Welcome to Part Two of our conversation with Kai Palmer-Dunning, Senior Associate of Building Decarbonization at Clean Energy Works. In Part One, we explored what geothermal networks are, how they work, and why they offer a more affordable, scalable path for building decarbonization. In this post, Kai unpacks the barriers to scaling geothermal networks, the policy shifts and partnerships needed to accelerate adoption, and how we can ensure frontline communities benefit from this clean energy solution.
Kai Palmer-Dunning is Senior Associate of Building Decarbonization at Clean Energy Works. He has experience working on topics related to building energy codes, building decarbonization policy, and environmental justice. Prior to Clean Energy Works, he was the Director of Equitable Building Transition at the Home Energy Efficiency Team (HEET), where he helped guide programs related to improving access to weatherization and building retrofits in environmental justice communities. He also helped expand awareness of networked geothermal as a gas transition pathway. In addition to his work at HEET, Kai served as a review board member for Boston’s building performance standard, BERDO. He is completing his B.S. in Environmental Science and Data Analytics at Southern New Hampshire University and plans to pursue a Masters of Architecture in Sustainable Design.
What are some barriers to implementing and scaling geothermal networks?
Geothermal networks face a few key challenges, especially when it comes to securing regulatory approval. These are extensive infrastructure projects that typically require the right geological conditions, local government support, and significant building and infrastructure retrofits. Massachusetts is an example where state policy support was helpful in overcoming barriers. In 2020, the Department of Public Utilities (DPU) issued an order to open an investigation to explore the future of natural gas in the state. The order helped the state’s investor owned utilities secure commission approval for their proposed geothermal network pilots. However, in states that don’t have policies or plans to transition away from gas, securing utility commission approval may be more difficult.
Retrofitting older buildings also presents a costly and complex challenge, especially for older buildings, due to pre-weatherization barriers (knob-and-tube wiring, asbestos, etc.), deferred maintenance, and other issues. Geothermal networks require the installation of ground source heat pumps, ductwork or ductless mini splits, and potential panel upgrades to increase the home’s electric capacity. There is a high upfront cost for these upgrades that becomes more expensive when barriers must first be remediated. Existing funding, whether from state, federal, or ratepayer funds for energy efficiency, often aren’t enough to cover these upfront costs at scale.
In the Eversource pilot I mentioned in Part 1 of our Q&A, the utility covered all costs associated with converting the participating buildings to a geothermal heating source, including all in-home equipment. Participating customers are only responsible for a small monthly geothermal service fee and their energy usage (electric bill). For a pilot, this is a great way to evaluate the technology with the least impact on participating customers. However, it’s probably not a financially sustainable model for widespread deployment.
How can geothermal networks be equitably deployed in low-income and frontline communities to ensure inclusive access to clean energy?
To make geothermal networks equitable, we should prioritize minimizing the impact that the gas transition will have on current gas customers, especially those who can’t afford to electrify. As more people leave the gas distribution system, the cost of maintaining it will fall on fewer customers, raising rates for those left behind. Without an equitable and strategic approach, low-income households could end up paying drastically more for stranded gas system assets. Thus, a well planned transition making incremental progress at the neighborhood and community scale is best, as this approach allows sequential decommissioning of portions of the gas system—key to minimizing this risk of stranded assets.
When it comes to deploying geothermal networks at neighborhood scale, one potential solution is charging a flat networked geothermal rate and usage rate for electricity, similar to Eversource’s approach. Another novel solution is a blended rate structure that spreads the cost of both gas and geothermal systems during the transition. As more of the gas system is replaced, customers would gradually shift to paying for geothermal only. While the cost impact would need further analysis, this could help protect vulnerable customers from rising rates—but again, this is premised on a neighborhood scale approach that would allow portions of the gas system to be taken offline sequentially
For neighborhood scale transitions to geothermal to be equitable, we need financial solutions that ensure inclusive access to the geothermal network—specifically, the home equipment and infrastructure upgrades needed to connect to the network. Consumer debt financing is likely not a good approach due to restrictive eligibility criteria for loans, consumer debt aversion (especially among low-income and frontline communities), and landlord-tenant split incentives that would typically prevent renter participation.
However, inclusive utility investments are uniquely well-suited as a financial solution that can provide inclusive access to geothermal networks. Through a tariff for site-specific utility investment and cost recovery, this approach can provide households access to clean energy upgrades without taking on debt. Further, the extremely high efficiency of geothermal networks could help these in-home upgrades meet the net annual cost savings or positive cash flow required in the design of an inclusive utility investment program.
What role do gas utilities play in the transition to geothermal networks, and how do you see their role evolving?
Geothermal networks use some of the same infrastructure as the gas distribution system. In the future, gas utilities could evolve into thermal utilities. States like Minnesota are already envisioning this future by expanding the scope of what energy services gas utilities can provide to include thermal energy. Thanks to the similarity of the infrastructure, the gas utility workforce can play a key role in the transition, as many of their existing skills can be adapted to operate and maintain thermal energy systems. While gas may not be part of a truly clean energy future, it is important to support the existing workforce that will be needed to transition equitably.
What policy changes or regulatory shifts are needed to accelerate the deployment of geothermal networks? How should we work with policymakers, utilities, or community organizations to advance adoption?
At the state level, defining a geothermal network in statute would be the first step. States also need to pass laws and set up regulations that allow utilities to develop and operate geothermal networks. For instance, New York passed the Utility Thermal Energy Network and Jobs Act which gave utilities the green light to develop geothermal networks and help ensure there are job opportunities for transitioning utility workers.
People can help advance the adoption of geothermal networks by spreading awareness about them. Advocating for pilots like the one deployed by Eversource is one way of spreading awareness and evaluating the potential of geothermal networks. We can also work with utility commissions and encourage regulators to open proceedings that explore non-pipeline alternatives. Partnering with community organizations that encourage utilities to adopt policies that avoid building new gas infrastructure and invest in decarbonizing the energy system can help lay the groundwork for geothermal network deployment.
Are there existing incentives or funding mechanisms that cities and states can leverage to implement geothermal networks?
The Department of Energy’s Geothermal Technologies Office (GTO) and Office of Energy Efficiency & Renewable Energy (EERE) have been providing federal funding opportunities for state energy offices, utilities, academic institutions, and local governments to explore geothermal network deployment. For larger, utility-scale projects, cities and states may also consider applying for funding through DOE’s Loan Programs Office. With federal funding now in flux, it’s hard to predict which programs will remain available. But one thing is clear: geothermal networks are a clean, efficient heating and cooling solution with the potential to benefit utility customers across the country.
How do geothermal networks fit into broader building decarbonization efforts alongside technologies like virtual power plants and distributed energy resources?
As distributed energy resources and virtual power plants grow, buildings are becoming grid assets, helping to manage demand and improve energy infrastructure sustainability. Geothermal networks are designed around the concept that buildings are networked assets in a thermal loop that share heating and cooling loads. This design fits with broader decarbonization efforts and allows buildings to be truly grid-interactive, making a strong case for utility investment in upgrades that benefit both electric and thermal grids. Moreover, geothermal energy’s high level of efficiency can help mitigate potential strain on the grid as electric loads continue to grow.
What advice do you have for communities, advocates, or policymakers looking to champion geothermal networks in their region?
My advice would be to identify the need locally first. What are the current heating and cooling challenges faced by households in your community that geothermal networks could help solve? There could be issues with old, leaky gas infrastructure impacting air quality; high energy burden; and concerns about equitable access to clean energy upgrades.
Reviewing the legislative, pilot project, and advocacy efforts nationally could also help provide a framework or surface promising approaches for local deployment. Best practices and policies are emerging all over the country, helping to accelerate geothermal network development.
Finally, I recommend developing partnerships and opportunities to collaborate with those who have expertise in the geothermal network space. Before I joined Clean Energy Works, I worked at Home Energy Efficiency Team (HEET), a Massachusetts-based organization that helped develop the concept of utility-owned geothermal networks as a gas transition pathway. Organizations like HEET are a great resource for communities, advocates, and policymakers looking to become champions in their region.
For those looking to get involved, the time is now to bring forward-thinking, community-centered solutions to life.
Questions? Reach out to our team at info@cleanenergyworks.org.
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