Geothermal Startup Fervo Energy Secures $206 Million for Utah Power Plant
Fervo Energy, a leading player in the geothermal energy sector, announced on Wednesday that it had successfully secured $206 million in funding to further develop a groundbreaking power plant in Utah.
The company is in the process of constructing what is poised to be the largest enhanced geothermal power plant globally. The first phase of the Cape Station project is projected to be operational by next year, generating 100 megawatts of electricity. Subsequent expansion plans set for 2028 will see an additional 400 megawatts added to the plant’s capacity.
Enhanced geothermal technology, which delves deeper into the Earth’s crust and harnesses higher temperatures compared to traditional geothermal methods, has gained popularity as a sustainable energy solution for powering AI data centers. By tapping into the Earth’s natural heat reservoirs, geothermal energy offers a continuous and emissions-free power source. Leveraging expertise from the oil and gas industry has also bolstered its credibility, particularly within the current administration.
Following the recent completion of its deepest and hottest well to date, Fervo Energy drilled down to a depth of 15,765 feet in just 16 days, with temperatures at the bottom of the well expected to stabilize at approximately 520°F.
Efficient drilling operations are crucial in minimizing geothermal power plant costs, prompting a competitive race among startups to achieve greater depths at faster rates.
The latest financing round for Fervo Energy includes $100 million in project-level preferred equity from Breakthrough Energy Catalyst, a project finance division of Bill Gates’ Breakthrough Energy group. Mercuria, a previous lender providing a $120 million loan, contributed an additional $60 million to the facility. Additionally, an affiliate of X-Caliber Rural Capital injected $45.6 million in bridge debt financing.
Having recently raised substantial funds, including $244 million in February 2024 and $255 million in December through a mix of equity and debt, Fervo Energy is on a strong fundraising trajectory. The involvement of Energy Secretary Chris Wright, previously associated with Liberty Energy, further underscores the confidence in the company’s potential.
The escalating levels of investment signify a growing belief among investors that enhanced geothermal technology has crossed the threshold of commercial viability and is poised for widespread adoption.
