Fervo now has $12B in orders for its geothermal power tech

Fervo, a geothermal power company, has secured an impressive $11.9 billion in contracted revenue, a significant increase from $7.2 billion in the previous quarter. The company has been consistently meeting its deadlines, which has led to a surge in orders as companies such as Google seek sustainable electricity for their AI data centers.

Fervo is on track to complete a 396 megawatt power plant for Google by the end of 2028. The company recently connected its first 100 megawatt power plant to the grid in Utah, a location that could generate a massive 8.4 gigawatts of electricity. This development has allowed Fervo to surpass initial estimates of the site's capacity, which were predicted to be around 4 gigawatts.

Google has co-signed a deal with Fervo, known as Cape Google 400, to draw power from the plant and sell it to other customers if not immediately used. This arrangement allows both parties to operate independently. Fervo's approach to geothermal power construction is unique, with each well being deeper and hotter than previous ones, capable of generating 15 megawatts gross power each.

These geothermal power generation units, called GeoBlocks, are designed to match the demand of a typical data center, enabling hyperscalers to add them as they complete. Despite being in the early stages of business, Fervo ended the quarter with a $43.7 million operating loss but holds $1.9 billion in cash and $301.6 million in long-term debt, providing ample runway.

The company's cost of power plants is a significant factor for its success, as hyperscalers' hunger for power might change their pricing preferences in the future. However, Fervo has shown progress, as the cost for its Google project is $5,500 per kilowatt, a substantial decrease from $7,000 per kilowatt in its first phase. If Fervo can hit a target of $3,000 per kilowatt, it could potentially undercut natural gas power plants, even at today's fuel costs, making it a compelling option for the future.