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Habitat Magazine Business of Management 2021

HABITAT

ARCHIVE ARTICLE

Good-Bye, Fossil Fuel. Hello, Earth

Ask Joseph Sbiroli how the geothermal heating and cooling system is working at The Modern apartment building, and he’ll say, “It’s working beautifully.”

But that sentence isn’t quite all. He adds: “...After a lot of aggravation and blood, sweat, and tears.”

Sbiroli is the principal of Ventura Land Corporation, which developed The Modern, a luxury eight-unit, six-story rental in Manhattan’s Meatpacking District that opened Labor Day weekend. While he was committed to using geothermal energy for the project, Sbiroli says he was not prepared for how hard it was to implement – cutting through red tape, waiting for permits, and not being able to find contractors experienced in this area.

But geothermal backers say the technology promises sizeable savings in heating and cooling costs. Geothermal energy works by using the constant temperature of the earth instead of fossil fuels to heat buildings in winter and cool them in the summer. There are several different ways to set up a geothermal system, but in Manhattan, the preferred method is what is called a standing-column well.

Greg Lampman, project manager for the New York State Energy Reduction Development Authority (NYSERDA), says it works like this: a well or several wells, usually about eight to ten inches in diameter, are dug near a building’s property, often on the sidewalks. The wells usually go down about 1,500 feet, where the groundwater is about 50 degrees. Electricity is used to pump that well water into a device known as a heat pump.

In the winter, the heat pump pulls the heat – called BTUs, or British Thermal Units, which are a measurement of heat – from that relatively warm, 50-degree water. The BTUs are then diverted to a building’s common areas and apartments either by blowing hot air through a forced-air system or through water via a fan coil unit. Even though the well water is only 50 degrees, a comfortable 72-degree temperature can be attained because the heat pump concentrates BTUs. In the summer, the pump is reversed. It sucks in that 50-degree water, which is now relatively cool, and then uses those BTUs to send cool water or air through a building’s system. In addition, hot air from the building is drawn back into the heat pump, and the BTUs are essentially dumped back into the water. That, in turn, is returned to the geothermal well where it will cool down again before the cycle repeats. Electricity is used to power a geothermal set-up, but it is a fraction of the amount needed for an electric heating system, and it eliminates gas and oil fuels.

At The Modern, Sbiroli says some of the problems with geothermal appeared at the outset. “First of all, the difficulty of getting the necessary city and state clearances and permits to dig a well into Manhattan bedrock on the sidewalks of a Manhattan street are huge,” he says. It took nine months. “It’s one thing to have your well in the ground, it’s another thing to have your sensors and controls all working perfectly,” he says. “If there’s one thing wrong, it’s like a chain reaction.”

Sbiroli says he even had a hard time hiring a superintendent for the building; few candidates wanted to deal with the complex system. There is at least one heat pump in each unit and the one in the penthouse did not work so Sbiroli could not show the apartment for rental for months. He also says he ended up installing an emergency backup electric heat system that would kick on if the units dropped below a certain temperature.

Sbiroli is frank: he doesn’t think that installing geothermal would make sense for many existing properties. “Most older buildings use steam heat, they have two-pipe hot-water systems, they have old pipes … it’s doable on paper but the cost involved would be off the charts,” he says.

Sbiroli estimates that installing a geothermal system at The Modern cost about $120,000 more than a traditional system. But he also estimates that geothermal will save an average of about $600 per year per apartment. At some point, the building could go condo, and Sbiroli says geothermal would be a good marketing point. “Whether you’re doing a condo or a rental, the only way to survive is to have units where you have the lowest possible energy costs available,” he says. “We eliminated the cost of oil out of the equation.”

Still, one of the biggest difficulties, Sbiroli notes, was that few contractors and subcontractors were familiar enough with geothermal to make the project go smoothly. That’s a problem that even NYSERDA recognizes.

“Part of the work we do here is related to market transformation,” says Paul Tonko, president and CEO of NYSERDA. “It deals with creating the workforce needed to carry this technology into the market.” To that end, NYSERDA is working with local community colleges to train professionals who would install geothermal equipment.

“I think you have to develop a comfort zone for consumers,” Tonko says.

Currently, there is no NYSERDA incentive for geothermal installation. However, installing it is one way that a building can get cash incentives under the agency’s Multifamily Performance Program, which requires a 20 percent reduction in energy consumption through a variety of methods. (The Modern got about $22,000 to offset its geothermal project, under an incentive program for new construction.) Buildings can also apply for low-interest NYSERDA loans to take on geothermal projects.

NYSERDA’s Lampman says most are easier to install in new construction, before a building is erected, although retrofits are possible. NYSERDA estimates you can save 30 to 60 percent on your cooling costs. The estimates for heating savings are more modest.

“On the heating side, we say between zero and thirty percent,” says Lampman. “That tends to make everyone unhappy.” Lampman notes that heating savings are lower because it depends on the type of system being replaced and the type of fuel used. Replacing an efficient gas-fired boiler will give less savings than replacing an ancient oil-driven one.

But even if savings are low, Tonko touted the predictability of a geothermal system. Lampman says that even though some electrical power is needed, it uses far less than a traditional heating/cooling system. For example, you would use one-third of the electricity to power with geothermal than you would to power with a traditional electric heating system.

While geothermal does offer an economic savings over traditional heating and cooling methods, it was the environmental impact that ultimately motivated the General Theological Seminary of the Episcopal Church to embark on a massive geothermal project at the 190-year-old campus in Manhattan’s Chelsea Square. “We’re doing this because we think it’s the right thing to do for the environment and the long term benefit of the institution,” says Maureen Burnley, executive vice president of the seminary.

The project began about four years ago because the 20-building campus needed to upgrade its aging infrastructure, including an old oil-fired boiler and window air-conditioning units, says Burnley.

“We realized that we needed not to just drag this into the 20th century but position it for the 21st century,” Burnley says. Construction began in summer of 2007. Steam heat radiators will be replaced with fan coil units that will eventually blow hot or cool air into the building. The project includes 20 geothermal wells that will come online in three phases, the first one in Spring 2008. The project’s total price tag is $15 million, which Burnley says will be financed through capital fundraising and loans.

“Ultimately, the system will pay for itself in reduced costs over time,” she says. Burnley is projecting a return on investment in about 15 years, though that time may be even shorter. When that return-on-investment projection was calculated, heating oil was $1 a gallon; it is now $3 per gallon. “We spend about $450,000 a year on heating and cooling for the whole complex,” she says. “That is going to get down to less than a third of that by the time it is all up and running.”

Burnley adds that she was unprepared for the difficulty in installing geothermal. There was no “rule book” to say how many different agencies needed to bestow approval.

“Each time we thought we had done everything, another city agency weighed in,” she says. Permits took more time than expected, and the project was complicated because the city’s water tunnel runs under the seminary property and had to be avoided.

When asked whether the seminary was receiving any NYSERDA incentives, Burnley ruefully laughed. The total amount to offset a $15 million price tag will likely be less than $200,000, obtained through a program that covers non-residential renovations. Burnley says the project started out as an economic and environmental decision, but, over time, that sentiment changed. “In the end, we’re doing it because we feel it’s morally right,” she says. “That has been the only thing that could sustain us through all the obstacles.”

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