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Geothermal Heat Pumps Are Integral to Efficient Electric Markets

Geothermal Heat Pumps Are Integral to Efficient Electric Markets

As the national trade organization for the U.S. geothermal heat pump industry, the Geothermal Exchange Organization (GEO) believes that a more efficient energy future MUST include a framework for geothermal heat pumps (GHPs) and their production of renewable thermal energy from the ground beneath our feet.

Regulators looking for ways to increase the efficiency of power generation and delivery in response to electricity demand peaks should also take a close look at the energy savings and efficiency offered by GHPs. Indeed, they offer a demand side management (DSM) tool that is unequaled in terms of service and reliability. 

This is especially true as smart metering is adopted, which will allow electric customers can  see their daily energy consumption. GEO supports utility programs for home energy controls like communicating thermostats, which will convey to ratepayers the energy and cost savings they experience with GHPs.

Modern electric generation through independent system operators is meant to capture efficiencies in production and distribution of power. GEO believes that the desire for a larger market system to capture energy efficiencies at a higher level must include GHPs. As a DSM measure they offer a high level of truly attainable and more cost effective savings compared to building new generation facilities.

Research at Oak Ridge National Laboratory confirms this fact, showing a cost savings of approximately 50% comparing widespread GHP installations and construction of power plants on an equivalent energy basis. Not only that, system-wide installation of GHPs helps shave summer power peaks and builds winter load.

With many states having adopted energy efficiency standards and utility portfolio standards for renewable electricity purchases, why should they ignore the huge renewable resource of the earth surrounding our building infrastructure?  Especially when the U.S. Department of Energy tells us that buildings are consume nearly 40% of our total energy use.

The notion that end-use energy efficiency should be a competitor to the generation of power is an idea whose time has come.  The lowest cost electricity is the megawatt that does not have to be produced. GEO agrees that this idea of “Negawatts” can ultimately be applied not just to generation but to transmission and distribution. Here again, GHPs should be a vital program component, because they do not require costly new power lines to serve their customers. GEO believes that both transmission/distribution utilities and system operators can cost-effectively promote and support energy efficiency as a competitive option to buying expensive power from new generation plants (natural gas-fired or renewable).

Those programs should include promotion and support of widespread installation of GHPs. Such support can include low-cost system loans, on-bill financing to lessen consumer “sticker shock,” and even utility ownership of GHP ground loop heat exchangers as a metered and billable option.

However the debate swings regarding energy efficiency as a potential competitive resource for electric generation, transmission and distribution among the system operator, utilities and independent power producers, GEO asks that GHPs be included in all discussions.  The reason is obvious:

The U.S. Environmental Protection Agency confirms that GHPs offer the highest efficiency source of heating and cooling currently available. Using the free thermal energy produced by GHPs instead of air-source air conditioning and electric heating is the most cost-effective, efficient and responsible way forward for utilities, consumers and the environment.

By Douglas A. Dougherty – President and CEO – GEO / The Geothermal Exchange Organization

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