Geothermal Energy for Data Centers: A Sustainable Solution

The Impending Power Demand and a Geothermal Solution

An increasing demand for electricity is anticipated as both artificial intelligence and cloud computing providers continue to expand their data center infrastructure. However, a recent analysis indicates a potential solution may be found directly beneath these facilities.

According to a report by the Rhodium Group, utilizing advanced geothermal power could fulfill almost two-thirds of the projected increase in data center energy needs by the year 2030. This expansion would result in a quadrupling of U.S. geothermal power capacity, growing from 4 gigawatts to approximately 16 gigawatts, at a cost comparable to, or even lower than, current data center energy expenses.

Geothermal Potential in the Western U.S.

In the western regions of the United States, where geothermal resources are more abundant, this technology has the capacity to meet 100% of the new data center demand. For instance, Phoenix could potentially accommodate an additional 3.8 gigawatts of data center capacity without the need for constructing any new traditional power plants.

Geothermal resources possess substantial potential for delivering a consistent and reliable power supply. Traditionally, geothermal power generation has been restricted to areas where the Earth’s heat is readily accessible near the surface.

Advanced Geothermal Techniques

However, advanced geothermal techniques are poised to unlock an estimated 90 gigawatts of clean power within the U.S. alone, as per the U.S. Department of Energy.

These advanced methods generally involve drilling to greater depths and expanding the scope of drilling operations. This allows access to hotter rock formations – yielding increased power output – and enables the installation of a greater number of geothermal wells on a single site.

The sector has experienced a notable increase in startup companies in recent years, largely fueled by expertise and technologies transferred from the oil and gas industries.

Innovative Startups in Geothermal Energy

Fervo Energy, established by former oil and gas engineers, aims to broaden geothermal’s capabilities through the application of horizontal drilling techniques refined over the past several decades. The company secured over $200 million in funding in 2024, following significant reductions in well drilling costs.

Bedrock Energy is another startup focused on minimizing the physical footprint of geothermal systems through deep drilling. This approach allows space-limited facilities, such as office buildings and data centers, to extract more power from their available land area. Their specialized drilling rigs reach depths exceeding 1,200 feet to access consistent heat throughout the year.

Future Technologies

Quaise Energy is developing a technology that resembles science fiction. The company utilizes microwaves generated by gyrotrons to vaporize rock. By bypassing conventional drill bits, Quaise intends to drill to depths of up to 12.4 miles (20 kilometers). At such depths, rock temperatures remain consistently near 1,000°F, providing a virtually limitless heat source for power generation or building heating.

While many companies are focused on harnessing the Earth’s natural heat, Sage Geosystems is exploring its use for energy storage. They inject water into wells under pressure, and when power is required, they release the water to drive a turbine, functioning similarly to a reversed hydroelectric dam.

Cost Competitiveness and Siting Considerations

The Rhodium report highlights that, due to its low operational costs, geothermal power is currently competitive with existing energy costs for data centers. When data centers are located based on current practices – prioritizing proximity to fiber optics and major metropolitan areas – geothermal power costs approximately $75 per megawatt hour.

However, if developers actively consider geothermal potential during site selection, costs can decrease substantially, falling to around $50 per megawatt hour.

Behind-the-Meter Arrangements

The report anticipates that new generating capacity will be implemented “behind the meter,” referring to power plants directly connected to a customer, bypassing the traditional power grid. Lengthy wait times for connecting new power plants to the grid have made behind-the-meter arrangements increasingly attractive to data center operators seeking to rapidly expand capacity.