06 February 2022 |

Geothermal energy and heat pumps


Before the new year, PwC put out their State of Climate Tech 2021 report. While it highlighted record investment flows into climate tech firms in the second half of 2020 and the first half of 2021, it also pointed to disparities between the largest drivers of emissions in our society and the climate technologies to which the majority of investment is flowing.

Specifically? As we’ve discussed previously, EVs took in nearly two thirds of all climate tech funding in the time period that PwC covered, raking in nearly $60B compared to, say, companies innovating around our Built Environment, which took in less than $2B. 

Yes, EVs are critical to electrifying the future. But road transportation is far from the only contributor to the emissions that are accelerating global warming:

More granularly, in the state of New York, heating buildings accounts for ~30% of the state’s greenhouse gas emissions. Why? For one, it can get pretty cold in New York in the winter. Not even just from my vantage in Brooklyn; upstate is a whole different beast.

The appliances and energy sources used for heating in New York are also often not particularly green. While the state as a whole is relatively energy efficient (on a per capita basis), up to a quarter of all households in New York use petroleum based products for heating. Many of them still use fuel oil.

Electric cars get a lot of attention. ‘Green’ solutions for heating (and cooling)? Not so much. While New York did recently make headlines by banning gas-powered appliances in new buildings, there’s a long road ahead to electrifying heating. What types of solutions are more green? Beyond solar, there’s another source of heat that is a lot less variable than solar, meaning it requires less storage. It comes from underground rather than from the sky.

Geothermal energy and heat pumps

If you dug a hole deep underground, you would find that it’s pretty hot . Even if you dug just a few feet underground, temperatures start to get much less variable than above ground. Where does this heat come from? I hadn’t thought about it in a while either, but the Earth’s core is as hot as the sun. It’s a renewable energy source just like wind and solar. It’s just hard to harness at scale. If we could harness even a fraction of the energy produced underground, the Earth’s core, like the sun, would produce far more than enough power for than we could regularly use.

While we’re a long ways away from being able to harness even a tiny fraction of the Earth’s geothermal energy, there are systems that can both produce electricity from geothermal and leverage the reserve of heat that exists underground. Some countries like Iceland are blessed with highly specific geology (e.g. hot hydrothermal water sources) that can be used to generate electricity in ‘traditional’ geothermal energy plants. Icelanders generate about a quarter of all their electricity from them.

Meanwhile, the most common geothermal systems in use today don’t produce electricity. Instead, they pump heat from underground into buildings, or pump heat out of buildings into the ground (for cooling). In fact, geothermal heat pumps have been in use since World War II

How do geothermal heat pumps work? If you recall your high school physics class, heat wants to move ‘downhill’; if it’s hotter in one place than another, the heat will move towards the colder area. Heat pumps take advantage of this dynamic to transfer heat around. To dig a step deeper, they use ground loops, i.e. series of pipes underground where the temperature is constant. The ground loops circulate water to absorb heat from the ground and move it.

While not the talk of the town, geothermal heat pumps can be more efficient than other heating and cooling appliances. This efficiency is good for the grid, and can also help cut down on emissions from electricity generation. Perhaps more impactfully, it’s also certainly a greener way to heat your home than burning fossil fuels. These systems don’t produce energy; they’re still connected to the grid, and aren’t 100% emissions free until the grid itself is. 

Geothermal heat pumps can be used in a variety of different types of buildings. Residential is the low-hanging fruit so-to-speak, but heat pumps can be scaled to service commercial buildings, and even high-rises. This does come with another caveat; the larger the building, the more important the energy mix that powers the heat pumps. If the electricity used to power the pumps isn’t ‘green’, the emissions intensity of heating and cooling the entire building can add up quickly and start to rival those of other heating and cooling systems.

Beyond heat pumps, you can explore more on the different types of geothermal energy systems in this video (h/t to Mehrad for the source).

Other wild ideas?

Other interesting applications of geothermal could include things like cooling data centers. The need for data centers is ballooning alongside our screen time and the amount of data we generate; by some accounts, data centers already hoover up 1% of global electricity usage (a large portion of which is for cooling). 

Could geothermal cooling be a more efficient way to cool data centers where servers are humming 24/7? Some data center operators are certainly saying ‘yes’, though from what I’ve seen they’re focused on siting data centers in geologically advantageous locations versus making a scalable geothermal cooling system. As an aside, I also once chatted with an investor who was excited about using data centers as the heat source for a spa (not joking) 😂. 

In any case, this is an area that came to mind as a shower thought when I was planning out this primer. If you’re already jumping out of your seat with technical challenges that render it a bad idea… let me know! 🤝