Renewable Geothermal Energy Gaining Traction in Colorado

By Sharon Sullivan

Colorado Mesa University saves $1.5 million in energy costs per year by using a heat pump geothermal exchange system installed in 2008. The system provides 80% of the university’s heating and cooling. 

Geothermal energy is heat-energy from the earth that is tapped via wells drilled into underground shallow groundwater or deep thermal reservoirs. Warm or hot water, or steam are brought to the surface for various uses, including direct-use heating and cooling, and electricity generation. 

CMU’s heat pump connects to a loop of pipes buried underground that circulates the heat-transferring fluid to the earth’s surface to heat buildings during the winter months. In the summer, the system works in reverse, drawing hot air out of buildings and replacing it with cooler air from heat exchangers using the cooler underground water. 

Although geothermal energy is available 24/7, high drilling costs have discouraged widespread development of this resource. However, technology gains, along with state and federal policies aimed at helping Colorado reach its 100% carbon emissions–free goal by 2050, have made geothermal development more attractive. 

As chair of the Western Governors’ Association, Colorado Gov. Jared Polis announced in July 2022 his Heat Beneath Our Feet initiative to help jump-start geothermal energy development in Colorado and across the West. This effort culminated in a report released June 26, 2023, exploring opportunities for, and barriers to, the accelerated development and deployment of geothermal energy technologies. 

Additionally, Colorado House Bill 22-1381 created a $12 million grant program within the Colorado Energy Office to facilitate geothermal energy development. And this year’s HB 23-1272 offers more than a billion in refundable tax credits supporting economy-wide decarbonization over the next 10 years, specifically with the intention to complement the Biden Administration’s Inflation Reduction Act clean energy tax credits. Colorado’s legislation has lined up an anticipated $140 million in refundable tax credits for geothermal heat pumps and geothermal electricity generation facilities. 

The laws help level the playing field where the oil and gas industry has long enjoyed federal subsidies and other incentives; available tax credits for wind and solar energy have brought those startup costs down. “The new legislation is intended to ensure Colorado is a national leader in investments in supporting an equitable transition to a clean energy economy,” said Bryce Carter, Emerging Markets Program Manager for Geothermal at the Colorado Energy Office. 

In Steamboat Springs, future residents of Brown Ranch, a 2,300-unit Yampa Valley Housing Authority project, are expected to save millions of dollars in energy costs due to a ground-source heating system being installed there. The Steamboat Pilot reported that the return on investment for the $58 million geothermal project will be five years. 

There are 500 geothermal heat-pump systems in Colorado, located mostly on the Western Slope, according to Cary Smith of Sound Geothermal Corporation and President of GreyEdge Group, which specializes in complex geothermal systems. The town of Gunnison heats and cools many of its municipal buildings via geothermal energy. And on the Front Range, the Colorado State Capitol is the first state capitol building in the nation to be cooled by geothermal power. The Colorado Governor’s Mansion is also heated and cooled with geothermal. 

Smith, a drilling engineer who worked in the oil and gas industry for 25 years, was on the architect and design team for CMU’s geothermal system that links 16 buildings on campus. As new construction or renovation takes place, the system will expand. With geothermal, “everybody wins — industry, consumers, utilities,” Smith said. 

Geothermal energy can be developed on a larger scale to generate electricity for the power grid. While there are currently no geothermal power plants in Colorado, a group of geothermal experts, energy providers, and government officials are seeking funding to drill a test site in Chaffee County near Mount Princeton Hot Springs. “At the test site, geophysical evidence suggests the presence of a major underground geothermal resource,” said Mike Allen, geologist and Senior Business Development/Key Account Specialist for Sangre de Cristo Electric Association in Buena Vista. “To evaluate the validity of the geophysical interpretation, a temperature-measuring test well is necessary to determine the presence or absence of a geothermal reservoir.”

Chaffee County is located on the northernmost edge of the Rio Grande rift that extends south to Mexico. “A successful thermal well test would be a model for further geophysical exploration along the rift,” Allen said. Establishing a power plant in Chaffee County “could make it attractive for other power plants south along the rift.” However, like all power plants, geothermal plants come with potential impacts, and a group of community residents have raised questions and expressed opposition to such a power plant in the county. SDCEA board members have supported the search for external grant funding to secure funds to drill a test well to determine the presence of a hot-water reservoir. “If testing results are positive, SDCEA, as a community cooperative, can help assure appropriate steps are taken to address members’ inquiries and concerns through public and regulatory channels before advocating for the establishment of a power plant,” Allen explained.

In addition to providing a clean base-load energy source, geothermal offers new job opportunities as the nation moves away from fossil fuels to combat climate change. Skills acquired in the oil and gas industry are similar to those needed to develop geothermal energy. “It’s the same concept — drilling to bring fluid to the earth’s surface; it’s a similar skill set,” said Johanna Ostrum, Chief Operating Officer for Transitional Energy, a geothermal development company that helps oil and gas companies reduce their carbon footprint by generating onsite, emissions-free geothermal electricity used to power their operations.

United Power, an electric cooperative that serves Colorado’s northern Front Range, has signed a letter of intent with Transitional Energy to develop a dispatchable energy pilot program. United Power provides electric service to multiple oil and gas operations in Colorado’s Denver-Julesburg Oil Basin to power drilling rigs and other equipment.

Additionally, Transitional Energy is exploring the idea of repurposing existing oil and gas infrastructure for geothermal energy development. The company is currently looking at a former oil and gas site in Weld County, Ostrum said, who worked for 16 years as an oil and gas engineer before being laid off after the company went bankrupt. “Geothermal was a nice transition for me,” she said. “It’s energy for the future. There are opportunities in oil and gas basins in Colorado for this technology. As oil and gas workers get laid off, geothermal is a great place for these folks to land.”

Like all energy development, environmental impacts exist but are minimal, Carter said. When repurposing existing oil wells, there could be a brief period of enhanced oil recovery, although it is anticipated the oil would bottom out over time, he noted. And, while geothermal is considered essentially carbon-free, in some basins there is a possibility of minor emissions. Once a closed-loop geothermal system is operating, there are no emissions, he said. 

Drilling and enhancing geothermal reservoirs can potentially cause microquakes not felt on the surface, although there are a few rare cases of larger seismic events that have occurred at previously unknown fault lines. However, technologies have advanced in recent decades where scientists have gotten better at mapping fault lines and managing reservoirs, making the risks well-mitigated, Carter said.

“Ultimately this is a win-win-win using energy beneath our feet and creating jobs that are local,” Carter said. “As coal power plants retire, why not build geothermal? The available infrastructure within our communities provides a lot of opportunities today and for future generations. What we’re finding in Colorado has implications for the world.”

Sharon Sullivan is a freelance journalist based in Grand Junction. She writes for a variety of magazines, newspapers, and nonprofit organizations. When not working she’s likely to be out hiking the public lands surrounding the Grand Valley.