Florian Mueller, Bjarne Steffen, Tobias S Schmidt
Geothermal power generation could play an important role in future energy systems, provided it experiences strong cost reductions. However, unlike for other renewables, data on geothermal cost dynamics are sparse. We address this gap by estimating global and local (country-level) experience rates using a newly compiled dataset of all 514 plants built over seventy years, 206 of which have cost data. We estimate a negative global experience rate (-20%) with 97% confidence for hydrothermal systems, indicating rising global costs. On the country level, we observe both negative and positive experience rates. Explaining these patterns, based on 51 expert interviews, we identify six factors, including varying hydrogeology, regulatory density and variance, and knowledge spillovers. We further assess two emerging technologies: enhanced and closed-loop geothermal systems. While they may exhibit higher local experience rates than hydrothermal in suitable contexts, they are unlikely to exhibit rapid global cost declines similar to other renewables.