Advanced geothermal startups are just getting warmer

Advanced geothermal startups were largely spared when Congressional Republicans took Sledgehammer to the Inflation Reduction Act last summer. Drilling for renewable energy appears to be one of the few that generate bipartisan support.

Now, with uncertainty resolved, geothermal companies are announcing a deal that promises to pave the way for a wider deployment of their technology.

Houston-based Fervo Energy said it had selected a supplier for the main portion of the power plant on Tuesday, indicating that the second phase of Utah’s Cape Station project is moving forward with all its strength. The startup said Baker Hughes, a leading oilfield services and energy technology company, will design and provide five steam turbines. Overall, they generate 300 megawatts of power 24/7, enough to power around 180,000 homes.

Fervo is one of several startups pursuing deeper, hotter geothermal wells. The company has adapted directional drilling technology used in the oil and gas industry to tap rocks about 16,000 feet below the surface. At that depth, the temperature is expected to remain at a stable 520°F.

Behind the Baker Hughes deal is $26 million in funding secured by Fervo in June. This is split into $100 million in project-level preferred stock from Bill Gates’ Climate Investment Fund, Breakthrough Energy Catalyst. A $60 million bump into existing loans from global energy trading company Mercuria. A $45.6 million bridge debt loan from X-caliber rural capital affiliate, a local infrastructure investment company. Trump Energy Secretary Chris Wright oversaw investments in Fervo in 2022, when he was CEO of Liberty Energy.

Meanwhile, fellow startup Sage Geosystems said last week it had agreed with geothermal developer Ormat Technologies to deploy the technology to one of Ormat’s existing power plants.

If everything goes as planned, Ormat licenses Sage’s “pressure geothermal” technology. When the water returns to the surface, sage harvests both heat and pressure from both, and uses both to rotate the turbine to generate electricity.

Geothermal power plants are attracting the attention of data center developers because they generate heat around clocks. A recent analysis states that the technology can generate enough electricity by 2030 to supply nearly two-thirds of the data center’s demand.