When Congressional Republicans took a sledgehammer to the Inflation Reduction Act last summer, advanced geothermal startups were largely spared. Drilling for renewable energy appears to be one of the few things that engenders bipartisan support.
Now, with the uncertainty settled, geothermal companies are announcing deals that promise to pave the way for broader deployment of their technology. Houston-based Fervo Energy said on Tuesday it has picked a supplier for key parts of its power plants, signaling that the second phase of the Cape Station project in Utah was moving full steam ahead. The startup said that Baker Hughes would design and deliver five steam turbines. Altogether, they will generate 300 megawatts of electricity around the clock, enough to power around 180,000 homes.
Fervo is one of several startups pursuing deeper, hotter geothermal wells. The company has adapted directional drilling techniques used by the oil and gas industry to tap rocks nearly 16,000 feet below the surface. At that depth, temperatures are expected to maintain a steady 520 degrees Fahrenheit.
Behind the Baker Hughes deal is 206 million dollars in financing that Fervo secured in June. This is split between 100 million dollars in project-level preferred equity from Breakthrough Energy Catalyst, a 60 million dollar increase to an existing loan from Mercuria, and 45.6 million dollars in bridge debt financing from an X-Caliber Rural Capital affiliate. Trump energy secretary Chris Wright oversaw an investment into Fervo in 2022 when he was CEO of Liberty Energy.
Meanwhile, fellow startup Sage Geosystems said last week that it had signed an agreement with geothermal developer Ormat Technologies to deploy its technology at one of Ormat’s existing power plants. If all goes as planned, Ormat will license Sage’s Pressure Geothermal technology, which injects water into fractured rock under pressure, where it absorbs heat. When the water returns to the surface, Sage harvests both the heat and pressure from it, using both to spin turbines to generate electricity.
Because geothermal power plants generate heat around the clock, they have attracted the interest of data center developers. A recent analysis said that the technology could generate enough electricity to supply nearly two-thirds of data center demand by 2030.