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Data Centres: Boom and Backlash
10JUN

Baker Hughes drills geothermal for Meta

3 min read
10:06UTC

XGS Energy and Baker Hughes are developing a 150 MW enhanced-geothermal project in New Mexico with Meta as anchor customer, redirecting oilfield drilling expertise into 24/7 carbon-free baseload as operators move off BTM gas.

IndustryDeveloping
Key takeaway

Baker Hughes redeploying drilling rigs into geothermal validates firm carbon-free baseload as a commercial data-centre power market.

XGS Energy is developing a 150 MW enhanced-geothermal project in New Mexico, with Meta as anchor customer and Baker Hughes, an oilfield-services major, as development partner.⁠1 Enhanced geothermal pumps water through hot dry rock to raise steam where natural reservoirs do not exist, delivering round-the-clock carbon-free power that intermittent solar and wind cannot. Baker Hughes is moving its oil and gas drilling expertise into the work.

The partner, not the megawatts, carries the signal. Oilfield-services firms commit equipment where multi-year demand is, so a major pointing rigs at geothermal baseload reads as a verdict on where data-centre power procurement is heading. Where Pure DC's 110 MW Dublin microgrid became the template for generating around a grid queue, the XGS deal goes further: changing the fuel source itself to escape the curtailment exposure the May 202(c) order attached to gas.

Geothermal had lacked anchor-tenant validation at this scale. A hyperscaler signing as offtaker, with an oilfield major taking the development risk, gives the technology a commercial footing that pilot projects could not.

Deep Analysis

In plain English

Enhanced geothermal is different from the geothermal power you may have heard of in Iceland or California. It does not need a natural hot spring. Instead, engineers drill several kilometres deep into hot dry rock, inject water at high pressure, and use the heat from the rock to raise steam and generate electricity. It works anywhere the geology is hot enough underground, and it delivers power 24 hours a day regardless of weather. Baker Hughes supplies the drills, equipment, and engineering expertise to extract oil and gas from underground for energy companies worldwide. By partnering with XGS Energy, it is redeploying that same directional-drilling technology into geothermal wells, keeping its crews and rigs busy while fossil-fuel demand plateaus. For Meta, this is attractive because 150 MW of enhanced geothermal runs continuously, unlike solar that stops at night or wind that drops in calm weather. It also cannot be curtailed by grid operators the way gas turbines now can.

Deep Analysis
Root Causes

The DOE 202(c) curtailment of BTM gas, combined with GE Vernova's 80 GW backlog stretching delivery of new gas turbines to 2029, created a procurement gap: operators needed 24/7 non-gas baseload urgently, and the supply chain for new gas turbines was already saturated.

Baker Hughes's strategic rationale mirrors the same pattern: its oil-and-gas drilling business faces a structural demand ceiling as energy transition accelerates; redirecting drilling rigs and directional-drilling crews into geothermal preserves its revenue base without requiring new capital-intensive manufacturing capacity.

What could happen next?
  • Opportunity

    Oilfield-services companies with directional-drilling capacity face a new revenue channel as enhanced geothermal projects scale from pilot to commercial, directly cannibalising the demand reduction their fossil-fuel clients are experiencing.

  • Risk

    XGS Energy's 150 MW project will be the first enhanced-geothermal project at this scale; reservoir engineering failure modes seen at smaller Australian and European projects could affect the commercial timeline and Meta's capacity delivery.

First Reported In

Update #4 · Grid wins power to switch off data centres

Data Center Dynamics· 26 May 2026
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Causes and effects
This Event
Baker Hughes drills geothermal for Meta
An oilfield-services major committing drilling capacity to geothermal baseload signals that firm non-gas power for data centres is now a bankable market, not a pilot.
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Written with AI from Lowdown's published reporting. Not individually reviewed by an editor. Editorial standards.