Geothermal Power Could Be Answer to Data Center Needs

Geothermal power could meet a large portion of projected demand growth for electricity from continuing large-scale data center development, a recent report indicates.

The report from the Rhodium Group explored the growth scenarios and accompanying increase in electric demand from growth in AI data centers, using two scenarios based on where the facilities are located. It then focused on how next-generation geothermal technology could help to meet this demand while also helping data companies meet their clean energy goals.

Traditional geothermal systems now account for about 4 gigawatts (GW) of electric capacity in the U.S. Operating geothermal plants are concentrated in California and Nevada, which have hot rock formations not far from the surface. Wells are drilled to circulate water or other fluid through naturally permeable reservoirs and produce steam that spins a turbine to produce electricity. The fluid is then reinjected as a closed-loop system.

Enhanced geothermal systems, which are based on hydraulic fracturing technology and allow fluids to circulate through the fractured rock formations, is opening up geothermal to be deployed economically in a wider part of the country.

Data centers now account for about 4.5% of U.S. energy consumption, but that could grow to 7-12% of total demand by 2028 and continue to rise. The report authors, however, note there is great uncertainty about how much demand will grow. The report estimates that about 80 GW of total data center demand will exit by 2030, a 22% compound annual growth rate.

Using the current model of data center location, which has clustered in areas with available land and proximity to needed fiber optic networks, the report determined that geothermal energy could meet 64% of data center demand growth by the early 2030s. A more recent siting approach has prioritized access to large amounts of baseload energy over other factors. Under this approach, geothermal could meet 100% of projected demand growth, while cutting both energy costs and emissions.

The authors caution that there are a number of challenges facing geothermal expansion. Those include a permitting process that can take years, holdups in obtaining approvals for interconnection to the electric grid, and funding challenges that may require investment incentives. It also suggests that developers could use a “behind-the-meter” approach, where a geothermal project is co-located with a data center and directly provides electricity to it without connecting the electrical grid.

Geothermal presents an emerging, clean energy source capable of producing large amounts of around-the-clock electricity required to power an increasing number of data centers and the authors indicate that policymakers need to begin addressing it now to promote its growth.