Thermal energy networks are being pursued by utilities across the U.S., while state lawmakers are also examining how to foster the development of those networks.
A thermal energy network uses a network of pipes to connect multiple buildings together, often including a large anchor off-taker, and to thermal sources and sinks, such as geothermal, surface water, waste heat, and the air, to provide space heating cooling and domestic hot water, the New York State Energy Research and Development Authority notes on its website.
Connecticut
In February, Connecticut lawmakers held a hearing on HB 6929, which would require Connecticut’s Commissioner of Energy and Environmental Protection to establish a thermal energy network grant and loan program to provide funding for the development of thermal energy networks.
The bill defines thermal energy as heating, or heating and cooling, derived from fuel sources that do not emit greenhouse gases when combusted, or geothermal energy.
The commissioner “shall develop and issue a request for proposals from eligible recipients that shall include, but need not be limited to, any local or regional governmental entity, municipal corporation, regional council of governments, public authority, state and federally recognized tribe, electric distribution company, participating municipal electric utility, energy improvement district and nonprofit, academic and private entity seeking to develop a thermal 29 energy network,” the bill states.
“Any such eligible recipient may collaborate with any other such eligible recipient in submitting such proposal,” the bill states.
Massachusetts
In June 2024, investor-owned Eversource announced the commissioning of its first-in-the-nation networked geothermal neighborhood in Framingham, Massachusetts.
Over the course of two heating and cooling seasons, the pilot project will evaluate whether utility-scale geothermal networks can feasibly and affordably heat and cool homes and businesses in densely populated and mixed-use areas of New England.
Approved by the Massachusetts Department of Public Utilities in 2020, this project broke ground in June 2023 and connects 31 residential and five commercial buildings, serving approximately 135 customers “with an innovative heating and cooling system that harnesses renewable energy from the earth,” Eversource said.
Each customer will be connected to an approximately one-mile loop that utilizes the earth's consistent underground temperature to deliver the most efficient heating and cooling available, it said.
In July 2024, the Massachusetts Department of Public Utilities released new safety guidelines from its Pipeline Safety Division for networked geothermal projects.
The safety guidelines apply to closed-loop geothermal systems that interconnect ground-source heat pumps and are designed to support the development of this clean form of energy while prioritizing the safety and wellbeing of the public, workers, and the environment.
Specifically, operators of these systems are advised to follow these safety guidelines to protect and promote the welfare of consumers and contractors. Networked geothermal pilots in Massachusetts use existing pipeline infrastructure as a map and employ gas workers and pipe fitters using their current skillset. This helps reduce the burden for additional skilled labor during the clean energy transition.
The guidelines provide definitions and safety directives to ensure compliance with the state’s existing laws, regulations, and utility safe-operating practices. The Pipeline Safety Division will conduct periodic inspections to ensure that the emerging networked geothermal distribution systems are operating safely, effectively, and reliably. The guidelines will be updated as needed.
In docket 20-80, the Department issued an order requiring the local gas distribution companies to evaluate non-gas alternatives such as networked geothermal systems rather than invest in new natural gas infrastructure.
Municipalities have expressed their interest in pursuing networked geothermal in their areas.
In 2024, 13 municipalities received $450,000 in funding from the Kickstart Massachusetts program.
The grants help support a range of projects from building retrofits to new commercial and residential construction in these cities and towns. 50% of the funding was directed to Environmental Justice populations to further advance an equitable energy transition.
Michigan
On Feb. 20, Michigan utility Consumers Energy said it received approval from the Michigan Public Service Commission to conduct a feasibility study about the potential implementation of a network geothermal system in areas where Consumers Energy serves as both electric and natural gas provider.
“The effort will reduce heating costs for vulnerable customers while also lowering emissions in neighborhoods with historically low air quality,” the investor-owned utility said.
“Network geothermal systems have been demonstrated to improve energy efficiency by up to 600 percent, supporting environmental justice, carbon reduction and cost savings,” said Holly Bowers, Consumers Energy’s vice president of gas engineering and supply. “This study is only the beginning of our work, and we look forward to taking what we learn from it and continuing to expand to support our customers’ needs.”
The study will model and assess the potential for a network geothermal system, planning for the most cost-effective and energy-efficient locations to replace natural gas usage through electrical heating and cooling options. The systems, which have been used for decades in places like college campuses, work best in regions with diverse energy loads, like neighborhoods adjacent to industrial parks.
Networked geothermal refers to a method of heating and cooling buildings and homes by using a ground-source heat pump to transfer liquid via a looped pipe system. In the case of network geothermal, this interconnected system allows energy to be shared between customers, allowing heat rejected by a business for cooling purposes to be used by a home down the street, greatly increasing energy efficiency.
The project aims to reduce emissions from heating Michigan homes and businesses by 17 percent by 2030, eliminating approximately 8 tons of CO2e per home annually. It also contributes to the MI Healthy Climate goal of achieving economy-wide carbon neutrality by 2050.
New York
In New York State, in July 2024, the New York PSC adopted initial Utility Thermal Energy Network rules as required by the Utility Thermal Energy Network and Jobs Act of 2022.
The Commission’s action “creates fair market access rules for utility-owned thermal energy networks to accept thermal energy; identifies small-scale thermal energy networks that will be exempt from Commission regulation at this time; promotes the training and transition of utility workers impacted by this act; and encourages third-party participation and competition where it will maximize benefits to customers,” the PSC said.
As part of this process, and consistent with the Act, the Commission directed the seven largest, investor-owned utilities to initially submit at least one, and as many as five proposed pilot utility thermal energy network projects, with at least one such pilot project per utility service territory located in a disadvantaged community.
The Act also required the Long Island Power Authority and its service provider to also propose between one and five UTEN pilot projects. LIPA made a joint filing with Keyspan Gas East Corporation.
Twelve pilot projects, totaling $880 million, were in active development as of July 2024.
Nine of these pilot projects had advanced to the utility final engineering designs and customer protection plans stage which will result in filings later this year that will be released for public comment; Commission action is expected in 2025.
Three other proposed pilot projects have or will be responding to issues raised by Department Staff for review prior to advancing to the next stage. The UTEN pilot projects are intended to test out various models to provide an equitable form of building electrification as opposed to individual electrification on a building-by-building basis.
It is envisioned that these pilot projects will provide further insights and learning that can inform future Commission rules and regulation to support UTENs at scale.
