Geothermal’s New Frontier: Powering the Cloud from Underground

The geothermal industry has long been a quiet giant in the renewable energy sector, with Ormat Technologies standing as its largest operator for six decades. Recently, however, Ormat is positioning itself to play a crucial role in powering hyperscale data centers through enhanced geothermal systems (EGS). EGS combines traditional geothermal methods with cutting-edge oil-drilling and fracking techniques, allowing Ormat to tap into deeper, higher-temperature underground reservoirs more easily.

This shift marks a significant departure from the industry’s traditional reliance on regions of high tectonic activity. By leveraging EGS, Ormat can build next-generation geothermal power plants almost anywhere, catering to the insatiable demand for clean energy from data centers and cloud infrastructure. The move is driven by the recognition that geothermal has become a rare commodity in today’s renewable energy landscape – one where wind and solar power are increasingly under fire.

The science behind EGS is well-established, but Ormat must still demonstrate economic viability to compete with other forms of power generation. To achieve this, the company is launching two pilot projects in collaboration with Sage Geosystems and SLB (the largest oilfield services firm in the world). These partnerships underscore the growing recognition that geothermal’s potential extends far beyond traditional high-temperature reservoirs.

Ormat CEO Doron Blachar believes that his company’s unique combination of traditional geothermal growth, battery energy storage, and newer solar power installations will position it to dominate the EGS market. He points to Ormat’s existing relationships with hyperscalers like Google and data center developer Switch as evidence of its competitive edge.

Blachar’s thesis is straightforward: by leveraging Ormat’s 60-year legacy in geothermal operations, the company can tackle the enormous potential of EGS with unparalleled efficiency. This strategic pivot has already yielded results – Ormat’s stock has risen almost 20% over the past year, and revenues have surged 43% to $662.7 million for the first half of 2026.

Ormat’s EGS push is also notable in its timing, as the company navigates a rapidly shifting landscape on Wall Street. Fervo, another EGS startup that went public in May with the largest clean energy IPO ever in the U.S., has seen its market cap plummet to $5 billion despite strong long-term potential.

In contrast, Ormat’s stock remains robust at around $6.75 billion – a testament to its proven track record and diversified business model. While some may view this pivot as a high-risk strategy, Blachar is unwavering in his conviction that EGS will be the company’s growth driver.

The global implications of Ormat’s push into EGS are substantial. The company’s existing operations already power 1.85 gigawatts – enough to energize over 1.4 million U.S. homes or two large data center complexes. With a 2028 target of achieving up to 2.8 gigawatts through traditional geothermal and battery storage, EGS represents the next major chapter in Ormat’s growth story.

The politics surrounding renewable energy are increasingly complex, with both parties seeking to capitalize on geothermal’s unique appeal – clean energy that also generates profits for traditional oil and gas companies. By embracing EGS, Ormat is positioning itself as a key player in this emerging landscape.

As the world hurtles towards an unprecedented data-driven future, the need for reliable, clean energy has never been more pressing. Ormat’s bold pivot into enhanced geothermal systems may just prove to be its most significant move yet – one that will power not only the cloud but also a sustainable future for generations to come.

Ormat is set to embark on this new frontier with pilot projects scheduled to go online by late 2027. With EGS, Ormat is poised to unlock the full potential of geothermal energy – and cement its place as a leader in the renewable energy landscape.