Fervo Energy is ending 2024 much like how it started it- raising hundreds of millions of dollars in financing to support its next-generation geothermal projects.
Today Fervo announced that it has secured $255 million in new funding and capital availability comprising both opportunistic corporate equity and new debt financing. Capricorn’s Technology Impact Fund II led the $135 million corporate equity round, which also included Breakthrough Energy Ventures, CalSTRS, Congruent Ventures, CPP Investments, DCVC, Devon Energy, Galvanize Climate Solutions, Liberty Mutual Investments, Mercuria, and Sabanci Climate Ventures.
“The demand for 24/7 carbon-free energy is at an all-time high, and Fervo is one of the only companies building large projects that will come online before the end of the decade,” noted Fervo CEO and cofounder Tim Latimer. “Investors recognize that Fervo’s ability to get to scale quickly is vital in an evolving market that is seeing unprecedented energy demand from AI and other sources.”
In addition to corporate equity, Fervo secured a $120 million letter of credit and term loan facility from Mercuria, one of the world’s largest independent energy and commodity groups. The facility will provide additional liquidity for Fervo to accelerate the deployment of EGS projects across the U.S. as it seeks to meet skyrocketing demand for clean, firm power.
A new report from consulting firm Grid Strategies shows that over the past two years, the five-year load growth forecast has increased by almost a factor of five, from 23 gigawatts (GW) to 128 GW. According to Strategic Industries Surging: Driving US Power Demand, nationwide electric demand is forecast to increase by 15.8% by 2029.
“In surveying power markets across the U.S. today, the need for next-generation geothermal is undeniable,” said Brian Falik, Group Chief Investment Officer of Mercuria. “We believe in Fervo not just because their EGS approach is cost-effective, commercially viable, and already being deployed at scale, but because they set ambitious targets and consistently deliver.”
Fervo’s first greenfield development, Cape Station, was recently approved by the Bureau of Land Management and is now fully permitted up to 2 GW. The project produces energy by injecting water into hot subsurface rock formations and then extracting the heated water to generate electricity, rather than depending on naturally occurring underground hot water like traditional geothermal systems. It will begin generating electricity in 2026.
In February, Fervo Energy announced that it had raised $244 million in new funding led by Devon Energy, meant to enable Fervo’s next phase of growth. 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.
This fall, Fervo joined forces with Southern Utah University (SUU) and non-profit investment platform Elemental Impact on a first-of-its-kind geothermal apprenticeship program to help oil and gas workers and Southwest Utah residents join the rapidly growing industry. The program will be administered by SUU and funded in part by Elemental. By the end of the year, it aims to enroll at least 40 apprentices and enable them with new skill sets, providing an opportunity to fill an immediate workforce need upon completion. The program will combine on-the-job training with college-level coursework on geology and energy systems, offering a unique pathway for both typical college students and adults already in the workforce to learn more about careers in geothermal.
