Please note that some of the following information has become outdated and the referenced resources may no longer be relevant or available.
The Biomass District Energy Information Package
The following is to be published both as a handout, for distribution as part of the biomass district energy information package, and as freely-available data on the internet.
The other components of the biomass-fired district energy information package (contained in a large format looseleaf binder) are, as it now appears:
- Overview / outline (handout)
- copy of text and slides from presentation
- videos from Marsh and from CANMET
- video on OujŽbougoumou from CANMET
- outreach documents on OujŽbougoumou and PEI
- IPPSO Sourcebook
- DHC educational materials from CDEA and IDEA
- DHC training materials from Finland
- Handout on further reading material, business contacts and surfing the net
How Biomass-Fired District Energy Can Help Your Enterprise
ENERGY AT YOUR DOORSTEP
Improve reliability, decrease costs, manage wastes, create jobs, improve air quality ...
WHAT IS DISTRICT ENERGY?
District Energy Systems (DES), also known as district heating and cooling (DHC), or "combined heat and power" (CHP) are energy systems for buildings that make use of a simple fact: it is cheaper and more efficient to use a single central piece of equipment to heat several buildings than for each facility to build, operate and maintain its own separate heating, and cooling system. Even greater efficiencies are achieved when heat and power are simultaneously produced through a cogeneration system.
District energy can provide one or more of the following energy services: heating, cooling, electricity, and mechanical shaft power. District energy also provides operational benefits for your enterprise, and is better for the environment.
Wood or wood waste, where readily available, make an economical and effective fuel for district energy systems. Virtually all biomass, (organic matter), can be burned for energy, and there is a lot of it in some parts of Canada. In fact, sawdust, bark and other kinds of waste wood often present a disposal problem to many Canadian communities. This "disposal problem" can be turned into an opportunity with biomass combustion for energy.
Biomass systems can be used for industrial process heating, space heating for offices, schools, hotels and institutions, biomass fired power plants, district heating and cooling, cogeneration, and other applications. This information package focuses on burning biomass in a district energy system to generate heat and power.
Savings, Plus ...
5 GOOD REASONS TO SWITCH TO BIOMASS DISTRICT ENERGY
All over the world, district energy is being used by industries, businesses and institutions to achieve lower operating costs and other benefits. Here are just some of the reasons.
- Reason #1: Savings
Biomass district energy systems generate multiple savings by using a more efficient central heating system; replacing fuel that is imported to the community with lower cost, local fuel; and where cogeneration is used, maximizing fuel efficiency through production of both heat and electricity. How much can district energy save your operation? That depends on how much your energy bills are right now. Assuming that you have a significant heating and electrical bill and a source of low-cost biomass to burn, you should look closely at the options. The Worksheet at the end of this newsletter will help you assess the financial advantages for your situation. But savings aren't the whole story.
- Reason #2: Reliability
Biomass technology is mature and reliable, widely used in many applications in Canada and around the world.
- Reason #3: Security
Security of supply is an important consideration. Biomass systems based on locally managed resources, provide more energy stability. They shelter users from price shocks and escalating prices associated with other energy sources and enable local institutions to stretch reduced budgets even further.
- Reason #4: Wealth Creation
Biomass district energy systems can be a major catalyst in community wealth creation by displacing imports, using local resources, avoiding waste disposal costs, creating jobs associated with use of local fuel source, and generating new business income.
- Reason #5: The Environment
You may not be able to quantify the benefits of improved air quality or your growing reputation for environmental leadership, but you should consider these factors anyway! Biomass energy systems: are based on a renewable resource, are considered CO2 neutral, dispose of wood waste which often creates local pollution problems, and use technology which can meet strict emision regulations.
DISTRICT ENERGY FROM COAST TO COAST
There are biomass energy systems in communities across Canada. Some are used solely for district heating or to generate electricity while others provide both heat and power.
In Charlottetown, PEI, the wood-fired district heating system has been in operation since 1986. Using hot water as the heat transfer medium, it supplies heat to 15 buildings, including the Provincial Government buildings, City Hall, two churches, three hotels and the fire hall. The system was designed to interconnect with a future larger scale district heating and cogeneration system serving much of the downtown area.
In Chapais, Quebec, the Chapais Generating Station uses wood fuel to generate 28 MW of power for sale to Hydro-QuŽbec. The developer hopes to be able to use surplus heat to supply a district heating system for an industrial park in Becancour.
In Ouje-Bougoumou, Quebec, a Cree community has built a wood-fired district energy system that helps keep money in the community and improves local air quality. Large amounts of money used to leave the community to pay for imported fuel which was burned inefficiently and caused local pollution problems.
In Williams Lake, B.C. a pollution problem was turned into an energy solution with the construction of the Williams Lake power plant. This 60 MW facility burns wood waste from forestry operations in the area. Previously, forestry operators disposed of waste wood in beehive burners, but that caused serious local air quality problems and was discouraged by the government. Now the air pollution problem is almost gone, there are new jobs in town, and the forestry companies no longer have a disposal problem.
In the Town of Ajax, a central plant provides steam for a district energy system serving the Community Centre, Ajax Pickering Hospital, the Ajax Works Department and over a dozen industrial customers. The steam plant has been in operation since 1941 and is now owned and operated by The Ajax Energy Corporation. Biomass is the major source of fuel (mainly construction wood waste) and fossil fuels are used as a backup. The steam is used for food processing, space heating, generating chilled water for space cooling and for humidification.
In addition to biomass fired district energy systems such as those listed above, there are several Canadian district energy systems which use other fuels, including very large systems in Montreal, Toronto and Vancouver.
EDITORIAL: WHY ISN'T DISTRICT ENERGY MORE COMMON IN CANADA?
It is ironic that, although Canada is a country with a large economic potential for district energy systems (cold climate, urbanized and industrialized, thermally inefficient), many other countries are installing more district energy than we are, even though the economic fundamentals are better here. Why?
District Energy has been disadvantaged in Canada for several understandable reasons:
- a) Canada subsidizes energy prices, so we are not comparing district energy system costs against the real cost of energy supply, and
- b) District energy systems require extensive co-ordination between utilities, private sector builders, financiers, and government approval authorities.
Although the question of energy pricing is not within the control of the prospective district energy proponent, you can do something about co-ordination between the various authorities. Developing a district energy project requires significant effort to bring together local, regional, provincial, and federal agencies as well as energy policies, environmental policies, funding mechanizms and construction approvals.
Unfortunately in Canada, these authorities are highly fragmented, and in some cases even protect their "separateness". Such bureaucratic territoriality may help to preserve local autonomy, but tends to slow the introduction of any effort that requires multi-sector co-operation.
When designed to include power generation, district energy systems are so efficient and financially attractive that some of Canada's electric utilities are actually trying to delay their installation, claiming "unfair competition."
Fortunately, such attempts at discouragement are only temporary, and will not deter effective opportunities from proceeding.
WHAT ARE THE TECHNICAL OPTIONS?
Many types of district energy systems are available, based on fuel source, type of combustion equipment, whether electricity is being produced as well as heat and the choice of heat transport medium.
District energy can be fired by: natural gas, propane, coal, or biomass materials. Multi-fuel combustion systems that switch fuels, even in mid-burn, have been developed by several manufacturers, allowing operators to use the most economical fuel at any time.
Wood is the most common type of biomass in Canada and the most economic source is forestry waste, usually in the form of wood chips, hog fuel or sawdust. In urban areas, construction wood waste may be used.
Peat is widely used as fuel in Europe, but although there are extensive peat reserves in Canada it is not often used.
A wide variety of agricultural byproducts may be used as biomass fuel (e.g., straw, corn husks and nutshells).
If electricity is being produced, district energy systems can use small reciprocating engines (similar to an automobile engine), larger industrial engines, and a wide range of turbines.
If electricity is not being produced, then there is an even greater variety of technologies possible, ranging from industrial combustion equipment to fluidized bed boilers.
Heat Transport Medium
Another set of technology options revolves around the choice of ¥heat transport medium¥. Until recently, most large systems used steam in steel pipes. Today's systems frequently substitute hot water in plastic pipes, making district systems possible in communities which are smaller and more spread out. Cooling can be distributed with water or a variety of specially designed liquids such as glycol or refrigerant solutions.
WHAT DOES IT TAKE TO GET STARTED?
The basic requirements to get started with district energy are:
- - a demand for heat,
- - a demand for power,
- - a steady supply of fuel, and
- - a champion.
Phase 1: Concept
Anyone can get the ball rolling. The champion could be:
- - a developer or equipment supplier,
- - a potential host site for the heating plant, e.g., an industry, institution, or municipality
- - a community, or
- - a local utility.
Besides identifying the champion, Phase 1 will involve two other steps:
- - a preliminary assessment of the project concept, and
- - development of a working group of players and stakeholders to identify project objectives and needs.
The Worksheet which is included with this information package outlines the information required for a preliminary assessment.
Phase 2: Feasibility
This phase involves more detailed study to assess the project feasibility as well as a series of negotiations to plan the project's ownership and financial structure. Negotiations with suppliers of equipment and fuel as well as purchasors of heat and electricity will help to determine the financial viability of the project.
Phase 3: Construction
Finally, the project is underway with steps to obtain government approvals, finalize financing, and design and construct the system. Phase three ends with the commissioning of the district energy system.
Phase 4: Operation
In addition to ongoing operation, Phase 4 may also involve plans for future expansion of the system to add more energy users in the community or to include cogeneration.
FINANCING AND OWNERSHIP OPTIONS
Structuring the ownership and financing package for a district energy system can be just as important as the engineering design. And, like system design, the ownership structure must be tailored to the circumstances of the individual project.
District energy systems may be owned by individual companies or insititutions, or held in joint ownership by a number of project participants or partners. Institutions and municipalities often find it advantageous to lease the system from a third party which provides the initial capital for the project.
There are two approaches to financing the construction of a district energy system. Standard debt financing or equipment leasing is the preferred approach for projects with capital costs under $1 million. With this approach, the system capital costs are simply included in the on-going capital budget of the project sponsor.
Where the district energy project is relatively small in relation to the overall operation of the project sponsor, financial institutions will be mainly concerned with the financial strength of the proponent organization. Where a project is larger in relation to the size of the proponent organization, financial institutions will be more concerned with areas of potential risk associated with the project such as markets for energy produced, reliability of fuel source, equipment reliability and capital and operating costs.
Larger projects, (over $5 million) may require separate project financing. With this approach, the district energy system becomes a venture in itself and the financing is secured on the basis of the cash flow generated by the project. Financial institutions will be more concerned with the specifics of the project and firm long term contracts are usually required for purchase of fuel and sale of the energy output.
WHERE DO I FIND OUT MORE?
There are many consultants and engineers who can advise you on the feasibility of biomass-fired district energy systems in your plant or building. For advise on choosing a consultant or other matters, you may wish to contact:
- Canadian sources of Information
- For information on Canadian companies
- For information on Canadian activities
- For information on international activities
You may well want to include other factors in this calculation, such as operational flexibility and reliability, avoiding the cost of replacing or upgrading your existing boilers, or air conditioning system to the new demanding CFC-free standards, waste management values, or the value of freed-up space in your mechanical systems room.
District energy projects involve significant capital investment. Fortunately, there are a number of financial interests who are able to help a company develop a district energy project. In fact, there are several groups in Canada that act as "turnkey developers," which means that they will have the studies done, raise the money, engineer and build the project, in return for a share in the incremental profits.
Of course you don't need to share the profits with another agency if your in-house operating engineer or building manager is prepared to manage the venture. Although the system design and engineering must be highly qualified work, almost any plant manager can supervise a district energy project.
You may wish to review the Biomass District Energy and Cogen Worksheet
The Biomass-Fired District Energy System
Training Program Resource Package
Published April 1995
Renewable Energy In Canada (905) 841-5551
Canadian Institute for Energy Training
See also related training materials on:
- wind energy
- solar energy (photovoltaic and thermal)
- small hydro
- from the same sources as above
"Wood Chip Combustion in Eastern Canada," recent report sponosred by REAP in partnership with the Eastern Ontario Model Forest.
REAP - Canada, Resource Efficient Agricultural Production
PO Box 125 Glanaladale House,
Ste. Anne de Bellevue
Que, H9X 3V9
(514) 398-7743 fax (514) 398-7972
contact: Ian Flann
Eastern Ontario Model Forest
PO Bag 2111
Kemptville, Ont. K0G 1J0
The Renfrew County Wood Energy Study: The Potential and viability of various technologies and industries, by Newviews Community Forestry Inc., PO Box 1000, Killaloe, Ont., K0J 2A0, March 1992, for the Ontario Ministry of Energy.
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Last update: 8 July 1995