Quaise Energy raises $134M to fuel superhot geothermal ambitions

Startup Quaise Energy has raised $134 million to advance its first superhot geothermal power plant in central Oregon.

On Tuesday, the Houston-based company announced the first tranche of its Series B financing round, which brings the firm’s total funding to $230 million. Quaise is developing a 50-megawatt plant near the Newberry Volcano that will use novel rock-melting technology to tap into significantly hotter geothermal resources than conventional plants can.

The fundraise comes as Quaise prepares to start drilling its first test well later this month for the Oregon plant, called Project Obsidian, which is slated to come online by 2030.

“Our ambition is to power civilization with Earth’s most compelling energy source,” Carlos Araque, CEO and president of Quaise, said in a statement. ​“This round takes us from field-proven technology to first commercial revenues.”

The Series B was led by Prelude Ventures, which backs early-stage climatetech firms, and included strategic investments from two major Japanese energy players: the power generation company JERA and the petroleum refiner Idemitsu Kosan. Japan is increasingly investing in cutting-edge geothermal projects to help meet the land-constrained nation’s need for clean, around-the-clock power — and to harness the potential of its 111 active volcanoes.

In the United States, the geothermal industry is experiencing a renaissance as new technologies make the energy resource viable in a wider range of geographies. Soaring power demand from data centers is fueling much of that interest, as are state renewable-energy targets and the electrification of vehicles and buildings.

In May, the startup Fervo Energy became the first next-generation geothermal firm to go public, netting about $1.9 billion. The company focuses on enhanced geothermal systems, an emerging approach that involves fracturing rocks and pumping them full of water to create artificial reservoirs. Fervo is developing a large-scale enhanced geothermal plant in Utah that is set to start sending power to the grid later this year.

At Quaise’s Project Obsidian site, the company will initially use standard drilling tools to build an enhanced system. But as early as next year, Quaise aims to deploy its millimeter-wave drilling techniques to access even hotter and deeper geothermal resources.

The technology uses high-frequency beams to melt and vaporize rocks at depths and temperatures that are too difficult or costly for conventional tools to access. Quaise aims to tap rocks at 300 to 500 degrees Celsius (572 to 932 degrees Fahrenheit) to heat fluids that drive steam turbines on the surface. The hotter the fluid, the more efficient and powerful the system, which means projects can derive more energy from a smaller number of wells.

Quaise isn’t alone in chasing the promise of superhot geothermal. The startup Mazama Energy is developing its own pilot project at the Newberry Volcano, where it says it can reach temperatures of over 330°C. And major research projects are moving forward in Iceland, Japan, and New Zealand.

As Quaise develops its Oregon plant, the company is continuously demonstrating its unique approach at its field site in central Texas. Quaise said it drilled through more than 100 meters (330 feet) of granite there last year and is now approaching 1 kilometer of depth, which would represent a milestone for its drilling technology.

Meanwhile, Quaise is looking to secure another $100 million in grants and debt for Project Obsidian, on top of the Series B funding. The firm has already inked a power-purchase agreement for the initial 50 MW with an undisclosed customer, and it’s working to sign deals for an additional 200 MW in future capacity.

“We have backed Quaise since the beginning because we believed accessing superhot rock would unlock geothermal energy at a scale the world has never seen,” Mark Cupta, managing director at Prelude Ventures, said in a press release. ​“What the team has achieved in the field and what they are now building at Project Obsidian validates that conviction.”