Small, but exemplary: how Ireland’s energy transition problems are a microcosm of the world’s challenge. Part 3: a geothermal pathway to affordable and radical energy emissions reduction.

Energy Flow in Northern Ireland in 2018

• Systematic deployment of geothermal heat pumps in residential, commercial and industrial facilities can replace most of the heating currently provided by fossil fuels.
• With increasing penetration of renewable energy sources in both regional systems and microgrids, the substitution can deliver a 75% reduction in emissions.
• Redistribution of environmental and social obligation levies currently effectively only carried in electricity charges makes geothermal cost competitive.

The Department for Economy (DfE) in Northern Ireland has been working on a new energy strategy for the best part of two years now and will be unveiled in the next few weeks.  MLA Gordon Lyons, the minister for DfE is to present at the Northern Ireland Energy Forum 2021 next week in Belfast and the title suggests that his address will go some way to reveal at least some of the components of the strategy.

With these events on the horizon we decided to offer two more blogs in the series of “small but exemplary” series in which we use the island of Ireland’s energy transition challenges as illustrative of the world in general.  These next two articles will explain how geothermal can make a material contribution to the decarbonization of Northern Irish energy systems.  In this first blog, we outline the opportunities as we see them if a progressive and systematic approach is taken to decarbonizing heat.  In the second one we address the various challenges to full deployment that must be overcome.  Note that since the potential for economic electricity generation from the average temperature geothermal resources that characterize Northern Ireland is currently considered low,  we are instead focused on heat and its provision to residential and industrial heating and cooling using heat pump technology.

Residential Heating: Energy efficiency and fuel substitution leads to reduced “imported” grid or transported fuel use and a 75% reduction in emissions.

Residential Heat

The figure above shows our projection from 2018 energy consumption in Northern Ireland’s homes to 2030, assuming a systematic improvement of building efficiency and deployment of geothermal systems.  Note that in this exercise we have for simplicity ignored solar thermal which is the other readily available, local source of renewable heat.  Indeed, we believe that several renewable energy sources with storage in distributed energy systems will be a key component of Northern Ireland’s energy future.

In the projection we have assumed a 5% growth in the housing stock but a 25% improvement overall of energy efficiency delivered by high efficiency new homes and retrofit insulations of old dwellings.  Then in our projection we eliminate oil and coal heating by substitution by heat pumps, 100% ground source (aka geothermal) as we prefer ground source to air source for a number of reasons including higher efficiencies (or coefficient of performance, COP), especially over a full year.  In this model we have left natural gas as is, but this fuel particularly where it is a not a grid-connected gas boiler is also a target for replacement.

LCOE comparison and emissions reduction in residential heat using geothermal. Each bar has modeled fuel or in the case of geothermal electricity cost (p/KWh), left current, right with Environmental/Social obligation costs shifted to gas and oil.

The results are of the projection are compelling.  Although the demand for electricity (assumed from the grid but could also be in part behind-the-meter microgrid generation) increases 45%, because the electricity is decreasing in emissions intensity over time with more wind and solar generation, emissions are overall reduced by 75% through replacement of oil and coal.

Can this be delivered at costs that are competitive and affordable to the consumer?  Yes.

While the installation costs of a ground source heat pump are higher than a natural gas boiler, the key driver of the lifetime cost (or levelized cost of energy, LCOE) is the price differential between natural gas and electricity.  More on this issue in part 2, but the big point out for now is that currently in the UK electricity bears a much higher – more than 50 times higher – environmental and social obligation levy than gas.  The graph above shows the impact of redistributing the 1.5p/KWh of the levy, currently added to electricity in Northern Ireland, to gas and oil.  In the left-hand columns of each energy source is the LCOE for the system at current residential pricing of oil, gas and electricity.  In the right-hand column is the equivalent LCOE with the environmental and social levy redistributed to gas and oil and deducted from electricity (think: a version of carbon pricing).  With this equilibration of fuel/power costs the geothermal solution is now a third less in LCOE terms compared to natural gas, as well as one tenth the emissions.

Commerical and Industrial Heating: Energy efficiency and fuel substitution leads to reduced “imported” grid or transported fuel use and a 75% reduction in emissions.

Industrial processes and large buildings

CAUSEWAYGT is focused on using geothermal energy to decarbonise heating and cooling of large commercial facilities and industrial processes.  In the model depicted above for industrial heat in Northern Ireland, we have taken a similar approach as residential to the projection to 2030.  We first grew industrial capacity by 5% but improved efficiency by 25%.  Then we replaced oil and coal combustion with 25% biofuels and 75% geothermal heat pumps.  We’ll get into the technology hurdles some more in part 2, but the simple assumption we made is that biofuels would be retained for the highest temperature processes (>150 ºC, there may be a role for hydrogen here too as an energy vector), and geothermal heat pumps would take care of the rest.  Currently, geothermal technology is more than able to deal with heating and cooling below 80 ºC, even for tens of MW scale.  CAUSEWAYGT is working hard on the development and deployment of technology that will deliver up to 140 ºC process heat and steam from modest geothermal sources.

Like residential heating, the prize in industry and commercial is large.  We can decarbonise heat using Northern Ireland’s locally sourced energy resources in cost competitive ways that also increases energy security by relieving dependency on foreign, imported fossil fuels.

The benefits to Northern Ireland and other regions and countries that take this approach go beyond meeting emissions targets.  Northern Ireland has the natural resources and the human capital to underpin the deployment of an affordable, clean and secure energy system.  Not only the construction and operation of such a system be a boost for local employment, an economy underpinned by such an energy system will be attractive to outside investment from companies keen to decarbonise their whole operation and supply chain including their energy.