Meta is getting even hotter on next-generation geothermal energy.
The Facebook parent company inked a deal Thursday to buy 150 megawatts of power from Houston-based startup XGS Energy.
It’s the second deal of that size that Meta has signed with a geothermal company. Last year, the social media giant agreed to buy 150 MW of electricity from Sage Geosystems, a fellow Houston-headquartered startup looking to harness the Earth’s molten heat for electricity.
“Advances in AI require continued energy to support infrastructure development,” Urvi Parekh, Meta’s global head of energy, said in a press release. “Geothermal can be a major player in supporting the advancement of technologies like AI as well as domestic data center development.”
Deals like the one between XGS and Meta are key to popularizing geothermal technology. Unlike advanced nuclear reactors, next-generation geothermal experienced a breakthrough too late to net any billion-dollar programs under the Inflation Reduction Act. Conventional geothermal companies also saw a series of busts in the past few decades that chilled investors on the industry.
So to unlock more capital and make so–called enhanced and advanced geothermal companies less risky, startups in the sector need to prove the technology works and that they can build plants on time and budget. Contracts with deep-pocketed counterparties such as Meta make it easier for companies like XGS to raise and borrow money to take the next steps in building out its business.
Geothermal power has been around for more than a century, but it’s been confined to places with easily-tapped underground reservoirs of magma-heated water. As a result, places like the American West — think the Yellowstone geysers — as well as Iceland and New Zealand have generated large amounts of geothermal power, while most of the world goes without.
But a new generation of startups is promising to use modern drilling techniques honed by the oil and gas industry to delve deep enough to access geothermal heat almost anywhere on Earth. Companies such as Sage and Fervo drill horizontal wells with hydraulic fracturing, or fracking, then inject water into that hot rock to make steam that’s used to generate electricity.
XGS takes a different approach. The company bores deep, vertical wells then sticks a steel pipe filled with water into the hole. Its engineers then backfill the area around the pipe with a liquid slurry made of a proprietary blend of conductive minerals to transfer heat from the rock, through the pipe, to the water pumped into the tube. By keeping the fluid contained, XGS avoids losing any water.
That will be key in New Mexico, where XGS plans to build a plant to power Meta’s growing fleet of data centers. The Facebook owner controls 11 of 17 data centers in Albuquerque, New Mexico’s biggest city, and won approval in January to embark on an $800 million expansion. However, like most of the Southwest, the state doesn’t have much water to spare.
“The state of New Mexico is a growing hub for data center development,” XGS CEO Josh Prueher said in a statement. “We are eager to feed clean, water-independent geothermal power into the New Mexico market at a scale uniquely possible with XGS technology.”
While geothermal pilot projects so far tend to be concentrated in Nevada and Utah, New Mexico could be poised for a major buildout of its own. The Land of Enchantment has at least 160 gigawatts of untapped geothermal potential, according to a new report released Thursday by the state’s Bureau of Geology and Mineral Resources and co-authored with researchers at New Mexico Tech and the consultancy Project InnerSpace.
“New Mexico is not only the second-largest oil and gas producer in the U.S., but also one of the nation’s leading sources of clean energy,” New Mexico Governor Michelle Lujan Grisham said in a statement. “We’ve worked hard to ensure New Mexico remains at the forefront of the energy transition, and geothermal energy represents a promising new frontier.”
