Khosla-Backed Geothermal Startup Taps ‘Superhot’ Rocks for Energy

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(Bloomberg) — A startup backed by billionaire Vinod Khosla says it has successfully drilled into the hottest rock ever reached by an enhanced geothermal energy system. 

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Geothermal energy companies have seen an uptick in investment as tech companies look to power the artificial intelligence boom. That includes startups like Mazama Energy Inc., which is developing unconventional techniques to tap new sources of energy. The project is the first step to harnessing what are known as superhot rocks to generate continuous carbon-free energy.

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Mazama’s demonstration system near Newberry Volcano in Oregon has accessed an area underground using a proprietary hydraulic fracturing technique. It created an enhanced geothermal reservoir to tap the Earth’s heat that hit a temperature of 331C (628F). Other enhanced systems usually maintain reservoirs that are under 300C. 

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Because of the more intense heat, superhot geothermal promises to allow producers to access more energy with fewer wells. Companies working on this next-generation approach say that’s critical to making geothermal cost-competitive with other energy sources. 

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What’s held back geothermal developers from pursuing geothermal that relies on superhot rocks is that conventional drilling techniques and equipment don’t work at such high temperatures, said Mike Matson, a partner at Boston Consulting Group and a member of the firm’s energy and climate and sustainability practices. 

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Mazama and other companies attempting to access high-temperature geothermal resources will have to solve challenges like effectively cooling subsurface equipment, but “the reward is significantly higher” than traditional geothermal, he said. A report from the nonprofit Clean Air Task Force estimates that a mere 1% of North America’s superhot rock resource has the potential to provide 7.5 terawatts of energy capacity, which the report notes would be enough to meet the annual electricity demands of Toronto 2,700 times over. However, most of that potential is at greater depths than at the Newberry Volcano site, posing greater challenges to commercialization.

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Other startups are using other unconventional techniques to access geothermal resources. They include Quaise Energy, another Khosla-backed company trying to access superhot rocks, and Fervo Energy, which uses horizontal drilling to tap geothermal heat at more traditional temperatures. 

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With data center energy demand set to skyrocket in the coming decades, finding new sources of power is taking on added urgency. “Nuclear fusion and geothermal are the only ways” to meet the surge, said Khosla. While he’s bullish on fusion, “geothermal will happen much faster” as it’s closer to commercialization. How big a role it can play is unclear as geothermal is currently responsible for just a small sliver of all US electricity generation, and few of the new techniques have proven commercially viable.

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Mazama is developing a relatively modest 15-megawatt commercial pilot plant at the same site, which the company plans to complete by the end of 2026 and have connected to the grid by 2027, according to Chief Executive Officer Sriram Vasantharajan. Simultaneously, it’s continuing to target tapping rocks with higher temperatures of up to 400C, which Mazama says would allow it to access even more energy at a lower cost. The company is supported by a $36 million Series A round, led by Khosla Ventures, as well as a $20 million grant from the Department of Energy.

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