Why Geothermal is the Hot Ticket to Low-Carbon Data Centers?

Globe and Mail

18-03-2025

Geothermal energy has great potential, but it has been underused for years. Although it's been available for over a century, its global impact has been limited. New drilling and resource management technologies, many from the oil and gas sector, are now lowering costs and tapping into deeper reservoirs.
These innovations could make geothermal a crucial part of future energy systems, especially for the proliferating data centers.
Data Centers' Power Hunger: The Next Energy Crisis?
Data centers have seen a sharp rise in electricity use in recent years, starting from a small base. A December 2024 report from Lawrence Berkeley Lab (LBL) found that data center power demand grew by 20-25% each year in the early 2020s. Their share of total U.S. electricity use rose from about 2% in 2020 to around 4.5% in 2024.
By 2028, data centers will consume between 325 and 580 TWh of electricity, accounting for 6.7% to 12% of total U.S. energy use.
Source: Lawrence Berkeley Lab
Tech giants like Amazon, Microsoft, and Meta are expanding quickly. This growth pushes utilities and policymakers to find sustainable energy solutions.
Geothermal Energy's Role in Low-Carbon Future
Geothermal energy harnesses Earth's heat to produce electricity with minimal emissions. Unlike wind and solar, which depend on weather, geothermal plants run at over 90% capacity. This ensures a stable power supply.
According to EIA, geothermal power plants create electricity without burning fuel, leading to very low pollution. They emit 97% less sulfur and 99% less carbon dioxide than similar fossil fuel plants.
These plants use scrubbers to remove hydrogen sulfide from natural reservoirs. They then inject the used steam and water back into the earth. This process helps renew the resource and reduces emissions.
The U.S. DOE revealed that,
By 2050, geothermal energy can avoid up to 516 million metric tons (MMT) of CO₂ equivalent emissions. This is comparable to removing 6 million cars from the road per year.
Geysers and fumaroles in places like Yellowstone National Park are protected by law and are national treasures.
Enhanced Geothermal Systems (EGS): The Next Big Power Play for Data Centers
The U.S. has about 4 GW of geothermal capacity, mainly in California and Nevada. Traditional geothermal taps into naturally occurring steam or hot water. Next-gen geothermal tech, called Enhanced Geothermal Systems (EGS), uses advanced drilling. This method taps into heat from deep rock layers. This expands its potential beyond the Western states.
EGS provides a great solution to rising energy needs and helps reduce greenhouse gas emissions. By deploying EGS at data centers, companies can generate clean and reliable power. This makes geothermal a viable option for sustainable growth.
Rhodium Group says geothermal energy could supply 55-64% of data center energy needs by the early 2030s.
Large-scale data centers run by Amazon, Microsoft, and other tech giants will need about 27 GW of power by 2030. Of this, 15-17 GW could come from geothermal facilities built at hyperscale data centers.
With strategic placement near optimal geothermal sites, energy costs could drop by up to 45%.
In a broader scenario, geothermal could supply at least 15% of power in 20 out of 28 key data center hubs. Most geothermal potential lies in the western U.S., but cities like Northern Virginia, Chicago, Columbus, and Memphis also have promise. Only Atlanta and New York City have limited potential for on-site geothermal.
Source: Rhodium report
Direct Cooling: A Smart Energy Solution
Geothermal can also cool data centers effectively. AI-driven facilities generate excessive heat, increasing the need for advanced cooling systems. Instead of relying on electric methods like adiabatic or liquid cooling, geothermal can directly manage temperatures. Here's how:
Geothermal heat pumps use underground pipes to cool IT components efficiently.
Geothermal absorption chillers use low-grade heat to create cooling through evaporation.
Shallow aquifers offer another way to access stable underground temperatures for cooling.
By reducing the need for deep drilling, these methods lower costs and minimize water use—an advantage in water-scarce regions.
The Future of Geothermal Power
An NREL report predicts geothermal will make up 1.94% of U.S. generating capacity by 2035 and 3.94% by 2050. Geothermal energy runs steadily. Its impact on clean energy is much greater when we look at total electricity generation.
Source: NREL
According to DOE, the U.S. grid will need 700-900 GW of extra firm capacity by 2050. Next-gen geothermal could provide 90-300 GW. In many decarbonization plans, solar PV and onshore wind are key players. Battery storage and natural gas provide backup support.
Source: DOE
Despite its low carbon potential, geothermal cooling isn't widely used due to high upfront costs. Tax credits and utility incentives help data centers save energy and cut emissions. Some companies are investing in it. However, more research is needed. This will help improve efficiency and tackle issues like heat buildup in certain climates.
On a positive note, DOE revealed that costs could drop to $60-70/MWh by 2030. The U.S. Department of Energy's Enhanced Geothermal Shot™ aims for $45/MWh by 2035.
Tech Giants Invest in Geothermal Energy
Major tech companies are investing in geothermal. In June 2024, Alphabet teamed up with NV Energy. They secured 115 MW of geothermal power from Fervo Energy.
A few months later, Meta partnered with Sage Geosystems. They aimed to supply geothermal power to data centers located east of the Rocky Mountains. This marked a first for the region. Data centers will pay a 20% premium for green energy over standard rates.
This analysis shows that geothermal energy could transform data center power and cooling. With support from innovation and policy, it offers a reliable, low-emission option. As demand grows, it drives the industry toward sustainability.