Sage Geosystems has achieved a milestone in clean energy by bringing its first next-generation geothermal plant online near San Antonio, Texas, becoming only the third enhanced geothermal system to connect to the US grid.
The Houston-based startup announced on August 19 that its 3-megawatt pilot facility, located on land next to San Miguel Electric Cooperative lignite-fired power station in Atascosa County, has been operating reliably for over 120 days. The company began selling electricity into the ERCOT grid in the second quarter of 2026, building its own substation to connect the facility.
How Enhanced Geothermal Works
Unlike conventional geothermal plants that depend on rare geological conditions where heat, water, and permeable rock naturally converge near the surface, enhanced geothermal systems drill deep into hot rocks and fracture them to create artificial water pockets. The heat from these rocks generates steam that drives turbines around the clock.
The technology is gaining traction as data center operators and technology companies seek reliable, around-the-clock clean power. Sage CEO Cindy Taff said the Texas results will directly inform and de-risk an upcoming collaboration in Nevada with Ormat Technologies, a conventional geothermal leader that holds a stake in Sage.
Part of a Geothermal Boom
Sage joins two other grid-connected enhanced geothermal projects in the US: Fervo Energy 3.5-megawatt Project Red in Nevada and Ormat Desert Peak 2, also in Nevada. The sector is drawing significant capital, with Fervo completing a $2.2 billion initial public offering in May and Sage raising over $97 million in a Series B round co-led by Ormat and Carbon Direct Capital in January.
Meta signed a 150-megawatt geothermal power agreement with Sage in August 2024, with Nevada serving as a precursor to that deal. Taff told media that Sage expects to begin drilling its first Nevada well later this year and produce electricity in 2027.
The push toward next-generation geothermal is driven by surging electricity demand from artificial intelligence infrastructure and data centers, which require continuous baseload power that intermittent solar and wind cannot always provide.
Sage Texas facility sits near a coal plant, and the company had initially planned to use the site for geothermal energy storage before pivoting to power generation as battery storage technology rapidly expanded in Texas. The startup now plans to drill at Ormat Nevada facility, supplying hot water to existing equipment already connected to the grid.
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