XGS’ Geothermal Tech Unfazed by Poor Permeability or Low Water

Limited water, lack of porous rock, poor permeability? No problem for California-based XGS Energy.

The geothermal company uses a pipe-in-pipe heat system to circulate a working fluid, usually water, inside a steel casing. The fluid heats up underground, without touching nearby hot rock, and is returned to the surface—via an inner insulated tube—where it is used to power generators to create electricity. Key to the fully closed loop geothermal system is thermally conductive materials that draw heat to the well.

“This network of material is placed near or surrounding the wellbore and maximizes the heat transfer directly from the rock to the wellbore and working fluid,” XGS Energy COO Ghazal Izadi told Hart Energy. The water is continuously recycled in the closed-loop geothermal system.

“This approach really increases our thermal efficiency,” Izadi said. “Basically, instead of relying on conductive fluid loss into the rock, which is [how] traditional geothermal works, we use a purely conductive heat flow method.”

Unlike other enhanced geothermal systems, the company’s technology does not rely on fracturing to assess heat. Plus, it is designed to use zero operating water. “By removing geologic risk and the reliance on the subsurface water, we really make it a precise and reliable solution that we can deploy almost anywhere,” Izadi said.

XGS Energy is among the companies activating innovative technologies to harvest the earth’s heat for electricity production. Geothermal energy, which utilizes many of the technologies and techniques used in oil and gas fields, has become a standout among renewables in the energy world because of its potential to provide baseload power as energy demand rises. Big Tech, one of the largest consumers of electricity, has especially taken notice as it looks to power and cool data centers.

XGS recently announced a partnership with Meta to develop a 150-megawatt geothermal project in New Mexico. Targeting operational startup by 2030, the two-phase development will support Meta’s data center operations in the state as the hyperscaler continues efforts to lower its emissions.

“Advances in AI require continued energy to support infrastructure development,” said Urvi Parekh, global head of energy at Meta. “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.”

The technology

The collaboration demonstrates confidence in this next-generation geothermal technology as a reliable, sustainable and affordable way to meet growing power demands of modern data centers, Izadi said. She added XGS is positioned to co-locate its heat resource technology near data centers anywhere to meet load growth.

“So, because our system is modular, we can really standardize mass deployment and we can have a repeatable design that works in geologies … not accessible through previous geothermal development or hydrothermal development,” Izadi said. “And again, because it really decouples geology and uncertainty, we can enable this scaleup expansion anywhere—for example, industrial, rural or urban setting.”

Having a fully closed loop system eliminates the need for vast amounts of water, resulting in lower opex. “We don’t require the water handling, and we don’t have the issue around the scale and corrosion because our water never touch the rock and it doesn’t extract any contaminant or minerals from the rock to the surface,” she said.

Addressing thermal depletion over time, however, will be crucial to maintaining the heat flow and efficiency needed to generate electricity. This will require resource management and operational optimization, including evaluating flow rates, well spacing and design among other areas, she said.

Like other geothermal companies, XGS builds on existing oil and gas techniques and utilizes much of the same equipment, supply chains and workforce. Izadi, whose background is in technical reservoir services and petroleum engineering, is no exception.

“Our goal is to leverage anything that has been deployed in unconventional oil and gas or any oil and gas assets” and augment material science with oil and gas techniques to enable scalability and improved economics, she added.

Scaling geothermal

The Meta project is expected to increase the total geothermal electricity produced in New Mexico by a factor of ten. New Mexico has only one operating geothermal power plant, but the state is home to some of the best hot rock resources in the U.S.

A report released earlier this month by Project InnerSpace, New Mexico Tech and the New Mexico Bureau of Geology and Mineral Resources stated New Mexico has the potential to produce more than 160 gigawatts (GW) of geothermal power.

“The state is the second-largest producer of oil and gas in the nation. This means that both the technology and expertise needed to develop everything required for next-generation geothermal energy—from geoscientists to drillers to service providers to legislators—are already there,” the report said.

Advances in technology can unlock geothermal elsewhere as well. In addition to the western U.S., hot temperature rock in the Philippines, Japan, Indonesia and Saudi Arabia came to mind for Izadi.

“Any hot dry rock that has been developed in terms of knowledge so far is a good place for us, and we are having some discussion around that,” Izadi said. Also, “we are really unlocking these heat pockets in the areas that nobody has thought about geothermal before.”

She sees geothermal scaling along a similar path as shale developments in the U.S., with factory drilling, standardized subsurface components and modular equipment.

“I think we can really scale up similar to unconventional oil and gas,” Izadi said. “Most of the technology is ready; it’s about how we can accelerate and … reduce the cost.”

XGS aims to develop a 3-GW pipeline of projects through 2031. In the longer term, it is eyeing development of 30 GW.