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Last Updated on: 28th March 2025, 01:51 am
The new whack-a-mole energy policy of the US government is long on ambition for fossil fuels, but short on ability to stop renewable energy from carving out new territory. A case in point is the geothermal energy startup XGS Energy. The Texas-based firm is part of a cohort of geothermal innovators pre-qualified to bid on Department of of Defense contracts, and it has just secured another $13 million to help speed its way along the road to commercialization.
US Air Force Hearts Geothermal Energy
The US Air Force played a vanguard role in the use of solar energy to help improve energy resiliency and security at permanent bases while containing costs, so it’s no surprise to see them hot on the trail of the latest innovations in geothermal energy.
Earlier this month, the Air Force put the final touches on a list of 11 geothermal energy innovators that are pre-qualified to compete for contracts in any branch of the Defense Department.
DoD interest in the geothermal field has already been heating up, so to speak. The locations for advanced geothermal demonstration projects underway include Joint Base San Antonio and Fort Bliss in Texas, Fort Wainright in Alaska, Mountain Home Air Force Base in Idaho, Fort Irwin in California, Naval Air Facility El Centro in California, and Naval Air Station Fallon in Nevada, to name a few.
$13 Million More For Advanced Geothermal Energy
The list of pre-qualified geothermal firms includes Addis Energy, Baker Hughes, EarthBridge Energy, Energy Systems Group (ESG)/GE Vernova and partners, GreenFire Energy, Power Planet, Inc., Quaise Energy, Sage Geosystems, SLB Technology Corporation, TLS GEOTHERMICS, and XGS Energy.
XGS has not been letting the geothermal grass grow under its feet. On March 26, the company announced a new $13 million round of financing towards the commercial deployment of its technology. “The over-subscribed round included new investors Aligned Climate Capital, ClearSky, ClimateIC, and WovenEarth Ventures,” XGS notes. Internal investors also participated.
The new funding round indicates continued investor interest in US geothermal technology, despite the sudden shift in federal policy. It builds on earlier fundraisers, including a round last year that featured Constellation Technology Ventures, VoLo Earth Ventures, and Valo Ventures.
New Geothermal Energy Systems Can Go Anywhere
President Trump included geothermal in his “American energy dominance” plan, which means that DoD has White House support for its pursuit of geothermal energy, even though it will chip away at the US military’s status as a leading purchaser of fossil fuels.
Perhaps the famously fossil-friendly president assumes that geothermal energy cannot offer much competition against fossil fuels in the power generation field, due to geological constraints. Historically speaking, that has been true of the US. Conventional geothermal power plants require a naturally occurring combination of rock, water, and heat, which explains why only a few are in operation today, all concentrated west of the Rocky Mountains.
Well, that was then. XGS is among the innovators developing new systems that can pick up and go anywhere, deploying human-made infrastructure instead of relying on naturally occurring rock.
How Does It Work?
XGS also deploys a closed loop, 100% recycled working fluid system, meaning that it can go into areas where water resources are strained. At the unit level, the modular system consists of a pipe within a pipe, which prevents any fluid from escaping into the surrounding rock, or for that matter even touching any rock.
When the working fluid is heated, it rises to the surface within the insulated inner pipe, where it can run conventional electricity, heating, or cooling systems.
If that sounds like something somebody should have thought of long ago, they did. The challenge lies within the inefficiency of the heat exchange for conventional pipe-in-pipe geothermal technology, rendering it uneconomical.
“This well design has always been attractive, in particular to the communities in which geothermal energy is being developed, due to these considerable benefits versus an open, fracture-based geothermal system. But it hasn’t been economic,” explained XGS CEO Josh Prueher in a recent interview posted on Renewables Now.
The XGS solution is a specialized conductive material that improves heat transfer efficiency, but the company is not giving away any trade secrets.
“We boost the performance of our system by placing a proprietary thermally conductive materials system around the wellbore,” Prueher explained. “These materials pull additional heat to the well, making a water-independent, geology-independent geothermal system economic for the first time.”
That certainly caught the eye of Aligned Climate Capital. “With its focus on minimizing exploration risk and optimizing for long-term predictability, XGS is systematically overcoming the barriers that have historically prevented geothermal from securing large-scale, low-risk project financing, unlocking a new era of geothermal scale,” enthused ACC CEO Peter Davidson.
Don’t Look Back, Geothermal Energy Might Be Gaining On You
When XGS announced the new $13 million funding round, the company also reminded everyone that it completed an initial field test of its “Thermal Reach Enhancement” system last year, and that its first commercial-scale project is up and running in California.
XGS expects the new cash infusion to support a swift transition from commercial scale to actual commercial viability in the market.
“The funding supports the execution of XGS’ multi-gigawatt project pipeline that has materialized as demand for baseload power skyrockets,” XGS states, in an oblique but definite reference to the booming data center construction industry.
“We are ramping commercial operations ahead of our planned growth equity round later this year, which will highlight the results of our first commercial-scale system plus our growing project pipeline,” emphasized the Chief Commercial Officer at XGS, Lucy Darago.
All of this does not bode well for the fossil energy stakeholders who hold the candle for “American Energy Dominance.” The White House threw a monkey wrench into the idea of a brave new era for fossil energy when it endorsed geothermal energy and tapped the geothermal fan Chris Wright as Energy Secretary.
On that note, let’s hear from the A-list oil and gas services firm Baker Hughes, which joins XGS among the geothermal innovators to make the Air Force cut for pre-qualification.
“Having achieved “Awardable” status, Baker Hughes can now explore developing utility-scale geothermal power plants to supply U.S. military bases around the globe with reliable and cost-effective electricity, even during a grid outage,” the company stated.
“The ability of geothermal to provide reliable, secure baseload power makes it an ideal addition to America’s energy mix,” chipped in Baker Hughes VP of Geothermal, Oilfield Services & Equipment Ajit Menon.
Game on…
Photo (cropped): The geothermal energy innovator XGS Energy is stepping into commercial production following laboratory and field tests, with an endorsement from the US Air Force to boot (courtesy of XGS Energy).
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