The next-generation geothermal company Fervo is ending the year much as it began: with news of a quarter-billion-dollar fundraise.
Today, amid a flurry of year-end announcements, Fervo shared that it secured $255 million in new funding and capital availability. About half, or $135 million, came in the form of corporate equity, led by Capricorn’s Technology Impact Fund II. The energy and commodity group Mercuria supplied the additional $120 million letter of credit and term loan facility, and has plans to provide additional cash to accelerate Fervo’s scale-up.
The company’s previous round — $244 million led by shale oil and gas company Devon Energy — came less than a year earlier, in February. In March, post-Series D, Fervo began to plan for scale, including by eyeing project-level finance. And in June, the company signed two deals to supply Southern California Edison with a combined 320 megawatts. Together, the company said, they make up the world’s largest-ever geothermal power purchase agreement.
The company said that its first greenfield development, Cape Station in Southwest Utah, is now fully permitted for up to 2 gigawatts of capacity and will begin generating electricity in 2026.
The second of Fervo’s back-to-back raises is a direct consequence of the fact that “demand for 24/7 carbon-free energy is at an all-time high,” said CEO and co-founder Tim Latimer, nodding specifically to the artificial intelligence boom’s impact on energy demand.
As a result, demand for the clean firm power that geothermal supplies is up — way up. It’s a stunning surge for a company, and an industry, that only in late 2023 saw its first pilot go live in Nevada. While people have used geothermal for power for over a century, the “enhanced” or “next-generation” approaches introduce surface infrastructure — Fervo’s is adopted from the fracking industry — to tap hot rocks deep underground without worrying about natural permeability.
Listen to the Catalyst with Shayle Kann for a deep dive on next-generation geothermal:
A year ago, Maud Texier, global director of clean energy and decarbonization development for Google, expressed optimism about the technology’s market potential. “We would like to see geothermal power follow a similar trajectory as solar has over the last few decades in terms of rapid cost declines and performance improvements,” Texier said at the time.
And as it worked to support geothermal projects, Google itself has been an instrumental driver of the industry’s growth in 2024.
Most significantly, the tech giant unveiled what it dubbed a “clean transition tariff.” The new rate structure is the company’s proposed fix for the problem facing both data centers and the energy transition itself: how to commercialize emerging technologies like enhanced geothermal that could provide 24/7 clean power, but are currently too expensive for utilities to purchase.
The model is at the core of a partnership between Google, Fervo, and the Berkshire Hathaway Energy subsidiary NV Energy to supply 115 megawatts of geothermal to Google’s Nevada data centers. The CTT allows any large customer, like Google, to work directly with a power developer and utility company on a long-term agreement to fund the novel technology.
As Amanda Peterson Corio, Google’s global head of data center energy, told the audience at Latitude Media’s Transition-AI event earlier this month, it’s a model that ideally benefits utilities just as much as Google or Fervo.
The CTT, she said, “helps these utilities bring it into their system because they always have to build the lowest cost, most economic generation. They want to try these new technologies but they can’t wear the risk. And so we’re saying ‘pass that on to us, pass on the value to us, and let’s get this stuff built so we can start to see it scale.’”
While geothermal has yet to achieve anywhere near solar-level cost drop-offs — or even true scale — investors clearly see the potential. And it’s not just Fervo that’s drawing interest.
Sage Geosystems also uses technology from the oil and gas sector, but incorporates storage into its enhanced geothermal approach as well. It uses curtailed renewables to inject water into fractures, holds it underground until electricity is needed, and then it reopens the well to power a turbine. And the company’s approach has drawn the attention of another tech giant: Meta.
In 2027, the Facebook parent company will purchase up to 150 MW specifically for its data centers from Sage, the two announced in August. While that deal is strictly for energy generation rather than storage, the startup announced a separate geothermal storage milestone that same month. As soon as this month, Sage will launch its first “EarthStore” facility in Christine, Texas; in partnership with the San Miguel Electric Cooperative, it will store up to three MW of excess renewables.
Other startups, addressing every part of the geothermal space, are also seeing renewed attention from venture capitalists. XGS Energy, for instance, which developed a closed-loop approach to enhanced geothermal, closed a $20 million Series A this year. And the MIT spinoff Quaise, which is striving for a “geography agnostic” approach that uses high-power microwaves, closed $21 million to fund its first pilot.
Looking to 2025, the momentum will likely continue.
Incoming President Donald Trump has tapped fracking CEO Chris Wright as his secretary of energy. Wright’s company Liberty Energy is an investor in Fervo — which the sector has taken as a sign that they may have an ally in the next administration.
Support may also come from other areas of the federal government. Congress left permitting reform out of the year-end spending deal under consideration this week, which is a blow to geothermal as much as any other major infrastructure project. But Katherine Hamilton, chair of 38 North Solutions, said geothermal is one of the industries with enough bipartisan support on the Hill to get a dedicated bill passed.
Especially in light of load growth and the urgent need for more clean energy across the board, she said, “these problems aren’t going to go away.”
