Fluids drawn from the deep earth carry a mixture of gases, notably carbon dioxide (CO2), hydrogen sulfide (H2S), methane (CH4) and ammonia (NH3). These pollutants contribute to global warming, acid rain, and noxious smells if released. Existing geothermal electric power plants emit an average of 122 kg of CO2 per megawatt-hour (MW·h) of electricity, a small fraction of the emission intensity of conventional fossil fuel plants. Plants that experience high levels of acids and volatile chemicals are usually equipped with emission-control systems to reduce the exhaust. Geothermal power plants could theoretically inject these gases back into the earth, as a form of carbon capture and storage.

In addition to dissolved gases, hot water from geothermal sources may hold in solution trace amounts of toxic chemicals such as mercury, arsenic, boron, antimony, and salt. These chemicals come out of solution as the water cools, and can cause environmental damage if released. The modern practice of injecting spent geothermal fluids back into the Earth to stimulate production has the side benefit of reducing this environmental risk.

Direct geothermal heating systems will contain pumps and compressors, and the electricity they consume may come from a polluting source. This parasitic load is normally a fraction of the heat output, so it is always less polluting than electric heating. However, if the electricity is produced by burning fuels, then the net pollution of geothermal heating may be comparable to directly burning the fuel for heat. For example, a geothermal heat pump powered by electricity from a combined cycle natural gas plant would produce about as much pollution as a natural gas condensing furnace of the same size. Therefore the environmental value of direct geothermal heating applications is highly dependent on the emissions intensity of the neighboring electric grid.

Plant construction can adversely affect land stability. Subsidence has occurred in the Wairakei field in New Zealand and in Staufen im Breisgau, Germany. Enhanced geothermal systems can trigger earthquakes as part of hydraulic fracturing. The project in Basel, Switzerland was suspended because more than 10,000 seismic events measuring up to 3.4 on the Richter Scale occurred over the first 6 days of water injection.

Geothermal has minimal land and freshwater requirements. Geothermal plants use 3.5 square kilometres per gigawatt of electrical production (not capacity) versus 32 and 12 square kilometres for coal facilities and wind farms respectively. They use 20 litres of freshwater per MW·h versus over 1000 litres per MW·h for nuclear, coal, or oil.

Twenty-four countries generated a total of 56,786 gigawatt-hours (GWh) (204 PJ) of electricity from geothermal power in 2005, accounting for 0.3% of worldwide electricity consumption. Output is growing by 3% annually, because of a growing number of plants and improvements in their capacity factors. Because geothermal power plant does not rely on variable sources of energy, unlike, for example, wind or solar, its capacity factor can be quite large – up to 96% has been demonstrated. The global average was 73% in 2005. The global installed capacity was 10 gigawatts (GW) in 2007.

The thermal efficiency of geothermal electric plants is low, around 10-23%, because geothermal fluids are at a low temperature compared to steam from boilers. By the laws of thermodynamics this low temperature limits the efficiency of heat engines in extracting useful energy during the generation of electricity. Exhaust heat is wasted, unless it can be used directly and locally, for example in greenhouses, timber mills, and district heating. The efficiency of the system does not affect operational costs as it would for a coal or other fossil fuel plant, but it does factor into the viability of the plant. In order to produce more energy than the pumps consume, electricity generation requires high temperature geothermal fields and specialized heat cycles:

1. Dry steam plants are the simplest and oldest design. They directly use geothermal steam of 150°C or more to turn turbines.
2. Flash steam plants pull deep, high-pressure hot water into lower-pressure tanks and use the resulting flashed steam to drive turbines. They require fluid temperatures of at least 180°C, usually more. This is the most common type of plant in operation today.
3. Binary cycle power plants are the most recent development, and can accept fluid temperatures as low as 57°C. The moderately hot geothermal water is passed by a secondary fluid with a much lower boiling point than water. This causes the secondary fluid to flash to vapor, which then drives the turbines. This is the most common type of geothermal electricity plant being built today. Both Organic Rankine and Kalina cycles are used. The thermal efficiency is typically about 10%.

Geothermal power plant is power extracted from heat stored in the earth. This geothermal energy originates from the original formation of the planet, from radioactive decay of minerals, and from solar energy absorbed at the surface. It has been used for bathing since Paleolithic times and for space heating since ancient Roman times, but is now better known for generating electricity. Worldwide, geothermal power plants have the capacity to generate about 10 gigawatts of electricity, and in practice supply 0.3% of global electricity demand. An additional 28 gigawatts of direct geothermal heating capacity is installed for district heating, space heating, spas, industrial processes, desalination and agricultural applications.

Geothermal power plant is cost effective, reliable, sustainable, and environmentally friendly, but has historically been limited to areas near tectonic plate boundaries. Recent technological advances have dramatically expanded the range and size of viable resources, especially for applications such as home heating, opening a potential for widespread exploitation. Geothermal wells release greenhouse gases trapped deep within the earth, but these emissions are much lower per energy unit than those of fossil fuels. As a result, geothermal power has the potential to help mitigate global warming if widely deployed in place of fossil fuels.

The Earth's geothermal resources are theoretically more than adequate to supply humanity's energy needs, but only a very small fraction of it may be profitably exploited. Drilling and exploration for deep resources costs tens of millions of dollars, and success is not guaranteed. Forecasts for the future penetration of geothermal power plants depend on assumptions about technology growth, the price of energy, subsidies, and interest rates.

Twenty-four countries generated a total of 56,786 gigawatt-hours (GW·h) (204 PJ) of electricity from geothermal power plant, accounting for 0.3% of worldwide electricity consumption. Output is growing by 3% annually, keeping pace with global electricity generation from all sources. Growth is being achieved through a growing number of plants as well as improvements in their capacity factors. Because geothermal power does not rely on variable sources of energy, unlike, for example, wind or solar, its capacity factor can be quite large—up to 96% has been demonstrated. The global average was 73% in 2005. The global installed capacity was 10 gigawatts (GW).

The largest group of geothermal power plants in the world is located at The Geysers, a geothermal field in California, United States. As of 2004, five countries (El Salvador, Kenya, the Philippines, Iceland, and Costa Rica) generate more than 15% of their electricity from geothermal sources.

Geothermal electric plants have until recently been built exclusively on the edges of tectonic plates where high temperature geothermal resources are available near the surface. The development of binary cycle power plants and improvements in drilling and extraction technology may enable enhanced geothermal systems over a much greater geographical range. Demonstration projects are operational in Landau-Pfalz, Germany, and Soultz-sous-Forêts, France, while an earlier effort in Basel, Switzerland was shut down after it triggered earthquakes. Other demonstration projects are under construction in Australia, the United Kingdom, and the United States of America.