Month: May 2021

Tapping the geothermal energy stored beneath the Earth’s surface as a way to generate renewable power is one of the new visions for the future that’s captured the attention of environmentalists and oil and gas engineers alike.

That’s because it’s not only a way to generate power that doesn’t rely on greenhouse gas emitting hydrocarbons, but because it uses the same skillsets and expertise that the oil and gas industry has been honing and refining for years.

At least that’s what drew the former completion engineer (it’s not what it sounds like) Tim Latimer to the industry and to launch Fervo Energy, the Houston-based geothermal tech developer that’s picked up funding from none other than Bill Gates’ Breakthrough Energy Ventures (that fund… is so busy) and former eBay executive, Jeff Skoll’s Capricorn Investment Group.

With the new $28 million cash in hand, Fervo’s planning on ramping up its projects, which Latimer said would “bring on hundreds of megawatts of power in the next few years.”

Latimer got his first exposure to the environmental impact of power generation as a kid growing up in a small town outside of Waco, Texas near the Sandy Creek coal power plant, one of the last coal-powered plants to be built in the U.S.

Like many Texas kids, Latimer came from an oil family, and got his first jobs in the oil and gas industry before realizing that the world was going to be switching to renewables and the oil industry — along with the friends and family he knew — could be left high and dry.

It’s one reason he started working on Fervo, the entrepreneur said.

“What’s most important, from my perspective, since I started my career in the oil and gas industry, is providing folks that are part of the energy transition on the fossil fuel side to work in the clean energy future,” Latimer said. “I’ve been able to go in and hire contractors and support folks that have been out of work or challenged because of the oil price crash… And I put them to work on our rigs.”

When the Biden administration talks about finding jobs for employees in the hydrocarbon industry as part of the energy transition, this is exactly what they’re talking about.

And geothermal power is no longer as constrained by geography, so there are a lot of abundant resources to tap and the potential for high-paying jobs in areas that are already dependent on geological services work, Latimer said (late last year, Vox published a good overview of the history and opportunity presented by the technology).

“A large percentage of the world’s population actually lives next to good geothermal resources,” Latimer said. “[There are] 25 countries today that have geothermal installed and producing and another 25 where geothermal is going to grow.” 

Geothermal power production actually has a long history in the Western U.S. and in parts of Africa where naturally occurring geysers and steam jets pouring from the earth have been obvious indicators of good geothermal resources, Latimer said.

“Fervo’s technology unlocks a new class of geothermal resource that is ready for large-scale deployment. Fervo’s geothermal systems use novel techniques, including horizontal drilling, distributed fiber optic sensing and advanced computational modelling, to deliver more repeatable and cost effective geothermal electricity,” Latimer wrote in an email. “Fervo’s technology combines with the latest advancements in Organic Rankine Cycle generation systems to deliver flexible, 24/7 carbon-free electricity.”

Initially developed with a grant from the TomKat Center at Stanford University and a fellowship funded by Activate.org at the Lawrence Berkeley National Lab’s Cyclotron Road division, Fervo has gone on to score funding from the DOE’s Geothermal Technology Office and ARPA-E to continue work with partners like Schlumberger, Rice University and the Berkeley Lab.

The combination of new and old technology is opening vast geographies to the company to potentially develop new projects.

Other companies are also looking to tap geothermal power to drive a renewable power-generation development business. Those are startups like Eavor, which has the backing of energy majors like bp Ventures, Chevron Technology Ventures, Temasek, BDC Capital, Eversource and Vickers Venture Partners; and other players including GreenFire Energy and Sage Geosystems.

Demand for geothermal projects is skyrocketing, opening up big markets for startups that can nail the cost issue for geothermal development. As Latimer noted, from 2016 to 2019 there was only one major geothermal contract, but in 2020 there were 10 new major power purchase agreements signed by the industry. 

For all of these projects, cost remains a factor. Contracts that are being signed for geothermal that are in the $65 to $75 per megawatt range, according to Latimer. By comparison, solar plants are now coming in somewhere between $35 and $55 per megawatt, as The Verge reported last year. 

But Latimer said the stability and predictability of geothermal power made the cost differential palatable for utilities and businesses that need the assurance of uninterruptible power supplies. As a current Houston resident, the issue is something that Latimer has an intimate experience with from this year’s winter freeze, which left him without power for five days.

Indeed, geothermal’s ability to provide always-on clean power makes it an incredibly attractive option. In a recent Department of Energy study, geothermal could meet as much as 16% of the U.S. electricity demand, and other estimates put geothermal’s contribution at nearly 20% of a fully decarbonized grid.

“We’ve long been believers in geothermal energy but have waited until we’ve seen the right technology and team to drive innovation in the sector,” said Ion Yadigaroglu of Capricorn Investment Group, in a statement. “Fervo’s technology capabilities and the partnerships they’ve created with leading research organizations make them the clear leader in the new wave of geothermal.”

Restoring and preserving the world’s forests has long been considered one of the easiest, lowest-cost and simplest ways to reduce the amount of greenhouse gases in the atmosphere.

It’s by far the most popular method for corporations looking to take an easy first step on the long road to decarbonizing or offsetting their industrial operations. But in recent months the efficacy, validity and reliability of a number of forest offsets have been called into question thanks to some blockbuster reporting from Bloomberg.

It’s against this uncertain backdrop that investors are coming in to shore up financing for Pachama, a company building a marketplace for forest carbon credits that it says is more transparent and verifiable thanks to its use of satellite imagery and machine learning technologies.

That pitch has brought in $15 million in new financing for the company, which co-founder and chief executive Diego Saez Gil said would be used for product development and the continued expansion of the company’s marketplace.

Launched only one year ago, Pachama has managed to land some impressive customers and backers. No less an authority on things environmental than Jeff Bezos (given how much of a negative impact Amazon operations have on the planet), gave the company a shoutout in his last letter to shareholders as Amazon’s outgoing chief executive. And the largest e-commerce company in Latin America, Mercado Libre, tapped the company to manage an $8 million offset project that’s part of a broader commitment to sustainability by the retailing giant.

Amazon’s Climate Pledge Fund is an investor in the latest round, which was led by Bill Gates’ investment firm Breakthrough Energy Ventures. Other investors included Lowercarbon Capital (the climate-focused fund from über-successful angel investor, Chris Sacca), former Uber executive Ryan Graves’ Saltwater, the MCJ Collective, and new backers like Tim O’Reilly’s OATV, Ram Fhiram, Joe Gebbia, Marcos Galperin, NBA All-star Manu Ginobili, James Beshara, Fabrice Grinda, Sahil Lavignia and Tomi Pierucci.

That’s not even the full list of the company’s backers. What’s made Pachama so successful, and given the company the ability to attract top talent from companies like Google, Facebook, SpaceX, Tesla, OpenAI, Microsoft, Impossible Foods and Orbital Insights, is the combination of its climate mission applied to the well-understood forest offset market, said Saez Gil.

“Restoring nature is one of the most important solutions to climate change. Forests, oceans and other ecosystems not only sequester enormous amounts of CO2 from the atmosphere, but they also provide critical habitat for biodiversity and are sources of livelihood for communities worldwide. We are building the technology stack required to be able to drive funding to the restoration and conservation of these ecosystems with integrity, transparency and efficiency” said Saez Gil. “We feel honored and excited to have the support of such an incredible group of investors who believe in our mission and are demonstrating their willingness to support our growth for the long term.” 

Customers outside of Latin America are also clamoring for access to Pachama’s offset marketplace. Microsoft, Shopify and SoftBank are also among the company’s paying buyers.

It’s another reason that investors like Y Combinator, Social Capital, Tobi Lutke, Serena Williams, Aglaé Ventures (LVMH’s tech investment arm), Paul Graham, AirAngels, Global Founders, ThirdKind Ventures, Sweet Capital, Xplorer Capital, Scott Belsky, Tim Schumacher, Gustaf Alstromer, Facundo Garreton and Terrence Rohan were able to commit to backing the company’s nearly $24 million haul since its 2020 launch. 

“Pachama is working on unlocking the full potential of nature to remove CO2 from the atmosphere,” said Carmichael Roberts from BEV, in a statement. “Their technology-based approach will have an enormous multiplier effect by using machine learning models for forest analysis to validate, monitor and measure impactful carbon neutrality initiatives. We are impressed by the progress that the team has made in a short period of time and look forward to working with them to scale their unique solution globally.”