What is networked geothermal, and how can it drive decarbonization?
In this discussion, hosted by Fresh Energy on behalf of the Energy We Can’t Afford Coalition, Fresh Energy's Joe Dammel, John Farrell from Institute for Local Self-Reliance, and Zeyneb Magavi from HEET sit down to dive into the details on how geothermal microgrids and district systems can drive cold climate decarbonization and provide an opportunity for larger-scale implementation of geothermal by utilities.
Hello and welcome to Decarbonize: the Clean Fresh Energy is a Minnesota nonprofit working to speed our state's transition to a clean energy economy. My name is Briana Kerber. I am Fresh Energy's policy communications associate. And today I'm here with you to share a recording of the webinar we hosted on behalf of the Energy We Can't Afford Coalition, titled How Networked Geothermal Can Help Get Minnesota Off Fossil Gas. As the next big thing in the energy transition, panelists Joe Dammel from Fresh Energy, John Farrell from Institute for Local Self-Reliance, and Zeyneb Magavi from HEET give you the scoop on how geothermal microgrids and district systems could play a key role in the decarbonization of cold climates, as well as provide an opportunity for larger scale implementation of geothermal by utilities. And with that, let's jump into the recording.John Farrell, Institute for Local Self-Reliance:
Yeah, with that, I think I will just dive in the technology. But before I do that, very quick. So I'm from the Institute for Local Self-Reliance. Just very quickly, we're a national non-profit that focuses on building local power to fight corporate control of the economy. And I also, in addition to being co-director of our Institute, direct our Energy Democracy Initiative, where we work on decentralizing and democratizing our energy system. So this is a topic that has become very near and dear to me, so I'm excited to talk about it. I just want to start by sharing an article that I wrote in Utility Dive, and I'm just going to plop it in the chat here. So folks have it for reference. It was when President Biden had invoked the Defense Production Act for the production of heat pumps. And one of the things that I noted is that this method of approaching building decarbonization, network geothermal provides us a really significant opportunity to make sure that we don't make mistakes with how we decarbonize buildings, both from the standpoint of equity, from the standpoint of efficiency, from the standpoint of cost, that there's a lot of potential unintended consequences if we're not organized and coordinated about how we do this. And that's one thing that makes this technology so exciting. So I covered that in that article. I'm not going to go through everything about it in this conversation right here, but I'll highlight a couple of the things from there in just a minute. The second thing I want to do, I'll put another link in the chat here. This is the Canary Media article that I thought provides a really nice just sort of basic overview of what is network geothermal. It was published back in March. I'm actually going to share screen and use the graphic from that article that I think is credited to Eversource Energy out in Massachusetts. But this basically just shows you a picture of how does this work. So there's pipes in the ground that run down the middle of the street. They are transferring heat energy or cool energy from underground and they're bringing it into buildings. And if you can see in that building that looks a little bit like a school, there's a box there that is the heat pump. So it's getting that input of that energy from inside of the street. Electricity given to the heat pump, then through the electric grid is providing the additional energy needed to make sure that that heat that's being pulled from underground can be brought up to our typical room temperature. So whether it's hot outside and we're trying to get cool air into buildings or it's cold outside and we're trying to bring warm air into buildings, we're able to tap that underground network of very stable heat energy year round. I think Zeyneb is going to talk more about it. So I don't want to get too much into the weeds. She'll also do a nice job of giving you a differential of different types of geothermal technology, but is a good sort of basic training, if you will. And I definitely recommend that Canary Media article has a way to learn more about it if you're relatively new to the technology. So what I do have to say about it, though, is we heard that slogan back in the 2008 presidential campaign, drill, baby, drill. It was about oil. Well, now we're talking about geothermal. And now it is, in fact, time to drill, baby, drill and to be excited about what this technology can do. So just a couple of things about why it is that the networked approach to geothermal and the networked approach to building decarbonization can be really important. One is the standpoint of equity with lots of technologies, whether it's solar or electric vehicles. We have this adoption curve where wealthier people are often able to move first. And if we are decarbonizing buildings by allowing it to happen one at a time with something like an air source pump, we're going to continue to have that problem. And it happens in two different ways. One is that the wealthy people get to switch to the new technology and capture the benefits, lower costs, more comfortable home, lower carbon emissions. And the folks that are left behind are still on the gas network and still paying the costs of that system to be maintained until the very last user is able to disconnect, which we know can be fairly complicated. So equity is a really important framework here. There's also a positive side to it, which is if we do this in a collective way, if we're organized about how we switch, for example, maybe by doing it a neighborhood at a time we can organize. The financing, you know, get some economies of scale and how we buy the equipment and find ways to pull everybody along at the same time. And we can also even potentially decommission the gas network when we do that. So it's a really excellent opportunity in terms of coordination to be more equitable. It also can be more efficient in a cold climate like Minnesota that we do have cold climate pumps now that can provide heating and cooling almost 100% of the time, year round, even on the coldest days. But they do have to work a lot harder than a network geothermal system, in part because that network geothermal system is tapping that underground energy that's much closer to the temperature that we want in our homes, as opposed to having to transform -20 Fahrenheit air into 70 degree air. So there's a lot of different opportunities with why this networked approach is important. The last thing I'm going to say about it, about why this networked approach really matters, is that we have local decision making options around this. So while states do give exclusive service territories in most states to gas and electric utilities, and although there can be some retail competition around the distribution, these are monopolies. But we don't have monopoly franchises and a monopoly service territory for network geothermal; it'svsomething new. Now, Zeyneb is going to talk to you about why gas companies might be a logical utility to take over this. And they do have a lot of technical expertise. And there's other reasons why it could be convenient for us to use them, but they don't have to. And I think there's a really interesting political opportunity here to talk about how cities can say we don't have a franchise for a network geothermal utility yet. We could have one and we could offer it to the gas company, but we could also offer this opportunity to somebody else if, for example, the gas company isn't very interested in doing it. And so we have an opportunity for cities to shape how this technology could roll out, not only to address local climate goals that cities have and our sort of global climate threat to address the issues of equity and making sure that everybody can get pulled along or even considering some of the interesting things like, Hey, I replaced my heat pump, now I want to get rid of the rest of my gas appliances. Can that somehow be coordinated with this effort as well? How do I get rid of my gas stove and my gas dryer and replace those with things that don't need the gas network either? So with that overview, I just want to say I'm super excited by this. I first read about it from a paper from HEET out in Massachusetts a number of years ago. I'm so excited that Zeyneb is here to tell us more about the technology, about the opportunity, much more competently. And I will just go into the background here and start surveying the Q&A for your questions, for her and for Joe. So, Zeyneb, with that I'll turn it over to you.Zeyneb Magavi, HEET:
The introduction. John, thank you. It was amazing to see, starting with that diagram from Eversource Gas. I first walked into the president's office at Eversource Gas in late 2017 and December of 2017, and I tried telling him that he was going to have some stranded assets and enter the utility death spiral, and really he should consider networking, ground source, heat pumps. And now I am actually sitting in Framingham, Massachusetts, this site of not which is not where I live or work. It is the site of Eversource Gas's first installation of network geothermal. And there is a drill rig that I am far enough away from that you cannot hear it, I hope, but it's kind of awesome. So I just wanted to set that stage that it's quite a unique moment in time for this technology. So I'm going to share a screen and hopefully not go into too much detail. But let's see. All right. All right. So first, so this is an electrification pathway that gas to network electrification, the gas to geo network electrification pathway. And we, HEET, do not take funds from gas or geo industries or any relevant industry and appreciate all of the foundations that make our independence possible. And I'm going to just do a quick language check because I've just run into this so many times. I am now saying it's it's a good idea to think of the word geothermal or geo as a last name to a family. And every member of the family is totally unique, of course, just like all of my kids are totally unique. And so when we are talking about network geothermal, we are talking about the image on the far right, which is interconnected ground source, heat pumps tapping the near earth temperature that is stored, energy from the sun. We are not talking about getting thermal, or heat energy from the kind of the core of the earth which drives geo power or even hot water which drives the Geo District. So I just wanted to clarify that. And in terms of HEET, just introducing heat to you. Again, we are a nonprofit Climate Solutions incubator, and we have a mission to drive emissions reductions through systems change and are attempting to do that for the gas system to go beyond gas in the common ground. And in order to do that, we have to engage all the stakeholders and then identify all of the leverage points or key barriers for them. And using those, innovate and iterate solutions that exist in that sliver of common ground between every key stakeholder and of course, moving at the speed of trust based on human relationships. And this is just an iterative cycle. I wanted to mention it because I think that the human aspect of socio technical systems change is essential. And so those stakeholders include, of course, gas, utilities, gas workers and every other element of the system. And this is the result of that process for us. We were working in emissions reduction from methane leaks for years before going into network geothermal. This is a set of core requirements that came out of all of the stakeholders we spoke to and we set out saying, okay, well, these are if we meet these all, then there is no stakeholder we know of that has a significant barrier to us moving forward with the technology. So that sounds great, except when you look at the list, it's a little daunting. And so this gas to geo network electrification pathway actually does meet all of these. And for that reason it is moving rapidly forward because there are no core barriers. There are, of course, 100 small barriers, but no core barriers to the technology's growth. And some of them are met with any business model. A couple of them are only with certain business models. And so that's a piece that's in debate, and there are many options. I'm not going to talk about all of them, I promise. I mean, I think some of them you can figure out for yourself, it doesn't explode. So. Yeah, and safety and and I'm just going to touch on four that I think are so essential and also really interesting talking points as we move forward with this technology and not necessarily always obvious. So emissions of course is obvious. It's why most of us are here talking about this. We must rise to the challenge of climate change. And it does provide an interesting opportunity in Massachusetts and now also in D.C. and Philadelphia and elsewhere. We have driven forward a conversation about gas system and gas systems change and emissions based on gas leaks. And partly because nobody loves a gas leak. And a lot of old cities, most old cities have quite a few leaks. And this is an image from Massachusetts. We have similar maps again for DC, for Philadelphia and can make more. There are interesting ways to have a connection in your street, in your neighborhood, at your kids school to the energy system and its needs. And of course, well, getting rid of gas combustion gets rid of emissions. The leaks are 84 times in 20 years, which is a crazy opportunity to cut carbon fast and drive significant change. And there's our DC map, just in case you don't believe there's leaks everywhere, okay? I mean, there really aren't leaks everywhere. But anyway, affordability, this is one that everybody, the general public and the decision makers are very concerned about. And now it's only more concerning as Russia invades Ukraine, and that is whether a new system is going to increase or decrease energy costs for customers and energy burden for the low income. And we have three different economic projections for Massachusetts that result in lower energy costs and lower energy burden for the network geothermal pathway instead of gas, comparing to gas as the benchmark, which most people have until now thought of as the cheapest option or lowest cost option. And there's a couple pieces hidden in that outcome that's pretty consistent, and one of them is the aspect of a utility. So in some sense, business models set aside. The utility of a utility is the socialization of energy. And by sharing infrastructure, we're sharing costs over the long time and hopefully increasing efficiency of our energy system. So when we begin to move buildings or customers off of a network utility like this, um, you know, yay to every heat pump that goes in, we're cheering and cheering. And the customers who are left on the gas system, if you think about it this way, as we electrify and move people off, there are fewer and fewer customers to pay for a fixed costs of infrastructure. So the Germans kind of call this the last grandmother problem. There's going to be some last grandmother who's paying for the entire network, which of course, is not, we're not going to get there. But the challenge of considering the customers who have yet to have the means or motivation or opportunity to transition is really very real when we consider our transition off gas. And this is actually from E3, the Massachusetts gas utilities who were required to produce a report and it shows the difference between that building by building transition off the gas system and a network geothermal transition off the gas system. And the energy burden difference is quite significant. And this graph depends on something that is illustrated here. If each of those buildings coming off are on the network, geothermal infrastructure or many of them are. And we make the gas to geo infrastructure equivalent, then you're not removing people off the right pace. And those people remaining on the gas system, as they transition, get the new system. But if they aren't there yet, they don't get the spiking prices. And that's really what this chart is saying. All right. Here's a simple one. The pipes at the top are HDPE plastic with a yellow stripe on the pipes, at the bottom are HDPE plastic with a blue stripe on them. This is not a big change. And so all of our pipefitters are all certified to work with this pipe and switching from gas to water. Okay. The diameter might be different and it might be a lot safer, but otherwise we have a ready workforce within the gas industry who can do a significant portion of the work in a network geothermal industry, which is a really big deal in terms of alignment and common ground. And I'm not going to play this video, but I will share it. It's an amazing video made by the Pipefitters nationally, who have announced with this very high drama video that they are all for electrification to solve climate change if it involves pipes. And so they really backed the transition legislation in New York, which is super exciting. All right. I'm going to go a little wonky and then we'll switch into other stuff. So this efficiency necessity is actually really about getting to our goals in time because our electric grid has to be able to carry us into the transition with renewable energy. And this graph is real data from a real system installed in Colorado Mesa for over ten years. And it's a graph that was sent to them by Xcel Energy. And Xcel Energy said, What are you doing? Because you just went from 800,000 square feet to 1 million, 200,000 square feet and kept your electric load flat. What they were doing is expanding with network geothermal for heating and cooling. And put another way, if you look at the whole US electric system, there is a direct relationship between the efficiency of our electrification technology choice and the impact on the electric grid. And just really simply calling this the Falcon curve. If we put electric baseboard in with a co efficiency of performance copy of one, we have a large winter peak to meet. If we do, the most efficient thing we know of now, which is the geothermal networks, we keep that electric grid impact minimal. Of course, we need everything in our solution. But the more of the high efficiency, the greater the positive impact for the grid. And I have the Minnesota version of that, which was shared at an MIT conference this year. This is a coefficient of a coefficient, a copy of one, which, of course, you're not going to do. You're not going to put electric baseboard into all of your buildings. And this is just for building energy use. And the purplish pink is new electricity demand. And if you did it with networked geothermal and of course, you're not going to do one or the other in any situation, but you're going to get this much lower impact. So that's a really big deal in terms of the larger system planning and the feasibility of getting to our goals in time. So all of that, I see, I told you I'd stop with the wonky part and all of that really drives the ability to bring a lot of different voices together to drive change forward. So if you're meeting the needs of a lot of different voices, you have things like a gas worker and an environmental activist speaking together in support of something which is an incredibly powerful thing. And this is part of why it's expanding really fast, at least in my perspective. And here are some of the locations that HEET is currently engaged with in some degree with feasibility or other projects moving forward. And, just to give a different view. There are feasibility studies in process and or completion really across the country. In Massachusetts, we have five gas to geo demonstrations with utilities and an additional one that is a community guest to geo demonstration. Washington Gas has one moving forward. And then of course, there's all the laws, including the one in Minnesota, the Natural Gas Innovation Act, and there is one coming at the federal level that will help fund and move this forward as well. So it's a really, really rapid expansion and progress. So here in Framingham, where I am, you can see this is a gas company website explaining geothermal energy as you saw the diagram before. Here's the location going in. The site has a bunch of elderly housing, a fire station, a school, and then a whole bunch of individual houses. It's pretty exciting. The woman on the left is the Eversource lead. The woman on the middle right is the geothermal expert. I just wanted to point out that most of them are short women and hardhats. And the Colorado Mesa University case study has been in the ground for long enough. There are a number of case studies. We're collecting them and sharing them. This one will be published soon. We're very excited about it. It is an amazing study that shows 7.9 million metric tons of CO2 per year reduction, 100% of heating covered. Their back up boilers have not had to fire and they are saving $1,000,000 a year in energy. Most shocking was they cut their water use by 60% by reducing chiller use, which is a big deal if you're on the Colorado River as they are. And these are just some pictures of what's in the ground, out of sight, making this work. It's a bunch of water pipe and pumps and heat pumps and they have 2.5 miles of central loop pipe, eight separate drill fields, just to give you a sense of scale. But you don't see any of it, of course, which is another advantage. Advantage of this technology. You don't see any of it. It looks awfully pretty and everything works. I just want to quickly summarize because I'm aware of time. So HEET's role as we see it as this process has been unfolding and evolving after initiating this pathway, we are working as hard as we can to convene, to learn and to continue innovating. So we're running stakeholder engagements. We call them sheretts often, and we are building and increasing our library of resources and tools all available to anyone for any stakeholders under Creative Commons. And we also are building a large database to hold all of our network geothermal projects across the country so that we can compare and learn rapidly and have a research team that consists of a whole bunch of national labs and other experts. So we will be sharing all of that as it unfolds. And I just want to close by saying that, we're not saying that networked geothermal is the only solution in the least bit. All heat pumps are part of the solution. Single source, ground source. We have to be tactical about where we deploy and I say this and get myself in trouble all the time. But if we're taking down the gas system, there are some gas customers that are not about building electrification but industrial processes. And that's where we should look to this issue of green hydrogen and R&D when we have a glass smelter. And so there is space for them and need for them, but appropriate use. And so as we grow this network, I'm going to end with the words of that first gas utility president who said in a, I think Washington Post article that if this technology eventually supplanted a significant portion of the company's natural gas network, he thought it was okay. One displacing the other is not scary. It's exciting. So on that note, thank you so much. And if you have questions, I'm excited to answer.John Farrell, Institute for Local Self-Reliance:
Thank you so much, Zainab. There have been a million requests in the chat for your slides, which I imagine are going to be shared afterwards. And this whole webinar is being recorded as well for folks who would like to be able to share it with others. As I turn it over to Joe. I also want to invite you to look at the Q&A. There's a lot of good questions in there already, some of which you could probably type answers to several of them about density, either in high density areas or small towns, that kind of thing. But thank you again is a terrific overview, really comprehensive as well. I love how you walk through all the different ways in which network geothermal can address a lot of the concerns that folks have. So next we're going to Joe Dammel from Fresh Energy. He's going to give context about Minnesota. We've got some new laws and some new legislation in Minnesota that can help enable the use and exploration of this technology, he's going to give us a sense of where that's at and how that would be integrated. And frankly, I just say that the nice thing about hearing from Joe about this is lots of other states and cold climates could follow Minnesota's footsteps in terms of what we could do here. So while very specific in terms of his deep knowledge about Minnesota's process, I think some really good lessons there. And so I'll turn it over to you, Joe. Thanks so much.Joe Dammel, Fresh Energy:
Thanks, John, and thanks, everyone, for I'll try to keep my remarks fairly brief so we can get to the Q&A, which I'm really looking forward to. And I'll just say that HEET and the work that Zeyneb and the folks in Massachusetts have been doing is a really big inspiration for the work that we hope to accomplish here in Minnesota. So it's great to kind of hopefully look into the future a little bit and see a state that's really achieving some impressive results. And we hope to build on that here in Minnesota. So I'll give a quick introduction to Fresh Energy. As John mentioned, we're a Minnesota based energy and climate policy organization. We've been around, this is our 30th year, and we're really focused on pulling policy levers to ensure a just and equitable and a rapid transition to a carbon neutral economy. I'm the managing director of our relatively new Buildings program. And within that program we focus on getting buildings cleaner via building code, advocacy, coalition, building around that and providing comments and advocacy work towards building codes, building technologies, including heat pumps that we're talking about today. And also gas decarbonization, which is a really important prong of our Buildings work. And it's going to be the focus of the remarks today regarding the Natural Gas Innovation Act and some of the opportunities for geo grid and other ground source heat pump programs that are going to hopefully develop and roll out in Minnesota. So the Natural Gas Innovation Act that passed in 2021, it was a bipartisan law and it really has two big components. The first of which is it kicks off a proceeding that we're calling the Future of Gas. And it's similar to some other states across the country. The goal in that proceeding is to take a really broad look at policies that are utility policies that can be applied to meet the state's greenhouse gas reduction objectives. That docket is in 21-565. And thank you, Jo, for dropping into the chat, a blog that we wrote that describes the NGIA Act or NGIA in more detail. So this Future of Gas proceeding is really exciting. It's in the beginning stages. The Public Utilities Commission is hosting a series of technical conferences. The first one happened on Monday and it was recorded. It will be available and there's going to be some additional conferences and we hope some additional, to hear from some additional voices on things like technologies. So networked gothermal, as I've said, the energy and hydrogen discussion, I think we're really interested in in identifying ways that those can be put to their best and highest uses. And I'll just do a quick plug for some future industrial focus that Fresh Energy is going to be digging into in the coming months and years. So that really fits that those hard to hard to electrify areas of our economy that are also going to be really important in the energy transition. So the future of gas proceeding is just kicking off, as I said. Our hope is that we build a record on things like technologies and also things like workforce development and transition, economic impact, and then just making sure that we have a Minnesota based record that we can use to develop policies that will apply to the gas utilities operating in the state. The second part of NGIA are what we call innovation plans, and these are really exciting opportunities for utilities to try a host of different resources. We're really excited about electrification, efficiency and district energy. So the way district energy is defined in NGIA is pretty broad and we think it encompasses, you know, both a kind of a more traditional district, geothermal, but also the network networked ground source, heat pump or geo grid that Zeyneb showed. I thought that was a really helpful figure of the different use cases for the, under the geothermal umbrella. Gas utilities may file plans that include these resources. And we're working right now through stakeholder discussions with utilities to develop their plan that we have heard are going to be filed sometime in the mid 2023 for the two largest gas utilities, CenterPoint (Energy) and Xcel (Energy). This is a brand new law and a brand new five year plan that they'd be kicking off. So we're really working on the details with them right now, and we're looking forward to seeing the opportunities for some really innovative projects coming out of the first plans sometime next year. So that is all of my remarks, and I'll be happy to turn it back to John and we can dive right into Q&A. Thank you.John Farrell, Institute for Local Self-Reliance:
Thank you so much, Joe. We've got a lot of great questions here. So when I try to dive into some of them, Zeyneb I see that you're already active in the Q&A thing. Got you. It says you're typing answers to like four different questions at the same time, which I'm impressed by. Maybe what I could do is just toss one question to you, sort of generally there were several questions about this idea of density and like neighborhoods and whatnot. I do want to flag that. I put in the chat a link to the HEET feasibility study, which does have a conversation about the different kinds of neighborhoods that were modeled. But is there anything you could just give as an overview? One of the questions, for example, is, is there a minimum design size in order to make this work?Zeyneb Magavi, HEET:
Yeah, absolutely. There's a bunch of questions about that, so I thought I'd just address them all at once. And it's actually a really interesting answer because of course, it's not an easy answer and if it's okay to just share a screen for a second, I have a graphic. Let's see. So. This is from a Massachusetts feasibility study that looked at four representatives street segments from our gas utility. And the first part I want to say is that so far the data we have, the ratio of houses or energy use to distance that justifies a gas pipe connecting them is about on par with and matched to what would justify a thermal geothermal network connection. If you have houses that are very far apart, you don't want to spend the the money on the pipe connecting, just put in individual systems. So you do have a minimum density. But then when you go up and density and include mixed use, this chart from a feasibility study is just comparing the exact same geothermal installed every 20 feet, 500 foot closed loop vertical boreholes in the exact same piece of street and that would meet 100% of that low density residential, 100% of the mixed use medium density residential, nearly all of the mixed use, I mean medium density without mixed use, and a chunk of the high density. You would never design the system this way. And this is kind of what a lot of the questions we're getting at is. If you were going to design your first street segment, you would look at, how much can we meet and do we have excess capacity? So for example, you can see the excess capacity of these three segments and then you would look at the balance and this is the annual balance between heating and cooling energy. And you'll see that that high density that was giving us only 30% by using the streets boreholes is actually beautifully in balance with, which means that it's going to be an easier first place to start. And that's why Eversource is actually targeting the high density mixed use as they're first installed. It's going in now, but adding a borehole field in some other common space to meet the load. And so it's a juggling act between the load you need to meet, the space you have, and also the amount of energy, the rate of energy dispersion in the bedrock, whether there's water flowing or not. And so all of those factors are basically part of the design, and you can build geothermal boreholes to meet nearly anything. The question is the threshold of cost. So if you need to go down multiple boreholes and and have other challenges, it may not be worth the cost. But so far the costs have played out almost everywhere. I hope that answered some of the questions and I think one of the pieces of that efficiency that's important to understand is just that they're, by interconnecting with an ambient temperature loop, you are having load cancellation and sharing between buildings. So some ice rink that's using cooling in the middle of the winter is dumping heating, which can be used by other buildings. And then you can also store energy over time with energy storage, heat from the sun going into the ground and being pulled out later when heat is needed. So I'll stop there and hopefully I've got a bunch of the questions in one go.John Farrell, Institute for Local Self-Reliance:
Awesome. Thank you so much, Zeyneb. So build more ice rinks, I'm hearing as part of our Minnesota strategy. That's great. I was curious. Yeah, right. I was curious. One of the questions was about gas leaks. And I know that there have been you showed a couple of maps in your presentation. I don't know if Joe would know this. It seems like not just is it interesting information to have, but it could be a very strong motivation for people to talk about this in terms of their potentially a safety risk, their climate risk. And if you've got old gas pipes, why not replace them with a geothermal network rather than so? I guess maybe I'll toss it to you first, Joe, in terms of how you're thinking about this, in terms of like the broad carbon emissions. I don't know if you have information about whether we have some mapping of that in Minnesota, for example. Yeah. How do you think that might be a factor?Joe Dammel, Fresh Energy:
Thanks, John. I'm not aware of any of the that we have in Minnesota. Our utilities do look for leaks and have a leak detection and process and a way to identify and manage leaks. I will say from accelerated replacement of infrastructure perspective that I know drives a lot of the cost comparisons and the getting to the stranded asset problem. We do have a relatively younger system in Minnesota than for places on the East Coast like Massachusetts. But we also have a really significant replacement program that our utilities have been undertaking, and that's having a similar effect on rates. So some utilities are in for a rate increase every other year, and they've been in that cycle for much of the past decade. Other utilities get annual rate increases through what are called cost riders that are addressed or meant to address costs related to the replacement. So I think that's a great next step to understand and map out these leaks. I think there's a lot of opportunity to coordinate with the electric system and understand where our places on the electric distribution system that have a lot of extra capacity that we can start to target be tactical as Zeyneb said about deployment of these new electrified systems and maybe find ways to coordinate with cities who are doing a lot of construction and and coordinate activity. Installing systems when the road is already torn up and the right of way is open, gas utilities do it already, which is great. It's a cost savings. But I think the Zeyneb's point about the pipes are very similar. If we can get buy in to start installing on a neighborhood basis, uh, that way, that would be, I think, a really good cost savings for ratepayers in a way to really get systems deployed as well. So as to leaks, I think we don't have that centralized map, but we also do have a newer system. But we also have increased spending on the distribution system. So you have kind of a smorgasbord of elements that are in play Minnesota.John Farrell, Institute for Local Self-Reliance:
Are there ... Zeyneb shared that quote from the gas utility, seeing this as an opportunity. Have you had conversations with gas utilities in Minnesota? Is there similar interest? Is there an opportunity to say, hey, maybe we should stop replacing gas pipes in a big hurry and start putting in geothermal pipes, for example?Joe Dammel, Fresh Energy:
Haven't quite broken and gotten into the very But I do know that the big utilities in Minnesota have been partners in trying to figure out how to implement the process, how to set the regulatory frameworks that we need to assess different projects. And they're actively looking at how to do geo grid or, you know, and some sort of a network geothermal system. That's a requirement in NGIA for CenterPoint as the largest gas utility, they have to facilitate and develop a district energy system, which again encompasses, I think, many of the systems we're talking about today. So we haven't. I'm optimistic that, uh, that we're going to get buy-in. And part of our job is to really focus our advocacy on providing pathways for the Commission and utilities to adopt and to change their business model. And I think we've had that discussion and are having that discussion on the electric side. I remember in a previous role, I was at the AG's office as a ratepayer advocate, and we were in the middle of grid modernization dockets and EV dockets. And I turn to a colleague and we remarked, man, eventually we're going to have to get to the gas system. And that wasn't that long ago. Having been in this field for that long. So I think the speed of policy development in Minnesota and elsewhere across the country on the gas side--momentum is growing for these really significant changes to the utility system and then what actually gets installed on the ground. So I'm optimistic.Zeyneb Magavi, HEET:
And I will add that HEET has been in year. Both around Colorado, where they have joined us in the case study, but also they're moving forward with a feasibility study in Minnesota. And I will also just say that my experience so far with gas utilities is there's, there's the adopters, there's the followers, and then there's the ones that are going to resist. And the same is true within even the early adopter utility. There's still going to be a lot of crossed wires and different individual people who it takes time, like years of time, for there to be more alignment. And, you know, for example, since we're using Eversource as an example today, there was, of course, resistance and misunderstanding and all kinds of stuff. And now, there's actually a sense that the network, among a significant portion of the gas company employees, that the network geothermal is going to save them. There's a bunch of jokes to that end, but it takes years.John Farrell, Institute for Local Self-Reliance:
So Joe was kind of talking about how the the we're dealing with the gas network. We've had two fairly big pieces of federal legislation, the Infrastructure Act and the Inflation Reduction Act. Do either of those have implications for how this could be made easier?Zeyneb Magavi, HEET:
Yeah, I can start, Joe. So first of all, the infrastructure work that's happening, I've seen a number of comments around the idea of undergrounding everything at once--that if you're opening up the streets for some lead pipes, it's a wonderful opportunity to save a lot of money and put in network geothermal without having to do another round of opening up the ground. And so in my, in my fantasy world, we actually tactically plan this out and we don't just replace our water pipes, thank goodness, but also put in networked geothermal and we underground the electric, which does two things. It increases their reliability, but also it gets the public really excited, which is what we've seen is that, that's one that feels like a tangible benefit in a way that many things don't. And the most recent Inflation Reduction Act actually has network geothermal mentioned in it. And there are two tax credits that really change the economics of the system. There is a residential ground source, heat pump tax credit that has gone up. But most relevantly for this, there is an investor tax credit. And if a company, whether it's a municipal, whatever, the ownership model, if a utility puts in this infrastructure with good worker practices, they can get a 30% tax credit. If they do it within a positive neighborhood impact, they add 10%. And if they do it with American made products like the pipe, then it goes up another 10%. So you can get a 50% tax credit, which is quite a significant thing. And then I am very hopeful that there will be some new network, geothermal specific federal legislation, and in part from your senator, Joe, Senator Klobuchar.John Farrell, Institute for Local Self-Reliance:
It's great. Another question I'm seeing in interest, given the name of my organization, is what leverage do cities have? And in part being asking on behalf of folks who are saying like, what can I do if there's a city connection? One person asked about, for example, the city's own the right of way where this work takes place. Cities also have franchise agreements with utility companies. Is there a way that people should be trying to talk to their city council members, for example? And is there particular leverage that cities have?Zeyneb Magavi, HEET:
Yes. And I think that we should be having neighbor, with your city, with your utility, with your state, and with the cities. A lot of them have climate targets, which--and new sustainability director--and are trying to find how to decarbonize and knowing about this pathway and knowing that there could be an avoided cost or avoided disruption by redirecting gas pipe replacement to such a thing and meeting their targets. I think you've got to have all the options on the table to make a decision. And also, I would say that there really is an opportunity for those municipalities that might be game to do one of two things either build their own because the municipality does grant the right of way, which is the key barrier to doing this, is do you have a right of way in the street? And also they grant the franchise in most in most states legal structures, which means the permission for the gas utility or if there is no gas utility, if it's a propane town, like I think one of the questions answered. You can create a utility by granting a franchise, by granting a right of way in the street as a municipality.John Farrell, Institute for Local Self-Reliance:
So I think we probably only have time maybe Zeyneb, this is something you and I got to nerd out on in our sort of webinar planning thing. And so I wanted to ask it for the benefit of this group, which is to this larger question about replacing infrastructure in homes. So we've got the network itself, which is going to be built and connect all the buildings. But then there's the heat pump which is going to go in each building, and then they've got all these other appliances in my home that use gas. And one of the big opportunities here is can we coordinate all of this stuff happening? So one of the things that I got super excited about was, hey, if you're financing the pipes, why don't you just finance the heat pumps? If you're financing the heat pumps, why don't you just finance new electric appliances like heat pump water heaters or electric ranges or induction stoves? And if you're doing that, why don't you also finance energy efficiency improvements at the same time? So is that...you're doing a lot of pilots and feasibility studies at this point of just getting this particular technology working. But tell me a little bit about what thinking might be going into that broader question of electrification and decarbonization.Zeyneb Magavi, HEET:
Yeah. So I first of all, don't think we're building owner to do it all themselves in terms of cost. That's not a path to a just transition or or a fast transition. And so when we we have to find a way to finance it, not everyone has that money. And so with the networked geothermal paths to electrification, there's an existing financing structure that can be, can include both the heat pump, and when you have that approach of one touch, kind of like we were talking about doing everything in the street once it's possibly even easier to structure that if there is a thermal system upgrade from gas to geo on your street, that the weatherization happens and that the appliances are provided and financed in the process. And so it kind of streamlines the entire transition that we need and provides the financing so that it is not a barrier to entry whether you have enough money to buy a new stove. And so we've got a legislation in Massachusetts that tries to directly structure that financing. The next pilot going in the ground is going to be paying for all the electric appliances and attempting to fully transition. And we'll just be reporting back how it goes.John Farrell, Institute for Local Self-Reliance:
Well, Jo, it looks like we're pretty close to this up, but I just want to thank again Joe Dammel and Zeyneb Magavi for doing a terrific job, giving us an overview of this, how it fits into the Minnesota context in terms of policy, where these conversations are, the regulatory opportunities, the chances that we have to intervene at the city level with our neighbors. It's super exciting. I'm super excited about this. Everyone who is here should be excited about this. We have a great opportunity, but thank you again. Really appreciate what you've brought to this conversation.Zeyneb Magavi, HEET:
Thank you all so much. Go, Minnesota.Joe Dammel, Fresh Energy:
Yeah, go us! Thank you, everyone.Briana Kerber:
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