New report finds geothermal can power data centers at costs competitive to natural gas
A new report by Project InnerSpace and Future Ventures shows that geothermal can power data centers at costs competitive to combined-cycle natural gas plants.
A new report published by Project InnerSpace and Future Ventures presents that geothermal can provide power for data centers at a levelized cost of energy (LCOE) competitive with a combined-cycle natural gas based on a theoretical 1-GWe geothermal energy project in the Western United States. The analysis presents a pathway to reducing the LCOE of enhanced geothermal systems (EGS) to approximately USD 50/MWh within the next 10 to 15 years through investment, policy support, technology transfer from oil and gas, and ongoing advancements in technology,
The report complements a previous paper published by the Rhodium Group which states that geothermal can economically provide up to 64% of the US data center energy needs.
At $50/MWh, a theoretical 1-GW geothermal energy project can undercut nearly all combined-cycle natural gas plants. However, the estimate is based on the application of investment tax credits (ITCs). Without such benefit, the LCOE of the geothermal project will increase to $119/MWh. This is still significantly better than Lazard’s current estimates for nuclear power, which is at $140/MWh.
The report acknowledges that the continuance of ITCs remains uncertain based on potential policy changes in the United States. The authors argue that if the government chose to invest $10 billion (half of annual US oil and gas subsidies), then the subsequent unsubsidized LCOE for EGS would fall below the media of combine-cycle natural gas within 10 years. Thus, ensuring that tax credits remain intact for geothermal is critical in ensuring the growth of next-generation geothermal.
Source: Project InnperSpace
