Advanced geothermal heats up with $138M round for startup Fervo Energy

Houston-based Fervo uses drilling techniques from the oil and gas industry to tap heat deep in the Earth and turn it into clean electricity.

An industrial drilling site in the desert in front of a snowy mountain range
Fervo Energy's advanced geothermal drilling site in Nevada. (Fervo)
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A leading geothermal energy startup just raised $138 million to build and run a fleet of power plants fueled by the Earth’s heat.

Fervo Energy announced the new funding on Monday. With the latest round, which was led by venture capital firm DCVC, the Houston-based startup has raised $177 million in total investment since launching five years ago.

Fervo aims to lower the cost of developing geothermal power by making it easier to tap heat deep within the Earth to make steam and produce clean electricity. The startup uses the same horizontal drilling techniques and fiber-optic sensing tools as the oil and gas industry, with the goal being to access geothermal resources that are otherwise too expensive or technically complex to reach using existing technologies.

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The company is part of a growing effort by startups, research institutions and government agencies to harness geothermal energy from deeper wells and hotter sources. In February, MIT spinoff Quaise Energy raised $40 million to develop high-frequency beams that melt and vaporize rocks, in theory allowing developers to extract heat virtually anywhere in the world. In May, Schmidt Futures — the philanthropy run by former Google CEO Eric Schmidt and his wife Wendy Schmidt — backed a new nonprofit, Project InnerSpace, to accelerate geothermal development worldwide.

Power buyers are interested in geothermal power because they are actively looking for reliable energy sources that can address climate change and rising energy prices,” Tim Latimer, CEO of Fervo, said in a press release. Our mission is to meet that growing demand by putting gigawatts of 24/7 carbon-free energy on the grid.” 

To date, geothermal’s ability to provide around-the-clock baseload electricity has been largely limited by geography. Most projects are located near relatively easy-to-access sites like hot springs and volcanoes. That explains why only about 0.4 percent of annual U.S. electricity generation comes from geothermal plants. Wind and solar power account for 9.2 percent and 2.8 percent, respectively.

Fervo’s first commercial project is now under construction. The 5-megawatt site will produce power to support Google’s data center operations in Nevada. Latimer said the latest investment will help Fervo complete its power-plant projects in Nevada and Utah, as well as evaluate new projects in California, Colorado, Idaho, New Mexico, Oregon and internationally. 

Fervo is poised to make geothermal as important as solar and wind to our energy future,” Matt Trevithick, a partner at DCVC, said in the Monday press release. 

The funding announcement comes a week after President Joe Biden signed into law the Inflation Reduction Act, which authorizes as much as $350 billion for new federal loans and loan guarantees for energy and automotive projects and companies. In an interview with The New York Times on Monday, Latimer said the law’s new loan authority could help geothermal development expand more quickly.

I don’t think we were expecting good news a month ago, but we’re getting more ready for prime time,” he told the NYT. We have barely scratched the surface with the amount of geothermal that we can develop in the United States.”

Maria Gallucci is a clean energy reporter at Canary Media, where she covers hard-to-decarbonize sectors and efforts to make the energy transition more affordable and equitable.