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On Thu, 19 Dec, 4:03 PM UTC
5 Sources
[1]
AI's energy hunger fuels geothermal startups but natgas rivalry clouds future
(Reuters) - Geothermal energy startups are on the upswing with Big Tech companies looking to feed their power-intensive AI data centers, but long-term investments remain uncertain as oil majors double down on natural gas. Meta and Alphabet's Google are among the tech companies partnering with startups proposing to produce geothermal electricity, to power their data centers. Large data-center operators are also racing to meet the energy needs of artificial intelligence, accelerating a range of clean technologies in the process. "We believe geothermal, along with abundant natural gas, can be part of the all-of-the-above energy mix we need to meet the demand," said Trey Lowe, chief technology officer at U.S. shale gas producer Devon Energy, an investor in geothermal startup Fervo Energy. Geothermal has been promoted as a faster way to generate carbon-free electricity than nuclear, and without the intermittency of wind and solar. But the startups still face high upfront costs, particularly for drilling, and long project approval times. That has soured some of the initial enthusiasm, with limited investments so far - analysts estimate just over $700 million in financing has been contributed to overall geothermal projects since 2020. Top shale oil producers Chevron, Diamondback Energy and Exxon Mobil have also begun advocating for natural gas as the mainstay fuel for electric power, offering to work with utilities to couple their power plants with carbon sequestration projects that cut greenhouse emissions. "In general, (there is) a lot more interest from smaller oil and gas producers as well as service companies ... we've talked to Chevron and Shell but the supermajors seem to be taking more of a wait-and-watch view," said Cindy Taff, CEO of Sage Geosystems, which is developing energy storage and geothermal baseload technologies deep in the earth. Sage recently closed a $30 million fundraising led by U.S. shale gas producer Expand Energy, formerly Chesapeake Energy, and plans to launch its Series B round in January. In December, Colorado-based Gradient Geothermal - which generates geothermal energy using existing oil and gas infrastructure - announced it was providing Chord Energy services to help generate power at one of its oil and gas sites in North Dakota. Gradient Chief Operating Officer Johanna Ostrum said most mid-size and smaller independent energy firms were interested in geothermal energy for their own power needs, not to create electricity for resale. Geothermal aims to compete on cost. The average levelized cost of electricity (LCOE) of the conventional geothermal projects in the U.S. is around $64 per megawatt-hour (MWh), which is competitive with other dispatchable energy sources such as combined cycle gas, which is around $77/MWh on average, and nuclear, which is around $182/MWh, according to energy consultancy Rystad Energy. Thanks to an improving investment landscape, more than 60 startups have sprung to life in the last two years, said Bryant Jones, executive director of industry association Geothermal Rising. "Texas is becoming the 'place to be' for geothermal exploration and development across the board," said Matt Welch at the Texas Geothermal Energy Alliance (TxGEA). "Much of this is due to an abundance of identified geothermal resources, 1-stop shopping permitting process and our regulatory certainty." Ten of the 22 geothermal startups launched in the U.S. between 2016 and 2022 were headquartered in Texas, according to a report published last year. The current lower commodity prices could also encourage more shale companies to diversify their revenue streams by tapping geothermal power. The sector is receiving increased bipartisan interest as well. The CLEAN Act and HEATS Act recently passed the House and are awaiting Senate approval. If they become law, it would make it easier to set up geothermal projects in the country. "Government incentives and private investments are increasing...combination of a low decline asset with high certainty on pricing piques the interest of many investors," said Devon's Lowe. (Reporting by Mrinalika Roy and Seher Dareen in Bengaluru; Editing by Devika Syamnath)
[2]
AI's energy hunger fuels geothermal startups but natural gas rivalry clouds future
Geothermal energy startups are on the upswing with big tech companies looking to feed their power-intensive AI data centres, but long-term investments remain uncertain as oil majors double down on natural gas. Meta and Alphabet's Google are among the tech companies partnering with startups proposing to produce geothermal electricity, to power their data centres. Large data centre operators are also racing to meet the energy needs of artificial intelligence, accelerating a range of clean technologies in the process. "We believe geothermal, along with abundant natural gas, can be part of the all-of-the-above energy mix we need to meet the demand," said Trey Lowe, chief technology officer at U.S. shale gas producer Devon Energy, an investor in geothermal startup Fervo Energy. Geothermal has been promoted as a faster way to generate carbon-free electricity than nuclear, and without the intermittency of wind and solar. But the startups still face high upfront costs, particularly for drilling, and long project approval times. That has soured some of the initial enthusiasm, with limited investments so far - analysts estimate just over $700 million in financing has been contributed to overall geothermal projects since 2020. Top shale oil producers Chevron, Diamondback Energy and Exxon Mobil have also begun advocating for natural gas as the mainstay fuel for electric power, offering to work with utilities to couple their power plants with carbon sequestration projects that cut greenhouse emissions. "In general, (there is) a lot more interest from smaller oil and gas producers as well as service companies ... we've talked to Chevron and Shell but the supermajors seem to be taking more of a wait-and-watch view," said Cindy Taff, CEO of Sage Geosystems, which is developing energy storage and geothermal baseload technologies deep in the earth. Sage recently closed a $30 million fundraising led by US shale gas producer Expand Energy, formerly Chesapeake Energy, and plans to launch its Series B round in January. In December, Colorado-based Gradient Geothermal - which generates geothermal energy using existing oil and gas infrastructure - announced it was providing Chord Energy services to help generate power at one of its oil and gas sites in North Dakota. Gradient Chief Operating Officer Johanna Ostrum said most mid-size and smaller independent energy firms were interested in geothermal energy for their own power needs, not to create electricity for resale. Geothermal aims to compete on cost. The average levelized cost of electricity (LCOE) of conventional geothermal projects in the US is around $64 per megawatt-hour (MWh), which is competitive with other dispatchable energy sources such as combined cycle gas, which is around $77/MWh on average, and nuclear, which is around $182/MWh, according to energy consultancy Rystad Energy. Thanks to an improving investment landscape, more than 60 startups have sprung to life in the last two years, said Bryant Jones, executive director of industry association Geothermal Rising. "Texas is becoming the 'place to be' for geothermal exploration and development across the board," said Matt Welch at the Texas Geothermal Energy Alliance (TxGEA). "Much of this is due to an abundance of identified geothermal resources, 1-stop shopping permitting process and our regulatory certainty." Ten of the 22 geothermal startups launched in the US between 2016 and 2022 were headquartered in Texas, according to a report published last year. The current lower commodity prices could also encourage more shale companies to diversify their revenue streams by tapping geothermal power. The sector is receiving increased bipartisan interest as well. The CLEAN Act and HEATS Act recently passed the House and are awaiting Senate approval. If they become law, it would make it easier to set up geothermal projects in the country. "Government incentives and private investments are increasing...combination of a low decline asset with high certainty on pricing piques the interest of many investors," said Devon's Lowe.
[3]
AI Power Needs Fuel Geothermal Startups, But Natural Gas Remains a Rival
Geothermal energy startups are on the upswing with Big Tech companies looking to feed their power-intensive AI data centers, but long-term investments remain uncertain as oil majors double down on natural gas. Meta and Alphabet's Google are among the tech companies partnering with startups proposing to produce geothermal electricity, to power their data centers. Large data-center operators are also racing to meet the energy needs of artificial intelligence, accelerating a range of clean technologies in the process. "We believe geothermal, along with abundant natural gas, can be part of the all-of-the-above energy mix we need to meet the demand," said Trey Lowe, chief technology officer at U.S. shale gas producer Devon Energy, an investor in geothermal startup Fervo Energy. Geothermal has been promoted as a faster way to generate carbon-free electricity than nuclear, and without the intermittency of wind and solar. But the startups still face high upfront costs, particularly for drilling, and long project approval times.
[4]
Why Google and Meta are partnering with geothermal startups
Geothermal energy startups are on the upswing with Big Tech companies looking to feed their power-intensive AI data centers, but long-term investments remain uncertain as oil majors double down on natural gas. Meta and Alphabet's Google are among the tech companies partnering with startups proposing to produce geothermal electricity, to power their data centers. Large data-center operators are also racing to meet the energy needs of artificial intelligence, accelerating a range of clean technologies in the process. "We believe geothermal, along with abundant natural gas, can be part of the all-of-the-above energy mix we need to meet the demand," said Trey Lowe, chief technology officer at U.S. shale gas producer Devon Energy, an investor in geothermal startup Fervo Energy. Geothermal has been promoted as a faster way to generate carbon-free electricity than nuclear, and without the intermittency of wind and solar. But the startups still face high upfront costs, particularly for drilling, and long project approval times.
[5]
AI's energy hunger fuels geothermal startups but natgas rivalry clouds future
Dec 19 (Reuters) - Geothermal energy startups are on the upswing with Big Tech companies looking to feed their power-intensive AI data centers, but long-term investments remain uncertain as oil majors double down on natural gas. Meta (META.O), opens new tab and Alphabet's (GOOGL.O), opens new tab Google are among the tech companies partnering with startups proposing to produce geothermal electricity, to power their data centers. Large data-center operators are also racing to meet the energy needs of artificial intelligence, accelerating a range of clean technologies in the process. "We believe geothermal, along with abundant natural gas, can be part of the all-of-the-above energy mix we need to meet the demand," said Trey Lowe, chief technology officer at U.S. shale gas producer Devon Energy (DVN.N), opens new tab, an investor in geothermal startup Fervo Energy. Geothermal has been promoted as a faster way to generate carbon-free electricity than nuclear, and without the intermittency of wind and solar. But the startups still face high upfront costs, particularly for drilling, and long project approval times. That has soured some of the initial enthusiasm, with limited investments so far - analysts estimate just over $700 million in financing has been contributed to overall geothermal projects since 2020. Top shale oil producers Chevron (CVX.N), opens new tab, Diamondback Energy (FANG.O), opens new tab and Exxon Mobil (XOM.N), opens new tab have also begun advocating for natural gas as the mainstay fuel for electric power, offering to work with utilities to couple their power plants with carbon sequestration projects that cut greenhouse emissions. "In general, (there is) a lot more interest from smaller oil and gas producers as well as service companies ... we've talked to Chevron and Shell (SHEL.L), opens new tab but the supermajors seem to be taking more of a wait-and-watch view," said Cindy Taff, CEO of Sage Geosystems, which is developing energy storage and geothermal baseload technologies deep in the earth. Sage recently closed a $30 million fundraising led by U.S. shale gas producer Expand Energy (EXE.O), opens new tab, formerly Chesapeake Energy, and plans to launch its Series B round in January. In December, Colorado-based Gradient Geothermal - which generates geothermal energy using existing oil and gas infrastructure - announced it was providing Chord Energy (CHRD.O), opens new tab services to help generate power at one of its oil and gas sites in North Dakota. Gradient Chief Operating Officer Johanna Ostrum said most mid-size and smaller independent energy firms were interested in geothermal energy for their own power needs, not to create electricity for resale. Geothermal aims to compete on cost. The average levelized cost of electricity (LCOE) of the conventional geothermal projects in the U.S. is around $64 per megawatt-hour (MWh), which is competitive with other dispatchable energy sources such as combined cycle gas, which is around $77/MWh on average, and nuclear, which is around $182/MWh, according to energy consultancy Rystad Energy. Thanks to an improving investment landscape, more than 60 startups have sprung to life in the last two years, said Bryant Jones, executive director of industry association Geothermal Rising. "Texas is becoming the 'place to be' for geothermal exploration and development across the board," said Matt Welch at the Texas Geothermal Energy Alliance (TxGEA). "Much of this is due to an abundance of identified geothermal resources, 1-stop shopping permitting process and our regulatory certainty." Ten of the 22 geothermal startups launched in the U.S. between 2016 and 2022 were headquartered in Texas, according to a report, opens new tab published last year. The current lower commodity prices could also encourage more shale companies to diversify their revenue streams by tapping geothermal power. The sector is receiving increased bipartisan interest as well. The CLEAN Act and HEATS Act recently passed the House and are awaiting Senate approval. If they become law, it would make it easier to set up geothermal projects in the country. "Government incentives and private investments are increasing...combination of a low decline asset with high certainty on pricing piques the interest of many investors," said Devon's Lowe. Reporting by Mrinalika Roy and Seher Dareen in Bengaluru; Editing by Devika Syamnath Our Standards: The Thomson Reuters Trust Principles., opens new tab Suggested Topics:Carbon MarketsSustainable MarketsGrid & InfrastructureExploration & ProductionGas Mrinalika Roy Thomson Reuters Mrinalika is a business reporter. She has covered the energy and mining industry in North America for Reuters since 2022 and is based in India. Seher Dareen Thomson Reuters Seher oversees and writes market reports with the commodities and energy team in Bangalore round-the-clock and monitors newsworthy events in the resources space.
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Geothermal energy startups are gaining traction as Big Tech companies seek to power AI data centers, but face challenges from natural gas competition and high initial costs.
The surge in artificial intelligence (AI) development has created an unexpected beneficiary: geothermal energy startups. As tech giants like Meta and Google grapple with the enormous power requirements of their AI data centers, they're turning to innovative geothermal solutions to meet this demand 14.
Geothermal energy is being promoted as a faster alternative to nuclear power for generating carbon-free electricity, without the intermittency issues associated with wind and solar 1. This has led to a boom in the geothermal sector, with over 60 startups emerging in the last two years alone, according to Bryant Jones, executive director of the industry association Geothermal Rising 12.
Despite the growing interest, geothermal startups face significant hurdles. High upfront costs, particularly for drilling, and lengthy project approval times have tempered initial enthusiasm 1. Moreover, the sector faces stiff competition from natural gas, with major oil companies like Chevron, Diamondback Energy, and Exxon Mobil advocating for its use in electric power generation 12.
Investment in geothermal projects has been limited, with analysts estimating just over $700 million in financing since 2020 1. However, the landscape is improving. Sage Geosystems, a company developing energy storage and geothermal baseload technologies, recently closed a $30 million funding round and plans to launch its Series B round in January 12.
Geothermal energy aims to compete on cost. According to energy consultancy Rystad Energy, the average levelized cost of electricity (LCOE) for conventional geothermal projects in the U.S. is around $64 per megawatt-hour (MWh), compared to $77/MWh for combined cycle gas and $182/MWh for nuclear 12.
Texas is emerging as a hotspot for geothermal exploration and development. Matt Welch of the Texas Geothermal Energy Alliance (TxGEA) attributes this to the state's abundant geothermal resources, streamlined permitting process, and regulatory certainty 12. A report last year revealed that ten of the 22 geothermal startups launched in the U.S. between 2016 and 2022 were headquartered in Texas 15.
The geothermal sector is gaining bipartisan interest in the U.S. The CLEAN Act and HEATS Act, which would facilitate the establishment of geothermal projects, have passed the House and await Senate approval 12. This legislative support, coupled with increasing government incentives and private investments, is creating a more favorable environment for geothermal energy development 15.
As the demand for clean, reliable energy to power AI and other technologies continues to grow, geothermal energy startups are poised to play a significant role in the future energy mix, despite the challenges they face from established fossil fuel competitors.
Reference
[2]
[4]
Meta Platforms, the parent company of Facebook, has entered into a significant geothermal energy deal to power its data centers in the United States. This move marks a shift towards sustainable energy sources for the tech giant's power-hungry operations.
8 Sources
8 Sources
Major tech companies, including Meta, Google, and Amazon, are investing in nuclear and renewable energy sources to meet the growing power demands of AI operations while maintaining carbon-neutral goals.
16 Sources
16 Sources
Exxon Mobil and Chevron are venturing into powering AI data centers with natural gas plants, aiming to meet the growing energy demands of tech companies while implementing carbon capture technology.
2 Sources
2 Sources
The rapid growth of AI is driving unprecedented energy demands, prompting discussions on the future of clean energy and the potential resurgence of natural gas in the power sector.
3 Sources
3 Sources
Microsoft is exploring the use of natural gas with carbon capture technology to power its AI data centers, balancing the increasing energy needs of AI with its net-zero commitments. This shift comes as the tech industry realizes renewables alone may not meet the power demands of expanding data centers.
3 Sources
3 Sources
