Anonymous land agents are dominating auctions for exploratory drilling rights across the West, driving a seismic shift in geothermal leasing.
According to analysis by market intelligence firm Currence, which collected data from recent federal auctions, these agents now account for nearly half of all lease spending in the last decade. The bidders represent undisclosed clients, and reliably offer only on premium targeted acres, never buy at the minimum bid per acre, and pay an average per acre nearly twice that of any other bidders.
Individual land agents could be bidding on behalf of several types of clients, including data center developers or oil and gas majors, said Guy Cohen, a senior research associate at Currence.
Among those bidders is Buffalo River Minerals, for example, which Cohen said is widely believed to be buying on behalf of Chevron and has been bidding in auctions since 2024. But there are also new entrants: Rock Canyon Resources and Novo Mesa, two companies that have never bid before, landed at the top of a mid-June auction in New Mexico, spending $5.3 million on 21,000 acres and $3.7 million on 44,000 acres, respectively.
Auction activity by both land agents and more established players has ramped up dramatically in the last 12 months, and is still increasing. As load growth prompts more interest in both conventional and enhanced geothermal, several states hosted their first federal auctions in over a decade last year. Moving forward, states like Colorado, New Mexico, and Washington, among others, are preparing to host auctions for state-owned land too, Cohen said.
Geothermal companies like Ormat and Fervo are among the largest lease holders, but large renewables developers are also moving aggressively to secure enhanced geothermal positions, he explained. Hexagon Energy, for example, is second only to Fervo when it comes to total leasing footprint, with more than 430,000 acres across state, federal, and private land. Invenergy comes in fourth on that list, behind geothermal giant Ormat.
This shake-up is likely because renewables developers are seeking new growth opportunities, Cohen said, particularly in light of federal opposition to wind and solar. “Next-gen geothermal looks like it might be there, and they want the option in case it does, and so both have been buying up a lot of land.”
Taken together, he added, the growing role of these new players in geothermal leasing activity shows a stronger demand for next-gen geothermal than is reflected in public project announcements. It also indicates that a growing share of near-term geothermal capacity may be developed not by startups, but by deep-pocketed incumbents.
The geothermal startup problem
Trailing behind land agents and renewables developers is a long tail of earlier-stage geothermal startups staking out cheaper, lower-quality acreage, Cohen said: “A lot of the early-stage geothermal companies…they’re buying crap, they’re buying stuff no-one else wants.”
There are a few reasons for that, including that startups just don’t have as much cash on hand to buy and maintain leases as the bigger players. But for some companies, including those whose approach requires digging extremely deep, the lower-quality acres may work just as well, Cohen explained.
The other emerging trend, he added, is “claimed improvements in AI modeling for the surface.” As AI modeling tools advance, companies may bank on being able to avoid extensive exploratory drilling to validate resources by getting more from surface surveys, which are significantly cheaper. That’s the approach taken by Zanskar, a geothermal startup which operates a plant in New Mexico, and was a major participant in the state’s recent BLM auction.
Geothermal startups just entering the leasing market now are in a different position than Fervo was when it first joined the auctions, Cohen added. Fervo was able to buy a lot of high-quality acres — those with high-potential heat resources and, ideally, access to above-ground energy infrastructure — at low prices, because it entered the market in the early 2020s.
Today, though, exploration alone can cost as much as $30 million or more per project. To get project finance, a startup needs a power purchase agreement, but getting a PPA is hard to do without conducting expensive exploration drilling. (Notably, many of the announced geothermal partnerships and deals aren’t formal PPAs.)
“I think that means a lot of what’s been announced won’t happen — but a lot of what will happen hasn’t been announced,” Cohen said. A lot of startups, who tend to be the ones announcing their project plans, won’t actually get the money to execute on their projects, he added, “but for these renewables developers and these oil and gas majors, raising $20 billion is not a big deal.”
Cohen estimates that there could be as much as two GW of geothermal projects in active development that haven’t been publicly announced: a loose number based on the amount of land companies have leased, and on the assumption that big players including Chevron, Invenergy, and Hexagon are developing their own parcels at the same rate as Fervo, which has been the most public with its development numbers.
It’s an indication that this “hidden actors market,” only visible through the lease data and made up of companies that aren’t issuing press releases or promoting their activities, “is probably the biggest part of geothermal development in the U.S. at the moment,” Cohen said.
