Mazama Energy raises $135M for superhot geothermal at Oregon volcano

The startup Mazama Energy just nabbed $135 million to accelerate its next-generation geothermal activities near Oregon’s Newberry Volcano.

Mazama is seeking to generate clean electricity from superhot rocks — an emerging and largely unproven approach that could have an enormous payoff for the power sector. That’s because the hotter the geothermal resource, the fewer expensive wells companies have to drill to build powerful and efficient systems.

“Superhot rock is almost essential for geothermal to become cost-competitive with fossil fuels,” Sriram Vasantharajan, Mazama’s CEO, told Canary Media ahead of Thursday’s announcement.

The Frisco, Texas–based company said its new funding includes an oversubscribed Series B led by the billionaire John Arnold’s Centaurus Capital and Doerr Capital. Oil and gas giants ConocoPhillips and Shell Ventures also participated, as did existing investors Khosla Ventures and Gates Frontier.

“Superhot geothermal offers the promise of firm, carbon-free power with a relatively small footprint, but realizing that promise requires significant technical innovation,” Arnold said in a news release. ​“Mazama has made impressive progress, and I am excited to support its next phase of development.”

Mazama’s announcement follows a flurry of activity within the next-gen geothermal sector. The startup Fervo Energy went public earlier this year, then its Utah project landed a huge power-purchase deal with Google. Sage Geosystems recently started producing power from its first pilot system in Texas. And Quaise Energy — which is also drilling a geothermal well near Newberry Volcano — closed a $180 million funding round last month.

All these geothermal companies are trying to break the constraints that have held back traditional projects in the U.S. and globally.

Conventional plants rely on natural pockets of hot water to heat fluids and drive turbines. Newer firms and old-school geothermal giants alike are developing technologies to harness heat from hot, dry rocks that could potentially unlock hundreds of gigawatts of around-the-clock power in the western U.S. Enhanced geothermal systems in particular involve drilling several miles into the earth and fracturing rocks to create artificial reservoirs.

Mazama, like many of its competitors, has its roots in the fossil fuel industry.

Vasantharajan is a chemical engineer who previously worked on complex oil and gas wells, including in deep-water and heavy petroleum reservoirs. In 2023, Mazama launched with the goal of developing innovative drilling tools and techniques to extract heat from harsh, superhot environments.

The startup hit its first major milestone last October: Mazama said it built the world’s hottest enhanced geothermal system — reaching 331 degrees Celsius (629 degrees Fahrenheit) — at its pilot site near the Newberry Volcano. The project, which received a U.S. Department of Energy grant, earned praise at the time from industry experts.

“This proof of concept opens the door to deeper and hotter opportunities at Newberry and beyond,” said John McLennan of Utah Forge, a federally funded geothermal laboratory in Beaver County, Utah.

Mazama reached a depth of 10,350 feet for its first well. For its second, the company hit the same depth about 80% faster this year — a key improvement when rigs can cost over $100,000 per day to operate. Mazama continues to drill down thousands more feet as it seeks to hit 400℃, a temperature at which such a project could deliver up to 10 times more power than a conventional 200℃ well, according to Mazama.

The new financing will fund Mazama’s next initiative: Project Ceres, which is supported by the Department of Energy. It involves drilling horizontally to demonstrate the potential for 15 megawatts of clean electricity capacity from each well. Vasantharajan said the startup plans to start drilling wells later this year and start testing the system early next year.

“Ceres becomes our blueprint for our scalable, commercial pathway for deployment of superhot rock,” he said.