By Atharva Singh and Pragyan Kalita
May 13 (Reuters) - Fervo Energy
The company raised $1.89 billion in an upsized U.S. initial public offering on Tuesday, selling 70 million shares at $27 apiece, above its marketed range. The shares of the Houston-based company opened at $36 on Wednesday.
The listing comes as surging power demand from
artificial intelligence growth and the rapid expansion of data centers strain the U.S. grid, boosting the need for stable energy supplies.
Demand from electric vehicles and domestic manufacturing is also adding to electricity consumption, further underscoring the need for reliable power.
Fervo, backed by Bill Gates' investment firm Breakthrough Energy Ventures and shale producer Devon Energy, is among several energy developers seeking to capitalize on rising power demand from data centers.
Founded in 2017, Fervo develops advanced geothermal systems designed to generate around-the-clock, carbon-free electricity, positioning the technology as a complement or alternative to intermittent renewable sources such as solar and wind power.
U.S. President Donald Trump has also taken a more favorable stance on geothermal energy than on some other renewables during his second term, helping companies like Fervo move toward going public.
"I think we've seen growing awareness from policymakers in DC of the importance of geothermal," CEO Tim Latimer said in an interview with Reuters.
"We generate a lot of electricity on a small amount of land, so it has great environmental benefits there"
The company employs horizontal drilling and multi-stage hydraulic fracturing to produce geothermal energy at its pilot project and expects its first commercial facility to begin delivering power by the end of 2026.
The company has agreements with Southern California Edison, Shell and Alphabet, which also participated in its $462 million funding round in December.
Fervo said it has about $7.2 billion in potential contracted revenue backlog tied to power purchase agreements across its portfolio.
(Reporting by Atharva Singh and Pragyan Kalita in Bengaluru; Editing by Tasim Zahid and Shailesh Kuber)
