Geothermal Energy Startups Gain Momentum with Major Deals and Bipartisan Support for Renewable Energy
Geothermal energy startups, largely unscathed by Republican efforts to dismantle the Inflation Reduction Act last summer, are now making strides in advancing their technology. Bipartisan support for renewable energy drilling seems to be a consistent trend.
With the political landscape now more settled, geothermal companies are announcing significant deals that promise broader implementation of their technology.
Houston-based Fervo Energy disclosed on Tuesday that Baker Hughes, a major oil field services and energy technology company, will design and deliver five steam turbines for the second phase of the Cape Station project in Utah. This development signals the full acceleration of the project, which is expected to generate 300 megawatts of constant electricity, capable of powering approximately 180,000 homes.
Fervo is among several startups pioneering deeper, hotter geothermal wells. The company employs directional drilling techniques common in the oil and gas industry to access rocks roughly 16,000 feet below the surface, where temperatures remain a consistent 520Ëš F.
The Baker Hughes deal is facilitated by $206 million in financing secured by Fervo in June. This funding consists of $100 million in project-level preferred equity from Breakthrough Energy Catalyst, Bill Gates’ climate investment fund; a $60 million expansion of an existing loan from Mercuria, a global energy trading company; and $45.6 million in bridge debt financing from X-Caliber Rural Capital affiliate, a rural infrastructure investment firm. In 2022, Chris Wright, former energy secretary under the Trump administration, led an investment into Fervo when he was CEO of Liberty Energy.
In another development, fellow startup Sage Geosystems announced last week that it had reached an agreement with geothermal developer Ormat Technologies to deploy its technology at one of Ormat’s existing power plants. If all goes according to plan, Ormat will license Sage’s “Pressure Geothermal” technology, which involves injecting water into fractured rock under pressure, enabling it to absorb heat. Upon returning to the surface, the water yields both heat and pressure, which are utilized to spin turbines for electricity generation.
The constant heat production of geothermal power plants has piqued the interest of data center developers. A recent analysis suggests that geothermal technology could provide nearly two-thirds of data center demand by 2030.
