Google has agreed to purchase 396 megawatts of electricity that Fervo Energy will produce at the Cape Station geothermal power facility in the U.S. state of Utah, in a deal that could expand to nearly one gigawatt. The facility is expected to begin operations in 2028, while Google retains the option to purchase an additional 600 megawatts through June 2030.
The agreement is linked to a new data center that Google plans to build in Utah and comes as cloud computing and AI companies seek stable electricity sources to meet the growing demand for powering data centers. Unlike intermittent renewable energy sources, geothermal energy can provide continuous generation, making it an important option for projects that require a steady around-the-clock supply.
Why does this agreement matter?
Google has been purchasing electricity from wind and solar power and battery systems in the United States and other markets for years, as part of its commitment to achieve net-zero emissions by 2030. However, the company signed an agreement in April with data center developer Crusoe to obtain 933 megawatts of electricity generated by natural gas in Texas, making the environmental target more difficult to achieve. The Fervo deal could provide another source to power Google’s AI expansion while reducing pressure on this target, according to the information cited in the report.
Cape Station’s potential and enhanced geothermal technology
Fervo has obtained permits to develop up to two gigawatts of geothermal energy at the Cape Station site. TechCrunch quoted Sarah Jewett, Fervo’s senior vice president of strategy, as saying that an independent engineer estimated the site contains enough heat to produce twice the permitted capacity, or about 4 gigawatts if the project is fully developed.
This capacity would be approximately twice the total geothermal power generation capacity in the United States, according to a recent report by the U.S. Department of Energy. The report also estimates that enhanced geothermal energy technologies, which Fervo is developing to access deeper heat sources, could enable the United States to generate up to 57 terawatts of electricity.
What has not yet been settled?
The deal does not mean that the full potential capacity will become available immediately; the currently confirmed capacity is 396 megawatts, while the additional 600 megawatts is an option that Google can exercise through June 2030. Cape Station will also not begin operations before 2028, leaving the project’s actual implementation and testing of the technology’s performance as decisive factors in assessing the agreement’s impact.
Google and Fervo have been working together for more than five years. Google was among the first buyers of electricity produced by the startup and also invested in its latest funding round before it went public. Fervo’s stock rose about 30% after the deal was announced before partially declining as traders took profits, reflecting the agreement’s direct financial impact on the company alongside its value in the energy market.