Innovative Geothermal Startups Are Gaining Momentum

Last summer, while Congressional Republicans made significant moves against the Inflation Reduction Act, emerging geothermal startups managed to stay relatively unscathed. The drive for renewable energy through drilling appears to be one of the few topics that attracts bipartisan support.

With uncertainty now resolved, geothermal firms are starting to announce partnerships that may enable broader implementation of their innovations.

On Tuesday, Fervo Energy, based in Houston, revealed it has chosen a supplier for vital components for its power plants, demonstrating that the second phase of the Cape Station project in Utah is progressing swiftly. The startup disclosed that Baker Hughes will design and furnish five steam turbines, which will together generate 300 megawatts of electricity continuously—sufficient to power around 180,000 homes.

Fervo is among several startups dedicated to drilling deeper and hotter geothermal wells. The company employs directional drilling methods from the oil and gas industry to reach rocks nearly 16,000 feet underground. At this depth, temperatures are expected to remain consistently around 520˚ F.

Supporting the Baker Hughes deal is $206 million in funding that Fervo secured in June. This includes $100 million in project-level preferred equity from Breakthrough Energy Catalyst, a $60 million enhancement to an existing loan from Mercuria, and $45.6 million in bridge debt financing from an affiliate of X-Caliber Rural Capital. Chris Wright, who was the energy secretary under Trump, oversaw an investment in Fervo in 2022 while serving as CEO of Liberty Energy.

In another development, fellow startup Sage Geosystems announced last week that it has forged a partnership with geothermal developer Ormat Technologies to implement its technology at one of Ormat’s current power facilities.

If all goes as planned, Ormat will license Sage’s groundbreaking “Pressure Geothermal” technology, which entails injecting water into fractured rock under pressure, allowing it to absorb heat. Upon returning to the surface, Sage harnesses both the heat and pressure to drive turbines for electricity generation.

Thanks to the constant heat produced by geothermal power plants, they have attracted the interest of data center developers. A recent study suggested that this technology could meet nearly two-thirds of data center electricity demand by 2030.