Back
Fervo Energy is set to complete the first commercial-scale enhanced geothermal power plant in the United States later this year. It won’t be its last.
The Houston-based startup filed for its long-awaited initial public offering last Friday, and the document offers a more concrete look into the company’s long-term ambitions.
Fervo Energy’s Cape Station geothermal development, in Beaver County, Utah (Fervo Energy)
Fervo has a total of 3.65 gigawatts of power plant capacity that are under construction, ready to build, or in advanced stages of development, according to newly disclosed details in the filing. If built as planned, those projects would nearly double the current installed capacity of geothermal projects in the United States.
That development figure includes the Cape Station project, in Beaver County, Utah, which broke ground in 2023 and is on track to produce its first power in late 2026. A total of 500 megawatts are under construction at the site, though Fervo says it has permits in place to build an additional 1.5 GW on the premises and could scale up even further.
It also includes a “shovel-ready” 150-MW development at a site in Nevada, which Fervo aims to bring online by 2030 as part of a deal to supply electricity to Google and the utility NV Energy.
The firm says it has the potential to grow its power-plant portfolio far beyond these more mature projects. Across the nearly 600,000 acres it has leased — spanning public and private land in the American West, from New Mexico up to Washington — Fervo estimates that it has the potential to develop over 42 GW in total geothermal-energy capacity.
If Fervo is able to realize even a fraction of that larger potential, it would transform the long-stagnant geothermal space — and mark a significant breakthrough for America’s efforts to decarbonize the power grid. Geothermal energy is carbon-free and, importantly, always available, making it complementary to intermittent solar and wind installations.
But the energy source has historically been viable only at select sites with specific geological features, and as a result, it has played a limited role on the grid. Though the U.S. is the world leader in geothermal power production, it gets less than 1% of its annual electricity from the source.
Fervo is at the forefront of a group of startups looking to rapidly expand the footprint of geothermal energy by using innovative technologies. For its part, Fervo makes use of horizontal-drilling techniques honed in the shale oil and gas sector, where its CEO, Tim Latimer, worked before co-founding the company in 2017 alongside Jack Norbeck.
Investors have anticipated the firm’s initial public offering for more than one year. The company is reportedly seeking a valuation of between $2 billion and $3 billion.
Fervo will go public in a market that is red-hot for companies that promise to supply data centers with the enormous amounts of electricity they need. To that end, the firm and other next-generation geothermal players, such as Sage Geosystems and XGS Energy, have struck deals with tech giants in recent years. Fervo has particularly close ties with Google, which is an investor and an anchor customer of the forthcoming Nevada project as well as the startup’s first demonstration plant in the state.
Fervo has already raised nearly $2 billion in funding, including a recent $421 million infusion of commercial project financing for Cape Station. The next-generation geothermal space as a whole has attracted significant attention from investors and enjoys strong support from both Democrats and Republicans; it’s one of the few clean-energy sectors for which tax incentives were spared in last year’s One Big Beautiful Bill Act.
In its IPO filing, the startup says its Cape Station project will deliver its carbon-free power at $7,000 per kilowatt of installed capacity — a price it says is competitive with both traditional and next-generation nuclear power. Its goal is to cut that cost by more than half, to $3,000 per kW of installed capacity, which it contends would allow it to outcompete gas.
Repeatability is the secret sauce here: Fervo’s approach involves drilling and then aggregating together several smaller wells, which it says allows it to rapidly refine its techniques and reduce upfront expenses. Between 2022 and 2025, it says, it reduced drilling times by about 75% and slashed per-foot drilling costs by about 70%.
Going public is a major moment for not only Fervo but also next-generation geothermal in general. What has for years been a buzzy but nascent sector is now stepping firmly into the public eye. With that will come more scrutiny — including of the financials.
Fervo ran a net loss of just under $57.8 million last year, up from $41.1 million the year prior, and it warns in its filing that the losses will continue for the next “several years” as it increases spending and scales up.
But if Fervo proves it can deliver on its near-term power-plant construction targets, investors are unlikely to sweat a few years of losses.
.svg)
