For a species living on a planet filled with blistering hot magma, you’d think we’d be using that for most of our energy needs – but we’re not. These geothermal startups below are trying to change that.
Geothermal Energy: A Brief Overview
In its simplest form, geothermal energy has been around since the dawn of civilization; our early ancestors may have boiled their food in hot springs, for example. In a way, the same method is used in geothermal plants today, though it’s slightly more sophisticated: underground reservoirs of water, heated from below by the magma, are pumped to the surface. The steam produced by the water is used to spin turbines, which generate electricity; the water is then injected back into the rock. The exact mechanism might change depending on the plant in question, but that’s the basic principle behind traditional geothermal plants.
On paper, geothermal sounds like the perfect energy source. For one, it’s both renewable and consistent; unlike other renewables like wind and solar, geothermal produces energy at a constant rate and doesn’t depend on the weather or availability of daylight. There’s also a lot of it. The energy flowing from Earth’s sizzling interior comes out to around 40,000 GW: over twice the world’s energy consumption as of 2022. In some countries, it already makes up a healthy chunk of energy usage; Kenya, for example, runs on 47% geothermal, and 85% of houses in Iceland are heated with it.
Why, then, does geothermal only account for less than 1% of global energy generation (giving it its nickname, the ‘forgotten renewable’)? Some of it comes down to money; as reported by Forbes, geothermal projects can be pretty pricey to set up, requiring $8.7 million in investments per megawatt produced (compared to the $1.8 million/MW needed for wind projects). Geology also plays a role. The best sites for geothermal energy are tectonic plate boundaries or areas where Earth’s crust is thinner than normal – in short, follow the volcanoes. This is why countries like Iceland, Kenya, and Indonesia are particularly well placed to harness it.
But in areas that aren’t geologically blessed, modern methods – often spearheaded by startups – can help. For example, Enhanced Geothermal Systems – EGS – involves injecting fluids into the ground to make the rock more permeable (instead of relying on existing underground reservoirs). The fluid can then circulate, heat up, and be used for energy. Predictive modeling can also help identify viable drilling locations, reducing the risk of the site being a dud after millions of dollars in drilling costs.
Read also: Top 5 Renewable Energy Startups in 2024
5 Leading Geothermal Startups
Fervo Energy
With a cool $421 million in the bank, US-based Fervo is one of the most prolific geothermal startups. Founded in 2017, this startup focuses on ESG; its specialism is horizontal drilling, which allows it to create multiple wells from one drilling site. The technique originates from the oil and gas sector, where co-founder and CEO Tim Latimer worked in a past life before realizing the potential for geothermal. After drilling, Fervo fits its wells with fiber optic cables, through which it can analyze data from the reservoirs and ‘optimize flow distribution.’ Its first plant, called Project Red, was completed in 2023 and has a capacity of 3.5 MW. The startup is now working on its second plant, Project Cape, with a capacity of 400 MW once it reaches full-scale production in 2028. Latimer has also suggested a mass-manufactured, standardized 50 MW unit.
Eavor
Eavor – pronounced ‘Ever’ – was founded in 2017 out of Canada and has raised $288 million for its so-called closed-loop geothermal technique. The system, called Eavor-loop, works similarly to a radiator. A fluid flows through a set of isolated pipes that go kilometers deep into the Earth; it heats up and returns to the surface, where the energy is collected via turbines. Since the fluid is sent in via pipes, the technique doesn’t rely on the presence of underground reservoirs or specific rock formations. Eavor’s first two plants were inaugurated in 2019 and 2023, respectively; the company is now working on a plant in Geretsried, Germany, with a capacity of 65 MW upon completion in 2027.
Quaise Energy
Quaise Energy’s USP is simple: to ‘drill deeper, hotter, and faster’ than the competition. The startup was founded in 2018 with the aim of drilling as far as 20 kilometers into the Earth to reach temperatures of up to 500° Celsius; at these depths, claims Quaise, geothermal becomes viable anywhere on Earth. With a target for an initial demonstration still scheduled for 2024, Quaise has so far raised $91 million for its efforts; in 2026, Quaise aims to extract the first steam from its wells, followed by commercial operations in 2028.
Sage Geosystems
Sage Geosystems is a geothermal startup founded in 2020, recently hit the big time when it snagged a contract to build a 150 MW facility for Meta. It specializes in GeopressuredGeothermal Systems (GGS): essentially an underground battery. It works by creating fractures in the rock several kilometers below ground, then injecting them with water at high pressure (powered by solar or wind energy); all of this, the company claims, is possible with readily available fracking technologies. When more energy is needed, the water is released to collect the energy at the surface. Sage has investments totaling $56.8 million in its pocket; it’s now working on EarthStore, a 3 MW plant in Texas, in addition to its Meta facility and another handful of smaller development contracts.
Zanskar
All the EGS in the world won’t make geothermal a thing unless you find juicy drill sites; roughly half the eyewatering upfront costs for a geothermal plant come down to drilling, making it pretty painful if you get the site wrong. That’s where Zanskar comes in. The US-based startup, founded in 2019, has bagged $45.5 million in investments for its AI-driven technology for identifying ideal drill sites. This startup feeds satellite and geological data into its machine-learning models, adding data from exploratory digs to improve the models’ accuracy as they come (as reported by Forbes).
Why Might Companies Be Interested In Investing In Geothermal Startups?
There are two main types of companies investing in geothermal energy, both with their own reasons. The first group consists of tech giants like Meta and Google, both of which have recently invested heavily in geothermal alongside a host of other renewable or clean energy projects. Much of this is down to the groups’ interest in generative AI, which sucks up enough energy to require brand-spanking new energy facilities. Geothermal, as well as nuclear, would provide a steady stream of energy (though it doesn’t always directly go to the data centers; Meta’s Sage plant, for example, would supplement the grid with the same amount used up by the company).
Of course, the squeaky-green image these projects grant the companies is a nice side effect – one that the second group of investing companies might also enjoy. These are the fossil fuel giants the likes of Chevron and Liberty Energy. But for them, investing in geothermal also provides a way of diversifying their businesses while allowing them to influence the industry’s landscape lest any independently sponsored project hits the big time. And for fossil fuel companies, whose methods, equipment, and even personnel overlap with that of geothermal, investing a few million here is somewhat of a no-brainer.
The Future of Geothermal Energy Startups
While geothermal startups are popping up everywhere, the industry is particularly lucrative in the US – demonstrated by the startups listed above. And while most startups are still getting into the swing of things, the sector is on the rise (though it’s growing slower than other renewables). By 2050, the US Department of Energy expects to go from almost 4 GW in geothermal capacity – about 0.4% of the country’s electricity generation – to at least 90 GW. This is still significantly less than the thousands of GW predicted for more conventional renewables, but it’s a lot further than the field would be without next-generation techniques – developed predominantly by startups – that heighten the method’s efficiency and broaden the scope of drill sites.
Still, even though geothermal energy has been around for centuries and is already mainstream in many regions, this new wave of startups has yet to prove itself. Most of their technologies are either still in development or in their earliest phases of commercialization. And the tech might have come a long way, but some of the old issues remain– namely the high costs, scalability, and regulatory red tape, so BloombergNEF. While thousands of gigawatts’ worth of energy lurks just a few kilometers beneath our feet, reaching it is easier said than done.
