Companies Paying Record Sums to Develop Geothermal Energy

For the first time in years, the US federal government has leased every parcel of public land it has opened for geothermal development — and at record prices. 

Average prices for public land leases for geothermal energy development soared by 282% this year to $127 per acre, driven by growing energy demand from data centers and President Donald Trump’s administration embracing the energy source. The record prices are major step up from $33 per-acre average last year, according to data from the US Bureau of Land Management, the agency that conducts the auctions.

Geothermal companies tap the Earth’s heat to generate power. While it currently generates a small share of all US electricity, a wave of new technologies is opening the door for geothermal to play a bigger role, as is policy support. 

“With the current administration, I think the focus is very much on energy security, energy reliability and energy independence,” said Koenraad Beckers, geothermal energy lead at ResFrac, a hydraulic fracturing simulation software designer. “Geothermal checks all those boxes.”

The Trump administration has stymied wind projects and scaled back solar incentives, but geothermal is one type of renewable energy that’s seen some support. In February, Energy Secretary Chris Wright directed his agency to “prioritize affordable, reliable, and secure energy technologies,” including geothermal. The tax law Trump signed in July also preserved geothermal projects’ access to tax credits while weakening incentives for wind and solar.

Artificial intelligence’s voracious appetite for energy has also driven interest in geothermal to new highs. Alphabet Inc.’s Google and Meta Platforms Inc. are among the data center operators who have inked deals with geothermal companies to provide much-needed power.

Advances in geothermal drilling techniques are also helping give the industry new life. Companies are deploying methods traditionally used to extract oil and gas, including fracking, to use the Earth’s heat. New technology is making the process cheaper and easier to deploy, while also expanding the areas suitable to drill for geothermal energy. 

These factors are among the reasons analysts at the Rhodium Group project that next-generation geothermal technology can meet up to 64% of expected data center-driven energy demand growth by the early 2030s.

BLM has traditionally leased land mostly in Nevada and Utah. This year, it also offered geothermal leases in Idaho for the first time. The 24,000 acres auctioned in Idaho, fetched an average per-acre price of $180, which is $147 more per acre than the 2024 average. The highest bid topped out at $412 per acre. Leases usually last for a decade, and the acreage varies widely.

Some companies have been bidding on leases for years. Ormat Technologies Inc., a geothermal energy technology supplier, for example, has paid more than $3.5 million to lease more than 140,000 acres of land since 2014. 

But there are newcomers as well. Chinati Minerals LLC, a subsidiary of geothermal energy company Fervo Energy, submitted winning bids for the first time this year. Fervo and Ormat did not respond to a request for comment.

Winning the land leases is the first step in the process, and it will likely take years for these parcels to start producing energy. Some land may never actively produce, something that’s true for a large number of oil and gas leases. (Those tracts aren’t necessarily idle, though.)

BLM is set to auction more leases in Idaho, Nevada and New Mexico later this year. Stephanie Diaz, a senior associate in tech and innovation at BloombergNEF, expects these sales to attract interest.

“If current trends are any indication, geothermal developers are likely to once again spend big to secure promising resources,” she wrote in a report.

To contact the author of this story: Renata Carlos Daou in New York at rcarlosdaou@bloomberg.net

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