A few steps from the front door of Rochester, Minnesota’s city hall, two newly drilled wells plunge hundreds of feet down into a vast, cool aquifer. Rather than supplementing Rochester’s municipal water supplies, these wells will use the groundwater to heat and cool the 85,000-square-foot government building.
Groundwater-based geothermal heat pump systems use electricity more efficiently than air-source systems, Rochester Facilities and Property Manager Scot Ramsey told Facilities Dive. Rochester’s groundwater, which maintains a year-round temperature in the low 50 degrees Fahrenheit, reduces the system’s heat exchange workload and achieves consistent coefficients of performance, or COPs, between 4 and 5, Ramsey said. The COP of a heat pump is typically a ratio of useful heating or cooling provided to the energy required, with higher COPs reflecting higher levels of efficiency.
Air-source heat pumps have similar COPs in mild weather, but are less efficient and thus have higher operating costs at lower temperatures. Newer, cold-hardened air-source models, however, work even when temperatures are below zero degrees Fahrenheit, as they often are in Minnesota, Ramsey said.
“Air-source heat pump technology is getting better, but your COP is still going to be 2 or under when it’s really cold,” Ramsey noted.
Less space, more capacity
Ground-source geothermal systems, which tap latent heat in dry bedrock rather than groundwater, are nearly as energy-efficient as groundwater-based systems and operate effectively throughout the year. However, due to the lower efficiency of individual ground-source wells, ground-source systems require a larger number of boreholes, each spaced about 20 feet apart.
Nevertheless, groundwater systems are more space efficient and have the potential to “unlock an entire market that wants to take advantage of geothermal,” David Henrich, president of Minnesota-based drilling firm Bergerson Caswell, told Facilities Dive. Bergerson Caswell is a drilling contractor for Darcy Solutions, the geothermal company whose closed-loop technology underpins the Rochester City Hall system. When Darcy representatives approached Henrich about working together a few years ago, “I immediately said, ‘I’m in,’ because I knew the limitations of [ground-source] geothermal,” Henrich said.
Using Darcy’s technology, the Steamfitters and Pipefitters Local 455 union now cools its 100,000 square-foot training facility in St. Paul, Minnesota with just four groundwater wells, according to the St. Paul Union Advocate. A traditional ground-source geothermal system would have required 70 wells on the premises and the temporary closure of its on-site parking lot, the Union Advocate reported.
Minnesota has unusually favorable geology for groundwater-based geothermal heat pumps, Robert Ed, director of marketing and strategy for Darcy Solutions, told Facilities Dive. But the technology can be cost-effective in about 75% of the U.S. landmass,” he noted.
Economic considerations
Even in places where underground hydrology broadly favors groundwater-based geothermal heat pump systems, conditions can vary from site to site, based on factors like water table depth and bedrock composition.
“The aquifer could be 80 feet underground or 400 feet underground, depending on the local geology,” Ed said. Darcy’s staff hydrogeologists assess site conditions to determine optimal well depth, which is important because the system’s heat exchanger and groundwater pump must be immersed in the aquifer, he added.
The actual task of drilling the wells and placing the underground equipment requires larger equipment and special expertise that most water-well drilling companies lack, Ed said. He advises companies considering geothermal systems to scrutinize their drilling contractors.
Customers also need to understand the economics of ground-source and groundwater-based geothermal heat pumps to determine which type of system is right for them, Henrich said.
Traditional ground-source geothermal heat pumps make sense for residential and smaller commercial users that need less than 50 tons of thermal capacity, and for larger users with ample space for borefields, like suburban high school and college campuses, Henrich said. It may be the only “ground-coupled” option for users of any size in regions where groundwater conditions can’t support water-based geothermal systems, Henrich noted.
On groundwater-rich sites that are too small for traditional ground-source geothermal systems, the decision often comes down to choosing between closed-loop and open-loop “pump-and-inject” groundwater systems. In closed-loop systems, such as Rochester’s, the water in the building’s climate control system is separate from the groundwater. Open-loop systems circulate groundwater for direct heating and cooling, pumping it through the buildings before returning it to the aquifer, Henrich said.
Open-loop systems may be more cost-effective, Henrich said, depending on the local geology and the system’s anticipated heating and cooling loads. A large Minnesota casino recently consulted with Bergeron Caswell to optimize its planned 5,000-ton geothermal system and ultimately chose an open-loop option that cost 20% to 30% less upfront, he said.
A compelling case
Groundwater-based geothermal proponents believe the technology is poised to take off as municipalities and commercial property owners increasingly prioritize energy efficiency and emissions reductions measures.
“We’ve been telling people for a long time that if you’re going to electrify heating and cooling, you’re going to have to ground-couple,” Henrich said, adding, “There’s a danger that you can’t manage peak demand” with air-source heat pumps alone.
The Inflation Reduction Act, or IRA, offers a 30% tax credit for commercial geothermal systems, with tax-exempt entities like private nonprofits and government agencies eligible for comparable compensation via the IRS’s direct pay framework. Though groundwater-based systems still cost more to install than the fossil-fuel heating and cooling systems they typically replace, IRA tax credits, combined with lower operating costs, can offset the difference in just a year or two, Ed said.
For St. Paul-based Ever-Green Energy, which plans to install a closed-loop groundwater geothermal system at a new mixed-used development in Minneapolis, IRA credits strengthen an already compelling opportunity to slash building emissions and space conditioning expenses.
“Incentives through the Inflation Reduction Act [made groundwater-based geothermal] even more attractive,” Michael Ahern, senior vice president for system development at Ever-Green Energy, told Facilities Dive. Since Ever-Green’s system will be owned by a nonprofit, “we will be pursuing the direct pay alternative,” he added.
Scalability for the future
Even more compelling is groundwater-based geothermal’s scalability. Both Ever-Green and the city of Rochester designed their systems, keeping in view a potential to eventually serve other buildings nearby.
Ever-Green’s system, which will initially serve five buildings, could be scaled to heat and cool “other developments as they are constructed in the area,” Ever-Green said in a 2023 news release about the project. Rochester is designing a second geothermal phase that will replace an aging district steam system and connect the city’s library, civic center and public arts complex to a thermal energy network serving roughly 1 million square feet of indoor space.
Rochester’s second phase could achieve COPs of 6 to 8 by linking multiple buildings with different heating and cooling profiles, using an ambient water loop that ranges between 40 and 70 degrees Fahrenheit throughout the year and recycling waste heat whenever possible, Ramsey explained.
In the foreseeable future, Rochester’s thermal energy network could expand into a district heating and cooling system that serves much of the city’s core, including the Mayo Clinic and Destination Medical Center. As buildings on the network transition from combustion appliances to heat pumps, the network could eventually move gas utilities toward a “heat-as-a-service” model, Ramsey said.
