Enhanced geothermal startup Fervo Energy has raised $462 million to complete its first large-scale power plant and begin development on several others as it races to provide electricity to a power-hungry grid. The new funds will help the company continue work on its 500-megawatt Cape Station power plant in Utah while starting development on several other projects, according to Sara Jewett, senior vice president of strategy at Fervo.
The new funding round was led by B Capital and included participation from a wide array of investors such as AllianceBernstein, Breakthrough Energy Ventures, Devon Energy, Google, Mitsubishi Heavy Industries, and Liberty Mutual Investments, among others. Fervo has an existing deal with Google to supply electricity for its data centers.
The company is targeting 2026 to bring the first phase of Cape Station online, with Jewett confirming it will be mechanically complete this year. This new round comes just six months after the startup announced a $206 million financing package for Cape Station. Last year, Fervo raised nearly $500 million in equity and debt.
Enhanced geothermal technology has seen renewed interest due to rising data center demand. Large tech companies are eyeing geothermal as a potential clean energy solution. An analysis earlier this year found that by 2030, enhanced geothermal could provide nearly two-thirds of new data center demand at competitive prices. The technology is also viewed favorably within the current administration, with Energy Secretary Chris Wright’s previous company having invested in Fervo in 2022.
Fervo is considered a frontrunner in its field, using fracking and directional drilling techniques adapted from the oil and gas industry. Many of its employees have oil and gas backgrounds, applying their drilling expertise to geothermal challenges. This knowledge has significantly reduced well drilling times. The company’s first wells took about a month, but it recently completed one in just 16 days, with average times now in the mid-teens. Reducing drilling time is critical as it roughly halves the cost of wells and allows faster project completion.
For now, Fervo is focused on the Western United States, where hot rocks are closer to the surface. At its Utah site, the company drills down 8,500 feet to reach 450-degree Fahrenheit rock. The plan is to master operations in the West before expanding to other regions or countries, where differing regulations may present the primary hurdle.
Given the skyrocketing energy demand and Fervo’s progress, there have been rumors the company might file to go public in the coming year. Jewett did not comment on those rumors but stated the company is seeing off-the-charts demand.