As demand for artificial intelligence and cloud computing accelerates, data centers are facing a massive surge in construction. This raises a critical question: how can we sustainably power these energy-hungry facilities? According to a new analysis by the Rhodium Group, the answer could be beneath our feet. Advanced geothermal energy has the potential to power nearly two-thirds of all new data center demand in the United States by 2030.

This shift could spell a clean energy revolution. The analysis suggests geothermal capacity in the U.S. could rise from 4 gigawatts today to 16 gigawatts in just five years. Even better, it comes at a cost that is competitive with — or even lower than — current data center energy rates.

Geothermal’s Potential in the Western U.S.

In regions like the western United States, where geothermal resources are abundant, the outlook is even more promising. The Rhodium report asserts geothermal could meet 100% of new data center energy demand in these areas. For instance, in Phoenix, developers could add 3.8 gigawatts of data center capacity without the need for any new conventional power plants.

Geothermal offers a distinct advantage: it produces consistent, baseload power. This is a game-changer for data centers that require 24/7 power reliability.

What Is Advanced Geothermal?

Traditional geothermal wells relied on unique geographical conditions where Earth’s heat is relatively close to the surface. But advanced geothermal — also called enhanced geothermal — uses new drilling techniques to access energy from much deeper underground.

This includes drilling both deeper and wider to reach hotter rock formations, thereby enabling higher energy output. Seasonal constraints are eliminated, and a larger volume of wells can be drilled in a compact area, offering great scalability even in urban settings.

Startups Leading the Geothermal Revolution

Innovation is accelerating thanks to a new wave of startups bringing expertise and technologies from the oil and gas sector to geothermal. Here are a few noteworthy companies shaking up the space:

• Fervo Energy: Founded by former oil and gas engineers, Fervo uses horizontal drilling techniques developed in the fossil fuel industry. The company raised over $200 million in 2024 after significantly lowering well-drilling costs.
• Bedrock Energy: Specializing in compact, deep geothermal systems, Bedrock drills more than 1,200 feet below ground to deliver power in space-constrained areas like office parks and data centers.
• Quaise Energy: This startup offers a futuristic solution by vaporizing rock with gyrotron-powered microwaves. Their technology aims to reach depths of 12.4 miles (20 kilometers), tapping into rock temperatures of nearly 1,000°F.
• Sage Geosystems: Taking a novel approach, Sage uses Earth’s underground structures as an energy storage medium. They inject pressurized water into deep wells and release it through turbines when energy is needed — functioning like a reverse hydroelectric dam.

Geothermal Energy Economics

One of the most compelling features of geothermal energy is its low running cost. According to the Rhodium Group’s report, the average data center currently pays around $75 per megawatt-hour for electricity when following traditional siting models near fiber lines and major cities. Geothermal plants can supply energy at a comparable rate.

However, if data center developers integrate geothermal potential into their site selection process, energy costs can drop to just $50 per megawatt-hour. This presents significant cost-saving opportunities, especially for large-scale operators.

Behind-the-Meter Integration: A Smart Strategy

Another advantage of geothermal energy is the possibility of integrating it directly with data centers via “behind-the-meter” infrastructure. This approach links geothermal generation directly to the end user, bypassing traditional energy grids that often require lengthy approval times for new connections.

With grid interconnection wait times stretching for years in some regions, behind-the-meter setups are increasingly attractive for data centers looking to scale rapidly while maintaining energy resilience and price predictability.

Looking Forward: A Sustainable Data Center Future

The demand for data storage, AI computation, and cloud-based services shows no sign of slowing. Without significant changes, powering this infrastructure risks increasing dependence on fossil fuels and overburdening existing energy grids.

Advanced geothermal energy presents a sustainable, scalable, and economically viable solution. By investing in this technology, data center operators can significantly reduce their carbon footprint, ensure stable energy pricing, and futureproof their operations for decades to come.

From deeper drilling and thermal storage systems to microwave rock vaporization, geothermal innovation is transforming what’s possible beneath the Earth’s surface. As these technologies mature and deployment scales, the geothermal revolution in data center energy may arrive sooner than we think.