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The company is vying to challenge Fervo for leadership in the next-generation geothermal market.

The geothermal startup XGS Energy has now completed four months of tests to see whether its technology can maintain steady production of heat at temperatures above what’s needed to generate energy. Over 3,000 hours, the company monitored the drilling process and checked how heat flowed from its wells, the status of their temperature, and how precisely XGS’ mathematical predictions matched the outcome of the testing.
The results, which the company shared exclusively with Heatmap, were “almost too good,” XGS CEO Josh Prueher told me.
“Had we been within 10% of predictive performance, we would have been pretty happy with the outcome,” Prueher said. “Turns out we were within 2% under a variety of different parameters.”
“It worked like a charm,” he said.
To understand what makes XGS Energy stand out among the geothermal startups racing to commercialize next-generation technology, it helps to compare the company to its fellow Houston-based rival that’s currently leading the sector, Fervo Energy. Unlike Fervo, XGS doesn’t use fracking technology to drill horizontal wells in pursuit of hot, dry rocks from which to harvest energy.
Instead, XGS drills vertical wells and inserts a closed steel pipe with water and fills the gap between the metal and the rock with a patented slurry that conducts heat. Technology like Fervo’s requires pumping cold water over the fractured hot rocks to harvest heat. But with its method, XGS claims, it avoids losing any water.
The testing took place off the US-395 highway in a volcanic field in California’s Mojave desert, sandwiched between the eastern edge of the Sequoia National Park and western border of Death Valley National Park. The geothermal field XGS tapped is already actively producing energy for the Coso Operating Company, which runs a 270-megawatt geothermal power plant on the land. The results, the company said, showed the “unprecedented predictability and active control of field performance” of XGS’ technology “versus other geothermal systems, which are subject to complex and continuously changing subsurface reservoir conditions.”
At least one outside observer agreed. “This is impressive, and something to be proud of,” Advait Arun, an energy analyst and senior associate at the think tank Center for Energy Enterprise who co-authored a recent report on next-generation geothermal, told me.
While the 3,000 hours of testing still falls short of the year’s worth of data Fervo has produced at one of its sites, it’s the longest any other competitor in the space has successfully demonstrated its approach so far, Arun said.
“These guys would be second to Fervo in terms of their ability to prove a commercial-scale performance test,” he added.
XGS is now poised to build a 150-megawatt power plant for Meta’s New Mexico data centers. Even after that’s complete, however, Prueher said the surrounding area has nearly 3 gigawatts of untapped heat. In California, where the company is headquartered and carried out its demonstration project, there’s a growing need for clean power sources that don’t further tax the depleted water table.
“A lot of the historical sensitivities around developing in California — a state where, like many others, water usage for industrial development is kind of a no-no — because we don’t need water, we have some real advantages,” Prueher said.
At a moment when surging demand from data centers is supercharging dealmaking in the electricity sector, Prueher said XGS is looking beyond the boom from the artificial intelligence buildout.
“It’s not about data centers,” he said. “It really is just the fundamental power needs of California. With the restrictions around water usage, we line up really, really well for California.”
For now, the company remains focused on the U.S. But Prueher said XGS is well suited to export its technology to East Asia, as well, where countries along the Pacific Rim have vast geothermal potential and growing electricity demand but limited development. XGS already has ties to the Philippines and “may actually be subsurface” — i.e. digging wells — there by the end of 2026, Prueher told me.
The “big enchilada,” he said, would be establishing a foothold in Japan, where the onsen hotspring industry has long protested geothermal development they say could diminish the resource that makes the ancient bathhouse tradition possible. Prueher told me his technology mitigates concerns over fracking-induced earthquakes, as well.
For now, he said, his main market is in the fast-growing Southwest. The executive compared this moment to 2021, when he worked at a battery company. That February, Winter Storm Uri collapsed the Texas grid as natural gas pipes froze and demand for electricity to heat homes designed to stay cool in a typically arid climate skyrocketed. Back then, he said, batteries were “still a pretty new asset class.”
“People were still uncertain about how it would perform,” Prueher said. But his company was “able to keep our batteries up and operating 100% of the time, no one minute of downtime during that entire episode.”
“From a market perspective, the storm showed that, if you can bring this new type of technology into the market, it can really deliver remarkable value,” he added. “We made 10 years of revenue in six days.”
In a lot of ways, he went on, “this is the same thing.”
“We’ve proven a technology is reliable,” Prueher said. “It works at commercial scale over a period of time. We would regard this as a real pivot point in the industry.”
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On power prices keep climbing, TVA’s ‘historic’ gas buildout, and mounting climate woes
Current conditions: A powerful storm is rolling in from the Pacific to dump several inches of rain across Southern California, threatening floods • The Northeast is set to remain roughly 5 degrees Fahrenheit below historical averages, with New York City topping out at 50 degrees • A major storm is developing over Namibia, bringing flooding to its southern regions.

Pennsylvania Governor Josh Shapiro has withdrawn his state from the Regional Greenhouse Gas Initiative, leaving the state with the fourth-highest emissions in the country without a significant climate policy. The cap-and-trade market included 10 other states, including all of New England, New York, and some Mid-Atlantic states. After a two-year legal fight over the state’s decision to quit the carbon-cutting alliance through regulatory fiat, Virginia’s Republicans governor successfully exited the group. But, as E&E News noted, Shapiro is the first governor from any party to sign legislation pulling his state out of RGGI. The millions generated from RGGI were earmarked for clean energy and transportation projects in the commonwealth. Philadelphia’s transit system is teetering on the brink of a budget crisis, alongside the bus and light-rail network in San Francisco and Chicago, Heatmap’s Emily Pontecorvo wrote last month. Shapiro, widely considered a serious contender for the Democratic presidential nod in 2028, has sought to dominate the moderate lane in his party, maintaining vocal support for Israel, touting his popularity with his state’s Republican voters, and now reversing a major climate initiative in the name of “cutting costs.”
Meanwhile, in another blow to the climate movement, 350.org, the advocacy group founded by writer Bill McKibben to protest construction of the Keystone XL oil pipeline more than a decade ago, plans to “temporarily suspend programming” in the U.S. amid a funding pinch, Politico reported.
Wholesale electricity rates across the United States are forecast to spike again next year by as much as 8.5% to $51 per megawatt-hour, up from $45 per megawatt-hour this year, according to the latest outlook from the U.S. Energy Information Administration. This year’s prices were already 23% higher than the 2024 average. The biggest driver pushing up rates next year is the northern pricing hub of the Electric Reliability Council of Texas, the state’s independent grid operator, as demand from data centers and cryptocurrency mines exceeds available supply. The EIA warned that natural gas prices are the primary determinant of power prices. “But in 2026,” the federal analysts wrote, “the increase in power prices in ERCOT tends to reflect large hourly spikes in the summer months due to high demand combined with relatively low supply in this region.” Rising electricity rates could make the pitch for electrifying heating, appliances, and transportation a tougher sell, as Heatmap’s Katie Brigham wrote.
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Lithium is geographically limited, costly to mine, and, in batteries, has a bad tendency to overheat and blow up. Sodium-ion batteries solve all of those problems. But it’s been difficult to get sodium ions to move quickly and reliably through solids. Scientists at Western University in Ontario say they have a fix by formulating a new material containing sulfur and chlorine. Traditional electrolytes are chemically stable, but tend to move sodium ions too slowly between the positive and negative ends of a battery. Adding sulfur to the design boosts the conductivity by making it easier for ions to volley through the battery.
Katie has covered the nascent sodium-ion battery business well. Back in April, she wrote about the death of the startup Bedrock Materials. Last month, she described how the startup Alsym planned to break the industry’s streak of failures and establish a manufacturing line in the U.S.
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In his first few months in office, President Donald Trump fired most of the Tennessee Valley Authority’s board of directors and, in July, demanded the remaining members terminate the federally owned utility’s top brass. But CEO Don Moul has held onto his job, and is now singing a tune the administration should like. On Thursday’s earnings call, Moul said the TVA was “undertaking one of the largest new asset campaigns in our history,” with 3.7 gigawatts of new generation under construction. What kind of generation? It’s “a historic gas build right now,” the TVA’s finance chief Tom Rice said, according to Utility Dive. The utility is also developing new nuclear fission and fusion power plants, including what may be the nation’s first small modular reactor.
Global emissions from fossil fuels are on track to rise 1.1% this year, reaching an all-time high, according to data published Thursday by the Global Carbon Project. “Keeping global warming below 1.5 degrees Celsius is no longer plausible,” Pierre Friedlingstein, a climate researcher at the University of Exeter who led the study, told E&E News. The findings also suggested that the amount of carbon the planet’s land and forests absorb “is substantially smaller than previously estimated,” while the volumes the ocean takes in are now understood to be even greater, Bloomberg noted.
A new study by researchers at Pusan National University in South Korea illustrated what’s at stake for big global systems as temperature rises beyond humanity’s control. Melting sea ice in polar regions is transforming how oceans move and mix. New models to examine previously difficult-to-study patterns found that sea ice loss “strengthens currents and turbulence, particularly in the Arctic and Southern Oceans,” and that “such changes are expected to substantially alter the transport of heat, carbon and nutrient, ultimately affecting polar marine ecosystems.”
The symbolism is almost eerie, a microcosm of the violence and discomfort heralded by rising global temperatures. As the global climate summit in the Amazonian city of Belém reaches the end of its first week, the United Nations has scolded Brazil for failing to maintain security at the conference and keep the facilities at a comfortable air conditioned temperature.
Rob goes to Yale with Heatmap staff writers Emily Pontecorvo and Matthew Zeitlin.
It’s been a huge few weeks for climate news. Democrats swept state and local elections in New Jersey, Virginia, California, and New York City — and won two crucial regulatory races in Georgia. A few weeks before, the climate tech investor and philanthropist Bill Gates released a memo arguing for a pivot on climate funding vis a vis global health.
On this special episode of Shift Key, Rob talks to Heatmap staff writers Emily Pontecorvo and Matthew Zeitlin about what the 2025 elections might mean for climate policy, why “affordability” politics could hamper decarbonization, and whether the Gates memo represents anything but a rebrand. They recorded this conversation live at the Yale School of Management’s annual clean energy conference in New Haven, Connecticut.
Shift Key is hosted by Robinson Meyer, the founding executive editor of Heatmap, and Jesse Jenkins, a professor of energy systems engineering at Princeton University. Jesse is off this week.
Subscribe to “Shift Key” and find this episode on Apple Podcasts, Spotify, Amazon, or wherever you get your podcasts.
You can also add the show’s RSS feed to your podcast app to follow us directly.
Here is an excerpt from our conversation:
Robinson Meyer: When you talk to clean energy people about this race [for the Georgia Public Service Commission], how did they explain the stakes? Because one thing I've wondered is that, back during the Biden administration, when you talked to Biden energy officials about nuclear and about why nuclear was often unsuccessful, those officials — who are Democrats — would say, Oh, you gotta do what they did in Georgia. Look what they did in Georgia. That plant ran mega-over-budget and they just kept ratebasing it, and those ratepayers could absorb it. And that's how you should do nuclear, is find a sufficiently big electricity market where you can just begin pushing costs into the electricity market.
I'd also hear, to be fair, Biden energy officials basically saying, We have to authorize as many AP1000s as we can, which is the nuclear reactor that was built around Vogtle, that was built in Georgia. We have to authorize and get as many of these started as we can before the rate increases start hitting Georgia rate payers, because once they do, people are going to turn on the politics of nuclear in a way that maybe we're not anticipating.
Anyway, how did clean energy people think about this? Because one of the biggest drivers of rate increases in Georgia is the Georgia PSC’s total willingness to just keep taking costs from the 24/7 clean electricity giants that are nuclear plants and shoving them on rate payers.
Emily Pontecorvo: I actually think that the clean energy folks were thinking about this more in terms of the risks around a natural gas buildout in Georgia. Because Georgia Power, the biggest electricity utility in the state, has recently, in their most recent resource plan, proposed building, like, five nuclear power plants’ worth of new natural gas in the state to essentially power the data center buildout that they're anticipating. And like I said before, the commission has been known to basically just give them what they ask for, and say yes, and not ask questions, and not ask for alternatives. And also I think the commission has been accused of really stunting the growth of rooftop solar, facilitating more utility-scale solar but kind of stunting rooftop solar.
And so the Democrats really campaigned on saying, We're going to look at that resource plan, and we're going to ask questions, and we're going to ask to see what an alternative scenario with more renewable energy would look like. So I think those were the stakes.
Now, whether they're going to get anywhere is another question. Because of the lawsuits and the strange timeline for this election, one of the candidates will only serve for one year before having to be reelected. They also are only two out of five seats on the commission. The other three are Republicans. And so, it's a little bit unclear where they're going to find points of agreement with the other folks on the commission.
Mentioned:
How Mikie Sherrill Won New Jersey’s Electricity Election, by Matthew
Democrats Win 2 Key Energy Races in Georgia, by Emily
Zohran Mamdani’s Muted Climate Politics, by Rob
7 New Takes From Bill Gates on Climate ‘Doomsday’ Talk and Global Health
Where Bill Gates Got It Wrong, by Zeke Haufather
Previously on Shift Key: How to Talk to Your Friendly Neighborhood Public Utility Regulator
This episode of Shift Key is sponsored by …
Hydrostor is building the future of energy with Advanced Compressed Air Energy Storage. Delivering clean, reliable power with 500-megawatt facilities sited on 100 acres, Hydrostor’s energy storage projects are transforming the grid and creating thousands of American jobs. Learn more at hydrostor.ca.
Uplight is a clean energy technology company that helps energy providers unlock grid capacity by activating energy customers and their connected devices to generate, shift, and save energy. The Uplight Demand Stack — which integrates energy efficiency, electrification, rates, and flexibility programs — improves grid resilience, reduces costs, and accelerates decarbonization for energy providers and their customers. Learn more at uplight.com/heatmap.
Music for Shift Key is by Adam Kromelow.
In some cases, rising electricity rates are the least of a company’s worries.
Skyrocketing electricity prices are hitting Americans hard, which makes one wonder: Are electrification-based technologies doomed? No doubt sectors like green hydrogen, clean fuels, low-carbon steel and cement, and direct air capture would benefit from a hypothetical world of cheap, abundant electricity. But what happens if that world doesn’t materialize anytime soon?
The answer, as it so often turns out, is significantly more complicated than a simple yes or no. After talking with a bunch of experts, including decarbonization researchers, analysts, and investors, what I’ve learned is that the extent to which high electricity prices will darken the prospects for any given technology depends on any number of factors, including the specific industry, region, and technical approach a company’s taking. Add on the fact that many industries looking to electrify were hit hard by the One Big Beautiful Bill Act, which yanked forward deadlines for clean hydrogen and other renewable energy projects to qualify for subsidies, and there are plenty of pressing challenges for electrification startups when it comes to unit economics.
“Having lower energy prices is good for everybody,” Bryan Fisher, a managing director at the energy think tank RMI focused on industrial decarbonization, told me simply. And so when those prices go up, “the biggest macro theme is it hurts industries or applications of industry unevenly — green hydrogen being the biggest one.”
There was a general consensus among the people I spoke with that electrolytic hydrogen — known as green hydrogen if it’s produced with renewable electricity — is the clearest casualty here. That’s unsurprising given that electricity drives roughly 60% to 70% of its production cost, as it powers the process that splits water into hydrogen and oxygen. Rising hydrogen costs will also have knock-on effects across other emergent industries, as many companies and investors are banking on green hydrogen to replace fossil fuels in hard-to-electrify sectors such as chemical production or long-haul transport.
Fisher told me that rising electricity costs now means that the transition from blue hydrogen — produced from natural gas feedstock, with carbon capture and storage to control emissions — to green hydrogen will be prolonged. “What we always thought was going to happen was that a blue hydrogen market would develop and be replaced by green as those costs went down,” Fisher explained. “So I think the time at which the market will utilize low-emissions blue hydrogen is just extended.”
Dan Lashof, the former U.S. director and a current senior fellow at the World Resources Institute, told me that if and when hydrogen projects scale, circumventing the rising costs of grid electricity with behind-the-meter renewable power could be a viable option, given that new wind and solar generation remains quite cheap. He also emphasized the other factors at play when it comes to making green hydrogen economically feasible — mainly the high cost of electrolyzers themselves, the devices that split water into its component parts. “Tariffs on Chinese imports are going to be a big factor in terms of electrolyzer costs,” he told me. That leads him to ask, “will other countries like India step up and be able to produce low cost electrolyzers for the U.S. market?”
Among industries that rely on green hydrogen, sustainable aviation and green shipping might suffer the most, as hydrogen is a necessary ingredient in certain net-zero fuels. But high electricity prices — and by extension green hydrogen costs — are far from their only financial concern. Producing clean fuels often requires combining hydrogen with captured carbon to synthesize hydrocarbons.Sourcing and capturing CO2, breaking it down into carbon monoxide, and synthesizing hydrocarbons are all expensive in and of themselves.
Fisher told me that when it comes to the category of sustainable aviation fuels known as e-SAF, which is made from green hydrogen and captured carbon dioxide, innovations in these other areas — as well as economies of scale — are more likely to make a meaningful dent in fuel prices than cheaper electricity. “Power prices going up 20% adds about $1 or $1.50 a gallon to e-SAF,” he explained. “And right now we’re probably $5 to $7 out of the money.” So while lower electricity prices would certainly be welcome, the industry needs cost breakthroughs on multiple fronts before this fuel has a shot at competing.
Some companies, including Twelve, require electrolyzers to break down both CO2 and H2O. Rajesh Swaminathan, a partner at Khosla Ventures, told me he simply doesn’t think the current approaches to e-SAF will get there economically. “It’s a terrible economic idea. It doesn’t pass any kind of sniff test,” he said. “Even if electricity prices were extremely low, this will not be competitive from a capex and opex perspective,” he said, referring to both capital expenditures and the cost of operating the business.
Khosla has instead invested in Lanzatech, which sources carbon-rich gases from industrial facilities such as steel mills and ferments them into ethanol, which can then be chemically converted into jet fuel. Its core process doesn’t rely on green hydrogen or electrolysis at all. “That’s such a low-cost approach that will meet the SAF targets of $4 per gallon,” Swaminathan told me — a claim that remains to be seen, of course.
Efforts to decarbonize high heat industrial processes such as steel and cement production also rely heavily on electrification. The clean cement company Sublime Systems and clean steel companies Boston Metal and Electra, for instance, all use electricity-driven chemical processes to replace the need for burning fossil fuels in either cement kilns or the blast furnaces used in steel production.
The companies themselves often emphasize the importance of low electricity prices for making this tech cost-competitive. For example, when Boston Metal’s CEO Tadeu Carneiro was asked by a Time magazine reporter two years ago about where the company would source the enormous amount of electricity needed to melt iron ore as planned, he replied, “If you don’t believe that electricity will be plentiful, reliable, available, green, and cheap, forget about it,” essentially acknowledging the tech won’t pencil out in the absence of cheap power. He added that there are regions such as Quebec and Scandinavia — both of which have abundant hydropower resources — where it would make economic sense to deploy Boston Metal’s tech sooner rather than later. Similarly, Sublime is building its first commercial-scale clean cement plant in Holyoke, Massachusetts, where it’s sourcing power from the city’s hydroelectric dam.
“We have to believe that the electricity will be available,” Carneiro told Time.
Lashof told me that in the meantime, higher electricity prices will “push industrial decarbonization more towards using carbon capture and sequestration pathways” over electrification-driven approaches. But Fisher thinks that in many cases there’s still “headroom” for electrification of power and heat to make sense domestically, even with a relatively significant “20% to 30% type increase” in electricity costs.
“If you’re doing a heat by electrification project at your industrial site, in some cases it’s an adaptive problem, not an economic problem.” he told me. Indeed, plants will need to be redesigned — no small cost in itself — and teams must be willing to change their systems and processes to accommodate new technologies. That organizational inertia could, in some cases, prevent the adoption of novel electrification tech, even if electricity prices would support it.
One technology that Fisher is absolutely certain isn’t constrained by electricity prices so much as the lack of a fundamental technical breakthrough is engineered carbon removal, such as direct air capture. “Innovation is the key, not low power prices, because we need to get from $500 bucks a ton in carbon removal to $50 bucks a ton,” he told me. While DAC certainly requires loads of electricity to pull CO2 out of the air and chemically separate it, that won’t be enough to conjure the 90% price reduction necessary before DAC can reach scale.
But rest assured, rising electricity prices will also create some winners, with energy efficiency likely to be at the top of the list, Duncan Turner, a general partner at venture capital firm SOSV, told me. Personally, he’s excited about everything from innovations in HVAC systems to companies developing more energy-efficient chemical separation processes, low-power light-based data transfer hardware for data centers, and plasma-based cooling products for computing chips.
Energy efficiency isn’t the only category he thinks stands to benefit. “There’s a bunch of long-duration energy storage companies that will look very interesting indeed as the price of electricity starts to go up and the demand for electricity from data centers starts to peak,” Turner told me. Like Fisher, he also sees an opportunity for point-source carbon capture, viewing it as a way to “very quickly get cheaper and cleaner electricity onto the grid.”
Moments like these are also when investors are quick to remind us that betting on consistency across seemingly any dimension — whether that’s clean energy incentives, the funding environment, or commodity prices — is often a losing strategy. Or, as Turner put it, “It’s probably for the good for the whole industry — our community as a whole — that we reset to, We work better than anything else, even when there’s expensive electricity.”