WAPA Comments

Submittal Date: July 27, 2012

Comments to:   Western Area Power Administration
Submitted by:   Geothermal Exchange Organization (GEO)

As the leading trade group for the geothermal heat pump (GHP) industry, the Geothermal Exchange Organization (GEO) urges the Western Area Power Administration to take a fresh look at GHPs as part of an overall strategy to effectively help electric service providers (ESPs) build load while shaving peak during periods of high power demand.

GHPs have long been recognized by the U.S. Environmental Protection Agency and the U.S. Department of Energy (DOE) as one of the most environmentally friendly and economically sound technologies for heating and cooling buildings, which comprise nearly half of the nation’s energy use. GHPs are a distributed renewable energy source installed at individual homes and businesses. They tap the Sun’s renewable thermal energy through ground loops installed just below the Earth’s surface. For every unit of energy used to power a GHP, four to five times more energy is produced by “geoexchange” of thermal energy in the ground.

It’s no secret that buildings present our largest available opportunity for improving demand-side efficiency of electrical energy use. Indeed, typical American homeowners spend nearly three-quarters of their energy bills on heating, cooling and producing hot water. GHPs can slash that monthly cost by an astounding 40 to 70 %…  GHPs in residential, commercial and institutional settings offer electric service providers (ESPs) a solid tool to help them meet demand-side needs, environmental goals and renewable policy mandates (where allowed by law). And they do so by fulfilling expectations of price/cost, reliability, customer service—and energy efficiency.

Forward-looking ESPs across the country have shown that by promoting GHP installations within their service territories, they can:

  • Improve their load factors;
  • Mitigate price increases;
  • Reduce strains on the transmission grid;
  • Forestall expensive future generation needs;
  • Reduce carbon and polluting emissions; and
  • Improve customer relations and comfort

 Even so, GHPs are a relatively new product in a still largely regional market (Midwest and Northeast). Though they have been widely adopted by schools, churches and government in the West, their penetration into western residential and commercial heating, ventilation and air conditioning (HVAC) markets has been slower, because of perceptions of higher installation costs compared to traditional HVAC systems, and seemingly inexpensive alternatives like natural gas and hydroelectricity. These barriers are largely erased with knowledge about immediate energy savings, and incentives offered by government and some ESPs that help “payback” GHP system investments in a very short time.

In fact, GHPs have shorter payback periods than renewable power technologies, and don’t require expensive back-up infrastructure like wind and solar do on calm days or when it is cloudy or dark. GHPs are 24/7 every day, 365 days per year.

DOE estimates that GHPs cost only about $.8 million/MW (equivalent) to install, compared to new fossil-fueled power plant costs of ~$2 million/MW. And since GHP thermal ground loops last more than 50 years, ESPs could easily treat them as infrastructure similar to transmission lines. Considering equipment longevity and continuing production benefits, GHPs offer the lowest life-cycle cost compared to renewable electricity sources.

GEO believes that WAPA’s Renewable Energy Program can effectively address two significant barriers to more widespread adoption of GHPs across the West:

  1. Recognition by ESPs and agencies of GHPs’ renewable energy production potential and benefits to load factors and the grid; and
  2. Need for improved consumer awareness of GHP technologies for homes, businesses and institutions.

Awareness of GHP benefits for ratepayers and ESPs would be greatly expanded and enhanced with appropriate dissemination of technical and economic information by WAPA. Past efforts should be funded and reinstated, including the Geothermal Utility Working Group. This work should be punctuated by various informational and technological workshops on various aspects of GHP design, installation and financing. And finally, a program for public information about GHPs should be instituted, funded and maintained.

Thank you for your consideration of these suggested initiatives, which GEO believes should be an important adjunct to WAPA’s Renewable Energy Program as you seek definitions of your future in the 21st Century. If you would like further information, or an opportunity to discuss Geothermal Exchange Organization participation in any of the suggested program ideas, please contact me.



Douglas A. Dougherty
President and CEO
Geothermal Exchange Organization
888.255.4436 / 217.414.0341 Direct