Meta's Geothermal Data Center Deal Marks Milestone For Emerging Green Energy Source

Social media giant Meta has signed a deal to power data centers with geothermal energy, a step forward for a renewable energy source that could impact the data center development landscape.

The partnership between Meta and Texas-based energy startup Sage Geosystems, announced this week at a joint event with the U.S. Department of Energy, will see Sage provide 150 megawatts of geothermal energy to power future Meta data centers, with the first phase of the project expected to be operational in 2027.

Neither firm provided specifics as to where these data centers or power plants would be, although a Sage press release indicated the project will be east of the Rocky Mountains. 

The technology Sage will deploy for the project is different from traditional geothermal generation, using oil and gas drilling techniques to produce hot water in a system the company claims vastly increases the number of locations where geothermal is viable as an industrial power source. Meta said in a statement that the deal will “significantly expand the use of geothermal power in the U.S.”

These next-generation geothermal systems have never been deployed at industrial scale and face roadblocks to widespread adoption. But proponents of the technology say the deal with Meta could mark an inflection point in the growth of geothermal as a key tool to solving the data center industry’s power woes.

“It has huge potential, but it’s all going to come down to cost,” Jay Dietrich, research director for sustainability at Uptime Institute, told Bisnow. “These geothermal approaches are reliable carbon-free energy. That’s why the big hyperscalers are interested in this and why they’re entering these contracts.”

This isn’t the first time geothermal energy has been tapped to power data centers.

Just this year, developer CalEthos announced plans for a 300 MW campus in Southern California’s Lithium Valley powered by nearby geothermal plants, while Google partnered with Fervo Energy and NV Energy on more than 100 MW of geothermal power in Nevada.

But Meta and Sage say the technology behind their upcoming project is fundamentally different, with the potential to vastly expand geothermal energy as a power source for data centers.

Traditional geothermal energy generation needs to be located in certain places, including parts of California and Nevada, where there are naturally occurring subterranean reservoirs of heated water due to volcanic activity or other geological factors. In the U.S., locations with this geology are few and far between, particularly east of the Rocky Mountains.

By contrast, Sage’s proprietary Geopressured Geothermal System uses oil and gas drilling techniques and equipment to inject water into dry, hot rocks underground through a process similar to fracking. This can be performed by drilling new wells or through repurposing dry oil wells. The subsequent hot water is taken back to the surface in a closed water loop system.

By artificially creating the geology needed to tap hydrothermal energy, GGS expands the number of regions where geothermal energy can be viable at an industrial scale, according to the Department of Energy and other backers of the technology.

“Hot dry rock is a vastly abundant resource compared to traditional hydrothermal formations, making Sage’s GGS technology a highly scalable approach with the potential for rapid expansion across the US and globally,” Meta wrote in a statement announcing the deal.

The 150 MW Sage plans to produce for Meta is a drop in the bucket compared to the 12 gigawatts of renewable energy projects Meta says it has contracted globally. Tech giants like Meta, Amazon, Microsoft and Google have been among the largest global buyers of renewable energy as they try to hit ambitious carbon reduction goals.

Yet geothermal generation systems like Sage’s, while untested at scale, offer an advantage over more established energy sources. Unlike wind and solar, whose power output varies depending on weather conditions and time of day, geothermal systems produce a constant, steady stream of energy. This kind of energy stream, known as baseload, is necessary for regional power providers to produce enough power to meet demand even when the sun isn’t shining or the wind isn’t blowing.

Finding carbon-free sources of baseload has emerged as a central challenge facing data center firms, utilities and federal energy officials as they try to balance a transition away from fossil fuels with an unexpected uptick in energy demand. Data centers’ share of overall energy use has shot up in the last 18 months due to the vast computing needs of AI — unprecedented growth that is already pushing regional power grids in major data center markets to their limits. 

Faced with this increasingly acute power pinch, Big Tech and the federal government have taken steps to support the development and commercialization of carbon-free baseload technologies, from small modular nuclear reactors and an array of energy storage systems to now geothermal.

The Department of Energy has high expectations for the kind of geothermal solutions produced by Sage.

A March DOE study found that the technology could power the equivalent of 4 million households by 2030 and 260 million homes by 2050 by adapting existing off-the-shelf technology. DOE officials say they hope that through deals like Meta’s partnership with Sage they can leverage the ongoing power crisis to bring these technologies to market faster. 

“The Administration views this increased demand as a huge opportunity to add more clean, firm power to the grid and geothermal energy is a game-changer as we work to grow our clean power supply,” Deputy Energy Secretary David Turk said following the deal’s announcement, according to ITPro.  

While it remains to be seen whether Sage’s GGS or other next-generation geothermal systems will become commercially viable and become the key tool in solving the data center energy crisis, the success or failure of Meta’s partnership with Sage could end up moving where data center developers look to build these facilities, Uptime’s Dietrich said.  

More data center developers and operators are looking to locate facilities close to energy sources, particularly renewables or other carbon-free forms of generation. DigitalBridge announced earlier this year that its portfolio companies were looking to build near wind and solar projects, while Amazon acquired a campus adjacent to a Pennsylvania nuclear power plant in March. Other firms have been willing to pay premiums for land near natural gas pipelines — once considered a prohibitive liability — to fuel on-site generators.

Similarly, the viability of next-generation geothermal could see developers place greater value on sites in areas where such generation projects are possible, Dietrich said, even sites close to existing oil and gas extraction infrastructure that data center builders shy away from today.   

But Dietrich said getting to that point will require speculative projects like Meta’s partnership with Sage, with the world’s largest tech companies taking calculated risks on promising but unproven technologies and willing to pay higher costs to potentially jump-start their evolution toward wide-scale commercial viability. These partnerships will be necessary to find feasible pathways to solving a power crisis that is only expected to become more acute. 

“These guys need early adopters,” Dietrich said. “It's going to be more expensive, but that's the only way they're going to proof out the technology, work out the kinks and then expand it.”