SIZING UP PELLETS' PROMISE

Portland Press Herald

Heating with wood pellets has its advantages -- low cost and high efficiency -- but can those benefits be exploited on a far larger scale? A state task force aims to find out.

By TUX TURKEL Staff Writer March 2, 2008

OLD ORCHARD BEACH — Seen through a small viewing window, the tiny pile of burning wood pellets didn't seem to be putting out much heat. But the afternoon was mild, and the burner inside the boiler was cycling on just enough to keep water around 170 degrees, sufficiently hot to warm a house, apartment and shop at Evergreen Heat Inc.

The workings of the boiler interested Dale McCormick, director of the Maine State Housing Authority. She and three colleagues had come from Augusta last week to see products sold by Evergreen Heat, one of the few Maine companies selling high-efficiency boilers and furnaces fueled by wood pellets. They wanted to know whether a pellet-fired central heating system might supplement oil boilers in the agency's apartment projects.

"We want to educate ourselves," she said. "It looks like a lower-cost fuel. But we need to make sure it will work. We're doing our due diligence."

McCormick is a member of a new wood-to-energy task force set up in January by Gov. John Baldacci. The group is looking at ways to reduce Maine's dependence on imported oil and cut heating costs, particularly in public buildings. It also wants to enhance markets for local wood products and encourage investment in biofuels.

That doesn't sound too difficult in a state largely covered by trees, where people are struggling with record heating oil prices and have a history of burning wood. But feeding logs into a living room wood stove, and warming a school or a state office with wood-fired central heat, are two different things.

As McCormick observed, modern wood boilers still aren't as convenient and maintenance-free as oil or gas units.

Beyond that, Maine is still developing the bulk storage and delivery systems to make large-scale pellet heat practical here, as it is in Europe. For now, pellets are most-widely available in 40-pound bags and used by homeowners who burn them in specially designed stoves.

During her visit, McCormick got a primer on the equipment needed to store and automatically feed pellets into boilers, and what it takes to maintain the units.

Other task force members are analyzing how a big new push to wood heat will affect forest ecology. Some are examining the impact on the price and supply of wood used by paper mills and other forest products industries.

The task force is expected to make its recommendations to the governor by June. Early calculations suggest, for example, that producing and burning an additional 300,000 tons a year of wood pellets could generate $150 million in benefits for Maine linked to harvesting revenue, lower heating costs and local spending, according to Les Otten, the task force chair. Otten, former owner of the Sunday River and Sugarloaf ski areas, recently formed a business looking at alternative energy investment opportunities.

The task force has just begun collecting information, Otten said, and many questions remain unanswered. Among them is how much a cash-strapped state government can or should do to promote a major conversion from oil to wood, and what should be left to the private market.

There is wide agreement on one point: Wood heat is much cheaper today than oil. To get the heat output of 1 million BTUs, figuring the same efficiencies and current prices, it costs $19.05 with wood pellets, compared to $29.53 with oil.

A GLOBAL MARKET

The task force appears to be focusing on pellets because they burn cleanly, produce little ash, are made from low-grade wood and can be metered easily into heating equipment. Maine has two pellet-producing mills -- in Ashland and Corinth -- that can produce 115,000 tons a year, according to the task force. More may be built soon.

But wood pellets have become a global commodity. Plants along the East Coast and in Canada also ship pellets to Europe. That makes it hard to predict future pellet supply and prices in Maine.

Task force members also want to know how ramping up pellet production in the region will influence existing wood markets.

Pulp and paper mills and biomass power plants use the same low-grade wood that pellet producers need, according to Patrick McGowan, Maine's conservation commissioner. Supply and demand equation keeps shifting, however. Most recently, McGowan noted, a couple of sawmills closed in Aroostook County. That cut off a major supply of sawdust waste used to make pellets.

"The things we do know are all good and positive," McGowan said. "But the things we don't know are very real."

A growing pellet industry can create jobs in harvesting, manufacturing, delivery and equipment maintenance. But a pellet plant requires far fewer workers than a pulp and paper mill, so the task force is unlikely to recommend policies that could put the paper industry at a disadvantage.

One thing the state could do, according to McGowan, is give priority funding to new public buildings that heat with wood. Schools are an obvious choice, but of 21 new schools on the drawing board, only two are considering wood. A few existing schools, including Leavitt High School in Turner, burn wood chips.

The state also may have a role in promoting demonstration projects, which is what McCormick is considering at the housing authority.

The agency has hundreds of multifamily projects financed over the years. Energy costs are a drain on owners who must pay back the loans. McCormick wondered if pellet-fired boilers could lower operating costs, and whether they would be practical to run and maintain.

THE MAINTENANCE FACTOR

These are frequent questions for Mark Norwood, who owns Evergreen Heat.

Evergreen is among only a handful of Maine businesses selling pellet-fired boilers and furnances. One reason, Norwood said, is because there are only three major manufacturers in North America. Another factor is that most people aren't aware pellets can warm large homes and small commercial buildings.

The Canadian-made boiler that interested McCormick sells for $6,950. With installation, the price rises to roughly $10,000. It can warm up to 4,000 square feet and has a coil for domestic hot water.

The boiler has a hopper that can hold 160 pounds of pellets. That's enough to last a day in cold weather. To automate operation, Norwood built an 800-pound storage bin that feeds the hopper via a pipe and grain auger.

But Norwood told McCormick that an apartment building would need a big bin or a grain silo, like on a farm, for some serious storage capacity. To heat an apartment complex, delivery would need to be made by the truckload, not 40-pound bags.

The state's apartment projects typically have multiple heating units. Norwood suggested keeping an oil boiler in the system, to provide supplemental heat in the coldest weather and for back-up purposes. Think of the pellet boiler as a way to provide 75 percent of the building's heat load, he advised.

Wood boilers also have ash pans that need to be emptied, and internal parts that must be regularly cleaned. Unlike oil and gas, pellet fuels have yet to develop a network of certified installers and maintenance technicians to handle boilers and furnaces.

It will take time for these services to evolve, no matter what the task force finds. These and other barriers suggest that if Maine embraces wood-fired central heat in a big way, business owners and maintenance staff will be taking a more hands-on approach than just reaching for the thermostat.

"The operative word is, you have to participate," Norwood said.

Staff writer Tux Turkel can be contacted at 791-6462 or at:

tturkel@pressherald.com

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