The Rise of Geothermal in Minnesota
Federal incentives and climate goals have heightened interest in geothermal energy
By Frank Jossi | March 21, 2024
Mechanicals for the geothermal system for Metro Transit’s 350,000-square-foot North Loop Garage in Minneapolis. Photo courtesy of LHB.
FEATURE
As architects and clients look for ways to reduce carbon emissions from buildings by eliminating natural gas as a heating source, a renewable solution lies right under their feet.
The earth maintains a steady temperature that designers have tapped for decades using ground-source geothermal systems to warm and cool buildings. Tapping the ground or underground aquifers for geothermal has gained momentum as new federal incentives take a bite out of the cost and pressure grows from governments and investors to decarbonize built infrastructure.
Minnesota’s state government and communities aim to drive down carbon emissions, a significant portion of which is generated by natural gas used for heating residential and commercial buildings. More than half of the state’s electricity comes from carbon-free sources such as nuclear, wind, solar, and hydropower, according to the U.S. Energy Information Administration. Shifting heating and cooling to electricity, which powers geothermal systems, would significantly reduce carbon emissions.
The Minnesota legislature, now in session, is considering several bills related to geothermal, including a utility task force to study ways to incorporate geothermal into the grid and a rebate program for homeowners who add geothermal heat pumps to their homes.
Ever-Green Energy helped design community geothermal systems for Highland Bridge in St. Paul and the Towerside Innovation District, where developers ultimately chose to pursue sustainability goals in other ways. But Ever-Green president and CEO Luke Gaalswyk says it’s clear that clients have “a desire to figure out how to reduce emissions from their buildings, which is primarily driven by heating and cooling needs. Climate action planning and decarbonization commitments are driving interest.”
Some architectural firms are seeing the same thing. “I think it’s like a fire catching on some kindling, and it’s just going to go crazy,” says LHB CEO Rick Carter, FAIA.
LHB has recently designed a handful of geothermal projects and has at least six clients interested in the technology, says Carter. A project that opened in 2022, Metro Transit’s 350,000-square-foot North Loop Garage, includes a geothermal system built off pilings that cover a section of the building that crosses over the subterranean Bassett Creek.
Metro Transit’s North Loop Garage in Minneapolis. Photo courtesy of LHB.
LHB recommended a geothermal ground-source system for the West Tonka Hennepin County library as part of a net-zero study and for a ski chalet at Mt. Telemark Village, the Cable, Wisconsin, resort that hosts the annual American Birkebeiner cross-country ski race.
Another place where geothermal could play a significant role is at the Heights, a St. Paul Port Authority–led development on the city’s East Side that aims to become a carbon-free, mixed-use community where more than 1,000 people will work and another 1,000 will live. Geothermal received another boost from the state’s two largest gas utilities, CenterPoint Energy and Xcel Energy. Both have submitted “innovation” plans to the Public Utilities Commission that include proposed pilot projects for “networked” geothermal that would heat and cool several buildings or homes from one source.
Geothermal might also help address the concentration of air pollution in low- and moderate-income communities. An aquifer-based system will be part of a new project on East Lake Street in Minneapolis at a former U.S. Bank property that burned during the civil unrest following George Floyd’s murder. Redesign, Inc., and architecture firm 4RM+ULA are working with BIPOC nonprofits to develop the site into affordable housing that will attach to the aquifer system.
Taylor Smrikárova, Redesign’s Real Estate Development Director, says the group’s goal is carbon neutrality based on the wishes of the surrounding community. “Our neighborhood’s recovery process presented us with an opportunity to do things differently as we rebuild,” says Smrikárova. “That includes not continuing harmful impacts to the environment via more traditional heating and cooling systems. It means improving air quality and reducing the cumulative pollution and health impacts experienced by this community.”
Why Now for Geothermal’s Ascent?
Carter says the Inflation Reduction Act of 2022 provides the ignition for geothermal’s rise. Clients receive a potential 30-percent tax credit if they pay prevailing wages and have an apprenticeship program. They can add another 10-percent bonus if the system reaches domestic content requirements and another 10 percent if the project is located in an “energy community” such as a brownfield site or a neighborhood in or near a former coal or natural gas plant. Government agencies and nonprofits that do not pay taxes receive the incentives back in cash.
Clients have “a desire to figure out how to reduce emissions from their buildings, which is primarily driven by heating and cooling needs. Climate action planning and decarbonization commitments are driving interest.”
To sweeten the deal, Carter says LHB suggests clients install photovoltaic panels, which have the same federal incentives, to offset the cost of electricity. Powered by onsite solar energy, a geothermal system could operate with very low electricity costs, says Carter—or no cost.
Architect Richard Graves, FAIA, is director of the University of Minnesota’s Center for Sustainable Building Research, which oversees the state’s SB 2030 sustainable building standards. For projects seeking to meet SB 2030’s aggressive performance standards, geothermal is one of the strongest alternatives, says Graves.
Graves notes that, while federal incentives help geothermal compete with natural gas, the electricity bills for an owner of a geothermal system could increase, which could affect the cost effectiveness. Solar offers the best option for reducing the cost of electricity, along with battery storage, he says, and a combination of the two would help structure operating costs and allow building owners to improve financial viability.
In some cases, aquifer systems can offer a less expensive alternative to ground-source geothermal—or at least give buildings in dense neighborhoods a chance to decarbonize their heating and cooling. Twin Cities–based Darcy Solutions has developed a unique aquifer system and installed it at several locations. Dan King, Darcy’s chief technology officer, says interest in aquifer systems has come from building owners who have properties without land for wellfields. A Darcy aquifer well can replace anywhere from 20 to 50 closed-loop wells, leading to potentially fewer capital costs than ground source-geothermal, he says.
Nonprofits whose interest in geothermal has been piqued by the federal incentives have reached out to Darcy to discuss projects. “We hope that we’re able to urbanize geothermal and bring it to places where it just wasn’t feasible before,” says King.
Geothermal mechanicals at Johnson High School in St. Paul. Photo by Frank Jossi.
St. Paul Public Schools is using Darcy technology at the new Bruce Vento Elementary School and to replace natural gas at Hidden River Middle School. Indoor air quality coordinator Angela Vreeland says “it was a big deal” for the district to find an alternative to a ground-source system. Darcy’s aquifer system “is a game changer,” she says, because it can work in constricted land areas.
The district’s first foray into geothermal came at Johnson High School, where contractors installed more than 150 wells in a sports field. Working with TKDA, the district found that geothermal at Johnson would offer a better deal than new boilers and an air-cooled chiller package because those technologies would require roof reinforcement and larger mechanical rooms, which would have reduced classroom space. Geothermal did not change the building’s structure and will save the district an estimated $7 million over 30 years.
Tom Parent, AIA, Executive Director of Operations and Administration at St. Paul Public Schools, says geothermal has not been difficult for staff to operate or understand. He says it may not be the solution for all schools but believes it will be part of heating and cooling schools in the future. “We’re still trying to fully understand how to take geoexchange to a truly district-level scale,” says Parent.
Many who have tried geothermal have become believers. Carter says geothermal will become a standard solution for HVAC in the coming years. “I just can’t imagine five years from now that we’re even going to be talking about it,” he says. “We’re just going to do it.”
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