A new report from the Rhodium Group suggests that geothermal energy could play a major role in meeting the rising energy demand driven by artificial intelligence (AI). According to the study, geothermal could potentially fulfill up to 64% of the expected energy demand growth by the early 2030s, assuming key conditions remain favorable.
While advanced geothermal technology is still in its early stages, it could significantly contribute to clean energy production if it becomes commercially viable. However, the U.S. Department of Energy (DOE) highlights several hurdles that must be overcome for geothermal to expand. A 2019 DOE report stated that technical challenges, particularly in subsurface exploration, are among the most significant obstacles due to the high cost and complexity of accessing the Earth’s heat.
These barriers have made geothermal projects difficult to finance. The report noted that, since 2020, only around $700 million has been invested in geothermal energy worldwide, a small fraction considering the global scale of renewable energy. Currently, geothermal accounts for just 0.5% of the world’s renewable energy.
Despite these challenges, technological advancements are bringing geothermal energy closer to viability. Innovations drawn from industries like nuclear fusion and fracking have made it easier to drill for geothermal resources, making the heat from the Earth’s core accessible from more locations. In regions like Iceland, where natural geothermal activity occurs, the technology is already effective. However, in other areas, access to geothermal energy remains limited by geographical and geological factors.
As geothermal technologies advance, major tech companies are beginning to invest in the sector. Meta and Alphabet, the companies behind Facebook and Google, are among those supporting geothermal startups. New geothermal ventures are also emerging, particularly in Texas, which has abundant geothermal resources and a streamlined permitting process. According to Matt Welch of the Texas Geothermal Energy Alliance, the state’s regulatory certainty has made it an attractive location for geothermal development.
The growing interest from Big Tech companies is partly in response to the sector’s rapidly increasing energy needs. Google’s 2024 Environmental Report revealed that its greenhouse gas emissions have risen nearly 50% since 2019, making it increasingly difficult for the company to meet its emissions reduction targets. This surge in energy demand is largely driven by the expansion of AI, which requires substantial amounts of electricity, especially as data centers continue to grow. According to The Register, the electricity consumed by U.S. data centers has increased from 2% of national demand in 2020 to 4.5% in 2024.
The rising energy consumption of AI has placed significant strain on global energy grids, raising concerns about energy security and climate goals. However, geothermal energy could provide a potential solution. The Rhodium Group’s report suggests that geothermal could meet all the anticipated demand growth from data centers in 13 of the 15 largest U.S. markets, and at least 15% of demand in 20 out of 28 national markets.
The report also notes that while the future potential for geothermal energy is promising, several factors must align for it to become a reality. Data center operators would need to pay a “green premium” for geothermal power, tax credits must remain in place, and strong policy support will be necessary at the federal, state, and local levels.
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