Released December 30, 2024 | SUGAR LAND
en
Written by Paul Wiseman for Industrial Info Resources (Sugar Land, Texas)--The exponential rise of data centers demanding power from an already-energy-transition-burdened grid has given rise to an "all-of-the-above" approach to power sources. Natural gas and coal have become reinvigorated, and previously ignored renewable sources are finding new ground. Such is the case with longtime laggard geothermal energy.
In the U.S., Amazon.com Incorporated (NASDAQ:AMZN) (Seattle, Washington) and geothermal provider Fervo Energy (Houston, Texas) in June announced a partnership for 114 megawatts (MW) of geothermal power in Nevada for the former's data centers. Other similar projects are in the works.
In a recent document entitled "The Future of Geothermal Energy" the International Energy Agency (IEA) outlined geothermal power's current worldwide usage (about 1%) and some of the technologies that could enable it to supply 15% of the world's power needs by 2050.
Currently, six nations are responsible for harnessing about 90% of all geothermal power. They are the U.S., Iceland, Indonesia, Turkey, Kenya and Italy. Even there, much of the current geothermal use is for non-grid options such as community heating, heating, ventilation and air conditioning (HVAC) heat exchange, and other more direct applications.
Advantages/Disadvantages
Geothermal is alone in being independent of weather, the time of day, rainfall, agriculture, refining/processing or any of the vagaries applicable to all other forms of green energy. Even fossil fuels must be processed before use, unlike geothermal.
Its drawbacks have mainly involved its limited availability--Yellowstone (Wyoming), Iceland, New Zealand and a few other areas are dotted with surface-accessible heat, for example. While the earth is hot everywhere underground, the economics of accessing that heat from geyser basins has been a work in progress--showing that it can be done, but not economically--and one that has received much less funding and notoriety than intermittent sources like wind and solar, said the IEA. And, of course, it will never directly help any transportation other than third-rail-based commuter trains and the like. But as demand grows, geothermal research is advancing, and things could change soon.
Tech Advances
The IEA lists several options that are significantly advancing today, including "horizontal drilling and hydraulic fracturing honed through oil and gas developments in North America."
Funding Growth
Investors, including governments, are taking heed as well. Although geothermal was mostly ignored in the Inflation Reduction Act (IRA) and other federal energy transition spending, the IEA noted that, if geothermal can be proven to be cost-effective, backers could start lining up at its door. But the cost improvement will have to be significant.
"If deep cost reductions for next-generation geothermal can be delivered, total investment in geothermal could reach US$1 trillion cumulatively by 2035 and US$2.5 trillion by 2050," said the report. "At its peak, geothermal investment could reach $US140 billion per year, which is higher than current investment in onshore wind power globally. As a dispatchable source of clean power, geothermal is also attracting interest from stakeholders beyond the energy industry, including technology companies looking to meet the fast-growing demand for electricity in data centers."
As the report points out, some of the newer technology, such as horizontal drilling and hydraulic fracturing, are already highly developed in the oil and gas industry. The IEA report omitted the fact that many environmental organizations are opposed in principle to fracturing due to concerns about its environmental impact on groundwater and on nearby citizens--an issue that is strongly disputed by the oil and gas industry.
IIR's Data Center Insight
As to how the power needs of data centers is affecting the "all-of-the-above" issue, Geoffrey S. Lakings, an IIR Energy senior analyst, seems concerned not only about "how," but about "if." "It is not only what fuel source will power the data centers, but also if data centers have such a voracious appetite for electrons that the demand on the grid from residential, commercial, industrial and other users will be able to be met at all. Or must they resign themselves to rolling blackouts?"
It is no wonder that Amazon and others are looking to bypass the grid and contract for direct supply from geothermal and other forms of energy. Many have already tied directly to natural gas-producing areas to generate off-grid power, combining the advantages of lower fuel costs (at almost a wholesale level) and reliability--the same benefits inherent in contracting for geothermal generation.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 trillion (USD).
In the U.S., Amazon.com Incorporated (NASDAQ:AMZN) (Seattle, Washington) and geothermal provider Fervo Energy (Houston, Texas) in June announced a partnership for 114 megawatts (MW) of geothermal power in Nevada for the former's data centers. Other similar projects are in the works.
In a recent document entitled "The Future of Geothermal Energy" the International Energy Agency (IEA) outlined geothermal power's current worldwide usage (about 1%) and some of the technologies that could enable it to supply 15% of the world's power needs by 2050.
Currently, six nations are responsible for harnessing about 90% of all geothermal power. They are the U.S., Iceland, Indonesia, Turkey, Kenya and Italy. Even there, much of the current geothermal use is for non-grid options such as community heating, heating, ventilation and air conditioning (HVAC) heat exchange, and other more direct applications.
Advantages/Disadvantages
Geothermal is alone in being independent of weather, the time of day, rainfall, agriculture, refining/processing or any of the vagaries applicable to all other forms of green energy. Even fossil fuels must be processed before use, unlike geothermal.
Its drawbacks have mainly involved its limited availability--Yellowstone (Wyoming), Iceland, New Zealand and a few other areas are dotted with surface-accessible heat, for example. While the earth is hot everywhere underground, the economics of accessing that heat from geyser basins has been a work in progress--showing that it can be done, but not economically--and one that has received much less funding and notoriety than intermittent sources like wind and solar, said the IEA. And, of course, it will never directly help any transportation other than third-rail-based commuter trains and the like. But as demand grows, geothermal research is advancing, and things could change soon.
Tech Advances
The IEA lists several options that are significantly advancing today, including "horizontal drilling and hydraulic fracturing honed through oil and gas developments in North America."
Funding Growth
Investors, including governments, are taking heed as well. Although geothermal was mostly ignored in the Inflation Reduction Act (IRA) and other federal energy transition spending, the IEA noted that, if geothermal can be proven to be cost-effective, backers could start lining up at its door. But the cost improvement will have to be significant.
"If deep cost reductions for next-generation geothermal can be delivered, total investment in geothermal could reach US$1 trillion cumulatively by 2035 and US$2.5 trillion by 2050," said the report. "At its peak, geothermal investment could reach $US140 billion per year, which is higher than current investment in onshore wind power globally. As a dispatchable source of clean power, geothermal is also attracting interest from stakeholders beyond the energy industry, including technology companies looking to meet the fast-growing demand for electricity in data centers."
As the report points out, some of the newer technology, such as horizontal drilling and hydraulic fracturing, are already highly developed in the oil and gas industry. The IEA report omitted the fact that many environmental organizations are opposed in principle to fracturing due to concerns about its environmental impact on groundwater and on nearby citizens--an issue that is strongly disputed by the oil and gas industry.
IIR's Data Center Insight
As to how the power needs of data centers is affecting the "all-of-the-above" issue, Geoffrey S. Lakings, an IIR Energy senior analyst, seems concerned not only about "how," but about "if." "It is not only what fuel source will power the data centers, but also if data centers have such a voracious appetite for electrons that the demand on the grid from residential, commercial, industrial and other users will be able to be met at all. Or must they resign themselves to rolling blackouts?"
It is no wonder that Amazon and others are looking to bypass the grid and contract for direct supply from geothermal and other forms of energy. Many have already tied directly to natural gas-producing areas to generate off-grid power, combining the advantages of lower fuel costs (at almost a wholesale level) and reliability--the same benefits inherent in contracting for geothermal generation.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 trillion (USD).
