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Untapped Geothermal Energy


As the world moves to reduce carbon emissions, ERCE examines the role geothermal could play in the renewable energy mix, especially for Southeast Asia.


Historically Harnessed as Heat

Geothermal energy has been harnessed by mankind since ancient times . Currently, more than 80 countries use geothermal energy for heating purposes in household, commercial and industrial sectors, with China, Turkey, Iceland, Japan and Hungary taking the lead[i].

More Heat Than We Can Use

In 2015, the total annual utilization of geothermal energy as heat was 163, 273 GWh, which is only 28% of the total installed geothermal heating capacity world-widei. A large portion of the world’s geothermal energy remains untapped. While geothermal energy is most efficiently harnessed as heat, it would see much wider usage if converted to electricity. The first experimental geothermal power plant was developed in Larderello, Italy and successfully generated electricity in 1904, and by 1911, the geothermal field had started commercial production.

The success sparked the commercial harnessing of geothermal energy as electricity, but adoption of geothermal electricity has been slow. At the end of 2019, only 24 countries shared a total worldwide installed capacity of 15,406 MWe. The United States, Indonesia, The Philippines, Turkey and New Zealand have the highest installed capacities, with more than 1,000 MWe in installed capacity each.


Figure 1: Top 10 Geothermal Countries in Installed Capacity in MWe
Source: ThinkGeoEnergy Research, 2020

Methods of Electricity Production from Geothermal

There are currently three main types of electricity plants employing different systems and applied to different reservoir conditions to harness geothermal energy.

The first, oldest and simplest method of producing electricity is dry steam. Steam of above 150°C flows from the reservoir to provide the mechanical force required to turn turbines, thus generating electricity.

The second type is flash steam. Water with temperatures above 180°C flows or is pumped up through wells in the ground under its own pressure. It is kept under pressure until it is ‘flashed’ at the surface (depressurised) to produce steam. The remaining water and condensed steam are injected back into the reservoir, to gain heat from the surrounding and be used again.

The third type is the binary cycle power plant.  This can operate at lower temperatures than steam or flash systems.  Water with temperatures as low as 100°C is pumped up through wells. The heat from the hot water boils a second fluid that has a low boiling point, termed the working fluid. The vaporised working fluid turns the turbines, condenses, and is vaporised again by the continued supply of heat from the geothermal waters. The geothermal water is injected back into the ground to be reheated for a continual cycle. The water and the working fluid only exchange heat during the whole process and the water never makes it to the surface, so there are little to no emissions to atmosphere.  The minimal emissions are also why these systems are increasingly used at higher temperatures..


Figure 2: Schematic Diagram of a Binary Cycle System
Source: Government of Western Australia, Department of Mines, Industry Regulation and Safety

Reliable Energy

Geothermal is a reliable renewable energy source: heat is continuously generated inside the earth and could theoretically be harnessed forever. Larderello, which is the first geothermal field to be exploited for electricity in the world, has been producing since 1911. The field currently has 34 plants, with the capacity of 800MW, supplying nearly 2% of Italy’s energy. The next oldest field is in Wairakei, New Zealand. This was first produced in 1958 by the Wairakei Power Station, which is being phased out by the Te Mihi Power Station, completed in 2014, which has 166MW capacity.

Additionally, geothermal energy sources can be more reliable than other renewable energy sources. Solar and wind depend on weather conditions and vary in output during the day, raising issues of storage in times of surplus and insufficient supply for demand peaks. As such, geothermal plants have the highest capacity factor (the ratio of time in use over time it could be in use), often 95% in most geothermal fieldsi.

Low Operation Costs For Low Carbon Emissions

As the world moves to lower our carbon emissions, geothermal energy can provide a cost-effective, low carbon option. Some plants do produce solid waste that needs to be properly disposed of, although some compounds can be extracted from the waste for additional revenue, such as zinc, silica and sulphur. If binary geothermal plants are employed, the emission of steam and other by-products from the subsurface are reduced.

Geothermal plants do not require large input of freshwater in most cases. Generally, geothermal fluids brought to the surface are pumped back into the reservoir to replenish the aquifer, reducing reliance on surface water sources.

Geothermal plants are also space efficient, having high electrical output per unit area (power density), when compared to other renewable sources such as solar and wind. Even when factoring in the potential for subsidence in the initial stages, the power density is still high, making geothermal a viable option for cities with limited land.


Figure 3: Typical Power Densities of Renewable Assets
References:  Geothermali, Solar and Wind

Overall, operational costs are low: ranging from USD$0.01 to $0.03 per kWh. However, the levelised energy cost (LCOE) is higher, at USD $0.05 – 0.13 per kWh in 2018. The higher LCOE stems from the high initial capital required to explore and develop a geothermal field.

Assessment and proper evaluation of a field with exploration and appraisal wells is paramount to a project’s success, as most project failures result from lack of knowledge of the geothermal field. Projects generally fail as insufficient steam is available to fuel the geothermal plant, leading to lower productivity than expected. Some projects may be revitalised with injection wells when production declines or is less than expected, such as in the case of the Poihipi Power Station in New Zealand which has produced at half its expected capacity since its inception in 1996, prior to being reworked in 2007. However, there are limitations to reinjection capacity, as was the case for the Thermo No.1 Geothermal Power Plant in Utah, USA, operated by Raser Technologies between 2009 – 2011.

Geological Limitations

Geothermal energy is most accessible in areas of high tectonic activity, where magma is closer to the surface. As such, development of geothermal resources has been largely limited to plate boundaries, especially if the energy is being harnessed as electricity.


Figure 4: Global map showing theoretical heat flow, assuming that the correlation between heat flow and geology is upheld throughout
Source: Davies, 2013

To harness electricity with the traditional dry steam method, temperatures need to be above 150°C and at reasonable depths for a project to be economically viable. The higher temperatures and acidity of the geothermal fluids also decrease the lifespan of drilling components by corrosion. However, the more advanced binary cycle system has proven able to produce electricity from fluids with temperatures as low as 90°C, in Chena Hot Springs Power Plant in Alaska, USA, back in 2006. This has increased the range of where potentially viable reservoirs lie.

Reservoirs also require a supply of water in cases where the natural recharge of the geothermal fluids is insufficient to sustain the flow. Depending on the plant and technology employed, production can lower the water table over time.  Aside from being used in energy generation, water is also required for cooling processes, such as cooling the working fluid of a binary cycle plant. If the geothermal field is in an area with limited access to water, operational costs might rise if water is to be imported.

Geothermal reservoirs also need high fluid mobility. Without flowing through the rock, water cannot be heated and carry the thermal energy back to the surface to power the turbines. Most successfully developed fields already had pre-existing fractures that act as natural conduits for geothermal fluids. Some geothermal resources remain inaccessible and without natural permeability, in dry and impermeable rock commonly referred to as hot dry rocks (HDR). To artificially enhance or create conduits in HDR, Enhanced Geothermal System (EGS) practices often involve fracturing the reservoir with high-pressure water injection, which requires more water at start up. While EGS will increase the range of geothermal resources away from plate boundaries, water-scarce regions may not be able to fulfil this requirement.

With the high capital incurred in the development of fields, many projects rely on grants from governments, development banks or crowdfunding.

Exploration in SEA

Figure 5: Geothermal Installed Capacity in SEA: only 3 countries (Indonesia, The Philippines and Thailand)
Source: IRENA

Southeast Asia sits in a tectonically active region. Both Indonesia and The Philippines’ current installed geothermal capacities are at least 25% of the global capacity, with Indonesia being the second largest producer, with a capacity of 2133MW and Philippines coming in a close third, with a capacity of 1918MW, as of 2019.

Philippines started developing its geothermal plants in the 1970s but development slowed after 2000. In 2009, the government passed the Electric Power Industry Reform Act which encouraged the privatisation of the geothermal energy industry. This might have inadvertently contributed to a decline in development, as geothermal exploration projects have higher capital costs when compared to other renewable projects which were also being encouraged. The development of geothermal in the Philippines has also been affected by the decrease in tariff, reduction in oil prices, and concerns regarding the indigenous peoples in areas of potential geothermal exploration.

However, Indonesia has expanded its geothermal capacity, growing to almost 1000MW in 10 years (20072018). In addition, the Ministry of Energy and Mineral Resources recently announced initiatives to encourage investors to develop geothermal energy in the archipelago. The government has also started regional development of geothermal in Flores in the Flores Geothermal Island program, with hopes to expand the programme into other regions. Tax incentives have been provided by the government, including property tax and import duty exemptions and tax allowances. Additionally, the government plans to undertake much of the exploration for geothermal resources, since contractors are often unwilling to face the risks of exploration themselves.

Thailand is the only other country in Southeast Asia that has a geothermal power plant, in Chiang Mai, with a plant capacity of 0.3MW. There are also surface expressions of geothermal resources in the form of hot springs around the country. Based on the geochemical compositions of the hot spring water at the surface, geothermometer calculations estimate most of the hot springs in Southern Thailand have reservoir temperatures of around 120°C, which is suitable for binary plants. However geothermal was not included in the 2018 Power Development Plan. Instead, hydropower and solar PV contribute the bulk of the renewable energy mix.

Figure 6: Installed Capacity of Renewables in SEA
Source: IRENA

Like Thailand, little exploration has been carried out in other Southeast Asian countries, with greater focus on hydropower, solar PV and wind. There was speculation that Vietnam might explore its geothermal potential in 2017, but no concrete plans have been formed. Malaysia terminated its first 37MW geothermal power plant project in 2018, after project progress staled and drilling operations ceased.

The other Southeast Asian countries also have geothermal potential. Vietnam’s hot springs line its coast and the largest hot spring, Binh Chau, has temperatures of 40-84°C. Even the island country of Singapore has surface expressions of geothermal resource in the form of the Sembawang Hot Springs with a surface temperature of 70°C and another hot spring at Pulau Tekong. While there has been no plan to explore Singapore’s geothermal potential, Nanyang Technological University plan a three year study on geothermal-driven technologies for passive enabling of urban sustainability under a grant for collaborative research efforts in Singapore.

Contributing to the mix

There have also been projects outside Southeast Asia pairing geothermal plants with other green projects that effectively employ the benefits geothermal energy has to offer.

Studies have found that combining geothermal and solar systems increases the efficiency and power generation of both systems. While geothermal produces a baseline supply, solar PV production can cope with peak demands during the day. Excess solar energy can also be used to heat up the geothermal fluids, thus effectively still being captured and stored by the system for conversion to electricity.  The LCOE of a solar PV field using lithium battery storage with a duration of three hours is estimated to be 0.112 ± 0.024 $/kWh, while a comparably sized PV field with a hybrid plant and synthetic fluid storage duration of 3 hours will have a lower LCOE of 0.081 ± 0.011 $/kWh.

In Iceland, where geothermal energy is abundant, simultaneous carbon capture and storage (CCS) is being researched and developed with geothermal projects. As steam from geothermal sources is used to power turbines, the steam can simultaneously be used in CCS technology, liquefying atmospheric CO2 into a condensed form that can be dissolved into water. The carbon enriched water is then channelled through the bed rock where it calcifies, effectively storing carbon in the rock.

Figure 7: CO2-geothermal coupled system
Source: World Economic Forum

In New Zealand, a geothermal powered 1.5MW hydrogen production project was recently launched and scheduled to start production in 2021. The plant will utilise the power of the geothermal field in Mokai, Taupo, producing 250Nm3 of hydrogen per hour. The project is also part of plans for New Zealand to supply Japan with hydrogen for their emerging hydrogen economy.

Figure 8: Hydrogen projects in New Zealand, including Geothermal-powered Hydrogen Pilot Plant
Source: New Zealand Hydrogen Association

Untapped Potential in Existing Hydrocarbon Industry?

The hydrocarbon industry has had an extensive history studying the world’s sedimentary basins, including  fluid mobility and heat flow – a parameter that has yet to be investigated a useful energy source. Using the existing technology, knowledge and expertise, this potential new frontier could be more effectively explored and with fewer hurdles to research. Just last month, the New Energies business of oilfield services giant Schlumberger and Texas-based Thermal Energy Partners (TEP) formed a new company called GeoFrame Energy that aims to develop 100 megawatts of geothermal projects in deep sedimentary basins using the current deep drilling technology and efficencies.

In conclusion, with increasing global efforts to lower carbon emissions, geothermal resources are becoming prevalent and often complement other renewable projects. Southeast Asia has significant potential but would require more stable funding, incentives and government initiatives in exploration to develop. As with other renewable energy sources, where costs of production have been decreasing due to improvements in technology and streamlining of production, geothermal energy could likewise see similar cost reductions as development continues. In addition, the capital investment cost of a geothermal plant could also further be offset with carbon credits. In the meantime, the hydrocarbon industry has a wealth of existing expertise and technology that would aid in the exploration and exploitation of deep geothermal fields.

With over 40 years’ experience in the energy sector, ERCE’s integrated team of subsurface and economics professionals add value to our clients petroleum and sustainable energy portfolios. From basin modelling to facilities studies, our geothermal specialists can support your ambitions to supply greener energy globally. To see how we can we can help you and for more information on our full range of services please contact us at


[1] Smil, V. (2015). Power Density: A Key to Understanding Energy Sources and Uses, The MIT Press.