Geothermal handbook: PlanninG and Financing power Generation t e c h n I c a L r e p o r t 2 / 2

INTrOduCTION TO gEOThErMAL ENErgy
Up until a century ago, geothermal energy was known mostly as a source of heat for spa and bathing 
purposes. The use of geothermal steam for electricity production began in the 20th century—with the 
first experimental installation built in Larderello, Tuscany, Italy in 1904. A 250 kWe geothermal power 
plant began operation there in 1913 (Kutscher 2000). Today, about 11 GWe of geothermal power 
capacity has been built around the world, with more than a five-fold increase taking place in the last 
three decades. 
The share of geothermal power in the overall energy balance of the world is still quite small, at about 
0.3 percent (IEA 2011a), with the prospect of growing to 0.5 percent by 2030 in the International 
Energy Agency’s (IEA) conservative Current Policies Scenario or to about 1.0 percent in the aggressive 
450 Scenario.
1
The scale of geothermal power generation is also modest when compared with other 
renewable energy sources (Figure 1.1).
However, the exploitable geothermal energy potential in some parts of the world is far greater than 
current utilization, offering scope for significant investment in scale-up.