Could Thermal Energy Be New York’s Best Shot at Reaching its Climate Goals?

As wind and solar renewable projects across the state hit hurdles, environmental advocates say investing in an underground network of heat pumps is the Big Apple’s best bet at reducing its greenhouse gas emissions. 

Clean energy companies suffered a blow last month when New York State’s Public Service Commission (PSC) refused a request to help renewable energy developers fund projects that have become increasingly expensive thanks to inflation.

The ordeal put into question New York’s ability to transition away from polluting fossil fuels and meet the target of reducing greenhouse gas emissions 85 percent by 2050, as stipulated by the state’s climate law.

But environmental advocates say there is still hope in a little-known infrastructure solution called thermal energy networks, which can significantly reduce a building’s carbon footprint. This is particularly important in New York City where over 70 percent of greenhouse gas emissions come from buildings.

These networks connect multiple buildings to sources of thermal energy deep underground through a series of pipes that carry water-based fluid. Buildings are linked to the network through heat pumps that provide heating, cooling, and hot water to people’s homes. The heat pumps produce clean energy and use less electricity because they transfer heat from the underground loop into the building during the winter, and remove heat from the building during the summer. 

Geothermal heat pumps can reduce energy consumption and emissions 72 percent compared to standard air-conditioning equipment, according to the U.S. Department of Energy

The technology, however, only accounts for about 0.4 percent of electricity generated in the U.S because harnessing thermal energy requires drilling deep underground, which can be difficult and expensive. 

But New York is at the forefront of testing how the technology can become more widespread,  partnering with utility companies to convert the current framework used for fossil fuel hookups into thermal energy networks using the utilities’ existing workers.

Last year, New York became the first state in the nation to pass a law that required the state’s largest utility companies to design at least one thermal energy network project, and to use their “existing utility union work-force” to bring them to life. 

Such projects can lower emissions on a larger scale than building-by-building energy upgrades, supporters say.

“We are going to have to [decarbonize buildings] at neighborhood scale to be able to meet our climate goals in time. And [thermal energy networks] is one of the best tools we have in our toolbox to help us do that,” said Lisa Dix, New York Director of one of the Building Decarbonization Coalition. 

The organization is part of UpGrade NY, a larger coalition of environmental groups and unions that pushed for the bill’s passage. 

The pilots will allow the state to learn more about the benefits and the costs of working with thermal networks. Each utility company can design up to five projects, and have until Dec. 15 to refine their proposals; 11 pilots have already been suggested. 

“It’s a really exciting moment, because it’s the first time in 100 years that we are creating a brand new utility model,” Dix said.

A just transition

When John Murphy, a 59 year-old fourth generation union plumber from Yonkers saw New York sign the transition away from fossil fuels into law in 2019, he feared for the livelihood of his trade. 

“When you suddenly start to replace [fossil fuel] power generating facilities with renewable energy, you’re displacing high paying union jobs,” said Murphy, the international representative for the New York State Pipe Trades Association. “It’s highly unlikely that a 55-year-old pipefitter would actually be retrained to become an offshore wind technician.” 

But when it comes to building thermal energy networks, Murphy says the current workforce wouldn’t need much in the way of training.

“The personnel that install and maintain fossil fuel systems can use their skills to install and maintain thermal energy networks. It’s the exact same skill set,” Murphy told City Limits.

“Thermal energy networks is the closest solution that we’ve seen to a just transition [away from fossil fuels] that would allow workers to pivot and move into another sector, and in the case of union workers, continue to have their medical coverage and pension credits,” he added.

While thermal energy networks could potentially be a win-win for the environment and the utility workforce alike, New York is still in the initial phases of figuring out how much it’s going to cost.

“If you have a large multifamily building and it already has a traditional fossil fuel furnace or boiler, then you have to put in the upfront cost to switch over from that furnace or boiler to a heat pump,” said Heather Deese, director of policy and regulatory affairs at the thermal energy company Dandelion Energy. 

But energy experts say it’s worth the investment, because heat pumps save significant energy in the long run. Geothermal heat pumps are 300 percent to 600 percent more energy efficient than conventional air source heat pumps, according to the U.S Department of Energy.

“It’s a little bit like electric cars where it’s more expensive upfront, but then it’s much less expensive to own and run,” Deese explained.

In July of this year, the Public Service Commission ordered the New York State Energy Research and Development Authority (NYSERDA) to set aside $1 billion to help utility companies subsidize “energy efficiency” projects. While the money can be spent on a wide variety of clean energy initiatives, the order implies that the money could be spent on heat pumps as well.

In 2021, NYSERDA also provided $32.2 million in funding for thermal energy networks through its Community Heat Pump Systems Pilot Program. The initiative “supported over 50 feasibility studies, detailed designs, and construction projects,” a NYSERDA spokesperson said in an email.

Hope for the future

Across the nation, there have been improvements in getting thermal energy networks off the ground. 

In April, the Department of Energy Announced that it would set aside $13 million to help 11 communities across 10 states design and deploy “community geothermal heating and cooling systems.”

And13 states are in the process of implementing thermal energy networks. Massachusetts is in the construction phase of the country’s first thermal network pilot project. Colorado also passed a law in the spring to give utility companies the authority to develop thermal energy networks, and Illinois is following suit with a similar bill.

But advocates say New York is ahead of the game. Not only is it the first state to legally demand that utility companies build out thermal energy networks on a larger scale, it also requires that “at least one pilot project” be located in a “disadvantaged community”—a designation under the state’s climate law to identify neighborhoods disproportionately impacted by pollution and environmental issues, which are being prioritized for funding and other benefits. 

For companies that decide to carry out more than four projects, “at least two shall be proposed in disadvantaged communities,” according to the Utility Thermal Energy Network and Jobs Act. 

Con Edison has proposed three pilot projects so far, one of which will benefit a disadvantaged community by using thermal energy networks to supply the heating, cooling, and hot water for two public housing buildings in Chelsea.

“Through our pilots, we will gain important knowledge about the engineering, technical and economic aspects of how these networks can contribute to a low-carbon future and a positive customer experience,” a spokesperson for the utility company said.

Advocates believe that investing in this clean energy source will ultimately help the state meet its targets when it comes to reducing greenhouse gas emissions.

“I am very hopeful because I feel that this is one of the only solutions that could move at the scale and at the speed that we need to transition all our buildings off of fossil fuels,” said Ania Camargo, the Building Decarbonization Coalition’s thermal energy networks manager.

“This is the system that works at a scale large enough to allow us to move fast and meet our climate goals,” she said.