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A personal account of the final act in the fight to pass the United States’ first comprehensive climate law
One year ago, the Inflation Reduction Act became law, throwing the full financial might of the federal government behind the clean energy transition and forever changing the fight against climate change.
Recent polling finds that too few recognize the historical significance of the hundreds of billions of dollars the law invests to make clean energy cheaper for American households, businesses, and industries.
Even fewer people appreciate just how close we came to losing it all.
This is a personal account of the final days of the fight to pass the nation’s first comprehensive climate law, and of how the Inflation Reduction Act remarkably arose from the ashes of near-defeat.
On July 14, 2022, just over a month before eventually becoming law, the budget bill that would eventually become known as the Inflation Reduction Act died. Again.
That evening, Senator Joe Manchin, the coal-state Democrat from West Virginia, called Senate Majority Leader Chuck Schumer to tell him he was done with the long-simmering inter-party negotiations striving to craft a budget bill that could unite all 50 Democratic senators and pass the evenly divided Senate. The stubborn hold-out had already dashed progressive dreams multiple times in the year and a half since the 117th Congress gaveled into session, including dealing the killing blow to the House-passed Build Back Better Act in December 2021.
The news was a shock. Less than two weeks earlier, over the Fourth of July weekend, I was told by Senate staffers party to the budget negotiations that a deal was imminent. They told me to prepare the REPEAT Project, a Princeton University team that I lead and that assesses the impacts of federal energy and climate policies as they are debated, to stand by to run the numbers on a new bill.
But in July 2022, inflation was running at nearly 9% and gasoline prices were over $5 per gallon in many parts of the U.S. Then we got one bad report on the rate of inflation after another, prompting Manchin to say he could no longer support any additional government spending that might further fuel inflation.
Manchin called Schumer on July 14 to say he could no longer continue negotiations, and that he would not support legislation that included any clean energy or climate spending — leaving only a slimmed-down bill focused on health care left in play.
"DEVASTATING... utterly SENSELESS!" I tweeted at the time, using REPEAT Project modeling to illustrate the massive climate gap we would have faced, had that been the end of the story.
Courtesy of the REPEAT Project at Princeton University's Zero Lab
And it really did seem like the end.
The tone I heard from Senate staffers that day was very different from the several prior ‘false demises’ of the budget negotiations we had all endured. They were despondent. “I feel like I just wasted the last six years of my life,” one staffer texted me on July 14. So did I.
The next day, Manchin issued an ultimatum: Either Democrats could quickly pass a “skinny” budget bill focused only on health care or they could wait a few weeks to see if inflation improved and try negotiating a larger package in August.
The problem: Basically no one thought inflation would meaningfully cool that quickly, and there was only a few weeks left to pass a law before the August recess, after which Congress would go into full campaign season and nothing would pass.
The game clock was winding down.
Then President Biden threw in the towel. He issued an official statement vowing to keep the climate fight up via executive action but urged the Senate to quickly pass a bill focused only on health care.
Schumer appeared poised to do just that, and a caucus meeting for Senate Democrats was set for the following Tuesday to discuss how to move forward. Since Congress only gets one shot at a budget reconciliation law per fiscal year, if they ended up passing a bill without any climate package, it was game over.
I had been working to advance federal climate policy since 2008. I lived through the demise of the last serious effort to pass a federal climate law in 2009 and 2010. I knew how rare these windows of opportunity to pass meaningful legislation are. And we’d just blown a once-in-a-decade chance. Would we have to wait until the 2030s for our next shot? Could we even survive another decade with the United States standing on the sidelines of the global climate fight?
By July 16, I had apparently had enough time to go through the various stages of grief, arriving at bargaining (or perhaps denial). “It’s just not okay to end like this, with Manchin walking away from the deal and the rest of the caucus just quietly accepting that!” I wrote in a text to a key Senate staffer. “There’s got to be at least a dozen [Senate] members who are furious and could be unwilling to accept that in the end, right?”
“Working on it 😄,” the staffer replied.
And just like that, while many gave up and others fumed, staff from just a handful of Senate offices and a rag-tag group of allied individuals and advocacy groups got back to what we’d been doing since the start: doggedly working the problem to find some way to passage.
Even then, I had very little faith our efforts would succeed. I just knew that the game clock had a few seconds left on it, time enough to run a couple more Hail Mary plays, and I wanted to be able to look my kids in the eye some day and say, “We failed, but we truly tried everything we could.”
So we got back to work.
So how did we get Manchin back to the negotiating table?
From my limited perspective, three things worked.
First, the concern that climate spending would stoke inflation was bogus. The budget deal under negotiation was doubly paid for, raising twice as much new revenue as it spent. What’s more, the spending plan was estimated to be in the ballpark to $30 to $50 billion per year spread over a decade, or less than 1% of our roughly six trillion dollar federal budget.
The climate spending was peanuts, and any honest macroeconomist would say that the budget deal would have a mild, fiscally contractionary effect at best or no effect on inflation at worst. Plus, the proposals specifically took aim at two key drivers of inflation: health care costs and energy costs.
Either Manchin was honest in his inflation fears but misappreciating the issues, or he was trying to give himself cover to scuttle the bill.
Our so-called “Never Give Up Caucus” took him at face value. To address his inflation concerns, allies succeeded in getting inflation-hawk-in-chief Larry Summers, the conservative leaning Penn-Wharton Budget Model team, and the deficit hawkish head of the Committee for a Responsible Federal Budget to tell Manchin (and the press) that the deal would cut the deficit and not raise prices.
Second, the many vested interests that stood to gain from the clean energy package were mobilized and pushed Manchin hard not to leave them high and dry.
This was always a key part of the political strategy of the clean energy package: rather than focus on pricing carbon emissions and making fossil energy more expensive (as Congress had attempted in 2009), the budget bill would instead provide a wide-ranging set of direct subsidies — tax credits, grants, loan programs — to make climate-friendly technologies cheaper and help build up manufacturing of clean energy components in the U.S. Concentrated beneficiaries create organized power to back the bill. That was the theory, and it was time to put it to the test.
The pressure campaign to get Manchin back to the table was “across the board,” according to National Wildlife Federation CEO Collin O’Mara, who was one of the most dogged and effective organizers during those pivotal final days.
Executives from renewable energy companies reminded Manchin that billions of dollars of investment were at stake.
The United Mine Workers of America pushed Manchin not to walk away from his promise to create a permanent trust fund for miners suffering from black lung disease, which the budget bill would do.
In my personal estimation, the most effective voices were probably from those sectors Manchin had styled himself as personally championing as chairman of the Senate Energy Committee: carbon capture, nuclear power, hydrogen, and advanced manufacturing.
A senior executive with a utility operating in Appalachia reportedly told Manchin: “We know coal plants are ultimately going to close. What is going to replace them? What are the jobs? What are we transitioning to? In this case, we are going to explore hydrogen, new nuclear and get manufacturing in the state.”
Manchin received incoming pressure to pass a bill from the Carbon Capture Coalition, oil companies like BP with big plans to invest in hydrogen, and Nucor, the nation’s largest steel maker, which planned new investments in West Virginia in part to supply growing demand for steel for burgeoning renewable energy industries.
Utilities like Constellation and Duke reminded Manchin that this law was our best shot at preserving the nation’s existing nuclear fleet, which provides about a fifth of our electricity without contributing to air pollution or climate change.
Bill Gates, who has invested in nuclear and energy storage startups, called Manchin personally. And executives at a Gates-backed battery company with plans for a West Virginia manufacturing hub explained to Manchin’s staff how the bill’s incentives would accelerate their growth trajectory.
Third, a few key senators that Manchin personally trusted or respected, including John Hickenlooper of Colorado, Chris Coons of Delaware, Tina Smith of Minnesota, Mark Warner of Virginia, and Ron Wyden of Oregon, reportedly pressed him with direct personal appeals.
I imagine their pitches either made the political case — did Manchin really want to send his party into the midterms having utterly failed on their domestic policy agenda? — or a personal one, emphasizing the opportunity to secure his legacy and the admiration of his grandchildren.
I don’t think we should discount the importance of these personal appeals. At the end of the day, senators are humans too. They crave the respect of their colleagues (at least those they admire). And everyone wants to be the hero of their own story, not the villain.
Which of these (or other parallel efforts I don't know about) pushed Manchin back to the table? Who knows what went through his mind in the end. But somehow, against virtually all expectations, it worked.
We didn’t know it until later, but by as early as Tuesday, July 19, Manchin and Schumer, with just a couple key aids each, began meeting in secret somewhere in the Senate offices and got back to work.
No one else had any idea this was happening.
Like others working to save the bill, I spent the next week continuing to talk to press, allies, congressional staff, etc., marshaling talking points and data, mobilizing various interests to pressure Manchin, and doing everything we could to convince the stubborn senator to make a deal that would get a climate package into law. Little did we know, he was already back at it.
In fact, a little over a week later, on Wednesday, July 27, Manchin issued a statement that shocked everyone: He and Leader Schumer had reached a deal after all and were unveiling a full-fledged bill to be called “The Inflation Reduction Act.”
“The Inflation Reduction Act of 2022 addresses our nation’s energy and climate crisis by adopting commonsense solutions through strategic and historic investments that allow us to decarbonize while ensuring American energy is affordable, reliable, clean and secure,” Manchin wrote.
The full text of the bill dropped later that evening, and we were blown away to see how much of the original climate package from the ill-fated Build Back Better Act was retained by this new legislation.
The deal contained roughly $370 billion in estimated climate and clean energy spending, an historic package. All the key tax incentives were still in the proposal, including credits for clean electricity, electric vehicles, and heat pumps. Major grant programs were funded at similar levels. Even a new fee on methane pollution from the oil and gas sector had survived. In fact, a tax credit for U.S. clean energy manufacturing had even been expanded, apparently at Manchin’s request, to support production of batteries and their components and the mining and processing of critical minerals.
Rather than lose it all, we were poised to win nearly everything we’d hoped for.
“Holy shit. Stunned, but in a good way,” wrote Senator Tina Smith, a tireless advocate for the climate package, on Twitter. “$370B for climate and energy … BFD.”
It took us a couple weeks to run the numbers, but once we did, REPEAT Project estimated on August 4 that the Inflation Reduction Act, or IRA (pronounce it like your friendly Uncle Ira!), would cut emissions by about one billion metric tons per year in 2030 and retained about 80% of the cumulative emissions reductions of the larger Build Back Better package.
Courtesy of the REPEAT Project at Princeton University's Zero Lab
IRA could get the United States to about 42% below our peak historical emissions by 2030, we estimated at the time. (REPEAT Project’s latest updated analysis published last month revises 2030 emissions under IRA to 37-41% below peak.) That was still short of the target of 50% below peak levels that President Biden had committed the country to on the world stage, but the proposed legislation was a true game changer that gave us a fighting chance to hit that goal.
After the Manchin-Schumer deal dropped, we were off to the races.
Manchin shifted from the package’s chief obstacle to its chief spokesperson, stumping for the bill on Fox and haranguing senators on the floor alongside Schumer to get IRA passed during an exhausting, overnight “vote-a-rama.” After a 16-hour process where Republicans proposed amendment after amendment to be shot down one by one by a united Democratic caucus — plus a little last minute drama wherein Kyrsten Sinema nearly killed the bill to save private equity firms billions in taxes — the Inflation Reduction Act passed the Senate at 3:17 PM on August 7, 51-50, with Vice President Harris casting the deciding vote.
The House passed IRA in turn on August 14, and President Biden signed it into law two days later. The rest, as they say, is history.
We’re still writing that history, but it’ll be forever changed by passage of the landmark law. And we almost lost it all.
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On power plant emissions, Fervo, and a UK nuclear plant
Current conditions: A week into Atlantic hurricane season, development in the basin looks “unfavorable through June” • Canadian wildfires have already burned more land than the annual average, at over 3.1 million hectares so far• Rescue efforts resumed Wednesday in the search for a school bus swept away by flash floods in the Eastern Cape province of South Africa.
EPA
The Environmental Protection Agency plans to announce on Wednesday the rollback of two major Biden-era power plant regulations, administration insiders told Bloomberg and Politico. The EPA will reportedly argue that the prior administration’s rules curbing carbon dioxide emissions at coal and gas plants were misplaced because the emissions “do not contribute significantly to dangerous pollution,” per The Guardian, despite research showing that the U.S. power sector has contributed 5% of all planet-warming pollution since 1990. The government will also reportedly argue that the carbon capture technology proposed by the prior administration to curb CO2 emissions at power plants is unproven and costly.
Similarly, the administration plans to soften limits on mercury emissions, which are released by burning coal, arguing that the Biden administration “improperly targeted coal-fire power plants” when it strengthened existing regulations in 2024. Per a document reviewed by The New York Times, the EPA’s proposal will “loosen emissions limits for toxic substances such as lead, nickel, and arsenic by 67%,” and for mercury at some coal power plants by as much as 70%. “Reversing these protections will take lives, drive up costs, and worsen the climate crisis,” Climate Action Campaign Director Margie Alt said in a statement. “Instead of protecting American families, [President] Trump and [EPA Administrator Lee] Zeldin are turning their backs on science and the public to side with big polluters.”
Fervo Energy announced Wednesday morning that it has secured $206 million in financing for its 400-megawatt Cape Station geothermal project in southwest Utah. The bulk of the new funding, $100 million, comes from the Breakthrough Energy Catalyst program.
Fervo’s announcement follows on the heels of the company’s Tuesday announcement that it had drilled its hottest and deepest well yet — at 15,000 feet and 500 degrees Fahrenheit — in just 16 days. As my colleague Katie Brigham reports, Fervo’s progress represents “an all too rare phenomenon: A first-of-a-kind clean energy project that has remained on track to hit its deadlines while securing the trust of institutional investors, who are often wary of betting on novel infrastructure projects.” Read her full report on the clean energy startup’s news here.
The United Kingdom said Tuesday that it will move forward with plans to construct a $19 billion nuclear power station in southwest England. Sizewell C, planned for coastal Suffolk, is expected to create 10,000 jobs and power 6 million homes, The New York Times reports. Sizewell would be only the second nuclear power plant to be built in the UK in over two decades; the country generates approximately 14% of its total electricity supply through nuclear energy. Critics, however, have pointed unfavorably to the other nuclear plant under construction in the UK, Hinkley Point C, which has experienced multiple delays and escalating costs throughout its development. “For those who have followed Sizewell’s progress over the years, there was a glaring omission in the announcement,” one columnist wrote for The Guardian. “What will consumers pay for Sizewell’s electricity? Will it still be substantially cheaper in real terms than the juice that will be generated at Hinkley Point C in Somerset?” The UK additionally announced this week that it has chosen Rolls-Royce as the “preferred bidder” to build the country’s first three small modular nuclear reactors.
The European Union on Tuesday proposed a ban on transactions with Nord Stream 1 and 2 as part of a new package of sanctions aimed at Russia, Bloomberg reports. “We want peace for Ukraine,” the president of the European Commission, Ursula von der Leyen, said at a news conference in Brussels. “Therefore, we are ramping up pressure on Russia, because strength is the only language that Russia will understand.” The package would also lower the price cap on Russian oil to $45 a barrel, down from $60 a barrel, von der Leyen said, as well as crack down on Moscow’s “shadow fleet” of vessels used to transport sanctioned products like crude oil. The EU’s 27 member states need to unanimously agree to the package for it to be adopted; their next meeting is on June 23.
The world’s oceans hit their second-highest temperature ever in May, according to the European Union’s Earth observation program Copernicus. The average sea surface temperature for the month was 20.79 degrees Celsius, just 0.14 degrees below May 2024’s record. Last year’s marine heat had been partly driven by El Niño in the Pacific, so the fact that the oceans remain warm in 2025 is alarming, Copernicus senior scientist Julien Nicolas told the Financial Times. “As sea surface temperatures rise, the ocean’s capacity to absorb carbon diminishes, potentially accelerating the build-up of greenhouse gases in the atmosphere and intensifying future climate warming,” he said. In some areas around the UK and Ireland, the sea surface temperature is as high as 4 degrees Celsius above average.
Image: Todd Cravens/Unsplash
The Pacific Island nation of Tonga is poised to become the first country to recognize whales as legal persons — including by appointing them (human) representatives in court. “The time has come to recognize whales not merely as resources but as sentient beings with inherent rights,” Tongan Princess Angelika Lātūfuipeka Tukuʻaho said in comments delivered ahead of the U.N. Ocean Conference in Nice, France.
Microsoft, Amazon, Google, and the rest only have so much political capital to spend.
When Donald Trump first became a serious Presidential candidate in 2015, many big tech leaders sounded the alarm. When the U.S. threatened to exit the Paris Agreement for the first time, companies including Google, Microsoft, Apple, and Facebook (now Meta) took out full page ads in The New York Times and The Wall Street Journal urging Trump to stay in. He didn’t — and Elon Musk, in particular, was incensed.
But by the time specific climate legislation — namely the Inflation Reduction Act — was up for debate in 2022, these companies had largely clammed up. When Trump exited Paris once more, the response was markedly muted.
Now that the IRA’s tax credits face clear and present threats, this same story is playing out again. As the Senate makes its changes to the House’s proposed budget bill, tech giants such as Microsoft, Google, Meta, and Amazon are keeping quiet, at least publicly, about their lobbying efforts. Most did not respond to my request for an interview or a statement clarifying their position, except to say they had “nothing to share on this topic,” as Microsoft did.
That’s not to say they have no opinion about the fate of clean energy tax credits. Microsoft, Google, Meta, and Amazon have all voluntarily set ambitious net-zero emissions targets that they’re struggling to meet, largely due to booming data center electricity demand. They’re some of the biggest buyers of solar and wind energy, and are investing heavily in nuclear and geothermal. (On Wednesday morning, Pennsylvania’s Talen Energy announced an expanded power purchase agreement with Amazon, for nearly 2 gigawatts of power through 2042.) All of these energy sources are a whole lot more accessible with tax credits than without.
There’s little doubt the tech companies would prefer an abundant supply of cheap, clean energy. Exactly how much they’re willing to fight for it is the real question.
The answer may come down to priorities. “It’s hard to overstate how much this race for AI has just completely changed the business models and the way that these big tech companies are thinking about investment,” Jeff Navin, co-founder of the climate-focused government affairs firm Boundary Stone Partners, told me. “While they’re obviously going to be impacted by the price of energy, I think they’re even more interested and concerned about how quickly they can get energy built so that they can build these data centers.”
The tech industry has shown much more reluctance to stand up to Trump, period, this time around. As the president has moved from a political outsider to the central figure in the Republican party, hyperscalers have increasingly curried his favor as they advocate against actions that could pose an existential risk to their business — think tighter regulations on the tech sector or AI, or tariffs on key supplies made in Asia.
As Navin put it to me, “When you have a president who has very strong opinions on wind turbines and randomly throws companies’ names in tweets in the middle of the night, do you really want to stick your neck out and take on something that the president views as unpopular if you’ve got other business in front of him that could be more impactful for your bottom line?”
It is undeniably true that the AI-driven data center boom is pushing these companies to look for new sources of clean power. Last week Meta signed a major nuclear deal with Constellation Energy. Microsoft is also partnering with Constellation to reopen Three Mile Island, while Google and Amazon have both announced investments in companies developing small modular reactors. Meta, Google, and Microsoft are also investing in next-generation geothermal energy startups.
But while the companies are eager to tout these partnerships, Navin suspects most of their energy lobbying is now being directed towards efforts such as permitting reform and building out transmission infrastructure. Publicly available lobbying records confirm that these are indeed focus areas, as they’re critical to bringing data centers online quickly, regardless of how they’re powered and whether that power is subsidized. “They’re not going to stop construction on an energy project that has access to electricity just because that electricity is marginally more expensive,” Navin told me. “There’s just too much at stake.”
Tech companies have lobbied on numerous budget, tax, sustainability, and clean energy issues thus far this year. Amazon’s lobbying report is the only one to specifically call out efforts on “renewable energy tax credits,” while Meta cites “renewable energy policy” and Microsoft name-drops the IRA. But there’s no hard and fast standard for how companies describe the issues they’re lobbying on or what they’re looking to achieve. And perhaps most importantly, the reports don’t disclose how much money they allot to each issue, which would illuminate their priorities.
Lobbying can also happen indirectly, via industry groups such as the Clean Energy Buyers Association and the Data Center Coalition. Both have been vocal advocates for preserving the tax credits. The Wall Street Journal recently detailed a lobbying push by the latter — which counts Microsoft, Amazon, Meta, and Google among its most prominent members — that involved meetings with about 30 Republican senators and a letter to Senate Majority Leader John Thune.
DCC didn’t respond to my request for an interview. But CEBA CEO Rich Powell told me, “If we take away these incentives right now, just as we’re getting the rust off the gears and getting back into growth mode for the electricity economy, we’re really concerned about price spikes.”
The leader of another industry group, Advanced Energy United, shared Powell’s concern that passing the bill would mean higher electricity prices. Taking away clean energy incentives would ”fundamentally undercut the financing structure for — let’s be frank — the vast majority of projects in the interconnection queue today,” Harry Godfrey, the managing director of AEU, told me.
Being part of an industry association is by no means a guarantee of political alignment on every issue. Microsoft, Google, Meta, and Amazon are also members of the U.S. Chamber of Commerce — by far the largest lobbying group in the U.S. — which has a long history of opposing climate action and the IRA itself. Apple even left the Chamber in 2009 due to its climate policy stances.
But Powell and Godfrey implied that the tech giants' views are — or at least ought to be — in alignment with theirs. “Many of our members are lobbying independently. Many of them are lobbying alongside us. And then many of them are supporting CEBA to go and lobby on this,” Powell told me, though he wouldn’t reveal what actions any specific hyperscalers were taking.
Godfrey said that AEU’s positions are “certainly reflective of what large energy consumers, notably tech companies, have been working to pursue across a variety of technologies and with applicability to a couple of different types of credits.”
And yet hyperscalers may have already spent a good deal of their political capital fighting for a niche provision in the House’s version of the budget bill, which bans state-level AI regulation for a decade. That would make the AI boom infinitely easier for tech companies, who don’t want to deal with a patchwork of varying regulations, or really most regulations at all.
On top of everything else, big tech in particular is dealing with government-led anti-trust lawsuits, both at home and abroad. Google recently lost two major cases to the Department of Justice, related to its search and advertising business. A final decision is pending regarding the Federal Trade Commission’s antitrust lawsuit against Meta, regarding the company’s acquisition of Instagram and WhatsApp. Not to be outdone, Amazon will also be fighting an antitrust case brought by the FTC next year.
As these companies work to convince the public, politicians, and the courts that they’re not monopolistic rule-breakers, and that AI is a benevolent technology that the U.S. must develop before China, they certainly seem to be relinquishing the clean energy mantle they once sought to carry, at least rhetorically. We’ll know more once all these data centers come online. But if the present is any indication, speed, not green electrons, is the North Star.
Editor’s note: This story has been updated to reflect Amazon’s power purchase agreement with Talen Energy.
The new funding comes as tax credits for geothermal hang in the balance.
The good news is pouring in for the next-generation geothermal developer Fervo Energy. On Tuesday the company reported that it was able to drill its deepest and hottest geothermal well to date in a mere 16 days. Now on Wednesday, the company is announcing an additional $206 million in financing for its Cape Station project in Utah.
With this latest tranche of funding, the firm’s 500-megawatt development in rural Beaver County is on track to deliver 24/7 clean power to the grid beginning in 2026, reaching full operation in 2028. The development is shaping up to be an all-too-rare phenomenon: A first-of-a-kind clean energy project that has remained on track to hit its deadlines while securing the trust of institutional investors, who are often wary of betting on novel infrastructure projects.
The bulk of this latest financing comes from the Bill Gates-backed Breakthrough Energy Catalyst program, which provided $100 million in project-level equity funding. The energy and commodity trading company Mercuria provided $60 million in corporate loans, increasing its existing fixed-term loan from $40 million to $100 million. An additional $45.6 million in short-term debt financing came from XRL-ALC, an affiliate of X-Caliber Rural Capital, which provides loans to infrastructure projects in rural areas. That comes on top of a previous $100 million loan from the firm.
The plan is for Cape Station to deliver 100 megawatts of grid power in 2026, with the additional 400 megawatts by 2028. The facility has the necessary permitting to expand production to two gigawatts — twice the size of a standard nuclear reactor. And on Monday, the company announced that an independent report from the consulting firm DeGolyer & MacNaughton confirms that the project could expand further still — eventually supporting over 5 gigawatts of clean power at depths of up to 13,000 feet. The company’s latest drilling results, which reached 15,765 feet at 520 degrees Fahrenheit, could push the project’s potential power output even higher.
Traditional geothermal wells normally max out at around 10,000 feet, and must be built in locations where a lucky confluence of geological features come together: high temperatures, porous rock, and naturally occurring water or steam. But because Fervo can drill thousands of feet deeper, it’s able to access hot rocks in locations that weren’t previously suitable for geothermal development, pumping high-pressure water down into the wells to fracture rocks and thus create its own geothermal reservoirs.
The primary customer for Fervo’s Cape Station project is Southern California Edison, which signed a 320-megawatt power purchase agreement with the company last year, advertised as the largest geothermal PPA ever. Shell was also announced as a customer this year. Fervo is already providing 3.5 megawatts of power to Google via a pilot project in Nevada, which it’s seeking to expand, entering into a 115 megawatt PPA with NV Energy and the tech giant to further build out production at this location.
Fervo’s latest funding comes on top of last February’s $244 million Series D round led by Devon Energy, as well as an additional $255 million in corporate equity and debt financing that it announced last December. On top of investments from well known climate tech venture firms such as Breakthrough Energy Ventures and Galvanize Climate Solutions, the company has secured institutional investment from Liberty Mutual as well as public pension funds such as the California State Teachers’ Retirement System and the Canada Pension Plan Investment Board.
Fervo, like all clean energy startups, also stands to benefit greatly from the Inflation Reduction Act’s clean energy tax credits, which are now in jeopardy as President Trump’s One Big, Beautiful Bill works its way through the Senate. While Secretary of Energy Chris Wright has traditionally been a booster of geothermal energy and is advocating to keep tax incentives for the technology in place through 2031, the bill as it stands would essentially erase incentives for all geothermal projects that start construction more than 60 days after the bill’s passage.
Fervo broke ground on Cape Station in 2023, so that project will make the cut. For future Fervo developments, it’s much less clear. But for now, the company seems to be flush with cash and potential in a climate tech world awash in ill omens.