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In a Heatmap exclusive, XGS Energy is announcing a new $13 million funding round.
Mano Nazar spent nearly 40 years working in the atomic energy industry — first at Duke Energy, then at American Electric Power before his capstone years as the chief nuclear officer at NextEra.
Now a semi-retired investor, he’s turning his attention to a resource he thinks can help meet the surging electricity demand the slow-growing reactor business is struggling to supply: geothermal.
On Wednesday, he is slated to announce that he’s joining the board of directors at XGS Energy, which has emerged as the nuclear power industry’s geothermal darling, as part of the company’s latest funding round.
The new $13 million round of financing — reported exclusively by Heatmap — will help the Houston-based next-generation geothermal company to complete work on its first pilot project on land owned by the U.S. military in California.
So-called enhanced or advanced geothermal is among the hottest things in clean energy right now. The nascent industry is seeking to rapidly expand the areas where drillers can deploy America’s oil and gas know-how to tap into heat from the Earth’s molten core to generate 24/7 clean electricity.
Until now, conventional geothermal technology has limited the resource’s potential to the few places where magma close to the surface heats naturally formed underground reservoirs of water — think Yellowstone’s geysers in the American West or volcanic Iceland.
In 2023, however, fellow Houston-based startup Fervo Energy proved that modern oil and gas techniques such as the horizontal drilling methods used in hydraulic fracturing, or fracking, could be applied to geothermal power. The milestone sparked a rush into the industry, with rivals such as Sage Geosystems — whose top executive once ran the fracking division at Royal Dutch Shell — competing for power deals with major tech companies.
“Geothermal has never been able to expand to new geographies, so it’s really exciting that next-generation geothermal has the ability to go outside of the existing hotspots,” said Peter Davidson, who ran the Obama-era Energy Department’s Loan Programs Office before joining Aligned Climate Capital, one of the new venture firms backing XGS in this financing round. “That’s the real benefit of all the enhanced geothermal — it’s using the deep-drilling technology that’s been developed by the oil and gas industry.”
XGS took a unique approach. Unlike Fervo or Sage, which frack for heat and create artificial reservoirs underground, XGS bores deep, vertical wells then sticks a steel pipe filled with water into the hole. The company then fills the area around the pipe with a liquid slurry containing a proprietary blend of conductive minerals that transfer heat from the well through the pipe and to the water inside the tube. XGS declined to name what minerals it uses, but said they’re naturally occurring and widely sold as commodities.
This approach caught the attention of the nuclear industry. Among the company’s top investors so far is the venture arm of Constellation, the nation’s largest operator of atomic power stations, which led a key funding round last year.
Like nuclear or fossil fuel plants, geothermal power produces large amounts of heat. “The nuclear industry is really, really good at knowing what to do with that heat,” XGS CEO Josh Prueher said.
Prueher credits his past experience working for battery storage and microgrid developers with helping him forge closer ties with incumbents in the electrical industry. With electricity demand growing from data centers, he said, he knew enough about constructing projects to recognize that the timescales small modular reactor developers were proposing would likely take too long to satisfy the appetites of the artificial intelligence boom.
“I’m not a technology guy, I’m a guy who likes to build projects, and we want to build, own and operate,” Prueher told me. “We felt SMRs are pretty late to what we’re seeing … so then we started to look at geothermal.”
This latest financing includes venture firms such as Aligned Climate Capital and Clearsky, where Nazar is an investor.
“If you think of nuclear, each installation is a huge installation. That’s one of the challenges of the industry — finding the funding, insuring against cost overruns, and executing megaprojects,” said Charles Gertler, a former Energy Department researcher who authored the Loan Programs Office’s liftoff report on geothermal technology and just founded his own startup in the sector. “What’s so cool about XGS is that they’re building megaprojects that can be deployed piece by piece. The design of their system is a little more elegant and foolproof than some other approaches we’ve seen in the industry.”
Despite the breakthroughs enhanced geothermal companies have yielded, Nazar sees the technology serving different needs than nuclear power. Unlike reactors, which struggle to ramp up and down, geothermal plants can decrease or increase output when the electrons coming from weather-dependent renewables such as wind and solar are waxing or waning. But nuclear power could still generate electricity in plenty of places where hot rocks are just too deep to drill economically, he said.
“Geothermal you can stop and start the next hour, as opposed to nuclear … but you don’t have geothermal resources everywhere, whereas with nuclear you can build it as long as you have access to a coolant,” Nazar told me. “It’s complementary, not competitive.”
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On deadly blazes, China’s carbon market, and the goal of tripling renewables
Current conditions: Phoenix saw record high temperatures on Tuesday for the second day in a row • A freak hail storm turned a city in the south of Spain into a winter wonderland • Widespread bleaching has been recorded at Australia’s two World Heritage-listed coral reefs after an intense marine heatwave.
At least 24 people have been killed and more than 27,000 evacuated in South Korea as the country faces some of its worst wildfires in history. Some 200 buildings have been damaged, including two ancient Buddhist temples. The blazes broke out on Friday in the country’s southeast and have spread rapidly in the days since, fueled by high winds and dry weather. Lee Byung-doo, a forest disaster expert at the National Institute of Forest Science, toldReuters that climate change was driving more frequent wildfires across the globe. “We have to admit large-scale wildfires are going to increase and for that we need more resources and trained manpower,” he said. Indeed, a rapid analysis from European researchers concluded that recent wildfires in Japan and South Korea “have been fueled by meteorological conditions likely strengthened by human-driven climate change.” More than 10,000 firefighters and at least 87 helicopters have been deployed to bring the fires under control. The largest is about 70% contained.
China plans to add about 1,500 steel, aluminum, and cement companies to its carbon market this year, according to the environment ministry. As of now, only power companies are included in the system, which was launched in 2021 and requires firms to buy carbon credits to cover their emissions. But the expansion has been in the works for a while, and will cover about 60% of China’s total emissions. The country will eventually rope in other industries such as building materials, chemicals, and aviation to account for about 75% of total emissions. The newly added industries will have softer emissions rules to begin with, with caps only coming into place in 2027. This delay will “ease the financial burden on the new entrants,” Bloombergnoted.
Rivian officially spun off a new micromobility company today aimed at helping people switch to small electric vehicles (think bikes, scooters, or golf carts) for short daily journeys. Rivian said the new company, called Also, has raised a $105 million Series B funding round. Also’s CEO Chris Yu told Heatmap’s Katie Brigham that owning a car and owning a smaller EV are not mutually exclusive. “If I’m taking my family to Yosemite on the weekend, I want to use my Rivian R1S, but for my daily school runs, probably not,” Yu said. Also’s flagship product is set to launch in the U.S. and Europe early next year, and will be followed by consumer and commercial products for the Asian and South American markets, though the company hasn’t yet said what these products will be.
A new report on 2024 renewable power trends has both good news and bad news: While the world added more renewables last year than ever before, we’re still not on track to triple capacity by 2030. According to the International Renewable Energy Agency, 585 gigawatts of renewable energy capacity was installed in 2024, “the largest increase in renewable energy capacity to date.” Renewables accounted for about 93% of all global power additions, with solar alone making up three-quarters of the installations. But “current growth rates indicate the world is not on track to triple installed renewable power capacity to 11 TW by 2030,” said IRENA’s international director general, Francesco La Camera. “With just 6 years remaining to meet the goal adopted at COP28 to triple installed renewable power capacity by 2030, the world now needs additions in excess of 1,120 GW each year for the rest of this decade to keep the world on a 1.5 degrees Celsius pathway.”
In case you missed it: The Federal Emergency Management Agency has continued to withhold millions of dollars from states for disaster recovery, relief, and preparedness despite a district court’s order from March 6 calling on the administration to release the funds. As Heatmap’s Emily Pontecorvo reported, among the more than 200 FEMA grants to states that remain frozen are a case management program for survivors of the 2023 Maui wildfires, emergency readiness projects in Oregon, and flood hazard mitigation in Colorado, according to a motion filed on Monday in the lawsuit State of New York v. Trump. The motion was filed the day after Homeland Security Secretary Kristi Noem said her department would move to “eliminate” FEMA during a cabinet meeting.
States say the lack of access to funding is going to start disrupting crucial programs. “If Hawaii doesn’t start receiving reimbursements for its federally-funded case management program by March 31, for example, it will be forced to immediately discontinue its work helping more than 4,000 wildfire survivors create tailored disaster recovery plans and navigate recovery resources,” Pontecorvo wrote.
Nissan confirmed that its Leaf EV is making a comeback, but this time it will be an SUV. The car will be available in the U.S. sometime in the next year. No word yet on pricing. The company showed off the vehicle for the first time today:
Nissan
The electric vehicle company Rivian is known for products that are, well, large: pickup trucks, SUVs, and delivery vans. But for the past three years, it has been stealthily designing the technology platform for a slew of much smaller, yet-to-be-revealed electric vehicles — think bikes, scooters, and golf carts. Today, Rivian officially spun off that project into its own company, called Also, while … also … announcing that the new venture had raised a $105 million Series B funding round.
The name Also, the company’s CEO Chris Yu told me, points to the idea that owning a car and owning a smaller EV are not mutually exclusive — rather, it’s about finding the right tool for the job. “If I’m taking my family to Yosemite on the weekend, I want to use my Rivian R1S, but for my daily school runs, probably not. That’s not the most efficient or enjoyable way to do it,” Yu told me. In the U.S. about 80% of all car trips are 15 miles or less, and over 50% of are less than six miles. The goal of Also, Yu said, is for smaller EV’s — or “micromobility solutions” — to replace cars for those shorter daily excursions.
Prior to his new role, Yu worked as vice president on Rivian’s “Future Programs” team, working to incubate Also alongside Rivian’s CEO RJ Scaringe, who will now serve as the new company’s board chair while continuing to lead Rivian. The incumbent EV-automaker participated in Also’s Series B alongside the lead investor, venture capital firm Eclipse, and will maintain a minority ownership stake in it.
Also’s flagship product is set to launch in the U.S. and Europe early next year, and will be followed by consumer and commercial products for the Asian and South American markets, though the company hasn’t yet said what these products will be. In the U.S., electric scooters and e-bikes have taken off in cities, while in some suburban areas, beach towns and retirement communities, golf carts are ubiquitous. Across much of South Asia, Africa, and Latin America, three-wheelers such as rickshaws and mototaxis are everywhere, and are increasingly being electrified.
But there’s still a long way to go. “The rate of electrification for small vehicles across the world is far, far lower than cars, like low single digit percent,” Yu told me. He said that what will set Also apart from existing offerings — besides electrification, of course — is the scale the company aims to operate at and its intuitive technology platform.
Also is developing everything in-house, from the motors to the software, which Yu said will lead to the type of seamless, personalized user experiences that customers have come to expect from newer EVs such as Rivians or Teslas. Think “walking up to your vehicle and having it automatically know that it’s you and unlocking,” Yu told me, or “adjusting to your profiles, your media plays, what you were last playing, etc.” Making something like an e-bike or electric golf cart “smarter,” Yu explained, could also help with issues such as security — potentially making Also’s TBD products less vulnerable to theft — or safety, such as gauging if someone is riding at a dangerous speed for the area or in an inappropriate zone.
Even with this type of advanced technology integration, Yu claimed that the company’s products will be cost competitive with what’s on the market today due to the scale that Also aims to achieve. Yu’s hope is that taking advantage of Rivian’s existing technologies and retail footprint will help.
Whatever form factor Also’s small EVs take, Yu told me they will embody Rivian’s adventurous spirit, “weaving in some of what people aspire to do and look forward to doing, whether it’s on a weekend or summer vacations,” he explained. So will this look like an off-roading golf cart? A smarter electric mountain bike? A scooter that also rips on the backroads? We’ll have to wait until next year to see.
Rob and Jesse talk with a former Meta energy executive, Near Horizon Group’s Peter Freed.
If you care about decarbonizing the power grid anytime soon, you have to care about data centers. The AI boom and the ongoing growth of the internet have driven a big new cycle of data center construction in the United States, with tech companies trying to buy electricity on the scale of large cities’ energy demands.
Peter Freed has seen this up close. As Meta’s former director of energy strategy, he worked on clean energy procurement and data center development from 2014 to 2024. He is now a founding partner at the Near Horizon Group, where he advises investors and companies on emerging topics in data centers and advanced clean energy.
On this week’s episode of Shift Key, Rob and Jesse talk with Peter about whether AI and new data centers are going to blow up the grid and break decarbonization. What are the real-world constraints on developing a data center in 2025? Are tech companies beginning to run out of natural gas to burn? What do their investments in clean energy mean? And could the rise of AI prompt an accidental return to coal? Shift Key is hosted by Jesse Jenkins, a professor of energy systems engineering at Princeton University, and Robinson Meyer, Heatmap’s executive editor.
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: Even now, most of the data centers getting built are not AI data centers, right? The AI signal has yet to fully set in. Is that right?
Peter Freed: That’s right. What I would say is, if you look back at what happened, what got announced in 2024, most of the data centers that broke ground and were announced in 2024 were part of a demand plan that was done in 2023, when we did not have the AI demand ratchet, as I call it, on the system.
Now, what people then did is they probably just pulled stuff in. So you know, maybe you were going to do four data centers in 2024 and a few more in 2025. And instead they just, they yanked it forward. So it is also true that we’re definitely seeing the beginnings of this. But this year, 2025, will be a real bellwether year in terms of what the likely overall picture looks like. And one of the proxies that you can use for that is the capex forecast of the hyperscalers. So Meta’s capex forecast in 2024 was $38 billion; 2025, their capex forecast is $65 billion. So that’s a huge jump.
And by the way, Meta in particular doesn’t have a cloud business, so they’re not dependent on the signals coming in from other people. This is just for their own. So in some ways, it’s a clearer picture than we get from some of the other companies. Both Microsoft and Google are up at $80 billion. So to me this says, okay, 2025 is kind of going to show us where this trajectory is likely to go. And it’s pretty high.
I see the same reports that you all see. We’re probably somewhere between 30 [gigawatts] and 100 gigawatts of incremental data center-related load by 2030. I’d take the over at 50 gigawatts. It might be a little bit less, it might be more — 100 [gigawatts], I don’t know. So that’s a big signal.
Jesse Jenkins: For context, 50 gigawatts is half of the U.S. nuclear power fleet.
Freed: That’s correct. Yeah.
Jenkins: Maybe like 10% of U.S. electricity.
Freed: Yeah. Yeah. And so it lines up pretty well with what we were just talking about in terms of those forecasts. At the same time, if you look at all of the load growth projections that utilities with major data center demand have in their jurisdictions, you also get a number which is way larger than 50 gigawatts.
What is the reason for this gratuitous speculative behavior, the likes of which the industry has never seen? And we can talk as much or as little about that as you want, but it is simultaneously true that I think this is going to be a really large demand driver and that we have bubble-like characteristics in terms of the amount of stuff that people are trying to get done.
Music for Shift Key is by Adam Kromelow.