Quaise Energy raises $134M for first superhot geothermal plant as Japan hunts baseload options
Institutional capital backs deep geothermal drilling as gas-import economies like Japan search for baseload power that bypasses the LNG chain and stalled nuclear restarts.
Quaise Energy closed the first tranche of a $134 million Series B round on Tuesday (2026-07-07), earmarking the money for its first commercial superhot geothermal plant in central Oregon, the Houston-based startup said.5
The wager rests on drilling deep enough to reach superhot rock below 12.5km, generating steam pressurized enough for baseload power at costs the company argues can rival natural gas.5,3 For gas-import economies, that ambition speaks directly to fuel-supply risk. Japan burns gas for roughly 32% of its power generation and meets about 98% of domestic gas demand through LNG imports.1
The raise lands as Japan's import exposure gets a live test. With about 90% of its crude sourced from the Middle East, Tokyo has released roughly 80 million barrels from strategic reserves, near 26 days of domestic oil demand, after conflict with Iran and the effective closure of the Strait of Hormuz.1 Only about 6% of Japan's LNG transits the strait, but the episode sharpened the case for domestic supply.1
Gas leads Japan's power mix at around 32%, ahead of coal at 28%, nuclear at 9% and oil at 7%.1 The power sector absorbs 55-65% of total gas consumption.1 In 2025 Japan imported 66.3 Mt of LNG, down 1.5% on the year, keeping it the world's second-largest buyer after China.1
Nuclear was meant to ease that dependence. Japan's latest energy plan targets 20% of the electricity mix from nuclear by 2040, up from under 10% last year.2 Reaching it means restarting nearly all 21 eligible reactors; 15 are operational, three hold safety clearances but sit idle, and 18 await regulatory approval.2
The theoretical prize for superhot geothermal is large. The Clean Air Task Force estimates 13% of North America's land mass has resource potential below 12.5km, and tapping just 1% could supply 7.5 terawatts of capacity.3 Earlier efforts to harness supercritical fluids in Iceland, where they sit just 2-3km down, ran into drilling problems.3
Quaise's Oregon project, Mazama, targets 15MW from next year, scaling eventually to 200MW.3 That is a small slice of Japan's LNG-fired fleet, and commercial proof is still years off.3
Japan's renewables build is itself boxed in. Land-use rules limit solar on abandoned farmland, and weak transmission struggles to move wind from resource-rich areas to demand centers.2 Global wind capacity hit a record 165 GW in 2025, up 40% year-on-year, yet Japan had just 6.43 GW installed.4
Geothermal's appeal for Tokyo is that superhot rock runs continuously, unlike solar or wind, offering baseload without the import chain that runs through Hormuz.3,1
The near-term signal is drilling data at the Oregon site, where the technology must penetrate hard crystalline rock that wears conventional bits fast.3 For a Tokyo desk, the backdrop is a JKM Asian LNG marker near $16.52 and an annual import bill of 66.3 Mt that keeps fuel security near the top of the agenda.1
No single geothermal well replaces a gas plant soon.3 But the $134 million raise signals that institutional capital sees a route to baseload power that sidesteps both the LNG supply chain and the slow grind of nuclear restarts, and the first read on whether it works arrives with Mazama's drilling results next year.5,3