- Data centers and large commercial buildings waste a lot of heat.
- The utility Con Edison plans to capture the heat to help power underground thermal energy networks.
- The networks are more efficient and less-polluting than gas, and could help meet climate goals.
Less than a block from the bustling Chelsea Market on the west side of Manhattan, data centers hum 24 hours a day in a nondescript building.
All that computing power generates an enormous amount of heat, which has to be removed to keep the equipment cool and prevent outages. That heat becomes wasted energy when it's vented out the roof.
All that computing power generates an enormous amount of heat, which has to be removed to keep the equipment cool and prevent outages. That heat becomes wasted energy when it's vented out the roof.
The utility Con Edison wants to capture the heat and pipe it to a nearby affordable-housing complex, in a system known as a thermal energy network. A closed-loop network of water pipes and electric heat pumps circulates energy through buildings, creating an efficient heating and cooling system that avoids burning fossil fuels in residents' homes.
The pilot could be one of three that ConEd builds in and around New York City to test a cleaner way of delivering energy to customers. The proposals are in the design phase and likely won't be fully approved by regulators until late 2025, Gregory Koumoullos, ConEd's department manager of thermal energy networks, said. But the intention is to eventually scale the networks to help New York achieve its climate goals, because burning fossil fuels in buildings accounts for 32% of the state's greenhouse-gas emissions — the largest single source.
The pilot could be one of three that ConEd builds in and around New York City to test a cleaner way of delivering energy to customers. The proposals are in the design phase and likely won't be fully approved by regulators until late 2025, Gregory Koumoullos, ConEd's department manager of thermal energy networks, said. But the intention is to scale up the networks to help New York achieve its climate goals, because burning fossil fuels in buildings accounts for 32% of the state's greenhouse-gas emissions — the largest single source.
If the pilots go well, they could prove a business model for other gas utilities to follow to decarbonize entire neighborhoods, and potentially lower energy bills along the way.
"These pilots are just the first phase," Koumoullos said. "The larger the network you have, the lower the cost is because you can connect more customers with less infrastructure and they are sharing more waste heat. Thermal networks really bloom at a larger scale."
The technology isn't new. But ConEd is among the first utilities in the country to propose thermal energy networks after New York enacted a law two years ago requiring the utility to try it. Six other states, including Colorado and Massachusetts, have enacted similar laws either allowing or mandating pilots. Gas utilities have legal mandates to sell gas, so states have to pass laws allowing them to expand into new systems.
In Framingham, Massachusetts, the utility Eversource is leading the way. The utility already connected dozens of residential and commercial buildings to a geothermal network for a two-year pilot, WBUR reported. The project involved drilling boreholes hundreds of feet below ground, where the temperature is usually a constant 55 degrees Fahrenheit. Water pipes are connected to ground-source electric heat pumps in buildings, which exchange and push energy around the system.
ConEd is proposing its own geothermal network for Mount Vernon, a suburban neighborhood north of New York City where up to 76 buildings, including homes, apartment complexes, churches, and fire stations, could be hooked up. But drilling boreholes isn't always feasible in densely packed cities, which is why capturing waste heat from data centers and other buildings is being tested. Rockefeller Center in NYC is the other proposed site.
High upfront costs, but long-term benefits
Retrofitting buildings and laying new pipes is expensive. The estimated price tag of all three pilots combined is $255 million, which would be spread across ConEd's customer base, Koumoullos said. For those participating in the pilots, ConEd would guarantee that energy costs won't go up during a 5-year test period. The utility is also looking at tax breaks under the Inflation Reduction Act to offset the cost to customers. ConEd would use the pilots to find out the actual costs of building thermal energy systems and test different ways to charge customers.
The high up-front costs are a barrier to wider adoption. But climate advocates point out that an increasing amount of money is also being spent on replacing old gas lines every year. Between 2011 and 2022, gas utilities' capital expenditures on distribution infrastructure tripled from $7 billion a year to nearly $21 billion, according to a report by HEET, a climate-solutions nonprofit that spearheaded the push for thermal energy networks.
Whether utility-scale projects can recoup the upfront costs in energy savings remains to be seen. That was the case at Colorado Mesa University, which built a geothermal network in 2008. Kent Marsh, the university's vice president for capital planning sustainability and campus operations, said switching to geothermal saved $1.5 million a year. The system paid for itself within about 11 years.
Morgan Hood, the manager of new product development at Vermont Gas, told Business Insider that some utilities are looking for new business models. Vermont Gas aims to be net zero by 2050, so is considering community geothermal as a way to get there. Hood helped launch the Utility Networked Geothermal Collaborative, which now includes 27 gas utilities in North America that serve about half the customers in the US, so they can keep tabs on pilot projects and share information.
"All eyes are on New York, in large part because it will show how these systems can be regulated within a utility environment," she said.