring geothermal system which is also known as a hydrothermal system defined by characteristics such as permeability, fluid, and heat. EGS is artificially made using engineering tools in areas that have hot rock but there is a significant lack of natural fluid saturation and permeability. Enhanced thermal system consists of carefully injecting fluid into the subsurface level under a controlled environment. This action results in the reopening of pre-existing fractures causing permeability.

The added feature allows fluid circulation across artificially fractured rock. The heat generated is then transferred to the surface and used for electricity production. Enhanced geothermal system is predicted to have tremendous untapped potential to meet the growing clean energy demands across the globe since it allows researchers and scientists to tap into deep the capabilities of geothermal reservoirs created using industrial tools. Studies indicate that EGS emits negligible to zero amount of greenhouse gasses thus helping the regional governments meet their demands for clean energy. However, the EGS industry is relatively new and only a limited number of players across the globe are investing in the technology due to high cost and other factors. During the forecast period, more investments can be expected.

Key Insights:

• As per the analysis shared by our research analyst, the global enhanced geothermal system (EGS) market is estimated to grow annually at a CAGR of around 3.85% over the forecast period (2024-2032)
• In terms of revenue, the global enhanced geothermal system (EGS) market size was valued at around USD 2,145.36 million in 2023 and is projected to reach USD 3,014.11 million, by 2032.
• The market is projected to grow at a significant rate due to the increasing demand for energy globally
• Based on the technology, the hydraulic fracturing segment is growing at a high rate and will continue to dominate the global market as per industry projection
• Based on the end-user, the commercial sector segment is anticipated to command the largest market share
• Based on region, North America is projected to dominate the global market during the forecast period

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Enhanced Geothermal System (EGS) Market: Growth Drivers

Increasing demand for energy globally will drive more investments toward the market

The global enhanced geothermal system (EGS) market will be driven by the increasing demand for energy across the globe. Continuous access to energy is one of the basic needs of the modern world across residential, commercial, and industrial sectors. Energy is the power source for running all essential facilities including heavy machinery to home gadgets. However, the sharp rise in urbanization and industrialization has resulted in the emergence of a significant gap between energy supply and demand. Conventional methods of energy production are no longer meeting the energy demand levels resulting in higher investments toward the development of novel methods of leveraging previously untapped energy sources.

Naturally occurring geothermal systems have extremely high energy-generating potential since they deal with the use of natural heat stored within the Earth’s surface. Although these reservoirs have been used globally for generating electricity and other direct applications, the quantity of natural reservoirs is low and difficult to locate. This has resulted in governments and energy companies investing in the artificial development of geothermal systems using modern advanced tools and applying the concept of accessing Earth’s heat for energy production. As per the International Energy Agency (IEA), in 2022, more than 775 million people did not have access to electricity. One of the primary economic growth inhibitors, as indicated by years of research, is the lack of access to energy. The high gross domestic product (GDP) values are often correlated to greater access and use of electricity along with enhanced affordability and accessibility.

Rising technological development will ease the development of EGS reservoirs

Industrial growth works simultaneously with advancement in technology used in the respective industry. Enhanced geothermal systems work on highly sophisticated engineering tools and concepts. The rise in investments toward further technological advancements and understanding better ways to leverage the offerings of the global enhanced geothermal systems (EGS) market will help the industry thrive during the forecast period.

Enhanced Geothermal System (EGS) Market: Restraints

Costly initial investment and lack of sufficient skilled labor will restrict the market expansion rate

The global industry for enhanced geothermal system (EGS) is expected to be restricted due to the high cost of EGS-related projects. The main cost heads of enhanced geothermal systems are divided into drilling, stimulation, and power plant development. For instance, drilling costs also include expenses associated with the exploration of areas suitable for conducting such projects. Additionally, since drilling sites are beneath the Earth’s surface and sometimes can be extremely deep, it requires the use of highly advanced tools and systems. Moreover, the success of EGS depends on the skilled professionals deployed for the assignment. The lack of access to a sufficient pool of skilled labor may further impact the market expansion rate.

Enhanced Geothermal System (EGS) Market: Opportunities

Growing interest of regional governments to promote EGS-related activities will generate high growth opportunities

The global enhanced geothermal system (EGS) market is expected to come across more growth opportunities during the forecast period. A growing rate of regional governments are investing in the promotion of EGS projects. In March 2024, the United States Department of Energy (DOE) published a report called the Pathways to Commercial Liftoff: Next-Generation Geothermal Power describing in detail the advantages that can be attained using next-generation geothermal power across the energy landscape in the country. The report further supports the agency’s aim to reduce the cost of enhanced geothermal systems by 90% by 2035. DOE expects to bring down the cost to $45 per MWh. In addition to this, government support will be beneficial to drive innovation in the EGS sector as it will result in increased awareness.

Growing demand to reduce greenhouse gas (GHS) emissions will promote the expansion of EGS

Enhanced geothermal systems do not lead to large-scale emissions of harmful greenhouse gases. Research indicates that EGS results in GHS emissions at a negligible rate unlike exploration activities associated with other forms of non-renewable energy sources. The growing quantity of greenhouse gas emissions has resulted in an evident shift in climate conditions globally resulting in an urgent need to develop new measures to curb GHS emissions. Initiatives aimed at reducing the impact of greenhouse gas emissions on the environment can prove beneficial for the global enhanced geothermal system (EGS) market.

Enhanced Geothermal System (EGS) Market: Challenges

Environmental risks posed by enhanced geothermal systems may challenge the market growth trends

The global enhanced geothermal system (EGS) industry faces multiple challenges. One of the leading causes of concern among industry players is the risk of instigating anthropogenic events. Enhanced geothermal systems deal with mechanical activities deep inside Earth’s surface and it can lead to provoking seismic events such as earthquakes. Companies operating in the EGS sector must ensure community safety when undertaking such activities. Additionally, the complexities related to regulatory hurdles may further impact the market expansion rate.

Enhanced Geothermal System (EGS) Market: Segmentation

The global enhanced geothermal system (EGS) market is segmented based on technology, station, end-user, and region.

Based on the technology, the global market divisions are explosive stimulation, chemical stimulation, hydraulic fracturing, and thermal stimulation. In 2023, the highest growth rate was observed in the hydraulic fracturing segment. The technology can significantly improve the productivity of geothermal reservoirs. Hydraulic fracturing induces better heat exchange since it leads to the creation of an extensive fracture network. The widespread success of hydraulic fracturing will promote segmental growth during the projection period. As per official estimates, around 100 GWe or more energy can be created in the next 50 years.

Based on stations, the global enhanced geothermal system (EGS) industry is divided into binary cycle power stations, flash steam power stations, and dry steam power stations.

Based on the end-user, the global market divisions are the industrial sector and commercial sector. In 2023, over 65.07% of the total segmental share was led by the commercial sector. The growing energy demand across commercial industries including healthcare, transportation, information technology (IT), and retail is the leading cause of growth in the commercial unit. Moreover, the rising emphasis on industrial and commercial sector companies to reduce their carbon footprint may further promote the segment revenue.

Enhanced Geothermal System (EGS) Market Report Scope

Enhanced Geothermal System (EGS) Market: Regional Analysis

North America will lead with the highest revenue during the projection period

The global enhanced geothermal system (EGS) market will be led by North America during the forecast period. The US will lead the regional revenue due to the growing efforts of the US government to encourage higher investments in enhanced geothermal systems. The US DOE has taken a headstart in terms of exploring the benefits of EGS and the ways in which it can meet the country’s growing energy demands. It has conducted extensive research on understanding the complications with EGS and the potential environmental impact thus helping the country work in achieving clean energy resources with data-backed measures. In February 2024, the US Department of Energy selected three pilot projects with a total funding of USD 60 million. These projects will demonstrate the ways in which EGS can contribute to the economy’s need to have perpetual access to clean energy. The companies that will be funded through the projects are Chevron New Energies, Fervo Energy, and Mazama Energy. However, by March 2024, the projects narrowed down to two leaving Mazama Energy out of the agreement. As per the November 2021–enacted Infrastructure Act, around USD 84 million have been allocated to EGS pilot projects in the country.

Enhanced Geothermal System (EGS) Market: Competitive Analysis

The global enhanced geothermal system (EGS) market is led by players like:

• Baker Hughes Company
• Terrapin Geothermics
• Ormat Technologies
• Toshiba Energy Systems & Solutions Corporation
• Geodynamics Limited
• Cyrq Energy
• EnergySource LLC
• Schlumberger Limited
• Geothermal Engineering Ltd.
• Alterra Power Corp.
• Eavor Technologies Inc.
• Calpine Corporation
• Enel Green Power
• Quaise Energy
• Geothermal Resource Group Inc.

The global enhanced geothermal system (EGS) market is segmented as follows:

By Technology

• Explosive Stimulation
• Chemical Stimulation
• Hydraulic Fracturing
• Thermal Stimulation

By Stations

• Binary Cycle Power Stations
• Flash Steam Power Stations
• Dry Steam Power Stations

By End-User

• Industrial Sector
• Commercial Sector

By Region

• North America
  • The U.S.
  • Canada
• Europe
  • France 
  • The UK
  • Spain
  • Germany
  • Italy
  • Rest of Europe
• Asia Pacific
  • China
  • Japan
  • India
  • South Korea
  • Southeast Asia
  • Rest of Asia Pacific
• Latin America
  • Brazil
  • Mexico
  • Rest of Latin America
• Middle East & Africa
  • GCC
  • South Africa
  • Rest of Middle East & Africa