At Department of Defense (DoD) installations, critical operations depend on a reliable, cost-effective, and resilient energy infrastructure. Currently, space heating is primarily supplied through direct combustion, an approach that can be inefficient, costly, and vulnerable to supply chain disruptions. Thermal microgrids present an opportunity to modernize DoD heating and cooling systems with advanced, a market-driven solution that transforms readily available, high-utility components into a powerful innovation that enhances efficiency, lowers operational costs, and strengthens installation resilience.

This project will demonstrate and validate the use of ground-source heat pumps, groundwater heat pumps, surface water heat pumps, and thermal energy storage to optimize thermal load management. The first phase will conduct a feasibility study to assess cost-effectiveness and mission readiness, ensuring that the proposed solution meets the operational and economic needs of the DoD. These technologies will be integrated into a thermal microgrid operating at near-ambient temperatures, significantly improving efficiency compared to conventional hydronic heating, ventilation, and air conditioning (HVAC) systems. By leveraging lower operating temperatures, this system will enable better energy utilization, capture waste heat for productive use, and enhance resilience by reducing dependence on external energy supplies.

A comprehensive feasibility study will quantify expected cost savings, energy efficiency gains, and long-term return on investment, reinforcing DoD’s commitment to energy independence and operational effectiveness.

Current district thermal energy systems in the U.S. generally rely on separate heating and cooling networks, with heating typically provided through high-temperature pressurized hot water systems (180°F / 82°C). As of 2016, 12 DoD installations operated district energy systems, primarily utilizing combined heat and power (CHP) and district heating infrastructure. While effective, these systems often require significant maintenance and are vulnerable to external fuel supply risks.

Thermal microgrids represent a cutting-edge, American-driven innovation designed to enhance installation energy resilience and reduce operational costs. Operating at near-ambient water temperatures, these microgrids integrate heating and cooling into a single, flexible network that enables bidirectional mass flow. Heat pumps within connected buildings precisely regulate temperatures, ensuring efficient energy distribution. Additionally, buildings and processes within the microgrid can function as both energy consumers and producers (“prosumers”), reducing peak demand and optimizing load balancing.

This project will produce a conceptual design for a thermal microgrid at a DoD installation, forming the foundation for Phase 2—full-scale deployment. A successful demonstration will pave the way for competitive solicitations from engineering and energy service firms to implement the thermal microgrid, ultimately delivering a next-generation energy solution that reduces costs and strengthens energy independence.

The National Renewable Energy Laboratory (NREL) has identified potential reductions in source energy-use intensity for HVAC of 21%–25% when implementing thermal microgrid systems in suitable applications. These reductions translate directly into cost savings, improved operational efficiency, and greater energy security for DoD installations. The distributed nature of thermal microgrid infrastructure enhances resilience by reducing the risk of system-wide failures, ensuring installations remain mission-ready under all conditions. Compared to traditional building-level HVAC systems, thermal microgrids require less maintenance, reducing long-term sustainment burdens and associated costs.

By increasing the potential for on-site energy generation, thermal microgrids strengthen DoD energy independence, reducing reliance on foreign energy sources and insulating installations from market volatility. This effort also advances American-led energy technology and supports domestic industries, reinforcing the Administration’s commitment to economic growth, military readiness, and national security. By leveraging a cost-effective, market-driven solution that transforms readily available, high-utility components into a powerful innovation, this project supports the Administration’s priorities of reducing government waste, increasing installation resilience, and securing American energy independence for the future.