Sunita Somvanshi
California’s major power company, Southern California Edison (SCE), has agreed to purchase geothermal energy from startup Fervo Energy. These 15-year contracts will supply energy to approximately 350,000 households across Southern California, supporting the state’s transition to cleaner energy. Fervo Energy produces electricity using Enhanced Geothermal Systems (EGS) technology and is currently developing a geothermal power plant project in Utah known as “Cape Station.” This project aims to create 100 geothermal wells with and is expected to be connected to the grid by 2026, with full power production starting in 2028, potentially generating up to 400 MW of endless clean power.
Fervo Energy announced through a statement that they have signed two power purchase agreements (PPAs) totaling 320 MW with Southern California Edison. These agreements pertain to Fervo Energy’s Cape Station project, expected to generate 400 MW once completed. The first phase of 70 MW is set to be operational by 2026, followed by the second phase in 2028.
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This deal was prompted by regulatory authorities in California requiring utility companies to procure 1,000 megawatts of cleaner energy that can be used more frequently than existing wind and solar power plants by 2026. This has sparked interest in geothermal power, which can operate 24/7. According to David Hochschild, Chairman of the California Energy Commission, “Enhanced geothermal systems complement our abundant wind and solar resources by providing critical base load when those sources are limited.”
Fervo’s innovative drilling technology, adapted from the oil and gas industry, meets this increasing demand for continuous renewable energy. Initial drilling results, published in February 2024, show faster drilling times and overall cost reductions at the Cape Station project. These positive results support ongoing commercialization and readiness for large-scale agreements like this geothermal PPA, the largest in the world to date.
“Geothermal stands as the dependable and adaptable solution essential for California’s journey towards a fully decarbonized grid,” says Dawn Owens, VP, Head of Development & Commercial Markets at Fervo Energy. “As electrification increases and climate change burdens already fragile infrastructure, geothermal will only play a bigger role in U.S. power markets. Fervo looks forward to continuing to meet these needs, providing firm, clean power to help balance California’s energy portfolio.”
Since 2021, Fervo has signed several contracts, including a 53 MW agreement with community choice aggregators in California and a partnership with Google to develop the first next-generation geothermal power plant dedicated to a corporation. Fervo’s commercial pilot in Nevada, operational since November 2023, provides carbon-free electricity to Google’s local data center grid.
