Texas geothermal startup raises $244M
Fervo Energy, a geothermal energy startup based in Houston, has raised $244 million from oil and gas producer Devon Energy and billionaire energy investor John Arnold, among others.
Oklahoma-based Devon invested $100 million, and Arnold, a former Enron executive, invested $30 million, according to Sarah Jewett, Fervo’s vice president of strategy. She declined to disclose Fervo’s valuation following the latest fundraising round.
The investment is part of a growing trend among oil and gas companies eager to cash in on the budding geothermal industry, which leverages technology similar to that used in fracking to tap underground heat sources. This heat warms fluids into steam, which spins turbines to produce carbon-free electricity that is not dependent on weather conditions.
“Having oil and gas investors participate in rounds like this really signals they recognize how much technical potential exists for what we’re trying to do,” Jewett said.
Other investors in the latest round include Mitsubishi Heavy Industries, Liberty Mutual Investments, Houston-based commodity trader Mercuria Group and Galvanize Climate Solutions, a climate-focused investment firm founded by former Democratic presidential candidate Tom Steyer.
Fervo has one commercial geothermal project in partnership with Google operating in Nevada, which produces 3.5 megawatts of electricity. It is drilling a second 400 megawatt project in Utah, from which the company aims to begin sending electricity to the grid in 2026 and finish developing in 2028.
The fundraising will go toward Fervo’s continued operations in Utah, according to the company’s statement. The startup was also recently awarded up to $25 million from the Department of Energy to advance geothermal technology at its Utah site.
In Fervo’s statement announcing the funding, Arnold called the energy trilemma of generating affordable, reliable and clean energy one of the defining global challenges.
“Fervo has transformed geothermal into a scalable carbonfree resource ready to meet the moment,” he said.