Geothermal startup Fervo Energy has brought its Cape Station project in Utah online, selling 33 megawatts of power to the grid. This marks the first time a utility-scale, next-generation geothermal facility has achieved such a feat worldwide.
Cape Station Enters Commercial Operations in Utah
The Houston-based firm brought an initial 33-megawatt power block online late last week. Since then, the facility has undergone testing and output ramping. On Thursday, commercial operations officially begin, supplying carbon-free electricity to Shell Energy, a retail power provider operating in California.
The $2 billion Cape Station project is slated to reach 500 megawatts eventually. Unlike traditional geothermal plants that draw on naturally occurring hot water and steam, Fervo engineered its own subterranean resource. The company uses drilling techniques from the oil and gas industry to create reservoirs in hot, dry rocks that generate steam to produce electricity.
“Traditional geothermal would have never been done in southern Utah,” says Dawn Owens, Fervo’s senior vice president and head of development and commercial markets.
With the first unit active, Fervo is working to commission two additional 33-megawatt power blocks by January 1, 2027. Construction is already underway for the remaining 400 megawatts of the project, backed by a supply agreement with Google and scheduled to come online in 2028.
Scaling Beyond Project Red
Prior to Cape Station, Fervo operated a 3.5-megawatt commercial pilot plant in Nevada known as Project Red, which went online in late 2023. Owens notes that while the pilot was essential for demonstrating the core technology, firing up Cape Station proves that the approach can scale to meet wider commercial markets.
“This is massive for both Fervo and the geothermal industry at large,” Owens says.
Fervo is positioning itself at the forefront of a movement to supply clean, always-on energy. Surging demand from power-hungry data centers, alongside the need to balance intermittent wind and solar supplies, has driven billions of dollars in private capital into next-generation geothermal developments designed to operate in harsh, deep environments.
Economics and Future Infrastructure Expansion
Geothermal currently accounts for just 0.4 percent of total annual U.S. electricity generation. Scaling that share requires confronting high upfront drilling costs, economic hurdles, and regulatory barriers while managing community and environmental impacts.
“Fervo’s first power achievement shows investors the size and scale of the opportunity to fuel many more such milestones across developers and sites in the future,” says Mitchell Smith, grid lead for the Mountain West Geothermal Consortium. The bipartisan initiative advocates for increased public and private financing to accelerate project deployment.
While Fervo declined to disclose exact terms for power purchase agreements covering its 1,000 megawatts of in-progress and future developments—enough to power roughly 1 million U.S. homes annually—the company outlined declining capital expenditures. Phase 1 of Cape Station delivers power at $7,000 per kilowatt, while Phase 2 is projected to drop to $5,500 per kilowatt. By comparison, natural gas-fired power plants averaged $2,157 per kilowatt in 2025.
Beyond reducing drilling costs, enhanced geothermal assets aim to capture value by operating flexibly. Next-generation facilities could adjust output during peak evening hours when solar generation drops, or operate behind the meter to directly supply data centers without shifting infrastructure costs onto everyday utility customers.
“We’ve been saying all along that our technology makes geothermal more scalable and affordable in more places,” Owens says, pointing to Cape Station’s milestone launch. “That’s just something no next-generation geothermal company has ever been able to do before.”
