This article was originally published by Colorado Newsline.

The state commission that regulates Colorado’s oil and gas industry this week adopted its first set of rules governing geothermal drilling, taking another step towards fulfilling the broader mandate it was given as part of a legislative makeover of the agency last year. But regulators and experts say not to expect a “boom” in the new technology just yet.

The Energy and Carbon Management Commission was formerly known as the Colorado Oil and Gas Conservation Commission until lawmakers rebranded it in 2023. The name change that came with new authority to regulate emerging industries like carbon capture and so-called deep geothermal energy.

ECMC adopted its Deep Geothermal Operations rules on a unanimous 5-0 vote Monday. The 59-page addition to the agency’s rulebook outlines permitting and enforcement procedures broadly similar to those already in place for oil and gas operations, giving the commission the power to approve or deny permits to protect health and safety and ensuring that local governments have a say in the process.

While existing technologies like heat pumps involve drilling geothermal wells hundreds of feet into the ground to heat and cool homes and even entire neighborhoods, the deep geothermal industry aims to help power the electric grid by drilling thousands of feet down into much hotter pockets of the Earth’s crust. To date, the application of deep geothermal technology has been limited by a variety of factors, but some experts point to its potential to serve as a “baseload” source of clean energy to help offset the intermittency of renewables like wind and solar.

Gov. Jared Polis, who has touted geothermal energy’s potential in his “Heat Beneath Our Feet” initiative, said in a statement Monday that with the ECMC’s new rules, the state is “poised to leverage this clean, renewable energy resource.”

“Colorado has incredible low-cost renewable energy resources like geothermal that can help reduce emissions and save Coloradans money,” Polis said. “Geothermal energy can play an integral role in powering the way Coloradans live, work and play, and will help future generations.”

The feasibility of tapping into deep geothermal resources can vary widely according to local geology. A study released last month by the ECMC, the Colorado Geological Survey and Atlanta-based energy firm Teverra analyzed “geothermal utilization opportunities” and found that the Piceance Basin north of Grand Junction, the Raton Basin near Trinidad and a “localized hot spot” along the Colorado-Kansas border rank as the state’s most promising locations.

Colorado Communities for Climate Action, a coalition of 43 local governments supportive of clean energy policies, said the rules adopted by the ECMC struck an “impressive balance.”

“Local governments are optimistic about the role of deep geothermal electricity in efficiently decarbonizing Colorado’s power grid,” Emma Pinter, an Adams County commissioner and vice president of Colorado Communities for Climate Action, said in a statement. “But we have to make sure this new technology benefits all Coloradans and their environment while avoiding the damage we have seen from oil and gas development and other extractive industries.”

“Despite its promise as a clean energy source, (deep geothermal operations) will have some adverse impacts, although we don’t yet know the scope of them, and it’s important to recognize that,” Kate Burke, an assistant county attorney for Boulder County, told commissioners in a rulemaking hearing last week. “The net impacts … should be less than oil and gas, and in some instances, the scale may be smaller, but that doesn’t mean there won’t be impacts to the people, plants and animals living near the facilities.”

Geothermal Rising, a trade group representing geothermal energy companies, was “very satisfied with where the draft rules have landed,” an attorney for the group, Matt Lepore, told commissioners Monday. Lepore is a former chair of the agency who departed in 2018 and has gone on to represent the oil and gas industry in commission proceedings.

Environmental groups have urged the ECMC to follow up with a second geothermal rulemaking process to flesh out its regulations before operations ramp up. Commissioner Brett Ackerman, a former Colorado Parks and Wildlife official, said prior to Monday’s vote that it was important not to “hamper industry” at an early stage, but the agency should “appropriately address future concerns and opportunities as they arise.”

“I agree that it’s highly unlikely that there’s any pending boom of deep geothermal development,” Ackerman said. “We’re rather more at a pilot stage.”

Colorado oil and gas regulators adopt ‘deep geothermal’ drilling rules is an article from Energy News Network, a nonprofit news service covering the clean energy transition. If you would like to support us please make a donation.

Minnesota is home to a growing number of networked geothermal systems — essentially massive ground-source heat pumps providing low-emissions heating and cooling to a group of buildings. 

Now, state legislators have introduced bills that aim to support further adoption of the technology, which advocates say is a key tool for cutting emissions in the building sector, especially in cold-weather states.

The legislation builds on what’s already happening in the state. Thermal energy networks have been installed in Rochester’s city hall and will be extended to a library and civic center to create a system serving more than one million square feet. Carleton College built a networked geothermal system and The Heights, a development on St. Paul’s East Side where more than 1,000 people will live and another 1,000 will work, will be heated and cooled by a networked thermal system.

“There’s a lot of excitement building around networked geothermal,” said Luke Gaalswyk, president and CEO of St. Paul-based Ever-Green Energy, a utility system operator and advisor with an expertise in district energy.

The state’s two major gas utilities, Xcel Energy and CenterPoint Energy, included networked geothermal pilots in plans submitted under the Natural Gas Innovation Act to the Public Utilities Commission. At least one legislative initiative calls for devoting 15% of the Innovation Act budget to networked geothermal. The federal government has several initiatives underway, too.

Joe Dammel, managing director for buildings at policy nonprofit Fresh Energy, said the state’s goal of becoming net zero by 2050 means shifting away from natural gas for heating. 

“We think that there’s tremendous potential from network geothermal,” he said. “The studies being considered and the number of bills at the Legislature right now are only going to help us understand the technical and economic potential of geothermal.”

Fresh Energy also publishes the Energy News Network.

The proposed laws encourage geothermal in a variety of ways. One (HF 4759/SF 4849) offers planning grants to cities, counties and planning agencies to examine the feasibility of geothermal systems. A second (HF 4689/SF 4686) creates rebates related to geothermal. A third (HF 4688/SF 4687) requires the Public Utilities Commission to set up a workgroup. A fourth (HF 4423 / SF 4760) builds a framework for thermal energy network pilots and instructs the Commerce Department to study the potential for geothermal networks in Minnesota.

State Rep. Larry Kraft, a co-author on several of the bills, said buildings in Minnesota represent around 40% of carbon emissions and more than 60% in his suburban community of St. Louis Park. He believes municipalities that receive grants for geothermal and build systems will demonstrate, by example, the technology’s ability to decarbonize heating.

Kraft said ground-source systems, while expensive, are more efficient at heating than air source heat pumps. New developments may be easier to build with geothermal energy, or when streets are being reconstructed, neighborhoods could be retrofitted for it.

He imagines utilities that distribute natural gas will move to operating geothermal networks someday.

“How we decarbonize heating is going to be a big challenge for us here in a cold climate, but geothermal has great potential,” Kraft said.

Geothermal of any sort, however, remains expensive because the most common application, ground-source systems, requires drilling hundreds of boreholes and installing significant amounts of piping. There aren’t many contractors who can do this job, and financing institutions have little familiarity with it. Utilities may remain skittish because it threatens the natural gas business model.

Advocates believe more adoption will drop costs, create a robust contractor pool and enable more financing. Minnesota’s new Climate Innovation Finance Authority appears poised to be a potential financing source, having just provided $4.7 million for planning a networked geothermal for The Heights development in St. Paul.

What is networked geothermal?

Networked geothermal systems serve several buildings or homes with centralized heat or cooling using the same principle as district energy systems. A central heating and cooling source — typically borefields or aquifers — to serve many buildings while employing economies of scale to decrease costs through shared infrastructure.

Trade unions view networked geothermal as increasing employment opportunities for pipefitters and other contractors. Gas utilities could potentially transition toward geothermal as fossil fuel demand diminishes, Dammel said.

Clean energy advocates meanwhile like geothermal’s efficiency and ability to operate on electricity for heating instead of natural gas or propane. Lawmakers see thermal systems as providing a path to meeting the state’s goal of being net zero by 2050, Kraft added.

The Inflation Reduction Act incentivizes thermal networks by offering tax credits and direct reimbursements to government agencies and nonprofits. 

“The [IRA] is contributing to an explosion in interest and adoption of geothermal,” said Ryan Dougherty, president of the Geothermal Exchange Organization.

Schools and other nonprofits can now receive 30% to 50% of the installed cost of a geothermal system, Doughtery said. The surge in commercial and institutional installations has grown so significantly that the industry has begun to face a labor shortage.

Geothermal’s advantages

For the electric grid, networked thermal systems could bring relief because they use substantially less electricity than competitive solutions. Ground source heat pumps operate more efficiently than air source heat pumps, which now outsell fossil gas furnaces. And although ground source heat pumps use electricity, they consume less energy than heating alternatives, Gaalswyk said.

Such systems could even tap sources such as waste heat from wastewater facilities or data centers to warm buildings, he said. Another benefit is the ability to shift heat on a sunny day from a south-facing building, for example, to a north-facing one needing it.

Audrey Schulman, co-founder and co-executive director of the nonprofit climate solutions incubator HEET, said utilities with networked geothermal can begin heating water a week before an expected cold snap to avoid stressing the system — for instance, taking advantage of excess electricity from wind farms.

“There’s a lot of different options available,” Schulman said.

The role of utilities

Massachusetts has required utilities to direct a growing percentage of funding allotted for replacing natural gas piping to networked geothermal, Schulman said. The fastest way to move away from natural gas and toward geothermal, she argues, will be by maintaining the financial health of natural gas utilities.

Utilities would socialize the cost of the capital expenditures to networked geothermal and then potentially pay it off by charging customers for the operations and maintenance, depending on the size of their homes or businesses.

“No one’s quite figured out how the charges will be structured,” she said.

Dammel said natural gas utilities have a long history of innovation and changing their business models. Initially, they provided natural gas for streetlighting before transitioning to a delivery service for natural gas.

“We certainly see that gas utilities could play a significant role in providing heat to customers and maintaining that longstanding customer relationship gas utilities have with their customers,” Dammel said.

Obstacles and opportunities

Dammel and Schulman say regulators, utilities and others will face inevitable challenges in moving thermal systems into the mainstream. One is getting utilities onboard. Schulman said one Massachusetts utility, Eversource, fully embraces networked geothermal as the future, while others have taken a wait-and-see approach.

Dammel said utilities and clients must learn through pilots the upfront costs of the systems and how they could save money over time. Helping state residents and lawmakers understand the potential for networked geothermal and how it could benefit communities will be another task, he said.

Developing a geothermal workforce remains critical to growth. Minnesota has existing tradespeople capable of building geothermal systems, but the potential to create a much bigger workforce remains, Dammel said.

“There’s a huge opportunity,” he said, not only for installers but for companies developing new geothermal technology, financing, design and other aspects of the business.

Schulman agrees. Contractors drilling boreholes for geothermal in Massachusetts have become “overtaxed” with all the projects underway. The adoption speed will increase once regulators, utilities, and customers see the advantages. 

“I can’t imagine any reason a customer would not want lower heating and cooling bills,” she said.

Legislative committees have heard several of the geothermal bills. Minnesota’s legislative session ends May 20.

Networked geothermal is catching on in Minnesota. New legislation aims to push the technology further is an article from Energy News Network, a nonprofit news service covering the clean energy transition. If you would like to support us please make a donation.

Geothermal heating and cooling is emerging as a go-to technology for St. Paul Public Schools as it seeks to renovate aging facilities in line with the district’s climate action plan.

Minnesota’s second-largest school district is also one of the city’s largest property owners, with 73 buildings containing more than 7.7 million square feet. Its climate action plan calls for reducing greenhouse gas emissions at least 45% by 2030.

New technology and federal incentives have helped convince district leaders that geothermal is among its best options for slashing emissions from school buildings. The energy efficient systems pump refrigerant through a closed loop circuit of pipes that moves heat between buildings and below ground reservoirs.  

Last year, the district completed a ground-source geothermal system while renovating the 1960s-era Johnson High School. This year, it’s installing a different type of system at two other schools that tap aquifers rather than the ground as a heating and cooling source.

The aquifer-based systems that will be used at Bruce Vento Elementary School and the nearly 100-year-old Hidden River Middle School were developed by a Twin Cities-based company called Darcy Solutions that specializes in water-based geothermal systems.

The company’s technology requires far fewer wells than conventional, ground-based systems, making them more practical for dense, urban neighborhoods. Darcy places heat exchangers directly into the wells, where they can capture heat from the constant, 52-degree groundwater.

Darcy’s system changed the school district’s thinking, said Tom Parent, the district’s executive director of operations and administration. The elementary school project required just five wells, compared to more than 150 ground source wells at Johnson High, which disrupted outdoor sports activities for two summers. 

“We see a lot of promise,” Parent said. “This is an incredible leap in technology.”

State and federal incentives

Geothermal and aquifer-based systems could be an essential strategy for reducing emissions, along with energy efficiency, LED lighting, electric buses and solar energy, Parent said. Because many St. Paul schools have small footprints, Darcy’s system could become a go-to HVAC solution.

Traditional ground-source geothermal would have been “impossible” at either school because of their small sites, according to the district’s indoor air quality coordinator Angela Vreeland. Darcy’s geothermal systems also take up less interior space than traditional, fossil fuel heating systems. 

In Minnesota, several trends are driving geothermal’s growth. Nearly all projects receiving state aid must follow the rigorous standards for energy efficiency. Matt Stringfellow, a manager with Kraus Anderson who works on geothermal installations, said that “any state-funded project pretty much requires that (geothermal) to meet their guidelines at this point.”

Another catalyst has been the Inflation Reduction Act. The law allows a commercial building owner installing geothermal to claim as much as a 30% tax credit. It will enable nonprofits to receive the equivalent amount in cash from the federal government.

Parent said the school district used federal money to pay for its first geothermal project and plans to submit paperwork to take advantage of the Inflation Reduction Act’s direct pay option for this year’s projects, too. While not the only driving force in selecting geothermal, it played a role, he said.

Geothermal ‘seems to be more and more the right answer’

Robert Ed, Darcy’s director of marketing strategy, said geothermal is one of the only solutions for electrifying large buildings in cold climates. “There are other energy efficient technologies, but in a northern climate, being able to use geothermal energy and not having to expend a lot of energy to provide thermal capacity is a big advantage,” he said.

The Netherlands, Denmark, Sweden, and Belgium have been the primary users of geothermal aquifers, but Darcy aims to change that. Ed said the startup has expanded to Wisconsin and will now begin adding more states that have the right groundwater characteristics to work with its technology. 

Parent said the Johnson project shows “just how viable (geothermal) can be under certain circumstances for our system. Now we’ve got two more projects underway with geoexchange systems; we’re learning how it can play a role in the continuous cycle of renewal in our buildings.”

Darcy advertises that its technology creates 70% fewer emissions and lower cooling costs than a traditional heating and cooling system. At Bruce Vento Elementary, named after a Minnesota congress member well-known for environmental advocacy, stakeholder engagement at the district level led to a desire to decrease energy intensity in buildings.

“Geothermal is the only way we are getting within spitting distance of what we want it to be able to do,” Parent said.

A Department of Energy analysis found retrofitting around 70% of buildings, combined with building envelope improvements, could bring a 13% reduction by 2050 in electricity demand.

Yet geothermal systems barely make a slice of the energy pie chart, producing less than 1% of the country’s energy capacity, according to the United States Department of Energy. The industry, however, is growing. Ground-source heat pump sales have grown by 3% annually, and the United States continues to be the international leader in geothermal energy.

The three schools will see significant savings over natural gas systems. Vreeland said the annual savings will be $143,000 at Hidden River Elementary and $200,000 at Bruce Vento. Both should pay for themselves in a decade. Johnson High’s savings will be $7 million over 30 years.

Darcy is also installing aquifer-based geothermal systems at two schools in Winona in southeastern Minnesota. It also recently installed a system at Rochester’s City Hall. 

Parent said geothermal may not be the answer to every HVAC renovation, but it shouldn’t’ be overlooked. 

“We don’t see a world in which geothermal energy is our only solution path forward because of the idiosyncrasies of our building, funding, and timing,” he said. “But it seems to be more and more the right answer.”

St. Paul, Minnesota’s public schools are tapping geothermal to cut emissions and building costs  is an article from Energy News Network, a nonprofit news service covering the clean energy transition. If you would like to support us please make a donation.

This story was originally published by Canary Media.

Last month, utilities in New York state submitted plans for 13 pilot projects meant to replace fossil-gas pipelines with infrastructure that can power clean, carbon-free heat pumps.

These underground thermal networks range from dense midtown Manhattan commercial centers to low-income housing, and from neighborhoods in the Hudson Valley to the upstate town of Ithaca.

But the projects, spurred by a 2022 state law that puts New York on the cutting edge of a decarbonization strategy now being explored by a growing number of states, share a common goal: to cut fossil fuels and carbon emissions out of the gas utility business, while still carving out a role for those utilities in the decades to come.

That work will still involve digging trenches, laying pipelines and installing equipment — the same kind of capital investments that earn gas utilities long and stable rates of return today. But instead of flammable and planet-warming gas, those pipes will carry water or other liquids that transfer heat from underground — or from other buildings and sources in the network — that can be used by heat pumps to keep buildings warm.

Heat pumps, which operate like reversible air conditioners, are much more energy-efficient than fossil-fired furnaces or boilers. They’re even more efficient when they can exchange heat and cold with fluid at a stable temperature, rather than from cold outside air, as the more common air-source heat pumps do.

The U.S. Department of Energy estimates that ground-source heat pumps reduce energy consumption and emissions by up to 44 percent compared to air-source heat pumps and 72 percent compared to standard air-conditioning equipment.

Capturing and sharing waste heat from thermal energy networks can increase efficiency even further. That, in turn, can cut the electricity bills of customers, which will rise as they switch from gas to electric heating.

But most building owners would struggle to afford the cost of drilling boreholes and installing pipes for their own geothermal heat pump systems, or to craft contracts with their neighbors to build and share underground networks. That’s why New York’s approach to adapting the gas utility infrastructure holds so much promise. Doing so will help all those individual homeowners and businesses share in the costs and reap the rewards, said Lisa Dix, New York director for the nonprofit Building Decarbonization Coalition.

Her team led an effort to rally utility labor unions, environmental groups and community organizations behind the 2022 law, called the Utility Thermal Energy Network and Jobs Act. These groups have since coalesced into a coalition called UpgradeNY that hopes to see these pilot projects serve as a model for a statewide conversion.

The newly proposed projects in New York are meant to offer a ​“clear understanding of neighborhood scale thermal energy networks,” she said, ​“so that as the transition happens, we can get to the scale we need to get to.”

The projects could also help serve as an early blueprint for the other half dozen or so states pursuing or exploring this method of decarbonization, she said. ​“We’re going to have to stop digging the hole, stop subsidizing the expansion of the fossil fuel system.”

New York’s pilot projects 

By design, the 13 pilot projects in New York cover a variety of different neighborhoods.

UpgradeNY has endorsed 11 of the projects but is asking the New York Public Service Commission to review the remaining two, one on Long Island and another in the city of Buffalo, that would continue to use fossil-gas-fired boilers for high-temperature heat.

Con Edison, the utility serving New York City and Westchester County, has proposed three projects taking on some of the most challenging urban settings, including the landmark Rockefeller Center.

For that project, Con Ed plans to convert three large commercial buildings from the utility’s district steam-heating network to heat pumps. These heat pumps would draw on water that’s warmed up by waste heat from sources including the sewers, data centers and adjoining buildings’ cooling systems. 

“There are some misconceptions out there — people think you have to drill a million boreholes” to capture underground heat, Dix said. ​“But you can get your heat from different [underground sources]. You can get it from the subway. You can get it from the sewer. And it’s going to help decarbonize Con Ed’s steam system if we do it right.”

Real estate company Tishman Speyer, the owner of 30 Rockefeller Center, is a key partner in the project, she noted. The firm has a strong incentive to participate because the project could lower the cost of complying with New York City’s Local Law 97, which requires all large buildings to reduce their carbon emissions by 40 percent from 2019 levels by 2030.

Hitting those targets will require an estimated $18.2 billion in investment in alternatives to fossil-gas-fired boilers and furnaces. Shared networks could significantly reduce the cost to individual buildings, but property owners ​“don’t want to deal privately with all that permitting — they want the utility to deal with all that,” Dix said.

Another Con Ed project in Manhattan’s Chelsea neighborhood plans to get 100 % of heating, cooling and hot-water needs for a low-income multifamily residential building from a nearby data center. ​“We can have a data center literally heating an entire multifamily building or a big skyscraper,” Dix said.

Other projects on the list will test how thermal energy networks can link residential and commercial buildings in less dense environments. Those include a project by utility NYSEG in the city of Norwich that will connect homes and buildings to underground networks and waste heat from a grocery store’s refrigeration system, and a project by utility Orange & Rockland in the town of Haverstraw that will build two networks — one serving new waterfront construction, and the other municipal and school district buildings — that are close enough to be linked together in future expansions.

Dix highlighted a project that utility NYSEG has proposed in Ithaca, which in 2021 became the first U.S. city to pledge to completely decarbonize its buildings by 2030. It’s also the home of Cornell University, which has a district heating, cooling and cogeneration system that now uses fossil gas, but which the university hopes to convert to geothermal power. 

How thermal energy networks could transform the gas utility business

New York is an early leader on this front, but thermal energy networks are gaining ground across the country.

Today, three other states — Colorado, Massachusetts and Minnesota — have passed laws that allow or mandate gas utilities to undertake thermal energy network pilot projects. In Massachusetts, the first utility-built network, covering 32 residential and five commercial buildings and 140 customers in the city of Framingham, is expected to be complete in the next few months.

Other states including Illinois, Maine, Vermont and Washington are exploring similar laws. And 13 gas utilities have created a Utility Networked Geothermal Collaborative to explore options.

To be clear, thermal energy networks, also called geothermal networks or geo-districts, aren’t a new idea. A number of cities, colleges and corporate campuses in Europe, Asia and North America use district energy systems — shared steam or hot water exchange networks — for heating and cooling needs, and many of them aim to switch from fossil fuels to zero-carbon electricity. In the U.S., geothermal networks that tap into underground heat, cool water from nearby lakes or waste heat from sewers and other buildings are proving the efficiency and cost benefits of the concept.

But gas utilities are an ideal party to carry out thermal energy networks at scale, said Audrey Schulman, co-executive director of the Home Energy Efficiency Team (HEET), a Cambridge, Massachusetts–based group that helped spur the state’s first such pilot projects by utilities Eversource and National Grid, including the project in Framingham.

First, gas utilities have the workforce, expertise and access to capital needed to build the sprawling and interconnected underground networks required, she said. Second, they’re already spending billions of dollars per year on fossil-gas pipeline expansions and repairs that will inevitably become ​“stranded assets” long before their costs are paid back by customers.

In Massachusetts, the state’s six investor-owned gas utilities plan to spend more than $40 billion on a Gas System Enhancement Program to replace the roughly 22 percent of gas lines in the state that are prone to leaks, she said. Customers pay the cost of those investments via increases on their bills that can persist for decades — far past the state’s deadline to reduce greenhouse gas emissions by 85 percent from 1990 levels by 2050.

The state’s push toward thermal energy networks will likely be accelerated by a December decision from the Massachusetts Department of Public Utilities to reject gas-utility decarbonization plans that relied too heavily on alternative fuels like hydrogen and renewable natural gas. Beyond that, the department’s ​“beyond gas” order calls for ​“minimizing additional investment in pipeline and distribution mains” and specifically calls out thermal energy networks as an alternative.

“The whole thing is about setting up the regulatory structure by which we get off gas and onto something else,” Schulman said.

New York faces similar choices as it works to implement its 2019 climate law that calls for cutting fossil gas use by at least one-third by 2030 and converting the ​“vast majority” of customers to electric heating by 2050, Dix said. Despite these imperatives, gas utilities in the state have spent $5 billion on infrastructure investments and identified $28 billion in pipeline replacement plans since the law’s passage.

This disconnect between climate imperatives isn’t limited to Massachusetts and New York. Consultancy Brattle Group found in a 2021 report that U.S. gas utilities may face $150 billion to $180 billion of ​“unrecovered” investment in pipelines over the coming decade. States including California and Colorado have set policies to limit expanding gas lines and to push gas utilities to transition customers to less-polluting alternatives.

Gas utilities across the country have largely fought such mandates or pushed proposals that rely on continuing to use their pipelines to carry carbon-neutral fuels such as biomethane or hydrogen. But a growing body of research indicates that these plans will likely falter due to the high cost and low availability of those alternative fuels.

At the same time, when looking for large-scale conversion of entire neighborhoods to low-carbon alternatives, ​“utilities make the most sense to do this,” Dix said. ​“They’ve got rights of way, they have the permitting authority, they have access to capital, and they have the workforce, which is already unionized.”

Like many other states with decarbonization mandates, New York has offered hundreds of millions of dollars in incentives for heat pumps and building electrification, and has imposed regulations limiting the expansion of fossil gas to new buildings.

But according to a 2023 report from the Building Decarbonization Coalition, this ​“house-by-house” approach could end up leaving gas utilities and regulators in a bind — being forced to maintain expensive gas distribution networks to supply fuel to a dwindling number of customers.

The customers that remain, meanwhile, will bear a greater and greater proportion of the cost of paying off those gas investments, leading to a vicious cycle of cost increases being imposed on people who can’t afford to make the switch to heat pumps on their own. These left-behind customers are more likely to be lower-income earners already struggling to afford increasingly expensive utility bills.

Thermal energy networks, by contrast, can be planned on a neighborhood-by-neighborhood basis, she said. That gives utilities and regulators an opportunity to target disadvantaged communities, areas with the most aged or leak-prone infrastructure, or other strategic approaches to shifting people from gas to electric heating and appliances en masse.

The efficiency benefits of these networks can also provide significant relief to power grids that will experience massive growth in demand from building heating and electric vehicles. Department of Energy research has found that installing geothermal heat pumps in nearly 80 percent of U.S. homes could reduce the costs of decarbonizing the grid by 30 percent and avoid the need for 24,500 miles of new transmission lines by 2050.

From pilot projects to statewide transformation 

Many steps remain for New York to bring these on-paper pilots into the real world, however.

First, each utility will have to negotiate with the customers involved in the pilots on how to share the costs of installing heat pumps and other new equipment. Then they’ll need to build the projects and get them up and running, track the performance of the equipment and underlying networks, and assess the cost-effectiveness of the projects.

Bringing down the cost of these projects will be an important first test. Heat pumps are more expensive than gas furnaces, and designing and constructing the pipes, boreholes and networked heat-exchange technologies involved will be more costly than standard gas infrastructure projects.

“There will be a marginal cost increase compared to business as usual,” said Matt Rusteika, Building Decarbonization Coalition’s director of market transformation. ​“But because you’re not buying the gas, and the gas is like half the bill, the cost for consumers would come down.”

Altering laws now on the books in New York, Massachusetts and other states to allow utilities to switch customers from gas to thermal energy network service without triggering ​“obligation to serve” objections will also be important, he said. Under those laws, ​“if the customer says ​‘I want gas,’ the utility has to give gas to them,” he said. That obligation is a core part of a utility’s mission, but its strict application could allow a single customer in a neighborhood slated for a thermal energy network to stymie the entire project.

In New York, the Utility Thermal Energy Network and Jobs Act suspends that law for the pilot projects now being considered, Dix said. But another law would need to be passed to extend that shift to the state at large. In Massachusetts, the Home Energy Efficiency Team and other environmental and community groups are endorsing a ​“Future of Clean Heat” bill that would make similar changes.

More complexities will emerge as utilities and regulators start to consider the methods for some members of a thermal energy network to exchange their waste heat with others, Rusteika said. ​“How you compensate people who provide it and those who use it is a more complicated question.”

For now, backers of thermal energy networks are waiting for the first pilot projects in Massachusetts and New York to provide the real-world testing grounds for answering these kinds of questions. Eversource’s first project in Framingham, Massachusetts is set to come online later this spring, he said. ​“We’re going to learn a lot about efficiency and functionality and comfort and cost from that pilot.” 

New York will replace gas pipelines to pump clean heat into buildings is an article from Energy News Network, a nonprofit news service covering the clean energy transition. If you would like to support us please make a donation.

Vermont’s only natural gas company is exploring possible sites for its first fossil-fuel-free, networked geothermal project, a heating and cooling technology that could be a natural fit for a company already skilled at designing and constructing piping systems. 

“It’s a near-perfect overlay of our current business model,” said Richard Donnelly, director of energy innovation at Vermont Gas Systems, which currently serves about 55,000 customers.

Legislation pending before the House Committee on Environment and Energy could help speed such geothermal innovation. The bill, still awaiting a number, directs the state Public Utility Commission to adopt rules for permitting thermal energy networks — underground loops of liquid-filled pipes that are heated or cooled by the earth and connected to multiple buildings.

It would authorize any entity, not just existing utilities, to operate geothermal networks as regulated utilities, enabling them to recover their costs through the rates paid by customers. 

“An electric cooperative, a homeowners’ association, a municipality, a large fuel dealer — they could become utilities so they could access the capital needed and recover their costs over time,” said Debbie New, a community organizer who helped draft and is promoting the legislation.

Emissions from heating and cooling buildings represent about 34% of Vermont’s carbon dioxide emissions. The state must find ways to reduce those emissions in order to meet its climate goals, and geothermal could be a key part of the solution, advocates say. 

A geothermal system — or ground-source heat pump — consists of an underground piping network and a connected heat pump inside the building. Powered by electricity, the pump moves heat from the pipes to warm the building in cold weather. In hot weather, it reverses the process and draws heat from the building into the ground. 

The pipes are placed at a depth where the earth’s temperature is relatively constant, around 50 degrees in Vermont. 

The systems have no visual impact because they are underground. The pumps are significantly more efficient than other forms of heating and cooling, “and if the electricity being used is renewable, you can envision a really, truly decarbonized future,” said Jake Marin, senior emerging technology and services manager at Efficiency Vermont. 

The downside, however, is cost. 

“Without question, geothermal is one of the most, if not the most, expensive options out there,” Marin said. “The big question mark is, can we do this at scale? The networked geothermal is an interesting take on this. If that cost can be sucked up into a utility model and amortized over time with the end users paying an access fee to spread that out, the speculation is that that may be a good answer for helping to scale geothermal.”

Donnelly said Vermont Gas has been trying to develop a business model around geothermal for the past two years, “primarily because it’s a unique way for the company to use its core functions and decarbonize.”

The company is currently considering the feasibility of installing its first networked system at a multifamily housing construction project that includes some affordable units. They are largely focused on new construction projects as possible testing grounds because it is easier to put in a system where the ground hasn’t been developed yet, Donnelly said.

Vermont Gas previously submitted a proposal to develop a geothermal project at one of the buildings at Rutland Regional Medical Center, a hospital in central Vermont. But that idea was rejected by regulators last year, largely because Rutland is out of the utility’s service territory. 

That rejection “is one example of a need for clear statutory guidance to direct development of these types of decarbonized projects in the future,” said Dylan Giambatista, director of public affairs for Vermont Gas.

Another bill identified by legislative leaders as a major priority this session would also help advance geothermal. Senate Bill 5, the Affordable Heat Act, would require importers of fossil heating fuels to compensate for that pollution by delivering or paying for cleaner heating options. It designates geothermal as one of the technologies that would generate the necessary clean heat credits. 

Utilities in New York and Massachusetts are also exploring geothermal technology. Legislation adopted last year in New York directs the state’s seven largest gas and electric utilities to develop at least one and as many as five pilot thermal energy network projects. 

And in Massachusetts, Eversource has broken ground on a networked geothermal system in a neighborhood in Framingham. The system will serve around 40 homes, as well as part of a school, a firehouse, and a few businesses, said Audrey Schulman, co-founder and co-executive director of the Home Energy Efficiency Team, known as HEET, a Cambridge-based nonprofit that has been promoting the networked concept. 

The Framingham installation should be active by this fall. A research team assembled by HEET is studying every aspect of the system along the way, and will make the data available in a public data bank, Schulman said. 

The organization’s outreach efforts with gas utilities around the country have so far yielded a coalition of about a dozen of them, including Vermont Gas, that are actively discussing or installing networked geothermal, she said. 

“We believe the fastest way forward for building electrification is for us to work with gas utilities,” she said. “They will otherwise have no business plan going forward.”

The future business plan for Vermont Gas does not envision a complete transition to geothermal, however. The company’s long-term decarbonization objectives also call for renewable natural gas, green hydrogen, and carbon capture technology for industrial users. 

The networked geothermal bill previously included a provision calling for a prohibition on the extension of natural gas transmission lines into new service territories. But Vermont Gas did not support that provision — “as we seek to decarbonize, flexibility is going to be very important,” Giambatista said.

So sponsors made the geothermal provision a standalone bill, uniting the gas utility and climate advocates behind it.

Vermont gas utility sees geothermal as a part of its carbon-cutting portfolio is an article from Energy News Network, a nonprofit news service covering the clean energy transition. If you would like to support us please make a donation.