Geothermal Unicorn Fervo Energy Is Building a Massive Next-Gen Plant in Utah

Between power-hungry AI data centers, domestic manufacturing growth, and electric vehicles, US electricity demand is set to soar in coming years, and utilities aren’t yet sure where the supply to meet this growth will come from. Geothermal power is increasingly looking like a viable option thanks to companies deploying next-generation technologies.

One of these is Fervo Energy, which announced $206 million in funding this week, adding to the $255 million they secured earlier this year. The new funding round was led by Breakthrough Energy Catalyst, part of Bill Gates’ climate investment firm Breakthrough Energy Ventures.

Fervo’s approach, which uses technologies developed for the oil and gas industry, could help push geothermal’s share of total US electricity supply from its current 0.4 percent to 10 percent or greater.

Vertical Drilling for Water

Conventional geothermal works by drilling vertical wells into underground reservoirs of hot water or steam. Wells are up to 10,000 feet (or about 3 kilometers/1.9 miles) deep—and those are the easy ones. The hot water accessed through vertical wells is brought to the surface, where it’s turned into steam that’s used to spin turbines.

A major advantage of geothermal over solar and wind is that it’s not limited by intermittency; the rocks in the Earth’s crust are hot 24/7. This means geothermal is a reliable source of baseload power, and tech companies including Meta and Google have jumped on the geothermal bandwagon.

However, easily accessible underground reservoirs only exist in a handful of geologically active spots around the globe, like Iceland, Kenya, and New Zealand. These countries are positioned over sections of the Earth’s crust that have high heat flow and permeable rock relatively close to the surface, as they’re close to fault lines and areas where there’s volcanic activity.

Such areas exist in the western US as well, namely in California, Nevada, Utah, and Hawaii. In fact, the US leads the world in installed geothermal generating capacity—yet we’ve tapped less than 0.7 percent of our geothermal resources. The majority of those resources can only be accessed via enhanced geothermal technology—and that’s where Fervo comes in.

Horizontal Drilling for Heat

Rather than only drilling vertically to access naturally occurring reservoirs of hot water, Fervo and other enhanced geothermal companies also drill horizontally to create artificial reservoirs in hot, dry rock. After drilling vertically to depths of about 8,000 feet, they bore horizontal tunnels then pump water through them, essentially creating artificial reservoirs. Heat from the rock transfers to the water, which is brought to the surface and used to generate electricity. The water is typically recycled and pumped back into the ground again.

Besides putting more surface area in contact with geothermal fluid and maximizing heat transfer, horizontal drilling allows multiple wells to be drilled from a single surface location. This means there’s a smaller surface footprint and less impact on the environment surrounding the wells.

Horizontal drilling was developed for oil and gas production to find new fossil fuel deposits. Fervo’s cofounder, Tim Latimer, started his career in the oil and gas industry, but after a 2015 flood in his home city of Houston, he realized the urgency of the climate crisis and decided to find a way to apply fossil fuel technologies to renewable energy.

Horizontal drilling isn’t the only technology Latimer repurposed for geothermal. Fervo installs fiber-optic cables in its wells to monitor real-time data on flow, temperature, and performance. They also use an advanced drill bit technology called polycrystalline diamond compact (PDC). PDC contains lab-grown diamond, one of the hardest and most resilient materials in existence. The drill bits can cut through harder types of rock, do so faster, and go longer without wearing down. In addition, Latimer said in an interview with Time Magazine, “One of the things that we drove forward was a way of pumping fluid down while we’re drilling that cools your drilling system more efficiently than in an oil and gas operation.”

Fervo set multiple drilling performance records with its recent completion of an appraisal well in southwest Utah (part of the larger project the company will use its new funding on): The 15,765-foot-deep Sugarloaf well will reach a temperature of 520 degrees Fahrenheit and was completed in 16 drilling days. The company says that’s a 79 percent reduction in drilling time compared to the US Department of Energy baseline for ultradeep geothermal wells.

Beyond the Low-Hanging Fruit

Fervo’s technology is making it feasible to develop geothermal power plants in areas where they wouldn’t have been possible before, mainly because the economics wouldn’t have made sense. The company plans to use the $206 million in new funding to keep building out its Cape Station plant in Beaver County, Utah. Phase I of the project plans to deliver 100 megawatts of power to the grid starting in 2026, and Phase II will add another 400 megawatts by 2028. The site has received permitting approval to expand up to two gigawatts.

Fervo ultimately has ambitions to go far beyond those two gigawatts—and the resources to do so definitely exist. A US Geological Survey assessment published last month says geothermal energy in the Great Basin alone, which spans Nevada and neighboring states, could produce electricity equal to one-tenth of the current US power supply.

“Principally, there’s virtually an unlimited amount of geothermal energy,” Latimer said. “The world is really big, and the world is really hot. We’ve got billions of years of energy under our feet. It’s all a question about how much you can access economically.”