National Lab Study Proposes Underground Cold Storage to Slash Data Center Cooling Costs
December 4, 2025
As global data center electricity demand surges, driven by artificial intelligence and cloud computing, the energy-intensive task of cooling these facilities has come under intense scrutiny. Cooling systems are a primary contributor to operational costs and carbon footprints, second only to the power required to run the servers themselves. A new analysis from the National Laboratory of the Rockies (NLR) presents a promising geothermal-based solution to this growing challenge.
Published in the journal Applied Energy, the techno-economic study led by NLR researchers demonstrates that Reservoir Thermal Energy Storage (RTES) can dramatically improve cooling efficiency and reduce costs. The system works by storing cold energy underground during periods of low ambient temperatures and off-peak electricity rates, typically in winter or at night. Chilled water is injected into deep, naturally contained aquifers. During peak summer demand, this stored cold water is pumped to the surface to cool a data center directly via a heat exchanger, avoiding the need for energy-intensive mechanical chillers.
The research team modeled the performance of an RTES system for a 5-megawatt high-performance computing data center in Colorado over a simulated 20-year period. The proposed setup utilized four wells drilled to a depth of 275 meters and dry coolers for the initial chilling process, which requires no water and minimal electricity. The analysis found the RTES system to be nearly seven times more efficient than traditional vapor-compression chillers during peak summer conditions, achieving a coefficient of performance of 16.5 compared to 2.4.
“Electricity consumption of traditional cooling systems is significant, especially during summer, whereas the RTES system significantly lowered electricity consumption, yielding an innovative and improved method for data center cooling,” said Hyunjun Oh, a geothermal engineer at NLR and the study's lead author. This efficiency gain translated into substantial cost savings. The levelized cost of cooling—a lifetime cost metric—plummeted from $15 per megawatt-hour with conventional chillers to just $5/MWh with the RTES system.
The implications for the data center industry are significant. For facilities with continuous cooling demands, RTES offers a path to lower utility bills, enhanced grid stability by shifting load away from peak periods, and a major reduction in water consumption compared to cooling towers. The study, funded by the U.S. Department of Energy’s Geothermal Technologies Office, is part of a broader multi-lab project examining the technology's applicability for facilities ranging from a 30 MW crypto-mining site in Texas to a 70 MW hyperscale data center in Virginia.
Future research, including NLR's ongoing Cold Underground Thermal Energy Storage project, aims to optimize RTES by further leveraging time-of-use electricity pricing and exploring its integration with other subsurface thermal storage methods. These efforts underscore the potential for geothermal principles, more commonly associated with heating, to revolutionize data center cooling sustainability and economics.
Source: nrel
