Pilot projects in Haverstraw and Buffalo will test whether utilities can deliver clean heat instead of fossil fuels, all while retaining jobs.
Haverstraw, New York, will get one of the state’s first utility thermal energy networks. (Alexisrael, CC BY-SA 3.0, via Wikimedia Commons)
For the past four years, the UpgradeNY coalition of clean energy, environmental, and labor groups has been pushing New York regulators to approve projects that could switch entire neighborhoods from fossil gas to clean electric heating — and to do it without undermining fossil gas utility jobs and investments.
The vision? Replace gas pipelines with networks that tap into latent, otherwise wasted sources of heat, from both underground and industrial or municipal systems, to dramatically improve the efficiency and sustainability of electric heat pumps.
Last week, the coalition won a long-delayed — if partial — victory. The New York Public Service Commission approved two of these utility thermal energy network (UTEN) plans, committing a combined $111.5 million to build what will be the second and third such projects of their kind in the country.
But the commission rejected nine other UTEN projects, including several high-profile ones in New York City and others in upstate communities.
Still, UpgradeNY is hoping that the two approved projects — one in the Hudson Valley town of Haverstraw and the other in the city of Buffalo — will demonstrate that utility thermal energy networks are worth pursuing on a wider scale.
“From a workers’ rights and environmental justice standpoint, it’s a win-win,” said Theodore Moore, executive director of The Alliance for a Greater New York (ALIGN), an environmental justice group that’s part of the UpgradeNY coalition. “This is a vital step to wean us away from fossil fuels.”
Thermal energy networks use wells and pipes to circulate water or other fluids that capture the steady ambient temperatures hundreds of feet below the earth’s surface, as well as waste heat from sewer systems, industrial facilities, and data centers. Having this steady and stable heat-exchange medium can greatly improve the efficiency of electric-powered heat pumps, which can replace gas-fueled boilers and furnaces.
Such networks already heat and cool college campuses, industrial parks, and entire cities in Europe, Asia, and North America. But New York is one of a growing number of states exploring the potential for gas utilities to change their business model from delivering fossil fuels to delivering clean heat, all while continuing to employ workers — such as the pipefitters, steamfitters, and plumbers that are part of the UpgradeNY coalition — and invest capital in underground infrastructure.
But it’s not yet clear how the costs of installing and running these systems might be balanced out by the advantages they deliver to utility customers and for meeting state climate goals. “Because there are so few of these around the country,” the two approved projects “are setting a standard and creating a blueprint,” Moore said.
For the project in Haverstraw, a town of about 40,000 people on the Hudson River, utility Orange & Rockland plans to spend $50 million to construct a thermal energy network. It will connect up to 30 structures, including single- and multifamily residences, commercial and government buildings, and an elementary school.
This network will draw ambient heat from borefields drilled on municipal land. It will also tap into wastewater in the city’s sewer network — a fairly common source of heat for thermal networks, including one being built in Denver.
The project in Buffalo will tap into an already existing steam heating system serving municipal and private buildings in the downtown area. The utility National Fuel Gas plans to spend $61 million to combine water from boreholes and a wastewater heat recovery system to serve low-income multifamily housing and displace a portion of the fossil gas–fired boilers at the city’s legacy district heating system.
Similar district energy networks in Boston, New York, Philadelphia, and other U.S. cities that use fossil fuels to heat or boil water are being targeted for conversion to electric-powered alternatives.
The big task ahead is proving that these projects can deliver benefits that make the costs of creating them worthwhile, said Allison Considine, New York director for the nonprofit Building Decarbonization Coalition, an UpgradeNY member.
Continuing to upgrade and expand gas pipelines is incompatible with New York’s carbon-reduction mandates, she said. What’s more, putting additional money into a gas delivery network could leave customers stuck paying for higher and higher costs as more and more people stop using the fuel.
But New York Gov. Kathy Hochul and state agencies are loath to pursue projects that might add burdens to utility customers who are already contending with rising energy costs. So the Public Service Commission’s order approving the Haverstraw and Buffalo projects will tap into $93 million in state funds to offset costs to the two utilities’ customers.
That money comes from a $150 million commitment to thermal energy networks, which is part of a state fund of nearly $1 billion for climate and energy programs. Building the nine projects that the commission declined to approve would have required utilities to collect about $1 billion from customers.
“We’re disappointed they didn’t approve more,” Considine said. “We thought there were a lot of exciting projects that stakeholders could have learned from and benefited from.”
As the Haverstraw and Buffalo projects move to the next phases of design, implementation, and construction, UpgradeNY coalition members will be dogging utilities and state agencies to share more data on the projects. That information could reveal how these projects can make heat pumps more efficient, which dramatically reduces the pressure on utility grids, and deliver cleaner heating and cooling to underserved communities facing increasingly harsh summer heat and winter cold, she said.
New York’s utility projects are mandated under a 2022 state law, the Utility Thermal Energy Network and Jobs Act, that calls for utilities and state regulators to “advance pilots so we can have a just transition for utility workers, and so we can learn how a utility model can serve the public interest,” Considine said.
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Jeff St. John is chief reporter and policy specialist at Canary Media. He covers innovative grid technologies, rooftop solar and batteries, clean hydrogen, EV charging, and more.