Why Are Investors Pouring Hundreds of Millions into Fervo Energy’s Method for Unlocking Earth’s Heat?
The world needs clean energy that works all the time, not just when the sun is shining or the wind is blowing. A company called Fervo Energy is working on a solution using heat from deep inside the Earth. They are not the first to do this, but their new approach could help make this type of power much more common.
Fervo Energy is a geothermal energy company that uses special drilling methods borrowed from the oil and gas industry. This allows them to get more power from the Earth’s natural heat, potentially making it a reliable and widespread source of clean electricity. Investors see promise in this idea, which is why the company received $244 million in funding in early 2024. This money helps them build more projects and improve their technology.
What Is Geothermal Energy?
Before we look at what makes Fervo special, it helps to understand the basics of geothermal power. The concept is simple:
- The center of the Earth is very hot.
- We can use that heat to make electricity.
- Energy companies drill deep wells into the ground where there are hot rocks.
- They pump cool water down into these wells.
- The hot rocks heat the water until it turns into steam.
- This steam shoots up to the surface and is used to spin large fans called turbines.
- The turbines are connected to generators, which produce electricity.
This process provides a constant supply of power, 24 hours a day, 7 days a week. It’s a clean source of energy because it doesn’t burn fossil fuels or produce greenhouse gases. Countries like Iceland, New Zealand, and Kenya already use geothermal power for a significant portion of their energy needs.
The Old Way vs. Fervo’s New Method
Traditionally, building a geothermal power plant has been difficult. Companies had to find very specific spots where hot rocks, water, and permeability (cracks for water to flow through) all existed together naturally. This limited geothermal power to only a few locations. The process often involved drilling a single vertical well, which was like sticking one straw into the ground. It worked, but it was not very efficient.
Fervo Energy changes this with a technique called directional drilling. Instead of just drilling straight down, they drill down and then turn horizontally, sometimes for thousands of feet.
Here is how Fervo’s process improves on the old model:
- Drilling Paired Wells: Fervo drills two horizontal wells, one above the other, through hot, hard rock.
- Creating a Flow Path: They then carefully create small cracks in the rock between the upper and lower wells. This forms a man-made reservoir.
- Circulating Water: Cold water is pumped down one well. It flows through the network of cracks, absorbing a huge amount of heat from the surrounding rock.
- Generating Steam: The now superheated water or steam travels up the second well to the surface.
- Producing Electricity: At the surface, the steam powers turbines to generate electricity, just like in a traditional geothermal plant.
By drilling horizontally, Fervo creates a much larger surface area for water to heat up. Think of it as replacing a single drinking straw with a whole network of them. This makes the process far more efficient and allows them to build power plants in many more places, not just the “perfect” spots.
The Economics of Fervo’s Geothermal Power
Making this technology work costs money, but it also has the potential to be very profitable and competitive.
- Drilling Cost: Each well pair costs about $4.8 million to drill and prepare. This is a significant investment.
- Energy Price: The company plans to sell the electricity it generates for around $100 per megawatt-hour (MWh). This price is what customers or utility companies would pay.
- Future Costs: The U.S. Department of Energy (DOE) is optimistic about this technology. The DOE predicts that the cost of this type of geothermal energy will fall to about $60 per megawatt-hour by 2030. A lower price would make it just as affordable as solar and wind power, but with the added benefit of being available 24/7.
This dependable, always-on power is a key advantage. Solar and wind energy are intermittent, meaning they stop producing when it’s dark or the air is still. Geothermal energy provides a steady “baseload” power that can keep the lights on at all times.
America’s Geothermal Potential
Fervo Energy’s work is part of a larger push toward geothermal power. The U.S. government sees this as a huge, untapped resource. According to the Department of Energy, geothermal energy has the potential to power more than 65 million homes in the United States. That would be a massive contribution to the country’s clean energy goals.
Currently, geothermal energy is produced in eight U.S. states, but advanced techniques like Fervo’s could expand that number significantly. The DOE forecasts a twentyfold increase in geothermal energy production by the year 2050. This growth could create jobs, increase energy independence, and dramatically reduce the country’s carbon footprint.
Benefits and Hurdles of Geothermal Energy
Like any technology, geothermal power has both advantages and challenges.
Benefits
- Reliable and Consistent: It produces power around the clock, regardless of the weather.
- Small Physical Footprint: Geothermal plants take up much less land per megawatt than solar or wind farms.
- Low Emissions: Once a plant is running, it produces almost no greenhouse gas emissions.
- Energy Security: It provides a domestic source of energy, reducing reliance on foreign fuel sources.
Hurdles
- High Upfront Costs: Drilling deep wells is expensive, as seen with Fervo’s $4.8 million cost per well.
- Geographic Limitations: Even with new technology, plants must still be built in areas with accessible hot rock formations.
- Drilling Risks: Drilling deep into the earth comes with risks, though the industry has a strong safety record.
- Water Use: Geothermal plants require water, which can be a concern in dry regions. However, many modern plants use closed-loop systems that recycle the water.
Fervo Energy is directly addressing some of these hurdles. By making drilling more efficient and opening up new locations, they are lowering the barriers that have held geothermal power back. Their success could play a crucial role in building a cleaner and more reliable energy future.