On September 1, Fervo Energy and Google announced a 396-megawatt geothermal power agreement, the largest single geothermal contract either company has signed. The 15-year deal covers power from a project in Utah that is expected to come online in 2028, delivering steady, round-the-clock electricity for Google’s data centers and offices.
The deal is a bet on a technology that has spent decades on the margins of the energy industry. Geothermal power, which taps heat deep underground to generate electricity, offers what wind and solar cannot: constant output that does not depend on the weather. Fervo has spent years trying to industrialize the technology, borrowing techniques from the oil and gas industry to drill wells and fracture rock deep below the surface. The Google contract gives the company its largest customer and the financial certainty to build at scale.
The scale of the agreement matters for both sides. For Fervo, 396 megawatts is roughly enough to power hundreds of thousands of homes, and the contract, with its 15-year term, provides the revenue base that lenders require to finance geothermal projects, which are expensive to build even when the fuel is free. For Google, the deal is one piece of a much larger effort to secure clean power for its AI operations, whose electricity demand has grown so quickly that the company has become one of the largest corporate buyers of power in the world.
The agreement also reveals the shape of Google’s power strategy. The company has signed contracts across the energy spectrum in recent years: nuclear power purchase agreements, wind farms, solar projects and now the largest geothermal deal in its history. The common thread is a willingness to pay long-term premiums for power that is clean, reliable and, above all, available when the company needs it. Google has said it wants its data centers to run on carbon-free energy around the clock, and geothermal, which produces power 24 hours a day, fits that requirement better than intermittent sources.
The Utah project is characteristic of the new wave of geothermal development. Unlike the traditional geothermal fields of California and Iceland, which rely on naturally hot water near the surface, the new projects use enhanced geothermal systems: companies drill deep wells, inject water to fracture hot rock and bring the heat back to the surface in a closed loop. The approach opens vast areas of the country to geothermal development, and Fervo has been among the most aggressive companies commercializing it. The company’s work in Utah has been watched closely by the energy industry as proof that the technology can scale.
The financial structure of the deal shows how the AI boom is changing energy markets. Power purchase agreements of this size used to be the province of utilities and merchant power companies; now technology companies sign them directly, locking in supply for facilities that did not exist a decade ago. The willingness of Google and its peers to pay premiums for firm, clean power has made renewable energy development more predictable and has attracted capital to technologies, like geothermal, that struggled to find financing when their only customers were utilities.
Fervo’s shares jumped on the announcement, according to trading data, as investors calculated what a contract of this size means for a company that has been growing rapidly but burning cash. The deal validates the company’s technology and its business model, and it positions Fervo to compete for the growing volume of corporate power contracts that the AI boom is generating. Analysts said the agreement could also prompt other data center operators to consider geothermal, which has historically been overlooked in favor of solar and wind.
The agreement is also a signal to the rest of the energy industry about the size of the opportunity. Corporate power demand, driven by data centers and artificial intelligence, is projected to grow for the rest of the decade, and technology companies have become the most aggressive buyers of new clean power. That demand has reshaped the economics of generation: developers can now sign long-term contracts with creditworthy corporate buyers, reducing the risk that made power projects hard to finance. Geothermal, with its constant output and low operating costs, is particularly well suited to that model, and Fervo’s deal with Google is likely to be followed by others as the technology matures.
The project’s timeline, with power expected in 2028, reflects the realities of geothermal development: drilling, permitting and grid connection take years, and the technology carries construction risk that solar and wind no longer do. But the deal also reflects a broader shift in how technology companies think about energy. The cheapest power is no longer the only consideration; reliability, carbon intensity and the ability to deliver power around the clock have become equally important. Google’s record geothermal contract is a signal that for the largest buyers of electricity in the world, the premium for certainty is worth paying.
