Fired Up: Bioheat Gains Momentum as Recovery Takes Hold

The reasons are simple enough. Low rates of new construction, a declining housing market and lower oil prices have made capital intensive investments in wood pellet, chip and gasifying systems a tough sell.

But the signs of recovery are now being seen in this space. Consumer demand is improving and policymakers are placing renewable heating higher up on their energy agendas. In the last six months, the American Renewable Biomass Heating Act of 2010 (S.3188) was introduced in Washington, D.C. The bill would add renewable heating systems to the list of technologies that qualify for federal renewable energy tax credits. New state- and utility-level incentives were also created in New Hampshire, with more expected in other Northeast states.

Charile Neibling, chairman of the Biomass Thermal Energy Council (BTEC) and general manager of New England Wood Pellet,  said the policies being put in place at the government and utility level signal a return to pre-recession thinking, when oil was expensive and both consumers and corporations were looking to be more eco-friendly. The result, he said, is that the industry is seeing momentum return, leading leading policy makers and utilities to put incentives in place to help get the market moving again.

"In Washington, there are three pieces of legislation we're working on. All of them are demand side incentives for commerical, residential and industrial applications for high efficiency biomass thermal technologies," Neibling said. "The utilities, which have historically been focused solely on electricity, are starting to view their role more expansively and are viewing the efficiency monies that they administer in a more technology and fuel neutral way, and that's a really encouraging sign."

Niebling wasn't alone in his optimism at the Heating the Northeast with Renewable Biomass (Heat NE) event last week in New Hampshire.

Lew McCreery, Biomass Coordinator for the U.S. Forest Service's (USFS) Northeastern Area said that he's encouraged by the increasing cooperation taking place between government agencies. But he cautioned that there is still a lot more to be done politically to increase the adoption of high efficiency bioheating technologies. Recognizing heating and combined heat and power technologies under renewable portfolio standards is a top priority for the industry, McCreery said.

"The thermal use of wood is almost the ideal use as an energy source," he said. "The biggest concern I have is the inefficiency of wood in standalone electric plants, which are being encouraged by things like renewable portfolio standards that don't include heat as a recognized technology."

Joe Kohler of Kohler & Lewis, Mechanical Engineers said that the recession caused some customers to put plans for biomass systems on hold as a result of the recession. Now Kohler said he's seeing interest come back and expects it to remain high for the foreseeable future. The keys to keeping interest high, he said, will be the availability of systems and the quality of the work being done in the field.

"Once it gets to the point where oil is $3.50 a gallon, I think this will be a self fueling industry, we don't even have to do much to make it happen. We just need to have the product out there for consumers to buy and we have to have successes," he said

Though higher oil prices will undoubtedly lead people to look at new choices for heating, challenges to market adoption still exist. Mark Froling, president of boiler installer Froling LLC said that installers need to act as both marketers and educators by building showcase projects — even if it means working for a reduced price — in order to prove to consumers that biomass thermal projects work. Showcase projects will allow people to “kick the tires," he said.

"Right now we're building a project in Peterborough, New Hampshire and doing it at a reduced cost so that it's a showcase [and] people can see the project and see that it works. There's really no one out there that has equipment installed and there are only a handful of boilers out there running," he said.

As is the case with any new industry, consumer education plays a big role in renewable energy implementation and adoption. Educating regulators and policy makers is also important. During his keynote address, John Kerry, Director of the Maine Office of Energy Independence & Security, reminded Heat NE attendees to make more effort to communicate the industry's message in order to provide people with a better understanding of the benefits of the industry.

"I think the very first thing thing needs to be knowledge, that is, the legislature, the public, and the industry itself needs to become fully engaged in understanding the newest of technologies, the resources and the impact of harvesting the resources to create jobs and economic development," he said.

The energy transition is a cultural transition from one based on fossil fuels to one based on conservation and sustainability, said Kerry.

Christiane Egger, deputy manager of the Upper Austrian Renewable Energy Agency (Oberösterreichischer Energiesparverbund)  used her European region, which is on a path to get 100% of its primary energy from renewable sources by 2030, as an example of the sustainable culture Kerry alluded to. The most important component to making the move she said, is to make a commitment and to stick to it.

"My state decided in the mid 1990's that sustainable energy was a crucial question for us and we're now in the third phase of state action plan, under which we said that by the turn of the millennium we would have 30% of our energy from renewables. And we did it," she said.

In order to overcome many of the challenges in front of the biomass industry, BTEC recently issued a report called a “Bold Vision for 2025." The report calls for a shift to 25% renewable heat in the Northeast, with 19% from biomass and the rest from solar thermal and geothermal heat pumps.

BTEC, Maine Pellet Fuels, the Pellet Fuels Institute, the New York Biomass Energy Alliance and the Alliance for Green Heat laid out a series of steps needed to achieve this goal, including increasing state and local government support for renewable heating through the use of regulatory requirements, tax incentives and rebates. The report also said that in order to hit this figure, academic institutions will need to develop improvements to technologies currently on the market and work to create new, more efficient ones.

Were these targets hit, the industry would bring more than US $4.5 billion in economic activity to the region and would create more than 140,000 permanent jobs, as well as thousands of temporary and indirect jobs in the construction, farming, forestry and transportation industries. The expansion of the bioheating industry would also prevent $1.6 billion from leaving the U.S. for petroleum producing nations in the Middle East and elsewhere.

Check back with RenewableEnergyWorld.com for more coverage from Heat NE in the coming days. We'll be releasing video and podcast interviews from the event as well as more information about the “Bold Vision for 2025” report.