Geothermal energy gets cheaper to drill
Geothermal energy, power made from heat trapped in rock deep underground, is getting cheaper and faster to drill, and a major utility is betting on it. In June 2024, Southern California Edison signed 320 megawatts, a unit of electric power, of new power purchase agreements, contracts that lock in a price and years of supply, with Fervo Energy, a company that drills geothermal wells using techniques borrowed from oil and gas fracking. Utility Dive independently confirmed the terms and called the Fervo Energy Utah geothermal power deal a record setting geothermal contract. The 2 contracts run 15 years each, bringing the total capacity under contract from Cape Station, the geothermal project Fervo Energy operates in southwest Utah, to 373 megawatts, on top of an earlier 53 megawatt deal signed with California community choice aggregators in 2022. The first phase, 70 megawatts, is due online in 2026, the rest in 2028. The deal counts toward a 2021 California mandate requiring 1,000 megawatts of power that does not depend on sun or wind.
The 3,700 figure is the total United States geothermal capacity at the time of the 2022 federal target announcement, source 4. The 5,000 figure is an independent reserves estimate for development potential at Cape Station, source 2. The 3 figures measure 3 different things, a national installed base, 1 company signed contracts at 1 site, and 1 estimate of that same site potential, not 3 points on 1 consistent scale.
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| United States total, 2022 | 3,700 |
| Cape Station contracted | 373 |
| Cape Station estimated potential | 5,000 |
Enhanced geothermal systems complement our abundant wind and solar resources by providing critical base load when those sources are limited.
David Hochschild, chair of the California Energy Commission. Source 1.
The record well that cut drilling time 79%
The confidence behind that contract traces to real drilling gains, but the strongest number belongs to 1 well, not the whole project. In June 2025, Fervo drilled a well named Sugarloaf to a true vertical depth of 15,765 feet, about 4,805 meters by a MAOWCE conversion since Fervo states the figure only in feet, projected to reach 520 degrees Fahrenheit, about 271 degrees Celsius, once fully heated. Fervo finished the well in 16 drilling days, a 79% reduction in drilling time against a baseline the United States Department of Energy set for ultradeep geothermal wells. Sugarloaf is an appraisal well, drilled to test the resource, not one of the regular production wells at Cape Station, which run shallower and are not stated to reach that temperature.
A separate number for cost, not time
A second improvement covers cost rather than time, from a different set of wells. Fervo states the cost of drilling the first 4 horizontal wells at Cape Station fell from 9.4 million dollars for the first well to 4.8 million dollars for the fourth, a drop of about 49%, a MAOWCE calculation from those 2 stated dollar figures since Fervo never states the percentage itself. Fervo also states a 70% year over year reduction in drilling time across its wider well program, a third and separate measurement from the Sugarloaf figure above. None of these 3 percentages describe the same comparison, and none should be added together into 1 number.
Figures are for the first 4 horizontal wells drilled at Cape Station, source 3. The drop from the first well to the fourth is about 49%, a MAOWCE calculation from the 2 dollar figures the source states, not a percentage source 3 itself gives.
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| First horizontal well | 9.4 |
| Fourth horizontal well | 4.8 |
Fervo's drilling improvements are like the early days of the shale revolution.
Trey Lowe, chief technology officer of Devon Energy, an oil and gas company with its own commercial interest in enhanced geothermal drilling technique adoption. Source 3.
The federal target this drilling progress is racing against
The United States Department of Energy set a goal in 2022 to cut geothermal power costs 90% to 45 dollars per megawatt hour by 2035, aiming at more than 5 terawatts, a unit equal to 1,000 gigawatts, of heat the agency says sits under the country, enough potential to power over 40 million homes. United States geothermal capacity stood at about 3.7 gigawatts, a unit equal to 1,000 megawatts, at the time. Fervo signing a 320 megawatt contract, and cutting drilling time and cost the way its own releases describe, both happened years before that 2035 target date.