MANILA -The cost of constructing and developing geothermal power plants will remain high globally compared with other power renewable technologies as countries race to achieve carbon neutrality, according to a report by Fitch Solutions.
Fitch, through its unit BMI, said equipment required to build geothermal power plants were costly and limited across the globe, given that the sector was “much smaller” than other sectors such as solar and wind power.
In its report, the think tank noted the cost of installing geothermal power plants had risen over the past 10 years, from $2,714 per kilowatt in 2010 to $3,991 per kilowatt in 2021.
Additionally, global geothermal capacity stood at 22 gigawatts (GW) in 2022, much smaller than the 902 GW of wind and 1,034 GW of solar capacities.
Fitch cited the more intensive nature of obtaining geothermal resources for power generation.
“This includes field preparation and well construction, both of which require heavy drilling equipment not needed for other types of nonhydropower renewables technology,” Fitch said.
Required grid developments and regulations were also slowing down the development of geothermal power plants despite projections that this technology would continue to expand globally “over the upcoming years.”
While Asian countries, including the Philippines, still have untapped geothermal potential, Fitch noted in its report that ideal locations for new facilities were often scattered across different islands, making grid connection more challenging. Environmental regulations were also adding to developers’ woes, it added. INQ
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