Feasibility Study: Wisconsin School Wood Energy Program
The Wisconsin Department of Administration's Division on Energy asked BERC to help determine if the state should create a program to promote the use of wood heating by schools.
Key conclusions and recommendations of the BERC study:
Conclusion
Biomass heating in schools holds great promise to advance renewable energy policy, stabilize and reduce school heating costs, benefit the local economy, support the forest products industry, and reduce greenhouse gas emissions.
Based on the level of interest shown among contacts made for this study, BERC believes Wisconsin could design and implement an excellent school wood energy program. Much of the expertise needed to deliver a successful program already exists, in various state agencies and program partners.
Schools with Potential for Cost Savings
At 2003 fuel prices larger schools that pay over $125,000 per year for natural gas, $100,000 for fuel oil, or $75,000 for propane will find wood to be a cost-effective alternative. BERC analyzed data from a number of sources on school buildings, and discovered that, among 438 school districts in Wisconsin, about 100 in the northern two-thirds of the state have fuel bills that exceed $100,000 per year.
Over 90% of Wisconsin schools use natural gas as their heating fuel. Perhaps a dozen use fuel oil, fewer use propane, and a very few heat with electricity. About a dozen school districts use wood to heat at least some of their buildings.
Schools are a good market for biomass heating because they have access to long-term (10- to 20-year), low-interest financing. In many cases, a wood heating system will yield a positive cash flow for the school from the year it is installed. To improve their buildings at favorable rates and terms, Wisconsin municipalities and school districts can borrow from the State Board of Commissioners of Public Lands.
Designing and Implementing a Successful Program
BERC recommends that a Wisconsin school wood-energy program focus its marketing efforts on the most likely candidates in the northern two-thirds of the state, where heating costs tend to be higher and there is a rich biomass resource, with many sawmills that can supply hardwood chips.
School districts are good candidates for wood energy when:
- They are planning the construction of new school, a significant addition or renovation, or another major capital project;
- The wood system project could be combined with a major heating-system replacement that must be done anyway - such as a boiler replacement, steam-to-hot-water conversion, or conversion from electric heat;
- Current costs for heating fuel exceed $75,000 per year, or heating fuel prices are high; and/or,
- A school district uses fuel oil or propane for heating.
A successful program will need buy-in and participation from many different state agencies and program partners. It's essential that all school participants be happy with their results, especially in the early stages of implementing the program. To achieve this, program staff will need to educate both wood fuel suppliers and school districts about the peculiarities of this market.
To guarantee success, program design should also include qualified professional consultants for technical support for programmatic issues, and for direct involvement in the first project installations.
Fuel Supply: The Biomass Resource in Wisconsin
Wisconsin's biomass resource is very large - and so is the demand on it. But a program to promote wood-chip heating in Wisconsin schools would have very little impact on the overall supply of chips to paper mills. In fact, developing a niche market of providing wood fuel for schools can provide additional revenue for local sawmills, and help keep jobs in-state.
BERC recommends that the program focus on green hardwood chips, which make an excellent biomass fuel. Sawdust, shavings, and bark are poor fuels for school wood heating, and should be avoided. The northern two-thirds of the state has 39 sawmills that handle hardwoods and also produce chips.
Any single school project should identify several potential suppliers. This both creates the security of a backup supply and generates competition, which tends to reduce fuel costs.
Based on a survey of Wisconsin sawmills, BERC assumes a proxy cost of $30/ton for hardwood chips, for preliminary analysis. For any specific project, a cheaper fuel may be located close by. But the use of less expensive and more difficult biomass fuels should be carefully analyzed before a boiler system is committed and designed.
Cost-Effectiveness of Wood Heat in Wisconsin Schools
Fully automated school wood systems require no manual handling of fuel. School custodians spend less than 30 minutes per day on maintenance.
Under current fuel prices, there are three ways in which installing a fully automated chip system can be cost-effective:
- When a wood-chip system can be included with the construction of a new school, an addition, or a major renovation;
- When the school has very high fossil-fuel heating costs - at least $75,000 per year; and/or,
- When there is a federal or state mechanism for sharing capital costs, that can pay for a portion of the system costs.
Semi-automated chip systems are considerably less expensive, and chip storage for these systems can cost much less as well. Chips are stored in a pile in a simple slab-on-grade building and delivered to a day bin using a small tractor. The tradeoff is that maintenance staff will need to use the tractor to load the day bin once or twice per day.
BERC is currently working with vendors to develop the semi-automated system technology and adapt it for schools. We believe it can be a very good choice for small rural schools.