A new report by the Rhodium Group reveals that geothermal energy could supply up to 64% of the projected energy demand growth from data centers by the early 2030s. This finding positions geothermal as a potential game-changer in addressing the rising energy needs fueled by artificial intelligence (AI).
Despite historically high upfront costs and technical hurdles, advancements in geothermal drilling technology and increasing investments from major tech firms like Meta and Alphabet are accelerating its development. The report highlights that breakthroughs in subsurface exploration—leveraging techniques from nuclear fusion and fracking—are making geothermal energy more accessible beyond geologically active regions like Iceland.
Currently, geothermal contributes just 0.5% of global renewable energy, with only $700 million invested in the sector since 2020. However, with AI-driven energy consumption surging—data center power use in the U.S. has doubled from 2% in 2020 to 4.5% in 2024—Big Tech is intensifying efforts to secure sustainable energy sources.
Texas, with its rich geothermal resources and favorable regulatory environment, is emerging as a hub for innovation in the sector. The Rhodium Group estimates that geothermal could meet all anticipated data center growth in 13 of the 15 largest U.S. markets and at least 15% in 20 of 28 national markets.
However, this potential hinges on key factors: continued tax incentives, policy support, and willingness from data center operators to pay a “green premium” for geothermal energy. If these conditions are met, geothermal could provide a sustainable, scalable solution to the AI-driven energy crisis.
Story by Haley Zaremba for Oilprice.com
