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Early investor feedback has “skewed positive” after enhanced geothermal developer Fervo Energy went public last month, but the company’s pipeline of around 42 GW is impacted by transmission constraints in the West, said a Monday research note from Jefferies.
Those constraints “could slow [Fervo’s] anticipated roll-out as most sites are in rural areas with limited infrastructure,” Jefferies equity analyst Julien Dumoulin-Smith said in the note. “Management has highlighted this as a risk factor for full 384MW, citing behind-the-meter as a potential solution.”
Market intelligence and research platform MLQ.ai made a similar assessment in a May 5 analysis of Fervo’s initial public offering.
“Fervo depends on third-party transmission infrastructure for all current revenue and contracted [power purchase agreements],” the analysis said. “For Cape Station Phase II specifically, the company holds approximately 290 MW of interconnection and transmission rights, which is insufficient to support the full 384 MW of combined contracted capacity under expanded SCE and Clean Power Alliance PPAs. If additional transmission capacity cannot be secured, revenues will be reduced or contracts may be modified.”
