NEW YORK (Reuters) -Meta signed an agreement with XGS Energy to help develop 150 megawatts of advanced geothermal electricity in New Mexico to power the Facebook parent company's artificial intelligence expansion, the companies said on Thursday.

WHY IT'S IMPORTANT

Giant technology companies like Meta are striking unprecedented power deals to secure massive amounts of electricity for the data centers needed to develop AI, which is a top driver of the record U.S. power consumption projected for 2025 and 2026.

Geothermal energy, which does not produce climate-warming carbon emissions, has become a popular source of electricity for Big Tech companies, many of which have emissions reduction goals. Unlike conventional geothermal power production, advanced geothermal does not rely on natural water sources.

Last year, Google announced plans to fuel its data centers with advanced geothermal power produced by Fervo Energy.

CONTEXT

While 150 megawatts is a tiny fraction of the many gigawatts of power sought by technology companies to power AI, it would represent about 4% of total U.S. geothermal production.

New Mexico, which lays claim to a section of the world's largest shale oil basin, has 160,000 megawatts of untapped geothermal power generation potential.

The phased-in project between XGS and Meta is projected to be operational by the end of the decade. The advanced geothermal electricity will be deployed to the electric grid and support Meta's operations in the state.

KEY QUOTE

"With next-generation geothermal technologies like XGS ready for scale, geothermal can be a major player in supporting the advancement of technologies like AI as well as domestic data center development," Urvi Parekh, Global Head of Energy at Meta said in a written statement.

"We're excited to partner with XGS to unlock a new category of energy supply for our operations in New Mexico," he said.