The Boon of Biomass: Alternative Energy Systems Can Cut Costs, Create Jobs, and Benefit the Environment
Rural communities are finding energy solutions that utilize local resources
In a state rife with natural resources, it makes sense to try to find ways to use these resources to produce energy. And while Alaska always has been and likely will be heavily reliant on fossil fuels, biomass as an alternative resource is beginning to attract interest.
“Biomass generally refers to plant and animal matter or municipal waste used for energy, though most of the biomass projects in Alaska are thermal wood heat projects,” says Alaska Energy Authority (AEA) Executive Director Curtis Thayer, adding that most of the agency’s biomass work is based around these types of projects.
According to AEA records, community biomass projects date back to 1995, when they applied for funding opportunities through the US Department of Energy. The Alaska Legislature created the Renewable Energy Fund in 2008, which supports biomass projects statewide.
While some projects have been met with success—such as the large-scale biodiesel refinery opened by Alaska Waste in 2010 that uses local restaurant vegetable oil waste to operate its fleet of sixty vehicles using 10 percent biodiesel—other projects have not fared as well. Despite the fact that Haines Borough used energy produced from biomass to heat its senior center successfully for years, a larger project designed to build a biomass boiler plant near the school and a second biomass system at the wastewater treatment plant did not come to fruition.
“In the right circumstances, I would absolutely recommend using biomass, but each situation is unique; it really depends on what biomass is available and what capacities an organization has. On the North Slope, woody biomass isn’t the best idea given that there are no trees up there. You have to be able to use what’s local; if the resource is available, it can solve several problems at the same time.”
“That project did not proceed,” says Edward Coffland, Haines Borough’s director of public facilities. “There was never enough public support, the economics were marginal, and a ready, reliable supply of biomass was not available, so the grant money was returned.”
According to AEA, there are currently more than 170 prefeasibility biomass systems throughout the state and in excess of 50 operating systems. A wealth of different groups—from the State of Alaska and the US Forest Service (USFS) to the Denali Commission and local governments—are helping fund and support these systems from feasibility to construction through training and long-term operation.
“The Alaska Wood Energy Development Task Group has nearly twenty participants that represent agencies from government entities [including AEA] to private, nonprofit, and tribal groups all working together to promote biomass in Alaska,” says Thayer. He also explains that Alaskans’ interest in biomass is largely dependent on the price of fossil fuels and a community’s ability to have fuel delivered regularly.
“When the price of diesel is low, biomass projects often do not pencil out economically,” he adds. “Biomass utilization will likely depend on both diesel prices and government investment in these systems.”
Pros and Cons
According to Thayer, there are many benefits to biomass use in Alaska, which is why it has garnered so much attention.
“When communities install these systems, they see direct cost savings from reduced diesel consumption. These systems also help to keep money in the local community by providing jobs to locals for maintenance, project management, wood harvesting, and stoking the boilers,” he says.
“Money in the local community doesn’t just mean jobs, but it also creates a positive feedback loop for the economy,” he adds. “Additionally, because most of the wood used for these systems is waste, it pairs nicely with wildfire mitigation efforts, helping to provide fire breaks while heating community buildings.”
On Prince of Wales Island, the Southeast Island School District, in partnership with AEA, designed and constructed a cordwood boiler system for the Thorne Bay School. By using cordwood as a heating fuel, the school district created local jobs and has started to develop a cordwood economy on the island.
The Tok Biomass Project is a prime example of a biomass project meeting a number of needs. With a Renewable Energy Fund grant from AEA, Tok School designed and constructed a biomass wood chip heating system in the fall of 2009, which began operation in 2010. In 2013, the boiler was modified to produce steam and a steam turbine was installed to provide electricity in addition to heat.
“Before we started this project, the trees that were cut down for wildfire mitigation had no commercial value, so they were burned, which required paying people to monitor the disposal of this biomass,” explains Scott MacManus, superintendent of Alaska Gateway School District. “We came up with a way to use that waste that is not only more environmentally sound but is cheaper than the cost of disposal because it costs less to give the biomass to the school district to create heat and electricity for the Tok school complex than to destroy it.”
While the concept was originally met with some skepticism from government leaders, MacManus says the community quickly embraced the idea.
“We showed up at an economic development meeting with a projector and a screen, and our five-minute presentation turned into a half-hour conversation,” he says of pitching the idea with Tok area forester Jeff Hermanns. “It wasn’t a difficult sell when we mentioned job creation, wildfire mitigation, and heating the school more efficiently. We didn’t have to twist too many arms, except the state, but my background in commercial construction helped with that.”
As with every new technology, there was a learning curve. “Our biggest challenge was learning how to handle the wood; I talked to a lot of different experts and took trips to other states to see their working systems to understand procurement and how they got the woody mass,” MacManus says. “We’re still learning new things; the university did a study last fall about the moisture content of standing green forest trees after freeze up, so now we know to harvest material after freeze-up but before the deep snow, when trees are sitting around 20 percent moisture, which is the perfect level.”
He adds that it took a while to get the infrastructure into place—and to find the right price point.
“We tried contracting for wood at first, but sellers were trying to maximize profit and we were trying to maximize savings; we were at opposite ends of the spectrum,” he says. Though the school district was originally paying $55 to $60 a ton, by taking over most of the work, it is now able to get wood delivered to the school for a consistent $20 to $25 a ton.
With the ability to make its own electricity, the district is seeing impressive savings.
During the 2017-2018 heating season, Galena Interior Learning Academy’s wood chip heating system displaced roughly 92,000 gallons of imported heating oil, worth roughly $554,760. The community instead spent approximately $385,100 on locally harvested wood chips, which equates to an annual savings of $169,660.
“At this point, we’re saving anywhere from $250,000 to $400,000 a year depending on how much electricity we can produce,” says MacManus. “With only the hydronic unit, we were looking at a 20- to 25-year payoff. But because we can produce electricity, it’s already paid itself off 10 years into operation.
“We used to pay $35,000 a month for electricity and now we’re paying less than $7,500 a month,” MacManus continues, adding that Tok has an exceedingly high cents-per-kilowatt rate. “And that’s not including offsetting 60,000 gallons of fuel for the complex.”
In addition to saving money, the project employs two full-time and one part-time worker in the plant. With the money it’s saved, the school hired counselors, restarted its music program, and uses its electricity to heat a greenhouse that produces 20,000 pounds of fresh vegetables each year.
On Prince of Wales Island, the Southeast Island School District, in partnership with AEA, designed and constructed a cordwood boiler system for the Thorne Bay School. The system was integrated with the existing hydronic heating system in the school and later expanded to heat a greenhouse. By using cordwood as heating fuel, the school district created local jobs and has started to develop a cordwood economy on the island.
According to a case study provided by AEA, the project has resulted in offsetting 15,000 gallons of fuel for a savings of $36,000. It also created six part-time jobs.
“Because these systems can operate sustainably without outside fuel delivery, they also provide a sense of energy security and displacement of fossil fuels, which is important for rural communities that may be subject to delays in fuel delivery.”
While some may worry that biomass projects will cause the state to lose jobs in the fossil fuel industry, it in fact creates more jobs statewide.
“Biomass does not offset 100 percent of the diesel fuel or electricity used for a building, so although fuel consumption is reduced, those jobs are not lost,” explains Thayer, noting that biomass systems also lead to construction jobs, maintenance positions, and wood handling positions.
He adds that some biomass boilers have the ability to create biochar (biological charcoal), which is gaining interest in the state as a carbon sink used for agricultural purposes for its ability to absorb net carbon from the atmosphere, lower the need for fertilizer, and slow water runoff.
“Because these systems can operate sustainably without outside fuel delivery, they also provide a sense of energy security and displacement of fossil fuels, which is important for rural communities that may be subject to delays in fuel delivery,” he says.
As with any energy source, there are some challenges. Biomass boilers result in fine particulates, which can impact air quality, though this is largely dependent on wood moisture content. Trees also release carbon when they are burned, though this would eventually happen naturally through the decaying process. Additionally, due to the size of these systems, they are not subject to air quality permits by the US Environmental Protection Agency (EPA).
“Most of the communities with these systems do not have air quality issues and this is not a major concern,” says Thayer.
One of the biggest hurdles, according to those who have installed these types of systems, is finding an affordable, available, consistent source of biomass. The Ketchikan Airport is a perfect example.
In 2016, the airport installed a commercial-sized pellet boiler to heat its building. In addition to potential fuel cost savings, the price of the equipment was covered through grants, which made it an attractive option.
“I started looking at replacing the boiler system and sent out an RFP, and the bids I got were expensive,” says Airport Manager Mike Carney of prices starting in the $700,000 to $800,000 range. “I began looking at other options and going to biomass clinics and visiting biomass operations in town. I looked into grants, and the bottom line is that the airport wouldn’t be able to get a grant for anything to do with oil, but because AEA was pushing biomass we could get the $800,000 system for free.”
While the original plan was to work with a local company that would provide pellets for the furnace, after a couple of years that company was sold and the new owners chose to forego that line of business.
The Galena Interior Learning Academy was heated using imported oil at roughly $6 per gallon, which cost the school a tremendous amount. As part of a biomass project, the school campus’ heating district was revamped, including the installation of a wood chip boiler, which utilizes local timber resources.
“We were stuck finding pellets from out of town and then the ferry stopped running, and we couldn’t get pellets out of Canada,” says Carney of one of the difficulties of supplying the boiler. “We now buy them from a local hardware store in Ketchikan that has them shipped up on the barge, and then we use our own delivery truck to take them to our silo. When we’re paying $350 a ton for pellets and people in Oregon or Washington are paying $150 a ton, it’s unfortunate. It’s not a best-case scenario.
“If the USFS or the state or AEA could create a reliable storage facility so that someone could make money delivering to more than one person, the demand would go up and the price would go down,” he adds. “There needs to be a way to make supplying pellets locally profitable.”
While the biomass boiler originally saved the airport approximately 40 percent over the cost of oil, the cost of finding pellets has reduced that savings, as have dropping oil prices.
“We’re still saving some money, and we’re still dedicated to using the wood boiler, which runs all the time,” says Carney. “It’s still my preferred way to go. It operates flawlessly; when we had the old system, we spent a lot more time on maintenance than we do on this one. We just put it down once a year for cleaning, and we rarely have to replace parts; if we do, they are just small consumables.”
Case by Case
The goal of using more biomass is compelling, however—as with any new technology—there are still some kinks to work out.
“In the right circumstances, I would absolutely recommend using biomass, but each situation is unique; it really depends on what biomass is available and what capacities an organization has,” says MacManus. “On the North Slope, woody biomass isn’t the best idea given that there are no trees up there. You have to be able to use what’s local; if the resource is available, it can solve several problems at the same time.”
In This Issue
The Corporate 100
Alaska Business has been celebrating the corporations that have a significant impact on Alaska’s economy since 1993. At the time, the corporations weren’t ranked as the list didn’t have specific ranking criteria. Instead, the Alaska Business editorial team held long, detailed, and occasionally passionate discussions about which organizations around the state were providing jobs, owned or leased property, used local vendors, demonstrated a high level of community engagement, and in general enriched Alaska.