Fervo Energy has raised $206 million to continue building its Cape Station geothermal plant in Utah, projected to be the biggest enhanced geothermal system worldwide. The project is being developed in phases: the first stage, which is likely to go online next year, will provide 100 MW, with another increase in 2028, which will see the project provide an extra 400 MW.
Enhanced geothermal systems (EGS) are drilled deeper and access higher temperature resources than the traditional geothermal, and can provide reliable 24/7 clean energy – a model that is well aligned with energy intensive uses such as AI data centers. The promises of this are demonstrated by a recent drilling success by Fervo: the firm drilled to a depth of 15,765 feet in only 16 days, bottom-well temperatures of approximately 520 o F were reached
That 206 million financing was structured in the following combination of instruments:
$100 million of preferred equity provided by Breakthrough Energy Catalyst, which is the investment entity of Bill Gates.
An extra 60 million dollars in financing by Mercuria, which had previously advanced it 120 million dollars in the form of a loan.
$45.6 million of bridge debt of an X-Caliber Rural Capital affiliate.
This funding follows previous rounds of $244 million in February 2024 and $255 million in December that gave Fervo a total capital raised of approximately $700 million.
These large funding rounds indicated that EGS is leaving the pilot project phase and heading towards commercialization.
Geothermal drilling is a traditionally large part of the project costs. Fervo was lowering cost and time by drilling deeper and faster, which is the key to enable its model to be scalable in Utah and beyond.
Federal and state leaders have also joined the bandwagon to support the project. Its potential has been lauded by former Energy Secretary Chris Wright, an investor in Fervo through Liberty Energy and bipartisan lawmakers. Advocates say enhanced geothermal could provide reliable, 24-hour clean energy, unlike solar or wind which are intermittent and therefore is an attractive prospect to utilities and other high energy consumers
The future of the system, however, relies heavily on the policy support: The scalability of Fervo to gigawatt scale is subject to the existing clean-energy tax credits, especially under the proposed changes in the legislation
Why It Matters
Baseload Clean Energy: EGS can provide continuous power, therefore it is suitable to data centers and industries that require energetic continuity.
Tech-Hybrid Innovation: Fervo is employing high-tech drilling technologies originally developed in the oil and gas industries to reduce costs and speed up deployment.
Funding Validation: Having raised more than $700 million, with Breakthrough Energy among its supporters, EGS is making investor confidenceBuilding Validation: Having raised over $700 million, with Breakthrough Energy among its supporters, EGS is making investor confidence.
Policy Dependency: The contribution of the on-going government incentives will be decisive in expanding beyond pilot and regional projects.
