Advanced Geothermal Startups: The Future of Renewable Energy

Geothermal Energy Gains Momentum Following Inflation Reduction Act

Despite significant revisions to the Inflation Reduction Act by congressional Republicans last year, advanced geothermal startups were largely unaffected. The pursuit of renewable energy through drilling appears to be a rare area of bipartisan consensus.

With the regulatory landscape now clarified, geothermal companies are announcing new partnerships and agreements that are expected to accelerate the wider adoption of their technologies.

Fervo Energy Advances Cape Station Project

Fervo Energy, headquartered in Houston, announced on Tuesday the selection of a supplier for critical components of its power plants. This signals substantial progress in the second phase of the Cape Station project located in Utah.

The startup revealed that Baker Hughes, a prominent energy technology and oil field services company, will be responsible for the design and delivery of five steam turbines.

These turbines will collectively produce 300 megawatts of electricity continuously, sufficient to power approximately 180,000 homes.

Deep Geothermal Drilling Techniques

Fervo is at the forefront of companies exploring deeper, hotter geothermal resources. They have successfully adapted directional drilling methods, originally utilized by the oil and gas sector, to access rocks situated nearly 16,000 feet underground.

At this considerable depth, consistent temperatures of around 520˚ F are anticipated.

Financial Backing for Fervo’s Expansion

The agreement with Baker Hughes is supported by $206 million in funding secured by Fervo in June. This includes $100 million in project-level preferred equity from Breakthrough Energy Catalyst, Bill Gates’ climate investment initiative.

Additionally, Mercuria, a global energy trading firm, increased an existing loan by $60 million, and an X-Caliber Rural Capital affiliate, a rural infrastructure investment company, provided $45.6 million in bridge debt financing.

Notably, Chris Wright, a former energy secretary under the Trump administration, oversaw an investment in Fervo in 2022 during his tenure as CEO of Liberty Energy.

Sage Geosystems Partners with Ormat Technologies

Simultaneously, Sage Geosystems, another geothermal startup, announced last week an agreement with Ormat Technologies, a leading geothermal developer, to implement its technology at an existing Ormat power plant.

Innovative Pressure Geothermal Technology

Ormat will license Sage’s “Pressure Geothermal” technology, which involves injecting water under pressure into fractured rock formations. This process allows the water to absorb heat.

Upon returning to the surface, Sage will extract both the heat and pressure from the water, utilizing both to drive turbines and generate electricity.