Rodatherm Energy wants to make geothermal more efficient, but is that cheaper?

New geothermal startup Rodatherm Energy emerged from stealth on Monday with $38 million in funding and plans to develop a pilot plan in Utah.

Startups distinguish themselves by piping boreholes in closed loops of steel, probably filled with refrigerant. It contrasts with other enhanced geothermal companies that tend to use water to transport heat from deeper into the earth.

The Series A round was led by Evok Innovations with participation from Active Impact Investments, Giga Investments, Giga Investments, Grantham Foundation of the Environment, MCJ, TDK Ventures, Tech Energy Ventures and Toyota Ventures.

Rodatherm faces tough competition from established players’ fields such as Fervo Energy, Sage Geosystems, XGS Energy and Quaise.

Fervo is considered the forefront of a space that raised nearly $1 billion. The company is expected to complete the first phase of 100 megawatts at the Cape Station Power Station next year, with an additional 400 megawatts added online in 2028. There is also a contract to provide data center power to Google. XGS Energy also has data center deals with Meta to develop a 150 megawatt power plant in New Mexico to power the technology company’s data center.

Rodatherm says that the closed-loop refrigerant-based approach is 50% more efficient than a typical water-based system. Air-source heat pumps, commonly known as minispritz, use hydrocarbon-based refrigerants to shift heat between indoors and out.

The startup’s patent on the technology states that the closed loop design eliminates the need for filters to screen for grit and debris that open loop systems suck when water flows through the ground gently breaks the rocks. It also states that closed-loop systems minimize water use.

However, the Rodatherm approach will almost certainly involve increased drilling and installation costs compared to simpler systems. Refrigerant-based designs could potentially offset these costs, but they remain open until the company completes the well.

The company plans to use Series A funds to complete a small pilot 1.8 megawatt pilot plant in Utah by the end of 2026.