The Philippines has long been a leader in renewable energy development, with abundant resources that can help secure a cleaner and more sustainable future. As the country accelerates its energy transition, it is important to understand the benefits of geothermal energy, one of the most reliable and scalable renewable resources available.
Geothermal energy draws heat from beneath the earth’s surface and converts it into electricity. Unlike other renewable sources that depend on the weather, geothermal power runs consistently and delivers dependable baseload capacity. This makes it a strong complement to solar, wind, and hydro resources, providing stability to the national grid while supporting decarbonization goals.
For investors, regulators, and communities, the question is not only what the benefits of geothermal energy are, but also how geothermal can drive shared value.
What are the benefits of using geothermal energy?
1. Reliable baseload power for a stable energy mix
Geothermal is a dependable source of baseload electricity that runs around the clock. Unlike solar or wind, which vary with the weather conditions, geothermal plants maintain steady output regardless of the time of day or season. In fact, geothermal facilities can achieve uptime rates of more than 95%, which helps stabilize grids and reduces reliance on fossil fuels. For governments and regulators, this reliability translates into stronger energy security and less exposure to external fuel price volatility.
2. Strong economic potential in high-grade geothermal areas
The Philippines is the third-largest producer of geothermal energy worldwide, behind only the United States and Indonesia. Resources are concentrated in high-grade areas where heat reservoirs are closer to the surface, making projects more viable. Geothermal energy accounts for nearly 15% of the country’s installed renewable capacity. This means proven opportunities in a resource-rich landscape, with high potential for scaling capacity in line with growing energy demand.
3. Competitive deployment costs for long-term value
While exploration and drilling require upfront investment, the operating costs of geothermal plants remain low once facilities start operations. Over the long term, this makes geothermal one of the most cost-efficient renewables. Compared to coal plants, which face fluctuating fuel prices, geothermal plants deliver stable pricing. This economic advantage makes geothermal energy highly attractive to investors seeking predictable returns and to communities seeking affordable electricity.
4. High capacity factor with uptime exceeding 95%
The benefits of geothermal energy include consistently high capacity factors, often above 90%, far outpacing intermittent renewables. This ensures that geothermal facilities are generating electricity almost all the time, maximizing asset utilization. For creditors and financing institutions, this high utilization rate enhances the bankability of geothermal projects.
5. Low operating costs once plants are established
Once geothermal plants are commissioned, the cost of energy production is relatively minimal, majority of which are for plant maintenance and the small amount of electricity needed for pumping. In fact, pumps can often be powered by surplus energy generated at the plant itself. It results in steady margins and predictable revenue streams, aligning well with long-term financing models.
6. Smaller footprint and lower environmental impact
Compared to coal, hydro or tidal energy, geothermal projects occupy less land and have reduced ecological impact. Plants are relatively compact and do not require the large-scale reservoirs needed for hydroelectric power. The environmental benefits of geothermal energy are also significant. Properly managed, geothermal plants release minimal greenhouse gases and avoid the air and water pollution associated with fossil fuels. For regulators, this helps meet emissions reduction targets, while for communities, it means cleaner air and water.
7. Expanding reach with enhanced geothermal technology
Emerging technologies are making geothermal feasible even in areas with thicker crusts or deeper heat reservoirs. Enhanced geothermal systems (EGS) allow drilling to greater depths and the injection of water to stimulate heat extraction. This expands the potential footprint of geothermal energy beyond traditional hotspots. For governments, this widens the scope of future energy planning, while for investors, it unlocks new markets with promising returns.
8. Clean energy with no air or water pollution
When implemented correctly, geothermal energy does not produce harmful emissions or discharge pollutants into water systems. This makes it one of the cleanest energy options available. The environmental advantages of geothermal energy, therefore, extend beyond carbon reductions to broader public health improvements. Communities hosting geothermal projects benefit directly from better air or water quality, while investors gain from alignment with ESG criteria and growing demand for sustainable energy sources.
Accelerate the transition toward a resilient and low-carbon economy
The benefits of geothermal energy go well beyond producing steady electricity. It opens the door to attractive investment opportunities, delivers affordable power over the long run, keeps the grid stable and brings lasting value to both people and the environment. For investors, it means dependable returns. For the government and regulators, it supports energy security and climate targets. And for communities, it provides clean power, local jobs and healthier living conditions.
As a renewable energy company in the Philippines, ACEN continues to expand its renewable energy portfolio, and geothermal remains one of the cornerstones of our vision for a cleaner, more sustainable energy future. Let us shape a future that is resilient, inclusive, and powered by clean energy.
References:
- Enel Green Power. (n.d.). All the advantages of geothermal energy. https://www.enelgreenpower.com/learning-hub/renewable-energies/geothermal-energy/advantages
- International Trade Administration. (2024, July 26). Philippines geothermal energy. U.S. Department of Commerce. https://www.trade.gov/market-intelligence/philippines-geothermal-energy
- Kassem, M. A., & Moscariello, A. (2025, August 29). Geothermal energy: A sustainable and cost-effective alternative for clean energy production and climate change mitigation. Sustainable Futures, 10, Article 101247. https://doi.org/10.1016/j.sftr.2025.101247
- Koons, E. (2024, October 11). Geothermal energy in the Philippines: A sustainability powerhouse. EnergyTracker Asia. https://energytracker.asia/geothermal-energy-in-the-philippines/
- ScienceDirect. (n.d.). Geothermal energy – An overview. In ScienceDirect Topics. https://www.sciencedirect.com/topics/chemistry/geothermal-energy
