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On the transformer shortage, sodium batteries, and a space grid

Current conditions: It’s pouring in Boston today, with temperatures that could feel as low as 47 degrees Fahrenheit • Severe flooding in Turkey’s Samsun province has sent a dozen people to the hospital • Bear season in Yellowstone has started earlier than usual, raising the risk of more violent encounters between hikers and grizzlies.
President Donald Trump formally began talks with Chinese president Xi Jinping today as the leaders of the world’s two largest economies seek some kind of rapprochement after more than a year of escalating battles over trade. The discussions are expected to cover a range of topics, including Taiwan’s sovereignty and the market dominance over critical minerals that Foreign Policy called Beijing’s “most potent” tool in the trade negotiations. Indeed, China’s control over critical minerals means Xi “will have the upperhand,” according to the Council on Foreign Relations, which noted that Trump folded last year in his trade battle with Xi once Beijing threatened to restrict flows of rare earths.
While Trump may have hoped that the prolonged closure of the Strait of Hormuz would put Beijing in a more desperate position by the time the summit started, China’s oil market has shown “signs of resilience” that “should concern U.S. officials” as efforts to prop up the domestic supply provide more buoyancy than expected, Semafor reported.
Fervo Energy, until now the hottest startup in the next-generation geothermal industry, is now the hottest stock on the market. On Wednesday, the Houston-based company’s stock began trading on the Nasdaq, where share prices surged nearly 40% by market close. “Geothermal is so hot right now,” Sarah Jewett, Fervo’s senior vice president of strategy, told me in a Q&A for Heatmap. “The IPO is not a finish line for Fervo. It is a financing milestone that facilitates the build out of more clean, firm, reliable, affordable energy. That is what we are most excited about as we ring the bell in Nasdaq. As we celebrate, we are more excited than anything to get back to work, to put clean megawatts in the grid.”
The company, she said, expects to start making overseas development deals soon, and indicated that Fervo may build its first geothermal plants on the East Coast, where hot rocks have historically been too deep to tap into, within a decade.
Nearly 16 years after it was first proposed, New York City’s biggest new source of clean energy has come online, meaning its 1,250 megawatts of capacity will be available to shore up the grid as summer heat waves roast the nation’s largest metropolis. Until recently, New York State regulators had planned for the Champlain Hudson Power Express to enter into service in August. But last weekend, the 339-mile project stretching from Lake Champlain down the Hudson River to the electrical substations in northwestern Queens managed to complete testing just before the state’s hard deadline of May 10 at 5 p.m. ET, after which the developer would have to wait two months before finishing the bureaucratic process to start the clock on the contract between the state and Hydro Quebec, the French-speaking Canadian province’s state-owned utility. That means if prices soar high enough between now and the end of May, Hydro Quebec could choose to bid into the market. But the real milestone is that, starting June 1, the utility’s contract will take effect.
“We didn’t think it was possible. The state didn’t think it was possible. We were counting on capacity coming online in August, but that’s way too late,” Peter Rose, the senior director of stakeholder relations for Hydro Quebec, told me on a call last night. “We have heat waves in July. It’ll be good for New York City to count on that 1,250 megawatts of capacity going into July.” Since the Blackstone-backed project’s inception, its proponents have suggested hydropower from Quebec would ultimately supply 20% of New York City’s power needs. But two weeks ago, when Hydro Quebec ran 13 hours of trial runs to stress test its equipment, the line provided more than 33% of the city’s power for a part of that duration. That, Rose cautioned, was probably due to relatively low load. Still, he said, “Unbeknownst to everybody during the testing regime, a third of our consumption in New York City was coming from this project. Those were specific conditions. But still pretty remarkable.”
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Texas, newly-crowned the nation’s No. 1 solar market, has installed enough panels that the state is now generating more electricity from photovoltaics than coal for the first time. Solar generation is expected to reach 78 billion killowatt-hours in 2026 in the grid operated by the Electric Reliability Council of Texas, according to the latest forecast from the Energy Information Administration. That comes to just 60 billion kilowatt-hours for coal. As Texas’ solar boom continues, the federal researchers projected that about 40% of all solar installations in the U.S. this year will occur in the Lone Star State. Among the developments poised to come online this year is the solar and battery megaproject Tehuacana Creek 1 Solar farm. The 837-megawatt project will be the largest solar facility of its kind to enter into service this year. Meanwhile, Texas has no current plans for new coal plants.
The U.S. is going to need a lot more projects coming online. New forecasts from the National Electrical Manufacturers Association project U.S. electricity demand to surge 55% by 2050. Data centers are the biggest source of near-term demand growth, with a projected 300% surge in electricity demand over the next 10 years. But electric vehicles of all kinds are on track to keep the party going by spiking power demand 2,000% by the middle of the century. To meet that demand, storage, wind, and solar generation are on track to increase by 300% as renewables start making up a majority of the generation in the American West, New York, and the Southeast.
As I told you two weeks ago, Belgium is not only abandoning its plans to phase out its remaining nuclear power stations, it’s nationalizing the fleet. Now Brussels is entering into a deal with the pro-nuclear neighboring Netherlands to work together on building new reactors. The memorandum of understanding — signed Wednesday at a binational summit by Belgium’s energy minister Mathieu Bihet and Dutch climate and green growth chief Jo-Annes de Bat — establishes periodic meetings between the two nations, where the Netherlands can tap into Belgium’s existing knowledge from operating a larger fleet of reactors, and the Belgians can in turn garner tips on building new reactors as the Dutch embark on a construction program.
Pakistan’s solar boom has so far insulated the country from the full effects of losing access to oil and gas through the Strait of Hormuz. Now Islamabad is going all in. Pakistan is now targeting 95% renewable electricity by 2040, and 60% by 2030, according to a document seen by the business news site ProPakistani.
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Corpus Christi is on the verge of running out of water. Stopping it would take a disaster.
Even in its frontier days, when it was a camp for General Zachary Taylor’s forces defending the border of newly annexed Texas, there was barely enough water in Corpus Christi to go around. The Tejanos, Americanos, and old Spanish ranchers crazy (or unlucky) enough to settle on the edge of this growing empire survived by drinking from arroyos, cisterns, and foul, sulphuric wells. The native Karankawa people lived nomadically to avoid straining the region’s streams, springs, and shallow groundwater resources.
You can follow Corpus’ subsequent history through the twists and turns of what historian Alan Lessoff calls the “endless search for a larger and more adequate water supply” in his book Where Texas Meets the Sea: Corpus Christi and Its History — the damming of local rivers, the failure of those dams, massive Depression-era reservoir projects, groundwater running dry, the consolidation of regional water districts, an expensive project to pipe in fresh water from 100 miles away, an even more expensive project to produce it on the spot. Take your pick of cities west of the 98th meridian: Phoenix, Las Vegas, Los Angeles. They’ve all followed similar beats.
But Corpus — never a superlative city, a chip on its shoulder that goes back to Taylor’s time — is now close to the inglorious distinction of becoming the first American metropolis to run out of water. Though it’s located on the shores of the Gulf of Mexico, its fresh water reservoirs sit at less than 10% of their total capacity; Day Zero will arrive in November unless there’s 20 to 30 inches of rainfall before then. Those are hurricane numbers, an unsettling thing upon which to hang one’s hope.
But that’s what desperation does. You hope for the second-worst thing because it’s better than the alternative.
The first sign that something had gone very wrong in Corpus Christi came in 2016. Over the course of 10 months — in July 2015, September 2015, and May 2016 — the city issued 22 days’ worth of water-boil notices for possible E. coli contamination, low chlorine levels, and the presence of indicator bacteria suggesting low disinfectant levels. The water quality problems appeared to stem from restrictions Corpus officials had ordered during a recent drought, when low flow through old pipes can create “dead zones” for bacteria to grow between the treatment plants and home taps.
Then came December 14, 2016. Late in the evening, the city issued the strictest water advisory yet for its 317,000 residents — a “do not use” order stemming from a corrosive chemical that had leaked into the town’s water supply due to backflow from a local asphalt plant. The notice, which pertained to everything from drinking water to tooth-brushing and showering, lasted for four days.
“Our group connected at an emergency meeting and committed to start learning as much as we could about the city’s water policies and problems,” Isabel Araiza, the co-founder of For the Greater Good, a grassroots organization focused on protecting Corpus Christi’s water supply, told me. “I really had not been paying attention prior to that.”
It turned out the chemical leak was only the tip of the iceberg. City officials in the 1920s and 1930s had recognized Corpus Christi as a strategic shipping location, the closest American port to the Panama Canal, and had dredged a channel into its shallow inner bay that allowed large ships to come and go — at the time, mostly shuttling the region’s cotton exports. Following the discovery of oil to the west of the city a few years later, though, the channel enabled Corpus to begin exporting petroleum products. Industry pounced.
“Why are there so many cement factories and inorganic chemical plants and metal manufacturers [in Corpus Christi]?” Lessoff, the historian, asked me. “It’s because of all the energy they need. And those things also need a lot of water.”
Though the city was competing with the humid, semitropical petroleum hubs in Houston and Louisiana, where water is less of a concern, Corpus Christi pressed forward, even as its residential population quadrupled. By the end of the 1950s, industry-related uses accounted for almost 40% of water demand in Nueces County, of which Corpus represents as much as 90% of the population. “If you’re a city official, you’re looking at this growth, and you’re telling yourself, ‘Well, we’ll figure it out,’” Lessoff said of the ballooning problem.
The situation took a turn in late 2015, when Congress repealed the 1975 export ban on crude oil. Corpus was perfectly positioned to capitalize on the opportunity, given its proximity to the extraction operations in Eagle Ford and the Permian Basin, its deep shipping channel, and its industrial base. Billions of dollars in investment in new plants soon poured into a city waiting with open arms.
Corpus officials at the time assured ExxonMobil, among other chemical companies, that its $10 billion plastics facility, which opened in 2018, would have sufficient water available to it for the “foreseeable future” despite the plant using 25 million gallons per day during its peak production — enough to meet the needs of a family of four for 170 years. To Steel Dynamics, a year later, the city promised an additional 6 million gallons of water per day. “We have enough now to attract development and keep our lawns and parks green,” then-mayor Joe McComb boasted in 2018 when revoking drought restrictions that he claimed “gave a false sense that we were always running out of water.”
Beginning in 2018, the largest industrial water users in Corpus were also offered the option to pay a voluntary, year-round “drought surcharge exemption” rather than face larger financial penalties when a drought emergency is declared. The exemption charge of just 31 cents per 1,000 gallons is effectively a rounding error for companies like Exxon or Valero, and about 10 companies in the area take advantage of the program.
The city’s blasé attitude stemmed in part from its bet that desalination plants would come to its rescue. When they approved the new influx of manufacturing in 2018, Corpus leaders acknowledged that a new city-owned desalination facility needed to be up and running by “early 2023” to fill anticipated gaps in its natural water supply. Preliminary plans weren’t even presented to the city council, though, until 2019.
By 2022, a year before the city’s estimated deadline for needing the water, there were plans for five desalination plants around Corpus Christi Bay, including two that would have been city-owned. (City officials said the astronomical cost of building a plant — around $1 billion — would be offset by the drought surcharge exemption fund, which only brings in around $6 million per year.) Groups like For the Greater Good and the Sierra Club fought hard against the city’s plan for a desalination plant in the shallow Inner Harbor, arguing that the freshwater it produced would prop up industry, allowing it to continue its insatiable consumption, much as critics of carbon capture have argued that the technology would allow fossil fuel companies to continue emitting and running their businesses as usual.
“We as residents are not using the majority of this water, so there is no reason why we should have to subsidize any kind of infrastructure that’s primarily beneficial to private corporations,” Chloe Torres, the Coastal Bend regional coordinator for Texas Campaign for the Environment, which opposed the desalination plant, told me. “Even by the rules of capitalism, that’s a tough sell.”
Coastal desalination relies on reverse osmosis, a process that filters salt out of seawater and would discharge the hypersaline brine back into the shallow bay. “When I was living there in the 1990s, desalination was like, Who would want to do something like that?” Lessoff, the historian, told me. “It’s outrageous because of the energy involved, the environmental factors, and the effect on these estuaries.”
It was also in 2022 that national environmental groups helped elect two candidates to the city council, Jim Klein, the former president of the Coastal Bend Sierra Club, and Sylvia Campos, who said they’d focus on holding industry accountable for its water usage. By some estimates, industry was guzzling as much as 80% of Corpus’ available water supply, with residents using just a fraction. The 2022 election was critical because “desalination is not done through voter approval,” Campos told me. “It is done through the city council purposely so the citizens really don’t have a say.” For the several-hundred-thousand people who live in the metropolitan area surrounding Corpus, who can’t vote in the city elections but are subject to its decisions as wholesale purchasers of its water, the situation is even less democratic.
Heading into 2024, national climate and environmental groups such as Lead Locally and the Sierra Club again endorsed a slate of candidates who opposed desalination. But industry had wised up since 2022, and spent big on the race. Environmental candidates got clobbered — Klein lost his election for an at-large council seat; Araiza, the co-founder of For the Greater Good, lost her mayoral bid by 36 points; and four other city council hopefuls also failed in their bids.
Voters returned only Campos to the city council, but it wasn’t because of their environmental concerns. “When I was knocking on their doors, they weren’t talking to me about water,” she told me.
In purple Corpus Christi, Campos, a self-described socialist, told me she convinced other city council members to turn against the desalination plans by arguing that a billion-dollar investment in a plant producing only 30 million gallons of freshwater per day didn’t make financial sense. In September 2025, in a 6-3 vote, the city council killed the Inner Harbor desalination proposal — a move that prompted Moody’s, S&P, and Fitch to either downgrade or review the city’s credit rating given the “unexpected acceleration of water depletion risk.” William Chriss, a third-generation Corpus Christian and local political analyst, told me, “I don’t think [the city council] necessarily changed their minds about the need for a desal plant. I think they changed their minds about the cost of this particular desal plant.”
Indeed, the need for water hadn’t gone away. Corpus’ water department has said that about 70% of residents already use less than a proposed restriction of 5,250 gallons per month. First-time violators who exceed that amount could face a $500 fee; a proposed penalty for second-time violators would see their water shut off.
Under a proposal floated this week, residential customers could use up to 6,000 gallons per month, while industrial customers would be forced to adhere to a 25% cut in their average water use between 2022 and 2024 — and face water shutoffs if they don’t comply.
The big industrial consumers like Exxon, Valero, and Flint Hills Resources have so far refused to disclose how they would adjust their operations in order to meet such reductions on the grounds that it’s proprietary information, as Dylan Baddour has reported in his ongoing coverage of the crisis for Inside Climate News. (Exxon and Valero failed to return our request for comment. A spokesperson for Flint Hills, which runs two crude oil refineries in Corpus, told me in a statement that the company is “optimistic we will be able to manage the potential curtailment scenarios without significantly disrupting our operations,” and pointed me toward its plans to use up to 2 million gallons per day of treated city wastewater for its operations.)
Texas Governor Greg Abbott has warned Corpus Christi’s leadership that there is “only … a little time more before the state of Texas has to take over” managing the water crisis, and blasted the city for “squandering” a $750 million loan commitments from the Texas Water Development Board, most of which had been designated exclusively for the construction of the Inner Harbor desalination plant. President Trump has also visited the Port of Corpus Christi and floated funding a revived Inner Harbor desalination project. “This is called a serious money ask, and I’m going to get that thing approved for you guys,” he told the local media. Last week, the Corpus Christi City Council voted 6-2 to begin talks with AXE H2O, a private company seeking to build a desalination plant with the city’s guarantee of a 30-year water purchase agreement.
Campos was one of the “no” votes, expressing skepticism about the “too good to be true” proposal, which would dump its high-saline discharge into the deeper gulf rather than the isolated bay, theoretically lessening the environmental impact. But its energy-intensive process would also run on natural gas, likely via on-site turbines, which its chairman said would keep its water costs lower than regional competitors as prices on the Texas grid tend to vary wildly. (Corpus Christi Polymers, which is constructing its own desalination plant, has also solicited the city for a purchasing agreement.) There is also the inherent irony of using fossil fuels to fix a problem created by fossil fuels.
A new desalination plant also does little to solve the immediate crisis, leaving Corpus in the most desperate position of its long history. A worst-case scenario would involve shutting off the tap for industry and facing its lawyers in court; limiting or rotating residential water availability; or trucking in water to manually refill the cisterns, as Baddour has reported. “The lead time that it takes to fix some of these problems just does not allow for a head-in-the-sand approach,” Amy Hardberger, the director of the Center for Water Law and Policy at Texas Tech in Lubbock, told me, having watched the situation unfold from afar. “But I don’t want to vilify Corpus,” she added. “I just think they’re getting to this point a little ahead of other cities.”
Some optimists have entertained the idea that a major rainfall could potentially break the region’s drought and buy Corpus a little more time to find a way out of its current water crisis. “The only alternatives that exist for Corpus Christi between now and three years from now at the earliest” — when a desalination plant could be up and running — “are a series of hurricanes or tropical storms that will miraculously fill our reservoir,” Chriss, the political analyst, said.
But Lessoff, the historian, gasped when I suggested a hurricane might relieve some of the pressure on Corpus. “If you want to have the biggest environmental disaster in American history, go ahead,” he said in disbelief.
The city is a catastrophe waiting to happen, Lessoff went on. Because of its low-lying chemical plants and petroleum refineries, if or when a climate change-strengthened hurricane makes landfall on the Coastal Bend, “it’ll make the BP disaster in the Gulf look like nothing,” he said. In other words, if there were ever a way to make Corpus Christians nostalgic for a mere 22 days of boil-water notices, then a direct hit by a hurricane would be it.
But that also means, perversely, that the best outcome might be for Corpus to have to sit with the consequences of over 100 years of bad water policy, deference to industry, and electing officials more interested in economic boosterism than protecting the limited resources for its residents. If any good comes out of the situation, it might be that other cities in the urban southwest learn from Corpus’ mistakes.
“It doesn’t help me to say ‘I told you so’ when there’s no water coming out of my tap,” Hardberger, the water policy expert, said. “It’s like, ‘Please don’t put me in that position. I want to live here, too. This is my home. Please work with me.’”
Talking with SVP of strategy Sarah Jewett about the competition, expansion plans, and how to get more Americans informed and onboard.
Just three years ago, enthusiasm for geothermal energy was lukewarm at best. In a sign of just how marginal it seemed, the firehose of federal money directed at clean energy investments under the Biden administration contained just $84 million for geothermal, specifically for next-generation technologies. By contrast, the next-generation nuclear industry received roughly 40 times more.
Geothermal electricity generation uses heat from the Earth’s molten core to spin turbines that generate carbon-free, 24/7, renewable energy — a pretty attractive offer in today’s age of rampant climate change and soaring demand. Though the technology has been in use since 1913, it’s been stymied since then by the industry’s dependence on finding rare and unique underground reservoirs of hot water.
Then in 2023, a little-known startup backed by Bill Gates, among others, achieved a breakthrough at a pilot project in Nevada, showing that fracking technology could be used to harvest energy from hot, dry rocks, which can be found virtually anywhere in the world.
Fervo Energy’s announcement hit the geothermal industry’s smoldering embers like a splash of gasoline. Investors saw a reliable new source of carbon-free electricity that could tap into existing oil and gas supply chains and workforces and clamored to put their money into the startup, which had raised roughly $1.5 billion from private investors prior to the IPO. As the need for more energy to power data centers for artificial intelligence has grown, that interest has only intensified. Case in point: The company actually upsized its initial public offering on the Nasdaq stock exchange this week.
The money from the IPO, the company said in its initial filing with the Securities and Exchange Commission, would go to Fervo’s flagship installation at its debut 500-megawatt Cape Station plant in Utah. When all was said and done after the company’s Tuesday debut, it had netted nearly $1.9 billion — about 50% more than the initially planned $1.3 billion. When trading picked up again on Wednesday, the price soared more than 30%, to over $36 per share.
Late Wednesday afternoon, I spoke to Sarah Jewett, Fervo’s senior vice president of strategy, to discuss the IPO and what’s next for the company. The transcript of our conversation, conducted over Zoom, has been lightly edited for clarity and length.
Congratulations, Fervo has just made quite the stock market debut. Just a few days ago, the company upsized its initial public offering. Then yesterday, when the FRVO ticker officially launched at the Nasdaq, you ended up raising nearly $1.9 billion, beyond the $1.3 billion you initially anticipated. You must be feeling pretty good today.
I’m teeing you up for the pun here, Alexander: Geothermal is so hot right now. The IPO is not a finish line for Fervo. It is a financing milestone that facilitates the build out of more clean, firm, reliable, affordable energy. That is what we are most excited about as we ring the bell in Nasdaq. As we celebrate, we are more excited than anything to get back to work, to put clean megawatts in the grid.
Well then, let’s drill down on that. What were you seeing from investors before the IPO?
Investors, when we went around to sell, sell, sell , they were familiar with the need for energy. They were familiar with what’s happening in tech and AI. They were familiar with the existing solutions for power. They saw us as a new entrant into the scene that is highly capable of bearing the weight of resolving this intense energy crunch. Because of that, as we sold our story over the IPO roadshow, we just saw insane demand and decided it was the right idea to upsize the round.
Beyond the big player in conventional geothermal, Ormat Technologies, there haven’t really been many pure-play options in the retail market for people who want a piece of the action more broadly within geothermal. Where do you draw the line between where investors are buying into Fervo, specifically, and where they are buying into geothermal, generally?
These are really sophisticated investors. It’s overly reductive to say they’re just investing in us because we are a leading contender in an interesting industry to them. These are sophisticated investors who have vetted our technology, our performance, our execution to date, how we think about growth. They really bought into that story, specifically, as being a story that they believe to have real sustainability.
Where do you see the biggest potential competition? Do you think it will come from an incumbent player who makes a pivot into the next-generation market? Or do you think one of these other startups in the mix such as Sage Geosystems or XGS Energy or Quaise Energy could find similar success to Fervo?
We’re driving a rising tide that should lift all boats. I’m not going to publicly place bets on who I think will be the closest follower. But I’m hopeful that we will start to see more successful competitors in the years to come. The market that we’re addressing is massive right now. Because of that, we should see enhanced competition going forward. In some ways, we would be disappointed if that weren’t the case. We have developed a technological solution that is really meaningful. It should encourage others to come try to do the same.
Fervo is really differentiated in the years of execution that we have under our belt. At this point in time, we’ve drilled 40 horizontal geothermal wells. That is a huge differentiating factor at this point in time. The demand is here now. We are well positioned to meet that demand in a way that is rapidly scalable. We are in the right place at the right time.
We like to say internally that, coming to this point, we didn’t have to contend with Fervo. Now competitors will have to contend with Fervo. We obviously believe in the geothermal energy industry, which is why we’ve been so public with publishing our data and talking about what we’re trying to do. But we do really think that we have a substantial lead on the market, just in execution. And then, of course, we have immense amounts of IP and data and learnings to go with it.
Do you plan for the primary business to remain electricity production? Do you foresee going into industrial heat, or district heating in Europe?
We will pursue all of those as business lines in the future. Right now, we are proving ourselves to be uniquely good at delivering power projects. That will be our focus for the near term.
I know you have been focused on the U.S. Where are you looking internationally?
The U.S. is a substantial market at this point in time, so while we do plenty of business development outside of the United States, right now we’re focused on developing at home.
How long will it take for the company and for the industry more broadly to start developing overseas projects in a big way?
We’re close to that already. It’s just a question of what is smart from a business model perspective, and when the timing is right. I’m probably not at liberty to say right now when the timing will be right to really lean into a thriving export side of the business.
If you had to estimate, what would you say is the share of your investors now who are classic energy investors — the types of people who would have been buying into or did buy into shale — versus the share you think are motivated by climate concerns and the clean energy potential of what geothermal is doing? Obviously I realize there’s plenty of overlap. But if you had to discern between those camps, where would you say you’re more indexed?
I would say the majority of energy sector specialists who are investing in this deal are either technology agnostic or are focused on the clean energy side of the business. We do have some marquee shale investors that we will be bringing on as part of the public offering that we’re really, really excited about. So, it’s probably a healthy mix.
Is the shale industry the best analog for how you expect geothermal to scale?
Certainly on the subsurface side it is the closest analog to what we’re doing. We are taking technology that was developed for the shale industry in the subsurface, then we’re deploying it in a similar fashion, which is just over and over and over repeated wells to ensure that we are learning at a really rapid rate and then achieving cost reduction on a learning curve in a single basin. That is a big part of our cost reduction story.
The other thing that we talk a lot about internally is bringing a manufacturing mindset to geothermal energy. It is an industry that has historically been much more akin to a construction industry, building bespoke projects that are tailored for a bespoke commercial need. That is not what we’re trying to do. We’re trying to build a much more scalable business. In order to build a scalable business, you have to establish what is the unit that you are standardizing around and iterating upon. We intend to standardize our design, and iterate and optimize off of a standardized design to allow us to move really fast and to get a lot better, to pull costs out of the business and to be able to scale.
Given how much faster you guys are coming to market, obviously, you have an advantage here over some of the new nuclear technologies being promoted right now. Do you think geothermal is mostly going to eat into the potential market that those could serve? Or do you see nuclear as having different use cases than what geothermal can do?
It’s an overlapping use case, for sure. We don’t talk a lot about eating market share, because the pie is really, really large right now.
How soon before we can anticipate building enhanced geothermal systems on the East Coast and in the Northeast, places where the subsurface heat is not as easily accessible as in the Southwest?
We like to remind people that the demand in the West is massive right now. Probably 18 months ago, we weren’t having as productive conversations with hyperscalers about siting the West as we are today. Today we are having tons and tons of conversations about siting and co-locating alongside geothermal projects in the Western U.S. So the market is really big. We like to mention that just to remind people that expansion is not the only marker of success here.
That said, there is hot rock everywhere, it’s just a question of how deep that hot rock is. We, through our standardized and iterative and repetitive approach in the subsurface, are meaningfully driving cost out of the subsurface, making depth much more of an economic question. If it is more expensive to drill to a certain depth but you already pulled an immense amount of cost per foot out of your drilling, then temperature at depth becomes more accessible even when it’s deeper.
Because drilling is just a portion of the capex of these projects, and a power plant doesn’t care whether it’s located in the West or the East, we basically think that we can move into the Eastern U.S. sooner than we probably had originally thought. It is our goal to do that sometime in the next decade.
In the scant polling I have seen on partisan attitudes on geothermal, most American voters are unaware of it, but among those who are, there seems to be a pretty close match to nuclear in terms of emerging as a rare purple form of energy with closely aligned support between Democrats and Republicans. As you grow, how are you thinking about maintaining that broad appeal and reaching more of those Americans still in the dark?
We benefit from being in an incredibly bipartisan seat right now, and that has been so helpful for our growth and development and is very important to us to maintain going forward. There’s no reason why it shouldn’t be bipartisan. It is a story that is relatable to all. We are highly adjacent to the oil and gas supply chain and oil and gas workforce. We are reliable energy. We are driving towards affordability. We are a clean energy industry with no operating emissions. And really, more than anything, we’re trying to build in a sustainable fashion. We’re trying to deliver projects the right way. It’s something that we have really been able to gain support on both sides of the aisle.
Obviously, that’s been hugely beneficial as we think about extending tax credits. Geothermal energy benefited from increasing tax credits under the Inflation Reduction Act, under President Biden. Then President Trump preserved geothermal energies tax credits in the One Big Beautiful Bill Act. That was hugely helpful to Fervo’s early development.
As we look to bring the cost of the technology down, we hope to continue educating a large group of stakeholders about this technology going forward, and continuing to bring people along with the story, no matter which side of the aisle they sit on.
The Secretary of the Interior said he “absolutely” planned to appeal a ruling that lifted blocks on wind and solar approvals.
The Trump administration is not backing down from its discriminatory policies for approving wind and solar projects. Interior Secretary Doug Burgum testified to Congress on Wednesday that his agency would appeal a recent district court ruling blocking it from enforcing these policies.
“We reject the whole premise,” Burgum said during a House Natural Resources Committee hearing.
Since Trump took office, the Interior Department has issued a series of memos and secretarial orders that systematically disadvantage wind and solar projects. Last July, it issued a memo requiring that nearly all approvals in the wind and solar permitting process be subject to additional reviews by the secretary’s office. A subsequent order required the agency to prioritize permitting projects with greater energy density, meaning ones that produce more power per acre of land, and deemed wind and solar “highly inefficient” compared with coal, nuclear, and natural gas projects.
The policies amounted to an effective freeze on wind and solar development on public lands, while also stalling projects on private lands that require federal consultations, affecting hundreds of clean energy projects. By the end of last year, Democrats saw no point in negotiating on permitting reform if the executive branch could simply make up its own permitting rules. They insisted on limits to executive power before they’d agree to a deal.
Around the same time, a coalition of clean energy groups, including the Clean Grid Alliance, Alliance for Clean Energy New York, and the Southern Renewable Energy Association, challenged the agency’s actions in the U.S. District court for the District of Massachusetts. The Interior’s permitting policies “place wind and solar technologies into second-class status without providing any rational justification for such disparate treatment or drastic policy shifts — unlawfully picking winners and losers among energy sources, contrary to Congress’ intent,” the lawsuit claimed. The groups argued the policies were arbitrary and capricious, in violation of the Administrative Procedures Act. In April, Judge Denise Casper sided with the plaintiffs, putting a temporary injunction on the agency’s wind and solar-hobbling memos.
During Wednesday’s hearing, Representative Susie Lee of Nevada told Burgum that his policies have “created a total permitting mess” in her sunny home state, and asked him what the immediate impact of the court’s order was within his agency. When Burgum responded by denigrating the judge’s decision, Lee asked if he was planning to appeal the order.
“Yeah, absolutely,” he said, asserting that “the idea that a single judge could decide” how the agency conducts permitting “is absurd.”
At the end of her questioning, Lee reaffirmed that the July 15 memo was the single thing stalling a permitting reform deal in Congress. “If you would just rescind that memo, we could get permitting reform passed this Congress, and we can start to talk about permitting all forms of energy.”
Later in the hearing, Burgum also defended another of the administration’s controversial actions regarding renewables. California Representative Dave Min questioned Burgum on his deal to pay the French energy company Total nearly $1 billion to walk away from its offshore wind leases. Was that an appropriate use of money, Min asked, considering so many Americans were struggling with high energy bills? Burgum rejected the premise, asserting several times that the agency merely “refunded” Total’s money.