A report from EB SECURITIES indicates that with the rapid development of the US AI industry, the number of data center construction projects in the United States has surged, leading to a non-linear increase in power demand from AI data centers. Based on the growing electricity demand from US data center construction, the EIA predicts US electricity consumption will reach a record high by 2026. The AI boom is exacerbating regional power crises in data center clusters in areas like California and Texas. Research from the International Energy Agency suggests that if deep underground thermal resources can be developed at scale, the global technical potential for power generation from Enhanced Geothermal Systems (EGS) could reach several hundred terawatts, far exceeding the current capacity of the global power system. Consequently, EGS is expected to play a more significant role in the future clean energy landscape. The main viewpoints from EB SECURITIES are as follows:
Enhanced Geothermal Systems (EGS) represent a new generation of stable renewable energy technology. EGS are artificial geothermal systems built using engineering techniques to exploit hot dry rock resources or enhance extraction from low-permeability thermal reservoirs. As the primary technology for harnessing deep geothermal energy, EGS is at the forefront of international geothermal research and development. MIT Technology Review listed EGS as one of the "10 Breakthrough Technologies of 2024." Traditionally, conventional geothermal power has been limited to specific geographical regions like volcanic zones or tectonic plate boundaries, hindering large-scale adoption. However, breakthroughs from shale oil and gas extraction have provided the capability to access deep underground resources. EGS is a product of this technological dividend. It involves drilling 3 to 8 kilometers deep, injecting fluid to fracture rock, and then extracting high-temperature fluid to generate electricity, thereby converting the "ubiquitous" deep geothermal heat into stable power.
From an energy structure perspective, EGS offers several advantages. First is strong stability. Geothermal power can operate consistently year-round, unaffected by weather conditions, giving it baseload power attributes similar to thermal or nuclear power. Second is its prominent low-carbon characteristic. As a clean energy source, EGS has extremely low carbon emissions during operation, aiding the transition to a low-carbon energy structure. Third is its immense resource potential. Global deep geothermal resources are abundant and, with mature technology, could theoretically provide long-term, stable clean power for energy systems.
The 51st Stanford Geothermal Workshop, held in February 2026 at Stanford University, saw record participation with 450 attendees from 26 countries and approximately 100 online participants, featuring 204 submitted papers and 188 presentations. The major focus of the conference was on significant breakthroughs in EGS. Firstly, a new EGS "sweet spot" was confirmed in recent evaluation drilling. With resource temperatures exceeding 555°F (approximately 290°C), this area possesses gigawatt-scale potential, meaning a single geothermal block could support stable power for large data center clusters or regional grids. This marks a transition for EGS from the technology demonstration phase to the scale development phase. Secondly, AI-driven drilling and exploration technologies are being used. Machine learning optimizes drilling paths and identifies optimal reservoir locations, significantly reducing development risks and costs, making previously challenging areas commercially viable. This signifies a shift in geothermal development from "experience-driven" to "data-driven."
In the opening speech, Kyle Haustveit, Assistant Secretary for the Office of Fossil Energy and Carbon Management at the US Department of Energy, clearly stated that geothermal energy is becoming a key pillar of America's future energy system. Concurrently, the latest progress of one of the world's most influential EGS experimental platforms, the Utah FORGE project, was systematically presented at the conference. Supported by the US Department of Energy and managed by the University of Utah, the project has established a complete EGS technology system after years of technical accumulation. The success of commercial projects is collectively pushing EGS from experimentation to industrialization.
The workshop sent a clear signal: Enhanced Geothermal Systems are reaching an inflection point for scaled development. Core factors driving this change include: 1) AI and digital technologies significantly reducing development risks, increasing drilling success rates, and shortening development cycles. 2) EGS breaking geological resource constraints, no longer reliant on natural reservoirs, and theoretically deployable widely globally. 3) Stable power demand becoming a critical factor in the energy transition, with substantial growth driven by AI data centers and electrification. 4) Continued policy and capital support, with the US Department of Energy and the European Union, among others, identifying geothermal as a key energy technology. From Stanford labs to Fervo's commercial power plants and towards global scaled deployment, geothermal energy is gradually transitioning from a "regional energy source" to a "global foundational energy source." Over the next decade, geothermal power is expected to become one of the world's most important stable clean energy sources, potentially serving as a crucial cornerstone supporting the energy demands of the AI era.
On the industrial practice front, domestic companies are also beginning to actively participate in the global geothermal development market. On March 6, OpenMountain Energy, LLC (OME), a wholly-owned subsidiary of Kaishan Group Co., Ltd. responsible for its North American geothermal new energy development platform, signed a term sheet with US-based Enhanced Geothermal developer Power Planet, Inc. (PP) in Reno, Nevada. The agreement is for the joint development of EGS resources in OME's Humboldt House geothermal resource area in Nevada. According to a 2011 specialist publication in the GRC Transactions, the conceptual model reassessment for the Humboldt House area predicts EGS resource potential of 200-500 MW. OME owns the majority of the resource area and has already constructed and operates the StarPeak geothermal power station there.
The collaboration between PP and OME will leverage their respective strengths to develop the EGS resources in this geothermal block. OME, besides holding the development rights, can provide power, discharge water from the StarPeak plant, grid capacity, and power generation equipment for EGS development. The PP team possesses a complete development team. CEO Mr. Keith Elliott held reservoir engineering and leadership roles for over 20 years at one of the largest private US oil and gas companies. The team includes drilling and development experts with experience successfully drilling hundreds of wells in shale plays, senior specialists in geoscience and geothermal engineering, and a financing expert formerly responsible for key energy strategy at the US Department of Energy.
Key terms of the signed term sheet are binding. The parties agreed to sign a contract within the next three months and commence drilling within twelve months of contract execution. The company will announce relevant commercial terms after the contract is signed.
Risk warnings include potential delays in new technology progress, uncertainty in local policies, slower-than-expected project investment and construction progress, lower-than-expected project returns, and intensifying industry competition.
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