Buying electricity, stockpiling electricity, building power plants—U.S. AI giants are being pushed to become power companies.

The International Energy Agency projects that U.S. electricity demand will grow by nearly 2% annually from 2025 to 2030—more than double the average growth rate over the past decade. A significant portion of this surge is attributable to data centers. By 2030, electricity consumption by U.S. data centers is expected to continue rising rapidly—potentially accounting for nearly half of the nation’s新增 electricity demand. Compounding the challenge, numerous power-generation projects are in the pipeline across the U.S., yet every link—from generation to transmission grid to data center—is backed up. As of the end of 2025, approximately 8,200 projects totaling 1,312 gigawatts (GW) of generation capacity—and roughly 749 GW of energy storage capacity—remain queued for grid interconnection. These projects are not AI data centers themselves, but rather new power sources: wind, solar, natural gas, and energy storage facilities. In other words: while the U.S. is frantically ramping up electricity demand, even newly built power sources haven’t yet been connected to the grid. Adding further strain, America’s aging grid infrastructure is nearing its breaking point. Much of the country’s transmission lines, transformers, and switchgear have operated for decades. According to data cited by the American Society of Civil Engineers, 70% of power transformers have been in service for over 25 years—and so have 70% of transmission lines. Today, however, even replacing aging transformers has become a bottleneck: in 2024, procurement lead times for new transformers in the U.S. ranged from 80 to 210 weeks, averaging about 120 weeks. So what confronts U.S. AI firms today isn’t merely whether enough electricity can be generated—it’s whether that electricity can even be delivered to their data centers. Competing for Power: Creative Solutions Emerge As public-grid access grows increasingly difficult and delayed, AI giants are pursuing alternative strategies. The most direct approach is securing electricity locally—right next to their data centers. In early September, Google signed a 396-megawatt (MW) power purchase agreement (PPA) with geothermal energy company Fervo—the largest enhanced-geothermal PPA globally to date. Starting in 2028, it will supply power to Google’s planned data center in Utah. 396 MW equals 396,000 kilowatts. Intriguingly, the final construction of Google’s Utah data center remains uncertain—but Google has already locked in its future electricity supply. Amazon has gone even further—acquiring an entire data center campus adjacent to a power plant. In 2024, Amazon spent $650 million to purchase, from U.S. energy firm Talen Energy, a 960-MW data center campus under development next to the Susquehanna nuclear plant in Pennsylvania. In 2025, the two parties expanded their collaboration: Amazon plans to secure up to 1,920 MW of nuclear power under a contract extending through 2042—though the expanded arrangement will deliver power via the public grid. Another strategy to increase power supply is restarting previously shuttered power plants. In 2024, Microsoft signed a 20-year PPA with Constellation Energy to restart Unit 1 of the Three Mile Island nuclear plant in Pennsylvania. This unit has a generating capacity of 835 MW—enough to power approximately 700,000 homes.

AI has revived a technology the U.S. abandoned two decades ago—and suddenly triggered a massive boom.

The explosive demand from AI data centers for round-the-clock clean electricity has sent U.S. electricity prices soaring—to unprecedented highs. 'In certain markets, developers and utilities are now signing long-term agreements where “firm” or on-demand power demand is two to three times higher than in 2021,' said Michael O’Connor, Executive Director of the Mountain West Geothermal Coalition. This price surge has revealed a lucrative opportunity for geothermal companies—making economic models that once failed now potentially viable. Even longtime industry veterans are returning. 'With the emergence of new technologies, opportunities are expanding—and we want to be part of them,' said Daniel Morck, Executive Vice President for Subsurface, Wells, and Next-Generation Geothermal Projects at Ormat Technologies. Ormat is currently collaborating with Houston-based Sage Geosystems to develop an enhanced geothermal pilot system, to be deployed at one of Ormat’s existing sites in Nevada or Utah. In January this year, Ormat invested $25 million in Sage as part of the startup’s $97 million Series B funding round. Additionally, Ormat is planning a joint venture with oilfield services giant SLB to build a new Desert Peak enhanced geothermal system project—and commercialize it. 'We’re returning to the beginning of our journey—it feels like completing a full circle,' Morck remarked. The company is currently collecting new geophysical data onsite to determine optimal drilling locations. Yet, when Ormat decided to re-enter the very sector it pioneered over two decades ago, Fervo Energy—a startup founded in 2017—had already emerged as the clear leader. Fervo Energy leverages horizontal drilling techniques and fiber-optic sensing tools from the oil-and-gas industry to fracture hard, impermeable rock formations—dramatically lowering development costs for enhanced geothermal projects. In 2023, Fervo completed its first 3.5-MW enhanced geothermal project in Nevada, delivering power to the grid to meet part of Google’s electricity needs in the state. Meanwhile, Fervo is developing the 500-MW Cape Station project in Utah—expected to be fully operational by 2028—and poised to become the world’s largest enhanced geothermal system. The company reports that between 2022 and 2025, it reduced drilling time by approximately 75% and cut per-foot drilling costs by roughly 70%—a major milestone for this nascent industry. In May this year, Fervo successfully went public, raising approximately $1.9 billion. This eight-year-old startup has become the industry leader—surpassing Ormat, the original developer of first-generation geothermal technology. Nonetheless, to seize this market opportunity, Ormat is simultaneously reviving cutting-edge technologies and reactivating its long-held conventional geothermal assets—even considering expansion. Compared to enhanced systems, conventional geothermal (hydrothermal resources) requires shallower drilling, is easier to develop, and incurs lower costs. Yet companies often need to invest tens of millions of dollars in exploratory drilling before confirming whether sufficient underground geothermal resources exist—limiting industry growth for decades.

Fervo Signs Geothermal Power Deal With Google for 2028 Launch

Sep 1, 2026

Alphabet Inc. contracted Fervo Energy to supply up to 396 MW of geothermal power for a Utah data center starting in 2028, with options for nearly 1 GW total capacity by 2030.

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Fervo Signs Geothermal Power Deal With Google for 2028 Launch

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