Google invests in Fervo’s $462 million round to unlock even more geothermal energy | TechCrunch

Improved geothermal startup Fervo Energy has raised $462 million to complete its first large-scale power plant and begin development of several others in its race to deliver electricity to an energy-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 others, Sara Jewett, senior vice president of strategy at Fervo, told TechCrunch.

The new round was led by B Capital with participation from AllianceBernstein, Atacama Ventures, Breakthrough Energy Ventures, CalSTRS, Capricorn Investment Group, Carbon Equity, Centaurus Capital, Climate First, Congruent Ventures, CPP Investments, Devon Energy, Echelon, Galvanize, Google, Impact Science Ventures, Kris Singh, JB Straubel, Liberty Mutual Investments, Marunouchi Innovation Partners, Mercuria, Mitsubishi Heavy Industries, Mitsui and Co., and Sabanci Climate Ventures.

Fervo has one existing agreement with Google to supply it with electricity for its data centers.

Fervo has set a goal of bringing the first phase of Cape Station online in 2026, and Jewett confirmed it will be “mechanically completed” this year. “It’s very real and very tangible.”

The new round comes six months after the startup announced a $206 million financing package, including loans and preferred equity at the project level, for Cape Station. Last year, Fervo raised nearly $500 million in equity and debt.

Enhanced geothermal energy has been in development for years, but has recently boomed as favorable conditions have improved prospects.

The most important of these is the rising demand for data centers. Major technology companies such as Google and Meta have seen geothermal energy as a possible solution to their energy needs. Earlier this year, an analysis by the Rhodium Group found that improved geothermal energy could meet nearly two-thirds of the demand for new data centers by 2030, at or below what operators are paying today.

Geothermal energy is also viewed positively within the Trump administration. Energy Secretary Chris Wright’s previous company, Liberty Energy, participated in a $138 million round that Fervo raised in 2022. Like many of its peers, the company uses fracking and directional drilling techniques borrowed from the oil and gas industry. Many Fervo employees previously worked in the oil and gas sector and applied their knowledge of drilling and underground development to a new challenge.

Fervo is considered a frontrunner among enhanced geothermal startups, drilling deeper than existing geothermal developers to tap into hotter rock and deliver more power.

That knowledge has helped Fervo reduce the time it takes to drill a new well. The company’s first wells took about a month, but this summer Fervo announced it had completed one in 16 days. “We’re averaging in the teens these days in terms of our drilling times,” Jewett said. “That’s pretty good, but we can always make improvements.”

The company’s obsession with drilling time is both economic and a point of pride. “About half of the cost of wells is in the drilling time,” Jewett said. Shorter drilling times allow Fervo to complete power plants faster, generating revenue sooner. They are also a sign of mastery. “It’s also a good representation of how much you’re investing in the well, how much you’re troubleshooting, how many problems are plaguing you that ultimately cost money,” she said.

For now, Fervo is focusing on the western US, where hot rocks are closer to the surface. For example, at the company’s Cape Station site in Utah, Fervo must drill 8,000 feet deep to tap into 450˚F rock.

‘If you go to Pennsylvania or West Virginia, [the hot rock] exists much lower,” Jewett said. Only after the company feels comfortable with how quickly it can drill a well in the West will it expand elsewhere, including abroad.

“There are a lot of places with a lot of potential around the world,” she said.

Within the US, however, there are plenty of different rock types for Fervo to drill through, giving it the potential to build up enough engineering experience before heading to other countries. By then, Jewett expects regulatory differences will be the main hurdle.

Given the skyrocketing demand for energy from data centers and Fervo’s progress at Cape Station, there have been rumors that the company could file for an IPO in the coming year. Jewett wouldn’t comment on that, but she said the company is seeing “extraordinary demand.”