Geothermal energy, a long-standing but underutilized resource, is finally receiving the attention it deserves. Despite being accessible for over a century, its global impact has been constrained. However, recent advancements in drilling and resource management technologies, many of which have roots in the oil and gas sector, are now driving down costs and enabling access to deeper reservoirs.
These innovations have the potential to position geothermal energy as a critical component of future energy systems, particularly in light of the escalating energy demands of data centers. The exponential growth of data centers has raised concerns about their power consumption and the sustainability of their operations. A report from Lawrence Berkeley Lab (LBL) in December 2024 highlighted a substantial increase in electricity usage by data centers, with their share of total U.S. electricity consumption climbing from 2% in 2020 to around 4.5% in 2024. By 2028, data centers are projected to consume between 325 and 580 TWh of electricity, accounting for a significant portion of the nation’s energy consumption.
Tech giants such as Amazon, Microsoft, and Meta are rapidly expanding their operations, prompting a push for sustainable energy solutions from utilities and policymakers. Geothermal energy emerges as a promising candidate for a low-carbon future, harnessing the Earth’s heat to generate electricity with minimal emissions. Unlike solar and wind power, which are weather-dependent, geothermal plants operate at over 90% capacity, ensuring a consistent power supply. According to the EIA, geothermal power plants produce electricity without burning fuel, resulting in significantly lower pollution levels compared to traditional fossil fuel plants.
Geothermal plants utilize scrubbers to eliminate hydrogen sulfide from natural reservoirs and reinject used steam and water back into the Earth, thereby replenishing the resource and reducing emissions. The U.S. Department of Energy (DOE) estimates that by 2050, geothermal energy could prevent up to 516 million metric tons of CO₂ equivalent emissions, equivalent to removing 6 million cars from the road annually. Protected geothermal features like geysers and fumaroles in places like Yellowstone National Park are not only national treasures but also serve as a reminder of the potential of geothermal energy.
Currently, the U.S. boasts around 4 GW of geothermal capacity, primarily concentrated in California and Nevada, where traditional geothermal plants tap into naturally occurring steam or hot water. Enhanced Geothermal Systems (EGS), a next-generation geothermal technology, utilizes advanced drilling techniques to access heat from deep rock layers, expanding its reach beyond the Western states. EGS presents a viable solution to meet the rising energy demands while mitigating greenhouse gas emissions.
By integrating EGS into data centers, companies can generate clean and reliable power, making geothermal a feasible option for sustainable growth. With large-scale data centers operated by tech giants projected to require approximately 27 GW of power by 2030, geothermal facilities could potentially contribute 15-17 GW to meet this demand. Geothermal energy holds promise in 20 out of 28 key data center hubs, with the majority of geothermal potential concentrated in the western U.S., although cities like Northern Virginia, Chicago, Columbus, and Memphis also show potential.
Geothermal energy also offers an effective solution for cooling data centers. As AI-driven facilities generate excess heat, the need for advanced cooling systems has escalated. Geothermal heat pumps, geothermal absorption chillers, and shallow aquifers provide efficient cooling solutions by leveraging stable underground temperatures. These methods not only reduce costs but also minimize water usage, particularly beneficial in water-scarce regions.
A report from the National Renewable Energy Laboratory (NREL) predicts that geothermal energy will account for 1.94% of U.S. generating capacity by 2035 and 3.94% by 2050. Despite its steady power generation capabilities, geothermal’s overall impact on clean energy is significant when considering total electricity generation. The DOE projects a need for 700-900 GW of additional firm capacity on the U.S. grid by 2050, with next-gen geothermal technology potentially providing 90-300 GW.
While geothermal cooling presents a low-carbon alternative, its adoption has been hindered by high initial costs. Tax credits and utility incentives can help data centers reduce energy consumption and emissions, with some companies already investing in geothermal solutions. Continued research is essential to enhance efficiency and address challenges such as heat buildup in specific climates. Encouragingly, the DOE anticipates that costs could decrease to $60-70/MWh by 2030, with the Enhanced Geothermal Shot™ initiative aiming for $45/MWh by 2035.
Leading tech companies are increasingly investing in geothermal energy, signaling a shift towards sustainable practices. In June 2024, Alphabet partnered with NV Energy to secure 115 MW of geothermal power from Fervo Energy, while Meta collaborated with Sage Geosystems to supply geothermal power to data centers east of the Rocky Mountains. This marked a significant milestone for the region, with data centers willing to pay a premium for green energy over standard rates. The integration of geothermal energy into data center operations not only transforms power generation and cooling but also paves the way for a reliable, low-emission energy source in the face of growing demand and sustainability imperatives.
As the demand for energy continues to rise, the industry’s focus on sustainability is intensifying, with geothermal energy emerging as a promising solution. With ongoing innovation and supportive policies, geothermal energy stands poised to play a pivotal role in the transition towards a more sustainable and environmentally conscious energy landscape.
