Fervo and Google sign world’s largest deal for next-gen geothermal power

Fervo Energy inked a landmark deal to supply Google with nearly 400 megawatts of clean electricity from the startup’s geothermal project in southwest Utah.

The agreement is the largest of its kind for a next-generation geothermal system — an emerging technology that involves drilling deep into hot, dry rock to use underground heat for producing power. Fervo is investing over $2 billion to build what could become the biggest such system in the world when it is completed in 2028.

Securing customer contracts is an essential step for a novel project like Fervo’s Cape Station. Without a clear buyer, it can be difficult to attract financing for first-of-a-kind facilities, even if they promise transformative benefits for the power sector. Fervo, which went public in May, saw its shares jump 15% on Tuesday morning following news of the Google power deal.

Houston-based Fervo is now developing the first, 100-MW phase of Cape Station and expects to start generating test power from a 33-MW unit in the fourth quarter of this year. The deal with Google supports the buildout of the second, 400-MW phase, which is slated to be up and running in about two years.

Google said it intends to buy the geothermal power for a potential data center in Utah.

“As demand for reliable electricity grows, customers like Google need energy resources that can be deployed at scale, operate around the clock, and deliver where power is needed,” Tim Latimer, Fervo’s CEO and co-founder, said in a Tuesday news release.

The companies did not disclose PPA terms. Phase 1 of Fervo’s Cape Station is set to deliver power at $7,000 per kilowatt, while Phase 2 should come in at $5,500 per kW, Sarah Jewett, Fervo’s chief operating officer, previously told Canary Media.

Geothermal energy generates just 0.4% of total U.S. electricity today. Conventional geothermal relies on natural features like hot springs, limiting where such facilities can go. Fervo is part of a rapidly growing effort to deploy innovative tools and techniques — often derived from oil and gas drilling — to access the earth’s heat in more diverse places.

The startup has been working with Google in this pursuit for years.

In 2021, the two companies signed an agreement to develop a next-generation geothermal project. Two years later, Fervo turned on its 3.5-MW commercial pilot plant in Nevada. The first-of-a-kind facility is still the largest operating ​“enhanced geothermal system” in the country — though another firm, Sage Geosystems, recently began producing power from its 3-MW, next-gen pilot project in Texas.

Before Tuesday, Fervo and Google had previously signed a 115-MW power purchase agreement with the Las Vegas–based utility NV Energy to develop more geothermal for the tech giant’s data centers in Nevada.

Google said it hasn’t determined where it will build the Utah data center that will run on Cape Station’s power.

“Even though right now we don’t have clarity yet on how this will service a data center … we know that it will be a foundational building block of power generation for a data center presence in Utah,” Lucia Tan, Google’s director of advanced energy technologies, told The Wall Street Journal on Tuesday.

Under the new deal, Google has the option to expand its Cape Station agreement by around 600 MW by June 2030. The tech company and Fervo also have a deal in place allowing Google the right of first refusal to purchase up to 3 GW of electricity from certain new geothermal power plants the startup develops.