Colorado opened applications Tuesday for a new grant program to kick-start an industry that harvests renewable energy hiding below the Earth's surface.
A state law signed in 2022 set aside $12 million for the geothermal grant program. In its inaugural round of funding, the Colorado Energy Office will award $5 million to boost plans to tap underground energy sources to heat and cool buildings or generate electricity.
Will Toor, the director of the Colorado Energy Office, said the new program marks one of the country's largest investments in geothermal energy, which could serve as a stable companion to more intermittent renewable energy sources like wind and solar.
“Geothermal can play a huge role in combating climate change and lowering energy costs,” Toor said.
Eligible applicants include developers, building owners, local governments, contractors, and private startups. Acceptable projects fall into two categories: ground-source heat pumps and geothermal electricity generation.
The energy office will prioritize projects that benefit low-income communities most affected by pollution. In the first round, $250,000 will be set aside for geothermal heat pumps at individual buildings in those communities.
Ground-source heat pumps are a well-developed technology to heat and cool buildings using stable temperatures just below the ground as a thermal piggy bank. In the winter, the systems can draw heat from underground pipes; in the summer, they can dump heat from buildings back into the earth.
Air-source heat pumps, by contrast, move heat back and forth from the outdoor air. Although ground-source heat pumps are expensive upfront, they are far more efficient. Toor said broader adoption could help cut energy bills and protect the electric grid from high demand in the winter.
“They could play a really important role in allowing us to reduce emissions from buildings without creating a big electric load on the coldest days of the year,” he said.
A shared network of underground pipes can also provide heating and cooling for multiple buildings. Colorado Mesa University in Grand Junction, for example, relies on an interconnected system to heat 16 different buildings, helping it save nearly $12 million in energy costs since 2008.
Despite the success of those projects, geothermal power plants have struggled to get off the ground or, rather, deep into it. As of 2022, only 0.4% of electricity in the U.S. came from geothermal sources, according to the U.S. Energy Information Administration.
Anyone who's visited a hot spring in Colorado has enjoyed the state's ample geothermal resources. The problem is power plants would need to take advantage of the same hot water, which has proven controversial in local communities like Chaffee County.
An alternative is “enhanced geothermal,” a novel approach where fluid is pumped into deep wells, heated into steam, and recovered to generate electricity. The idea has long promised a source of 24/7, clean energy, but it requires companies to dig more than 4,000 feet underground, according to the U.S. Department of Energy.
Toor said the grants could reduce the risk for companies hoping to drill test wells. Starting next summer, Colorado will open a separate tax credit program to offset the cost of investing in geothermal electricity projects and generating power with the novel resource.
