Fervo Energy IPO: CEO outlines geothermal future of US grid

Fervo Energy (FRVO) is making its Nasdaq debut on May 13, following its IPO that raised $1.89 billion. The company aims to deliver carbon-free power by accessing geothermal energy, utilizing drilling techniques from the oil and gas industries.

Fervo Energy co-founder and CEO Tim Latimer speaks with Julie Hyman about the provider's geothermal projects and partnership with Google (GOOG, (GOOGL).

Video Transcript

00:00 Speaker A

Fervo Energy is set to be trading on the Nasdaq after raising 1.8 billion, $1.89 billion in its US IPO. and joining me now is Tim Ladimer, Fervo Energy CEO and co-founder. Tim, thank you so much for joining me. We're waiting for the stock to open, I believe. Um I think not everyone is is familiar with how geothermal energy works. Um so, I think we should probably start there. I was just looking at some video of some of your rigs which look very much like hydraulic fracturing uh rigs, for example, um, which is where your background is. So so talk to tell tell the audience how geothermal works at Fervo.

00:54 Tim Latimer

Actually, we use a lot of the same technology that the oil and gas industry uses for drilling. The big difference there is rather than drilling for fossil fuels, we're drilling for heat, the actual heat of the rock itself. And so we drill very deep wells into the ground. We've pioneered new drilling technology that allows us to do that far cheaper than anybody's been able to drill for geothermal wells before. And as a result, it's unlocking a huge new resource for geothermal. So all geothermal kind of works the same way. You drill deep wells, you pump cold water down the injection wells, it flows through the hot rock in the reservoir and comes back up as hot hot water or steam that can generate electricity. But what Fervo does differently is um you know, at conventional geothermal only works in very unique volcanic areas. And because we've advanced drilling technology so we can drill much deeper and faster than has been done before, we can finally uh unleash geothermal across a much wider area, um you know, all across the United States and then eventually all around the world. And and that's what's new about our technology is how this drilling innovation has unlocked new locations that were previously not commercial for geothermal development.

01:54 Speaker A

And and Tim, we're we're not talking about little projects for a home residential, right? We're talking about big projects that are um aimed at powering things like data centers. Now you guys, I believe, are building out 500 megawatts under construction in Utah. Is this sort of like the the test case, if you will, the test project and then you're going to go on to some of the other big bigger projects you have in the pipeline?

02:26 Tim Latimer

Um sort of, that's what that's one way to think about it. You know, we actually completed what we would consider the test case in 2023 at project Rad, a partnership with Google, where we proved for the first time that horizontal drilling could unlock new resources for enhanced geothermal systems. Uh and that project has been producing now for two and a half years, which we thought was great validation for our technology. The project you're referring to, project Cape is now our massive scale up of that technology. So 500 megawatts is a very large project. You know, that's enough to power 400,000 plus homes. So we're talking about like a city's worth of electricity generated to that project. and we'll start producing first electrons from that project later this year. And it's just one of many, many that we have in the pipeline. We've actually studied and identified from the land we've acquired to date over 40 gigawatts of potential, which would be a very meaningful percentage of the country's electricity supply. and as we move through project Cape and beyond, we we plan to bring a lot of that power online in the coming years.

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