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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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