Geothermal costs can even be halved with a new method – A tough claim from an energy service company

In the future, the heating costs of large properties using geothermal heat can be significantly reduced when they can be connected to the electricity reserve market, claims the energy service company Geonova.

The savings opportunity applies, for example, to large building societies. According to Geonova, savings are created when the electricity consumption of ground heat is controlled centrally as a whole of several properties.

In practice, this means that geothermal systems are connected to the reserve market. According to Geonova’s own calculations, operating costs can then drop by up to 50 percent based on market data from recent years. The calculation includes electricity used for heating, electricity transmission, taxes and system maintenance.

The background is the rapid change of the electricity system and the growth of renewable electricity production, such as wind and solar power. Since production varies according to weather conditions, the power grid must constantly balance demand and supply. For this purpose, a reserve market has been created, where compensation is paid for the flexibility.

Increasingly, flexibility does not come from traditional power plants but from energy consumption, such as heating buildings. Geothermal heat pumps work with electricity, and their consumption can be scheduled as needed.

From buildings to virtual power plants

An individual building is not yet a significant player in the electricity system. However, when hundreds of geothermal sites are combined into one controlled entity, a so-called virtual power plant is created. According to Geonova, such an entity can already produce flexibility in the megawatt class.

From the residents’ point of view, the heating works as before, but in the background the system supports the operation of the electricity grid and can reduce costs at the same time.

According to Geonova, for the time being, the model is not suitable for small properties or detached houses, where the impact of a single object is minimal. On the other hand, in large objects, the effect can be significant. In practice, the limit is crossed with an annual consumption of about a thousand megawatt hours, which usually corresponds to housing associations with at least 100–200 apartments, depending on energy efficiency.

“Heating systems in buildings have a huge ability to be flexible, and it has not been exploited before. When the geothermal heat is managed smartly and centrally, buildings can help the electricity grid to function better. At the same time, the cost logic of heating changes”, CEO of Geonova Tuomas Humalajoki says in the announcement.