Meta Taps Geothermal Energy to Satiate Power-Hungry Data Centers

Meta Platforms (META) is turning to geothermal energy to meet the unending needs of its data center projects. The Facebook parent company has signed a deal with New Mexico’s XGS Energy to build a 150 megawatt (MW) advanced geothermal power plant in the state. The exact location of the plant and the financial details of the deal remain unknown at this time. Electricity from the plant which will go to the state’s grid is expected to power Meta’s Los Lunas data center beginning in 2030.

Data center electricity consumption has become one of the largest sources of power usage in the U.S., especially as companies commit billions to artificial intelligence (AI) expansion projects this year and next. Big tech companies are turning to various clean energy sources to support their infrastructure development and AI advancements. Green energy sources such as wind, solar, nuclear, and geothermal are increasingly becoming the go-to options for fulfilling these needs. Meta has set a target to achieve net-zero emissions by 2030.

Meta Adopts Geothermal to Fuel its AI Ambitions

Geothermal plants produce energy from the Earth, typically harnessing heat from hot, dry rocks. While traditional geothermal plants relied on natural water resources for the process, advanced plants are creating artificial water reservoirs to generate energy, which also bodes well for water conservation. New Mexico claims to have 160,000 MW of untapped geothermal power generation potential. XGS has designed a closed-loop system in which water circulates inside a steel casing to prevent it from escaping into the cracks of the rocks.

Meta has a similar deal with Sage Geosystems to develop 150 MW of advanced geothermal power plants. Additionally, Meta recently struck a 20-year deal with nuclear energy company Constellation Energy (CEG) to buy power from its Illinois nuclear plant. While that was a typical Power Purchase Agreement (PPA), allowing Meta to purchase clean energy credits to offset its greenhouse gas emissions from other operations, the deal with XGS is not a PPA. Instead, it is intended to produce the green energy to supply Meta’s data centers in the region. Alphabet’s (GOOGL) Google also has a partnership with Fervo Energy to develop similar technology at its Cape Station power plant.

Is Meta a Good Company to Buy?

Analysts are highly optimistic about Meta Platforms’ long-term stock trajectory. On TipRanks, META stock has a Strong Buy consensus rating based on 42 Buys, three Holds, and one Sell rating. Also, the average Meta Platforms price target of $699.81 implies that shares are almost fully valued at current levels. Year-to-date, META stock has gained 18.5%.

See more META analyst ratings