A secretive Seattle geothermal technology company called Altarock Energy has raised $4 million in a first round of venture backing from high-profile Silicon Valley investors, the latest in dash by investors to tap into the earth’s heat to generate electricity.
Geothermal has been largely overlooked as a source of alternative energy in recent years, according to a study by the Massachusetts Institute of Technology, and so has become the latest darling of investors looking for areas not over-invested.
If 40 percent of the heat under the United States could be tapped, it would meet demand 56,000 times over, according to that study. It is clean, quiet and is so abundant, it meet the world’s annual needs some 250,000 times over (see a summary of the MIT report by AP. For perspective, the study said, an investment of $800 million to $1 billion could produce more than 100 gigawatts of electricity by 2050, equaling the combined output of all 104 nuclear power plants in the U.S.
Several other companies are active in the area. Geopower Basel of Switzerland and an Australian firm are reportedly seeking to generate power commercially by boiling water on the rocks three miles underground. The water rises as steam, and drives a turbine to generate electricity. Chevron Corp. has used power plants in West Java, Indonesia for more than a decade and yesterday said it would expand production in that country by 110 megawatts. Last month, another company, Vancouver’s Western GeoPower Corp. raised $18.4 million to advance its geothermal efforts.
Meanwhile, Altarock isn’t saying much publicly, but is being led by Susan Petty (left), a consultant at Black Moutain Technology. It is backed by two well-known Silicon Valley venture firms, Kleiner Perkins Caufield & Byers and Khosla Ventures, both of which have focused strongly on alternative energy lately. GreatPoint Ventures also participated, according to a report first published by PE Wire.
Samir Kaul of Khosla Ventures, Joseph Lacob of Kleiner Perkins and Aaron Mandell of GreatPoint Ventures will join the board, according to a separate report by VentureWire (subscription only), citing a regulatory filing. VentureWire also mentions another geothermal company, Vulcan Power Co., of Bend, Ore., which received $35 million from Merrill Lynch Commodity Partners in April — the first stage of a $150 million total investment in an effort to generate up to 2,000 megawatts annually.