Latin America Geothermal Energy Market Size, Growth and Forecast Report 2025

Market Overview

The Latin America geothermal energy market size reached USD 1.82 Million in 2024 and is forecasted to grow to USD 2.23 Million by 2033, reflecting a CAGR of 2.10% during the 2025-2033 period. Key growth drivers include rising energy demand, government incentives, decarbonization goals, advances in technology, increasing private investments, and the region's volcanic activity potential.

Study Assumption Years

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

Latin America Geothermal Energy Market Key Takeaways

• Current Market Size: USD 1.82 Million in 2024
• CAGR: 2.10% (2025-2033)
• Forecast Period: 2025-2033
• Significant foreign investments and public-private partnerships (PPPs) are accelerating project development, supported by incentives and risk mitigation measures.
• The Inter-American Development Bank (IDB) allocated over $1 billion for renewable energy projects, with geothermal a focus in Mexico, Chile, and Central America.
• Chile aims to expand geothermal capacity from 90 MW to 200 MW by 2025, with untapped potential estimated at 16,000 MW.
• Mexico is the largest geothermal producer in the region, targeting 2 GW capacity by 2030 through projects like Cerro Prieto and Los Azufres expansions.
• Advances in Enhanced Geothermal Systems (EGS) could increase geothermal capacity by 40% by 2030, with countries like Argentina and Colombia exploring these technologies.

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Market Growth Factors

Foreign entities invested and partnered with private and public groups to build geothermal plants in Latin America after internal government entities incentivized and created policies. The Inter-American Development Bank (IDB) funds renewable energy investments exceeding $1 billion in Latin America. A large share involves geothermal development in Mexico, Chile, and Central America. Demand for electricity drives investment with policies, such as tax incentives and risk-sharing mechanisms, favoring the need to provide baseload renewable energy.

Geothermal energy with EGS technologies has become feasible in regions where it was previously not technically feasible. With EGS, Latin America has the potential to generate 40% more geothermal energy by 2030. Argentina, Colombia, and several other Latin American countries are reported to be exploring EGS options at present. Geothermal energy is also being used for industrial heating, and agriculture and desalination. For example, Costa Rica uses geothermal energy in order to process coffee and sugarcane.

Chile and Mexico are prioritizing geothermal in order to produce green hydrogen. Chilean geothermal hydrogen projects plan to provide 10% of the country's clean hydrogen by 2035. With improved efficiency and reduced costs, with diversification, policies support it, public-private entities partner, and research entities collaborate, Latin America can lead in sustainable geothermal energy solutions.

Market Segmentation

Type Insights:

• Binary Cycle: Includes geothermal power plants where hot fluids heat a secondary fluid with a lower boiling point, generating power indirectly.
• Flash: Involves geothermal plants that flash hot water into steam for direct turbine operation, commonly used for high-temperature resources.
• Dry Steam: Uses steam extracted directly from geothermal reservoirs to drive turbines without intermediate steps.
• Others: Covers additional geothermal technologies not classified under binary cycle, flash, or dry steam.

End User Insights:

• Industrial: Geothermal energy used in various industrial processes requiring heating or power.
• Residential: Application of geothermal energy for heating or electricity in homes.
• Commercial: Use of geothermal energy in commercial establishments such as offices, hotels, and shopping centers.

Regional Insights:

• Brazil
• Mexico
• Argentina
• Colombia
• Chile
• Peru
• Others

Regional Insights

Chile emerges as a dominant region with plans to expand its geothermal capacity from 90 MW to 200 MW by 2025. The country hosts one of the world's largest untapped geothermal potentials, estimated at 16,000 MW. Mexico, the region's largest geothermal producer, targets 2 GW capacity by 2030 through expansions like Cerro Prieto and Los Azufres. These dynamics reflect significant growth and investment in key Latin American countries.

Recent Developments & News

• February 2025: Mexican President Claudia Sheinbeum proposed a revised Geothermal Law as part of energy reforms to streamline project registration and exploration licensing, recognizing various geothermal applications including urban heating and agricultural drying.
• August 2024: GA Drilling partnered with Petrobras, the Brazilian energy corporation, to develop next-generation deep geothermal drilling equipment, featuring a downhole anchoring and drive system for an autonomous reeled 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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IMARC Group is a global management consulting firm that helps the world’s most ambitious changemakers to create a lasting impact. The company provide a comprehensive suite of market entry and expansion services. IMARC offerings include thorough market assessment, feasibility studies, company incorporation assistance, factory setup support, regulatory approvals and licensing navigation, branding, marketing and sales strategies, competitive landscape and benchmarking analyses, pricing and cost research, and procurement research.

I'm Joey Moore, a seasoned Research Analyst with 5+ years of experience in market research. Expert in data analysis, strategic planning, and industry insights.