Geothermal Energy:

Outlook Limited for Some Uses but Promising for Geothermal Heat Pumps

RCED-94-84: Published: Jun 3, 1994. Publicly Released: Jul 1, 1994.

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Pursuant to a congressional request, GAO reviewed the potential uses of geothermal energy for electrical generation, direct-use applications, and geothermal heat pumps, focusing on: (1) the obstacles to development; (2) industry and government efforts to overcome these obstacles; and (3) the environmental effects of geothermal production.

GAO found that: (1) increases in the use of geothermal electricity are limited, since most of the known economically viable hydrothermal fields are in use and production is declining; (2) there is little demand for geothermal electricity and the prices for such electricity are not competitive; (3) the Department of Energy (DOE) is supporting industry efforts to extend the life of hydrothermal fields, reduce drilling and extraction costs, improve efficiency, and explore new resources; (4) geothermal power production causes fewer, less serious environmental problems than conventional methods and its by-products are easier to dispose of; (5) the government has provided technical and engineering assistance, demonstration projects, and loan guarantees for geothermal energy development; (6) direct-use geothermal applications are limited by the high risk of drilling and cost of development, low fossil fuel prices, and the lack of information on geothermal sites near large population centers; (7) geothermal heat pumps are the most energy-efficient, cost-effective, and environmentally clean systems for heating and cooling buildings in most areas, but their use has been limited due to consumers' unfamiliarity with the technology, high installation costs, and the lack of promotion by DOE and the industry; and (8) geothermal heat pumps could save billions of dollars annually in energy costs and substantially reduce pollution if they are installed nationwide.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: DOE's September 13, 1994, response to the House and Senate committees stated that it concurred with the GAO recommendations concerning the promotion of geothermal heat pumps as a tool for energy efficient heating and cooling. According to the DOE geothermal heat pump program manager, DOE is participating in a collaborative effort with industry stakeholders to promote a significant increase in their use. The manager said that DOE's funding for geothermal heat pumps increased from about $500,000 in fiscal year 1994 to $6 million in fiscal year 1995 with $4.5 million requested for fiscal year 1996, with the possibility of being increased to $7 million. The private sector's share of the program is approximately double the DOE share.

    Recommendation: Because of the significant economic and environmental benefits that geothermal heat pumps may provide, the Secretary of Energy should establish, under existing DOE authority, a program to promote them as a tool for energy-efficient heating and cooling.

    Agency Affected: Department of Energy

  2. Status: Closed - Implemented

    Comments: DOE's September 13, 1994, response to the House and Senate committees stated that it concurred with the GAO recommendations concerning the promotion of geothermal heat pumps as a tool for energy efficient heating and cooling. According to the DOE geothermal heat pump program manager, DOE is participating in a collaborative effort with industry stakeholders to promote a significant increase in their use. The manager said that DOE funding for geothermal heat pumps increased from about $500,000 in fiscal year 1994 to $6 million in fiscal year 1995 with $4.5 million requested for fiscal year 1996, with the possibility of being increased to $7 million. The private sector's share of the program is approximately double the DOE share.

    Recommendation: The Secretary of Energy should gather and disseminate information on geothermal heat pumps so that utilities, contractors, and consumers will be aware of their benefits.

    Agency Affected: Department of Energy

  3. Status: Closed - Implemented

    Comments: DOE's September 13, 1994, response to the House and Senate committees stated that it concurred with the GAO recommendations concerning the promotion of geothermal heat pumps as a tool for energy efficient heating and cooling. According to the DOE geothermal heat pump program manager, DOE is participating in a collaborative effort with industry stakeholders to promote a significant increase in their use. The manager said that DOE funding for geothermal heat pumps increased from about $500,000 in fiscal year 1994 to $6 million in fiscal year 1995 with $4.5 million requested for fiscal year 1996, with the possibility of being increased to $7 million. The private sector's share of the program is approximately double the DOE share.

    Recommendation: The Secretary of Energy should establish, to the extent feasible, regional demonstration centers to provide information, training, and technical assistance to architects, designers, engineers, and contractors on geothermal heat pumps.

    Agency Affected: Department of Energy

  4. Status: Closed - Implemented

    Comments: DOE's September 13, 1994, response to the House and Senate committees stated that it concurred with the GAO recommendations concerning the promotion of geothermal heat pumps as a tool for energy efficient heating and cooling. According to the DOE geothermal heat pump program manager, DOE is participating in a collaborative effort with industry stakeholders to promote a significant increase in their use. The manager said that DOE funding for geothermal heat pumps increased from about $500,000 in fiscal year 1994 to $6 million in fiscal year 1995 with $4.5 million requested for fiscal year 1996, with the possibility of being increased to $7 million. The private sector's share of the program is approximately double the DOE share.

    Recommendation: The Secretary of Energy should contact state regulators and utilities and encourage them to adopt conservation programs that will promote such energy-saving technologies as geothermal heat pumps.

    Agency Affected: Department of Energy

 

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