Asia's geothermal capacity doubled, but investors are sitting it out

Asia's geothermal capacity doubled, but investors are sitting it out A Pinsent Masons report finds Asian geothermal capacity more than doubled over 25 years, yet not one surveyed investor holds a stake as regulatory risk deters capital. Asia's installed geothermal capacity rose 113% in the 25 years to 2020, outpacing the 83% global growth rate over the same period, but the boom is now slowing as regulatory risk mounts. The finding comes from a Pinsent Masons report, covered by Asian Power on Friday (2026-06-05).⁶ That matters because the money is watching from the sidelines. Of nearly 1,000 active venture investors and technology developers the firm surveyed, 21% said they plan to put capital into geothermal within the next 12 months. None currently hold an investment in the sector. Just 5% of the region's green energy developers have made any inroads at all.⁶ The gap is striking given the demand picture. Power consumption across Southeast Asia from data centres, electric vehicles and green industrial parks is forecast to grow by more than 100 terawatt-hours over the next three to four years, according to the 2026 Southeast Asia Green Economy Report from Bain & Company and Standard Chartered. Meeting it will need more than $200 billion, over half flowing to data centres whose operators want fast, reliable access to power.^2,1 That is the kind of load geothermal is built to serve. It runs around the clock, which suits operators trying to avoid grid-connection delays rather than chase intermittent supply.¹ The incumbent it would displace is coal, and coal is not retreating. China's thermal generation, most of it coal-fired, rose 1.5% in 2024 to 6.34 trillion kilowatt-hours, official data showed on Friday (2026-05-15), defying forecasts that coal-fired output had peaked. Growth was the slowest in nine years outside the pandemic, but it was still growth. Hydropower climbed 10.7% to 1.27 trillion kWh, and overall demand rose 4.6%.³ There are cracks in the coal story. December thermal output alone fell 2.6% year on year to 827 billion kWh, and Greenpeace analysts have said renewables could meet all of China's new power demand growth in 2025.³ If that holds, the room for new firm capacity like geothermal narrows to replacement rather than growth. So both the demand case and the decarbonisation case point the same way. Capital does not. The gap between the fifth of investors who say they intend to enter geothermal and the zero who have is the report's central warning.⁶ Pinsent Masons puts the blame on regulation. Investors must plan for regulatory risk if they want to unlock the full potential of Asia Pacific's geothermal projects, the firm said. It did not quantify the cost of that risk, which is part of the problem for anyone trying to underwrite a project.⁶ The growth driving the power demand is concentrated in economies like India and Indonesia, two of the fastest-expanding among the world's 20 biggest, according to The Economist.⁵ Their appetite for electricity is the reason the geothermal question is being asked now rather than a decade out. The scale of the task is not new. As far back as 1990, the Asia-Pacific region's fossil-fuel burning produced six gigatonnes of CO2, about a quarter of the world total, on IEA figures.⁴ The region's emissions have climbed since, which is why firm low-carbon baseload carries a premium few other sources can match. The number to watch is conversion. Survey intent is cheap; signed deals are not. Until that 21% turns into investors actually holding geothermal assets, and until regulators give developers a clearer line on permitting, the 113% figure describes what already happened rather than what is coming. For now, not one of the investors Pinsent Masons surveyed owns a geothermal stake.⁶