Advanced Geothermal Startups Gain Momentum With New Deals

Advanced geothermal startups in the United States are beginning to pick up speed as fresh partnerships and funding deals signal growing confidence in the technology. Even as political debates swirl around clean energy policy, geothermal energy appears to be one area that continues to attract support from both sides of the aisle.

Last summer, when congressional Republicans pushed back against several parts of the Inflation Reduction Act, many renewable sectors worried about losing support. However, advanced geothermal projects were largely unaffected. The technology — which taps heat from deep underground to produce electricity — is seen by many lawmakers as a promising and reliable source of clean energy.

With that policy uncertainty mostly resolved, geothermal companies are moving forward with major developments.

One of the most notable announcements this week came from Fervo Energy, a Houston-based startup focused on advanced geothermal systems. The company revealed it has chosen Baker Hughes to supply key equipment for its geothermal power plants. The energy technology giant will design and deliver five steam turbines for the second phase of Fervo’s Cape Station project in Utah.

Once completed, the turbines are expected to generate around 300 megawatts of electricity continuously, enough to power roughly 180,000 homes. The project is part of a broader effort to demonstrate that geothermal energy can provide reliable, around-the-clock renewable power.

Fervo is among a growing group of startups pushing geothermal technology deeper underground. By adapting directional drilling methods commonly used in the oil and gas sector, the company is able to reach rocks nearly 16,000 feet below the surface. At that depth, temperatures can reach about 520°F (271°C) — hot enough to produce significant geothermal energy.

The Baker Hughes agreement follows a $206 million financing package secured by Fervo in June. The funding includes $100 million in project-level preferred equity from Breakthrough Energy Catalyst, the climate investment initiative backed by Bill Gates. Additional support includes a $60 million increase to an existing loan from Mercuria, a global energy trading firm, along with $45.6 million in bridge debt financing from an affiliate of X-Caliber Rural Capital.

The company has also attracted attention from major energy figures. Chris Wright, who later became U.S. energy secretary, previously oversaw an investment in Fervo during his time as CEO of Liberty Energy in 2022.

Meanwhile, another geothermal startup, Sage Geosystems, is also expanding its reach. The company recently signed a deal with geothermal developer Ormat Technologies to deploy its system at one of Ormat’s existing power plants.

Sage’s approach, called “Pressure Geothermal,” works by injecting water into fractured underground rock at high pressure. As the water travels through the hot rock, it absorbs heat. When it returns to the surface, the system captures both the heat and the pressure, using them to drive turbines and generate electricity.

Because geothermal power plants can produce energy 24 hours a day, they are increasingly attracting interest from industries that require constant power. One major example is the fast-growing data center sector. Recent analysis suggests geothermal energy could potentially supply nearly two-thirds of global data center electricity demand by 2030 if the technology continues to scale.

As investment and partnerships grow, advanced geothermal may soon play a much larger role in the future clean energy mix.

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