China Is Scaling Geothermal District Heating & The World Should Pay Attention

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When China starts scaling a technology at massive levels, the rest of the world should take notice. That’s not a geopolitical statement, it’s a thermodynamic and logistical one. China doesn’t mess around when it comes to heat, power, and infrastructure. And in the case of ground-source heat pumps used for district heating, China has been quietly laying down tens of thousands of systems, with over 77 GW of installed capacity by 2019.

As a note, this is one in a series of articles on geothermal. The scope of the series is outlined in the introductory piece. If your interest area or concern isn’t reflected in the introductory piece, please leave a comment.

By comparison, the global geothermal electrical generation capacity is under 17 GW. While electricity is useful and can drive heat pumps with high coefficients of performance, and is necessary for the operation of ground-source geothermal, a single country having five times the GW of global geothermal electrical capacity should make policy makers stand up and take notice. This is distinctly a place where geothermal shines as opposed to getting pecked to death by black swans.

That’s not some speculative greenwashing pilot — it’s hundreds of millions of square meters of actual heated space, spanning campuses, residential developments, commercial buildings, and municipal networks. The Western discourse may still be stuck debating gas vs heat pumps at a single-home level, but China has moved on to “how do we dig 400 boreholes under a high school football field and connect them to every building in a ten-block radius?”

The core idea is simple. Instead of burning gas or biomass or shuttling steam across cities, you circulate water or glycol through pipes underground and tap the constant temperature of the Earth. It’s a dumb idea if you want quick wins or low upfront costs. But it’s a brilliant idea if you’re playing the long game — eliminating combustion, slashing emissions, and building infrastructure that lasts for generations. The Chinese deployments, along with parallel efforts in places like Sweden, Denmark, Germany, and even U.S. universities like Ball State, prove that ground-source heat pumps at district scale work. They’re not “emerging” technologies. They’re here, they’re big, and they’re getting better every year.

Take Ball State University in Indiana as an emblematic example. Over a few years, they drilled 3,600 boreholes about 120 meters deep across their campus and replaced an aging coal-powered steam system with water-to-water heat pumps. The result: 47 buildings heated and cooled with a system that delivers a seasonal coefficient of performance of 3.7. That’s a 270% efficiency gain over resistive electric heat, and it’s all electric, meaning it gets cleaner as the grid gets cleaner. If that’s not impressive enough, the heat pumps also do cooling, so they scrapped their old chillers too. It’s a one-two punch — carbon cuts and long-term cost savings in one go. The upfront cost was high, around $83 million, but when you’re replacing not just heat but chillers and laying in heat for half a century, the payback math starts to make fossil fuels look pretty dumb.

The economics aren’t necessarily straightforward. Ground-source heat pumps, especially when used at a district level, front-load the pain. Drilling isn’t cheap. Whether you’re going 100 meters or 400, you’re spending real money per hole. But unlike natural gas systems, where every BTU comes with a bill forever, a borehole field is a one-time investment that just keeps working. Think of it as drilling into a giant thermal bank account—you deposit once and withdraw for decades.

In Colorado Mesa University’s case, they installed nearly 500 boreholes and run a low-temperature ambient loop through a bunch of campus buildings. The university is located in Grand Junction, on the western slope of the Rocky Mountains in a high desert climate. Summer temperatures frequently rise above 100°F (38°C), while winter lows can drop below 10°F (-12°C), with occasional extremes near -20°F (-29°C). It’s not just about heat; it’s about efficiency. Their heat pumps hit COPs as high as 6 when buildings share waste heat through the loop. They’ve reported years where backup boilers never even fired up. This isn’t just sustainability — it’s operational robustness.

What makes ground-source particularly compelling at the district level is the scale-based efficiency. When you link buildings together with a shared borehole field, you get diversity of load. That means the system doesn’t need to be sized for the worst-case peak of every building — it only needs to meet the blended demand across the network. The result? Fewer boreholes per building, less equipment, and smoother operation. That’s not a theory — it’s been validated in places like Whisper Valley outside Austin, Texas, where every home gets its own borehole tied into a community loop. The system works because not all homes need peak heat or cooling at the same time, and the shared infrastructure can flex with the neighborhood’s rhythms. Homeowners pay a flat monthly fee, and the system operator maintains the geothermal infrastructure like a utility. It’s heat as a service, backed by dirt and physics instead of gas molecules and hope.

Of course, not every geography is a geothermal slam dunk. You need drilling access, decent subsurface conductivity, and enough space to make the borefield work. But the engineering isn’t exotic. We’ve known how to drill vertical boreholes for decades. And for places without a lot of land, innovations like energy piles — where the building’s foundation doubles as the heat exchanger — are bridging the gap. In dense cities, directional drilling or deep boreholes are opening up previously inaccessible projects. It’s not easy, but it’s getting easier. And the payoff is no combustion, low maintenance, and a system that just keeps humming.

Compare that to the alternatives. Gas boilers are cheap to install, but are a ticket to a future filled with volatility, carbon costs, and infrastructure lock-in. Biomass sounds great until you realize you’re hauling wood pellets across the country and installing particulate scrubbers to avoid choking your neighbors. Waste heat systems are amazing when they work, but they’re hostage to whatever industrial process or data center they’re attached to. If that plant shuts down or scales back, the heat’s gone. CHP systems are better than dumb boilers, but they’re still fossil-based and only make sense when the electric grid is more carbon-intensive than your gas turbine — not exactly the long-term picture. And large air-source heat pumps, while promising, are less efficient, noisy, and get grumpy when the mercury drops.

Meanwhile, a ground-source district heating system just sits there, quietly cycling water through the Earth and back, day in and day out. The thermal mass of the ground doesn’t care if it’s January or July. It doesn’t need a price on carbon to be efficient. It doesn’t require tankers full of fuel. It just works. And the systems are getting smarter — variable-speed pumps, distributed controls, predictive algorithms that match loads with ground capacity. They’re integrating with solar, managing thermal balance, and even pulling waste heat from grocery store refrigeration units. This isn’t a niche. This is a backbone.

The opportunity to displace natural gas distribution utilities with geothermal heat utilities isn’t just a technical one, it’s an infrastructural reset. Gas grids were designed in an era where the goal was to pipe combustible fuel to every building and burn it locally. Geothermal ground loops flip that completely: pipe low-temperature water instead of gas, and transfer heat rather than combust it. The thermodynamic efficiency is far higher, the emissions are practically zero, and the safety risks drop to near nothing. You’re not piping a flammable gas under pressure, you’re moving water or glycol.

Gas utilities don’t have a future in moving more combustible gases. The one they move through their pipes now is a fossil fuel and a potent greenhouse gas, so it has to go. After decades of trying, gas companies have managed to get to a range of 0.1% to 1% of gas being biogas, and that’s still putting a potent greenhouse gas in a leaky system. As for hydrogen, its vastly leakier, still a potent, if indirect greenhouse gas, and radically more expensive to boot. That’s why despite a decade of frantic lobbying by gas utilities, the EU has put a big red X through the idea. But they could have a future as heat utilities.

Right now gas utilities, outside of forward-thinking places like Utrecht in the Netherlands, are facing the utility death spiral as consumers pivot to heat pumps but the gas distribution system remains in place and costs just as much to operate. Lower revenue, persistent costs, bad business case. But if they got into the business of heat, they could strategically build geothermal loops in a region, shift everyone over, and shut down the gas connections.

Unlike hydrogen fantasies, this doesn’t require inventing new infrastructure materials or reengineering thousands of appliances. We already have the pumps, the controls, the heat pumps, and the boreholes. The regulatory frameworks are catching up, especially in places like the UK where companies like Kensa are proposing shared ambient loops as direct replacements for gas distribution in neighborhoods. In North America, utilities like Eversource and National Grid are piloting shared loop geothermal systems as thermal utilities. Instead of delivering molecules, they’ll deliver thermal potential. Once that business model catches on, and once regulators recognize a loop is infrastructure on par with a gas main, whole neighborhoods can decarbonize in a single project.

It’s not all smooth sailing. The challenges aren’t about physics — they’re about planning, permitting, and economics. For starters, drilling hundreds of boreholes isn’t something you do overnight. You need space, time, and the right subsurface conditions. In dense urban areas, space is tight, and every borehole might need bespoke design to avoid underground utilities or navigate tricky soil. Coordination across property lines can be painful. This is actually a place where the directional drilling so necessary for fracking has economic merit outside of fossil fuels, unlike the black-swan riddled ideas of deep and enhanced geothermal electrical generation.

Then there’s the upfront cost. Even if the lifetime cost is lower than gas, someone has to finance the capital, and utilities, municipalities, and developers don’t always play well together. Permitting is another mess. In many jurisdictions, there’s no established permitting process for shared thermal loops, or it’s lumped in with water well regulation, which is an awkward fit. And while private developers can act fast, public sector projects often move at the speed of frozen molasses in January. Add in concerns about performance risks (Will the borefield overheat? Will thermal imbalance degrade output over time?) and you get the usual institutional caution.

Then there’s the human side. People are used to gas. They understand gas bills, gas meters, gas furnaces. Asking them to adopt a subscription model for geothermal heat delivered through a shared loop requires rethinking how heating is sold, delivered, and maintained. Who owns the loop? Who maintains it? What happens when someone sells their home? Until recently I was the strata council president of my little vertical village of 233 households over 19 floors in a corner of the block here in downtown Vancouver. The only piece of climate-adaptation and mitigation I didn’t achieve on my watch was getting the building hooked up to the local district heating utility to replace our gas-boiler for hot water. One day… but at least we have heat pumps and EV charging (which have significantly increased my condo’s valuation, so call me self-interested).

These are solvable problems, but they require new business models, new utility thinking, and public education. Still, the payoff is immense: a local, zero-combustion energy source that can serve entire blocks without the risk of explosion, price volatility, or political exposure to imported fuels. And the ground doesn’t care if your loop serves 5 homes or 500, the thermal mass scales beautifully.

What’s clear is that the fight over the future of heating is shifting. Gas networks are aging, expensive to maintain, and increasingly misaligned with climate targets. Electrification is the way forward, but electrifying heating with resistive elements or even air-source heat pumps puts a strain on grids, especially in cold weather. Geothermal loops offer a stable, load-flattening alternative. They distribute heating capacity without adding megawatts of peak demand. And if they’re built out using utility cost-of-service models, they can be financed and maintained just like gas mains once were, except this time, without the explosions, carbon, or stranded asset risk. The next decade will determine whether we retrofit cities the dumb way — piecemeal and reactive — or the smart way, with shared infrastructure that taps into the Earth itself. The window is open. The ground is waiting.

The geothermal projects that grab headlines — deep wells tapping magma-adjacent rock or enhanced geothermal systems requiring hydraulic stimulation — come with big promises and even bigger risks. These are the moonshots: billion-dollar drill jobs that bank on hitting the geological jackpot. They look great in press releases and glossy investor decks, but they’re classic Bent Flyvbjerg long-tailed megaprojects, where a handful of winners hide a long trail of cost overruns, dry wells, seismic surprises, and flat-out failures. Every extra kilometer drilled multiplies uncertainty, and the moment you start fracturing deep granite, you’re not just managing energy, you’re managing public fear and regulatory scrutiny. The odds of blowing out your timeline or your budget are baked into the rock itself.

Meanwhile, boring old shallow geothermal for district heating barely gets a mention, despite being the quiet workhorse with a moderate and highly manageable risk profile. We’re talking about low-variance projects: modest depth boreholes, proven heat pump tech, and heat delivery systems that piggyback on existing infrastructure. No exotic geology. No induced seismicity. No billion-dollar wells. These projects don’t aim to change the world overnight; they aim to decarbonize buildings today. And they actually work, over and over again, in country after country. It’s not glamorous, but it’s dependable, replicable, and scalable — exactly the kind of solution that survives contact with the real world. While the deep drillers roll the dice, district-scale geothermal quietly replaces gas with heat pulled gently from the earth, no fireworks required.

So yes, the upfront costs are higher. But the long-term trajectory is unbeatable. We’ve built infrastructure that’s been obsolete in a decade. Ground-source district heating isn’t one of those. It’s a permanent upgrade. If you’re building a new neighborhood, a campus, a hospital district, or a cluster of commercial buildings and you’re not considering ground-source, you’re ignoring the quiet revolution that’s already halfway around the world and heating tens of millions of square meters without burning a single thing.

If you’re a gas utility that’s not working toward being a heat utility but betting on hydrogen, you’re throwing away your future and your shareholders’ revenue stream. If you’re an urban planner consider the future of existing neighborhoods and not in serious talks with district heating organizations like Creative Energy or your local gas utilities about create geothermal loops, you aren’t serious about your job.

The question isn’t whether district heating based on geothermal is viable. The question is why everyone’s not already doing it. And with China in the lead, we might not have long to ask. They’ll be reaping the benefits of cheap, low carbon heat while the west continues to waste energy and climate-solution time.