Steam rises from a section of the Cove Fort Geothermal Plant in Millard County operated by Ormat Technologies. The company submitted the highest bid ever for a geothermal land lease in an August BLM sale at $1,207 per acre. (Courtesy Ormat Technologies)
Developers of geothermal electricity generation are in an all-out bidding war to lease Utah land where subterranean heat makes their industry run.
Efficient Markets, a Houston-based broker of government land leases, has reported a new record-high price for the lease of Utah land for geothermal development. An August lease sale by the company produced a high bid of $1,207 per acre for one parcel in a 37-parcel offering, a 70 percent increase over the previous high bid. The previous high was $701 for a parcel in a New Mexico sale in June.
The sale on Bureau of Land Management land, conducted on Aug. 18, was for land in Central Utah where there is known geothermal potential. One of the parcels was in Beaver County, while the remaining 36 were in Millard County. Bids were received on 32 of the properties for high bids totaling $24.5 million. The parcels total 72,398 acres.
Ormat Technologies, a renewable energy company based in Reno, Nevada, and operator of the Cove Fort Geothermal Plant in Millard County, submitted the record bid for a 3,121-acre parcel near its current Utah operations. Ormat was also the high bidder on at least eight other sites, including a 5,052-acre property for which it bid $825 per acre.
Other major high bidders in the BLM auction included Chicago-based Invenergy Geothermal Development LLC, which bid won a pair of parcels, totaling about 8,000 acres, with bids around $400 per acre; and Suncoast Land Co., of Louisiana, which submitted high bids on several Millard County parcels.
“The recent results … highlight strengthening private market demand for clean, low-cost, reliable power generation and thermal management, driven by technology advancements and data center development,” Efficient Markets said in its release.
“Geothermal is a critical and fast-growing renewable energy source. Going forward, with continued government support and accelerated technology advancements, we expect increased investment in geothermal projects, driving stronger competition and momentum in geothermal power generation,” said Gus Rivero, chief ventures officer of Efficient Markets.
Winning the lease bids does not guarantee that the bidders will develop a project, but it opens the door for companies to explore the parcels and determine viability.
Under the federal geothermal program, revenues collected from the auction of federal lands for power plant development are divided among the state of Utah (50 percent), the counties where the leases reside (25 percent) and the U.S. Department of the Treasury (25 percent).
Geothermal energy development continues to be a growth industry in Utah. The power source has a history that dates to the state’s first commercial generation in 1984. That year, the Blundell Geothermal Power Plant, developed by Utah Power & Light and Phillips Petroleum, began supplying power to the grid from Beaver County. In recent years, further development included the Cove Fort operation and more recently, Fervo Energy’s Cape Station plant has garnered headlines with its major Beaver County project.
The University of Utah operates Utah Forge (Frontier Observatory for Research in Geothermal Energy), a dedicated underground geothermal field laboratory in Beaver County sponsored by the U.S. Department of Energy. Located near the town of Milford, it is designed to research, test and improve the techniques needed for enhanced geothermal systems.
Geothermal energy taps heat from within the Earth to generate electricity, and Utah’s geology — particularly in areas managed by the Cedar City and Fillmore BLM field offices — makes it a strong candidate for development.
The BLM determined that the 37 parcels in the recent sale met a “no significant impact” threshold following environmental impact studies for possible geothermal development. That finding is a standard threshold under the National Environmental Policy Act and clearing it allowed the sale to move forward.
