Geothermal Heating and Cooling A New Way to Realize the Benefits. October Christopher A. Cavanagh, PE

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Geothermal Heating and Cooling A New Way to Realize the Benefits October 2017 Christopher A. Cavanagh, PE

Reforming the Energy Vision (REV) Framework REV is the NYS proceeding to transform the New York electric energy industry Creating market-based sustainable products and services. Enabling distributed energy resources to manage load and optimize systems. Empowering customers to manage energy use and reduce energy bills. Carbon Reduction System Reliability & Resiliency Customer Knowledge REV Core Policy Outcomes Fuels and Resource Diversity Market Animation System Efficiency 2

Background{ Residential Heating and Cooling Energy Use NY s households are more than 20% higher than the national average. Source: Residential Energy Consumption Survey EIA 2009. https://www.eia.gov/consumption/residential/reports/2009/state_briefs/pdf/ny.pdf

Co 2 Equivalent Heating Emissions for Long Island

Comparative Heating Costs for Long Island 5

Empowering Customers and Animating Markets with Geothermal Energy Systems What is it? Geothermal energy systems are proven heating and cooling systems that exchange heat underground. Geothermal energy systems take advantage of a near unlimited and steady access to moderate temperature water. Why? Customers The net affect for customers is a very high effective efficiency for heating and cooling with savings of more than 70% for heating and 30% for cooling One unit provides heating & cooling (all inside & less floor space) Societal Substantial direct and indirect benefits in terms of environmental improvement and economic development. Utility peak load management (gas and electric) 6

Support for Current Policy Access to low cost heating Declines in the cost of natural gas has led to a significant reduction in heating costs only where gas service is available There is a sharp discontinuity in heating costs where natural gas service can be made available and where it can not. Environment NY State has adopted a goal of 80% carbon reduction by 2050. A geothermal system alone can reduce LI greenhouse gas emissions by more than 60% 1 in CO 2 equivalent Economic Development While savings are significant, Geothermal systems have a substantially higher capital cost which favors job creation. (1) calculated for Zone K (Long Island) Marginal Emission emissions rates for generation and SEER of 32 for cooling and SCOP 4.7 for electric heating compared to new conventional 80% oil fired boiler and SEER 12 A/C. 7

Strong Recent Local Community Support Valley Stream, 9/14/2015 NYC Intro 609 of 2015 8

Geothermal Heating and Cooling Common Undergrounds Assets The primary GHP market failure is the expectation that building owners finance the GHP infrastructure, or outside-the-building portion of the GHP system, such as the ground heat exchanger. Geothermal (Ground-Source) Heat Pumps: Market Status, Barriers to Adoption, and Actions to Overcome Barriers Oak Ridge National Laboratory, ORNL/TM-2008/232 December 2008

Background on National Grid National Grid New Energy Solutions NES We are an agile team focused on developing and launching innovative solutions and technologies that unlock value for National Grid s customers and communities, accelerating progress towards a sustainable future What can we do for our customers and communities What about those that are in our communities but can t serve them today Test and Learn Demonstration approved through 2016 KEDLI Rate Case (16-G-0059) Geothermal Demonstration Many NY residents do not have immediate access to clean Natural Gas Rely on higher carbon fuels Alternative to new gas infrastructure?

Gas REV Geothermal Demonstration Project Objectives Physical installation of geothermal heat pump (GHP) systems. Determine Technical and economically viability of GHPs Evaluate the installation and operating costs Viable option to mitigate growing peak demand for natural gas Viable option to provide low-cost heating to unserved gas communities or gas constrained areas Potential for utility ownership or other business models GSHP are tested and have performance ratings from AHRI. However if the underground geothermal heat exchangers are poorly design, it can affect the overall system. Evaluate potential benefit streams including: Customer energy savings Gas utility benefits Electric utility summer peak load and winter baseload Environmental and social benefits Timing: GHP systems installed in Glenwood Village for the 2017/2018 heating season

Potential Benefits of a Shared Loop Energy Efficiency Efficiency benefits if there is simultaneous heating and cooling Heat pump equipment operational coincidence Capital Efficiency Minimize Mobilization Costs Proactive loop construction Larger scale projects Customers join systems over time when they are ready Independent financing of the loops/s not dependent on energy throughput Longer term and lower costs financing for loop than heat pump

Gas REV Geothermal Demonstration Glenwood Village Loop Field Design

A Long Island Collaboration Design Build Contractor Customer Monitoring and Verification Cost Share and Preinstallation Energy Audits 14

Geothermal Heating and Cooling at Glenwood Village: Technical Description Deep Earth Temperature (T G ) 55 F The Average annual ground temperature below 20 ft. in this region remains at this constant temperature Formation Thermal Conductivity 1.63 BTU/hr-ft- F Physical property of the ground that determines how easily heat can pass through it Knowing this value is a prerequisite for a properly designed geothermal system Formation Thermal Diffusivity 1.21 ft 2 /day Physical property of the ground that determines the speed of heat propagation by conduction The higher the value, the faster the heat is diffused into the ground Undisturbed Formation Temperature 54.1 F 55.9 F This is the temperature at the bottom of the borehole if undisturbed or 24 to 36 hours after the borehole is left alone This temperature is important to determine the thermal grouting mixture required to set The Geothermal Heat Exchanger 20 boreholes using 1.25 inch High Density Polyethylene (HDPE) Pipes at an average vertical depth of 225 feet. That s approximately 9,000 feet of pipes combined. 20 boreholes will be connected to a main manifold feeder to provide service to 10 individual homes at Glenwood Village

Long Island Geology Region H UG Upper Glacier Gc Gardiners Clay Mg Monmouth Group M Magothy Aquifer Rc Raritan Clay L Lloyd Aquifer Br Bedrock Magothy Aquifer is the main drinking source for Suffolk and half of Nassau

Gas REV Geothermal Demonstration Geothermal Offering at Glenwood Village Geothermal heating and cooling Diverse generation of manufactured homes from the 1970s to 2017 Building sizes range from 1,008 sq. ft. to 1,566 sq. ft. Some Homes required home improvements. PSEG LI provided free audits Diverse heating and cooling behaviors and requirements Properly sized individual homes with Manual J Load Calculations Geothermal heat pumps Featuring Enertech Hydron Modules High efficiency unit available on the market Packaged EER 31.3 COP 5.1 Split system- EER 25.3 COP 4.2

Gas REV Geothermal Demonstration United Way Long Island Homeless Housing for Veterans Group Home Medford NY Status: Planned Single Family Residential Low-Income Housing United Way Mission to building sustainable homes to be healthy, easily maintained, and energy efficient ENERGY STAR rated home Future proofing energy costs for low-incoming homeowners Offering at for United Way and Association for Mental Health and Wellness Geothermal Ground heat Exchanger 3 Ton system individual system Featuring WaterFurnance 7 Series Desuperheater for DHW Highest efficiency unit available on the market Packaged EER=37 COP=5.3 Source: http://www.unitedwayli.org/housingandgreenbuilding

Future Financial Options Below Ground (70% of Cost) Under public and/or private property Options evaluated (one or more) Ueful life Initially a Utility Asset (capital and O&M) New Connection Tariff (similar to 100ft rule for gas service) Fixed Monthly Access fee (not metered) Third-party ownership NY Green Bank Shared Savings Typical Tax Asset Heat Pump 15-20 yrs 5 yrs Gas Piping 40-50 yrs 20 yrs Above Ground (30% of Cost) Consumer Financing 30% Federal Tax Credit Low-interest financing possible through the Home Performance with ENERGY STAR ETIP 19

Going Forward With your help we can lead the way in creating the climate for change christopher.cavanagh@nationalgrid.com nationalgrid