Tapping into the heat beneath our feet to provide gigawatts of clean energy
At DCVC, nothing excites us more than when ideas we invest in become concrete endeavors that reshape our world. That’s why we’re thrilled to witness the start of operations this week at Fervo Energy’s first commercial geothermal power plant — a 3.5‑megawatt (MW) facility in Winnemucca, Nevada.
The start of commercial operations at the plant not only validates Fervo’s game-changing approach but also signals the growing potential of and confidence in geothermal energy as a key means to achieve a decarbonized grid. Under an agreement signed in 2021, Fervo’s facility will supply Google with zero-carbon electricity to power its Cloud infrastructure datacenter in the Las Vegas region. To learn more about Google’s decision to partner with Fervo and to watch a video about the project, check out Google’s official blog, The Keyword.
Fervo is more than just an innovative energy company; it’s a visionary leader primed to build, own, and operate power plants collectively producing a gigawatt (GW) of always-available, zero-carbon power this decade and continue accelerating deployment beyond 2030. This scaling up will help meet the growing global demand for firm, carbon-free energy sources to decarbonize the electricity grid. Fervo’s approach, which combines a deeply-experienced team, first-mover advantage, novel use of technology, and smart co-investments, exemplifies our investing thesis at DCVC Climate.
The principle behind geothermal energy is simple yet powerful: the Earth’s internal heat, accessible at about 10,000 feet underground, is used to generate steam, which then spins turbines to produce electricity. Fervo has adapted advanced reservoir modeling and horizontal drilling techniques, initially developed in the oil and gas industry, to access and harness this heat more productively and reliably in many more geographies. To boot, the company’s use of downhole fiber optic sensors for data analysis has significantly improved the predictability and profitability of geothermal energy.
The company’s founders, Tim Latimer and Jack Norbeck, are at the forefront of the transition from traditional gas- and coal-fired power plants to renewable energy sources. Their ability to attract like-minded professionals from the oil and gas industry who bring their own deep experience in all aspects drilling is a signal strength for Fervo: the company offers rewarding and reliable careers in carbon-free geothermal energy to the very people best qualified to develop it.
In the United States alone, geothermal energy has immense potential for growth. In an analysis released earlier this year, the US Department of Energy’s Geothermal Technologies Office noted that the U.S. had around 3.7 gigawatts (GW) of installed geothermal electricity capacity, a fraction of the installed capacity of wind and solar power generation. But the analysis found that domestic geothermal power-generating capacity could reach 90 GW by 2050. With the adoption of Fervo’s technology, we think that number could be even larger.
Similar prospects exist at the global level. In its Geothermal Market Outlook released earlier this year, Rystad Energy predicted that the global installed capacity for geothermal power generation will almost double by 2030 to nearly 32 GW. Moreover, Rystad also expects the global geothermal power industry to grow from $6.4 billion this year to $14 billion by 2030 — a compound annual growth rate (CAGR) of approximately 10.2 percent.
The launch of the Winnemucca plant is a harbinger of the transformative potential geothermal energy holds in reshaping our energy landscape — and Fervo is just getting warmed up. The company is currently developing its second commercial geothermal power plant — with 400 MW generating capacity — in Utah. Fervo expects the first 90 MW of power production from that plant to come online in 2026 and the remainder to be online by 2028. As Fervo continues to innovate and expand, we look forward to supporting their journey in harnessing Earth’s natural heat to power our future in a cleaner, more efficient way.
Zachary Bogue is Co-Founder and Managing Partner of DCVC. Rachel Slaybaugh is a Partner at DCVC.