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The startup Fervo Energy just raised another $462 million to build America’s next generation of geothermal power plants.
On Wednesday, the Houston-based company said it closed a Series E funding round led by a new investor, B Capital, a global venture capital firm started by Facebook cofounder Eduardo Saverin. With the latest announcement, Fervo says it’s raised about $1.5 billion overall since 2017 as it develops what could become the world’s largest “enhanced geothermal system” in Utah.
“Fervo is setting the pace for the next era of clean, affordable, and reliable power in the U.S.,” Jeff Johnson, general partner at B Capital, said in a news release.
The Series E funding comes as Fervo reportedly prepares to become a publicly traded company, which would let it raise even more capital for its ambitious projects. When asked about a potential IPO, Fervo said only that the company is “focused on executing our development plan” in an email to Canary Media. “We have a lot of capital needs going forward to fuel our planned growth and will be tapping a lot of different opportunities to make that happen.”
Fervo is part of a burgeoning movement in the U.S. and globally to unleash geothermal energy in many more places.
The carbon-free energy from deep underground is available around the clock, but it represents only about 0.4% of total U.S. electricity generation — largely because the existing technology is constrained by geography. Today’s geothermal plants rely on naturally occurring reservoirs of hot water and steam to spin their turbines and generate power, which are available in a limited number of places.
Fervo’s approach involves creating its own reservoirs by fracturing hot rocks and pumping them full of water. The company uses the same horizontal drilling techniques and fiber-optic sensing tools as the oil and gas industry in an effort to reach deeper wells and hotter sources than is possible with conventional geothermal technology.
Its flagship development, Cape Station, is well underway in Beaver County, Utah. The project’s initial 100-megawatt installation is on track to start delivering power to the grid in October 2026, which will make it the first commercial-scale enhanced geothermal project to hit such a milestone worldwide, according to Fervo. An additional 400 MW is slated to come online in 2028.
“It’s very exciting to see at this point in time, because of the tangible progress that has been made,” Sarah Jewett, Fervo’s senior vice president of strategy, told Canary Media. “It’s really looking like a power project out there” in Utah, she added, noting that an electrical substation and three power facilities now sit alongside the drilling equipment and well pads. About 350 people currently work at the site.
Fervo has already completed a pilot project in Humboldt County, Nevada. The 3.5-MW facility went online in November 2023 and supplies power directly to the Las Vegas-based utility NV Energy. Google, which backed the project, also joined the Series E as one of Fervo’s new investors.
The financing announced this week will enable the startup to continue building Cape Station and to start development on other project sites where Fervo is conducting rock and soil analyses, Jewett said. One of the new projects will be in Nevada, where Fervo is working with NV Energy and Google to develop 115 MW of geothermal energy that will power the tech giant’s data centers. But the startup isn’t ready to disclose more details on the other locations.
Jewett said the fact that Fervo’s Series E was oversubscribed — meaning the firm raised more funding than it initially sought — is a reflection of the robust U.S. market for clean energy that’s available 24/7, not only for powering data centers but also for new domestic factories and electrified vehicles and buildings.
“There is just massive demand for the type of electricity that we’re providing,” she said.
Hot rocks might be the next big thing in energy.
Global investment in geothermal energy is growing quickly — and it’s expected to keep climbing in the years to come, per new data from research firm Rystad Energy.
At the start of the 2020s, less than $2 billion flowed each year toward projects that harness the Earth’s natural underground heat to either produce electricity or directly warm buildings. By 2030, that figure could hit nearly $9 billion, Rystad predicts.
Geothermal systems have been around for decades in places where the Earth’s warmth sits close to the planet’s surface — think regions with lots of hot springs, for example. But decarbonization goals and rising power demand are fueling renewed enthusiasm for the always-available clean energy source, and emerging technologies mean companies can tap into it in areas with more challenging terrain.
Geothermal heating is most popular in Europe, where there’s growing interest in using the energy source for thermal networks that can warm up multiple buildings. Iceland, which has long leveraged its volcanic geology to keep homes toasty, is the famous example here.
When it comes to electricity, geothermal makes up less than 1% of the world’s supply. The U.S. is the global leader in terms of geothermal power capacity, with much of it located in California’s steamy Geysers region. It’s no surprise, then, that America is among the countries investing the most in the energy source, topping the chart this year and last.
Rystad doesn’t expect the U.S. to be No. 1 for much longer, predicting that volcano-laden Indonesia will steal the top spot for investment starting in 2027. Even so, geothermal could have a bright future in the U.S. It’s something of a unicorn: a clean energy source that has broad support among both Democrats and Republicans.
Geothermal energy is undergoing a renaissance, thanks in large part to a crop of buzzy startups that aim to adapt fracking technology to generate power from hot rocks virtually anywhere.
Meanwhile, the conventional wisdom on conventional geothermal — the incumbent technology that has existed for more than a century to tap into the energy of volcanically heated underground reservoirs — is that all the good resources have already been mapped and tapped out.
Zanskar is setting itself apart from the roughly one dozen geothermal startups currently gathering steam by making a contrarian bet on conventional resources. Instead of gambling on new drilling technologies, the Salt Lake City–based company uses modern prospecting methods and artificial intelligence to help identify more conventional resources that can be tapped and turned into power plants using time-tested technology.
On Thursday, Zanskar unveiled its biggest proof point yet.
The company announced the discovery of Big Blind, a naturally occurring geothermal system in western Nevada with the potential to produce more than 100 megawatts of electricity. It’s the first “blind” geothermal system — meaning that the underground reservoir has no visible signs, such as vents or geysers, and no data history from past exploration — identified for commercial use in more than 30 years.
In total, the United States currently has an installed capacity of roughly 4 gigawatts of conventional geothermal, most of which is in California. That makes the U.S. the world’s No. 1 user of geothermal power, even though the energy source accounts for less than half a percentage point of the country’s total electricity output.
The project is set to go into development, with a target of coming online in three to five years. Once complete, it will be the nation’s first new conventional geothermal plant on a previously undeveloped site in nearly a decade, though it may come online later than some next-generation projects.
“We plan to build a power plant there, and that means interconnection, permitting, construction, and drilling out the rest of the well field and the power plant itself. But that’s all pretty standard, almost cookie-cutter,” said Carl Hoiland, Zanskar’s cofounder and chief executive. “We know how to build power plants as an industry. We’ve just not been able to find the resources in the past.”
Prospecting is where Zanskar stands out. While surveying, the company’s geologists found a “geothermal anomaly” indicating the site’s “exceptionally high heat flow,” according to a press release. The team then ran the prospecting data through the company’s AI software to predict viable locations to drill wells in order to test the temperature and permeability of the system.
Zanskar drilled two test wells this summer. Roughly 2,700 feet down, the drills hit a porous layer of the resource with temperatures of approximately 250 degrees Fahrenheit. The company said those “conditions exceed minimum thresholds for utility-scale geothermal power” and “contrast greatly” with other areas in the region, which would require digging as far down as 10,000 feet — potentially viable for the next-generation technologies Zanskar’s rivals are pitching.
The firm’s announcement comes as the U.S. clamors for more electricity, in large part because of shockingly high forecasts of power demand from data centers. Many of the tech companies developing data centers, like Google and Meta, are eager to pay big for “clean, firm” power — electricity that is carbon-free and available 24/7. Geothermal, whether advanced or conventional, is a tantalizing option for meeting those standards, and tech giants already anchor some next-generation projects.
Ultimately, Zanskar thinks it can convince data centers to colocate near where it finds resources.
If it’s able to find additional untapped resources that are suitable for conventional technology, Zanskar could deliver new geothermal power faster and cheaper than the flashier startups on the scene can. Those firms, including Fervo Energy and XGS Energy, are making significant progress in bringing down the cost of their drilling techniques, but they are still using new technologies that remain more expensive than the traditional approach, which has been refined over time.
“The core reason we started the company is we came to believe that the Department of Energy’s estimates of hydrothermal potential were just orders of magnitude too low and were all based on studies that are over 20 years old,” Hoiland said. “We think that there’s 10 times more out there than they thought, and that every one of those sites can be 10 times more productive in terms of the number of megawatts they can generate.”
Among the notable cheerleaders of this same theory? The chief executive of the leading next-generation geothermal company. Responding to a post on X from Zanskar cofounder and chief technology officer Joel Edwards describing how much more conventional geothermal remains untapped, Fervo CEO Tim Latimer wrote, “Joel makes a great point about geothermal that you see all the time in resource development: when technology improves, turns out there’s a lot more of something than we thought.”
This story was first published by Inside Climate News.
The U.S. Department of Energy has approved an $8.6 million grant that will allow the nation’s first utility-led geothermal heating and cooling network to double in size.
Gas and electric utility Eversource Energy completed the first phase of its geothermal network in Framingham, Massachusetts, in 2024. Eversource is a corecipient of the award along with the city of Framingham and HEET, a Boston-based nonprofit that focuses on geothermal energy and is the lead recipient of the funding.
Geothermal networks are widely considered among the most energy-efficient ways to heat and cool buildings. The federal money will allow Eversource to add approximately 140 new customers to the Framingham network and fund research to monitor the system’s performance.
The federal funding was first announced in December 2024 under the Biden administration. However, the contract between HEET and the Department of Energy was not finalized until Sept. 30 and was just announced Wednesday. The agreement, which allows construction to move forward, comes as the Trump administration is clawing back billions of dollars in clean energy funding, including hundreds of millions of dollars in Massachusetts.
“This award is an opportunity and a responsibility to clearly demonstrate and quantify the growth potential of geothermal network technology,” Zeyneb Magavi, HEET’s executive director, wrote in a statement.
The existing system provides heating and cooling to approximately 140 residential and commercial customers in the western suburb of Boston. The network taps low-temperature thermal energy from dozens of boreholes drilled several hundred feet below ground, where temperatures remain steady at 55 degrees Fahrenheit. A network of pipes circulates water through the boreholes to each building, enabling electric heat pumps to provide additional heating or cooling as needed.
“By harnessing the natural heat from the earth, we are taking a significant step toward increasing our energy independence and promoting abundant local energy sources,” Charlie Sisitsky, Framingham’s mayor, wrote.
Progress on the project is a further indicator that despite their opposition to wind and solar, the Trump administration and Republicans in Congress appear to back geothermal energy.
President Donald Trump issued an executive order on his first day in office declaring an energy emergency that expressed support for a limited mix of energy resources, including fossil fuels, nuclear power, biofuels, hydropower, and geothermal energy.
The One Big Beautiful Bill Act, passed by Republicans and signed by Trump in July, quickly phases out tax credits for wind, solar, and electric vehicles. However, the bill left geothermal heating and cooling tax credits approved under the Inflation Reduction Act of 2022 largely intact.
A reorganization of the Department of Energy announced last month eliminated the Office of Energy Efficiency and Renewable Energy but kept the office for geothermal energy as part of the newly created Hydrocarbons and Geothermal Energy Office.
“The fact that geothermal is on this administration’s agenda is pretty impactful,” said Nikki Bruno, vice president for thermal solutions and operational services at Eversource. “It means they believe in it. It’s a bipartisan technology.”
Plans for the expansion project call for roughly doubling Framingham’s geothermal network capacity at approximately half the cost of the initial buildout. Part of the estimated cost savings will come from using existing equipment rather than duplicating it.
“You’ve already got all the pumping and control infrastructure installed, so you don’t need to build a new pump house,” said Eric Bosworth, a geothermal expert who runs the consultancy Thermal Energy Insights. Bosworth oversaw the construction of the initial geothermal network in Framingham while working for Eversource.
The network’s efficiency is anticipated to increase as it grows, requiring fewer boreholes to expand. That improvement is due to the different heating and cooling needs of individual buildings, which increasingly balance each other out as the network expands, Magavi said.
The project still awaits approval from state regulators, with Eversource aiming to start construction by the end of 2026, Bruno said.
“What we’re witnessing is the birth of a new utility,” Magavi said. Geothermal networks “can help us address energy security, affordability and so many other challenges.”
New Haven, Connecticut, has broken ground on an ambitious geothermal energy network that will provide low-emission heating and cooling to the city’s bustling, historic Union Station and a new public housing complex across the street.
The project will play a crucial role in the city’s attempt to decarbonize all municipal buildings and transportation by the end of 2030. As one of Connecticut’s first geothermal energy networks, it will also serve as a case study of how well the technology can both lower energy costs and reduce greenhouse gas emissions as the state considers promoting wider adoption of these systems.
“At the end of the day, you’re going to have the most efficient heating and cooling system available for our historic train station as well as roughly 1,000 units of housing,” said Steven Winter, New Haven’s executive director of climate and sustainability. “Anything we can help do to improve health outcomes and reduce climate change–causing emissions is really valuable.”
In climate-conscious states across the country, thermal energy networks are emerging as a promising way to reduce reliance on fossil fuels for heating, lower utility bills, and create a pathway for the gas industry to transition its business model for a cleaner-energy future. These neighborhood-scale systems use ground-source heat pumps and a web of underground pipes to deliver heating and cooling to connected buildings.
The thermal energy for heating can come from a variety of sources, including geothermal systems, industrial waste heat, and surface water. Because no fossil fuels are directly burned to produce heat, the only emissions are those created generating the electricity to run the network. At the same time, the systems insulate customers from volatile and rising natural gas prices.
“There’s a lot of excitement around networked geothermal because it actually offers solutions to a lot of problems,” said Samantha Dynowski, state director of Sierra Club’s Connecticut chapter. “It can be a more equitable solution for a whole neighborhood, a whole community — not just a single home.”
The practice of deploying such systems as a neighborhood loop is relatively new, but the component parts are well established: Geothermal heat pumps have been around for more than 100 years, and the pipe networks are very similar to those used for natural gas delivery.
“The backbone technology is the same kind of pipe you use in the gas system,” said Jessica Silber-Byrne, thermal energy networks research and communications manager for the nonprofit Building Decarbonization Coalition. “They’re not experimental. This isn’t an immature technology that still needs to be proved out.”
There are a handful of networked geothermal systems around the United States, owned by municipalities, private organizations, and universities. A couple of miles away from the Union Station project, at Yale University, development is underway on a geothermal loop serving several science buildings.
But the idea is catching on among gas utilities, too. The nation’s first utility-owned geothermal network came online in Framingham, Massachusetts, in June 2024, and just received an $8.6 million federal grant that will allow it to double in size. Across the country, 26 utility thermal energy network pilots are underway, and 13 states have passed some form of legislation exploring or supporting the approach, according to the Building Decarbonization Coalition.
In Connecticut, a comprehensive energy bill that passed earlier this year established a grant and loan program to support the development of thermal energy networks. Advocates are now pushing Gov. Ned Lamont, a Democrat, to issue the bonds needed to fund the new initiative.
The New Haven network could provide a concrete example of the opportunities offered by such systems.
The plan began when the federal government was seeking applications for its Climate Pollution Reduction Grant program, an initiative created by President Joe Biden’s 2022 Inflation Reduction Act. Union Station seemed like an excellent property to retrofit because of its age, its size, and its prominent role in the city: Nearly a million travelers pass through the station each year, making it one of Amtrak’s busiest stops and an excellent platform for demonstrating the potential of geothermal networks.
“We thought it would be a powerful message to send for this beautiful landmark building that’s also the gateway to the city,” Winter said.
In July 2024, the federal program awarded the proposal just under $9.5 million; though there were questions earlier in the year about whether the Trump administration would attempt to block the money, the grant program ultimately proceeded. Planners expect federal tax credits and state incentives to cover the remaining $7 million in the project budget.
The network will use as many as 200 geothermal boreholes. Fluid will circulate through pipes in each of these wells, picking up thermal energy stored within the earth; in hotter weather, when cooling is needed, the systems will transfer energy back into the ground.
The city began drilling the first test boreholes in November. The results were promising: One test hole was able to extend down 1,200 feet, significantly farther than the 850 feet projected, Winter said. If more boreholes can be drilled that deep, it could mean fewer holes are needed overall — and thus less materials — making the project more efficient, he said.
Construction of the network is still in the early stages. The test boreholes should be completed this month, and the design of the ground heat exchanger — the underground portion of the system in which the thermal energy is transferred — is about halfway done, Winter said. The city is also preparing to accept proposals for the retrofit of the heating and cooling systems in the station itself.
The goal is to have the system up and running in the latter half of 2028. The apartment units, which are still in the design phase, will be connected to the system as they are built.
Even as the initial plan comes together, New Haven is already considering the possibility of expanding the nascent network to include more buildings, such as other apartment units under development nearby, existing buildings in the neighborhood, and a police station around the corner, Winter said.
“Ideally, we end up with a municipally owned thermal utility that can help decarbonize this corner of the city and provide affordable, clean heating and cooling,” he said.
In the early 2000s, the owners of the Mammoth Pacific geothermal station proposed expanding the plant into an area just east of California’s Yosemite National Park. The project boasted on its website in 2004 that the potential new wells, which would be located in one of the state’s richest heat resources, had been “carefully chosen to reduce or avoid potential environmental impacts.”
By 2009, the company had produced a study on how the development could impact plant life. The power station had been running since the 1980s, so the decades of data on its safe operation seemed to bode well for a swift approval at a moment when, much like today, rising electricity demand and concern over climate change were converging to bolster development of carbon-free power. The prospects looked so good that, in 2010, geothermal giant Ormat Technologies bought the company that owned Mammoth. In 2013 — a decade after the expansion was first conceived — federal regulators gave the project the green light.
Yet that was just the start of Mammoth Pacific’s permitting saga.
An environmental group and local opponents quickly accused regulators of failing to properly consider how the geothermal project could release organic gases into the atmosphere and groundwater, and filed a lawsuit under the California Environmental Quality Act. The litigation took years to resolve. By the time Ormat finally completed the expansion in 2022, the so-called Casa Diablo IV project had been in the works for nearly two decades.
“People in the industry know it took 17 years to expand an existing facility,” said Joel Edwards, the cofounder and chief technology officer at the geothermal startup Zanskar. “And that’s the last facility that’s been built in California.”
Building a new geothermal plant from scratch on an undeveloped site, he said, would presumably “be an even bigger lift.”
A bill that California lawmakers passed almost unanimously last month promised to change that calculus for the geothermal industry. AB 527 would have provided geothermal developers with categorical exemptions to CEQA reviews, clearing the way for companies to carry out the most expensive part of the process — drilling wells to identify viable hot-rock resources — without the costly burden of lawsuits and ecological assessments the state’s landmark environmental law imposes. A companion bill, known as AB 531, gives geothermal energy projects the same special “environmental leadership” status as solar, wind, energy storage, and hydrogen facilities.
But, in a move that has mystified the industry, Gov. Gavin Newsom (D) vetoed AB 527. In his letter explaining the rejection, Newsom said the legislation would have required state regulators to “substantially increase fees on geothermal operators to implement the new requirements imposed by the bill.”
Of more than half a dozen industry executives and analysts that Canary Media spoke to, however, none believed that argument.
“Something doesn’t add up,” said Samuel Roland, a research fellow at the Foundation for American Innovation who has tracked the bill. “It was a political play for him.” The foundation is a right-leaning think tank that advocates for speeding up energy deployments.
While Roland said it’s difficult to determine exactly which groups may have persuaded the governor to block the legislation, “the only people who were objecting were environmentalists,” a dynamic that echoes the fight against Mammoth Pacific’s expansion.
“It does seem like it was a giveaway to environmental groups,” Roland said.
Izzy Gardon, a spokesperson for Newsom, declined to comment. “The Governor’s veto message speaks for itself,” he wrote in an email to Canary Media.
California’s unique geology has made it the destination for the geothermal industry for decades. The Western Hemisphere’s first commercial geothermal power station opened in California in 1960. That plant — The Geysers geothermal complex, located in a valley of the Mayacamas Mountains north of the San Francisco Bay Area — remains the world’s largest electrical station powered by the planet’s heat.
The state has enormous untapped potential — and a growing need for electricity. California has shut down all but one of its nuclear power plants over the past few decades. In recent years, persistent drought has made the state’s hydroelectric stations less dependable. Solar generation has soared, and a growing fleet of batteries has helped steady the supply when sun-soaked days threaten to overwhelm the grid with electrons and dark nights send panels’ production plummeting. But the state remains reliant on natural gas and power imports from neighboring states to meet surging demand. To achieve its carbon-cutting goals and bring down electricity rates that are more than double that of nearby states, California needs to increase its supply of clean, firm generation.
Burning biomass, such as dry wood cleared from California’s forests to help prevent wildfires, could provide one option — but that still generates carbon dioxide, and the demand for wood might encourage logging of healthy trees. Despite the state’s reversal of its plan to shut down Diablo Canyon, its final atomic station, building new nuclear reactors is still banned in California. Hydropower is dogged by water scarcity. That makes geothermal a particularly attractive choice.
It’s not without some drawbacks. Conventional geothermal, which involves drilling down into underground reservoirs warmed by volcanic heat, is limited to easily accessible areas and comes with the challenge of maintaining the subterranean water source over time. Next-generation geothermal companies are rapidly advancing drilling techniques that the oil and gas industry perfected in recent years to go deeper and harvest heat from dry, hot rocks, vastly expanding the locations with potential to generate energy. In a seismically active state, that carries some risk since the version of next-generation geothermal that uses hydraulic fracturing, or fracking, technology to drill could trigger earthquakes.
But every energy source comes with challenges, and neighboring states such as Utah, Nevada, and New Mexico are aggressively pursuing next-generation geothermal projects.
In theory, the best place to develop those first-of-a-kind plants would be California, with its energy-affordability woes and status as a major global economy.
“Utah has low prices, and geothermal is still expensive,” said Thomas Hochman, director of infrastructure and energy policy at the Foundation for American Innovation. “If you want to bring geothermal down to cost parity with other technologies, you have to sell it to Californians. As a result, geothermal scaling runs through California.”
For the most part, however, developers are steering clear of the Golden State. Companies such as Fervo Energy, XGS Energy, and Sage Geosystems — three of the biggest next-generation startups — are based in Houston and are pursuing debut projects in Utah, New Mexico, and Texas itself. Zanskar, a developer using modern prospecting methods to tap conventional geothermal resources, is headquartered in Salt Lake City. States such as Arizona, Colorado, Idaho, and Oregon are “really exciting” as potential next areas for development, Edwards said.
“If California ever fixes CEQA,” he added, “it could be huge.”
The regulatory hurdles represent “the only real barrier” to geothermal taking off in the Golden State, said Wilson Ricks, a Princeton University researcher who focuses on geothermal.
“You can find projects pretty much all across the Western states but very few, if any, in California, despite it being the biggest potential market,” Ricks said.
“It’s stark. People are exploring projects in Texas, which has far, far worse-quality resources than the ones in California,” he added. “That’s because of the regulatory environment there. So the fact that regulatory barriers are going to remain in place doesn’t give me a lot of confidence that California’s going to be leaping ahead on geothermal anytime soon.”
In response to emailed questions, Fervo said it maintains leases near the Salton Sea region, an area with vast geothermal potential. But those parcels aren’t currently under development since the state’s permitting regime makes investing in drilling too risky.
“With the right legislative and permitting reforms, similar to those that were proposed in AB 527, the state could better position in-state resources for development and unlock the enormous economic benefits that come with local clean energy development,” said Sarah Harper, Fervo’s senior policy and regulatory affairs associate.
Not everyone is so bearish. Ormat, the nation’s largest geothermal operator of conventional sites, said the fact that the vetoed bill passed in the Legislature without a single no vote, just a handful of abstentions, shows there’s political support for geothermal “like we haven’t seen in the past.”
“It’s like a revolution for geothermal,” said Marisol Collons, Ormat’s manager of communications and government affairs. “We’re still highly optimistic about the future and ready to kickstart all our next legislative sessions across the country.”
While Fervo lamented that a small number of green groups fought the bill, the company said the fact that there were “more environmental groups in favor than there were ones opposed, or even neutral,” left it feeling hopeful about the possibility of future legislation.
For XGS, a next-generation company whose technology forgoes fracking and minimizes its water usage by keeping the fluid for its operations contained in a closed tube, California remains “the highest-priority market.”
“We feel that California provides a unique combination from both a resource perspective and a market perspective,” said Lucy Darago, chief commercial officer at XGS. “It’s a high-demand market that really needs the attributes that geothermal brings.”
The company backed the bill and said categorical exemptions from CEQA permitting for drilling would have shaved anywhere from six months to two years off its development efforts.
“It’s disappointing, but I’m optimistic that a future iteration of the bill will pass,” Darago said.
The key, she said, is time. Geothermal will grow in California no matter what — of that, Darago said, she’s certain. The question is whether that happens in time to stave off blackouts and slash emissions on the trajectory the state has set for its electrical system.
“The industry is going to happen. It will get there,” she said. “But if it’s going to get there on a timeline that’s meaningful for California’s resource-adequacy challenges and climate goals, we’ll need some of these changes.”
Eavor, an advanced-geothermal startup, says it has significantly reduced drilling times and improved technologies at its nearly online project in Germany — milestones that should help it drive down the costs of harnessing clean energy from the ground.
On Tuesday, the Canadian company released results from two years of drilling activity at its flagship operation in Geretsried, Germany, giving Canary Media an exclusive early look. Eavor said the data validates its initial efforts to deploy novel “closed-loop” geothermal systems in hotter and deeper locations than conventional projects can access.
“Much like wind and solar have come down the cost curve, much like unconventional shale [oil and gas] have come down the cost curve, we now have a technical proof-point that we’ve done that in Europe,” Jeanine Vany, a cofounder and executive vice president of corporate affairs at Eavor, said from the Geothermal Rising conference in Reno, Nevada.
Eavor is part of a fast-growing effort to expand geothermal energy projects beyond traditional hot spots like California’s Salton Sea region or Iceland’s lava fields. The company and other firms — including Fervo Energy, Sage Geosystems, and XGS Energy — are adapting tools and techniques from the oil and gas industry to be able to withstand the harsh conditions found deep underground.
The industry wants to produce abundant amounts of clean electricity and heat virtually anywhere in the world, and it could serve as an ideal, around-the-clock pairing to solar and wind power. But geothermal companies are only just starting to put their novel technologies to the test.
Eavor began drilling in Geretsried in July 2023, shortly after winning a $107 million grant from the European Union’s Innovation Fund. For its first “loop,” the company drilled two vertical wells reaching nearly 2.8 miles below the surface, then created a dozen horizontal wells — like tines of a fork — that each stretch 1.8 miles long. Once in place, the wells are connected underground and sealed off so that they operate like radiators: As water circulates within the system, it collects heat from the rocks and brings it to the surface.
Operations on the first of four loops are nearly complete, and the startup plans begin construction on its second loop in March 2026. All told, the system will supply 8.2 megawatts of electricity to the regional grid and 64 MW of district heating to nearby towns, operating flexibly to provide more heat during chilly winter months and produce more electricity in summer.
In its new paper, Eavor said it encountered significant challenges in drilling its first eight of twelve lateral wells, which took over 100 days to complete — a major expense in an industry where drilling rigs can cost about $100,000 a day to run. But the company said it improved its techniques and adapted its equipment in ways that reduced the drilling time for the remaining four wells by 50%.
For example, Eavor said it successfully deployed an insulated drill pipe technology, which can actively cool drilling tools even as they encounter increasingly hotter conditions underground and helps to increase drilling speed. The adjustments also enabled Eavor to triple the length of time its drill bit could run before wearing out, further reducing downtime during the operation.
On top of cutting drilling time and costs, these improvements should also pave a path to boosting Eavor’s thermal-energy output per loop by about 35%, Vany said.
The Germany project will be the first commercial system of its kind when it starts producing power later this year. But other next-generation approaches — like the enhanced geothermal systems that Fervo is building in Utah and operating in Nevada — are also scaling up.
Enhanced geothermal involves fracturing rocks and pumping down liquids to create artificial reservoirs. The hot rocks directly heat the liquids, which return to the surface to make steam. This approach is relatively more efficient at extracting heat from the ground, but it can also raise the risk of inducing earthquakes or affecting groundwater — though experts say that’s unlikely to happen in well-managed projects. In places that ban fracking, like Germany, closed-loop systems can still move forward.
But the closed-loop design has trade-offs of its own, said Jeff Tester, a professor of sustainable energy systems at Cornell University and the principal scientist for Cornell’s Earth Source Heat project. Namely, the pipes can limit the transfer of heat from the underground rocks to the fluids inside the pipe, which in turn limits how much energy a system can produce.
“While companies developing closed-loop systems can make them work, the main challenge they face is for fluid temperatures and flow rates to be high enough to pay off economically,” Tester said. “You can get energy out of the ground; it’s just, how much can you sustainably and affordably produce from a single closed-loop well connection?”
Vany said that Eavor’s modeling shows its technology is already in line with the “levelized cost of heat” in Europe, which estimates the average cost of providing a unit of heat over the lifetime of the project. That figure can fluctuate between $50 and $100 per megawatt-hour thermal in the region’s volatile energy market, she said.
“After we’ve drilled those first four loops, we will be at the bottom of the learning curve,” Vany added. “And that’s the purpose of the Geretsried project.”
When Matt Cooper found out in 2020 that the northwest Colorado coal mine where he works would close by the end of the decade, he was pissed.
Questions raced through his mind: Why didn’t the mine’s leaders fight harder to keep it open? And why was the coal industry being singled out? “Is it political?” he wondered.
But coal has been declining in the U.S. for over 20 years, outcompeted by cheap fossil gas and, more recently, even cheaper renewables. Cooper eventually accepted there was nothing he could do — except plan for what’s next.
Now the coal-fired Craig Station is set to shutter in 2028, and the Colowyo mine that feeds it is halting production by the end of the year. For his part, Cooper is choosing to dig for a different kind of energy: geothermal, the renewable heat beneath our feet.
“It works wonderfully well,” said Cooper, a longtime Hamilton, Colorado, resident with a snowy-white goatee and a strong Western accent. Geothermal energy from the shallow earth can be tapped to superefficiently heat and cool individual buildings or even entire neighborhoods. Leveraging his ample experience operating heavy equipment at the mine, Cooper has started a new business, High Altitude Geothermal, to drill for the resource. With the startup’s first projects underway, he’s working alongside his wife, daughter, and two sons, both of whom are also coal miners.
Others in the fossil-fuel industry could follow, finding a foothold in geothermal as clean energy takes off. Colorado plans to decarbonize its economy by 2050, and its remaining six coal plants are shutting down by the end of the decade. The Centennial State’s six active coal mines, which employed roughly 900 workers as of July, will likely shut down along with them.
The northwest corner of the state is the epicenter of the transition. And affected communities stand to lose not only jobs, but big chunks of their tax base. Moffat County, where Cooper lives, will be the hardest hit; Craig Station made up a third of its property taxes in 2022.
In 2019, Colorado created the Office of Just Transition, the first state-level office in the nation dedicated to providing personalized support to coal workers and their families, as well as funding to their communities.
“Small towns have this tendency to be dependent on one or two large employers,” said Wade Buchanan, director at the just-transition office, which helped the Coopers connect to state agencies as they worked on their business concept. “You want to help communities find a way to be more diversified, so that their fortunes are not subject to the fortunes of any single employer.”
Buchanan said he’s thrilled by the Coopers’ venture into geothermal, a tech that the state and federal government are backing with incentives. “They’re trailblazers showing the way for a lot of other people that opportunities exist.”
Cooper still isn’t happy that Colorado’s coal industry is sunsetting. “We produce some of the cleanest coal in the nation,” even if it is a fossil fuel, said Cooper, who plans to keep doing shift work at the coal mine until it closes. President Donald Trump also dubs coal clean, and Cooper reports feeling more aligned with Republicans than Democrats.
He’s clear-eyed that change is inevitable, though, like it or not. “I can’t save the coal industry,” Cooper said.
The Trump administration, meanwhile, has undertaken the Sisyphean task of resuscitating coal in the U.S. by, among other tactics, forcing uneconomic coal plants to keep running past their planned closure dates.
Cooper, who worked at a heat- and power-generating plant when he was in the military, isn’t a fan of most forms of renewable energy. “Windmills are ugly things to me,” he said — a view shared by the U.S. president. He finds batteries unpalatable. And solar panels send jobs overseas, he said.
“When you’re buying solar panels from China, I don’t think that’s the right way to go. If you’re going to buy the things, they ought to be built here,” Cooper said. (Though perhaps not a well-publicized statistic, domestic solar manufacturing employed about 34,000 workers in 2024.)
Geothermal is an up-and-coming energy source Cooper can get behind. Hooked up to heat pumps, it’s the most efficient way to warm and cool buildings.
In a geothermal system, loops of flexible pipe are installed ten to hundreds of feet deep into the ground. At these depths, the earth is a fairly stable 45 to 75 degrees Fahrenheit, funneling a ready source of heat in cold weather to a building’s electrically powered geothermal heat pump. In the summer, the appliances provide air conditioning by dumping a building’s extra warmth underground.
Geothermal heat pumps are extremely efficient. They can deliver the same amount of heating as a fossil-fueled or electric-resistance system using just a fourth or even a sixth of the energy.
“In northwest Colorado, you can pay $700 a month for propane to heat your house, or $400 for natural gas,” said Cooper. “That’s a chunk of change, because our winter up here lasts about five to six months — about half a year where you’re going to be heating your home.” And the cold cuts like a knife: Cooper recalls winters in the area with lows in the minus 50s and 60s Fahrenheit.
Plus, a geothermal heat pump actually “helps the grid out,” Cooper said. The appliances are not only superefficient but also provide warmth steadily, rather than in bursts. That reduces peaks in power demand, keeping electricity more affordable for everyone.
Geothermal systems aren’t yet widespread. Most people don’t know the tech exists, and the up-front cost to install them is typically two to three times the price tag of an air-source heat pump or gas furnace plus a central air conditioner.
But the higher costs in northwest Colorado are partly due to far-flung geothermal drillers having to haul their equipment across the Rocky Mountains, said Cooper, who’s been spinning up the startup in his off-time. “I think I can keep my costs of mobilization down, and so that makes the product more affordable.”
His geothermal drilling business will be the first in Moffat County and neighboring Routt and Rio Blanco counties — a region home to more than three-quarters of the roughly 1,700 workers that make up Colorado’s coal industry and its supply chain. The state is backing High Altitude Geothermal, providing four years of tax relief and a $40,000 grant for operations through the economic development program Rural Jump-Start.
For now, the startup consists of Cooper and his family members. His wife, Kristine, is helping with administrative work. His daughter, Anna, handles operations. His sons, Matthew and Nathan, are drilling alongside him. Anna is also certified to do that work, so she can step in when the need arises. But as business picks up, Cooper aims to expand to a second crew and hire more people — especially other miners in the area.
“Hiring displaced coal workers was part of Matt’s ‘why’ for starting this business,” Kristine said. “He wanted to be part of the solution for the employment of these individuals.”
Going into geothermal energy “felt so right,” Anna said. “It’s a wonderful resource that everyone has access to. It’s there all the time.” And it’s a boost to the local economy. “It’s really exciting … when you have something that’s so powerful.”
High Altitude Geothermal has already secured its first contracts: retrofits of two homes in Moffat County. The Coopers are also bidding on two large-scale commercial projects in the municipalities of Steamboat Springs and Gunnison. They’re building a future with geothermal energy, regardless of the federal push for coal.
“There’s some people that are holding out that somehow Trump will be able to make coal viable again and make the power plants stay open,” Cooper said. “Maybe they’ll be right. … I have no idea. But my intuition is that this ball is rolling, and I don’t see it stopping.”
“So you better just try to figure out what’s next for you.”
XGS Energy, an advanced-geothermal startup, says it has completed crucial testing that proves its novel technology can operate reliably at commercial scale — without losing a drop of water in the process.
The milestone, announced on Tuesday, will allow Houston-based XGS to begin financing and building its first next-generation geothermal energy project, according to the company. XGS is partnering with Meta and the utility PNM to develop 150 megawatts of around-the-clock clean electricity in New Mexico that will supply the tech giant’s data centers.
“We’re really off to the races now,” said Josh Prueher, the CEO of XGS. The startup is slated to deploy the project’s first 5 MW by around 2027 and bring the remaining megawatts online by 2029, he added.
XGS is part of a fast-growing industry that’s working to harness the world’s abundant geothermal resources to meet soaring electricity demand. Dozens of U.S. companies are developing cutting-edge technologies that promise to access Earth’s heat in drier, deeper, and hotter conditions than is technically or economically feasible for conventional geothermal plants. Another of these firms, Sage Geosystems, is also partnering with Meta to build its own 150-MW geothermal facility somewhere east of the Rocky Mountains.
Today, geothermal energy represents about 0.4% of total U.S. electricity generation, and most facilities are concentrated around geysers and hot springs in Northern California and Nevada.
The next-generation geothermal projects that are currently in development fall into one of three buckets. Enhanced geothermal systems, like the ones that Sage and Fervo Energy are building, involve fracturing rocks and pumping them full of water to create artificial reservoirs far below the earth’s surface. Superhot geothermal, which scientists are studying in Iceland, aims to tap into extreme resources like magma chambers to extract gargantuan amounts of heat.
XGS’s approach falls into the third bucket: closed-loop systems, which entail placing pipes deep underground and sealing them off so that they operate like radiators. As water circulates within the system, it collects heat from the hot rocks below and brings it to the surface, where the heat produces steam that drives electric turbines.
What sets XGS apart from its closed-loop competitors, such as Canadian startup Eavor, is the “thermally conductive” cement alternative that the company places between the hot rock and pipe system. XGS claims its proprietary material, which includes a naturally occurring mineral, can increase the total amount of heat it pulls from the subsurface by 30% to 50%, allowing the company to use simpler and cheaper well designs to access hotter rocks with existing drilling technologies.
XGS completed its first pilot project in late 2024 with a 100-meter-deep well in central Texas. Earlier this year, the startup began operating a full-scale prototype using an idled well at the Coso geothermal field in the Western Mojave Desert region of California. The well runs more than 1,000 meters deep — a standard depth for commercial geothermal wells — and reaches subsurface temperatures of around 200 degrees Celsius (392 degrees Fahrenheit).
For 3,000 hours, or 125 days, XGS continuously ran its closed-loop system while adjusting key variables, such as the rate at which liquid flows and the amount of heat extracted at the surface. The idea was to simulate how the technology performs in different operating conditions, in order to prove it can withstand various types of stress while also demonstrating the company can accurately predict the system’s performance.
The startup claims the prototype’s actual performance fell within 2% of its predictions, results that XGS later verified with independent engineers, Prueher said. Being able to accurately predict how a project will perform — and for how long — is an essential step for the company to be able to raise the many millions of dollars in debt financing it needs to build its first geothermal power plants, he added.
“This unlocks a huge commercial pipeline that has been accumulating in parallel,” Prueher said of the test results. Along with the 150 MW it’s developing with Meta, the startup has lined up over 3 gigawatts of projects “mostly in the Western United States, where water sensitivity is a huge issue, and where there’s a strong demand signal from data centers and other types of clean energy consumers to build this as quickly as we can.”
XGS has raised $55 million so far from private investors to develop its heat-harvesting technology. One of its biggest backers is VoLo Earth Ventures, which focuses on early-stage climatetech companies.
Joe Goodman, a managing partner for VoLo, said his firm identified XGS “as one of the leading geothermal solutions” about a year and a half ago after reviewing its experimental lab data, and Goodman later joined XGS’s board of directors.
By boosting the system’s overall energy output, XGS’s thermally conductive materials could be the key to making closed-loop geothermal more economically viable, he said, adding that the technology also sidesteps the concerns around water-supply constraints facing enhanced geothermal systems.
“We’re quite optimistic about what we’ve seen,” Goodman said.
Two of the leading startups working on advanced geothermal energy just struck deals with established industrial giants — moves that will help the companies accelerate their efforts to harness the potentially abundant source of carbon-free energy from underground.
Last week, Fervo Energy said it had picked oilfield services giant Baker Hughes to provide crucial equipment for the startup’s Cape Station geothermal plant in Utah, a selection that brings the 500-megawatt project closer to its 2028 completion goal. Baker Hughes will design and deliver equipment for five power-generating units totaling 300 MW in capacity, which will operate with Fervo’s fracking-based “enhanced geothermal system.”
The news followed an Aug. 28 announcement that startup Sage Geosystems is partnering with Ormat Technologies, a major global developer of conventional geothermal plants. The agreement will enable Sage to deploy its next-generation technology at one of Ormat’s existing sites in Nevada or Utah.
Teaming up with Ormat accelerates Sage’s timeline to build its first commercial power-generation facility by about two years. It’s now targeting to bring the plant online by late 2026 or early 2027, said Cindy Taff, CEO of Sage.
“For us, the ability to scale faster with Ormat is huge,” Taff told Canary Media. “But it’s also a great opportunity for Ormat to reach a deeper [geothermal] resource than what they’re targeting now.”
Geothermal energy represents only about 0.4% of total U.S. electricity generation — largely because existing technology is constrained by geography. Today’s geothermal plants rely on naturally occurring reservoirs of hot water and steam, found only in places like Northern California and Nevada, to spin their turbines and generate power.
Technological advances are making it possible to deploy geothermal in less obvious areas, breathing fresh life into the decades-old industry. In recent years, the carbon-free energy source has seen a surge of investment and bipartisan policy support amid soaring demand for electricity from data centers, factories, and electric vehicles.
Fervo and Sage, both based in Houston, have previously inked deals to supply the tech giants Google and Meta, respectively, with hundreds of megawatts of clean, around-the-clock power for their sprawling U.S. operations.
Next-generation geothermal also benefits from the fact that it shares the same workforce and supply chain as oil and gas companies, an industry now heavily favored in Washington, D.C. The sweeping budget law that President Donald Trump signed in July largely preserves key tax credits for geothermal power plants — despite slashing incentives for wind and solar — and the Trump administration is pushing to fast-track environmental reviews for all types of geothermal projects.
“Geothermal has always enjoyed support from both sides of the aisle,” said Taff, who was previously a vice president at fossil fuel company Shell. “But now there’s a lot of momentum for the industry.”
Sage’s approach to geothermal energy involves tapping into both heat and pressure from hot, dry rocks found deep underground. To start, the company drills wells and fractures rocks to create artificial reservoirs that it pumps full of water. Sage cycles the water in and out of the fracture — like inflating and deflating a balloon — and can jettison the liquid to the surface to drive turbines and produce electricity.
The startup’s partnership with Reno, Nevada-based Ormat will allow Sage to access land and power-plant equipment and to connect to the grid far more quickly than if the startup set up a new site on its own. The companies are looking to install the next-generation system at a facility where Ormat’s older conventional wells are declining in capacity.
“In general, plants may operate below capacity due to a combination of factors, such as changes in the geothermal resource over time,” said Smadar Lavi, Ormat’s vice president and head of investor relations and ESG planning and reporting. “These sites are well-suited for piloting Sage’s technology, as it offers the potential to unlock additional production from existing assets.”
Terra Rogers of the nonprofit Clean Air Task Force said that Ormat’s decision to expand beyond its traditional hydrothermal resources and into next-generation tech represents “an important step, and we’ve all been waiting for it.” Rogers, who leads the advocacy group’s superhot rock geothermal program, called Ormat the “grandparents of geothermal,” given that the company has been around for 60 years and operates more than 190 geothermal plants globally.
As part of the agreement, Ormat can license Sage’s technologies for power generation as well as energy storage. The startup uses a similar setup to store excess grid energy. But instead of drilling deep into high-temperature rocks, Sage pumps water into shallower formations that aren’t as hot, since heat isn’t needed for storage. Pressure builds up underground and can be released later, when power demand spikes, to spin a pinwheel-like Pelton turbine and send electricity back to the grid.
“The idea that [Ormat] chose Sage specifically, with their storage technology, is also very telling for the needs of the grid in the West,” Rogers said, adding that it “complements existing or intermittent forms of renewables” like wind and solar.
Sage recently finished building its first commercial storage project on the site of a coal plant owned by San Miguel Electric Cooperative in Christine, Texas. The facility, which is expected to connect to the Texas grid in December, will be able to discharge 3 MW for four to six hours at a time, according to Taff.
The startup plans to perform a demonstration of its electricity-generating tech in the first quarter of 2026 in Starr County, Texas, in partnership with the U.S. Air Force. Sage is also evaluating potential sites east of the Rocky Mountains to develop its 150-MW project with Meta.
Fervo, meanwhile, continues drilling away at its Cape Station project in Beaver County, Utah, which has been under construction for almost two years.
The eight-year-old company said an initial 100-MW installation is poised to start delivering power to the grid in 2026. An additional 400 MW is slated to come online in 2028, a portion of which will use the new equipment from Baker Hughes. The startup’s recent supply deal comes just months after Fervo said it secured $206 million in new financing for the Cape Station project.
“Fervo designed Cape Station to be a flagship development that’s scalable, repeatable, and a proof point that geothermal is ready to become a major source of reliable, carbon-free power in the U.S.,” Tim Latimer, Fervo’s CEO and cofounder, said in a Sept. 2 statement.
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