By colocating data centers with geothermal plants, operators could tap into a clean, baseload power source that aligns with their sustainability goals. Operators could reduce transmission losses and enhance energy efficiency.
Meanwhile, the paper points out that one of the most promising aspects of geothermal energy is its scalability. The Rhodium Group estimates that the U.S. has the technical potential to generate up to 5,000 GW of geothermal power—far exceeding the current and projected needs of the data center industry. With the right investments and policy support, Rhodium contends that geothermal could become a cornerstone of the industry’s energy strategy.
The researchers project that 55-64% of the anticipated growth in hyperscale data center capacity could be met with behind-the-meter geothermal power, representing 15-17 GW of new capacity. In 13 of the 15 largest data center markets, geothermal could meet 100% of projected demand growth using advanced cooling technologies. Even in less favorable markets, geothermal could still meet at least 15% of power needs.
Challenges and Opportunities for Geothermal-Driven Data Center Siting Strategies
The Rhodium Group report explores two potential siting strategies for data centers: one that follows historical patterns of clustering near population centers and fiber-optic networks, and another that prioritizes proximity to high-quality geothermal resources. In the latter scenario, geothermal energy could easily meet all projected data center load growth by the early 2030s.
Geothermal heat pumps also offer an additional benefit by providing efficient cooling for data centers, further reducing their overall electric load. This dual application of geothermal energy—for both power generation and cooling—could significantly enhance the sustainability and resilience of data center operations.
However, despite its potential, geothermal energy faces several challenges that must be addressed to achieve widespread adoption. High drilling costs and technical risks associated with EGS development have historically deterred investment. (The report notes that federal funding from initiatives like the Inflation Reduction Act (IRA) and the Bipartisan Infrastructure Law could help de-risk geothermal projects and accelerate their deployment.)
Another key factor is need for collaboration between and among the data center industry, energy developers, and policymakers. By working together, stakeholders can create a regulatory and financial environment that supports geothermal development while ensuring that data centers have access to the clean energy they need.
Other hurdles include permitting complexities, resource rights disputes, limited subsurface data, and supply chain constraints. The report also highlights the need for continued research and development in geothermal energy.
The Path Forward That Leads Underground
The research emphasizes that realizing the full potential of geothermal energy will require collaboration among data center developers, tech companies, and geothermal energy providers; and, how early movers like Google and Meta are already leading the way, with Google securing a power purchase agreement (PPA) with Fervo Energy for its Nevada data centers and Meta partnering with Sage Geosystems.
The Rhodium Group’s findings paint a compelling picture of a future where geothermal energy plays a central role in powering the data center industry. By leveraging this clean, reliable, and scalable energy source, data centers can not only meet their growing power demands but also contribute to a more sustainable and resilient energy system.
As the industry continues to evolve, the report illustrates how geothermal energy could emerge as a cornerstone of the data center energy strategy, offering a path to sustainable growth that aligns with both operational needs and environmental goals.
Yet for data center operators, the time to explore geothermal solutions is now—before the technology’s window of opportunity closes.
