Geothermal energy, the heat radiating from the Earth’s core, offers a uniquely reliable source of clean energy. Unlike solar or wind, which depend on the weather, geothermal power plants tap into the Earth’s constant core heat. This allows them to generate electricity 24 hours a day, 7 days a week. This consistent output is referred to as “baseload power,” and it’s a major advantage versus other renewable sources. It helps balance the grid, ease the integration of renewables, and improve grid reliability. This article explores top geothermal energy stocks for 2024, focusing on those with the greatest pure-play focus.
How to Invest in Geothermal Energy
The best way to directly invest in geothermal energy is to buy stocks in companies specializing in this field. These can be big energy players with geothermal divisions or smaller, up-and-coming companies. Be aware though, geothermal projects are capital intensive, and the technology is still nascent. Finding pure-play geothermal companies is more difficult than with solar or wind.
Investors can gain indirect exposure through larger energy companies or utilities that have geothermal power plants as part of their generation mix. A few clean energy ETFs may also hold some geothermal stocks, but mostly they’ll be broader energy investments. Still, the most reliable way will be to target pure-play geothermal energy stocks.
Tier 1: Pure-Play Geothermal Energy Stocks
These companies derive the majority of their revenue directly from geothermal energy projects. For investors seeking the most exposure to this sector, pure-play geothermal energy stocks are the way to go.
Note: As this is new technology, there are not as many publicly traded companies right now. This is set to change as more private players consider IPO.
Ormat Technologies (ORA): Pure-Play Geothermal Pioneer
Ormat Technologies (ORA) is a geothermal leader, boasting technological expertise, a global network of power plants, and a proven track record.
Ormat Technologies stands apart as a pioneer in the geothermal energy space. They aren’t just a power provider, but a total technology solutions company specializing in every aspect of geothermal energy development. This focused approach makes them a true leader in the industry. Here’s what sets them apart:
- Global Reach, Proven Experience: Ormat’s portfolio includes over 190 power plants across the globe, with a generating capacity exceeding 3,200 MW. This translates into decades of real-world operational expertise, crucial in the complex landscape of geothermal development. Projects like the Puna facility in Hawaii and the Olkaria complex in Kenya showcase their international reach.
- Innovation & Adaptation: Ormat continuously refines its technologies, including its robust air-cooled condensers optimized for arid regions. They adapt solutions for a variety of heat sources, tailoring them to specific geothermal resources.
- End-to-End Control: Ormat’s vertically integrated model spans exploration, drilling, plant design, equipment manufacturing, and long-term operations. This gives them maximum control over quality and efficiency, minimizing reliance on external suppliers.
Investor Takeaway: Ormat’s commitment to geothermal, technological prowess, and operational excellence offer a compelling investment opportunity. Their proven track record lowers the risk profile typically associated with the sector, making them the top choice for investors seeking secure pure-play exposure to geothermal energy’s potential.
Tier 2: Up-and-Coming Geothermal Players
These smaller, more agile companies are rapidly expanding their geothermal energy footprints. While potentially riskier, these geothermal energy stocks offer high growth potential. Some of these companies also have the possibility of entering Tier 1 in the future.
Innergex Renewable Energy (INGXF): Renewables with Geothermal Push
Innergex Renewable Energy (INGXF) strategically focuses on geothermal expansion within its diverse renewable portfolio, evidenced by acquisitions and a strong development pipeline.
Innergex Renewable Energy is a diverse renewable energy player with a focus on hydroelectric, wind, solar, and a strategic emphasis on expanding its geothermal portfolio. This approach positions them for growth within the geothermal sector while offering a degree of diversification. Here’s what sets them apart:
- Recent Acquisitions: Innergex has made significant geothermal acquisitions, including the Jimmie Creek Geothermal Project in California (6 MW capacity) and its partial acquisition stake in the 330 MW Energía Llaima geothermal project in Chile. These demonstrate their active commitment to building a geothermal presence.
- Development Pipeline: Innergex has several promising geothermal projects in development, such as the Long Valley Exploratory Area (LVEA) project in California with potential for up to 47 MW of capacity. This pipeline suggests further growth prospects in the geothermal sector.
- Broader Renewables Portfolio: While geothermal is a key focus, Innergex’s total operational capacity across diverse renewable sources exceeds 3,200 MW. This offers a degree of stability to their overall business model compared to pure-play geothermal companies.
Investor Takeaway: Innergex offers investors exposure to geothermal’s growth with the potential security of a broader renewable energy portfolio. Their recent acquisitions and development plans make them a company to watch for investors seeking a mix of geothermal potential and stability.
Polaris Infrastructure (PIF): Latin American Expertise
Polaris Infrastructure (PIF) brings Latin American expertise and a successful geothermal project to the table, signaling their ambition to further expand in the region.
Polaris Infrastructure is a renewable energy investor and operator with a strong base in Latin America. While their main focus has been on hydroelectric projects, their recent efforts in geothermal development signal a strategic shift towards expanded geothermal involvement. Here’s what sets them apart:
- Regional Focus: Polaris holds in-depth knowledge of the Latin American energy landscape. This expertise, cultivated through their involvement in various renewable projects, provides a distinct advantage as they navigate complex regulations and identify geothermal opportunities within the region.
- The San Jacinto Project: Polaris’s flagship geothermal project, San Jacinto-Tizate in Nicaragua, boasts an operational capacity of 72 MW. This successful project demonstrates their existing capabilities and potential for scaling their geothermal operations.
- Ambitious Growth Plans: Polaris has publicly expressed the intention to significantly expand its geothermal portfolio and is actively seeking new projects in Latin America. This signals a commitment to developing their geothermal presence.
Investor Takeaway: Polaris offers a unique investment opportunity for those interested in the Latin American geothermal market. Their regional experience, the success of San Jacinto, and their focus on geothermal growth make them a compelling choice. However, investors should carefully consider the specific risks and opportunities associated with investing in emerging markets.
Brookfield Renewable Partners (BEP): Diversified Renewable Portfolio
Brookfield Renewable Partners (BEP) is a global renewable energy powerhouse with big plans to expand its already significant geothermal holdings.
Brookfield Renewable Partners is a massive investor and operator of renewable energy assets, holding a diversified global portfolio that includes hydroelectric, wind, solar, and a growing interest in geothermal projects. Here’s what sets them apart:
- Vast Renewable Portfolio: Brookfield boasts one of the world’s largest renewable energy portfolios, with approximately 24 GW of generating capacity across various technologies. This scale offers a solid foundation for growth within any renewable sector.
- Geothermal Focus: Brookfield has highlighted geothermal as a key growth area with their recent investments. Their partnership with Canadian-based Terrapin Geothermics signals their commitment to geothermal development in North America. Additionally, projects like those in the Taupo Volcanic Zone in New Zealand illustrate their global ambitions within the sector.
- Global Reach: Brookfield’s international presence offers opportunities to develop geothermal projects in diverse regions. This lets them target promising geothermal resources around the world, mitigating geographic risk.
Investor Takeaway: Brookfield’s expanding geothermal ambitions and vast renewable energy expertise create an intriguing investment proposition. Their recent investments and public statements suggest significant potential for growth within the sector in the near future, making them a stock to watch closely.
Tier 3: Established Players with Geothermal Efforts
Large energy companies with geothermal power among their assets offer investors a good balance: stability from their overall business, plus a chance to tap into the growth of the geothermal sector. These stocks let you invest in geothermal energy alongside more traditional energy sources.
Calpine Corporation (CPN): Largest Geothermal Field in the US
Calpine Corporation (CPN) is a major energy player with a strong geothermal presence thanks to their ownership of The Geysers.
While primarily focused on natural gas power generation, Calpine Corporation holds a unique position due to its ownership of The Geysers, the largest geothermal field in the United States. This strategic asset gives them significant exposure to the geothermal energy market. Here’s what sets them apart:
- The Geysers Legacy: The Geysers complex boasts an installed capacity of over 725 MW, making it a substantial source of clean baseload power. Calpine’s expertise in managing this complex over many years strengthens their position in the geothermal industry.
- Natural Gas Foundation: Calpine’s core business with natural gas power plants offers revenue stability, providing a solid foundation for potential geothermal expansion. Their total generating capacity stands at approximately 26 GW.
- Potential for Expansion: Calpine has expressed interest in developing new geothermal projects, including Enhanced Geothermal Systems (EGS) that could unlock vast, untapped potential. Their existing infrastructure and expertise could support growth in this area.
Investor Takeaway: Calpine offers investors a hybrid opportunity – exposure to geothermal energy’s growth alongside the stability of a large-scale, established energy player. For investors seeking a balance of risk and opportunity within the geothermal sector, Calpine is certainly worth considering.
NextEra Energy Inc. (NEE): Renewable Energy Leader
NextEra Energy Inc. (NEE), a renewable energy giant, has the resources and expressed interest to become a major force in geothermal.
NextEra Energy is a leader in renewable energy development with a dominant presence in solar and wind power. While geothermal plays a smaller role in their current portfolio, their size, resources, and commitment to clean energy point towards a potential for greater geothermal involvement in the future. Here’s what sets them apart:
- Renewable Energy Powerhouse: NextEra’s renewable energy portfolio boasts a total generation capacity exceeding 30 GW, making them a major player in the clean energy sector. Their experience in scaling large projects would translate well to ambitious geothermal ventures.
- Financial Strength: NextEra’s substantial financial resources enable investment in research, development, and new projects. This gives them the flexibility to pursue aggressive expansion in the geothermal sector if that becomes their strategic focus.
- Emerging Interest: NextEra has invested in several geothermal projects, including the Blue Mountain facility in Nevada and is exploring further opportunities. This demonstrates their active interest in expanding their geothermal footprint.
Investor Takeaway: NextEra currently offers limited direct exposure to the geothermal sector. However, their proven success in renewables, financial strength, and expressed interest in geothermal technologies suggest they could become a significant player in the future. For investors looking for potential long-term growth alongside their interest in geothermal energy, NextEra warrants close attention.
Enel Spa (ENEL): Italian Multinational with Geothermal Assets
Enel SpA (ENEL) is a multinational energy company with a diverse portfolio of renewable energy assets, including a substantial geothermal footprint.
Enel SpA is an Italian multinational energy company with geothermal assets worldwide. While not a pure-play geothermal company, their expertise and projects worldwide make them a company to watch for investors with a broader renewables focus. Here’s what sets Enel Spa apart:
- International Portfolio: Enel’s geothermal projects span the globe. They are a leader in geothermal development in Italy with plants like the Larderello complex in Tuscany. In the United States, they operate facilities like Cove Fort in Utah and Stillwater in Nevada.
- Installed Capacity: Enel boasts a total geothermal installed capacity exceeding 1 GW globally. The company is involved in ambitious geothermal projects worldwide, such as the ongoing expansion of its Cerro Pabellón geothermal plant in Chile, a high-altitude project showcasing their technology’s adaptability.
- Integrated Renewables: While geothermal is a significant focus, Enel’s involvement in solar, wind, and hydroelectric offers investors exposure to a diversified renewable energy portfolio. This provides a degree of stability balanced with geothermal growth potential.
Investor Takeaway: Enel Spa offers investors a way to participate in the growth of the geothermal sector as part of a larger investment in a multinational renewable energy leader. Their expertise in geothermal technology, operational capabilities, and international portfolio position them well for potential expansion as the global demand for clean energy increases.
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The earth is literally humming with potential. Unlike some renewables, geothermal has a baseload generation advantage – rain or shine, hot rocks deliver. This analysis explored a range of geothermal players at the forefront of harnessing this power. From diversified giants to focused innovators, these players offer varying levels of exposure. For investors seeking to build out a clean energy portfolio, don’t ignore these geothermal energy stocks.
