State regulators approved two "thermal energy" pilots but rejected nine others, raising questions about the future of the technology, New York Focus reports.

This story originally appeared in New York Focus, a nonprofit news publication investigating power in New York. Sign up for their newsletter here .

New York is pushing ahead with a key technology to shift homes to clean heating—but not as fast as some had hoped.

Last week, in a unanimous vote, the state’s energy regulator greenlit two neighborhood-scale electrification projects known as "thermal energy networks," while rejecting nine others.

These networks aim to tap existing resources to heat and cool buildings instead of burning fossil fuels . Some circulate "waste" heat from sewage, data centers , subway tunnels , or other sources; others use geothermal drilling to draw on the stable temperatures in the earth’s crust.

Most, like the newly approved projects in Buffalo and the Hudson Valley town of Haverstraw, do a combination of both, and then use electric heat pumps to turn that ambient energy into year-round heating and cooling.

By recycling waste heat, thermal energy networks offer what some analysts call "unmatched efficiency, " making them a top contender to replace aging gas systems. But they remain largely untested in the US. So far, only Framingham, Massachusetts , has such a system up and running, though Boston , Denver , and other cities are racing to build their own following a wave of enabling legislation across the country.

Proponents of the systems, including environmentalists and some unions, see them as the most viable way to move New York off gas at the speed required by its climate law. The state will need to electrify nearly all homes and businesses by 2050 to achieve its net zero emissions target. Its roughly 6 million total buildings include some of the oldest housing stock in the country, making them particularly challenging to clean up. But state regulators say they need more proof that thermal networks are a cost-effective solution.

The Buffalo and Haverstraw projects will now advance to final planning and, in principle, construction, making them New York’s first major test cases. They will cost a combined $112 million and heat and cool at least 32 buildings total, including dozens of apartments as well as public and commercial facilities. Both will serve areas that the state has identified as disadvantaged.

The bulk of the upfront funding will come from the $1 billion climate fund included in this year’s state budget, meaning local customers won’t be on the hook.

As part of its decision last week, the Public Service Commission rejected nine other pilot projects across the state that utilities have spent four years and close to $50 million planning. They would have covered nearly 200 buildings total and cost $1 billion—a sum the commissioners ruled was too high to justify.

Still, thermal energy proponents largely celebrated the order, touting it as a milestone for the technology.

"It’s kind of a breakthrough step," said Allison Considine, New York director of the Building Decarbonization Coalition. Her group helps spearhead UpgradeNY, a broad coalition of unions, environmentalists, and clean energy industry groups that led the charge for the 2022 law that spurred the pilots.

Considine said she was disappointed regulators didn’t approve more of the projects, but said the two that are moving ahead will go a long way in proving that the model can work in New York, and help bring union workers on board.

Unions have rallied around thermal energy networks because they require mostly the same skills to build and maintain as gas and other pipe systems. That means they could allow utilities to go green while keeping current union workers employed.