Mashadipati: Geothermal’s big IPO moment

Geothermal energy is having a moment, and Fervo is poised to take advantage of it. The company just pulled in $421 million in new debt financing, and an even bigger sign of Fervo's momentum is its plan to go public.

Today's newsletter takes you to Utah, where the company is building a massive geothermal power plant. We also bring you some data insights on the emissions impact of chip manufacturing, and the latest Zero episode — an exclusive interview with IPCC boss Jim Skea.

Drilling down

By Michelle Ma

When I first started writing about climate tech four years ago, geothermal was barely a blip on the energy industry's radar. Using the Earth's heat for energy is an expensive endeavor that's only available in a few select places with the right geology.

Yet there was one company I kept hearing rumblings about: A startup called Fervo Energy that was trying to appropriate oil and gas fracking techniques to bring down costs and expand geothermal's potential. Then, in 2023, Fervo proved its approach could work commercially.

Construction materials at Fervo's Cape Station site. Photographer: Lindsay D'Addato/Bloomberg&nbsp; — Construction materials at Fervo's Cape Station site.

The company's fortunes have continued to rise since then. Fervo is getting ready for a long-awaited IPO, and geothermal has become a rare bright spot for a clean energy sector that the Trump administration has otherwise trampled on. In fact, it's due to the administration's push for what it calls "energy dominance" and the data center boom's voracious electricity appetite.

Still, it's one thing to be lucky on timing, as Chief Executive Officer Tim Latimer told me. It's another to take full advantage of it and actually succeed. Fervo still has to prove that its enhanced geothermal system can work at a meaningful scale and that it can keep costs down as its ambitions grow. To see how Fervo is trying to take advantage of the moment, I traveled to Utah last year to tour the company's new facility under construction.

The site was frenetic. In trailers, scientists examined rock samples to help track drilling progress. Outside, some of the roughly 400 workers switched out a used drill bit on one of three well pads that will make up the plant's first phase. Each pad is intended to house eight wells.

Along with borrowing fracking techniques, the site also mirrored the look of a shale field, complete with a giant drilling rig and a billowing American flag.

When fully operational, the Utah plant is expected to produce enough power for 400,000 homes annually. It could help unlock the immense potential of enhanced geothermal: The Energy Department projects that in the US alone, it could provide up to 120 gigawatts of energy — enough to power roughly 100 million homes.

While Fervo has benefited from a first-mover advantage, it will need to continue raising capital to stay ahead of other startups. The company announced Thursday that it secured a $421 million debt package to complete construction of the first phase of its Utah plant, and it's also planning its IPO.

I get into those details, as well as what challenges the next generation of geothermal technologies face, in my new feature for Bloomberg News. For more reporting on the energy transition and the companies at the forefront, please subscribe.

Geothermal wildcatters

282%

The percentage by which the average price of a geothermal lease in the US surged last year. Fervo used a large portion of its Series A funding to make purchases before prices spiked.

Need for speed

"Geothermal will happen much faster."

Vinod Khosla

Founder, Khosla Ventures

Khosla is bullish on both geothermal and fusion to meet burgeoning power demand. But he sees geothermal as much closer to commercialization.

Chip emissions on the rise

By Aaron Clark

The rush to boost production of memory chips to meet fast-accelerating demand from artificial intelligence will add to the semiconductor sector's climate footprint and risks lifting costs of managing emissions.

Higher manufacturing volumes, efforts to deliver more complex and resource-intensive products, and additional production in nations with fossil fuel-reliant power grids will combine to increase the industry's pollution profile, according to Ottawa-based research firm TechInsights Inc.

Semiconductor manufacturing emissions will climb by about a third to 247 million metric tons of carbon dioxide equivalent by 2030, the researcher forecasts. That's higher than annual emissions of scores of countries and roughly equivalent to the 2024 volume produced by Algeria.

Read the full story.

This week's Zero

The United Nations Intergovernmental Panel on Climate Change is responsible for collating our shared scientific understanding of how global warming is impacting the planet. But the body now faces a challenge after the US withdrew funding for its scientists to participate. Professor Jim Skea, who chairs the IPCC, joins Akshat Rathi on Zero to talk about the body's future, whether the organization can survive the US pullback, and what questions the next set of reports are going to answer.

Listen now, and subscribe on Apple, Spotify or YouTube to get new episodes of Zero every Thursday.

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Australia appointed former energy regulator Anthea Harris as a new fuel czar to coordinate the response to price spikes and supply chain disruptions as a result of the war in the Middle East.