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There's a new bidding war for geothermal

Illustration of a golden coin with an emboss of the Earth on it. 

Illustration: Aïda Amer/Axios

An auction for geothermal energy development on federal lands set a record yesterday. Companies placed six-figure bids for lease sales across more than 190,000 acres — nearly double the amount of land as the previous record-setting auction last fall.

Why it matters: The surge in interest reflects mounting investor appetite for geothermal energy development and, by extension, the level of demand they expect to see for the round-the-clock, clean electricity that geothermal can generate.

Driving the news: The Bureau of Land Management held a lease sale Tuesday for parcels across four districts in Nevada.

  • The auction attracted bids for 192,912 acres, or about 300 square miles, per results posted by BLM. The winning bidders committed to pay nearly $2.98 million.
  • That's vastly more than the previous recordholder, which was another lease sale in Nevada in October, a BLM spokesperson tells Axios. That auction received bids for about 102,402 acres, at a total of just $637,892.

Of note: Registered bidders for yesterday's auction included not just geothermal energy developers, such as Zanskar Geothermal & Minerals, OM Geothermal and TLS Geothermics Corp., but also oil and gas companies like Chevron and Kirkwood Oil and Gas.

  • Regional utilities and power producers, such as Nevada Energy subsidiary Sierra Pacific Power Co., participated as well.

State of play: Geothermal last year accounted for just 0.4% of U.S. electricity generation, but the sector's boom moment seems to be here.

  • The technology provides nonintermittent (or "firm"), zero-emissions electricity generated from hot rock deep beneath the Earth's surface.

Meanwhile: Geothermal energy developer Fervo Energy last week closed $138 million in funding, which appeared to be the largest investment round in the sector, as reported exclusively by Axios.

  • The U.S. Department of Energy this summer said geothermal could account for 8.5% of U.S. electricity generation by 2050.
  • California regulators last year issued a mandate for 1,000 MW of firm, emissions-free energy by 2026 — a move expected to spur the national geothermal market.
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