IPO Corner: Geothermal Energy

What if there were a way to harness the sheer, boiling power of the planet and use that to propel our energy needs? What if, instead of continually plunging the earth for her spoils and stripping our world’s natural beauty, we instead walked with the inherent power of the earth harmoniously to provide our species’ power needs? Well, according to some scientists and movers and shakers in the business world, that may not be as far out as it sounds.

According to them, there is such an abundant, readily available power source just waiting to be tapped. It’s called geothermal energy… and the earth has lovingly provided it to us, should we decide to utilize it. But what is geothermal energy, why is it important, and can geothermal pack the punch we’d need to supply the whole world with power? Let’s learn a few facts to find out.

Why It Matters

The first thing to know about geothermal energy is probably the most important thing it has going for it, and that’s the fact that it’s always on. Geothermal never stops, ever. In fact, output at a geothermal plant is extremely stable and incredibly predictable. Not only that, but some estimates say that tapping into geothermal energy would be tapping into 17 billion years of power… with no carbon emissions or nuclear waste.

Essentially, geothermal energy is a power source that comes directly from the earth’s magma. Geothermal power plants are different from what we’re used to in energy. These plants don’t need to manipulate the elements to produce power using chemicals and machines… rather, they harness the steam that comes from the hot water that sits a couple of miles down below the earth’s surface. This water is used to rotate turbines to start generators, and this produces electricity.

Why is this important for us to pay attention to right now? Because we’re in a major energy crunch… and OPEC just cut oil production… couple that with other forces currently at play in the market and you can understand our need to find more, easier, cleaner ways to generate power for ourselves. This is where geothermal comes in. And the space is projected to grow to $6.8 billion in the next three years.

Geothermal energy is all around us, it escapes the earth through openings. So, any time you see a geyser, steam vent, hot spring, or mud pot, you’re looking at geothermal energy. All anyone would need to do in order to harness the power of those natural phenomena would be to properly rig up a turbine and a few other little details and they’d be set (look at us oversimplifying again).

Deals To Watch

Eyeing a piece of that geothermal pie, several companies are cropping up in this space, including Fervo Energy and Quaise Energy. Fervo Energy is a Houston-based startup that develops geothermal power to provide round the clock, carbon-free energy. The company believes that geothermal will play a key part in the future of energy and has made it their mission to leverage innovation in geoscience to facilitate, and lead the way, in this transition. The company offers technologies that include advanced computational models, horizontal drilling, and distributed fiber optic sensing and has a pipeline of projects with partners including East Bay Community Energy and Google.

When it comes to investors and backers, Fervo’s got them, including Capricorn and Breakthrough Energy Ventures, Helmerich and Payne, BHP, Activate, ARPA-E, and the Department of Energy Geothermal Technologies. Recently, the company completed a round of series C funding in which they picked up $138 million, which will be used to further the creation and operation of their carbon-free power plants fueled by geothermal energy.

As a terawatt-scale geothermal, Quaise Energy is all about large-scale geothermal projects. The company has the ambitious goal of opening access to renewable, baseload power from anywhere on planet earth using the power of deep geothermal. They confidently assert that their unique approach to geothermal is the key, an approach which they call “geography agnostic” because they outfit existing drilling rigs with millimeter wave technology to open the way for power-dense, deep geothermal energy on a global scale.

Earlier this year, the company expanded its series A financing round from $40 to $52 million, which was led by TechEnergy Ventures, HostPlus, Prelude Ventures, Safar Partners, and Xplorer Capital. The company will be using the funds to expand their technology development roadmap and form new projects to continue to scale operations. The company will unlock deep geothermal by reaching depths of 10-20 km below the earth using millimeter wave drilling systems to access power-dense, virtually unlimited geothermal energy everywhere on the planet.

Wow… these guys could help change the world and unlock plenty of investment opportunities within the geothermal energy space. Some assert that geothermal is the only viable avenue for reaching zero emission targets, and that, since the energy source is potentially inexhaustible, and without waste or geographical limitations, there is no sustainable future without it. If they’re right, we could end up seeing them on our Buy List. Come back next week, we’ll have more from the IPO space to carry us through these choppy investment waters. See you then!