On September 1, 2026, Google and next-generation geothermal startup Fervo Energy signed a long-term power purchase agreement (PPA) to procure 396 megawatts (MW) of electricity from Cape Station, a geothermal power facility under development in Beaver County, Utah. The agreement includes an expansion option of approximately 600MW exercisable by June 2030, opening a path for the total capacity of geothermal power Google buys to grow to roughly 1 gigawatt (GW, 1,000MW). The electricity generated will serve as core power for a new large-scale Google AI data center planned within the state.
The explosive computing demand from generative AI is forcing hyperscalers into an unprecedented race to secure electricity. Solar and wind power, which have long been the primary source of decarbonized electricity procurement, have a weakness: their output fluctuates wildly depending on sunlight and weather. For AI infrastructure that must run massive semiconductor clusters nonstop, 24 hours a day, 365 days a year, weather-dependent intermittent renewables alone cannot support the baseload. To break through this physical constraint, Google has moved to procure gigawatt-scale power from next-generation geothermal (EGS: Enhanced Geothermal Systems), which stably extracts heat from deep underground.
Why Geothermal Now: The Limits of Decarbonization Exposed by a Natural Gas Deal
The reality facing hyperscalers is harsh. Google has set an extremely ambitious goal of achieving 24/7 carbon-free energy (24/7 CFE) at all its business sites by 2030 and reaching net zero. However, the rapidly growing power consumption of AI infrastructure has completely outpaced the previous rollout of renewable energy.
A symbolic moment came in April 2026. To meet the sudden surge in demand for launching AI data centers, Google was forced to sign a major 933MW natural gas power purchase agreement with Crusoe Energy in Texas. The business continuity imperative—that AI computing infrastructure cannot be allowed to stop—reignited, even if temporarily, a dependence on fossil fuels, creating serious friction with the company's environmental goals.
Even solar and wind paired with large battery storage systems can deplete their storage capacity under weather conditions with days of no wind or bad weather. AI model training and large-scale inference clusters demand flat, high-load operation that cannot tolerate even momentary interruptions in power supply. This is where "clean firm power" (always-on zero-carbon power) becomes essential—power that is unaffected by weather and can maintain a capacity factor of over 90%.
Small modular reactors (SMRs) for nuclear power are largely expected to begin commercial operation only in the 2030s or later, too late to address the immediate AI power shortage. Filling that gap, Fervo's next-generation geothermal technology emerged as an option capable of supplying hundreds of megawatts to gigawatts of always-on clean power on an extremely realistic timeline of 2028.
How EGS, Adapted From Oil Drilling, and "GeoBlock" Broke Down Geographic Barriers
Geothermal power itself is not a new technology. However, conventional geothermal power generation was only feasible in special volcanic zones where three elements happened to coincide: high-temperature magma heat, abundant groundwater, and natural fractures (permeable layers) allowing groundwater to permeate. Suitable sites meeting these conditions were limited worldwide, which was the main reason U.S. geothermal generation capacity had stagnated at around 4GW (about 4,000MW) for many years.
Fervo's next-generation geothermal system (EGS) broke through this geographic limitation. Rather than searching for natural hot springs, the company applied horizontal drilling (a technique for boring several thousand meters horizontally) and hydraulic fracturing (a technique for creating a network of artificial micro-fractures in rock using high-pressure fluid)—technologies refined to the utmost by the U.S. oil and gas industry during the shale revolution—to high-temperature, dry rock formations deep underground.
Multiple wells are drilled horizontally into high-temperature rock formations several thousand meters underground, creating an artificial reservoir. Water injected from the surface efficiently absorbs heat as it passes through the hot fractures, emerging from production wells as high-temperature steam and hot water. After the thermal energy is extracted, the cooled water is reinjected underground, forming a completely closed circulation loop. Even in dry rock formations lacking natural permeable layers, an artificial geothermal power plant can be built anywhere heat exists. According to estimates by the U.S. Department of Energy (DOE), EGS technology could unlock up to an astronomical 57 terawatts (TW) of zero-carbon power across the United States.
Furthermore, Fervo's strength lies in having elevated subsurface development from "one-off civil engineering" to an "industrialized mass-production process." The company established a standardized modular development method called "GeoBlock." It standardizes the placement of drilling rigs, the design of horizontal wellbores, and the unit structure of surface power plants, repeating deployment at the same site. This creates a learning effect where the construction time and cost drop exponentially with each additional well drilled. At the Cape Station site, significant reductions in drilling time and cost have already been demonstrated, and the knowledge gained from the initial 100MW phase directly carried over into this expansion to 396MW and, ultimately, the planned deployment of up to 1GW.
Utah's New "SB132" Law Enables a Direct-to-Load Network at No Cost to General Ratepayers
Alongside advances in geothermal technology, the decisive factor that made this agreement possible was Utah's progressive electricity regulatory reform.
As plans for large-scale data centers arise across the United States, the biggest points of friction for local communities and government have been "grid capacity constraints" and "rising electricity rates." Concerns that massive power consumption by giant IT companies would worsen congestion on existing power grids and that the capital costs of grid expansion would be passed on to households and small businesses through higher electricity rates have sparked referendums and legislative opposition movements.
To directly address this friction, Utah enacted a reform bill to its electric utility law called "SB132" in 2025. SB132 is a system that legally recognizes flexible power procurement paths for businesses consuming more than 100MW of large-scale electricity over a five-year period. Specifically, in addition to the option of receiving standard supply from an existing utility, it officially recognized a "direct-to-load" contract structure in which a new large-scale power plant and a consumer contract directly with each other, either bypassing the existing general transmission grid or drawing power directly after fairly settling transmission line usage fees.
In this PPA, Fervo and Google clearly stated the principle of "at no cost to existing ratepayers." In line with the SB132 framework, the electricity generated at Cape Station will be connected directly to the receiving equipment of the new Google data center without burdening the distribution grid used by ordinary Utah households. Building a highly transparent procurement model that does not trigger rate hikes for ordinary residents represents an important precedent for hyperscaler decarbonization development.
From a Five-Year Foundation to Gigawatt Scale: Cape Station Opens Up Competition for AI Power Procurement
The partnership between Google and Fervo was not built overnight. The two companies' collaboration began in 2021, and they have already accumulated more than five years of track record.
In 2023, Fervo successfully launched the world's first commercial pilot plant, "Project Red," in Nevada, achieving its first power transmission to the local grid to which Google's data center is connected. Then, in June 2024, together with Nevada utility NV Energy, the company signed a 115MW PPA, putting into practical use an innovative rate system called the "Clean Transition Tariff" (CTT), in which large consumers bear the full cost of renewable energy adoption. And in May 2026, Fervo completed its initial public offering (IPO) on the Nasdaq market (ticker: FRVO), and with ample capital in hand, launched full-scale development of Cape Station.
Cape Station, located in Beaver County, Utah, is the company's largest flagship site. It has already obtained development approval for up to 2GW, and estimates by third-party engineering firms suggest that up to 4GW (4,000MW) of power generation potential lies dormant as underground thermal resources. If this full 4GW were developed, it would double the total existing U.S. geothermal generation capacity from this single region alone.
The 396MW agreement announced here, along with the roughly 600MW expansion option exercisable by June 2030, illustrates that Google has taken the initiative in the "race to secure power infrastructure" that will determine the winner of the AI competition. Of course, challenges remain on the path to operations beginning in 2028, including final commercial approval by Utah regulators, progress on local transmission infrastructure construction, and detailed design of the data center itself. The roughly 600MW option, too, remains for now merely a secured right rather than a confirmed legal obligation.
Still, the significance of next-generation geothermal reaching a practical commercial stage—no longer merely a laboratory proof of concept, but a source capable of meeting gigawatt-scale demand—is substantial. For hyperscalers facing the dilemma of mass solar deployment subject to weather and the resulting swing back toward gas-fired power, direct procurement of always-on power centered on geothermal is becoming a core competitive axis that will shape sustainable computing infrastructure in the AI era.