Community Energy Innovation for Increased Adoption of Small Scale Wood Energy Technology in the Western USA

NW Wood Energy Forum Andrew Haden May 6th, 2014

Presentation Overview • Why Community Energy? » Lessons from Grant County, Oregon

• The Harney Community Energy Project » Notes from a Project in Development

» Community Energy versus District Energy » How are they different?

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Why Community Energy? Lessons from Grant County

Lessons from Grant County • The Grant County Biomass Cluster is composed of a series of biomass boiler systems that were installed between 2010 and 2012 in Grant County, Oregon • The heart of the system is the Malhuer Pellet Mill which was an ARRA-funded project to convert small-diameter forestry thinnings into densified wood products • Wood-fired boilers were installed at: » Grant County Regional Airport (3 mi) » Blue Mountain Hospital (2 mi) » Grant Union Sr/Jr High School (4 mi) » Prairie City Schools (24 mi)

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Lessons from Grant County • If there is a clear local economic development story, community support will be strong » i.e. the Malheur Pellet Mill combined with saving money at the Schools and Hospital means local development

• Capital costs are the primary barrier » Capital Grants are very effective incentives for moving projects forward, but are less available » Long-term, low-interest debt is enough for some institutions to switch, but communities are debt averse » If no appetite for debt, new ways of financing are needed Copyright © Wisewood, Inc., All rights reserved.

Lessons from Grant County • Maintenance issues are the second barrier » Wood pellet boilers need trained maintenance staff for successful operation » Wood chip boilers need dedicated staff with strong mechanical skills

• Existing heating distribution needs must be addressed at the outset » Extended commissioning almost always required » Some updating of existing balance of system may be required to fully integrate the new boiler Copyright © Wisewood, Inc., All rights reserved.

Harney Community Energy Project Overview

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The Situation in Harney County • Approximately 20 Public and Private Buildings are candidates for biomass in some form » Total annual fuel bill: ~$500,000 » Ongoing Repair Estimate: $50,000/yr » Necessary major repairs under B.A.U.: ~$1M

• Most every system in the county is in bad shape and at the very end of their useful life • Message from the County leadership: “pellets over my dead body!” – want to create demand for local wood from local land base and small processors • Message from the School District: “no debt!”

Existing Boilers Burns, Oregon

Oil Boiler

Slater Elementary

Existing Boilers Burns, Oregon

Oil Boiler

Slater Elementary

Existing Boilers Burns, Oregon

Oil Boiler

Burns High School

Existing Boilers Burns, Oregon

Oil Boiler

Hines Middle School

Existing Boilers Burns, Oregon

Oil Boiler

Lincoln School

Harney Community Energy • The Harney Community Energy project is designed to: » Incorporate the lessons learned from Grant County » Transition away from grants and public dollars as the sole means of financing projects » Remove the bottleneck of local pellet production as a prerequisite for programmatic boiler conversions » Create a scalable/replicable model of biomass thermal energy development appropriate for the American West using whatever source of biomass is locally available Copyright © Wisewood, Inc., All rights reserved.

Community Energy versus District Energy How are they different?

District Energy • Distribution of thermal energy from a single central facility to nearby buildings via a buried pipe network • Replaces individual boilers and furnaces in connected buildings • Brings increased efficiency to energy production through load balancing • Eliminates O&M cost for customers • Does District Energy make sense for Burns?

? NO

District Energy for Burns? • Traditional “District Energy” based on a single system not the best approach » Not cost effective due to distances between heat loads and the subsequent trenching cost » 3 miles of buried pipe = $ millions » Due to density requirements, a DE system would exclude large parts of community » We need a better, more flexible idea » Community Energy!

What is Community Energy? • A thermal energy services company » Composed of smaller district energy “micro-grids” » Owned and managed as single entity (a business) » Lowers heat distribution costs » Phased construction possible » Expandable to other parts of town without piping » Aggregation assists in project finance

Harney Community Energy • Blends the best elements of District Energy and stand-alone systems » Shared facilities when cost effective » Eliminates boiler O&M cost for all customers » Scale supports dedicated maintenance staff

• Creates a new forest products business in town that utilize wood chips directly from local landowners and wood processors • Project in development, stay tuned! Copyright © Wisewood, Inc., All rights reserved.

Acknowledgements • Many thanks to the Oregon Statewide Wood Energy Team for early stage funding! • And to the USDA and the Woody Biomass Utilization Grant program for funding ongoing project design and development work!

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Thank you!

Andrew Haden President Wisewood, Inc. 1001 SE Water Ave. Suite 255 Portland, OR 97214 (503) 608-7366 [email protected]