GEONII

Geothermal Heat Pump
National & International Initiative

Washington, DC
PO Box 145, Springfield, PA 19064

The Geothermal National and International Initiative Inc (GEO-NII) is a collaborative effort within the geothermal heat pump industry to:

1. To promote the goals of the "Road to 30%" for the geothermal heat pump (GHP) industry both nationally & internationally to; Federal, State and local governmental officials, Utilities, the design community, the HVAC industry and end users in all market segments.
2. To develop a sustainable infrastructure through professional development training.
3. To support the adoption of IGSHPA standards & training certifications & accreditations, both nationally and internationally, for the design, installation and commissioning of GHP systems.
4. To advocate" rate recoverable" geothermal heat exchanger (GHE) ownership for Utilities and other 3^rd party owners
5. To continue to work for the adoption of geothermal heat pumps in State's Renewable Portfolio Standard (RPS) mandates, as an acceptable technology available for Renewable Energy Credits (REC)and/or emission credits which would help eliminate the first cost barrier.
6. To promote the adoption of the R.I.D.E. (Register, Inspect, Document & Evaluate) program which can capture the metrics for GHP projects.

I look forward to your support in achieving the goals of the "Road to 30%". Please call if you have any questions or need further information.

"The Road to 30%"

Energy has become a defining issue of our time and Climate Change is a concern that we can no longer choose to ignore. Super Storm Sandy has reinforced the growing sense, in political circles, that the reality of Climate Change puts our Nation at risk. The entire face of New York and New Jersey has been dramatically changed by the effects of that storm, in the five boroughs of New York City, the devastation has been estimated at over $30 Billion.

The "Road to 30%" is a path to Work Our Way to the "Triple E" Goals of Energy independence & security, Environmental stability and Economic prosperity by using the "Energy Under Our Feet", the energy we already own, to deliver space conditioning to residential, commercial and institutional facilities throughout the United States.

The Department of Energy states building lighting, appliances, space conditioning and water heating account for 36% of primary energy in the United States. This is far greater than the total energy used in the transportation sector and nearly equals that of the industrial sector, two thirds (2/3) of that is supplied by electricity. Forty percent (40%) of the total energy used, in those buildings, is for space conditioning (heating & cooling) and water heating!

A recent study conducted by the Rockefeller Foundation and DB Climate Change Advisors, supports that fact and point out that upgrading and replacing energy consuming equipment, in buildings, offers an important capital investment opportunity with the potential for significant, economic, climate and employment benefits. They go on to state that "an investment, in this type of initiative, could yield more than $1 Trillion of energy savings over 10 years, equivalent to saving approximately 30% of the annual electricity use in the US."

Geothermal Heat Pump systems (GHPs), a technology that uses the earth's thermal properties, in conjunction with electricity, to provide space conditioning and water heating to facilities and one that the US Environmental Protection Agency (EPA) has stated reduces Greenhouse Gas emissions by up to 40% over conventional HVAC systems, can accomplish these goals.

A report released, in 2006 by the National Research Energy Laboratories (NREL), entitled "The Energy under Our Feet", states that, there were more than one million geothermal heat pump systems in use nationwide. Since then we estimate that number has grown to approximately 1.5 million. While this is a large number, it still represents less than 2% of all heating and air-conditioning units in the United States. Although the geo footprint is a small one, those units have had a significant combined effect on energy savings and environmental issues.

• Conserved over 31 million barrels of crude annually, reducing our dependency on fossil fuel.
• Eliminated approximately 9 million tons of CO2 (equivalence of taking 2 million cars off the road or planting about 748 million trees).

How can we accomplish this?

One of the main barriers and some think the only barrier, is first cost. The primary cause of this is the installation of the geothermal heat exchanger (GHE), which represents over 90% of the cost of a system. The goal is to remove that barrier by taking the geothermal heat exchanger out of the equation for the end user. The model that would work best is to have the GHE become an asset owned by a third party, preferably a Utility (electric or gas, Investor owned, Co-Operative or Municipal). This would be a "rate recoverable" business unit and would enable the company to take advantage of the numerous benefits the GHE represents, such as:

-Permanent Demand Reduction, (.55kW to .88kW reduction per ton of installed GHE) A reduction that requires no notification and delivers 365 days per year.

- Renewable asset, The States of Maryland and New Hampshire have made GHPs an accepted technology available for Renewable Energy Credits (REC's) under the State's Renewable Portfolio Standard (RPS) mandate. This allows Utilities to take credit for thermal load avoided.

This technology enables an entity to become the space conditioning (heating AND cooling) provider for a facility, reducing energy costs, saving water and providing comfort for the end user by moving energy from the ground to the facility.

What are the potential benefits to be derived from "The Road to 30%"?

Fossil Fuel Savings: @ 30% = 175 billion KWh reduction per year.

Dependency on Fossil Fuels: @ 30% = over 477 million barrels crude oil saved per year

Power Reduction: @ 30% = Reduction of electric demand, by over 36,564,000 KW or 36,564 MW demand reduction per year. (1 ton of geo loop capacity reduces demand by .55- .88 kW).

Power Production: @ 30% = the amount of energy (BTU to kW conversation) taken from the ground, by these systems. 306,771.96 MWH per year.

Environment: @ 30% = over 35 million metric tons of carbon and over 130 million metric tons of CO2 annually. Equivalent of removing 29 million cars or planting 8.5 billion trees per year.

Economic Development: @ 30 % = 5 million jobs will be created or retained, within this industry in order to achieve this goal and numerous other economic benefits occur. (See accompanying document)

Other Needs: The initiative's success depends on continuing to accelerate the development of a sustainable infrastructure, through professional development training, in all facets of the GHP technology. This can be accomplished by supporting the accredited training courses in design, installation, drilling and looping which have been developed by the International Ground Source Heat Pump Association (IGSHPA) and are currently available.

To recap, the goal of the "Road to 30%" is to gain a thirty-percent share of the HVAC market for safe, efficient and renewable geothermal heat pump technologies. The "Road to 30%" is the path for us to Work Our Way toward Energy Independence & Security, Environmental Stability and Economic Prosperity and creates a sustainable energy future for generations to come.

I welcome the opportunity to further discuss other ideas on how to achieve the goals of this initiative, please feel free to call me at 610- 659-4998.

Potential for Business

Geothermal heat pumps use the "Energy Under Our Feet" to provide heating, cooling and water heating using the earth's thermal properties, in conjunction with electricity for facilities such as schools, hospitals, office buildings and homes. This technology is one which is 90% "trade oriented" and has the ability to provide energy independence, environmental security and economic prosperity if we can achieve a 30% penetration of the HVAC market.

This document forecasts what a 30% share of the US HVAC market would mean to the manufacturing community, the drilling industry and also for the companies who install the geothermal heat exchanger (GHE). As you can see this only applies to the commercial and residential markets, it does not include the institutional or industrial market segments. The inclusion of those market segments would increase the estimations greatly

Residential:

A 30% share of the residential market would be 14,400,000 homes assuming 3 tons per home =43,200,000 tons.

Manufacturing:

14,400,000 heat pumps would be needed, assuming $2,500.00 per ton that would equate to $108,000,000,000.00 in revenue for the GHP manufacturers.

Drilling/Looping:

@ 200 drilling feet per ton that equates to 8,640,000,000 drilling feet @ $14.00 per drilling foot that adds up to $120,960,000,000 in revenue. (This would also require 17,280,000,000 feet of "pipe")

Commercial:

A 30% share of the commercial market would be 1,164,000 buildings assuming 20 tons per facility = 23,280,000 tons.

Drilling/Looping:

@ 200 drilling feet per ton = 4,656,000,000 drilling feet @ $14.00 per drilling foot = $65,184,000,000 in revenue. (this would require 9,312,000,000 feet of PIPE)

Moving Forward:

The 30% market penetration will only be realized if the "first cost" barrier of the geothermal heat exchanger (GHE) is eliminated. This can be accomplished by a third party (Utility) ownership of the GHE, who would then sell space conditioning or lease it to the end user. The obvious benefit to the Nation is a dramatic increase in jobs. These jobs would be in manufacturing, drilling & looping and all of the ancillary employment this increase would create (e.g. construction of manufacturing facilities, manufacturing of additional drill rigs, etc. etc.)

Once again, the "Road to 30%" promotes the use of the "Energy under Our Feet" to achieve the Triple E goals of; Energy independence & security, Environmental stability and Economic prosperity and solve some of the problems that are plaguing the United States.

We look forward to working with you in achieving these goals, on "the Road to 30%".

John (Jack) P. DiEnna Jr. Executive Director Geothermal National & International Initiative
jdienna@geo-nii.org
610-659-4998 (Cell)
610-328-5365 (Fax)

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