Geothermal data centers facing skepticism over their effectiveness
In the ever-evolving landscape of technology, the search for sustainable and reliable energy sources is paramount. One such promising solution is geothermal energy, with its constant internal heat source making it an attractive choice for powering large-scale data centers.
In 2022, Microsoft signed a 10-year agreement with Contact Energy for the supply of electricity from the Te Huka geothermal power station in New Zealand for its local data center. This move signifies the growing interest in geothermal energy for powering data centers.
The US President has declared geothermal a priority and introduced fast-track permitting for proposed geothermal projects. This initiative aims to accelerate the development of geothermal energy, particularly in the US.
However, drilling costs spike when the geology isn't favorable, making site selection and risk appetite crucial factors. Fortunately, innovations in drilling technologies are lowering costs and increasing efficiency in geothermal energy production.
One such advancement is the development of Enhanced Geothermal Systems (EGS). These systems enable geothermal energy generation in areas without natural reservoirs, by stimulating hot rocks or using closed loops to absorb heat from the surrounding rocks.
Key advancements in EGS include the use of ceramic proppants—thermally stable materials that keep fractures open under high heat and pressure, ensuring long-term reservoir productivity. The application of horizontal drilling and fiber optic monitoring also enables better control and scalability.
Challenges in using EGS for large-scale data centers primarily center on high upfront drilling and development costs, regulatory and infrastructure hurdles, technical challenges in reservoir management, and water usage considerations.
Despite these challenges, EGS offers promising benefits for powering large-scale data centers, particularly hyperscale cloud and AI infrastructure. Reliable, 24/7 clean energy supply is a significant advantage, meeting the continuous power demands that variable renewables like solar or wind cannot fully address.
Partnerships between geothermal startups and tech giants like Meta and Google indicate growing momentum and validation of geothermal as a power source for data centers needing stable, carbon-free energy.
While EGS is advancing rapidly with promising pilot and commercial projects underway, broad deployment at scales matching data center demands depends on further cost reductions, regulatory support, and engineering refinements to ensure long-term reliability and scalability.
Geothermal energy is unlikely to become the default source for powering data centers but is expected to play a bigger role in the energy mix alongside other renewable sources. Companies like Microsoft, G42, and KenGen are building a data center at the Olkaria geothermal field in Kenya, demonstrating the potential of geothermal energy in powering data centers worldwide.
References:
- Geothermal Energy Council
- US Department of Energy
- Fervo Energy
- Pennsylvania Geothermal Collaborative
- Wood Mackenzie
- The growing interest in geothermal energy for powering data centers is highlighted by Microsoft's 10-year agreement for electricity from the Te Huka geothermal power station in New Zealand.
- The US President has introduced fast-track permitting for geothermal projects to accelerate the development of geothermal energy, particularly in the US.
- Innovations in drilling technologies are lowering costs and increasing efficiency in geothermal energy production, making site selection and risk appetite crucial factors less daunting.
- Enhanced Geothermal Systems (EGS) enable geothermal energy generation in areas without natural reservoirs, and advancements in EGS include the use of ceramic proppants for long-term reservoir productivity.
- Challenges in using EGS for large-scale data centers include high upfront drilling and development costs, regulatory and infrastructure hurdles, technical challenges in reservoir management, and water usage considerations.
- Partnerships between geothermal startups and tech giants like Meta and Google indicate the validation of geothermal as a power source for data centers needing stable, carbon-free energy.
- Geothermal energy, while not expected to become the default source for powering data centers, is anticipated to play a bigger role in the energy mix alongside other renewable sources, as demonstrated by companies like Microsoft, G42, and KenGen building a data center at the Olkaria geothermal field in Kenya.
