Big Bet: $206M Push for Geothermal Scale

Fervo raises $206M to scale Utah geothermal to 500 MW by 2028, with backing from Shell and Southern California Edison

17 Jun 2025

Fervo Energy has raised $206mn to expand its advanced geothermal project in Utah, positioning the company as a frontrunner in delivering firm, carbon-free electricity to the US grid.

The company said the new financing will accelerate development of its Cape Station facility, which aims to supply 100 megawatts (MW) of constant, zero-emissions power by 2026. A second phase is expected to add another 400MW by 2028, bringing total capacity to 500MW.

The investment package includes $100mn in preferred equity from Breakthrough Energy Catalyst, a $60mn corporate term loan from energy trading group Mercuria, and $45.6mn in bridge debt financing from XRL-ALC LLC.

Fervo applies drilling techniques from the oil and gas industry, such as horizontal drilling and fiber-optic sensing, to access heat from deep rock formations. This approach is intended to scale geothermal energy beyond traditional high-temperature regions.

Cape Station has already secured long-term power purchase agreements. Shell Energy has committed to a 15-year deal for 31MW, while Southern California Edison has signed a separate agreement. These contracts signal a shift among utilities toward firm renewable energy sources that can balance intermittent generation from wind and solar.

“These investments demonstrate what we’ve known all along, that geothermal can be a cornerstone of a reliable, decarbonized grid,” said David Ulrey, Fervo’s chief financial officer. “Now we have the capital to prove it at full commercial scale.”

Geothermal has historically represented a small share of US energy output, limited by geography and cost. However, advances in drilling and a growing demand for clean baseload power have revived interest from investors and grid operators.

Challenges remain, including regulatory permitting and high upfront drilling expenses. Still, if successful, Cape Station would become one of the largest geothermal plants in the US and a model for broader deployment.

Fervo’s progress comes as US policymakers seek to accelerate decarbonisation without compromising grid reliability. The company’s backers see the project as a step toward meeting rising power demand while reducing reliance on fossil fuels.