24-hour uninterrupted supply and zero carbon emissions! This geothermal energy startup is favored by Google (GOOGL.US)
The Zhitong Finance App learned that Fervo Energy, an American geothermal energy startup that has recently become popular in the venture capital field, has successfully raised 462 million US dollars from a group of new and old investors, including the US tech giant Google, which is driving Fervo Energy towards large-scale commercialization. For tech giants such as Microsoft, Google, and Amazon, which are building AI data centers on a large scale around the world, geothermal energy with 24-hour stable supply, high efficiency and clean properties is essential. It is hoped that high-efficiency clean energy geothermal power generation will be used to drive major AI data centers
Fervo said in a statement on Wednesday that this round of E-round financing is being led by Capital B. Other new investors include Google, a subsidiary of Alphabet Inc., Tesla co-founder JB Straubel, and Kris Singh, founder of nuclear energy company Holtec International Corp. Existing investors participating in this financing also include Breakthrough Energy Ventures, an investment company owned by Microsoft founder Bill Gates, and shale oil producer Devon Energy Corp. (Devon Energy Corp.).
Geothermal energy currently accounts for only 0.4% of the world's electricity capacity, but due to the huge demand for electricity resources from electrification and artificial intelligence training/inference systems, geothermal energy has recently received more and more attention. To support the global artificial intelligence data center construction process, tech giants such as Google urgently need a carbon-free energy source that can be used efficiently 24 hours a day. Geothermal energy fits this demand.
According to public information, Fervo is the first startup to commercialize the so-called enhanced geothermal system (EGS). The system uses fracturing technology borrowed from the oil and gas industry to extract the Earth's own heat from hot rock deep underground.
The company has a commercialization pilot project in northern Nevada and has reached a long-term cooperation agreement with Google to supply electricity to its large AI data center. Additionally, Fervo is building a 500-megawatt electricity supply infrastructure in Utah, which will become the world's largest enhanced geothermal resource facility. According to a company statement, the infrastructure is expected to begin delivering up to 100 megawatts of clean, carbonized electricity to grid systems across the US in 2026.
The essence of the global AI competition is an AI computing power infrastructure competition, and the core foundation that drives AI computing power clusters is a stable and huge power supply system. Because of this, the demand for electricity in AI data centers is surging at an unprecedented rate, and AI seems to have become a “power devil.” The core foundation behind high-energy AI data centers, which are expanding exponentially in scale due to intense demand for computing power infrastructure such as AI chips, is inseparable from the core foundation of electricity supply. This is also the origin of the market view that “the end of AI is electricity.”
Wall Street financial giant Goldman Sachs recently revised its forecast of huge electricity consumption by 2030 driven by global data centers to a 175% increase in electricity consumption compared to 2023 (Goldman Sachs's previous forecast was +165%), which is equivalent to increasing the power resource load of one of the “world's top ten power consumers.” According to Goldman Sachs's team of strategy analysts, the end of the AI model is electricity — the agency emphasizes that AI, which can be called an “power-swallowing giant,” will bring an unprecedented global “super demand cycle” for electricity and a “super bull market” for electricity stocks.
The “clean + stable power supply” nature of geothermal energy makes it an important logic for technology companies such as Google and Microsoft to invest heavily in and purchase this type of renewable energy, which helps meet their needs for low-carbon, reliable, and efficient electricity. Unlike solar and wind energy infrastructure, geothermal energy is unaffected by weather and seasons, and can provide stable baseload electricity, so geothermal power plants can operate 24 hours a day, mainly using water instantly heated by underground rocks to generate electricity without generating carbon emissions.
Geothermal energy from ultra-high temperature magma within the Earth is transferred to the surface of the earth through cracks in the earth's crust or hydrothermal fluid. Precisely because geothermal energy is a natural release of the Earth's internal heat, this heat will last for billions of years throughout the Earth's life cycle. Therefore, judging from the Earth's timeline, geothermal energy is a renewable global resource, and geothermal power generation hardly emits greenhouse gases such as carbon dioxide during specific operations, making it a very efficient and 24/7 stable clean energy source.