Geothermal energy is an abundant resource available in the earth’s crust in many regions of the world at various depths and temperatures. It can be harnessed to produce carbon-free electricity or for heating and cooling purposes. The installed geothermal capacity at the beginning of 2023 amounted to 16 GW, but a huge potential still remains unexploited. According to a report by IHS Markit over 300 GW of global geothermal potential exists to be harnessed.

Considering its potential, geothermal energy still accounts for a mere 0.5% of globally installed renewables-based capacity for electricity generation, heating and cooling.

Several technical and economic challenges are limiting its development even though geothermal energy presents unique intrinsic advantages in comparison to all other renewable energies.

What are the advantages and disadvantages of geothermal energy?

The benefits of geothermal energy are many and they outweigh the disadvantages which, with an appropriate policy framework and the leveraging of existing opportunities, can be overcome for the growth of the market.

You can see listed in the chart below the advantages and disadvantages of geothermal energy.

Always availableLonger time to market
Flexible in useHigh upfront capital investment
ProgrammableHigh resource risks
Small footprintLack of financing
Higher capacity factor compared to other renewablesLack of policy and regulatory framework
Low, or even zero, greenhouse gas emissions 
Long-lasting life of power plants 
Low maintenance costs 
Highly efficient and cost effective 

Advantages of using geothermal energy over other renewables

1. Always available

Geothermal energy, in contrast to other renewables such as wind and solar, is a constant and stable resource that can produce electricity 24/7 for 365 days and is not dependent on weather conditions

2. Flexible use

Geothermal energy can be used to produce electricity, for heating and cooling purposes through direct district heating networks, or in residential and commercial buildings using geothermal heat pumps. Its heat can also be exploited in agri-food processes, as for example for greenhouse heating in horticulture, and in some industrial processes where heat is processed, as for example for distillation and brewing. Geothermal energy also aids the extraction of minerals – such as lithium, silica, and manganese – from their brine. The extraction of lithium in particular could be very advantageous for the production of batteries in a more sustainable and environmentally friendly way.

3. Programmable

Another benefit of geothermal energy is that of being continuous and thus programmable and predictable, allowing better integration in electricity transmission grids. When used in conjunction with the variable power from the recently accelerated deployment of wind and solar photovoltaic (solar PV) sources, geothermal energy can contribute to the stabilization of electricity grids.

4. Small footprint

In comparison to solar and wind sources, geothermal energy has a lesser land occupation per gigawatt/h of 404 m2 in comparison to 1335 m2 of wind and 3237 m2 of solar photovoltaic power stations (source Energy.Gov).

5. Very high capacity factor

Geothermal sources, unlike wind and solar sources, have a very high capacity factor, reaching more than 80% average and sometimes exceeding 90%: far above solar (20%) and wind (45%) sources. The capacity factor is the percentage of time that a plant is generating electricity (source “The future of geothermal in Texas).

6. Low environmental impact

Geothermal has the lowest lifecycle CO2 emissions and can even be zero emission when using binary technology. Binary power plants produce electricity through a completely closed cycle, in which 100% of the geothermal fluid extracted is re-injected into the reservoir, allowing for an emission-free operation. The life-cycle emissions of a geothermal binary plant with total reinjection are estimated to be as low as 11.3 grammes of CO2 per kWh, the same as wind, while solar PV is a higher contributor to CO2 emissions (around 40 g/kWh) (source IRENA, Global Geothermal Market and Technology assessment,, )

7. Long lasting power plant life

Among other advantages of geothermal energy there’s also a long running life of power plants, which is between 25 and 50 years.

8. Highly efficient and cost effective

Geothermal energy has an LCOE of USD 0.068/kWh for plants commissioned in 2021. Considering its high capacity factor, it is estimated that integrating geothermal electricity into grids in the United States will save the system around USD 41/kWh, mainly through avoidance of the need to install ancillary services to stabilize the grid. Other benefits of geothermal are related to heating and cooling applications. Using geothermal for heating by means of a geothermal heat pump system allows a saving of from 25% to 50% of the electricity that is normally used for conventional heating and cooling systems. This in turn is reflected in significant cost savings. According to the Environmental Protection Agency (EPA), property owners who install geothermal heat pumps can save up to 70% on heating costs and up to 50% on cooling costs.

Disadvantages of geothermal energy in comparison to other renewables

1. Long time to market

Among the disadvantages of using geothermal energy is a long development timeline before starting to produce electricity. This time ranges from 4 to 7 years from the securing of permits and licenses to the final commissioning and start of operations (source

2. High upfront capital investments

Geothermal project development is capital intensive and requires high upfront investments for the exploration and assessment of the resource and for the construction of the power plant. This, linked to the long time to market and consequently to several years to start delivering cash flow, discourages investors from financing geothermal and encourages them to opt instead for faster rewarding renewables such as wind and solar.

3. High resource risks

Another obstacle hampering the development of geothermal energy is the high risk associated with the development of a geothermal resource. Unlike other renewables, geothermal presents significant resource risks in the early stages of exploration when the cost of drilling to confirm the availability of the resource and its suitability for commercial exploitation is high. Technological developments and innovations will be key to the development of research and demonstration projects to reduce resource risks and improve project economics.

4. Lack of financing

Geothermal projects face difficulty in mobilizing or accessing capital for early exploration and project financing because of project complexity, investment risk, and other factors. Moreover, investment in new technologies for exploration requires additional high investment that does not find easy access to finance.

5. Lack of policy and regulatory framework

To overcome the obstacles, connected to the high cost, that make many geothermal projects unprofitable or not commercially viable, public support through policies and incentives are needed in many countries. Improvements to the geothermal regulatory framework are also needed in several countries to attract investors. Complex procedures for gaining permissions delay the acquisition of the development rights and permits needed to execute geothermal projects,

Geothermal FAQ

How does geothermal energy work?

Geothermal energy is present in the form of heat in the Earth’s crust, near to the surface or deep down, at various temperatures. After drilling down into the ground, the heat can be brought to the surface by transporting it in fluids.

What are the main uses of geothermal energy?

Geothermal heat can be used to produce electricity and for heating and cooling. The mode of utilisation depends on the temperature of the resource. High temperature (greater than 150°C) and medium temperature (90-150°C) are favorable for electricity production while low temperature (less than 90°C) can be used for heating and cooling in direct district heating systems or using geothermal heat pumps. In small scale applications it is also possible to produce electricity from lower temperature resources.

How is geothermal energy produced?

To produce electricity from the geothermal well the hot geothermal steam/fluid (brine) is channelled to the surface power plant through pipes. In the power plant the geothermal steam/fluid (brine) is converted into mechanical energy in a turbine that is coupled to a generator to produce electricity. In binary power plants, in contrast to flash power plants, the geothermal fluid or steam from the geothermal reservoir never comes in contact with the turbine and the generator. The geothermal fluid and a secondary (hence “binary”) organic fluid pass through a heat exchanger. The heat from the geothermal fluid causes the secondary fluid to flash to vapour, which then drives a turbine and finally produces electricity at the generator.

Can geothermal energy be depleted?

Geothermal energy is a renewable source, is abundant in many regions worldwide, and flows continuously from the earth’s crust to the surface.

How reliable is geothermal energy?

Geothermal energy is highly reliable as it allows round-the-clock power generation and is not weather dependent.

Can geothermal energy be depleted?

Geothermal energy is a renewable source, is abundant in many regions worldwide, and flows continuously from the earth’s crust to the surface.

How long is the payback for geothermal?

This depends on many factors related to the type of resource, the region in which it is located, the type of power plant used, the country’s regulatory framework and incentives, and other economic factors that influence it.ù


For its intrinsic characteristic of flexibility, high efficiency and availability 

geothermal energy will play a major role in the future renewable energy mix and its installed capacity could grow faster in the next decades if the difficulties hindering its development are solved or mitigated.

Learn more about producing electricity with geothermal power plants using binary systems . I want more info

Useful resources:

IRENA “Geothermal power technology brief”,

IRENA “Renewable Power Generation Costs, 2021”

IRENA “Global geothermal market and technology assessment”

Geothermal Rising

Geothermal energy

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