Geothermal Startup Raises $134 Million for Drilling Superhot Rocks
(Bloomberg) -- Geothermal startup Quaise Energy raised $134 million to develop technology for drilling superhot rocks.
The Series B funding, led by Prelude Ventures, will help the company scale its first commercial initiative, a 250-megawatt plant being built south of Oregon’s Newberry Volcano, Quaise said Tuesday. Capitalizing on the need for continuous carbon-free power for data centers, Quaise has already signed up a hyperscaler customer for the project’s first 50 megawatts, said Chief Executive Officer Carlos Araque. He declined to identify the customer.
For decades, geothermal was viewed as an expensive and hard-to-access energy source. But technological breakthroughs combined with a surge of AI-driven interest has resulted in the energy source experiencing a bit of a renaissance in recent years. In May, geothermal developer Fervo Energy Co. attracted almost $1.9 billion in a US initial public offering that priced above the marketed range, signaling renewed interest in a previously forgotten sector.
Araque said demand for reliable, always-available clean power has never been stronger, adding that Fervo’s IPO has boosted investor interest in the sector. But, he said, the electricity is still costly. “We can do a lot better than this.”
Houston-based Quaise has said it aims to lower geothermal costs by using a proprietary millimeter-wave drilling technology to access more energy with fewer wells by drilling deeper for hotter rocks. At greater depths, Quaise would replace a drill bit with an energy beam, essentially using microwaves to vaporize rock. The process is designed to reduce the downtime required for switching drill bits and the cost involved in replacing bits, making geothermal a more cost-competitive energy source.
To reach desired temperatures of 300C (572F) to 500C, Quaise will have to drill deeper than Fervo and other enhanced geothermal systems. So far, the company has reached depths of 500 meters at its site in Marble Falls, Texas, and it’s targeting 1,000 meters by the third quarter and 5,000 meters by the end of 2027. At the same time, Quaise plans to complete the first flow test at its commercial site in Oregon by the end of the year, a key step toward attracting money to finance the project.
The funds will cover the company’s program through the end of 2027, at which point it will pursue a Series C funding, Araque said. After that, it plans to follow the Fervo playbook and enter the public market, barring an acquisition or merger, he said.
Founded in 2018, Quaise is one of a number of companies attempting superhot rock geothermal. Competitors include Mazama Energy, which also is operating near Newberry Volcano.
(Adds information about company’s history in final paragraph. An earlier version corrected amount of fundraising and the drilling depth.)
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