There's a new bidding war for geothermal
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.