For the first time in years, every parcel of public land offered by the federal government for geothermal development has been leased — and at record-setting prices. The surge marks a turning point for a once-overlooked renewable sector now benefiting from policy shifts, technology breakthroughs, and surging energy demand from data centers.

According to the U.S. Bureau of Land Management (BLM), the average lease price for geothermal development rose 282% in 2025 to $127 per acre, up from just $33 last year. The auction results reflect growing investor confidence in geothermal’s role in America’s energy mix, even as other renewables like wind and solar face political and regulatory headwinds.

Geothermal energy, which harnesses the Earth’s heat to generate electricity, remains a small but steady part of the U.S. power grid. Recent technological advances, however, are expanding where and how it can be deployed. New drilling techniques — many borrowed from the oil and gas industry — have lowered costs and opened previously unsuitable regions to geothermal development.

“Geothermal checks all the boxes for energy security, reliability, and independence,” said Koenraad Beckers, geothermal energy lead at ResFrac. “It’s a resource that’s always on, no matter the weather.”

In this year’s auctions, 24,000 acres in Idaho were leased for geothermal exploration for the first time, fetching an average of $180 per acre, with bids reaching as high as $412 per acre. Nevada and Utah — traditional geothermal strongholds — also saw brisk activity.

Companies such as Ormat Technologies, a long-time player in the field, continue to expand their holdings, while newer entrants like Chinati Minerals LLC, a subsidiary of Fervo Energy, secured their first leases this year.

Policy Support — and Political Tensions

The geothermal boom comes amid a broader shift in federal energy priorities. While the Trump administration has rolled back incentives for wind and solar projects, it has carved out space for geothermal within its “affordable, reliable, and secure energy” agenda.

Energy Secretary Chris Wright directed his department earlier this year to emphasize technologies that strengthen energy reliability — specifically naming geothermal as a priority. A tax package passed in July maintained federal credits for geothermal developers, even as incentives for other renewables were pared back.

Critics, however, see a selective approach to clean energy policy. They argue that sidelining wind and solar in favor of geothermal and fossil fuels could slow overall progress toward carbon reduction goals. Supporters counter that geothermal’s reliability and smaller land footprint make it an attractive complement to intermittent renewables.

The rise in lease prices also reflects a new demand driver: artificial intelligence. The rapid growth of data centers, which consume vast amounts of electricity for computing and cooling, has sparked interest in steady, low-carbon energy sources. Tech giants such as Google and Meta have signed long-term deals with geothermal providers to supply renewable power directly to their facilities.

Analysts at the Rhodium Group estimate that next-generation geothermal could meet up to 64% of the additional power demand from U.S. data centers by the early 2030s if current investment trends continue.

While the leasing surge signals momentum, experts caution that production is still years away. Geothermal projects face long lead times for permitting, drilling, and power plant construction. Not all leased land will ultimately produce energy — a pattern familiar from oil and gas development.

The BLM plans additional lease auctions in Idaho, Nevada, and New Mexico before year’s end, and analysts expect competition to remain fierce. “If current trends are any indication, geothermal developers are likely to once again spend big to secure promising resources,” wrote BloombergNEF’s Stephanie Diaz in a recent report.

Whether this new wave of investment marks a geothermal renaissance or just a speculative rush remains to be seen. But one thing is clear: in a year dominated by debates over grid reliability, AI power demand, and climate goals, the Earth’s hidden heat is back in play.