District Energy on Campus

Biomass district heating and cooling could save most college campuses lots of money and it fits well with green initiatives, but these projects require rigorous planning and up-front capital costs are high.
By Anna Austin | April 29, 2011

Budgets are tight at most colleges and universities across North America and unfortunately, saving money long term often means spending money up-front, which is particularly true when it comes to energy system upgrades.

On top of reducing energy costs, these upgrades—switching from fossil fuel heating/power to renewable energy—are perhaps the most obvious and significant ways universities can achieve long-term greening plans. Setting carbon reduction goals and increasing environmental friendliness has become a trend at educational intuitions. Despite high initial capital costs, some colleges are still managing to make these projects pencil out.

For example, the University of Northern British Columbia recently completed the installation of a biomass gasification heating system that will displace up to 85 percent of the university's natural gas consumption, contributing to an energy cost savings of approximately $500,000 per year.

Middlebury College in Middlebury, Vt., completed its biomass gasification district heating system in 2009, and since then has cut its oil use in half, saving the college about $1 million per year.

 UNBC was fortunate to receive a substantial amount of financial help from the government, but since most projects won’t have that luxury, all grants, financial assistance and outside partnership avenues should be explored. Kamalesh Doshi, senior program director at the Biomass Energy Resource Center, says that the average-sized 20 million Btu-per-hour campus district heating system costs about $25 million, including the system itself and installation costs, and that’s cash most colleges don’t have on hand to spend.

When approaching a project, debating whether a biomass heating system will work isn’t the right initial question to ask, according to Doshi. Rather, it’s what set-up is best for each campus.

Exploring Options

“There is rarely a case where a biomass heating system doesn’t make sense on a campus,” he says. “Rather than just saying whether it will work or not, the university has to choose the option that is best for them.”

One of the first things to determine is where the biomass generator could be located. A large building or land area that is in a centralized location is the most ideal scenario. “Each campus will be very specific in its layout, so buildings will vary,” Doshi says. “The larger the building, the farther the pipelines can go. If it’s a smaller building, then the cost of the pipeline becomes prohibitive.”

The cost of laying pipe is different for each project, and a big influence on that cost is the condition of the soil and whether it is soft or hard. “With soft soil, piping can be installed for longer distances at a lower cost,” Doshi says.

Once the space for the biomass boiler is determined, another important factor is whether the school already has a steam or hot water distribution system.  Hot water is definitely better, according to Doshi. “In fact, in a lot of cases, it makes sense to remove the steam distribution system and replace it with a hot water distribution system because it is much more efficient, with lower maintenance and operating costs.”

There are projects where a steam distribution system will make sense such as at Middlebury College, which has a boiler that is also capable of running on oil when needed.

Typically, a university will spend the minimum for redesign of a hot water system. In some cases, the campus may not even have a centralized heating system to begin with, as some have separate, unconnected systems in each building.

 Perhaps the most important consideration when installing biomass district heat is the availability of the fuel or biomass source, Doshi says. “First they need to look at the vicinity where they could possibly get it from. Normally, we recommend a radius within about 50 miles; the lower it is the better.”

Another issue that should be considered is the quality of the available biomass. “The boiler system and design will depend on that quality,” Doshi says. “This is the opposite of other fuel sources—if someone buys an oil boiler, they can purchase it and then look for the oil dealer. With biomass, that process is in reverse; first they determine where they’ll get it and how, because that influences many other things, including the type of storage system and how much it can hold.”

The biggest challenge in implementing biomass district heat on campus is most often capital costs, Doshi says. Financing options vary, but a number of projects have opted to engage in energy service contracts. “This is where a private developer puts in the investment, and sells heat to the university,” Doshi says. “They buy the Btus, just paying for what they consume.”

Some colleges have already set-aside funding for green initiatives, others utilize reserve funds, donations or other internal sources of funding, or borrow the money. Although the typical return on investment for an average-sized system is about eight to 10 years, savings begin right away.

Ideas to Reality

Middlebury College finished the installation of its biomass gasification district heating system in 2009. Four boilers generate high-pressure steam that is sent through turbines before it leaves the central plant, producing 20 percent of the campus’s electricity. Then, it’s sent around campus as low-pressure steam to provide heat, or is run through chillers in the summer for cooling.  “When we built the biomass system, we built onto our existing central system, adding another segment to the building where we put in the biomass gasifier, boiler and related equipment, and connected it into the steam system,” says Jack Byrne, director of Middlebury’s Sustainability Integration Office. 

The system runs on biomass as its base-load fuel, and if more steam is needed, oil can be used, as that was what it originally ran on. “We’re at a point now where we have cut our use of fuel oil in half, from 2 million to 1 million gallons a year,” Byrne says. “That’s saving us, depending on the price of oil, just under $1 million per year.” 

Utilizing biomass also provides a considerable economic benefit for the region, as the college sources woody biomass within 75 miles of campus. “We’re spending somewhere around $800,000 per year, which is going to loggers, truckers, millers and foresters,” he says. “The most important thing to look hard at is whether there is a reliable supply of wood and how it’s being produced. We source 20 percent as byproducts from milling, and the remainder from forest management practices.” 

Byrne says the two biggest challenges they faced when developing the district energy project were siting and maintaining a fuel supply. “We decided to add on to our existing plant because a high-pressure steam line like we have costs about $1,000 a foot,” he says. “We built onto the existing steam system, and connected into it. Also, we would have had to build a new smokestack, which could have raised issues if it were in an area where people didn’t want that in their neighborhood.”

Adding onto the existing system came with its own set of challenges—one of which was storage for wood chips. “We didn’t have much room for them, not even for a 10-day supply, so we had to make sure we could get the chips when we needed them,” Byrne says.

The college’s solution was to hire a broker to ensure a steady supply of fuel, and stockpile a 20-day supply, in the form of round wood, about 15 miles from the site. 

The college borrowed money to finance the $12 million project, Byrne says. “When we did the financial modeling, the most important variables were the price of wood and oil, so we were very conservative projecting out over the future.”

At that time, the financial modeling showed a 12-year payback on the 25-year life of the plant. “If you took the price of oil and wood today, we’d be looking at something like an eight-year payback,” he says.

Once the plant was built, there was a year-long learning curve to understand how to make it run optimally. “We’ve got it running really well now, even better than the manufacturer’s specs in terms of the steam we can produce,” Byrne says. “It took that long to really figure out how to dial it in.”
 UNBC is working on doing just that, with the recent completion of its own biomass gasification district heating system.

Setting an Example

UNBC’s Prince George campus opened in 1994, and has utilized natural gas as a fuel until now. Biomass district heat made sense for several reasons, the most obvious being the infrastructure for heating and cooling that was already in place—buildings already connected to a power plant (see diagram).

Also, federal policy in Canada favors biomass projects. “B.C. has implemented both a carbon tax and a $25 per metric ton greenhouse gas emission fee,” says Robert Van Adrichem, UNBC’s vice president of external relations. “In other words, we pay at the pump and at the stack, so this provided some incentive. Even more important, this region is the largest wood products producer in the country, and though we’ve been huge in supply we often don’t showcase the use of these products ourselves; we’re an export-oriented region.”

Sawmill residue from Lakeland Mills of Prince George is delivered to the plant’s fuel storage area, which can hold up to 60 metric tons of material. In a typical year, the UNBC plant will consume about 6,000 dry metric tons of fuel, equivalent to about one or two truckloads each day.

When UNCB made the decision to go green, it issued a request for expressions of interest from companies that wanted to work with the college. It was bioenergy companies that responded, and Nexterra Corp. ended up being the supplier of the system, which will save the school from $600,000 to $800,000 per year in fuel costs.

Perhaps because the project is the first of its kind in Canada, the entire $15.2 million capital cost of constructing the 15 MMBtu per hour bioenergy plant has been covered by the provincial and federal governments through various grant programs. The university is seeking additional funds through donations from private and public sources to develop the research opportunity more fully and attract students and faculty through new scholarships and grants, according to Van Adrichem. “It’s a competitive marketplace for universities, and we felt this might be something that would help to position UNBC and distinguish us.”

Author: Anna Austin
Associate Editor, Biomass Power & Thermal
(701) 738-4968