Fervo Energy, Geothermal Startup, Sets Terms for Nasdaq IPO

U.S. history. 8 billion in its IPO.

4 billion. 6 million shares at around $21 to $24 each earlier this year, the line was reportedly out the door. Fervo uses horizontal drilling and fiber-optic sensing to tap geothermal sources previously out of reach.

The company has successfully deployed its technology in Nevada, producing enough clean energy to power about 2,600 homes. It is building the Cape Station facility in Utah that would produce more than 100 times the electricity of the Nevada deployment. Cape Station is slated to go online later this year.

Fervo has secured hundreds of millions of dollars in additional financing for Cape Station. The prospect has drawn high-profile investors including Bill Gates’s Breakthrough Energy Ventures and Alphabet, which has signed contracts to supply power to its data centers. Fervo hopes of cutting the price of geothermal from $7,000 to $3,000 per kilowatt.

“Innovation is allowing these technologies to cover a wider variety of sites,” said Zainab Gilani, a geothermal analyst with research firm Cleantech Group. The IPO comes against a backdrop of surging electricity demand driven by data centers for artificial intelligence. The Iran war has only exacerbated energy prices.

Grist reported that some view the offering as a promising sign for clean tech despite recent policy shifts. The Inflation Reduction Act was signed in 2022 by former President Joseph Biden. The Inflation Reduction Act included billions for solar, wind, geothermal and other green technologies.

But since returning to office, President Donald Trump and Congress have largely dismantled that legislation, rolled back much of the nation’s wind development, and pushed fossil fuel as the answer to the country’s energy woes. Earlier this year, Amazon-backed nuclear reactor developer X-Energy raised $1 billion with its public offering and is valued at more than $9 billion.

Grist reported that Jigar Shah, a former senior official at the Department of Energy under Biden and now managing partner at the investment firm Multiplier, said there is a level of confidence coming to the clean tech sector. “There is a level of confidence coming to our sector, which I think is great,” Shah said. “For a long time, our space has acted as if we’re alternative energy.

Climate economist Gernot Wagner at Columbia Business School called the IPO significant. “This is a very, very big deal. ” Rob Gramlich, president of Grid Strategies, offered a more tempered view on the technology’s immediate prospects.

“They’re just not here yet on any large scale.