Fervo Energy’s enhanced geothermal project aims to power data center boom

MILFORD, Utah — Deep in the Utah desert, down miles of gravel roads and hours from a major city, Fervo Energy bets it can economically harness heat from the Earth’s core for power, potentially unlocking dozens of gigawatts of baseload, emissions-free electricity at a time when U.S. power demand is meaningfully growing for the first time in decades.

Geothermal power is not new. Traditionally, it required specific geological formations, vastly limiting its potential. Now, Fervo aims to prove that, by utilizing the same drilling and hydraulic fracturing techniques developed by the oil and gas industry, what’s known as enhanced geothermal can become a key power source for the U.S.

The company’s Cape Station project in Milford is on track to send power to the grid next month, which would make it the first enhanced geothermal system in the U.S. to reach commercial operation. After an initial public offering in May and a new offtake agreement with Google, Fervo must prove it can provide cost-competitive enhanced geothermal at scale.

A transformation in the demand for power

The company’s roots precede the data center power boom. CEO Tim Latimer began his career as a drilling engineer in South Texas, before founding the company in 2017 with Chief Technology Officer Jack Norbeck. As Latimer tells it, when they first tried to raise venture capital funds, a common response was, “‘Why would we invest in a power generation company? The electric grid’s not growing.'”

Oil and gas companies also dismissed Fervo, with the prevailing assumption being that the kind of drilling the company was looking to do — hotter wells through harder granite — wouldn’t work. Now, less than a decade later, that narrative has flipped.

“It’s a total transformation from 10 years ago, when people were questioning even the need for more new electricity,” Latimer told CNBC. “This is a once-in-a-generation boom moment where hyperscalers, utilities and other customers need [power] now, and it’s our power that will be an important part of the electric grid.”

Recognizing the importance of prime acreage, Latimer, in Fervo’s early days, started acquiring geothermal rights on land across the Western U.S., amassing a portfolio of nearly 600,000 acres. The company acquired the rights at an average price of $4 per acre, a move that now seems prescient: The same land can now go for north of $400 per acre.

Fervo’s land grab included acreage across Beaver County, Utah, which is also where the Department of Energy set out to prove the case for enhanced geothermal via its Frontier Observatory for Research in Geothermal Energy, or Forge, amassing data aimed at helping private players commercialize enhanced geothermal system technology. Cape Station, Fervo’s flagship project, sits adjacent to Forge.

The goal of emissions-free power

On a tour of Cape Station, Latimer pointed out…