Geothermal Energy Could Help Power AI Data Centers

Tsvetana Paraskova

Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. 

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Technology giants are partnering with geothermal start-ups as they seek to power their energy-intensive data centers with clean but reliable power sources.

Several deals have been struck over the past year as Big Tech is looking to boast low-emission profiles of its energy use.

The other 24/7 low-carbon energy comes from nuclear power generation, and deals have been made in that space, too. Earlier this year, Constellation Energy, the biggest owner of U.S. nuclear power plants, signed its largest-ever power purchase agreement with Microsoft, which paves the way for the restart of the Three Mile Island Unit 1 nuclear plant.

But newbuilt nuclear generation capacity is not in the cards right now. Unlike geothermal, which could provide clean energy faster than a new nuclear reactor can be approved, built, and launched for commercial operation.

However, geothermal energy faces its own challenges, such as approvals, drilling technology, and high upfront costs for the start-ups.

Geothermal, especially in the United States, also faces increased competition from fossil fuels as abundant natural gas is easier to harness into a gas-fired power plant. The energy derived from the gas could be classified as lower-carbon if carbon capture and storage facilities accompany new gas generation, at least that’s what America’s top oil and gas companies say.

Big Oil is already proposing to help power the AI revolution and the enormous energy consumption with gas power plants. Chevron and Exxon are talking to power generators, energy providers and data centers to provide what they describe as lower-carbon energy.

“It fits many of our capabilities – natural gas, construction, operations, and being able to provide customers with a low-carbon pathway on power through CCUS (carbon capture, utilization and storage), geothermal, and maybe some other technologies,” Jeff Gustavson, president of Chevron New Energies, said at a Reuters event in New York earlier this month.

Related: EU Ready to Discuss Closer Energy Ties with US under Trump

According to some start-ups, Big Oil is currently more focused on natural gas than on geothermal.

“We’ve talked to Chevron and Shell, but the supermajors seem to be taking more of a wait-and-watch view,” Cindy Taff, chief executive of Sage Geosystems, told Reuters.

Sage Geosystems this summer partnered with Meta on what the owner of Facebook described as “a first-of-its-kind project to significantly expand the use of geothermal energy in the US.”

Under the partnership, Sage’s proprietary Geopressured Geothermal technology will be used to provide carbon-free power for Meta’s data centers. The first phase of this project will aim to be online and operating in 2027. As part of this partnership with Sage, Meta plans to deliver up to 150 MW of new geothermal baseload power to support its data center growth.

Then there is Google, which partnered with Fervo Energy, which uses drilling techniques pioneered by the oil and gas industry to harness heat that would have previously been difficult to access. Fervo Energy is backed by a U.S. shale firm. Last year, it announced a $10 million strategic investment from Devon Energy.

While Big Tech is pushing for geothermal development and breakthroughs, Big Oil seems hesitant to bet big on geothermal energy despite being the best fit for drilling to reach geothermal resources.

Fracking techniques perfected in the U.S. shale patch could help drill for deeper and hotter geothermal energy resources and slash geothermal costs to make this low-carbon energy source competitive to other clean energy solutions, the International Energy Agency (IEA) said in a report earlier this month.

The oil and gas industry could play a key role in unlocking geothermal resources—by both providing fracking expertise and boosting investments in the sector, according to the agency.

The IEA estimates that, with the right support, costs for next-generation geothermal could fall by 80% by 2035, the IEA said.

“At this cost level, next-generation geothermal would also be highly competitive with solar PV and wind paired with battery storage.”

By Tsvetana Paraskova for Oilprice.com

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