The race to dominate artificial intelligence (AI) is no longer waged only in the aseptic laboratories of Silicon Valley or in microchip factories; is moving towards a much more earthly and critical terrain: electricity. At a time when data centers threaten to saturate the global electrical grid due to their voracious consumption, big technology companies are desperately seeking sources of continuous, stable and emission-free energy.
The answer, surprisingly, does not seem to lie in looking to the sky for sun or wind, but in drilling down, miles underground. Geothermal energy has ceased to be a secondary actor and has become the great hope of the sector. But in Europe, this technological revolution is accompanied by a master shift.
It’s been under our feet. Historically, geothermal energy generation was considered viable almost exclusively in exceptional volcanic regions, such as Iceland or Indonesia. It depended on finding underground pockets that naturally had heat, water, and permeable rock. However, as the report explains Hot stuff: geothermal energy in Europe of the Ember think tankthe technological advances of the last decade have completely rewritten this map.
The industry has adapted deep drilling and reservoir engineering techniques from the oil and gas sector, reducing well costs by approximately 40%. Now, so-called Enhanced Geothermal Systems (EGS) allow fluids to be injected to create artificial fissures in hot, dry rock, extract that heat and generate electricity at the surface, regardless of the natural permeability of the ground.
Numbers that change the energy board. The impact of this technological disruption is monumental. As detailed by analyst Pawel Czyzak in his newslettergeothermal energy can now be produced at levelized costs (LCoE) of less than €100/MWh. To put it in perspective, the marginal cost of electricity generated by gas and coal in Europe ranged between €90 and €150/MWh during 2025. Geothermal is already economically competitive.
In the European Union, this technology could develop around 43 GW of commercially viable capacity today. With geothermal plants operating 24/7, this would translate into around 301 TWh of electricity per year, the equivalent of replacing 42% of all EU coal and gas power generation last year. The countries with the greatest potential identified under this profitability threshold are Hungary (with 28 GW), Poland, Germany and France.
The “Triple Victory” strategy. Europe’s great asset lies in geography and urban planning. According to Czyzak,the areas with the greatest geothermal potential at 5,000 meters depth coincide strikingly with large European data center nodes – such as Paris, Amsterdam and Frankfurt – and with planned district heating networks (known as district heating). The plan is to locate data centers near these geothermal plants. The plant powers the AI and, subsequently, the waste heat generated by both the plant and the servers themselves is injected into the district heating networks.
Institutions are already making moves. By the end of 2024, the Council and the European Parliament supported the creation of a European Geothermal Alliance to expedite permits and finance the sector. In this scenario, Spain claims a leading role: Vice President Teresa Ribera (whose position is now held by Sara Aagese) announced an injection of 100 million euros for ten deep geothermal projects. The majority will be located in the Canary Islands due to their exceptional volcanic subsoilalthough the peninsula already has pioneering projects underway, such as the 150-meter wells on the Vitoria university campus or the 6.5 MW installation in the City of Arts and Sciences in Valencia.
The Nordic laboratory. To understand how the final part of this plan—heating homes with data—works. you have to look at Helsinki. The Finnish capital has found an unexpected ally in the residual heat of servers to decarbonize its winters. Through the energy company Helen, the city has been testing this model for years. The results show that a single data center in Helsinki can heat up to 20,000 homes. The Telia installation, for example, already recovers 90% of the heat emitted by its machines, currently providing shelter to 14,000 apartments.
This thermal miracle requires two elements: an extensive network of urban pipes (district heating) and huge industrial heat pumps that raise the temperature of the waste water to the 85-90 ºC necessary for the urban network. Europe, and especially the Nordic countries, are leading the adoption of these heat pumps, turning Finland into a full-scale laboratory for what the future of the continent could be.
The risk of missing the technological train. Despite the promising outlook, Europe faces serious obstacles. As the Ember report warnsthe Old Continent invented geothermal electricity (the first plant was inaugurated in Larderello, Italy, in 1904), but now it risks giving up its leadership. As the United States and Canada scale commercially thanks to aggressive tax incentives (such as Inflation Reduction Act) and the private investment of the Big TechEurope is drowning in a morass of slow and complex permitting, inconsistent national support frameworks and a lack of financial risk mitigation for early phases of drilling.
Up to 64%. If the EU does not channel innovation funds and simplify bureaucracy, supply chain and cost reduction will consolidate outside its borders. In fact, US research cited by Ember indicates that geothermal could cost-effectively cover up to 64% of the projected increase in electricity demand from US data centers by the early 2030s.
The reward for doing things well is economic prosperity. As Czyzak recalls based on his experienceIceland in 1940 was 70% dependent on coal and was one of the poorest economies in the West; Today, thanks to a 100% clean electrical grid (30% geothermal, 70% hydroelectric), it attracted the aluminum industry and became the fifth country in the world in GDP per capita. Deep geothermal could be that same catalyst for countries like Hungary or Slovakia in the era of artificial intelligence.
The earthly paradox of the cloud. In their eagerness not to stop the progress of their algorithms, giants like Google or Meta have understood that the solution is not just to look at the sky waiting for the sun to shine or the wind to blow, but to drill towards the center of the planet.
Europe now has the opportunity not only to ride this wave, but to perfect it: transform the thermal problem of the digital age into an arterial network that feeds the intellect of machines and, at the same time, shelters its citizens during the winter. A revolution that is literally brewing under our feet.
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