Geothermal power presents opportunity for tech giants to decarbonise spiralling AI energy demand

What’s happening? Google’s climate goals are threatened as data centres powering its AI products drive up emissions. Over the past five years, Google’s greenhouse gas emissions have surged by 48%, largely due to electricity consumption and supply chain emissions from these centres. In 2023 alone, emissions increased by 13% to 14.3 million metric tonnes. The International Energy Agency predicts data centre electricity consumption could double by 2026, with AI using 4.5% of global energy by 2030. (The Guardian)

Why does this matter? According to Bloomberg, by 2030, data centres will use more electricity than India – the world’s most populous country and the third greatest user of electricity after China and the US. This growth is due to the rising energy demands of AI. When compared to traditional data centres, such as those used for cloud computing, video streaming and social media, the energy requirements for powering AI technologies are vast. One request on ChatGPT, for example, uses 2.9 watt-hours of energy compared to 0.3 watt-hours to power a Google search. As the technology evolves to become more sophisticated, the power requirements increase. Meeting this spiralling energy demand sustainably presents one of the major challenges facing the tech industry and society more broadly.

A lifeline for Silicon Valley – Tech giants, including Google and Microsoft, are turning to geothermal power to fill this void. Geothermal presents a reliable, baseload renewable energy source, complementing traditional, intermittent sources like wind and solar. Geothermal plants are almost carbon-free and are compact. In fact, in terms of energy generated relative to land used of any power plant, geothermal ranks as the second most efficient behind only nuclear.

Price competitiveness? – Developers have found the high upfront cost of geothermal to be a deterrent, with the drilling of a shallow 4km well costing $4m, rising to $20m for a 10km well. However, analysis by OceanWall shows the levelised cost of electricity (LCOE) – the average minimum price at which electricity must be sold to offset the cost of production over an asset’s lifetime – was $0.05-$0.06/kWh in 2022. For comparison, in the same year, solar PV’s LCOE was $0.049/kWh, with offshore wind at $0.079-0.081/kWh and hydropower on $0.061/kWh. While remaining competitive today, geothermal is expected to drop further, possibly reaching $0.02-0.035kWh in the long-term.

Iceland’s prime location – Another barrier to geothermal has been the location of compatible sites. Traditionally, geothermal projects have been confined to sites where heat is accessible at shallow depths, water is readily available, and the bedrock is suitably permeable – often volcanic hotspots. Iceland, for example, has taken advantage of its tectonic positioning, with geothermal power providing 70% of the country’s energy mix and heating 90% of homes.

Technology expands geothermal’s reach – Today, technological advances in drilling technology and new geothermal systems allow for the Earth’s heat to be tapped anywhere in the world. In the UK, for example, an estimated 10GW of heating demand is expected to be met by geothermal by 2050, with a new National Geothermal Centre recently launched in the country. Looking forward, researchers hope to tap supercritical geothermal systems, providing up to 10 times more energy than conventional systems.

The future of clean energy? – Despite its significant potential, geothermal electricity generation has grown at a modest 3.5% annually, reaching 15.96 GWe in 2021, accounting for only 0.5% of global renewable capacity. Heating and cooling saw quicker growth, increasing by 9% annually from 2015 to 2020, reaching 107 GWth in 2020. Future growth will be driven by technological advances, industry collaborations, and increased deployment in heating and cooling, with demand from data centres potentially catalysing the market.

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