Geothermal energy project developer Fervo Energy announced that it has secured $206 million in project capital aimed at accelerating the development of its geothermal project in Utah, with the potential of generating 2 GW of carbon-free energy for the grid.

Founded in 2017, Houston Texas-based Fervo Energy focuses on the development of enhanced geothermal systems (EGS) projects to deliver carbon-free energy. The company uses techniques such as horizontal drilling and distributed fiber optic sensing to make reservoirs of hot rock that exist beneath the earth’s surface into clean energy sources.

The company is currently developing its first greenfield development, Cape Station, in Beaver County, Utah. The project produces energy by injecting water into hot subsurface rock formations, extracting the heated water, and using it to generate electricity. Cape Station is expected to begin delivering 100 MW of power to the grid in its first phase in 2026, with a further 400 MW anticipated to come online in a second phase by 2028. The project has received permitting approval to expand up to 2 GW.

The new capital follows a $255 funding announcement by Fervo for the project in late 2024. The company said that with full funding in place and construction underway, the Cape Station project is on track for its 2026 commercial operation date.

David Ulrey, Chief Financial Officer at Fervo Energy, said:

“These investments demonstrate what we’ve known all along: Fervo’s combination of technical excellence, commercial readiness, and market opportunity makes us a natural partner for serious energy capital. The confidence our investors have in Fervo and in the Cape asset affirms that next-generation geothermal is ready to play a defining role in America’s energy future.”

The new capital includes $100 million in project-level preferred equity from Bill Gates-backed green tech investment program Breakthrough Energy Catalyst, in addition to a $60 million upsizing to an existing corporate term loan facility from energy and commodity group Mercuria, as well as $46 million in upsizing from an original bridge loan from construction financing-focused XRL-ALC (XRA).

According to the company, the investment from Breakthrough Energy Catalyst followed an intensive technical, financial, and environmental diligence process. Mario Fernandez, Head of Catalyst at Breakthrough Energy, said:

“Cape Station marks a major step forward in unlocking the infrastructure capital and project financing needed to commercialize EGS. This project proves what’s possible when breakthrough innovation meets disciplined delivery. It sets the foundation for a model that can be repeated well beyond this site to provide affordable, reliable, and clean energy to the world.”