Geothermal energy company Fervo has announced a quantum leap in its business volume, with the value of contracts in its backlog reaching $11.9 billion during the third quarter of 2026, compared to $7.2 billion in the previous quarter. This growth comes as hyperscalers race to secure sustainable and continuous energy sources to power energy-intensive AI data centers.
Strategic Projects and Expansion in Production Capacity
Fervo is currently in advanced stages of executing a 396-megawatt power plant project for Google, which is expected to be completed by the end of 2028. These projects rely on the company's site at Cape Station in Utah, where recent estimates have shown the potential to generate up to 8.4 gigawatts of electricity, double the initial estimates that pointed to only 4 gigawatts.
Tim Latimer, CEO and co-founder, explained that the nature of building plants in phases gives the company a competitive advantage, as generation units (GeoBlocks) can be connected to the grid gradually to meet the needs of data centers as soon as they are ready, without waiting for the entire project to be completed.
Why This News Matters
This development represents a shift in the energy strategies of major tech companies. While traditional renewable energy sources such as wind and solar rely on variable weather conditions, the geothermal energy developed by Fervo provides a stable baseload around the clock, which is urgently needed by AI data centers.
Cost Challenges and Economic Feasibility
Despite strong demand, the company is still in a growth phase, recording an operating loss of $43.7 million in the last quarter, while holding strong cash liquidity of $1.9 billion. The real battle lies in reducing production costs; the company has succeeded in reducing the cost of production capacity from $7,000 per kilowatt in the first phase to $5,500 in the Google project.
The company aims to reach a cost of $3,000 per kilowatt, a level that could make geothermal energy a direct competitor and cheaper than traditional natural gas plants, placing it in a strategic position within the global energy sector's shift toward low-carbon solutions.