National Grid pulls plug on a geothermal pilot program in Lowell

February 4, 2025

By Bhaamati Borkhetaria

National Grid has quietly scrapped a project that would have brought geothermal energy to low-income customers and environmental justice communities in Lowell, citing higher than anticipated costs.

The program in Lowell was one of three pilots across the state testing whether geothermal energy could displace the use of fossil fuels for heating, air conditioning, and gas appliances. National Grid has another project under development in Boston and Eversource has one that’s already operating in Framingham.

“After much consideration, we have determined that we will not be able to complete construction of the Lowell geothermal project at a cost that makes sense for our customers,” said Christine Milligan, a National Grid spokesperson, in an email statement. “The cost per customer for this project was unfortunately much too high.”

The company informed select stakeholders of its decision but did not announce the change publicly. 

All three geothermal pilot programs were placed in environmental justice communities, which are often overlooked in the green energy transition even though they are frequently the most impacted by climate change. The Acre neighborhood in Lowell was chosen because it meets the state’s criteria of an environmental justice community. The Lowell project won approval in 2022, broke ground in April 2023, and was set to deliver geothermal energy to 31 customers in the Acre neighborhood in the north of Lowell.

The company pulled the plug before more boreholes were dug, any pipes were placed underground, or actual homes were modified with the new technology. The two holes that were dug for the project have been refilled. National Grid decided to stop the project once it received bids on how much contractors would charge for the construction of the geothermal network, Milligan said. 

“There are a number of issues that contributed to the higher-than-anticipated costs including inflation, rising supply costs, an undeveloped market (lack of competition) for geothermal construction, and, notably, the underground geologic conditions in Lowell that made the infrastructure more costly,” said Milligan.

The project’s estimated cost was $15.6 million over 5 years with $6.4 million in capital costs and $9.2 million for operations and maintenance. National Grid declined to give specifics on how much more the Lowell project would cost. 

Geothermal involves heat pumps much like the air-based heat pumps that have become popular in the state. However, instead of exchanging warmer and cooler air, the geothermal heat pumps harness the temperature differential between the surface of the Earth and deep underground. Pipes filled with a special liquid transfer heat to the building in the winter and pull heat into the ground to cool the buildings in the summer. The projects in Framingham, Boston, and Lowell all involved a network of “ground-source” heat pumps connected by pipes under the street as opposed to a single geothermal heat pump that services one customer.

In the initial proposal, National Grid said that it would charge its participating customers monthly participation fees over a five-year period to recoup some of its costs. The monthly participation fees were supposed to be $60 per month for residential customers, $45 per month for residential low-income customers, and $90 per month for commercial and industrial customers.

When the Department of Public Utilities gave National Grid approval, it capped the project’s budget at $15.6 million in order to establish a limit on how much the company could recoup from its ratepayers. 

National Grid is continuing to move forward with its networked geothermal program in Boston and the program that Eversource is running in Framingham is already delivering energy to customers.

Milligan said that the project in Boston – which is supposed to deliver geothermal heating and cooling to 129 units at seven federal public housing buildings at the Boston Housing Authority’s Franklin Field community in Dorchester – will go ahead because it “connects multiple family housing units and therefore does not have as high a cost per customer as the proposed pilot in Lowell.”

Milligan also said that in Boston, the Boston Housing Authority will be taking care of replacing gas appliances inside of residences, which mitigates some of the cost. 

Rep. Jeffrey Roy, the House chair of the Legislature’s joint energy committee, expressed surprise about the company’s decision. He said that he had not been informed by National Grid that the pilot had ended.

“This was a tremendous opportunity for us to realize just how important geothermal energy is to our energy transition, and I’m disappointed that National Grid didn’t follow through,” said Roy. “We were hoping with these [pilot programs] that we would be able to show the feasibility in a

networked geothermal environment so I’m puzzled as to why they would stop it.”

Roy said that he is going to push for this project to come back online. “I’m hoping we can do something to get this back on track because [geothermal pilot programs] are yet another important component towards helping Massachusetts achieve its goals of net zero by 2050,” said Roy, referring to the state goal of net zero carbon emissions by that date.

Zeyneb Magavi, the head of HEET, a Massachusetts-based non-profit that commissioned a study that inspired the pilot projects in the state, said many factors led to National Grid pulling the plug. She highlighted two key insights that have come from several of these pilot programs: It’s more costly to retrofit older buildings, and the geothermal contractors that do the work of installing ground pipes are part of a nascent industry so costs can be high.

Vickash Mohanka, the head of the Massachusetts Sierra Club, said that it is common for low-income communities to not see as much clean energy transition as higher-income neighborhoods.

“If you’re in a low-income neighborhood, those folks are worse customers because there is less disposable income that they can spend,” said Mohanka. “For utility companies, it’s way more expensive to get the same benefits into low-income than high-income communities. This keeps those investments in the communities that already have money flowing in them.”

Milligan said that National Grid is working with the affected customers in Lowell to explore alternatives to natural gas heating such as conversion to air-source heat pumps or, in some cases, individual ground-source heat pumps.

Eversource’s program in Framingham was switched on in June 2024 and has been delivering geothermal energy to 140 customers in 38 buildings, including Framingham Housing Authority apartment buildings, since last month. 

Eversource recently won a federal grant awarded to five projects across the country. Eric Bosworth, Eversource’s manager of clean technologies, said that the company is in the process of negotiating with the Department of Energy on the exact terms of the grant but that the company expects to get around $7 million to expand the project in Framingham. 

“We know geothermal works,” said Bosworth. “The challenge is coming up with a sustainable utility model with this technology.”

Despite the Trump administration halting permitting for wind power projects, geothermal advocates believe they still have a path forward. Geothermal projects have bipartisan support in Congress. And, when Trump declared an energy emergency last week, he included geothermal in his list of essential domestic energy resources even as he excluded solar, wind, and battery storage. His pick to lead the Department of Energy, Chris Wright, has said that he supports geothermal power.

“I can’t predict Trump,” said Magavi. “However, there is some expectation and hope that geothermal may even have a clear path forward in this administration.”