Denver Real Estate Blog

Harnessing geothermal energy to heat and cool buildings could become cost effective.

Tapping Earth’s subsurface heat as a source of energy is a concept that’s starting to gain steam in Colorado. Unlike the better-known underground energy sources of oil and natural gas, geothermal energy is less developed but holds major potential for both residential and utility-scale projects. Proponents see it as a near-perfect source of clean energy with virtually no carbon emissions. The resource is abundant, renewable and gentler on the environment than fossil fuels. Still, geothermal energy has its own unknowns and limitations.

Colorado is reported to have one of the nation’s larger geothermal resources, thanks to geologic formations that allow Earth’s molten core to work its way closer to the surface. The state’s abundance of hot springs is the most visible evidence of the phenomenon. Experts say that within the next decade, Colorado is likely to become the site of electric power plants that use geothermal steam, effectively harnessing the energy of underground Old Faithfuls. Yet even today, homeowners and businesses are taking advantage of “geoexchange” systems that use the soil’s constant year-round temperature to cool buildings in the summer and heat them in the winter.

Geoexchange employs a loop of pipes buried a few feet underground, filled with a solution of water and antifreeze. After circulating below the surface, the fluid is sent through a heat exchanger to deliver either warm or cool air. The residential systems carry typical costs of $10,000 to $20,000, making them relatively expensive when compared with conventional heating and cooling using natural gas and electricity. But if fossil-fuel prices rise - considered likely by many analysts - geoexchange becomes cost-effective.

Limitations and unknowns

But like other renewable-energy sources such as wind and solar, geothermal has limitations and unknowns that leave it short of becoming a clean-energy panacea.

Preliminary studies of Colorado’s geothermal resources by state and federal agencies have provided only a partial picture - not enough solid data for power-plant developers. Mapping the resource more completely will require expensive drilling tests and time-consuming analysis.

In addition, developers would need to link prospective plants with high- voltage transmission lines - at a cost of $1 million or more per mile.

Experts peg the average cost of building geothermal power plants at about $4 million per megawatt. That’s more than twice the cost of the estimated $1.7 million per megawatt that Xcel is spending to build its 750-megawatt Comanche coal-fired plant near Pueblo. One megawatt supplies about 1,000 homes.

Supporters note, however, that coal-fired power faces future costs if carbon emissions are taxed or regulated. The U.S. Department of Energy has calculated that geothermal power emits less than one-tenth the carbon dioxide of coal-fired electricity.

Until power plants take off, Colorado’s chief use of geothermal will be hot springs and the heat that can be captured from them, and small-scale geoexchange systems.

Indian Springs Resort in Idaho Springs, for example, uses heat from its hot-springs pool to grow banana trees and other tropical foliage under a dome.

In Pagosa Springs, 146-degree water is collected from an artesian well and pumped through a series of pipes to provide space heating and snow-melting for about 20 buildings - homes, schools, churches and offices - in the town’s central business district.

15 years for payback

Montrose pharmacist George Gleason spent an estimated $32,000 three years ago to install a geoexchange system, plus radiant floor heating, in his new home at the Bridges Golf & Country Club. Since then, cooling provided by the system’s labyrinth of subsoil pipes has kept his summertime gas and electric bills as low as $60 a month.

The same system’s ability to heat the home during cold weather has produced winter bills of about $130.

Delta-Montrose Electric customers can either roll the costs of a system into their mortgage or have the utility front the costs of installation and pay monthly surcharges on their power bills for a period of years.

Gleason estimates that his payback period for the system’s cost will be at least 15 years.