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Fervo Energy has become a darling of the clean energy industry by using workers and technology from the oil and gas sector to unlock zero-carbon, all-day geothermal electricity. Last week, Fervo filed to go public, giving us the first deep look at its finances and long-term expansion plans. What’s the bull case, the bear case, and the fine print?
On this week’s episode of Shift Key, Rob is joined by Jesse Jenkins, a professor of energy systems engineering at Princeton University, as well as Heatmap’s Matthew Zeitlin to discuss the big news from Fervo’s new filing. Why are people so excited about Fervo? What are the biggest financial questions in its growth plans? And why does it need to go public now?
Shift Key is hosted by Robinson Meyer, the founding executive editor of Heatmap News.
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Here is an excerpt of their conversation:
Robinson Meyer: Jesse, one of the things that people are most excited about with Fervo — and one of the things, frankly, that you got me excited about with regard to Fervo and other enhanced geothermal companies — is that this is dispatchable power. It’s not only that it’s 24-7, but much like like we currently flex gas plants up or down to meet demand on the grid, we might be able to flex geothermal plants up and down. Can you just describe like how that would work and why it’s important to kind of overall value of this energy technology?
Jesse Jenkins: Yeah, so most people think of geothermal as a kind of zero marginal cost resource. It has no fuel cost, right? It’s producing power that’s on the margin, basically free. And so it would make sense to operate it like a “baseload resource” running 24-7, because why would you ever turn off?
The reality is that if you are deploying geothermal in a world with lots of cheap solar, for example, or wind in other parts of the West, there are many hours when power is literally worthless or very inexpensive, right? You’ve got wind and solar flooding the market at also zero marginal cost. And so producing power in those hours, you can do it, but why would you? It’s not valuable. When it’s valuable is the times when the sun is setting and the wind is dying down and you would otherwise have to fire up gas power plants.
So one of the cool things about enhanced geothermal is that you’re basically engineering a fracture network inside a very impermeable rock, right? You basically have a container around it of granite. And that means that very little fluid or pressure will leak out of the reservoir if you inject more fluid into it. And so you’ve basically built yourself a pumped hydrate reservoir underground for free, because that’s what you needed to create your heat exchanger to get the heat out for your power plant.
You can find a full transcript of the episode here.
Mentioned:
From Heatmap: 8 Things We Learned From Fervo’s IPO Filing
Jesse’s report on how to scale geothermal nationwide through experience-induced cost reductions
Jesse’s report on how geothermal can be a flexible resource, like natural gas
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Music for Shift Key is by Adam Kromelow.
