2015 Heating the Midwest conference commences in Minnesota

By Katie Fletcher | April 20, 2015

Collocated with the 2015 International Biomass Conference & Expo being held in Minneapolis, Minnesota, the Heating the Midwest conference began on April 20 with a discussion on overcoming obstacles to speed up the deployment of biomass thermal solutions.

Tony “T.J.” Morice, the newly appointed chair of HTM and vice president of marketing, operations and business development of Marth Companies, kicked off the conference by congratulating Brian Brashaw, director of the Wood Materials and Manufacturing Program, on his leadership as the former HTM chairman. HTM began in 2011, focusing on thermal energy and opportunities within the Midwest, especially locations without access to the natural gas grid. “We want to increase growth in biomass heating in the Midwest, but there are obstacles to overcome,” Morice said. “Biomass heating projects need to be on the radar and the rural economic development focus needs to be understood.” 

The first panel of the day began with some Austrian advice from Christiane Egger, deputy manager of OO Energiesparverband. Egger described how biomass thermal installations became Austria’s leading residential heat source by sharing activity that has taken place in Upper Austria, Oberosterreich. OO Energiesparverband was founded in 1991, and is mostly funded by the state to promote energy efficiency and renewable energy. Egger also manages Oekoenergie-Cluster in Upper Austria. This is a network of more than 170 renewable energy and energy efficiency partner companies in Europe. Egger drew attention to the dramatic increases in the OEC and the industry in general over the last 15 years. The number of partner companies has doubled from 74 to 170, combined revenues from these companies has jumped ten times from $250 million to $2.5 billion and exporting companies have increased from 12 to 108.

The state of Upper Austria, similar in geographical size to the state of Connecticut, has a population of 1.4 million, with biomass covering about 40 percent of heating in homes. Overall, renewable energy accounts for 35 percent of the total, primary energy demand in Austria; 16 percent clean biomass, 14 percent hydro, 5 percent solar and other renewables. Because of this, Egger said that Austria has avoided import expenses of fossil fuels by around $1.5 billion per year. The state has 50,000 automatic biomass systems installed—26,000 pellet systems, 24,000 wood chip systems and 330 biomass district heating plants. The main options for biomass heating installations in Upper Austria include modern stoves, automatic pellet heating, modern firewood boilers, automatic wood chip boilers, district heating and combined-heat-and-power (CHP) systems.

Egger also provided economic statistics by indicating that 4,500 jobs have been brought to the biomass boiler and stove industry in Austria across production, sales and installations, resulting in approximately $730 million in annual revenue.

All of these numbers contribute to Austria’s renewable energy goal of having all electricity and space heating needs met with renewables by 2030. Egger shared that Austria was able to create a successful biomass thermal energy market to work towards this goal with carrots, sticks and tambourines. Carrots represent financial incentives, sticks stand as regulatory measures and tambourines represent information and training.

The main market drivers Egger identified are outreach training, standards for fuel and equipment and cooperation across the value chain at an industry level. On the state and local government front, drivers include setting targets, removing administrative barriers and developing good incentive programs. Lastly, Egger believes the general public must be aware of the benefits, have the right combination of sticks, carrots and tambourines and maintain a long-term perspective.

Egger concluded by acknowledging Austria has made great progress over the past few years, but that 1.6 million households, or 45 percent, are still heating with oil and gas, so the opportunity remains to increase biomass’ place in Austria’s energy market.

Joe Seymour, executive director of the Biomass Thermal and Energy Council, spoke of big policy activities in the United States at the state and federal levels. The Biomass Thermal Utilization Act was amongst the federal activities Seymour highlighted. The act provides a 30 percent investment tax credit for industrial and residential biomass thermal heating systems, helping put biomass on a level playing field with solar and geothermal technology. Another federal tax initiative mentioned was the CHP and waste-heat-and-power (WHP) investment tax credits. The CHP initiative provides a 30 percent investment tax credit for CHP units. Seymour said a separate 10 percent WHP tax credit is moving along as well. Besides these tax initiatives, Seymour made mention of thermal energy’s inclusion in the White House Executive Order.

Department pressure is also occurring at the federal level and BTEC is encouraging pledges of support. The Energy Information Administration updated its data collection pertaining to densified biomass fuels—how much is being produced, and for what price and market. EPA’s New Source Performance Standards on heater regulations made the list of federal activities as well. Next, how the government will create carbon and 111(d) was mentioned. Farm bill revisions passed in 2014 and the work of the Rural Energy for America Program rounded off the list.

Statewise, renewable portfolio standard (RPS) programs and thermal inclusion in utility goals were first mentioned. New Hampshire and Maine’s generous rebate programs were also discussed by Seymour. He stressed the importance of state wood energy teams as well, referring to them as laboratories for democracy.

Seymour concluded by saying critical messaging is finally being built. “We’re finally building that momentum,” he said. “It’s the boots on the ground that’s going to help move this market, until those in Washington can get their act together."

William Strauss, founder and president of FutureMetrics, was the last of the speakers during the opening panel at HTM. Strauss said in the next 20 years pellets are expected to grow by about 20 million metric tons per year, heating markets are expected to grow about 5 million metric tons per year and an estimated 1.8 million tons of new, annual U.S. pellet demand for domestic heating is expected.

Strauss shared that 22.1 million tons of pellets were produced worldwide in 2013, and that North America has the capacity to produce nearly 16 million tons. The U.K. has the biggest end-use consumption of pellets, followed by Italy.

One obstacle with continuing pellet market growth is because it is partly driven by the market for heating oil. Strauss said it may be difficult for the pellet stove market to see growth this year because, as of March, pellet and crude oil prices hit close to a break even.

Strauss also shared his case to convert a home heating device to pellet fuel before home installation upgrades are made. Biomass Magazine reported on this subject earlier in April.

The resounding attitude amongst the panelists was that developing biomass thermal markets takes time and is challenging. “Developing a biomass thermal market is hard,” Egger said. “It takes passion and lifetime commitment.”

Adee Athiyaman, professor of marketing at Illinois Institute for Rural Affairs at Western Illinois University, was unable to present as originally planned on the panel. A white paper entitled “Tapping Unstructured Data to Gain Insights into Consumer Purchases of Biomass Residential Heating Appliances: An Exercise in Big Data Analytics”, which his presentation was based on, can be found here.