With the growing use of artificial intelligence (AI), the demand for data centers and the large energy loads required to support them is increasing rapidly. Geothermal energy has the potential to help add more reliable power to the grid and meet the needs of this increasingly digitized world.
How Geothermal Can Support Data Center Growth
Data centers require an enormous amount of power to sustain operations. Data centers’ share of total annual U.S. electricity consumption has already more than doubled from 1.9% in 2018 to 4.4% in 2023, and is projected to grow to between 6.7% and 12% by 2028 (2024 United States Data Center Energy Usage Report). Data centers’ energy-intensive operations also require a reliable power source that can operate continuously, as well as reliable cooling methods to prevent servers from overheating.
Geothermal technologies offer two solutions to the challenges of meeting and managing data center’s power and cooling demands.
Power Generation
Geothermal energy’s high capacity factor—generally about 90%—allows geothermal power plants to operate 24 hours a day, with steady output nearly all of the time. As a steady power generator, geothermal electricity is ideal for supporting the energy load generated by constant data center operations, such as that required by some AI data computing, as well as flexible computing loads like those of bitcoin mining, which can fluctuate between periods of high uptime (or regular operation) and reductions in response to market price sensitivities.
Enhanced geothermal systems (EGS) and other next-generation technologies can also provide versatile support for data centers’ high energy demands by removing or reducing power plant location limitations. The U.S. Department of Energy’s (DOE) Office of Geothermal (OG) is researching ways to improve geothermal exploration, reduce drilling costs, and advance next-generation technologies like EGS, helping to open more opportunities for cost-effective geothermal electricity nationwide.
Direct Cooling
Geothermal energy has the potential to reduce data center peak cooling demand and energy costs with Cold Underground Thermal Energy Storage (Cold UTES). Cold UTES is basically cold water that is injected into the subsurface, stored underground, then drawn back to the surface to be dispatched as needed to offset peak cooling demands.
Data centers can have large, megawatt-scale cooling demands to keep their servers operational, especially in times of high usage. Reducing the power required to meet peak cooling demand can mean avoiding the need to build new power plant capacity. As a long duration energy storage solution, Cold UTES offers a way to reduce and shift data center peak cooling loads, reducing demands on the electricity grid, while also improving cooling efficiency compared with other cooling methods.
OG is supporting work to understand the grid and system-wide value, costs, and impacts of large scale and widespread deployment of this emerging cooling solution.
OG is also funding a project to investigate the use of abandoned mine water for data center cooling at a site in Southwest Virginia. Located on former and abandoned coal mine lands, the site has access to billions of gallons of cool underground water below these former mines. The project team will drill two entries to the underground mine workings and circulate water through them; cool water will be brought up from the subsurface to absorb heat from a facility and then reinjected back into the underground pool to be cooled by the surrounding pool and subsurface temperatures. The project will test the sustainability of this concept of creating a “cold energy reserve” underground for data center cooling.
Learn more about OG’s data, modeling, and analysis and OG’s other initiatives, including an OG project exploring another form of geothermal energy storage.
Geothermal Energy for Data Centers
Constant Power: Geothermal plants run continuously with a ~90% capacity factor, matching round-the-clock AI and cloud computing demands.
Advanced Systems: Enhanced Geothermal Systems (EGS) use oil and gas drilling techniques to tap heat in wider geographic areas.
Direct Cooling: Underground Thermal Energy Storage (UTES) uses the earth's stable temperature to lower peak cooling loads. [1, 2, 3, 4, 5]
Geothermal power generation has become a critical pillar of the clean energy strategy for next-generation data centers, driven primarily by the massive, around-the-clock power demands of artificial intelligence and cloud computing. [1, 2]
The Core Value Proposition: "Firm" Baseload Power
Unlike solar and wind energy, which are intermittent and depend on weather conditions, geothermal energy offers a ~90% capacity factor. It provides a steady, uninterrupted stream of carbon-free electricity ("firm power") that directly matches the 24/7 operating profile of hyperscale data centers. Furthermore, geothermal facilities require a fraction of the land footprint needed for sprawling wind or solar farms. [1, 2, 3, 4, 5]
The Technological Catalyst: Enhanced Geothermal Systems (EGS)
Traditional geothermal energy relies on tapping natural underground hot springs, which severely limits where plants can be built. EGS solves this by adopting horizontal drilling and hydraulic fracturing techniques from the oil and gas industry: [1, 2, 3, 4, 5]
How it works: Operators drill deep wells into hot, dry basement rock (often 8,000+ feet deep), create artificial fractures, and pump water through the loop to absorb the Earth's heat. [1]
Organic Rankine Cycle (ORC): The superheated fluid brought to the surface vaporizes a secondary working fluid with a lower boiling point, which drives power-generating turbines in a fully closed loop. [1]
Location Independence: EGS unlocks the ability to build geothermal power plants in geographic regions that lack natural hot springs, opening up massive scaling potential. [1, 2, 3, 4, 5]
Major 2025/2026 Power Purchase Agreements (PPAs)
Hyperscalers are actively funding the commercial scaling of next-generation geothermal startups through massive long-term contracts: [1, 2]
Google & Fervo Energy: Following a successful pilot project in Nevada, Google significantly expanded its commitment. In mid-2026, Google signed a framework agreement with Fervo Energy for up to 3 Gigawatts (GW) of geothermal power by 2033—a massive leap from their initial 115 Megawatt (MW) PPA. This follows Fervo's successful Nasdaq IPO in May 2026. [1, 2, 3]
Meta & Sage Geosystems / XGS Energy: Meta partnered with Sage Geosystems and XGS Energy to deliver up to 150 MW of advanced geothermal power to support its data center expansions, with initial phases slated to come online by 2027. [1, 2, 3]
Industrial Consolidations: Recognizing the boom, traditional energy services companies are pivoting. For example, SLB and Liberty Energy formed a strategic alliance to build modular infrastructure and integrated power solutions specifically tailored for new data center projects. [1]
Direct Geothermal Cooling
Beyond electricity generation, the industry is leveraging the Earth's stable underground temperature (typically 10–15°C / 50–59°F) for Direct Heat Rejection. Instead of using electricity-hungry chillers to cool servers, closed-loop underground piping systems act as a heat sink. This eliminates the energy waste of converting geothermal heat into electricity first, significantly dropping the data center's Power Usage Effectiveness (PUE). [1, 2, 3]
The Potential for Geothermal Energy to Meet Growing Data ...
Geothermal can meet 100% of anticipated data center demand growth in 13 of the 15 largest markets using the most promising cooling...Rhodium Group
Geothermal and Data Centers | Department of Energy
Power Generation. Geothermal energy's high capacity factor—generally about 90%—allows geothermal power plants to operate 24 hours ...Department of Energy (.gov)
Fervo Energy’s Cape Station in Utah is utilizing rapid, shale-inspired drilling innovation to drive down capital expenditures from an initial $7,000/kW toward a long-term target of $3,000/kW. By reducing drilling time by over 70% and slashing per-well costs to $4.8 million, the project aims to make enhanced geothermal systems (EGS) cost-competitive with, or cheaper than, traditional baseload power. For more details, visit Fervo Energy's IPO filing and related analysis. [1, 2, 3, 4, 5]
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