XGS Energy may become the second next-generation geothermal power developer to go public this year. It would follow closely behind Fervo, which listed on the Nasdaq in May.
According to reporting by Axios, XGS has hired Morgan Stanley to evaluate whether it should capitalize on the sector’s momentum, as exemplified by Fervo’s $1.9-billion IPO — momentum fueled in part by data center demand for clean, firm power.
The news comes two months after XGS hired a former Calpine executive, Richard Chong, as its new chief financial officer. Chong’s expertise, the company said at the time, would help XGS execute its multi-gigawatt commercial pipeline, which includes a 115-megawatt project with community choice aggregators in California, and a 150-MW deal with Meta in New Mexico, which the company signed last summer.
The XGS approach to geothermal involves boring deep, vertical wells into the ground, and inserting steel pipes filled with water. XGS then backfills the area around the pipe with a proprietary liquid slurry made of conductive minerals to transfer heat from the rock, through the pipe, and into the water pumped into the tube. Late last year the company completed several months of testing at a site in California, running the system for roughly 3,000 hours to demonstrate stable performance at commercial depths and temperatures.
Importantly, the closed-loop system avoids water loss, a major constraint for some geothermal approaches, particularly in water constrained regions. It’s key in New Mexico, for example, where XGS is building a project to help power Meta data centers. That project is the hyperscaler’s second geothermal partnership, having agreed to buy power from Sage Geosystems the year before.
XGS’ technology is distinct from Fervo’s more classic approach to enhanced geothermal , which fractures rock and circulates water through an artificial reservoir. Fervo, which is further along than its peers in terms of operating projects and contracted capacity, has already lined up hundreds of megawatts of power purchase agreements with utilities and tech companies, and is starting to benefit from those very visible cost and performance benchmarks. According to some projections, Fervo’s approach is likely to see levelized costs fall below $50 per megawatt-hour across much of the American West in the coming years.
XGS, for its part, is betting that its closed-loop design will ultimately offer more predictable performance and flexible siting — particularly key for growing data center hubs. The company raised its initial Series A round in 2023, which was followed by several additional tranches of funding in 2024. In March last year XGS closed a $13-million growth round, and said it was planning to raise a subsequent equity round of up to $100 million to finance its New Mexico data center project.
Earlier this year, several months before hiring Morgan Stanley, XGS raised an additional $13 million to support its early commercial projects.
For more on the state of geothermal, listen to or watch this recent episode of Open Circuit:
