Tim Latimer on Solving the Financing Problem for Geothermal

Tracy Alloway (0:02)

Bloomberg Audio Studios.

Tim Latimer (0:04)

Podcasts, radio, news.

Joe Weisenthal (0:18)

Hello, and welcome to another episode of the Odd Lots podcast. I'm Joe Weisenthal.

Tracy Alloway (0:23)

And I'm Tracy Alloway.

Joe Weisenthal (0:25)

Tracy, we were recently down in Washington, DC.

Tracy Alloway (0:28)

I know, I really like DC. It has sort of like old school vibe.

Joe Weisenthal (0:32)

Yeah, I had-

Tracy Alloway (0:32)

Lots of power lunches, I like it.

Joe Weisenthal (0:34)

It seems like a good city for power lunches. It's also, did you know, not to sidetrack too much, they basically all the big, fast, casual innovation is from DC, as far as I can tell. So, Sweetgreen, I think was founded, Cava, we talked one of their-

Tracy Alloway (0:50)

I did not know this.

Joe Weisenthal (0:51)

Both of those companies are from DC. I'm not going to lie, when I think of this sort of modal worker in DC, I think of someone who eats a lot of fast casual lunches at their desk.

Tracy Alloway (1:03)

Yes.

Joe Weisenthal (1:03)

Which is no judgment because that's how I eat my lunch. So, I just want to make that clear, there's not a judgment done on anyone.

Tracy Alloway (1:09)

Right. But we are not actually here to talk about casual dining and takeout lunches. We were in DC for a very particular event, something very special. We were over at the Department of Energy's Deploy24 conference.

Joe Weisenthal (1:25)

That's right. So, regular listeners will have heard, we've done multiple episodes in the past with Jigar Shah, who is the head of the Loan Programs Office at the DOE. It was the LPO part of the DOE that put on this conference. Of course, the big theme that when you think about the Loan Programs Office, is this impulse to figure out a way to solve the financing problem for early-stage energy, in which there's some sort of proven technology out there, but the funding ecosystem for various reasons, on familiarity, risk, etc., doesn't exist. And so, a lot of the conversations are like, how do you solve that chicken and egg problem in energy finance?

Tracy Alloway (2:02)

Absolutely. And we do indeed have the perfect guest. We spoke with Tim Latimer, the CEO of Fervo Energy, which is that big geothermal start up that is doing some interesting things with fracking technology. So, take a listen.

Joe Weisenthal (2:17)

Hello, and welcome to a live episode of the Odd Lots podcast. I'm Joe Weisenthal.

Tracy Alloway (2:23)

And I'm Tracy Alloway.

Joe Weisenthal (2:24)

And we are joined here by Tim Latimer, co-founder, CEO of Fervo Energy, Advanced Geothermal. What is that? And when we think about America's energy mix or America's energy portfolio, how big can Advanced Geothermal be?

Tim Latimer (2:41)

Very big. That's the short answer. So first off, great to be with y'all. I'm a regular Odd Lots listener. So it's a treat to be with y'all. Geothermal, what is geothermal and what is Advanced Geothermal? It's a great question. So geothermal isn't new. And even power generation from geothermal isn't new. The first power plant for geothermal came online, actually over 100 years ago in Italy. So it's been something that's been around for a long time. But historically, even though it has really everything you want in an energy resource, it's carbon free, low environmental footprint, it works 24-7. It's been very limited to very specific geologies. So up until very recently, the story of geothermal is you either have the geology of Iceland, where steam is literally coming out of the ground or certain hot spots like Northern California or New Zealand, or you don't have geothermal. And those were kind of the only two options. So those places blessed with it had a great energy resource, but it certainly wasn't widespread.

Advanced geothermal or enhanced geothermal systems is really the whole concept that you could use new technology to go to deeper resources or impermeable rock where the hot water or the steam wouldn't flow on its own and still make geothermal work. And so in enhanced geothermal systems, oftentimes you're going deeper. In many cases, you're doing something to create permeability in the reservoir so it can work in more places. And the key there is you get all the positive attributes of geothermal, but you're not limited to just doing it in places like Iceland's geology. So the opportunity is huge. In the US today, geothermal only accounts for about 3 gigawatts of power, so less than 1% of the US electric grid. But the resource potential is massive. We just worked on a paper that was published as a collaboration with Princeton that actually showed pathways to get up to 750 gigawatts of geothermal power by mid-century. So if we unlock it with the right technology, this could be an enormous resource.