$5.55 Million Federal Wood-to-Energy Conversion Grants

By Ramona du Houx

November 9th, 2010

From the University of Maine in Presque Isle, to the Sanford School Department in York County wood will be heating buildings and saving funds because of federal oil to wood conversion grants.

The Maine Department of Conservation announced today that eight school, university and medical center oil-to-wood heating projects are receiving more than $5.55 million in federal recovery funds. The funding will leverage an additional $6.4 million in local investment in those projects.

“Converting public facilities to use wood-based fuel is a win-win-win situation,” said Commissioner Eliza Townsend of the Maine Department of Conservation. “These grants will save local schools money, reduce dependence on foreign oil, create a market for Maine-grown wood and create economic activity in rural areas of Maine.”

The projects not only are expected to reduce dependency on fuel oil, but also are helping to create and retain more than 132 jobs in Maine. Besides creating jobs, the goals are to achieve energy savings, reduce dependence on nonrenewable energy resources, reduce greenhouse gas emissions and support sustainable forestry.

In 2008, Gov. John Baldacci introduced a wood-to-energy initiative to reduce the state’s reliance on foreign oil and stimulate Maine’s economy by developing renewable sources of energy. This groundwork helped in the application process, as it gave the state a foundation to build on.

“Nationally, in order to create jobs and help transform our economy, we must promote clean energy and the careers of tomorrow that are needed to advance it,” said U.S. Rep. Michael Michaud. “These new investments will help ensure that we continue to lead the nation in showing how best to use renewable forest-energy resources as a significant fuel source. I am pleased that Maine received these important investments and is now able to put them to good use supporting our schools, universities and hospitals.”

Criteria for the project selection included: the number of jobs created and preserved; unemployment rates; the size and scope of the project; community support; and amount of community funding.

“With the great heritage of working woodlands and woodland workers in the state, these Recovery Act projects are clean and green solutions to energy security, employment security, and forest conservation,” said Tom Tidwell, U.S. Forest Service chief. “These Recovery Act projects help sustain permanent jobs for Maine’s workers and long-term forestry options for Maine’s woodland owners. Forest Service Recovery Act projects offer a full range of benefits— they save schools and hospitals money. They can reduce atmospheric greenhouse gas levels and they reduce dependence on fossil fuels.”

The grants are the second round to be awarded under the American Reinvestment and Recovery Act of 2009 (ARRA) energy grants first announced in August 2009 and awarded by the USDA Forest Service to the Maine Forest Service (MFS), under the Maine Department of Conservation. The total ARRA grant of $11.4 million, going to 13 projects, so far is creating and retaining more than 185 jobs in Maine, according to state and federal officials.

The eight projects funded in Round 2 include:

• RSU 39 – Limestone Community School, Aroostook County; awarded $750,000 for the installation of a wood chip boiler to supplement the current heating system. The new system is expected to displace more than 63,000 gallons of oil for the school department. The estimated total project cost is $1,528,545.

• Greenville Middle/High School, Piscataquis County — awarded $750,000 for the installation of a wood chip boiler in the Oakes Building to replace the current oil boiler. The wood chip boiler will displace more than 40,489 gallons of fuel oil. The estimated project cost is $1,126,957.

• Lee Academy, Penobscot County — awarded $300,000 for the installation of a pellet boiler to heat three buildings and to displace approximately 26,600 gallons of fuel oil. The total cost of the project is $745,000.

• Madawaska Junior/Senior High School, Aroostook County — awarded $750,000 for the installation of a wood chip boiler to heat the main building and to displace approximately 64,000 gallons of fuel oil. The total cost of the project is $1,392,417.

• Northern Maine Medical Center, Aroostook County – awarded $750,000 for the replacement of the current system with a wood chip boiler to heat the main building. It will displace approximately 97,000 gallons of fuel. The total project cost is $2,838,937.

• Sanford School Department, York County – awarded $750,000 for the installation of a wood chip boiler to heat three buildings, Sanford High School/Vocational School, Sanford Middle School and a gymnasium. It will displace 80,000 gallons of fuel. The total project cost is $1,750,000.

• University of Maine at Presque Isle, Aroostook County – awarded $750,000 for the installation of a wood chip boiler to heat Folsom and Pullen Halls, two classroom/laboratory buildings. It will displace 22,000 gallons of fuel. The total project cost is $1,260,000.

• Waterville Senior High School, Kennebec County – awarded $750,000 for a wood chip boiler, expected to displace 50,215 gallons of fuel. The total project cost is $1,343,913.

The oil-to-wood grant concept was developed and proposed by the Maine Forest Service and approved for funding by the USDA Forest Service. Alec Giffen, Maine Forest Service director, explained that the effort was designed as a competitive grant process open in all Maine communities for state, county, local and tribal governmental buildings, as well as for school and hospital structures.

A total of $11.4 million was made available to the state for the grants, with funding coming from the USDA Forest Service – Northeastern Area, State and Private Forestry, to help primarily rural, economically depressed counties.

The goals for the grant program are to create and retain jobs in Maine, to achieve energy savings through wood-to-energy installations, reduce dependence on non-renewable energy resources, reduce greenhouse gas emissions, and support sustainable forestry.

These Round 2 ARRA grants are expected to create 185 jobs in Maine during the grant cycle, and another 121 jobs are expected to be retained at least five years after construction. Those jobs include school, university and center staff, as well as suppliers.

With an average price per gallon of $2.76, the ARRA grant awards to date are expected to displace a total of 703,500 gallons of No. 2 heating oil a year at an annual savings to applicants of more than $1.4 million a year for all projects combined. That is enough to heat about 884 Maine homes, according to MFS officials.

“Not only are these projects a win-win for the communities and facilities involved by saving fuel dollars, using renewable fuels, and improving rural economies, they also will encourage others to switch to biomass fuels by showcasing the modern technologies involved,” Giffen said.

The MFS first called for proposals in October 2009, and a total of 41 applications were received. Five projects were funded in Round 1, with a total of $2.6 million in grant funds.

Round 2 was announced earlier this year, and 33 Maine projects applied. Grant announcements were delayed in June, however, when the EPA posted draft air-quality administrative standards for wood-fired boilers. The draft rules apply to boilers smaller than ever before covered and specified emission levels far below those ever before required. Despite the fact that the rules are “draft,” all projects initiated after they were announced may be required to meet them.

In response to concerns that the rules were unrealistic in several regards, the EPA responded in a September letter to Gov. John E. Baldacci that “the final standards will most assuredly differ from the proposed ones. The differences will demonstrate EPA’s intent [to] focus on making the regulatory subcategories appropriately reflect industrial variation in the real world … and on aligning the standards in each subcategory with the performance that real-world conditions prove are already achievable.”

Despite the fact that the draft rules may be changed, the Maine Forest Service has allocated additional funds for most projects to upgrade their emission control equipment. Boiler manufacturers also have now certified that with the additional emission controls, their equipment can meet even EPA’s draft rules under normal testing procedures. In addition, project contracts make it clear that whatever measures needed to meet EPA’s air quality rules will be taken.
For more information:

Go to: http://www.maine.gov/doc/mfs/arra/

Or call Tom Wood, Maine Forest Service senior planner, at: (207) 287-3920 or email: thomas.c.wood@maine.gov 287-3920