Geothermal energy has the potential to provide significant amounts of low-carbon, low-cost electricity in many developing countries, thereby opening up space for climate ambition. Geothermal is broadly cost competitive with fossil fuel alternatives and is the cheapest source of available power in some developing countries with rapidly growing energy demand.

But a new study by Climate Policy Initiative shows public finance needs to increase 7-10 fold for full and effective deployment of the technology.

The study includes case studies of geothermal projects in Turkey, Kenya and Indonesia that range from 13MW to 330MW – the largest in the world.

This chart by Climate Policy Initiative shows the potential of these and other developing countries:

Further key findings of the study:

• By enabling private investment, governments can achieve the same amount of electricity generation while providing only 15-35% of the financial resources they would have spent had they built and operated projects themselves.
• Governments and development finance institutions will need to provide 42-55% of the total additional financing of approximately USD 133 billion in the form of low-cost, long-term loans and equity.
• Support should be rebalanced towards earlier, riskier stages of project development that are the biggest barriers to investment.
• Development finance institutions should consider directing support to countries where geothermal has the greatest potential to increase energy supply at low cost and can achieve most emissions reductions.

See the CPI website to download the full report

Image at top of article: Olkaria Geothermal Plant, Kenya (UNEP web site)