Ormat Bets AI Data Centers Will Make Geothermal Worth Drilling Deeper

Ormat Technologies is betting AI data centers can open a much larger market for geothermal electricity. The company now has to prove that enhanced geothermal plants can be built economically enough to compete with gas, renewables and nuclear power.

The immediate test is in Nevada. Ormat is launching two enhanced geothermal systems, or EGS, pilot projects: one with Sage Geosystems at its Blue Mountain plant and another with oilfield-services company SLB at its Desert Peak plant. CEO Doron Blachar expects the projects could be online by late 2027.

A geothermal model built for deeper heat

Traditional geothermal plants depend on naturally occurring underground reservoirs of pressurized water or steam. Ormat says EGS combines geothermal operations with oil-drilling and fracking techniques to access deeper, higher-temperature reservoirs more easily, potentially making projects possible in more places. The underlying science is proven, but the commercial question is whether the plants can be built efficiently and cheaply enough at scale.

What Ormat is trying to combine

• Existing geothermal development experience, including land positions, permitting and grid interconnections.
• Separate Nevada pilots with Sage and SLB; SLB is contributing subsurface-analysis and well-drilling expertise as it expands in geothermal.
• A standardized Ormega100 power-plant unit, launched earlier in 2026, that Ormat says is designed to scale economically alongside EGS.

A larger customer load is the prize

That potential project size explains the attraction. Ormat says it is working with Google and data-center developer Switch as it pursues AI-related electricity demand. Blachar said the company already has contracts with hyperscalers and utilities for hundreds of megawatts.

Ormat is not relying on EGS to meet its nearer-term growth target. Its plan to reach up to 2.8 gigawatts by 2028 comes from traditional geothermal and battery storage rather than EGS, giving the company an operating business while it tests the riskier expansion route.

The wells will decide the next phase

Ormat experimented with EGS about two decades ago, Blachar said, but found it too costly and difficult at the time. He argues that advances in oil-and-gas drilling, including long horizontal wells, have changed the technical backdrop. The Nevada projects will test whether that progress translates into buildable power plants.

Ormat reported $662.7 million in first-half 2026 revenue and $71.2 million in net profit. Blachar says a successful pilot would lead to multiple EGS projects, but their cost and efficiency remain unproven for data-center power.