Data centre power demand rises 17 per cent as hyperscalers turn to geothermal

Global data centre electricity demand climbed 17 per cent in 2025, according to International Energy Agency data.

The expansion reflects the rapid buildout of generative artificial intelligence infrastructure across major cloud providers. Hyperscalers face tightening capacity constraints as load growth outpaces regional transmission upgrades and substation additions. Interconnection queues in key data centre markets now stretch several years, prompting operators to explore dedicated, behind-the-meter generation.

Conventional renewables cannot easily satisfy this demand profile alone. Solar and wind assets generate variable output, whereas modern accelerator clusters require continuous baseload power with high capacity factors. Relying on intermittent generation forces utilities to backstop capacity with natural gas peakers, running counter to corporate decarbonisation targets.

To bridge this deficit, infrastructure planners are turning to advanced geothermal energy as a clean baseload alternative. Traditional geothermal power depends on naturally occurring hydrothermal reservoirs, which exist only in specific volcanic or tectonic zones. Enhanced geothermal systems bypass these geographic boundaries by drilling thousands of metres into hot, dry rock formations.

These systems rely on directional drilling and hydraulic fracturing techniques adapted directly from the oil and gas sector. Developers drill multi-well systems, pump water through artificially created fracture networks, and extract the heated fluid to drive surface steam turbines. Because the closed-loop system recirculates working fluid, it delivers continuous power with a minimal surface footprint.

Commercial deployment is beginning to register at utility scale. Google has already contracted electricity from enhanced geothermal developer Fervo Energy to power data centres in Nevada. Other hyperscalers are evaluating similar long-term power purchase agreements to anchor clean generation assets directly beside their campuses.

Substantial barriers remain before geothermal can alleviate widespread grid strain. Deep subterranean drilling carries steep upfront capital costs and exploratory risk. Developers must also navigate lengthy environmental permitting processes and compete with oil companies for specialised high-temperature downhole tools and drilling rigs.

Can advanced geothermal developers scale drilling operations and lower capital costs quickly enough to satisfy hyperscale power demand before regional grids exhaust their available capacity?