Fervo Shares Surge on Geothermal Power Deal With Google
(Bloomberg) -- Shares of Fervo Energy Co. surged Tuesday after the geothermal developer signed a deal to sell almost 400 megawatts of power to Alphabet Inc.’s Google for a prospective data center in Utah.
Fervo’s stock rose as much as 26%, the biggest gain in more than a month, after the agreement was announced. The company plans to begin providing power to Google from its Cape Station project in southwestern Utah in 2028.
With backing from Bill Gates’ investment firm Breakthrough Energy Ventures and shale oil producer Devon Energy Corp., Fervo is among a number of companies applying oil and gas fracking methods to geothermal energy production, helping unlock more energy in more places. As part of these efforts, Fervo is seeking to capitalize on the growing power demand for data centers. The company already has power agreements with Southern California Edison Co. and Shell Plc, as well as Alphabet.
Geothermal’s clean, around-the-clock electricity is attractive to companies in search of continuous power — and a route to meet longstanding climate goals. In the agreement with Fervo, Alphabet has the option to tap another 600 megawatts of capacity from Fervo’s Cape Station project by 2030. That would bring Alphabet’s order to almost 1 gigawatt, the equivalent of a traditional nuclear reactor.
RBC Capital Markets analyst Christopher Dendrinos said the Fervo-Alphabet deal “was anticipated, but comes sooner than we thought.”
Fervo went public in May and the company’s stock rose to a high of almost $40 in early June and has since declined to under $20.
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