Hot rocks are hot business as geothermal contracts get snapped up by hungry utilities, and those who can tap into subterranean hot pockets are cashing in. ThermaSource, provider of drilling, engineering and consulting services for the geothermal energy industry, has raised $41.5 million in financing from Riverstone Holdings, US Renewables Group, and Rustic Canyon Partners. Founded in 1980 and based in Santa Rosa, Calif., ThermaSource says it’s raised $93 million in equity and debt over the past two years.
The company plans to spend some of that cash doubling its workforce from 210 to 420 employees by the end of the year. It will also use the new capital to acquire more geothermal drilling rigs as it expands its business domestically and internationally. With oil and gas prices still close to record highs, much of the world’s drilling equipment is indefinitely tied up looking for precious hydrocarbons making drills available for geothermal development that much more valuable, or so ThermaSource hopes.
Geothermal is still a largely untapped resource. In the United States, according to the National Renewable Energy Laboratory, geothermal energy is being exploited in all 50 states but only accounts for half a percent of our total energy consumption.
But geothermal is picking up steam, especially in the Western United States, and 103 projects are either under construction or on the drawing board. ThermaSource’s investment follows on the heels of news that Vulcan Power received $145 million from Denham Capital in July on top of $45 million from Merrill Lynch Commodity Partners last year. And AltaRock Energy, a smaller, stealthier Seattle-based geothermal startup, raised $4 million in Series A funding last year from A-list investors including Kleiner Perkins Caulfield & Byers, Khosla Ventures, Aaron Mandell of GreatPoint Energy, and an investment group affiliated with Dundee Securities.
Still, startups certainly don’t dominate the space. Oil giant Chevron claims to be the world’s largest developer of geothermal energy with 1,273 megawatts of energy coming from projects on the Pacific Rim.