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A power crunch is looming as AI and cloud providers increase the construction of data centers. However, new reports suggest that the solution lies under their foundations.
Advanced geothermal power could supply almost two-thirds of the demand for new data centers by 2030. analysis By the rhodium group. With the addition, the amount of US geothermal capacity (4 gigawatts to about 16 gigawatts) is quadruple compatible, equal to or less than what data center operators pay today.
In the US West, where geothermal resources are becoming more abundant, the technology could provide 100% of the demand for new data centers. For example, Phoenix could add 3.8 gigawatts of data center capacity without building a single new traditional power plant.
Geothermal resources have great potential to provide consistent power. Historically, geothermal power plants have been limited to areas where the earth’s heat penetrates near the surface. However, advanced geothermal technology could unlock 90 gigawatts of clean power in the US alone. According to to the US Department of Energy.
Advanced or enhanced geothermal covers a wide range of approaches, but is generally drilled deeper and wider than before. This allows you to access hotter rocks (which lead to more power) and pack more geothermal wells into a single property. The sector has seen a surge in start-ups in recent years, partly due to knowledge and technology borrowed from oil and gas companies.
For example, Fervo Energy was founded by former oil and gas engineers to expand the potential of geothermal using horizontal drilling techniques completed over the past decades. The company raised more than $200 million in 2024 shortly after a significant cost reduction in well drilling.
Another startup, Bedrock Energy, is drilling deep to minimize geothermal footprints, allowing space-constrained office buildings and data centers to extract more power from their limited footprints. The company’s special drilling rigs have dropped over 1,200 feet to tap consistent heat all year round.
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Quaise Energy’s technology sounds like something from science fiction. The startup uses microwaves generated by the gyrotron to evaporate the rocks. By skipping the traditional drill bit, Quaise wants to drill 12.4 miles (20 km) deep. At its depth, the rocks are close to 1,000°F all year round, providing almost endless heat to drive generators and warm buildings.
Most companies use the Earth’s ability to provide and store heat, but another startup uses it to store energy in a different way. Sage Geosystems injects water into wells under pressure. If you need power, open the tap and run the water through the turbine.
The running costs of geothermal power are so low that its prices are competitive with the energy costs of today’s data centers, according to a Rhodium report. If the data center is set up similar to today’s methods, geothermal power is typically over $75 per megawatt hour if it is a process that is optical and is in close proximity to major metropolitan areas.
However, when developers occupy the geothermal potential of coordinates, the cost drops significantly, down to about $50 per megawatt per hour.
The report assumes that the new generation capacity will be “behind the meter.” This is an expert called a power plant that is bypassed by the grid and connected directly to the customer. Wait for the new power plant to connect to the grid Please grow for years. As a result, behind the meter placement has become more attractive to data center operators scrambling to build new capacity.