Zanskar: Industry Trailblazer in Next-Generation Geothermal

Geothermal is one of the most promising sources of untapped renewable energy—literally. According to Zanskar (Carl Hoiland & Joel Edwards, Cohort 2020, Cyclotron Road), “there’s enough energy underground to power the globe,” but most of it is still undiscovered. That’s where Zanskar comes in, leveraging R&D breakthroughs in AI and advanced sensing technologies to identify new geothermal sites at an unprecedented rate.

Now the leader in next-generation geothermal discovery, Zanskar has had to overcome the challenges of establishing itself in a “market that didn’t really exist yet.” According to co-founders Hoiland and Edwards, they had to “help kickstart the industry” themselves in order to get to scale.

Carl and Joel at the Great Salt Lake, UT. (Photo credit: Zanskar)

How did they do this, how did Activate’s early support make a difference, and where are they headed next? Read our Q&A with Hoiland and Edwards to find out.

What is the most exciting thing happening in next-generation geothermal?

Right now, a unique convergence of market and tech forces is triggering large growth and investment in our industry. Advanced drilling methods and AI-driven technologies, many adapted from other sectors, are significantly reducing the costs of discovery and development. At the same time, demand for firm, clean power is surging, driven by accelerated load growth and ambitious 24/7 carbon-free goals set by major corporations and governments.

In this context, geothermal is finally capturing national attention and gaining levels of public and political support never seen before. This increased backing is helping to clear historic obstacles to growth, facilitating access to capital, creating offtake opportunities, and—almost—streamlining permitting processes. Though we’re still in the early stages, if this momentum holds, it could bring economies of scale, enhance competitiveness, and make clean, firm power more affordable—just in time to meet the rising demands of decarbonization, electrification, and global energy demand growth. It’s an exciting (and wild) time in a historically boring power sector. 

“Geothermal is finally capturing national attention and gaining levels of public and political support never seen before… It’s an exciting (and wild) time in a historically boring power sector.”

What have been the biggest challenges of commercializing your AI and advanced sensing technologies?

Perhaps the biggest challenge for Zanskar has been facing the chicken and egg problem of building technology for a market that didn’t really exist yet. This required that we commit early on to vertical integration whereby we could help kickstart the industry by being our own customer as a tech-enabled power developer. Although there are many benefits of doing so (i.e., faster learning cycles, less market risk, etc.), it has come with far greater operational complexity (i.e., most of our team works in the field, not at a laptop) and requires a far more sophisticated capital stack (i.e., project finance, tax equity, bridge loans, and development capital) to get to scale.

“Perhaps the biggest challenge for Zanskar has been facing the chicken and egg problem of building technology for a market that didn’t really exist yet.”

Zanskar field team sampling a spring for temperature and fluid chemistry. (Photo credit: Zanskar)

How did the Activate Fellowship prepare you to overcome these challenges?

Activate provided us with essential startup skills, including compliance, growth strategy, and human resources best practices. We learned how to manage recruiting and hiring, conduct effective board meetings, and communicate our progress to internal and external stakeholders. As first-time founders navigating the transition from Ph.D.s to venture-backed entrepreneurs, Activate bridged the gap, teaching us to convey the purpose and potential of our work to diverse audiences. Their support in crafting clear roadmaps and aligning capital needs with milestones has helped us gain stronger investor and partner support.

Where are you on your commercialization journey? What’s your biggest commercial success so far?

Our biggest commercial successes include originating and de-risking a substantial portfolio of geothermal projects with access to several large offtakers, securing key contracts with the U.S. Department of Defense and major mining companies, and acquiring an operating geothermal power plant with an existing long-term offtake agreement. Our biggest drilling success is a new production well Zanskar recently completed at Lightning Dock geothermal field in New Mexico that is capable of producing over 200 Megawatts thermal, making it the most productive pumped geothermal well in the United States and capable of fully repowering the power plant at this site. With a relatively small team, it’s been a busy few years, and we’re excited by the momentum we’re building. 

We’ve raised about $65M in equity from a range of investors, including Obvious Ventures, Lowercarbon Capital, USV, Munich Re Ventures, and Prime Impact Fund. Our financial backers include investors who deeply understand hard-tech development and power markets, helping us thread the needle in providing our company the right amount of capital at the right times while negotiating contracts with offtakers that set us up for success.  Currently, we have about $200M in contracted future revenues, and we expect that number to grow roughly 10x over the next several years. While profitability is still a few years away, we have promising line-of-sight to major commercial contracts within the next year.

“Our biggest drilling success is a new production well … the most productive pumped geothermal well in the United States.”

Zanskar field team traversing the backcountry en route to a prospective geothermal site. (Photo credit: Zanskar)

What potential impact do you envision for Zanskar?

If Zanskar enables the development of even half of the estimated 40 gigawatts of undeveloped conventional geothermal resources in the United States, it could catalyze hundreds of additional gigawatts in unconventional geothermal development (e.g., Enhanced Geothermal Systems). 

Already, even as a growing startup, Zanskar has identified and characterized dozens of geothermal sites with power potential. At scale, Zanskar could help unlock gigawatts of clean, firm power worldwide. Just think: with each gigawatt of geothermal power offsetting about five megatons of carbon emissions annually, this level of development could lead to gigatons of carbon abatement per year.

Read about more Activate Fellows who have moved from the lab, to commercialization, to defining new industries in Activate’s 2024 Annual Report.