How to Develop a

Thermal Energy Network

A practical guide to adding Thermal Energy Networks to decarbonization plans for your community

Please note: The resource on IRA incentives is currently being updated. Please check back soon.

To build a sustainable energy future, we need a diverse portfolio of solutions. Harnessing, moving, and sharing the heat we already have in Thermal Energy Networks (TENs) can help us decarbonize our buildings more efficiently, equitably, and affordably.

Why Thermal Energy Networks?

Capturing and recycling existing heat in Thermal Energy Networks (TENs) has a lower impact on the electric grid than many other decarbonization solutions.

TENs can use existing heat.

With TENs, we can access underground thermal energy and recover waste heat that is usually lost. Every day, we vent heat from large buildings, industrial processes, and large-scale refrigeration and send used hot water down the drain. Recirculating this existing heat means that we need to use less electricity to create new heating or cooling.

TENs are highly efficient.

TENs use water source heat pumps (1), which operate with significantly less electricity than air source heat pumps. Temperatures from underground or from waste heat are more stable than outdoor air temperatures. Because TENs create heating or cooling from more moderate temperatures, they require less electricity to meet thermal needs year-round.

Our Challenge

In Vermont, buildings are currently our second largest source of greenhouse gas emissions. Over the next 10-17 years, we must drastically reduce the 2.87 million tons of carbon (CO2e) emitted each year from burning fossil fuels to heat our buildings (2). This means providing clean thermal energy to 55,000 gas customers and eliminating the use of about 90 million gallons of oil and propane per year.

Electrifying heating, cooling, and domestic hot water is a key pathway to achieving state-mandated climate goals. Many Vermonters are installing air source heat pumps and taking advantage of this huge opportunity to decarbonize our buildings.

However, as electricity use increases for buildings and other uses, demands on our electric grid could impact customer bills and require building new electric infrastructure. The more we can lower peak use, the more affordable our electricity will be.

A Solution

Water source heat pumps provide a substantially more efficient way to electrify heating and cooling (3). Connecting multiple buildings to water source heat pump loops via TENs creates an even stronger solution, boosting efficiency significantly by capturing and sharing waste heat. Building TENs wherever possible can make electrification go further faster.

TENs can not only strengthen our ability to electrify buildings, but can also bring the economic and social benefits of local clean energy to more Vermonters. In addition, by moving and sharing the heat we already have, TENs can reduce our reliance on imported energy and fluctuating energy costs and markets.

As highly efficient community-scale systems, TENs can play a key role in our ability to achieve a successful energy transition and ensure that clean heating and cooling are more affordable, reliable, and accessible across our state.

(1) This guide uses the term "water source heat pump" to refer to equipment that uses heat recovered from buildings as well as from shallow boreholes. Often called "ground source" heat pumps or even "geothermal" heat pumps, these terms describe the same equipment. In most cases, "water source heat pump" is used here as the most inclusive term.
(2) Energy Action Network, Annual Progress Report for Vermont, 2023  
(3) US Department of Energy: Guide to Geothermal Heat Pumps

What Are Thermal Energy Networks?

Thermal Energy Networks (TENs) are highly efficient clean energy systems that:

  • Use water source heat pumps and underground pipes to repurpose thermal energy for heating, cooling, and hot water.

    TENs are already working in many locations, reducing the amount of fossil fuels consumed by heating and cooling buildings, cutting emissions dramatically, and providing multiple benefits to communities.

  • Move heat and balance thermal energy among buildings.

    TENs can include boreholes to access moderate underground temperatures and can also distribute waste heat from large buildings, refrigeration, industrial processes, or from wastewater. Using existing local heat reduces the amount of energy we need to generate in-state or import.

  • Offer dramatically lower emissions than other systems.

    TENs also provide safe, healthy, affordable thermal energy to many homes and businesses at once and protect customers from volatile electric and fuel prices. Combining a diversity of thermal energy resources makes TENs an even stronger solution for efficient, resilient, long-term energy infrastructure.

How to Use this Guide

Get started by engaging your community and laying important groundwork.

Begin by reviewing this summary and assembling a team to explore the full guide with you. Then:

  • Share videos and fact sheets to help you create a conversation in your community.

  • Use checklists to help you identify a project and evaluate what to prioritize.

  • Compare advantages and challenges of different ways to set up ownership.

  • Explore deeper dives with greater detail, examples, and best practices.

These resources can also be helpful if you want to be TEN-ready.

Maybe you want to employ this solution, but are unsure when a project might be possible. Taking stock of buildings and thermal energy resources, identifying where to start and how to grow a network, ensuring indoor systems can connect to a TEN, and understanding the legal requirements and financial support available are all good investments to make now for when the time is right to embark on a TEN project.

Some sections include technical terms and deeper dives.

Whether describing equipment, project design, or financing, this guide attempts to make technical details readily understandable and to provide helpful information as you connect with experts over the course of a project. 

Some aspects may still require an expert to fully explain or provide guidance. Where possible, notes suggest the kind of help to enlist, from municipal staff and leadership to engineering, legal, or financing expertise. Including people with this knowledge and experience in a working group or project team can strengthen your efforts, whether you’re just starting out or are ready to develop a TEN.



If you have questions or need expertise not readily available to you, please contact info@vctn.org.

This guide is for anyone curious about TEN development, but is particularly designed for you if you are: 

  • A municipal leader interested in initiating TEN planning in your town or city,

  • A community member exploring how to start a TEN locally,

  • A regional planner supporting communities in clean energy planning and development,

  • A business or developer working with a community to implement a TEN,

  • An affordable housing organization looking for lowest-cost clean energy solutions, or

  • An electric utility considering TEN development in communities in your territory.

Contents

1. START HERE

Identifying the right time and place to develop a Thermal Energy Network (TEN) is key to a successful project.

Learning from experts, talking with stakeholders, and bringing your community along can be as important as the design of the system itself. There are multiple benefits of adding a TEN and many ways to involve others in building a neighborhood-scale thermal solution.

Where and When a Thermal Energy Network Makes Sense

▶ LEARN MORE

ACTIONS

WORKSHEET

SUPPORTING MATERIALS

FACT SHEETS

2. IDENTIFY OPPORTUNITIES

Whether or not you’re ready to launch a Thermal Energy Network (TEN), you can lay the groundwork for an effective process and a successful project.

To get a head start on a TEN, it helps to know your buildings and local thermal energy resources, to add TENs to local and regional plans, and to upgrade systems in need of replacement with a TEN in mind.

How to Get a Head Start on a Thermal Energy Network

▶ LEARN MORE

  • Inventory thermal energy resources.

  • Inventory potential Thermal Energy Network buildings.

  • Identify opportunities to tie in to upcoming developments.

ACTIONS

RESOURCES

SUPPORTING MATERIALS

FACT SHEETS

WORKSHEET

3. UNDERSTAND OWNERSHIP

There are many ways to own and operate a Thermal Energy Network (TEN). Different kinds of ownership determine how a project can be financed.

Weighing the advantages and challenges of a few common ownership models can help identify which approach is most beneficial for your project.

▶ LEARN MORE

Which Ownership Model?

  • Explore ownership models as for profit, low-profit, or nonprofit business models that may fit your community or project.

  • Identify related financing and incentive opportunities from the Inflation Reduction Act and other sources.

ACTIONS

SUPPORTING MATERIALS

Updates coming soon. Please check back.

  • Financing a Thermal Energy Network

  • IRA Incentives for Thermal Energy Networks

RESOURCES

DEEPER DIVE

4. DEVELOP YOUR PROJECT

As with any infrastructure project, a Thermal Energy Network (TEN) depends on good planning, communication, and coordination throughout the process. 

A core team that understands each phase, maintains stakeholder and community engagement, and can envision the process as a whole can help to build a successful TEN.

What Does a Thermal Energy Network Project Look Like?

▶ LEARN MORE

  • Assemble a working group to sketch out a project.

  • Identify a core project team.

  • Create an initial plan for your project.

ACTIONS

SUPPORTING MATERIALS

WORKSHEET

DEEPER DIVE

Thank you for your interest in Thermal Energy Networks.

Please share your questions, thoughts, and requests for more information at info@vctn.org.

ACKNOWLEDGEMENTS

This guide was developed by Vermont Community Thermal Networks in consultation with and including valuable contributions from the Thermal Energy Network Team supported by Energy Action Network.

The team formed in 2022 to accelerate neighborhood-scale decarbonization in Vermont by:

  • Building a coalition to co-create a strategy for TENs,

  • Exploring multiple ownership models to make TENs available to more Vermont communities, and

  • Creating tools & resources to support TENs projects.

The team includes:

  • Vermonters with expertise in regional planning, town energy committees, engineering, and environmental law, and

  • Representatives from Central Vermont Regional Planning Commission, Efficiency Vermont, VEIC, Vermont Economic Development Authority, Vermont Bond Bank, Energy Action Network, and VGS.

TENs development expertise provided by Emergent Urban Concepts.

Peer review provided by multiple Vermont experts, local and regional leaders, and dedicated volunteers.

Design by Dana Dwinell-Yardley (ddydesign.com).

Published in March 2024. This material is meant to be freely distributed.

This page will continue to be updated with the most current editions of the toolkit and resources.