Fervo Energy: Powering Geothermal into the Mainstream

By Krupa Adusumilli, John Scull
2026 | Case No. E929 | Length 9 pgs.
Entrepreneurship

Fervo Energy, a geothermal start-up founded by drilling engineer Tim Latimer and geoscientist Jack Norbeck, set out to unlock a new form of clean, reliable energy by applying horizontal drilling and advanced sensing technologies from the shale oil and gas industry to geothermal reservoirs. If successful, their approach could allow geothermal power to be deployed far beyond the limited geographies where conventional geothermal resources exist today.

After several years of early research, fundraising, and technical experimentation, Fervo launched a pilot project in Nevada designed to validate the core technology and demonstrate its potential for commercial-scale development. The pilot represented a critical milestone for the company. Technical success would strengthen credibility with investors and position Fervo to develop large-scale geothermal projects requiring hundreds of millions of dollars in capital.

However, early drilling setbacks forced the team to reconsider how to proceed. With limited capital remaining and pressure to demonstrate progress, Fervo’s leadership faced difficult choices about how to complete the pilot and preserve investor confidence.

At the same time, the company was preparing for its first major commercial development, a large geothermal project in Utah expected to cost more than $500 million. Financing such a project would require moving beyond venture capital and accessing infrastructure-scale funding through project finance. Doing so depended not only on technical validation, but also on securing the right long-term customer whose contract could anchor the project’s financing.

The case explores the strategic challenges faced by hard-tech climate companies as they move from early experimentation to commercial infrastructure development. Students are asked to evaluate how Fervo should respond to the pilot setback and how the company should position itself to cross the “missing middle” between venture-backed innovation and financeable energy infrastructure.

Learning Objective

This case is designed to help students analyze how hard-tech climate startups transition from venture-backed experimentation to capital-intensive infrastructure development. Students evaluate strategic choices following a technical setback, including how to manage investor credibility, structure financing pathways, and select customers whose contracts can enable project finance and help the company cross the “missing middle” to commercial scale.
This material is designated for use in specific Stanford GSB classes only. For inquiries, contact the Case Writing Office.

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