Geothermal Supply Chain
The Clean Energy Manufacturing initiative has showcased the enormity of the supply chain for a diverse set of energy industry segments. This article will explore the geothermal industry and associated opportunities for manufacturers, including an on-site tour (see below.)
Supply Chain Opportunities
Geothermal systems are installed in both residential and commercial settings. Every geothermal system involves 1) deep wells to access suitable subsurface temperatures, 2) fluid that serves to transfer temperature differentials, and 3) furnaces that convert the temperature differential to heat or cool a building.
The manufacturing supply chain for the drilling of wells is very similar to that of natural gas and oil well drilling and includes tanks, pumps, motors, and multiple pipes and connectors. Therefore, a manufacturer that is currently part of the gas and oil drilling supply chain has the opportunity to also benefit from the commercial geothermal supply chain.
The fluid that circulates through geothermal systems, typically an antifreeze or brine solution, is circulated through tubing in the previously drilled wells. Given the subsurface environment and need for long-term reliability, material selection and durability are important considerations. Therefore, manufacturers of piping applications and antifreeze solutions have opportunities in the geothermal heat transfer supply chain, especially companies with strong research and development capabilities to continuously improve the performance of these products in challenging environments.
Geothermal furnaces are supplied by a number of domestic and international vendors. Fort Wayne, Indiana based Water Furnace which, along with Oklahoma City based Climate Control Group and its ClimateMaster brand, are owned by a Swedish parent company, are several of the more well-known domestic suppliers of geothermal furnaces and therefore potential business partners for Appalachian-based manufacturers.
Regional Projects
A collaboration among Northeast Natural Energy, the U.S. Department of Energy, West Virginia University, and Patterson UTI drilling is developing a 15,000-foot geothermal well near Morgantown, West Virginia to test geothermal energy potential and gather information relative to the potential for Carbon Capture and Sequestration. At least 35 vendors have contributed to the project so far – a testament to the supply chain opportunities with such a project.
Additional Opportunities and Next Steps
The Inflation Reduction Act (IRA) of 2022 offers energy-saving federal tax incentives for commercial projects that use geothermal water source heat pumps. Given the tax benefits associated with the installation of a new geothermal system, companies are encouraged to consult with their tax advisor to fully understand and take advantage of these benefits.
As with most industries, a number of trade associations are available to facilitate business contacts in the industry. Some of those partners include the Radiant Professionals Alliance, the Electric & Gas Industries Association and the International Ground Source Heat Pump Association.
Join the Clean Energy Manufacturing team on October 11 in Morgantown, West Viriginia, as they visit Northeast Natural Energy to learn about the relationship between geothermal and shale resource development. Reserve a spot here.