Market Overview

The Latin America geothermal energy market size reached USD 1.82 Million in 2024 and is expected to grow to USD 2.23 Million by 2033. It is projected to exhibit a CAGR of 2.10% during the forecast period from 2025 to 2033. Growth is fueled by rising energy demand, government incentives, decarbonization goals, technological advancements, and increasing private investments.

Study Assumption Years

• Base Year: 2024
• Historical Year/Period: 2019-2024
• Forecast Year/Period: 2025-2033

Latin America Geothermal Energy Market Key Takeaways

• The market size of Latin America geothermal energy reached USD 1.82 Million in 2024.
• The market is forecasted to grow at a CAGR of 2.10% during 2025-2033.
• The forecast period for the market spans 2025 to 2033.
• Foreign investments and public-private partnerships are expanding geothermal projects, notably with over $1 billion financing from the Inter-American Development Bank focusing on Mexico, Chile, and Central America.
• Chile aims to expand geothermal capacity from 90 MW to 200 MW by 2025 and holds an untapped geothermal potential estimated at 16,000 MW.
• Mexico targets 2 GW geothermal power by 2030 through expansions like Cerro Prieto and Los Azufres projects.
• Enhanced Geothermal Systems (EGS) could increase capacity by 40% by 2030, with Argentina and Colombia exploring EGS to overcome geological limits.
• Geothermal applications are growing beyond electricity to industrial heating, agriculture, desalination, and green hydrogen production in countries like Costa Rica, Chile, and Mexico.

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Market Growth Factors

Energy demand grows in Latin America and government policies favor decarbonization for market expansion. Private investors invest more. Governments finance with instruments. These instruments include risk mitigation and tax incentives. These factors enabled geothermal projects to expand in Mexico and Chile. Grid stability needs and volcanic activity chances support geothermal energy's potential.

Technological progress, with particular regard to Improved Geothermal Systems (EGS), is unlocking geothermal energy potential in regions previously deemed unsuitable, and could increase geothermal energy generation in Latin America by 40% by 2030. Argentina and Colombia are studying the EGS concept too, and its prospects could improve with the appropriate policies, financing and permitting structures in place.

Geothermal energy is being used outside of electricity generation for industrial heating, agriculture, desalination and clean hydrogen production; in Costa Rica geothermal heat projects have begun for coffee and sugarcane production. Chile and Mexico develop geothermal energy toward green hydrogen production to increase efficiency and reduce costs. Chile expects geothermal hydrogen to meet 10% of clean hydrogen demand in 2035.

Market Segmentation

Type Insights:

• Binary Cycle: Part of the geothermal energy generation technology insights.
• Flash: Included as a key technology in geothermal electricity generation.
• Dry Steam: Another technology type with market relevance.
• Others: Additional geothermal technology types categorized.

End User Insights:

• Industrial: A key sector utilizing geothermal energy for various operations.
• Residential: End user segment using geothermal for heating and other needs.
• Commercial: Segment includes businesses leveraging geothermal power.

Regional Insights

The market covers Brazil, Mexico, Argentina, Colombia, Chile, Peru, and other countries. Mexico, as the largest geothermal producer in the region, is enhancing its capacity, targeting 2 GW by 2030. Chile plans to expand geothermal capacity from 90 MW to 200 MW by 2025 and possesses an untapped potential estimated at 16,000 MW, highlighting its leadership in geothermal resources.

Recent Developments & News

• February 2025: Mexican President Claudia Sheinbeum proposed a revised Geothermal Law aimed at streamlining regulations, project registration, and exploration licenses, acknowledging diverse geothermal applications like urban heating and agricultural drying.
• August 2024: GA Drilling collaborated with Brazilian energy company Petrobras to develop advanced geothermal drilling equipment, including downhole anchoring and drive systems, forming a basis for an autonomous reeling drilling system.

Competitive Landscape

The competitive landscape of the industry has also been examined along with the profiles of the key players.

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