The escalating energy demands of artificial intelligence and data centres are prompting a renewed focus on geothermal energy as a viable and increasingly attractive power source. While the AI boom presents significant challenges to existing energy infrastructure, advancements in geothermal technology, coupled with supportive policy changes, are positioning it as a key component in a sustainable energy future, particularly for energy-intensive operations.
Meeting the AI Power Surge
Geothermal power plants could play a crucial role in meeting the fast-growing electricity demand of data centres, whose global consumption could more than double by the early 2030s. As data-centre capacity expands, geothermal offers a stable, always-available source of electricity that can be developed alongside these sites. Its continuous output helps balance the wider power system and reliably serves data centres energy-intensive operations over the long term.
Recent research by Project InnerSpace shows that if current clustering trends continue, geothermal could economically meet up to 64 percent of new data centre demand in the US by the early 2030s and even more when developments are located near optimal resources.
At the same time, AI is reshaping geothermal development. By analysing seismic and geological data, it helps identify promising sites, streamline drilling and improve performance – creating a feedback loop in which each technology accelerates the other.
Major technology companies are no longer experimenting with geothermal – they are deploying it. Announced in and now fully operational, Google’s partnership with Fevro marked the world’s first enhanced geothermal project built for a data centre. Others are following suit, with Meta signing a 150-megawatt deal with Sage Geosystems in the United States. In Europe, no similar cooperations were announced.
From Pilot Projects to Policy
In the United States, geothermal power is now firmly within the clean-energy toolkit. Federal legislation such as the Inflation Reduction Act has expanded investment and production tax credits to include geothermal electricity, establishing clearer economic signals for developers. Meanwhile, geothermal enjoys bipartisan backing because it leverages drilling and subsurface expertise tied to familiar industries and offers around-the-clock output.
The situation in Europe is more nuanced. Several Member States, including Austria, Croatia, France, Hungary, Ireland, and Poland, have developed national geothermal road maps aimed at supporting subsurface investment, demonstration wells and domestic supply chains, in some cases backed by dedicated financing and targets. saw Austria announce plans for funding to encourage more geothermal drilling, while Croatia published its plan for the development of geothermal potential. France unveiled its action plan for geothermal energy in .
However, momentum at the European Union level is more recent. In , both the EU Council and the Parliament voiced their support for accelerating geothermal and proposed a European Geothermal Alliance, to be set up by the Commission. As geothermal strongly aligns with the EU’s priorities on competitiveness, energy security and industrial decarbonisation, the forthcoming European Geothermal Action Plan is a much-needed and timely development.
Translating strategic recognition into deployment, however, will depend on how geothermal is integrated across broader EU policy instruments. As preparations for the next Multiannual Financial Framework advance, and initiatives such as the Industrial Decarbonisation Accelerator Act aim to strengthen permitting and demand signals for clean solutions, geothermal’s high upfront risk, long asset lifetimes and system value as a source of firm capacity make coordinated EU action particularly important.
Specifically, the effectiveness of a European geothermal framework will hinge on progress in three key areas: reducing investment risk and accelerating deployment through shared risk-mitigation tools and targeted EU financing for geothermal electricity projects; removing regulatory and geological bottlenecks through streamlined permitting processes and coordinated access to subsurface data; and ensuring geothermal’s system value is fully recognised across electricity market design, energy planning and EU energy and climate modelling, reflecting its role as a source of firm, low-carbon power.
The growing demand from data centres, driven by the expansion of AI, is not merely an energy challenge, but an opportunity to accelerate the development and deployment of sustainable energy solutions like geothermal. The convergence of technological advancements, supportive policies, and corporate investment suggests that geothermal energy is poised to play a significant role in powering the next generation of digital infrastructure.
