Dive Brief:
- Enhanced geothermal company Fervo Energy announced Tuesday that it has made a 396-MW power purchase agreement with Google, the largest-ever geothermal PPA, with Google planning to use that power as a “foundational building block” for a potential data center in Utah.
- “As part of the PPA, Fervo will offer Google an option to expand its offtake by approximately 600 MW, for a total of nearly 1 GW, by June 2030,” Fervo said. “Final data center plans remain subject to a variety of factors including engineering feasibility, state and local approvals, and commercial conditions.”
- In a Tuesday research note, financial services company William Blair said the PPA deal “increases contracted revenue across Fervo’s portfolio by about 65% and strengthens our belief that Fervo’s enhanced geothermal systems provide a critical solution to address our ‘baseload imperative’ thesis by delivering firm, dispatchable power to fuel AI data centers.”
Dive Insight:
The deal will enable the continued development of Fervo’s Cape Station enhanced geothermal project in Southwestern Utah, near the U.S. Department of Energy’s Office of Geothermal Frontier Observatory for Research in Geothermal Energy.
Fervo said it expects that project to come online in 2028. The company has stated its strategy is to “deploy repeatable GeoBlocks – standardized 50 MW units of geothermal energy” to form larger “GeoClusters.”
However, William Blair analysts noted that Fervo’s stock has recently struggled – on Wednesday, it was down 49% from initial highs following the company’s May IPO – and said, “Clearly the issue of late has been one of confidence.”
The company is currently in a “heavy investment phase,” Jefferies said in an Aug. 14 research note, and its second-quarter earnings call highlighted “new but temporary, transmission-related curtailment issues for 2027.”
“Still, baseload power remains scarce and Fervo represents a relatively inexpensive way for investors to gain exposure to time to power baseload,” William Blair said. “Key risks are first-of-a-kind execution at Cape Phase I, interconnection bottlenecks, capital intensity, and competing technology paths.”
Google and Fervo signed a corporate agreement to develop next-generation geothermal power in 2021, followed by the launch of Fervo’s Project Red, a Nevada commercial pilot project that came online in 2023 and began delivering power “to the local grid, including Google’s data centers in the state,” Fervo said in a release.
Google and NV Energy then signed a 115-MW PPA with Fervo in June 2024, and in Dec. 2025, Google participated in Fervo’s $462 million Series E funding round.
“Our multi-year partnership with Google has been important for Fervo’s growth, and we are excited to take the next step with them with this new 400 MW deal for enhanced geothermal power,” Fervo CEO Tim Latimer said in a Tuesday X post.
