Houston based Fervo Energy, which describes itself as “the leader in next-generation geothermal energy”– aka EGS (enhanced geothermal systems) – has announced the execution of two power purchase agreements (PPAs) totalling 320 MW with Southern California Edison (SCE). The 15-year agreements for 24/7 carbon-free geothermal energy envisage reliable, clean, and affordable power across Southern California and support SCE’s vision of helping California transition to a cleaner energy future.
SCE will purchase the power from Fervo Energy’s 400 MW Cape Station project currently under construction in south west Utah. The first 70 MW phase of the project is expected to be operational by 2026 and the second phase by 2028.
“This announcement is another milestone in California’s commitment to clean, zero-carbon electricity,” said California Energy Commission Chair David Hochschild. “Enhanced geothermal systems complement our abundant wind and solar resources by providing critical base load when those sources are limited. This is key to ensuring reliability as we continue to transition away from fossil fuels.”
In 2021, the California Public Utilities Commission issued a mid-term reliability (MTR) mandate requiring utilities to procure 1000 MW of non-weather-dependent, non-battery, zero-emission energy to increase the reliability of the state’s electric grid. This decision catalysed demand for geothermal, which provides firm, carbon-free power, filling gaps left by weather-dependent renewables like solar and wind.
Fervo’s “breakthrough” drilling technology enables geothermal to address this growing demand for renewable firm power. By using techniques adapted from the oil and gas industry, Fervo has de-risked a scalable approach to geothermal development. Early drilling results, released in February 2024 (see panel), show faster drilling times and an overall reduction in costs at Cape Station. These positive results support continued commercialisation and a readiness for large-scale agreements like this, the world’s largest geothermal PPA. Fervo has now contracted a total of 373 MW of renewable power from Cape Station.
“Geothermal stands as the dependable and adaptable solution essential for California’s journey towards a fully decarbonised grid,” said Dawn Owens, VP, Head of Development & Commercial Markets for Fervo Energy. “As electrification increases and climate change burdens already fragile infrastructure, geothermal will only play a bigger role in US power markets. Fervo looks forward to continuing to meet these needs, providing firm, clean power to help balance California’s energy portfolio.”
In 2022, Fervo contracted 53 MW of power from Cape Station to California community choice aggregators.
In 2021, Fervo and Google signed the world’s first corporate agreement to develop next-generation geothermal power. Fervo’s commercial pilot in Nevada came online in November 2023 and is providing power to Google via the local grid.
Fervo says its advancements in drilling and subsurface analytics “bring a full suite of modern technology to make geothermal cost competitive and globally scalable,” leveraging over a decade of innovation in drilling and production from modern oil and gas development, leading to major improvements in system performance and well design.
The company employs precision directional drilling technology to drill horizontally in geothermal reservoirs. This enables it to drill multiple wells from a single location, dramatically lowering its surface footprint and reducing drilling risks. Horizontal drilling also facilitates greater access to geologies that were previously challenging to reach, increasing the total resource potential for geothermal energy, Fervo asserts.
Also, by installing fibre optic cables downhole in its geothermal wells, Fervo gathers and analyses real-time data on flow, temperature, and performance of the resource, providing unique insights into subsurface behaviour “at a resolution never before possible,” the company says. It has developed advanced data analytics algorithms that enable precise identification of where the best resources exist and optimisation of flow distribution through the reservoir to maximise heat mining efficiency.
Taken together, Fervo says its “innovative approach to geothermal well design, reservoir engineering management, and advanced data analytics” allows it to “access a massive resource base that other operators are unable to exploit.”
Drawing on its expertise in Organic Rankine Cycle technology, Turboden of Italy (owned by Mitsubishi Heavy Industries), will provide engineering and procurement for power plant equipment for the initial phase of the Cape Station project. This includes the installation of three generators with six ORC turbines.
In February 2024, Fervo announced it had raised $244 million in new funding, led by Devon Energy, a pioneer in shale oil and gas. Galvanize Climate Solutions, John Arnold, Liberty Mutual Investments, Marunouchi Innovation Partners, Mercuria, and Mitsubishi Heavy Industries also joined the round alongside existing investors Capricorn’s Technology Impact Fund, Congruent Ventures, DCVC, Elemental Excelerator, Helmerich & Payne, and Impact Science Ventures. In August 2022, Fervo reported it had raised $138 million in funding from a round that included what were then new investors, DCVC, CPP Investments, Liberty Energy, Macquarie, Grantham Foundation for the Protection of the Environment, Impact Science Ventures, and Prelude Ventures, as well as strong participation from existing investors such as Capricorn’s Technology Impact Fund, Breakthrough Energy Ventures, Congruent Ventures, 3X5 Partners, Helmerich & Payne, and Elemental Excelerator.
In July 2023, Fervo announced that it had successfully completed the “well test” at its full-scale commercial pilot, Project Red, in northern Nevada.
The 30-day well test, standard for geothermal projects, achieved a flowrate of 63 litres per second at high temperature, enabling 3.5 MW of power production (as anticipated).
With Project Red, Fervo said it became the first company to successfully drill a horizontal well pair for commercial geothermal production, achieving lateral lengths of 3250 feet, reaching a temperature of 191°C, and proving controlled flow through rigorous tracer testing.
Fervo also implemented an induced seismicity mitigation protocol following best practices established by the US DOE and completed the project without incident.
In November 2023 it was announced by Google that the Project Red geothermal facility was operational and “carbon-free electricity has started flowing onto the local grid that serves our datacenters in Nevada.”
This is the culmination of the groundbreaking agreement signed in 2021 by Fervo and Google, the goal of the partnership stated as being “to power Google’s Cloud region in Las Vegas with an “always-on,” carbon-free resource that will reduce the company’s hourly reliance on fossil fuels.”
“Achieving our goal of operating on 24/7 carbon-free energy will require new sources of firm, clean power to complement variable renewables like wind and solar,” said Michael Terrell, Senior Director for Energy and Climate, Google. “We partnered with Fervo in 2021 because we see significant potential for their geothermal technology to unlock a critical source of 24/7 carbon-free energy at scale, and we are thrilled to see Fervo reach this important technical milestone.”
Fervo says its results from Project Red “support the findings of the DOE Enhanced Geothermal Earthshot and show that geothermal energy could supply over 20% of US power needs and complement wind and solar to reach a fully decarbonised grid.” Fervo’s drilling and well test results “pave the way for the US to meet this goal ahead of schedule” and “no technological barriers to geothermal deployment remain.”
Also supportive of the EGS Earthshot is a pilot project that Fervo is carrying out within the Milford Renewable Energy Corridor in Utah, adjacent to the DOE’s Frontier Observatory for Research in Geothermal Energy (FORGE) field laboratory.
Funded via President Biden’s Bipartisan Infrastructure Law, the pilot aims to produce at least 8 MW of power from each of three wells at a site with no existing commercial geothermal power production.
Drilling down into Fervo experience at Cape Station
In February 2024 at the Stanford Geothermal Workshop, Fervo Energy presented early drilling results from its Cape Station project, and these exceeded US Department of Energy’s (DOE) expectations for “enhanced geothermal systems.” These results substantiate the rapid learning underway in the geothermal industry and signal readiness for continued commercialisation, says Fervo.
Fervo began its drilling campaign at Cape Station, its 400 MW project in south west Utah, in June 2023 and in the subsequent six months successfully drilled one vertical and six horizontal wells there, rapidly reducing drilling times from well to well as learnings accelerated. Fervo says these advancements build on its pioneering Project Red, commissioned in 2023, where Fervo drilled one vertical and two horizontal wells.
Fervo reports consistently reduced drilling times and costs in horizontal, high-temperature, deep granite drilling. Though Cape wells are hotter and over 2100 feet deeper than Project Red wells, Fervo drilled its fastest Cape well in just 21 days, a 70% reduction in drilling time from Fervo’s first horizontal well drilled at Project Red in 2022. This increase in drilling efficiency has translated into significant cost reductions, with drilling costs across the first four horizontal wells at Cape falling from $9.4 million to $4.8 million per well.
“Since its inception, Fervo has looked to bring a manufacturing mentality to enhanced geothermal development, building a highly repeatable drilling process that allows continuous improvement and, as a result, lower costs,” said Tim Latimer, Fervo Energy CEO and Co-Founder. “In just six months, we have proven that our technology solutions have led to a dramatic acceleration in forecasted drilling performance.”
Fervo’s drilling performance to date fits an expected learning rate of 35% for drilling time improvement, portending far more significant advances in performance and cost. This is the latest example that private sector work like Fervo’s Project Cape and pioneering research like DOE-sponsored Utah FORGE (Frontier Observatory for Research in Geothermal Energy) are rapidly moving the world of geothermal deployment forward, Fervo maintains.
“Fervo’s drilling improvements are like the early days of the shale revolution,” said Trey Lowe, Chief Technology Officer of Devon Energy. “When you operate continually and understand the resource, you dramatically streamline operations. That’s the unique value of Fervo’s approach to enhanced geothermal.”
Fervo achieved its results by increasing both the rate of penetration (ROP) and life of drill bits. On the fourth horizontal well drilled at Cape, for example, Fervo sustained an average ROP of 70 feet/hour, already outpacing NREL’s 2035 projections for moderate technology improvement.
Modern oil and gas drilling equipment enabled this performance. Fervo used polycrystalline diamond compact (PDC) drill bits typically deployed in shale basins to cut through hard, abrasive granite, while mud coolers counteracted high subsurface temperatures that have historically derailed geothermal exploration. These results underscore the applicability of oil and gas technology to enhanced geothermal.
“We now have the best drilling technology from the petroleum drilling industry. What encourages me now is that we’re starting to learn how to use it in ways that specifically maximise performance,” said Fred Dupriest, Professor of Engineering Practice at Texas A&M University and Former Chief Drilling Engineer at ExxonMobil. “Performance isn’t just what you use, but how you use it. We’re not just achieving technology transfer, but an impressive rate of knowledge transfer in how to use it.”
