Fervo Energy has begun selling carbon-free electricity from its Cape Station project in Utah, switching on an initial 33-megawatt unit and starting commercial operations this week. The power is being supplied to Shell Energy, a California retail provider. The $2 billion facility is designed to eventually reach 500 MW, making it the first utility-scale, next-generation geothermal plant in the world.
Unlike conventional geothermal plants that rely on naturally occurring hot water and steam, Fervo engineers its own reservoirs deep underground using oil and gas drilling techniques. After proving the technology with a 3.5-MW pilot in Nevada, Cape Station shows the approach can work at commercial scale. Fervo expects to commission two more 33-MW units by early 2027, and the remaining 400 MW, supported by a new agreement with Google, by 2028.
But scaling the industry will require more than successful demonstrations. Experts point to high upfront drilling costs and economic and regulatory hurdles. Cape Station's first phase costs $7,000 per kilowatt, and the second phase is projected at $5,500 per kW, compared with roughly $2,157 per kW for a natural gas plant. Fervo is also exploring flexible operations and behind-the-meter power for data centers to improve the economics of enhanced geothermal. Currently, geothermal accounts for just 0.4% of U.S. electricity generation annually. Fervo's achievement, said one grid expert, signals to investors that many more such milestones could follow. However, the company has not disclosed power purchase agreement terms for its roughly 1,000 MW of contracted development.