There are a lot of biomass projects being approved/started in the last few months, and I thought it would be helpful to contrast a couple of them to identify key success factors and hurdles for biomass.
Let's start with a project here in Pennsylvania. Up in the northwest part of the state, in Crawford County, the Crawford Central school district broke ground last month on a wood-chip fired district CHP solution for three facilities:
"The Crawford Central School District, Crawford County Career and Technical Center, and the Meadville Recreation Complex have now entered into a Joint Operating Agreement to install a combined heating and power (CHP) biomass system that is fueled by renewable woody biomass and produces electricity...
This system will replace 80 percent of the annual cost of natural gas and 15 percent of the cost of electricity with a renewable energy source and will avoid future capital costs to replace HVAC equipment. This system will allow the three entities some control over future energy costs by replacing volatile fossil fuels with locally produced renewable energy sources. Their annual energy costs are projected to be reduced by approximately $200,000."The total cost of this project is $3.5 million, of which over $2.5 million, or roughly 70%, will be paid for by local citizens through a bond issue. Project planners were able to secure grants for the remaining 30% of the project, roughly $740,000 from the state of Pennsylvania and $200,000 from the federal government through the US Forest Service.
At the projected rate of $200,000 in annual energy savings, the locals will receive full payment of their bond obligation in about 12 years. After that point, they will continue to receive their annual savings for the remaining life-span of the system. If it lasts 40 years, and maintenance of the system is counted as equal to the cost of maintenance of any alternative system, then the good citizens of Crawford County will net a savings of $5.5 million over the life of the system. At a cost to the rest of us (the grantors) of about a million dollars.
Let's compare that to a recent announcement that the city of Montpelier, Vermont, will build a wood-chip district heating solution for its city hall, police station, fire station, and two schools. The cost of this project is much larger: $20 million. But the taxpayers of Montpelier only agreed to pay slightly more for this project, $2.75 million, than the taxpayers of Crawford County agreed to. The Vermonters are only paying for about 13% of their project, as opposed to the 70% the Crawfordians ponied up. Montpelier project planners were able to obtain $8 million in grants from the federal government through the Department of Energy, and an additional $8 million in grants through the state of Vermont.
From what I can read between the lines, it looks like the expected annual energy savings in Montpelier will be about the same as the Crawford County Project. Again, assuming the project delivers 40 useful years, the Montpelierians will net about $5 million in energy cost savings on their $2.75 million investment. But this particular project will cost the rest of us about $17 million, compared to the $1 million we're funneling up to Crawford County.
Great deal for the citizens of Montpelier, paying only 13 cents on the dollar for a system that frees them from the ties of dependence on fuel oil. So it is a little surprising that about 40% of the citizens voted against it. Many of those against the project were quoted citing (again!) the Manomet study and unrepaired potholes on the streets of Montpelier as their reason for opposing the bond proposal. Guess they don't highly value the $5 million savings in the cost of running their city over the next 40 years.
"We don’t have the money,” said Marie Hamel, 75, who voted no. “I’m not sure Montpelier’s handled the money we let them have that well. And this is for downtown. Us up in the hills, all we will have to do is pay. And pay and pay and pay.”Wonder how Ms. Marie would feel if she was like the rest of us, paying a collective $17 million to heat a few public buildings in a city we're not likely to visit even once in our lifetime? Bet she'd really be tweaked.
These two projects point to something that I suspect is poorly understood by most of the general public but suspected by a bunch of you out there. I'd be willing to bet there is a correlation between the cost of a project and the percentage of the project that is covered by public grants. Grant money tends to seem like "free" money to local project planners, and the project vendors, and is spent pretty freely. In contrast, projects that are funded by mostly local money are kept tightly focused on the exact needs of the project. If they aren't, folks like Ms. Marie run the project planners out of town on a rail with tar and feathers.
Seems like another good argument to keep biomass projects small and locally funded. Every dollar counts, these days.