Abstract Geothermal power has received a great deal of attention in China as the country strives to be less dependent on coal energy and to seek stable and base load renewable power. The country's 13th Five-Year Plan for geothermal energy calls for an additional 500 MW by 2020. To assess whether this ambitious target can be achieved, this paper provides an overview of the environmental and economic performance of geothermal power based on an emergy evaluation and economic analysis of the Yangbajain plant in Tibet, the largest working geothermal power plant in China. The results indicate that the full flow system that the plant currently uses has a much higher production efficiency than the dry steam geothermal power plant in Italy. In addition, the system exhibits a relatively good environmental sustainability compared to other renewable energy generation technologies. However, it is still not economically feasible without government subsidies. Labor is expensive due to the high demand for trained professionals and the harsh working conditions in Tibet. Since China's high-quality geothermal resources are mainly located in Tibet, it would be quite challenging to achieve the ambitious 500 MW target by 2020. However, considering its environmental competitiveness, attractive subsidy policies and support for scientific research to promote technological innovations are proposed in this study to encourage the growth of the geothermal power industry in China, which would provide the country with another valuable alternative to coal.