Google Signs 396-Megawatt Geothermal Deal with Fervo Energy

Ormat Technologies has been selected by the U.S. Department of Energy for up to $35 million in funding tied to two research-heavy geothermal projects. The DOE backing arrives after a choppy stretch for the company, with its share price down 18.17% on a year-to-date basis, though its 3-year and 5-year total shareholder returns stand at 38.68% and 39.75%. Analysts following Ormat see fair value at about $127.67 per share against a last close near $93.07, a view that leans on the extension of production and investment tax credits for geothermal and energy storage projects through at least 2033, which reduces capital costs and de-risks new project development. The bullish case also cites elevated demand for reliable, carbon-free baseload power from electrification trends including data centers and industrial customers, translating into premium power purchase agreement pricing. Still, the stock trades at about 45.2x earnings, well above the global renewable energy average of 14.7x, its peers at 30.5x, and the 24x fair ratio suggested by regression analysis, while heavy reliance on Chinese batteries and sizable planned capital spending remain key risks.

Fervo Energy said Thursday that it began selling electricity from its Cape Station power plant to the grid on September 30, one day ahead of schedule, making it the first enhanced geothermal company to reach a key commercial milestone. The plant synchronized with the grid about a week ago, bringing online the first third of what will soon become a 100-megawatt power plant, while the entire site could eventually generate as much as 4 gigawatts. The first block at Cape Station took 23 months from groundbreaking to commercial operations, and Fervo aims to complete future blocks in as little as 18 months. Google, Southern California Edison, and others have committed to buying power from the project. Fervo went public in May in an upsized IPO that raised $1.9 billion, and as a startup it raised more than $1.3 billion from investors including Breakthrough Energy Ventures, Congruent Ventures, and Capricorn Investment Group.

Controlled Thermal Resources Holdings Inc. and Plum Acquisition Corp. IV announced agreements with strategic investors that are expected to convert approximately $245 million of CTR's outstanding convertible notes into equity and a new planned PIPE structure at the close of their proposed business combination. Under the agreements, roughly $205 million of that convertible debt is expected to convert to equity, while approximately $40 million is expected to convert into the new planned PIPE. The combined company is expected to trade on the Nasdaq under the ticker symbol CTRH, with the transaction targeted to close in the fourth quarter of 2026, subject to shareholder and regulatory approvals. CTR said the simplified capital structure is intended to support project financing for Stage 1 of its Hell's Kitchen development, a planned 50 MW geothermal facility expected to reach commercial operation in 2028, followed by Stage 1 Lithium with planned annual battery grade capacity of 25,000 metric tons targeted for 2030. CTR has invested approximately $310 million in development to date and plans to develop approximately 650 MW of renewable baseload geothermal generation across an approximately 4,000-acre site in southern California's Salton Sea region.

Fervo Energy has reached First Power at its Cape Station project in Utah, with the site now delivering electricity into the grid. The milestone comes alongside fresh U.S. Department of Energy funding and the stock's addition to multiple Russell indices, though shares have fallen 48.6% over 90 days and 54.3% year to date even as they gained 2.2% in one day and 8.2% over 30 days. Fervo trades at $16.71 against an average analyst target of US$40.31, and the most followed narrative pegs fair value at $40.75, or 59% undervalued. That view rests on power purchase agreements totaling 658 megawatts and US$7.2b in contracted revenue, plus a 3 gigawatt framework agreement with Google, set against planned capex of about US$1.2b and ongoing operating losses. A separate check on its P/B ratio of 1.8x, slightly above the 1.6x peer average, suggests a narrower margin of safety.

Fervo Energy announced that its Cape Station geothermal development in Beaver County, Utah, has achieved First Power, the first time a utility-scale enhanced geothermal development has reached that milestone anywhere in the world. The first of three 33-megawatt GeoBlocks in Cape Station Phase I, an approximately 100 MW installation, is now synchronized to the grid and exporting electricity, and is expected to reach its contractual commercial operations date by October 1, 2026, with the remaining two GeoBlocks expected to reach contractual COD by January 1, 2027. The next phase, an additional 400 MW, is already under construction with an expected COD in 2028, and fully contracted offtake at Cape Station sits at approximately 900 MW, enough to power the equivalent of nearly 1 million U.S. homes annually. The milestone comes just over four months after Fervo's May 2026 initial public offering and follows the deployment of its EGS technology at Project Red, which has supplied electricity to the grid since 2023. CEO and Co-Founder Tim Latimer called the achievement a gamechanger for the geothermal industry, while Chief Technology Officer and Co-Founder Jack Norbeck said First Power is proof the science works.