Andrew Haden of A3 Energy Partners debates the advantages of biomass fuel heating and why it should not be given the same treatment as coal.
Ben Lack: There’s a recent rule that’s being proposed by the EPA that’s stating that they’re trying to reduce emissions from boilers and I guess they’re trying to lob it in other types of heat sources. And I wanted to get your thoughts on how this might be impacting your business and ultimately the industry that you guys are trying to play in.
Andrew Haden: Well, the way they’re proposed, they’ll certainly have negative impact. And primarily the negative impact will be due to the fact that the level of emission that they’re seeking for the industry to meet is very, very low on a global standard basis, looking at anywhere else in the world. No one’s proposing anything this strict. And more than that, I think the timeframe that’s very quickly would be enacted and really not give industry enough time to respond with technology development which is what would be required. Essentially, by lumping all boilers together, oil, coal, biomass, everything, they’re sort of not appreciating where the different technologies are in their phasing developments.
Ben Lack: How quickly does the industry have to convert the business practices to be in line with the new rules?
Andrew Haden: Well, the rules would go into effect in December and they would be retroactive to some degree, I think there’s grandfathering in some systems that more or less would start immediately, and everyone would have to drop plans to be compliant within some timeframe. I don’t know that timeframe offhand but it doesn’t appear to be a very long timeframe. So it would be quick. It would really affect the industries that kind of the primary manufacturing base in a lot of rural communities, especially out here in the west, the timber industry particularly.
Ben Lack: And you guys are based where?
Andrew Haden: We’re based in Portland, Oregon.
Ben Lack: Can you talk to us about what biomass fuel heating really is and how that differs from some of the other technologies?
Andrew Haden: Biomass heating is primarily wood-based so the different biomass fuels that are out there including agricultural fuels of all these different fuels that wood is really the best fuel today and probably for many years to come. It’s a fine fuel. What’s been going in the industry globally, especially in Europe, they’ve developed technologies that can utilize wood very efficiently and very cleanly down to the smallest scale, basically down to individual home boilers. And so whereas in the U.S., biomass and wood pellets and these kind of technologies have been primarily very small-scale and room heaters for small pellet stoves and the like, Europe has moved in a different direction which is primarily bulk distribution of pellets and wood-chip systems for individual homes all the way through municipalities in terms of district heating networks that might fueled with wood-chip boilers and then pellet boilers of all different scales as well.
Now they’ve had a great success by focusing on heat and not trying to create electricity with these boilers unless the scale is appropriate. And what that means is generally under, call it ten million BTUs per hour. They really focus only on heat, just providing thermal energy which is simple to do, can be done cleanly in very robust systems that can be highly automated and without any issue. Don’t require operators, for example. Rather than a lot of what the U.S. Department of Energy has been promoting almost always with an electrical component. It’s got a be a CHP unit or something like that, combined heat and power, which is fine but the scale at which that technology starts to come into its own and be effective from an operational standpoint as well, well larger than the 10 million BTUs, so you’re really looking at industry type boilers. And in a few select cities in the U.S., you might do some combined heat and power or district heating. But the long and short of it is, we focus on wood heating and heat only in automated systems for commercial and institutional premises at this point. So we just put a boiler into a regional airport in John Day. And we’re doing a boiler, next will be a hospital in that same town. So hospitals, schools, airports, any kind of commercial or institutional building would be a good candidate for biomass heat.
Ben Lack: You mentioned that you guys can use wood pellets and wood chips. I was under the impression that it was the same thing. Is there a difference?
Andrew Haden: Wood chips are generally more suitable in slightly larger applications because there’s a trade-off with the complexity of the infrastructure you need to use chips effectively in an automated way versus pellets. So, in short, wood pellets can be made from wood chips. They’re simply dried, ground down further in pellet size. So if you want to just use a wet wood chip direct from a saw miller from the forest, you can, but the fuel handling systems that you need to put in place to do that are slightly more complex and need to be more robust than if you’re going with pellets which can use much smaller material handling systems like augers and simple silos.
Ben Lack: What’s the carbon impact of using either?
Andrew Haden: Currently, in this part of the world, this part of the country, we are almost exclusively using waste wood or forestry residuals for our biomass feedstock. It’s a waste product. It’s currently, in the case of forestry residuals, they are currently burned in piles in the woods. And in other cases, we’re taking sawdust or shavings or something from the primary manufacturing sawmills and using that as a feedstock for pellets which we then turn into pellets and send it off to our smaller boilers.
Ben Lack: And I know that some of the boilers are more generating thermal heat, but there are also boilers out there that generate electricity. Is there one that’s better than the other?
Andrew Haden: It’s really all about scale. One isn’t better than the other. It’s great if you were at a scale where it makes sense to be producing electricity as well as heat, but we tend to see that that really only make sense in larger scale systems behind industry fence. For example, in the sawmill industry or other large prophesied applications where you need steam and you have a need for some electricity. They’re both efficient as long as they’re combined heat and power.
Now what needs to be drawn a distinction between is standalone electrical power generation where you don’t use the heat. And that’s the controversial technology, and I think that it should be looked at because what you have is a technology where about 60 to 75 percent of the energy in the wood is sent up through a cooling tower just out to the atmosphere and doesn’t do any useful work after it’s made electricity. And we think flipping that around and going for heat first where you can use 85% of the energy in the wood for useful purposes is the better way to go. So essentially getting three times the bang for your buck.
Ben Lack: Are there additional federal, state, or local incentives that are providing a more profitable opportunity for potential customers to integrate this in their generating platforms?
Andrew Haden: For what we do, we haven’t seen a lot of subsidy actually. There are some programs that are proposed. For example, the Community Wood Energy Program which is proposed at the federal level would be one of the first federal programs that would specifically target biomass heat as something to be promoted. Here in Oregon, we have a business energy tax credit which has been around for a few years which is a tax credit for all renewables and biomass is one of those. So that’s been useful here in Oregon. It’s been great. But in terms of incentives from the federal level, we haven’t yet seen a comprehensive strategy around thermal energy and I think that’s where we need to go. And hopefully the people who are working on that, myself included, but the BTEC, the Biomass Thermal Energy Council, is really working hard on this issue. I think we’re starting to make headway and people are starting to see the logic of and the simplicity of just making heat. The cost to do it is a lot less. It scales down to all manner of size buildings, and it can be done quickly. So we’re not yet being supported at the federal level the way I think we should be. And I think that could change, and I hope it does.
Ben Lack: What would you say to somebody that was thinking about trying to get into the industry? Are there jobs to be had or jobs being created in the sector?
Andrew Haden: Absolutely. And really the sector that would see direct employment is the HVAC industry. Tight fitters, all manner of HVAC technicians, mechanical engineering, mechanical engineer jobs, those are kind of jobs that would expand as we expand. They’re good paying jobs and there’s a lot to know to be good at those jobs so they’re high-skilled. But there is transfer of a lot of existing understanding. So we’re basically a boiler. What we’re selling is more or less like an oil boiler, in terms of how it functions. It has some different components such as augers and motors which are a little different from what most guys in the HVAC industry are used to. So starting out there might be use of folks who’ve had some wood products industry understand conveyors and augers and how to get integrated into the system. But for all intents and purposes from the engineering side and how the boiler behaves in the building, the HVAC system is more or less like any conventional oil boiler.
Ben Lack: And for those that are listening to the interview and are interested in trying to find ways to better educate the EPA on the negative impact of trying to create these restrictions, what would you say to those folks? What do they need to do to get involved?
Andrew Haden: Well, I think the best resource out there today is the Biomass Thermal Energy Council, and their website is www.biomassthermal.org. And they’re sort of the leaders in this space right now in helping the industry be heard in Washington, DC and also in local regions. We work out here at the state level and we’re working on taskforce and working groups and things like that as much as we can to get the message out.
Ben Lack: I’m curious to know why you do what you do.
Andrew Haden: I was fortunate enough to live in Sweden for some years, and I was just blown away by what they’ve been able to do with biomass. I think it was when I was in Stockholm in maybe in 2004, and I found out they heated the whole city of Stockholm with two boilers and one of them was biomass fired. So they were heating hundreds of thousands of homes and business with two heating systems. That, first of all, blew me away. Then I learned that the biomass that they were using in that particular boiler was coming from British Columbia, Canada through the Panama Canal and that also blew me away. And I realized that we were, because of the lack of leadership in the U.S. on climate and renewables, we have sort of abdicated this industry to the Europeans who had all signed up for Kyoto and were working their carbon emissions. And so they saw biomass as one of the most cost-effective way to do that and they were just going great guns. And so I just decided to learn more and got into it and started going to some trade shows and seeing what the situation was and was continually impressed by how far along have they come and I really saw an opportunity to bring that technology back to the U.S.
I saw we were buying foreign sources and we were selling our renewable sources off to countries that had signed on to Kyoto. So it didn’t really make sense to me that we would continue that path for very long. And we’re finally now starting to see a change. But that’s my personal interest. My background is in rural development and I saw that rural areas and especially the western U.S. had lots of biomass available but really were missing the technology to harness it in a good way and a clean way. And so that’s kind of where I got into it was realizing the economic development potential in this technology and for rural areas particularly.
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