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Texas Startup Aims To Make Geothermal Energy More Cost-Efficient

Photo Courtesy Fervo Energy

A lesser-known but growing renewable power source comes from deep within the ground in the form of extreme heat, which is brought to the earth’s surface to produce geothermal energy. According to the U.S. Energy Information Administration (EIA), geothermal energy is dependable because “heat is continuously produced inside the Earth” and can be used for everything from heating bathtubs and buildings to generating electricity.

Photo Courtesy EIA

The main challenge is figuring out how to tap into the earth’s heat cost-efficiently. Fervo Energy, a Houston-based geoscience startup, is one company working to improve the process. Fervo uses oil and gas technologies such as horizontal drilling to unlock geothermal energy in “previously uneconomic locations,” with the goal of increasing geothermal’s resource potential.

In February, Fervo made headlines when it published early drilling results for its Cape Station, Utah, project. According to a Feb. 12 press release, the results showed a 70% year-over-year reduction in drilling times, exceeding the U.S. Department of Energy’s (DOE) expectations and could pave the way for much faster geothermal deployment.

Cape Station is a 400-megawatt (MW) project in southwest Utah. Fervo began drilling there in June 2023. During the first six months of its campaign, the company said it successfully drilled one vertical and six horizontal wells at the site while also “rapidly reducing drilling times” and costs.

Wells at the Cape Station site are hotter and much deeper than previous ones that Fervo drilled at its Project Red site in Nevada.

Despite those obstacles, the company said it drilled its fastest Cape Station well in only 21 days — “a 70% reduction in drilling time from Fervo’s first horizontal well drilled at Project Red in 2022.”

Photo Courtesy Fervo Energy

Improved drilling efficiency has also led to much lower costs. According to the press release, drilling costs across the first four horizontal wells at Cape Station have fallen from $9.4 million to $4.8 million per well.

“Since its inception, Fervo has looked to bring a manufacturing mentality to enhanced geothermal development, building a highly repeatable drilling process that allows for continuous improvement and, as a result, lower costs,” Tim Latimer, Fervo CEO and co-founder, said in a statement. “In just six months, we have proven that our technology solutions have led to a dramatic acceleration in forecasted drilling performance.”

Because of its vast potential, tapping into geothermal energy is considered an important step in the clean energy transition. According to a report from the Center for Sustainable Systems at the University of Michigan, the U.S. had tapped less than 0.7% of geothermal electricity resources as of 2021. Most of that heat can become available with enhanced geothermal system technology.

The report also projects that electricity generated from geothermal plants will more than double from 17 billion kilowatt-hours (kWh) in 2022 to 37.2 billion kWh in 2050.

Photo Courtesy University of Michigan: Center for Sustainable Systems

In February, the DOE announced the selection of three projects that will receive up to $60 million to demonstrate the efficacy and scalability of enhanced geothermal systems (EGS), helping to bolster the geothermal energy industry.

One of the selections was Fervo’s pilot project within the Milford Renewable Energy Corridor in Utah, adjacent to the DOE’s Frontier Observatory for Research in Geothermal Energy (FORGE) field laboratory. DOE said in a press release the project aims to produce at least 8 MW of power from each of the three wells at a site “with no existing commercial geothermal power production.”

Photo Courtesy Fervo Energy

In addition to funding from DOE, Fervo raised $244 million in new private financing in a round led by Devon Energy, an Oklahoma-based oil and gas exploration and production company. The money will be used to fund future growth plans at Fervo. 

“Demand for around-the-clock clean energy has never been higher, and next-generation geothermal is uniquely positioned to meet this demand,” Latimer said in a Feb. 29 press release. “This investment enables Fervo to continue to position geothermal at the heart of 24/7 carbon-free energy production.”


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