As Big Tech pushes forward with new data centres, there is a growing need for reliable, clean power. Geothermal has emerged as a solution, enabled by next-generation energy technologies that are unlocking new geographies.
Delivery of these technologies looks familiar – much of the physical buildout of new geothermal systems relies on traditional oil and gas expertise and equipment. Some oil and gas wells may be repurposed, and new wells will lean on previous learnings.
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The opportunity is significant; investment in geothermal projects is forecast to reach $2.5tn by 2050 – and geothermal could offer a pivot for traditional hydrocarbon infrastructure. However, questions remain around risk-sharing and delivery timelines.
Drilling down into the detail is Florent Rousset, vice-president of new energy at Baker Hughes.
Why geothermal for data centres?
“Geothermal brings a couple of things to the table that are fairly unique,” says Rousset. “The first one is speed, the ability to bring power online and to bring electrons to the grid quickly, and the second one is baseload low-carbon renewable power.”
He calls this “a compelling combination” that has driven significant interest from Big Tech.
Indeed, Google signed a power purchase agreement with Fervo Energy for its Cape Station project in Utah in September 2026. This followed earlier deals with Ormat in February 2026 and Fervo via NV Energy in June 2024. Meanwhile, Meta signed a deal with XGS Energy in June 2025 and Sage Geosystems in August 2024. Microsoft and Amazon have also signed agreements with geothermal developers.
In a dramatic shift, the International Energy Agency reports that geothermal received only $22m in global financing in 2018. What changed, explains Rousset, is technology improvements, “developed, in particular, in the context of the unconventional revolution of the last two decades in North America”.
“Just like the oil and gas operators had an incredible learning curve, drilling those wells faster, drilling them longer, there is the opportunity to leverage all that know-how and bring it into the geothermal space.”
Carry-over of technology and expertise
Rousset explains that emerging, next-generation geothermal systems are “more technology-intensive in many ways than conventional hydrothermal has been”. Fossil exploration and production technologies such as hydraulic fracturing and horizontal drilling are allowing developers to drill into harder rock and tap heat at greater depths in more locations.
“A lot of the skills, a lot of the technologies required to bring those new geothermal resources online have been honed in the oil and gas industry,” he notes.
Operationally, geothermal exploration follows a similar path to natural gas projects, and requires parallel technology including drill bits, pumps, chemicals and power generation infrastructure.
“There is a phase of desktop study. There is a phase of exploration drilling. There is a phase of appraisal and pilot testing, and eventually a long phase of operations, productions, region of alienation and eventually abandonment,” says Rousset.
He adds that oil and gas service providers “have been developing and delivering that type of technology for decades”, and thus find themselves uniquely positioned to enter the clean energy sector.
Geothermal challenges
However, Rousset is clear that challenges accompany the opportunity: “There is a lot that has been said about the parallels between geothermal and oil and gas, but there are a couple of features really that are fairly unique in the geothermal space.”
He points to integration challenges, as operators require power plants to be located adjacent to well sites to avoid thermal losses. Geothermal developments must therefore incorporate local downstream plans and offtake agreements from the earliest stages.
There are also challenges to well repurposing, which is an attractive prospect for developers. Existing wells have known formations, are already drilled and sometimes tap into high-temperature reservoirs, but concerns include “understanding the integrity of those wells, and whether they can be repurposed safely is a key component”, says Rousset.
He adds that scale is another concern: “Power projects leveraging geothermal typically require some significant exploitation of the resource. We are talking about tens or hundreds of megawatts, sometimes gigawatts.” Well repurposing is yet to be proven at this scale.
Developing sites for hyperscalers
Challenges have not dampened Big Tech’s appetite, however, and Rousset says hyperscalers are being tactical about geology and site feasibility.
“We have seen some of the companies that are working on data centres be very proactive in understanding not only which parts of the US and the world have the right subsurface feature to generate power but also understanding which parts have the right surface features to generate power quickly.
“That will include, of course, the topography but also interconnection to the grid, the presence of the oil and gas ecosystem to bring in the right tools and the right equipment on-site.”
He notes that the geothermal commercial and risk-sharing model is “still evolving”, but points out that the lack of a standard template provides flexibility to a nascent industry. Bespoke agreements are being developed on a case-by-case basis according to the specific timelines and scale of each operation.
Timelines can differ, but Rousset says “we are seeing a lot of push for accelerating these early phases of understanding the subsurface, understanding and carrying out those exploration wells, and a lot of planning in parallel for appraisal or pilot wells”. He says several operators are targeting bringing electricity to the grid by the end of the decade, which he calls both “very attractive” and “much needed to support the data centre activity boom”.
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