Fervo Energy signs 400-MW geothermal deal with Google
Fervo Energy has signed the world's largest agreement for next-generation geothermal power, a 400-megawatt deal with Google to support a potential data
Fervo Energy has inked a landmark deal to supply Google with nearly 400 megawatts of clean electricity from a next-generation geothermal project in southwest Utah. The agreement, announced Tuesday, is the largest of its kind for the emerging technology.
Securing customer contracts is an essential step for novel projects like Fervo's Cape Station. Without a clear buyer, attracting financing for first-of-a-kind facilities can be difficult, even if they promise major benefits for the power sector. Fervo, which went public in May, saw its shares jump 15% on Tuesday morning following the news.
Project Phases and Costs
Houston-based Fervo is currently developing the first, 100-megawatt phase of Cape Station and expects to start generating test power from a 33-megawatt unit in the fourth quarter of this year. The new deal with Google supports the buildout of the second, 400-megawatt phase, which is slated to be operational in about two years. The companies did not disclose the power purchase agreement terms.
Fervo's Chief Operating Officer, Sarah Jewett, previously told Canary Media the projected capital costs for the project. The figures are presented below.
| Project Phase | Cost per Kilowatt |
|---|---|
| Phase 1 | $7,000 |
| Phase 2 | $5,500 |
Technology and Market Context
Geothermal energy generates just 0.4% of total U.S. Electricity today. Conventional geothermal relies on natural features like hot springs, which limits where facilities can be built. Fervo is part of a rapidly growing effort to deploy innovative tools and techniques-often derived from oil and gas drilling-to access the earth's heat in more diverse locations. This next-generation approach involves drilling deep into hot, dry rock to produce power.
"As demand for reliable electricity grows, customers like Google need energy resources that can be deployed at scale, operate around the clock, and deliver where power is needed," said Tim Latimer, Fervo's CEO and co-founder, in a news release.
Google's Energy Strategy
Google stated it intends to buy the geothermal power for a potential data center in Utah. Lucia Tian, Google's director of advanced energy technologies, told The Wall Street Journal, "Even though right now we don't have clarity yet on how this will service a data center … we know that it will be a foundational building block of power generation for a data center presence in Utah."
The startup has been working with Google for years. In 2021, the two companies signed an agreement to develop a next-generation geothermal project. Two years later, Fervo turned on its 3.5-megawatt commercial pilot plant in Nevada, which remains the largest operating enhanced geothermal system in the country. Before Tuesday's announcement, Fervo and Google had previously signed a 115-megawatt power purchase agreement with the utility NV Energy to develop more geothermal for Google's data centers in Nevada.
Future Expansion Options
Under the new Utah deal, Google has the option to expand its Cape Station agreement by around 600 megawatts by June 2030. The tech company and Fervo also have a separate deal in place, granting Google the right of first refusal to purchase up to 3 gigawatts of electricity from certain new geothermal power plants the startup develops. Fervo is investing over $2 billion to build what could become the world's largest next-generation geothermal system when completed in 2028.
