Unlock the White House Watch newsletter for free
Your guide to what Trump’s second term means for Washington, business and the world
A green power producer previously backed by Donald Trump’s energy secretary has soared on its stock exchange debut as investors bet on a group poised to benefit from the administration’s support for geothermal energy.
The company, Fervo Energy, is backed by Bill Gates and Google. Its Nevada project is providing the search giant with 3.5 megawatts and recently signed a nonbinding deal for another 3 gigawatts. It has signed over 600MW in power purchase agreements.
Shares opened at $36 on the Nasdaq on Wednesday, after the company priced at $27 per share on Tuesday evening, giving it a market capitalisation of $10.1bn.
Investors are betting that Fervo can develop “next-generation” geothermal, which uses oil and gas drilling methods to create underground wells to tap heat. Conventional geothermal relies on naturally occurring areas with hot water and steam near the surface.
Despite being a renewable energy technology, the Trump administration is bullish on geothermal due to its ability to provide large amounts of continuous power, unlike intermittent solar and wind, to the grid at a time when electricity demand from AI data centres is booming. According to BloombergNEF, data centre power demand is set to surge from 34.7GW in 2024 to 106GW by 2035.
US energy secretary Chris Wright, in his prior role as chief executive of power generator Liberty Energy, directed a $10mn investment in Fervo in 2022. Wright divested his holdings before taking office, but used his first secretarial order to pledge research and development focus on geothermal, along with fossil fuels and nuclear.
The geothermal sector has retained access to former president Joe Biden’s Inflation Reduction Act-era tax credits until 2035 — while other clean energy sources such as solar and wind face an earlier phaseout — and received fast-tracked permitting from the Department of the Interior.
“[President Donald Trump] made clear on day one that geothermal is a resource to prioritise,” said Fervo chief executive Tim Latimer, noting that the administration has pledged a $171mn grant for the industry, the largest ever offered by the government.
Latimer said Fervo was evaluating its application and would be “in a really good position” to receive funding.
The company said in its registration filing with the US Securities and Exchange Commission that it was reliant on government grants “for a portion of our revenue and to partially fund our research and development activities”, having received $50mn since 2018.
Fervo also said its first project, located in Utah, would produce power at $7,000 per kilowatt, and that over time that would drop to $3,000. It is expected to produce its first 100MW in early 2027.
In order to bring down costs and scale, the industry must overcome technological and supply chain barriers, such as access to rigs that can drill to superhot rocks, and the huge machinery needed to convert it to electricity.
This article has been amended to reflect that Fervo’s first project in Utah will produce power at $7,000 per kilowatt, not per kilowatt hour
Climate Capital
Where climate change meets business, markets and politics. Explore the FT’s coverage here.
Are you curious about the FT’s environmental sustainability commitments? Find out more about our science-based targets here
