Fervo Energy And Shell Energy Ink Deal For 31 MW Power Purchase Agreement

Fervo Energy, a pioneer in next-generation geothermal energy, has announced the execution of a 15-year power purchase agreement (PPA) with Shell Energy North America (US), L.P. for 31 megawatts (MW) of continuous, carbon-free geothermal power. Under this agreement, Shell Energy will begin using the geothermal power to meet the needs of its retail customers starting in 2026.

This PPA also marks an important milestone for Fervo Energy, as Shell Energy becomes the first off-taker to receive power from Phase I of Fervo’s Cape Station, which is located in Beaver County, Utah. Cape Station is one of Fervo’s flagship geothermal projects and is set to be a major contributor to the growing geothermal energy industry.

The agreement also signals the official upsizing of the Cape Station project from its original capacity of 400 MW to 500 MW. This capacity increase has been made possible by recent technological advancements and breakthroughs in Fervo Energy’s well design and field development strategy. These innovations include increasing the casing diameter of the wells, optimizing the spacing between them with the use of fiber optic sensing technology, and implementing staggered bench development techniques.

These improvements allow Fervo to generate more electricity from each well, thus increasing the total capacity by 100 MW without the need for additional drilling. As a result, Fervo is able to deliver more energy with enhanced efficiency, which significantly improves the economic feasibility and operational efficiency of the project.

Cape Station is set to become the world’s largest enhanced geothermal systems (EGS) development, and it will begin delivering power to the grid in 2026. With this new agreement, Shell Energy will be able to expand its renewable energy portfolio, which already includes wind, solar, and battery storage, by incorporating firm, zero-emission geothermal energy to serve its retail load customers. This addition of geothermal power to Shell Energy’s portfolio aligns with the company’s ongoing commitment to renewable energy and its efforts to support the transition toward a cleaner energy future.

Dawn Owens, VP, Head of Development & Commercial Markets at Fervo, stated, “We’re thrilled to work with Shell Energy. This agreement demonstrates that Fervo is stepping up to meet the moment. As customers seek out 24/7 carbon-free energy, geothermal is clearly an essential part of the solution.”

This power purchase agreement highlights the increasing demand for firm, non-weather-dependent, and zero-emission energy sources, a trend that Fervo is particularly well-positioned to address. In 2021, the California Public Utilities Commission (CPUC) issued a mandate requiring load-serving entities in California to procure 1,000 MW of non-weather-dependent, non-battery, zero-emission energy in order to support grid reliability.

Fervo’s geothermal power is uniquely suited to meet this demand, providing a reliable, continuous energy source that is critical to the state’s evolving energy mix. As a result, this PPA further underscores the growing need for firm, zero-emission energy sources, and Fervo Energy is at the forefront of providing such solutions. With this agreement in place, 500 MW of capacity at Fervo’s Cape Station is now fully contracted, highlighting the strong demand for clean, firm power from utilities and large energy purchasers.

In addition to Shell Energy’s PPA, Fervo has also secured major agreements with other energy providers, including the largest-ever geothermal power purchase agreement with Southern California Edison, announced in June 2024. Fervo has also expanded its deal with Clean Power Alliance, adding an additional 18 MW of carbon-free geothermal energy to their existing agreement. These deals underscore the growing interest and investment in geothermal energy as a reliable and sustainable power source for the future.