geothermal energy
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Geothermal technology has enormous potential to power the planet and Fervo wants to tap it
Tapping the geothermal energy stored beneath the Earth’s surface as a way to generate renewable power is one of the new visions for the future that’s captured the attention of environmentalists and oil and gas engineers alike.
That’s because it’s not only a way to generate power that doesn’t rely on greenhouse gas emitting hydrocarbons, but because it uses the same skillsets and expertise that the oil and gas industry has been honing and refining for years.
At least that’s what drew the former completion engineer (it’s not what it sounds like) Tim Latimer to the industry and to launch Fervo Energy, the Houston-based geothermal tech developer that’s picked up funding from none other than Bill Gates’ Breakthrough Energy Ventures (that fund… is so busy) and former eBay executive, Jeff Skoll’s Capricorn Investment Group.
With the new $28 million cash in hand, Fervo’s planning on ramping up its projects, which Latimer said would “bring on hundreds of megawatts of power in the next few years.”
Latimer got his first exposure to the environmental impact of power generation as a kid growing up in a small town outside of Waco, Texas near the Sandy Creek coal power plant, one of the last coal-powered plants to be built in the U.S.
Like many Texas kids, Latimer came from an oil family, and got his first jobs in the oil and gas industry before realizing that the world was going to be switching to renewables and the oil industry — along with the friends and family he knew — could be left high and dry.
It’s one reason he started working on Fervo, the entrepreneur said.
“What’s most important, from my perspective, since I started my career in the oil and gas industry, is providing folks that are part of the energy transition on the fossil fuel side to work in the clean energy future,” Latimer said. “I’ve been able to go in and hire contractors and support folks that have been out of work or challenged because of the oil price crash… And I put them to work on our rigs.”
Fervo Energy chief executive, Tim Latimer, pictured in a hardhat at one of the company’s development sites. Image Credits: Fervo Energy
When the Biden administration talks about finding jobs for employees in the hydrocarbon industry as part of the energy transition, this is exactly what they’re talking about.
And geothermal power is no longer as constrained by geography, so there are a lot of abundant resources to tap and the potential for high-paying jobs in areas that are already dependent on geological services work, Latimer said (late last year, Vox published a good overview of the history and opportunity presented by the technology).
“A large percentage of the world’s population actually lives next to good geothermal resources,” Latimer said. “[There are] 25 countries today that have geothermal installed and producing and another 25 where geothermal is going to grow.”
Geothermal power production actually has a long history in the Western U.S. and in parts of Africa where naturally occurring geysers and steam jets pouring from the earth have been obvious indicators of good geothermal resources, Latimer said.
“Fervo’s technology unlocks a new class of geothermal resource that is ready for large-scale deployment. Fervo’s geothermal systems use novel techniques, including horizontal drilling, distributed fiber optic sensing and advanced computational modelling, to deliver more repeatable and cost effective geothermal electricity,” Latimer wrote in an email. “Fervo’s technology combines with the latest advancements in Organic Rankine Cycle generation systems to deliver flexible, 24/7 carbon-free electricity.”
Initially developed with a grant from the TomKat Center at Stanford University and a fellowship funded by Activate.org at the Lawrence Berkeley National Lab’s Cyclotron Road division, Fervo has gone on to score funding from the DOE’s Geothermal Technology Office and ARPA-E to continue work with partners like Schlumberger, Rice University and the Berkeley Lab.
The combination of new and old technology is opening vast geographies to the company to potentially develop new projects.
Other companies are also looking to tap geothermal power to drive a renewable power-generation development business. Those are startups like Eavor, which has the backing of energy majors like bp Ventures, Chevron Technology Ventures, Temasek, BDC Capital, Eversource and Vickers Venture Partners; and other players including GreenFire Energy and Sage Geosystems.
Demand for geothermal projects is skyrocketing, opening up big markets for startups that can nail the cost issue for geothermal development. As Latimer noted, from 2016 to 2019 there was only one major geothermal contract, but in 2020 there were 10 new major power purchase agreements signed by the industry.
For all of these projects, cost remains a factor. Contracts that are being signed for geothermal that are in the $65 to $75 per megawatt range, according to Latimer. By comparison, solar plants are now coming in somewhere between $35 and $55 per megawatt, as The Verge reported last year.
But Latimer said the stability and predictability of geothermal power made the cost differential palatable for utilities and businesses that need the assurance of uninterruptible power supplies. As a current Houston resident, the issue is something that Latimer has an intimate experience with from this year’s winter freeze, which left him without power for five days.
Indeed, geothermal’s ability to provide always-on clean power makes it an incredibly attractive option. In a recent Department of Energy study, geothermal could meet as much as 16% of the U.S. electricity demand, and other estimates put geothermal’s contribution at nearly 20% of a fully decarbonized grid.
“We’ve long been believers in geothermal energy but have waited until we’ve seen the right technology and team to drive innovation in the sector,” said Ion Yadigaroglu of Capricorn Investment Group, in a statement. “Fervo’s technology capabilities and the partnerships they’ve created with leading research organizations make them the clear leader in the new wave of geothermal.”
Fervo Energy drilling site. Image Credits: Fervo Energy
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Geothermal startups get another boost from Chevron as the oil giant backs a geothermal project developer
The U.S.-based oil major Chevron is doubling down on its investment in geothermal power by investing in a Swedish developer of low-temperature geothermal and heat power projects called Baseload Capital.
Oil companies are under pressure to find new lines of business as the world prepares for a massive shift to renewable energy resources to power all aspects of industry in the face of mounting climate-related disasters caused by greenhouse gas emissions warming the temperature on the planet.
Joining Chevron in the investment was the ubiquitous billionaire-backed clean energy investment firm Breakthrough Energy Ventures and a Swedish investment group called Gullspang Invest AB.
The investment into Baseload follows closely on the heels of another commitment that Chevron made to the geothermal technology developer Eavor and a recent Breakthrough Energy Ventures investment in the Google-affiliated company, Dandelion Energy (a spinout from Google’s parent company’s moonshot technology development business unit, called X).
Dandelion and Eavor are just two examples of a groundswell of startups working to leverage the knowledge from the oil and gas industry to tap geothermal resources for applications ranging from baseload energy to home heating and cooling.
They’re joined by businesses like Fervo Energy, GreenFire Energy and Sage Geosystems, who’re all leveraging heat to generate power.
As Chevron noted in its press release, heat power is an affordable form of renewable energy that can be harnessed from either geothermal resources or waste heat.
The investments in Baseload and Eavor are financed by CTV’s Core Venture fund, which identifies companies with technology that can add efficiencies to Chevron’s core business in operational enhancement, digitalization and lower-carbon operations, the company said in a statement.
Together the two businesses are planning pilot projects to test technology and could look to current Baseload operations in Japan, Taiwan, Iceland or the United States to develop projects.
Financial terms of the deal were undisclosed.
“In August, we announced that we were looking for a new strategic investor to help us accelerate deployment in our key markets,” said Baseload’s Chief Executive Officer Alexander Helling. “We couldn’t have asked for a better one. Chevron complements our group of owners and adds expertise in drilling, engineering, exploration and more. These assets are expected to accelerate our ability to deploy heat power and strengthen our way of working.”
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Geothermal home heating gets a $30 million boost from Bill Gates’ Breakthrough Energy Ventures
There’s a low-energy solution to home heating and cooling sitting right underneath most houses, but until recently no one has been able to tap it.
That solution is geothermal energy, using the earth’s own heat to provide temperature-controlled comfort to homeowners is the mission that Kathy Hannun set for herself while working at Google X (the skunkworks division within Google) and it’s been her goal when she spun out her technology as the startup Dandelion Energy.
Her company is now helmed by chief executive Michael Sachse, a former entrepreneur in residence at the venture firm NEA and a longtime executive at the energy management company, Opower, so Hannun can focus on pushing forward the technology she developed.
Helping her advance the geothermal tech is a new $30 million cash infusion from Breakthrough Energy Ventures, the fund backed by Bill Gates and a slew of other billionaires to provide financing that can commercialize the new sustainable technologies needed to help the world respond and adapt to global warming.
In Dandelion’s case that means driving down the cost of installing geothermal systems from over $50,000 to roughly $18,000 to $20,000. The company partnered with Con Edison back in 2019 to offer Westchester homeowners $5,000 off their installations, and that project accounts for some of the 500 homes that are already using Dandelion’s system.
While the number of installations is small, Sachse and Hannun have ambitious goals, as well as some other strategic financial backers that may help them meet their targets.
Chiefly, the U.S. homebuilding giant Lennar is an investor in the company’s latest round and their presence on the cap table could mean big things if Dandelion can get its systems installed in any planned new construction.
“Our goal is to be able to do 10,000 homes per year. When we think about getting to 10,000 homes per year what that requires is for us to expand geographically,” Sachse said. “Lennar, which depending on how you measure it is either the second-largest or the largest homebuilder — they are not just an investor but we are working with them on developing communities.”
For now Dandelion’s technology is only used by folks in very specific situations who could loosely be described as upper middle class.
“We think of our typical customer as someone who is interested in making a sound economic choice. They’re in their 40s or 50s, with a college degree and good credit,” Sachse said. “Living in a home that is 2,000 to 2,500 square feet that is by definition a little bit removed from the traditional urban infrastructure. Upper middle class product in the same way that solar has found traction in homes like that.”
Currently, the company focuses on the retrofit market and is confining its operations to the Northeast, where there are roughly 5.6 million homes that use fuel oil or propane, where installing a Dandelion system can make economic sense given the current costs for the tech.
“The core target customer is someone who is using fuel oil or propane to heat their home. The reason to target them is because we think the payback for them is most attractive,” Sachse said. “Typically the customers who are investing in a Dandelion system and paying cash are going to see a five to seven-year payback. Customers who are financing are going to see a lower energy bill from day one.”
Dandelion’s innovations touch on three different aspects of making geothermal systems work: the drill, the heat exchanger and the monitoring and management system for the heating and cooling system once it’s installed.
First, the company designed a drill that could give installation operations a smaller footprint. Installers need about seven feet of space to drill down the 300 feet to 500 feet the company needs to access the 55 degree temperatures necessary to create the Dandelion heat loop.
The company then connects that loop to a novel heat exchanger located in a mechanical room of the house. That heat pump is connected to several sensors, allowing the company to integrate with things like the Nest Thermostat to enable homeowners to have more control of the temperature in their homes through their smart phones.
Dandelion Energy heating and cooling system. Image Credits: Dandelion Energy
Dandelion’s system also includes a smart remote monitoring system that collects and stores data. The data is then uploaded about every 10 seconds and is monitored by Dandelion engineers, the company said. This means any potential problems will be caught immediately and a repair man can be sent to the homeowner’s house before the customer is even aware there might be an issue.
The company’s executives argue that massive adoption of their home heating and cooling systems represent a vital part of any energy transition away from fossil fuels, chiefly because electric heating systems are inefficient.
“If we had a grid that was large enough to support renewable supply electricity and not worry about the efficiency of the electricity demand, we’d be in an amazing spot,” Sachse said. “Realistically to electrify the grid we need to triple our capacity while becoming more efficient. I don’t see how we get there without as part of that journey finding more sustainable ways to heat our homes.”
Geothermal home heating would certainly go a long way toward stabilizing the grid, according to Hannun.
“Already air conditioners that are more efficient are putting enormous strain on the grid. Drives fuel use and transition challenges. The benefits of geothermal because of that connection to the ground is really moving out the demand peak,” she said. “The technology has a lot of benefits that it confers to the grid and help it operate much better. Which is one reason why we’ve seen utilities in New York embrace this technology and really become its champion.”
Breakthrough Energy Ventures is wholeheartedly on board with Dandelion’s solution.
“Through a combination of technology, data and operations, Dandelion is making geothermal heating and cooling cost-effective for the residential market, and working to solve a critical need for homeowners and our energy ecosystem,” said Carmichael Roberts of Breakthrough Energy Ventures in a statement. “Dandelion’s geothermal heat pumps provide an efficient electric heating and cooling system that lowers the cost of heating and cooling for homeowners, no matter their region or climate. We’re looking forward to working with Dandelion as they look to fully displace fossil fuels from the home’s heating and cooling systems.”
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HyperSciences raises an untraditional $9.6M for its hypersonic drilling vision
We profiled HyperSciences in February, when the team had just successfully completed a launch milestone for a small business grant with NASA. The last time we checked in, the hypersonic drilling company had raised about $5 million as part of an untraditional Reg A offering. By the end of March, HyperSciences rounded out its first major round with $9.6 million from 3,552 individual investors on SeedInvest in the equity crowdfunding platform’s second largest raise to date.
The heart of HyperSciences’ work is its hypersonic propulsion system that can fire a projectile at five times the speed of sound. At its most simplistic, HyperSciences’ hypersonic engine can fire upward to power suborbital space launches (HyperDrone) and point downward to penetrate deep pockets of geothermal energy, for example (HyperDrill).
Rather than going the normal venture capital route, HyperSciences decided to raise from regular people who believed in its vision. The way the company sees it, traditional VC would have likely forced HyperSciences to narrow its mission.
“Reg A lets everyone who cares about our planned hypersonic future vote with their checkbook,” HyperSciences founder and CEO Mark Russell told TechCrunch. “I think that’s important.” Russell comes from a family-run mining business and is no stranger to the challenges of a public company.
“I’ve learned a lot from running ops in the back offices,” Russell said. “Based on our public company experiences, we do like that the SEC Reg A process has a clear path to taking your company to the public markets as the next step in the process.”
With infusions of $125,000 from NASA’s Small Business Innovation Research grant and $1 million from Shell’s Global’s GameChanger program, HyperSciences is happy to bounce between research grants with a boost from the Reg A’s special form of “mini-IPO” in order to maintain its autonomy for the time being.
Russell explained that the Reg A’s intensive SEC process requires a fair level of maturity from a company — and enough capital to jump through all the hoops. “You’re not typically a seller of t-shirts in Reg A crowd financing,” Russell said.
HyperSciences’ next milestone will come in May when the company will demo its drilling tech in a field test for Shell. The company plans to leverage its new funding for additional future field testing, pushing its existing business plan forward and moving toward sustainability.
“Our investors are more like smart ‘crowd VCs.’ They’re generally are pretty savvy and see that we went through a stringent process to get here,” Russell said. “We’ve provided them with enough information to make a great decision.”
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