A 33-megawatt power block in Beaver County, Utah, began feeding carbon-free electricity into the grid this week — the first time a utility-scale, next-generation geothermal plant has sold power anywhere in the world. Houston-based Fervo Energy switched on the initial unit of its $2 billion Cape Station project late last week and starts official commercial operations on Thursday, supplying California retail power provider Shell Energy.

The milestone matters because Cape Station, unlike conventional geothermal plants, does not draw on naturally occurring hot water or steam. Fervo engineers its own reservoirs, using oil-and-gas drilling techniques to fracture hot, dry rock deep underground and generate steam for turbines.

What does first power prove?

Fervo already runs a 3.5-MW commercial pilot, Project Red in Nevada, which went online in late 2023. Owens says the pilot demonstrated the technology itself; Cape Station demonstrates utility scale and market export.

"This is massive for both Fervo and the geothermal industry at large," Owens says. "That's just something no next-generation geothermal company has ever able to do before," she adds, referring to the plant's powering-up.

The commissioning schedule ahead is concrete:

• Two more 33-MW power blocks commissioned by 1 January 2027
• The remaining 400 MW — supported by a new agreement with Google — under construction, slated to come online in 2028
• Full build-out to 500 MW at the site

What does it cost?

Fervo has declined to disclose the terms of its power purchase agreements for in-progress and future development, which together represent about 1,000 MW — enough to power roughly 1 million U.S. homes annually. The company previously told Canary Media that Phase 1 of Cape Station delivers power at $7,000 per kilowatt, with Phase 2 targeted at $5,500 per kilowatt. For comparison, the average cost to build a natural gas–fired power plant was $2,157 per kilowatt in 2025.

Those figures frame the commercial challenge. Geothermal today supplies just 0.4 percent of U.S. electricity generation, and experts point to high upfront drilling costs plus economic and regulatory barriers as constraints on expansion, alongside potential community and environmental impacts that developers must manage.

Researchers have also suggested an economic pathway beyond cost cutting: rather than supplying around-the-clock baseload, next-generation plants could operate flexibly — ramping in the evening when solar output declines — to reduce overall grid costs. Owens adds a second option: running "behind the meter" to power data centers directly, so new capacity costs do not pass through to utility customers.

"We've been saying all along that our technology makes geothermal more scalable and affordable in more places," she says.

Who is backing the sector?

Fervo went public in May and anchors a fast-growing cohort of next-generation geothermal firms that have raised billions of dollars in private capital in recent years to develop technologies for harsh, deep drilling environments. Demand drivers are data centers seeking always-on clean power and grids needing firm capacity to balance intermittent solar and wind.

"Fervo's first power achievement shows investors the size and scale of the opportunity to fuel many more such milestones across developers and sites in the future," says Mitchell Smith, grid lead for the Mountain West Geothermal Consortium, a bipartisan initiative calling for increased public and private financing "to help bring more projects online responsibly and at the speed of demand."

The test now shifts from technical proof to execution: Fervo must hit its January 2027 commissioning targets for the next two 33-MW blocks and deliver the 400-MW, Google-backed phase in 2028 while driving installed costs down from $7,000 per kilowatt toward the $5,500 mark.