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.
