Published: September 4, 2026 | Category: Deals & M&A

Enhanced geothermal developer will supply a potential Utah data center from 2028, with an option to lift Google’s offtake to nearly 1 gigawatt by 2030.

Fervo Energy has agreed to sell 396 megawatts of geothermal power to Google, the largest power purchase agreement for enhanced geothermal energy signed to date. The Houston-based developer said on September 1 that the electricity would flow from its Cape Station project in southwest Utah beginning in 2028, and would serve as the foundational supply for a potential Google data center in the state.

The contract gives Google an option to expand its purchase by about 600 megawatts, taking the total to nearly 1 gigawatt by June 2030. Fervo cautioned that final data center plans remain subject to engineering feasibility, state and local approvals and commercial conditions.

Enhanced geothermal systems use the horizontal drilling and hydraulic fracturing methods refined in shale oil and gas to reach heat trapped in hot, dry rock several kilometers underground. Fervo has argued that the approach can deliver round-the-clock, carbon-free electricity at utility scale, a profile that sets it apart from intermittent wind and solar. The Google contract extends Cape Station beyond its initial 100 MW phase, with Fervo pointing to standardized, repeatable construction as the route to lower costs.

The deal deepens a partnership that began with Project Red, Fervo’s commercial pilot in Nevada that came online in 2023 and feeds the local grid, including Google data centers in the state. In June 2024 the two companies and NV Energy signed a 115 MW agreement structured through a Clean Transition Tariff, a mechanism designed to bring geothermal onto the grid without passing project costs to other ratepayers.

The agreement lands as hyperscale technology companies scramble for firm power to run artificial intelligence workloads. Data center electricity demand has strained grids and pushed operators toward suppliers that can guarantee output at all hours rather than only when the weather cooperates.

“This agreement reinforces that EGS is ready to power the next generation of computing infrastructure,” said Tim Latimer, chief executive and co-founder of Fervo. Michael Terrell, Google’s head of advanced energy, said the project would “help catalyze long-term energy cost reductions by making enhanced geothermal more affordable and accessible.”

Investors welcomed the news. Fervo shares rose about 28 percent on September 1 to close near $19.75, though the stock remains below the $27 at which it priced its initial public offering in May 2026. The company, backed by Bill Gates’s Breakthrough Energy Ventures, has spent heavily to scale its operations while generating little revenue, leaving its valuation a live question for the market. Analysts have also flagged transmission constraints across the western United States as a potential brake on how quickly contracted capacity can reach customers, according to a June note from Jefferies reported by Utility Dive.

With deliveries not due to begin until 2028 and the larger expansion option running to 2030, the commercial payoff from the Google contract sits several years out. For now it gives Fervo its biggest signed offtake yet, and hands Google a template for sourcing continuous clean power as it weighs where to place its next wave of data centers.

Sources