The AI Boom Is Driving a Massive Geothermal Energy Revival

Geothermal energy is becoming Big Tech’s newest darling. Silicon Valley is upending its deep pockets into enhanced geothermal startups in a bid to stay one step ahead of the massive energy demand growth trend being spurred by the AI boom. Geothermal boasts key advantages over leading clean energy technologies, most notably the fact that it’s a constant, baseload clean energy source and that it’s one of vanishingly few zero-carbon alternatives with broad bipartisan support in the United States. As a result, this relatively niche and nascent technology may finally be ready for its close-up.

Until very recently, geothermal energy was only viable in geologically anomalous places where heat from the Earth’s core naturally made its way up to the Earth’s crust – such as through hot springs and geysers. As such, thermally active countries like Iceland were able to meaningfully integrate geothermal energy into their national energy mixes, but very few other countries and regions could. As such, geothermal accounts for less than 1% of the world’s energy mix today, and just 0.4% of the United States’ utility-scale energy generation.

But all of that is changing as ‘enhanced geothermal’ exits theoretical modelling and enters the real world. Enhanced geothermal borrows drilling technologies from the oil and gas industry’s hydraulic fracturing sector, and is even exploring borrowing tech from nuclear fusion to essentially melt away layers of rock to reach greater and greater depths. The idea is that if we can dig deeply and cost-effectively enough, geothermal energy could be available, abundant, and financially feasible practically anywhere on Earth.

As a result, enhanced geothermal energy startups are currently generating a lot of buzz. One such venture, Houston-based Fervo Energy, is backed by Bill Gates and Google, among other high-powered investors. Fervo has already secured the largest-ever commercial contract for geothermal power, having inked an agreement to provide 320 megawatts of power to Southern California Edison utility.

The firm has proven the efficacy of its enhanced approach at a pilot plant in Nevada, and is now “dramatically” scaling up its operations at a Utah plant and readying itself for commercial operations in 2026, all while showing a “70% reduction in drilling time year on year (see chart) while achieving high temperatures and flow rates” according to a recent report from The Economist, which proclaims that “geothermal energy looks set to go from niche to necessary.”

The United States’ public sector seems to be just as bullish as the private sector. The Trump administration has backed the sector’s development and refrained from slashing funding for geothermal in the same ways it has for other clean energy technologies. “His administration is embracing geothermal energy, which is primed for a very American boom,” the Atlantic reported earlier this year.

The Department of Energy recently revised its outlook to increase geothermal’s projected share of the national energy mix, predicting that by 2050, geothermal technologies could provide up to 300 gigawatts of energy. That’s a huge figure, clocking in at more than three times the current output of the nation’s nuclear power sector – the most productive nuclear power sector in the world. The scale of that projected growth is hard to overstate – today, geothermal produces less than four gigawatts in the United States.

Global geothermal numbers are also set to rise in a dramatic fashion. The International Energy Agency, too, has revised its long-term forecast to give geothermal a larger slice of the pie, reporting that the technology’s global potential is over 800 gigawatts by 2050, up from 15 gigawatts today. This kind of growth would make a genuine impact in global energy and emissions trends, and could be pivotal to avoiding an AI-driven global energy crunch. A report released earlier this year by New York-based research firm the Rhodium Group estimates that “geothermal could economically meet up to 64% of expected demand growth by the early 2030s.”

By Michael Kern for Oilprice.com

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