Powered geothermal startup Fervo Energy has raised $462 million to complete its first large-scale power plant and begin development of several others as it races to feed power into the power-hungry grid.
Sarah Jewett, Fervo’s senior vice president of strategy, told TechCrunch that the new funding will help the company continue work on its 500-megawatt Cape Station power plant in Utah while beginning development on several other plants.
The new round was led by B Capital with participation from AllianceBernstein, Atacama Ventures, Breakthrough Energy Ventures, CalSTRS, Capricorn Investment Group, Carbon Equity, Centaurus Capital, Climate First, Congruent Ventures, CPP Investments, Devon Energy, Echelon, Galvanize, Google, Impact Science Ventures, Kris Singh, JB Straubel, Liberty Mutual Investments, and Marunouchi Innovation. Partners are Mercuria, Mitsubishi Heavy Industries, Mitsui & Co., and Sabanci Climate Ventures.
Fervo has an existing contract with Google to power its data centers.
The company is targeting 2026 to have the first stage of Cape Station operational, with Jewett confirming it will be “mechanically complete” by the end of this year. “It’s very real and very specific.”
The new round comes six months after the startup announced a $206 million funding package for Cape Station that included loans and project-level preferred equity. Last year, Furbo raised nearly $500 million in equity and debt.
Enhanced geothermal has been under development for years, but prices have recently skyrocketed as favorable conditions have increased its prospects.
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The biggest factor behind this is the increasing demand for data centers. Big tech companies like Google and Meta are turning to geothermal energy as a potential solution to their energy needs. Analysis by Rhodium Group earlier this year found that by 2030, enhanced geothermal energy could cover almost two-thirds of new data center demand for less than what operators are currently paying.
Geothermal is also viewed favorably within the Trump administration. Energy Secretary Chris Wright’s former company, Liberty Energy, participated in Furbo’s $138 million funding in 2022. Like many of its peers, the company uses hydraulic fracturing and directional drilling techniques borrowed from the oil and gas industry. Many of Fervo’s employees previously worked in the oil and gas field and applied their knowledge of drilling and underground development to new challenges.
Fervo is seen as a front-runner for an enhanced geothermal startup that drills deeper and extracts hotter rock to provide more power than existing geothermal developers.
That knowledge helped Fervo reduce the time it takes to drill new wells. The company’s first well took about a month, but this summer Fervo announced it completed the well in 16 days. “These days, the average time it takes to drill a well is in the mid-teens,” Jewett said. “That’s pretty good, but we always need to be better.”
The company’s focus on drilling time is both economical and a matter of pride. “Roughly half of the cost of a well is drilling time,” Jewett says. Reduced drilling time means Fervo can complete power plants faster and bring in revenue sooner. They are also a sign of mastery. “It’s also a good indication of how much you’re investing in your well, how much you’re troubleshooting, and how much problems are bothering you that end up costing you money,” she said.
For now, Fervo is focused on the western United States, where hot rocks are near the surface. For example, at the company’s Cape Station site in Utah, Furbo must drill 8,500 feet deep to drill into rock at 450 degrees Fahrenheit.
“If you’re going to Pennsylvania or West Virginia; [the hot rock] Only when the company is satisfied with how quickly it can drill oil wells in the West will it expand to other locations, including overseas.
“There are so many places around the world that have so much potential,” she said.
But the U.S. has a wealth of different types of rock that Fervo can drill, so it could potentially gain enough technical experience before heading to other countries. At that point, Jewett expects regulatory differences will be the main hurdle.
Given the surge in energy demand from data centers and Fervo’s progress at Cape Station, there are rumors that the company could file for an initial public offering in the next year or so. Jewett did not comment on these issues, but said the company was aware of “unanticipated demand.”
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