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Houston cleantech startup closes $17M round to tap into hot geothermal sector

fresh funding

The company develops ultra-high-temperature tools to withstand the heat of geothermal reservoirs. Photo via hephaeet.com

Houston-area startup Hephae Energy Technology Corp. has closed a $17.8 million Series A financing round to commercialize its geothermal technology.

The round was co-led by Pennsylvania-based Susquehanna Sustainable Investments, which invests in early-stage climatech companies, and Copenhagen-based Underground Ventures, which focuses on geothermal energy startups. Alfa8, Baruch Future Ventures, Centaurus Capital LP, Elemental Impact, Exa Ventures, Future Ventures, Grantham Foundation for the Protection of the Environment, New System Ventures and True North Institute joined the round, along with existing Houston-based investor Nabors Industries. Hyphae reports in a news release that the Series A round brings the company's total capital raised to $24.7 million.

Hephae develops ultra-high-temperature downhole sensing, measurement, communications and control systems that can withstand the heat of geothermal sites, which are hotter and deeper than traditional oil and gas reservoirs. The company's Pandora210 system can operate at up to 400 degrees Fahrenheit.

Hephae reports that it plans to use the new funding to commercialize its Pandora210 tool and to launch research and development into systems that can withstand temperatures of up to 570 degrees Fahrenheit. Houston-based Fervo Energy, for instance, recently tapped its hottest geothermal well to date in western Utah, showing temperatures above 555 degrees Fahrenheit.

"Commercial deployment represents a major milestone in our mission to scalable, always-on, emission-free power globally, with a world-class team to tackle this problem," Steve Krase, CEO of Hephae Energy Technology, said in the release." This investment enables Hephae to transition from development to scale, delivering the ultra-high temperature drilling technologies needed to support the rapid growth of the geothermal industry in the US and international markets."

Hephae has been collaborating with Fervo Energy in the field. The company told the Houston Business JournalHouston Business Journal this spring that it expected its Pandora210 technology to be deployed at its Utah sites.

“Fervo is encouraged by the early progress of our collaboration with Hephae, whose novel high-temperature innovations have the potential to contribute positively to EGS economics, unlock higher-energy geothermal resources, and further cement the competitiveness of next-generation geothermal power," Elliot Howard, director of drilling and completions at Fervo, added in the release.

As the geothermal industry continues to scale, Hephae says it aims for its technology to help companies "unlock hotter, deeper resources that result in lower produced energy costs."

The Spring-based startup was founded in 2020 by CEO Steve Krase and CTO John Clegg. Krase previously launched Navigate Energy Services, which was acquired by Nabors in 2013. Clegg is also an industry veteran and has held numerous leadership positions at energy companies, including Weatherford, NOV, Schlumberger and others.

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Baker Hughes announced partnerships this week with Google Cloud and geothermal startup XGS Energy. Photo courtesy Baker Hughes

Baker Hughes teams up with Google and XGS on energy tech

project partners

Houston-based energy technology company Baker Hughes recently forged two significant partnerships—one with tech titan Google and another with geothermal power startup XGS Energy.

Under the Google Cloud partnership, announced at CERAWeek 2026, Baker Hughes technology will be paired with Google Cloud AI and data analytics to improve the performance of AI data centers’ power systems and energy-transfer machinery. Furthermore, the two companies will explore opportunities for data centers to extract greater value from underused industrial and operational data.

“Infrastructure that powers the growing demand for AI and cloud computing is becoming one of the most critical drivers of global electricity needs,” Lorenzo Simonelli, chairman and CEO of Baker Hughes, said in the announcement.

“Through this partnership with Google Cloud, we are bringing together world-class power technologies and digital capabilities to help data center operators improve efficiency, enhance reliability, and accelerate progress toward lower-carbon operations,” he added.

Through the XGS partnership, Baker Hughes will provide engineering services for XGS’ 150-megawatt geothermal project in New Mexico. The project will supply energy to the Public Service Co. of New Mexico grid in support of New Mexico data centers operated by Meta Platforms, the parent company of Facebook and Instagram.

“With this single project for Meta in New Mexico, XGS will increase the state’s operating geothermal capacity by tenfold,” says Ghazal Izadi, chief operating officer at XGS.

“Geothermal energy plays a vital role in delivering reliable, cleaner power at scale,” added Maria Claudia Borras, chief growth and experience officer and interim executive vice president of industrial and energy technology at Baker Hughes. “By collaborating with XGS at this early stage, we are applying our ground‑to‑grid capabilities to reduce technical risk, accelerate reservoir validation, and engineer an integrated solution to deliver … power efficiently and reliably.”

California-headquartered XGS, which has a major presence in Houston, is known for its proprietary solid-state geothermal system that uses thermally conductive materials to deliver affordable energy wherever there is hot rock.

Fervo Energy has closed financing to support the remaining construction costs for the first phase of Cape Station. Photo via fervoenergy.com

Fervo secures $421M in financing for Cape Station construction

fresh funding

Houston geothermal unicorn Fervo Energy has closed $421 million in non-recourse debt financing for the first phase of its flagship Cape Station project in Beaver County, Utah.

Fervo believes Cape Station can meet the needs of surging power demand from data centers, domestic manufacturing and an energy market aiming to use clean and reliable power. According to the company, Cape Station will begin delivering its first power to the grid this year and is expected to reach approximately 100 megwatts of operating capacity by early 2027. Fervo added that it plans to scale to 500 megawatts.

The $421 million financing package includes a $309 million construction-to-term loan, a $61 million tax credit bridge loan, and a $51 million letter of credit facility. The facilities will fund the remaining construction costs for the first phase of Cape Station, and will also support the project’s counterparty credit support requirements.

Coordinating lead arrangers include Barclays, BBVA, HSBC, MUFG, RBC and Société Générale, with additional participation from Bank of America, J.P. Morgan and Sumitomo Mitsui Trust Bank, Limited, New York Branch.

“As demand for firm, clean, affordable power accelerates, EGS (Enhanced Geothermal Systems) is set to become a core energy asset class for infrastructure lenders,” Sean Pollock, managing director, project Finance at RBC Capital Markets, said in a news release. “Fervo is pioneering this step change with Cape Station, a vital contribution to American energy security that RBC is proud to support.”

The oversubscribed financing marks Cape Station’s shift from early-stage and bridge funding to a long-term, non-recourse capital structure, according to the news release.

“Non-recourse financing has historically been considered out of reach for first-of-a-kind projects,” David Ulrey, CFO of Fervo Energy, said in a news release. “Cape Station disrupts that narrative. With proven oil and gas technology paired with AI-enabled drilling and exploration, robust commercial offtake, operational consistency, and an unrelenting focus on health and safety, we have shown that EGS is a highly bankable asset class.”

Fervo continues to be one of the top-funded startups in the Houston area. The company has raised about $1.5 billion prior to the latest $421 million. It also closed a $462 million Series E in December.

According to Axios Pro, Fervo filed for an IPO that would value the company between $2 billion and $3 billion in January.

SLB and Nevada-based Ormat Technologies are aiming to scale enhanced geothermal systems. Photo courtesy SLB

SLB partners with renewables company to develop next-gen geothermal systems

geothermal partnership

Houston-based energy technology company SLB and renewable energy company Ormat Technologies have teamed up to fast-track the development and commercialization of advanced geothermal technology.

Their initiative focuses on enhanced geothermal systems (EGS). These systems represent “the next generation of geothermal technology, meant to unlock geothermal energy in regions beyond where conventional geothermal resources exist,” the companies said in a news release.

After co-developing EGS technology, the companies will test it at an existing Ormat facility. Following the pilot project, SLB and Nevada-based Ormat will pursue large-scale EGS commercialization for utilities, data center operators and other customers. Ormat owns, operates, designs, makes and sells geothermal and recovered energy generation (REG) power plants.

“There is an urgent need to meet the growing demand for energy driven by AI and other factors. This requires accelerating the path to clean and reliable energy,” Gavin Rennick, president of new energy at SLB, said in a news release.

Traditional geothermal systems rely on natural hot water or steam reservoirs underground, limiting the use of geothermal technology. EGS projects are designed to create thermal reservoirs in naturally hot rock through which water can circulate, transferring the energy back to the surface for power generation and enabling broader availability of geothermal energy.

The U.S. Department of Energy estimates next-generation geothermal, such as EGS, could provide 90 gigawatts of electricity by 2050.

Bill Gates says companies like Fervo push the geothermal technology 'to new depths.' Photo via fervoenergy.com

Fervo Energy spotlighted by Bill Gates as geothermal’s global growth driver

geothermal predictions

In a new blog post spotlighting Houston-based geothermal power startup Fervo Energy, billionaire Bill Gates — a Fervo investor — predicts geothermal will eventually supply up to 20 percent of the world’s electricity, up from his previous estimate of as much as 5 percent.

Today, geothermal accounts for less than 1 percent of electricity generated around the world, according to the International Energy Agency. The agency forecasts geothermal will represent up to 15 percent of global power by 2050.

“Geothermal power will have a big role to play in our clean energy future, and it’s exciting to see companies like Fervo push the technology to new depths,” Gates wrote.

Gates’ more than $1 billion Breakthrough Energy Ventures fund has contributed to the $982 million pool of money that Fervo has raised since its founding in 2017. Fervo is now a unicorn, meaning its valuation as a private company exceeds $1 billion. Its valuation has been estimated at $1.4 billion.

The Microsoft billionaire published the blog post on his Gates Notes website after touring the site of Fervo’s Cape Station geothermal project, which is under construction in Utah. Fervo says Cape Station will be the world’s largest geothermal plant, capable of someday producing up to 2 gigawatts of power.

Earlier this year, Fervo raised $206 million to put toward the development of Cape Station. Of that amount, $100 million came from Breakthrough Energy Catalyst, a green tech investment program backed by Gates, according to Inc.com.

The first phase of Cape Station is scheduled to be completed in 2026, with first-year power generation pegged at 100 megawatts. An additional 500 megawatts of power-producing capacity is slated to go online in 2028.

“Geothermal is one of the most promising ways to deliver clean energy that’s reliable and affordable,” Gates wrote.

In the blog post, Gates praised the simplicity of geothermal energy.

“The interior of the Earth is incredibly hot, and the deeper you go, the hotter the ground becomes,” he explained. “If you pump fluid deep enough to be warmed by this heat and then pump it back to the surface, you can turn the hot liquid into steam and use it to spin turbines and generate electricity — just like many other types of power plants.”

Gates noted that horizontal drilling is one of Fervo’s biggest innovations. The company extends its wells horizontally by as much as 5,000 feet at the deepest point. It couples horizontal drilling with hydraulic fracturing, or fracking, to extract geothermal energy from rock formations.

Most wells at Cape Station are 8,000 to 9,000 feet deep, and the deepest one is 15,000 feet below the surface, Gates pointed out.

Gates also emphasized the water-conserving, closed-system setup at Cape Station.

“Geothermal energy is one of the more climate-friendly sources of power, but one of its downsides is how much water it uses. … Fervo’s technology captures all the water that would’ve been lost and recirculates it underground to keep the system running,” he wrote.

XGS Energy plans to “aggressively expand” its team in Houston this year thanks to its latest round of investments. Photo via Getty Images

Houston geothermal company closes $13M in investments to fuel growth

fresh funding

XGS Energy, a California-headquartered geothermal power company with a major presence in Houston, has closed $13 million in new financing that included new investors Aligned Climate Capital, ClearSky, ClimateIC and WovenEarth Ventures, in addition to inside investors.

The company plans to “aggressively expand” its team in Houston this year, according to a news release.

“We are facing global energy supply challenges of unprecedented scale and urgency,” Kevin Kimsa, Managing Partner at ClimateIC, said in the release. “The XGS team is uniquely primed to meet the moment, bringing together innovative technology and leading engineering talent with the deep experience in infrastructure development and financing critical to deploying large-scale energy systems at speed.”

As part of the financing deal, Mano Nazar, ClearSky Senior Advisor and the former Chief Nuclear Officer of NextEra Energy, will join the XGS Energy Board of Directors.

“XGS’s advanced geothermal technology is uniquely positioned to deliver abundant energy to the grid faster than any other baseload energy technology at a time of unprecedented demand for energy resources,” Nazar said in a news release. “We are excited to partner with XGS to deliver on their mission of sustainable, reliable, and scalable geothermal energy.”

XGS is known for its next-gen closed-loop geothermal well architecture. The company saw massive growth in the Houston market last year and recently completed a 100-meter field demonstration in central Texas. The new funding supports the XGS’s multi-gigawatt project pipeline.

The recent financing also builds on an oversubscribed Series A round led by Constellation Technology Ventures, VoLo Earth Ventures, and Valo Ventures that closed last year.

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Sage Geosystems brings South Texas geothermal plant online

powering up

Houston-based Sage Geosystems, a provider of geothermal power, has begun full operations at its South Texas facility for the San Miguel Electric Cooperative.

Sage says the plant was recently “placed in service,” according to a news release. This means it’s fully built and tested, and ready to generate and supply electricity to the grid.

Since selling its first electricity in Q2 of this year, the facility has been operating for more than four months to evaluate aspects like efficiency and water management. Sage relied on its GeoTwin modeling tool to carry out some of the testing.

The testing demonstrates Sage’s proprietary approach to geothermal power “overcomes one of the industry’s most persistent challenges, high water losses in engineered reservoirs, while delivering the consistent performance required to scale next-generation geothermal,” co-founder and CEO Cindy Taff said in the release.

Sage says the South Texas facility will serve as a model for future projects, including one in Nevada. The Nevada facility will use Sage’s proprietary technology to extract geothermal heat from hot dry rock, creating a reliable, affordable source of carbon-free power.

During the testing period, water losses amounted to less than 10 percent. This low rate indicates most water remains in the system, enabling Sage to capture more usable energy, boost power production and improve the project’s finances, the company says.

“Commercial geothermal isn’t just about creating a reservoir. It’s about creating one whose performance can be engineered, predicted, and consistent,” Lev Ring, the company’s co-founder, president and chief technology officer, said in the release.

Since being founded in 2020, Sage has raised $159 million in outside funding. This includes a more than $97 million Series B round co-led by Ormat Technologies and Carbon Direct Capital.

Two years ago, Sage announced a deal with Meta Platforms, the parent company of Facebook and Instagram, to supply up to 150 megawatts of geothermal power to Meta data centers.

Halliburton Labs adds 3 energy, materials startups to Houston incubator

green team

Three new companies have joined Halliburton Labs, the incubator for early-stage energy and hardtech startups run by Houston energy giant Halliburton.

Halliburton Labs provides the emerging companies with mentorship, industry connections, laboratory access and other resources as they work toward commercialization. The latest companies to join the incubator focus on battery materials, resource recovery and gas separation solutions to address some of the "key bottlenecks in the energy and industrial landscape," according to a news release.

The new members include:

  • Electroflow, a California-based company that produces lithium iron phosphate (LFP) cathode material from lithium brines through its proprietary process. LFPs are critical components in batteries used in electric vehicles, grid storage systems and industrial electrification, according to Halliburton Labs.
  • Osmoses, a Cambridge, Massachusetts-based company that has developed a membrane platform to reduce the energy use, cost and emissions associated with gas separations used in natural gas, hydrogen, helium and other industrial applications
  • SiTration Inc., another Cambridge, Massachusetts-based company that has developed electro-extraction and filtration technologies to recover critical metals like copper directly from mining waste streams more quickly and affordably. Its process has completed successful pilot projects with Tier 1 mining companies in three continents.

"Affordable and reliable molecules are essential building blocks of the energy future. Each company brings a bold, technical solution to a complex industrial challenge. We look forward to helping them scale and deploy their technologies," Andres Cabada, Halliburton Labs managing director, added in the news release.

Halliburton Labs previously added four new members from around the world —Nandina REM, Noon Energy, Proof Energy and Tidal Metals—this spring. Alumni from the incubator include Houston-based companies like NanoTech Materials, which is developing insulation and fireproofing to reduce heat transfer in buildings and outdoor infrastructure; and SolvCor, which develops water additives to improve cooling for data centers and thermal storage.

With the addition of the three new members, the incubator currently supports nine early-stage companies.

Houston companies advance 200MW green ammonia plant in South Texas

coming soon

Two global companies with a major presence in Houston are teaming up on a green ammonia plant in Port of Victoria, Texas.

Topsoe, a Danish company with operations in Houston and Bayport, Texas, has been tapped to provide ammonia synthesis technology for the project being developed by First Ammonia, a New York-based company with offices in Houston and Denmark.

The flagship 200-megawatt plant will use renewable electricity to produce green hydrogen through electrolysis, which will then be combined with nitrogen from a nearby Air Liquide pipeline to make green ammonia, according to First Ammonia. It is expected to serve both U.S. and global markets.

According to First Ammonia, every 100,000 tons of electric ammonia produced avoids approximately 240,000 tons of CO2 emissions compared to fossil ammonia

The Topsoe technology used on site is designed to be able to increase production from 10 percent to 100 percent within 30 minutes, and decrease production at a similar rate, allowing the plant to respond to fluctuations from solar- or wind-based energy sources.

“Topsoe is the world leader in ammonia synthesis, and First Ammonia is delighted to continue our partnership with them in establishing a green ammonia industry in the US and around the world,” Joel Moser, CEO of First Ammonia, said in a news release.

Topsoe has previously signed on to supply its 100-megawatt solid oxide electrolyser (SOEC) to the First Ammonia project. However, the company announced in March that it did not extend the contract after multiple delays.

The First Ammonia project was originally expected to come online by 2027 and to produce 1.1 million tonnes of green ammonia. The project is now expected to reach financial before the end of 2026, with construction slated to begin in 2027 and commercial operations launching by 2029.

“As green ammonia projects move from ambition to execution, operational flexibility becomes increasingly important,” Yassir Ghiyati, chief commercial officer at Topsoe, added in a news release. “We’re proud to support First Ammonia with technology designed to enable efficient and reliable green ammonia production. We look forward to continuing to work with the First Ammonia team to help bring this important U.S project to life.”

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