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Geothermal Energy Services U.S. and global growth in geothermal energy services has been slow in recent years, but is expected to accelerate in the near term as countries add to installed capacity or develop new geothermal resources. The value of the global geothermal EPC services market was estimated at $315 million in 2010, and the O&M services market was estimated at $2.5 billion. In the United States, the value of the geothermal EPC services market in 2010 was estimated at $34 million, while the O&M services market was estimated at $594 million. Indonesia, the Philippines, Kenya, Rwanda, and Ethiopia all represent significant potential markets for new geothermal capacity, and thus for geothermal services. Factors Affecting Supply and Demand Government incentives have played a key role in the global development of renewable energy. Renewable energy has historically cost more to generate than energy from conventional sources like fossil fuels (e.g., coal, petroleum, and natural gas). As a result, renewable energy has largely been uncompetitive with the alternatives absent policy mechanisms that lower its generating costs and encourage (or require) its use. These policy mechanisms include fiscal incentives, such as tax credits to offset the cost of generating renewable energy, and regulatory policies that mandate the use of renewable energy and set its price. Often, a combination of these mechanisms are used to develop renewable energy resources and technologies and ensure their deployment. Over 125 countries have explicit policy targets in place to promote renewable energy. Econometric analysis indicates that feed-in tariffs have a direct, positive impact on installed capacity. The Commission examined the relationship between feed-in tariffs2 and installed wind capacity in 54 countries during 2006–10, and found that having a feed-in tariff policy correlated with an additional 1,856 MW of installed wind capacity. Growth in renewable energy installations and advances in technology boost demand for renewable energy services. Demand for renewable energy underpins overall demand for renewable energy services. Specific factors affecting services demand include the growth in installations of renewable technologies, the size and age of existing renewable capacity, and improvements or advances in renewable technologies. Falling equipment prices have driven up the demand for services as new capacity is developed. Increased competition among renewable technology manufacturers, greater economies of scale in manufacturing, and advances in technology and manufacturing processes have 2 Feed-in tariffs are government incentives that offer a set price for renewable energy to investors (which may include producers of all sizes). xviiPDF Image | Renewable Energy and Related Services: Recent Developments
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