Startup Mazama Energy has raised $135 million in a Series B funding round, which the company said exceeded its target subscription size. The company will use the capital to develop horizontal wells in superhot rocks, saying each well could produce up to 15 megawatts of electricity around the clock.
Mazama plans to begin generating electricity at its first site in the U.S. state of Oregon during the coming year. It is targeting completion of the site’s development by 2030 and production capacity of 200 megawatts. The company also said the site currently has, according to its estimate, the potential to produce 10 gigawatts, compared with a previous estimate of 5 gigawatts last year, as reported by investor Vinod Khosla.
Drilling in Deeper, Hotter Rocks
Mazama’s approach differs from conventional geothermal energy projects, which typically rely on thermal resources closer to the surface. The company drilled to a depth exceeding 10,000 feet in 15 days and is targeting approximately 15,000 feet, where the rock temperature is about 750 degrees Fahrenheit, or 400 degrees Celsius.
At these depths and pressures, water becomes what is known as a supercritical fluid, a state in which water is not entirely liquid or gaseous. The company says this state can absorb far more energy than ordinary steam, potentially allowing a well to produce up to ten times the energy provided by conventional geothermal technologies.
Why Does This Development Matter?
The round comes as technology companies and data center operators seek electricity sources capable of operating continuously to meet the large loads associated with artificial intelligence. The progress of enhanced geothermal energy companies points to an alternative to the growing reliance on natural gas to power those loads, but the ability of these projects to compete will remain tied to proving that drilling and commercial operation are possible at scale.
The appeal of this approach is based on the potential size of the resource; estimates from University of Twente and Clean Air Task Force indicate that exploiting just 1% of the world’s superhot rocks could produce more than 63 terawatts of electricity. However, this figure describes the theoretical potential of the resource and does not represent confirmed production capacity from operating projects.
Funding and Next Steps
The round was led by Centaurus Capital and Doerr Capital, with participation from ConocoPhillips and Shell Ventures. Existing investors also participated, including Khosla Ventures and Gates Frontier, while new investors SiteGround Capital, H. Barton Asset Management, and Jeffrey and Marieke Rothschild Foundation joined the round. Mazama originated within Khosla Ventures and has already secured land to develop a second project.
In practical terms, the decisive test now lies in the company’s transition from early drilling and theoretical estimates to actual electricity production in Oregon. The generation start date, the well’s 15-megawatt capacity, and the site’s estimated 10-gigawatt capacity remain targets announced by the company, while the source has not yet provided commercial operating results proving that they have been achieved.