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Comment: District heating and beyond – bioenergy lessons from Finland

Canadian Bioenergy Association

These days residents of Finnish cities, towns and villages, nestled among thick forests and thousands of cold lakes, are kept warm by wood. Bioenergy from wood pellets, chips or biofuel fuels a central boiler and pipes the heat into the local hospital, schools, and homes. For many of these towns, cooperative district heating models have brought not only a lower carbon footprint, but the foundation for a thriving, local economy.

So why aren’t the Canadian fledging forest towns in Northern Ontario, B.C. and New Brunswick following suit? The Canadian Bioenergy Association’s annual conference in Edmonton last autumn, set out to address that question.

Leading community models and the latest technologies were put on show – and the speakers explored how they could be applied to position communities, like Bingwi Neyaashi Anishinaabek First Nation, in Northern Ontario, as models for a sustainable future.

The secret to bioenergy district heating? Planning and cooperation

"In Finland in the early 1990s, we talked a lot about the potential of heating our communities with wood waste instead of fossil fuels, but it took a lot of time before things got off the ground," said Dominik Röser of the Finnish Forest Research Institute.

The situation is all too familiar for Canadian companies and municipalities looking to turn their rich wood resources into an economy with a future.

From adding value to existing sawmill operations, heating the town’s large buildings with wood energy, or building a full-scale biorefinery, Canada’s forestry towns and cities are talking and dreaming big. Most have no choice.

A plummeting US housing market has routed the Canadian sawmill industry, and globalisation has sounded a death knell for many pulp and paper mills, and it looks as if the Federal Government is limited in its ability to come to the rescue.

Röser offered municipalities new hope at the Canadian Bioenergy Association’s annual conference and trade show in Edmonton, Alberta last October by sharing success stories from Finnish cooperatives, which have implemented bioenergy district heating systems.

The Finnish example

“Heat entrepreneurship in Finland continues to rise,” said Röser. Beginning with just a few communities in the mid 1990s, there are over 430 district heating plants in Finland today.

Röser said putting a solid cooperative or network of owners together is essential right at the beginning of any project. In Finland bioenergy heating cooperatives take three forms—the most common is a network of forest companies looking to turn their existing forest waste into profit; the second is owned by the heating customers themselves and the third is municipality-owned.

“In Canada, all of these models can be applied,” said Röser. “All of these cooperatives are usually non-profit, so all the benefits stay with the members, which is very interesting for customers because they benefit.”

He admits the forest company model would require a re-think as most of the forests are on crown land and recommends a case-by-case analysis. “To move things forward, it has to be municipalities and entrepreneurs that take charge, the key is that someone really has to take the initiative,” he said.

Doug Bradley, President and Executive Director of the Canadian Bioenergy Association, points out that the Finnish coop model could be easily applied in Canada if the coops were run by the Sustainable Forest Licence (SFL) operators.

Eco-heat in Eno, Finland

A typical example of a bioenergy heating cooperative, are the district heating networks in Eno, Finland.

In 2004, 3000 m of heating pipes were laid in Eno Alakylä. Hooking up a municipal office building, health centre, fire station, old age home, local businesses and ten terrace houses to a 1.2 MWth and another 0.8 MWth boilers, these buildings are now heated with local wood chips, peat and pellets.

The system cost C$1,384,000 before renewable energy subsidies of C$319,000. Across the EU subsidies differ, but typically a heat plant project receives up to 40% of the investment cost from regional, national and EU governments.

Subsidies for renewable heat are one critical area where Canada falls short. Biomass heating consultant and Canadian Bioenergy Association’s Ontario Director, Christopher Rees says to get off the ground, district heating appliances need a 30% capital subsidy rate and recommends the subsidy should be in place for a minimum of five years.

Quebec is pioneering one such programme, launched in September by the Agence de l’efficacité énergétique du Québec, the Program to Aid the Utilization of Forest Biomass Residues for Heat provides subsidies to help institutions, commercial buildings, churches and other public buildings convert from light oil to heating systems using woody biomass.

The Canadian Bioenergy Association also hopes the programme will include options to fuel buildings with renewable bio-oil made from woody biomass, by Canadian companies like Ensyn and Dynamotive, rather than undergoing the process of installing boilers in every case.

District heating offers many benefits to rural communities

Eno has three small, bioenergy district heating systems owned by a cooperative of private forestry companies. Besides creating a new market for already existing material, the renewable heat from the cooperative replaces 1.6 million litres of oil every year and reduces carbon dioxide emissions by over 4000 tonnes.

Step-by-step plan

Röser gave municipalities a step-by-step plan for building a successful bioenergy district heating network.

  • Start by surveying the community and the potential buildings, he said, make sure you have sufficient heating space to justify the investment cost;
  • Next calculate the power capacity of the boiler and shop around for different options;
  • Then plan the heating pipe network and calculate the profitability for the cooperative and customers; and
  • Now calculate the network fees.

In Finland, every member of the cooperative pays an entrance fee to join the network (usually about C$25,000-30,000). Members also pay a flat monthly fee to cover fixed costs like loans, and an energy fee, which pays for the energy each member uses.

The cooperative should now be ready to put out a tendering contract for the plant.

Röser said municipalities have to work hard to demonstrate the project’s feasibility and profitability to coop members and potential customers before starting negotiations on equipment and suppliers. After that, municipalities will be in good shape to apply for subsidies, and after receipt, they can start building.

A Canadian bioenergy district heating model

It’s easiest and cheapest to implement a bioenergy district heating system in a brand new community. That’s why JP Gladu, President of Lake Nipigon Forest, an association of four First Nations communities around Lake Nipigon, and CANBIO Director, is pushing for a bioenergy district heating system when Bingwi Neyaashi Anishinaabek First Nation moves back to its traditional territory.

In the 1960s, the Bingwi Neyaashi Anishinaabek people were forcibly moved from their traditional lands to make way for a provincial park. After decades of negotiations the Federal Government has agreed to cede the provincial park back to the First Nation, whose members who are now scattered around the region. JP says if all goes according to plan they hope to have the final approval in spring 2010 and the first houses and large buildings on the land by 2014.

On a Canadian Bioenergy Association study tour to Eastern Finland last May, Gladu saw Finnish bioenergy district heating systems up close. Gladu is in talks with Röser and another Finnish expert, Jouko Parvianen, to draw up plans for a district heating system for the community.

“This project would be the first of its kind in Ontario. And with our First Nation building a new community, the opportunity to develop a district heating system with the Finns prior to erecting building and roads is exciting,” said Gladu who began talks with two other Finnish suppliers at CANBIO’s Edmonton conference.

The community plans to build a sawmill and use the residues from there along with forest harvest residue to fuel the bioenergy district heating system.

He says community support for the idea of heat from local wood is high because of the First Nation’s strong traditions of relying on a sustainable forest for subsistence and its ties to the land.

Pellets, heat and power – new technologies let municipalities produce all three

Most of the recent bioenergy activity in Canada’s western provinces and British Columbia involves building dedicated pellet plants that export much of the product to Europe. And market demand is insatiable. Canada’s pellet exports are expected to double from 1.5 million tonnes to 3m tonnes in three to four years, says Doug Bradley. Meanwhile, in Eastern Canada, combined heat and power plants are on the top of the agenda.

Christofer Rhén of GreenExergy put a new, more efficient solution on the table at the Canadian Bioenergy Association’s annual conference. It’s a combination plant – producing green electricity, pellets and heat.

“It’s a technology that’s available right now, combination plants are more energy efficient and profitable so they should be considered in Canada,” says Doug Bradley.

Ontario Power Generation plans to eliminate the use of coal by 2014 and fuel some of its generators with biomass , to do so it will need 2m tonnes of biomass. Communities like Bingwi Neyaashi Anishinaabek First Nation will have a ready market if they were to consider pellet production, says Bradley, as will communities near ports because they can ship pellets to growing European markets.

The heart of GreenExergy’s combination plant is its innovative steam dryer, which can take all kinds of woody biomass, like sawdust, chips, wood branches and treetops, and upgrade them to an even quality and size. Then they can either go to a generator to produce electricity, a pelletiser to produce pellets and either a district heating grid to produce heat or a sawmill dryer to produce dried wood products.

GreenExergy is currently operating two combination plants in Sweden. Its Hedensbyn plant commissioned in 1996 has a 98 MW CFB steam boiler, a 34 MW steam turbine.

Every year it produces 260 GWh district heating and 170 GWh of electricity along with 130,000 tonnes of pellets. Its Storuman plant commissioned in 2008 has a 32 MW steam boiler, an 8 MW steam turbine and annual production is 105,000 tonnes of pellets, 40 GWh of heat and 48 GWh electricity.

Bioenergy brings jobs

Rhén says Finland’s rural communities, which used to have the same high jobless rates as Canada’s forest towns, are reaping the rewards of bio-economy development.

The trick, he says, is to focus wood energy development on rural communities with high unemployment and a need to diversify their local economies. By 2020 jobs in the forest fuel supply chain and in machinery supply in Finland are expected to increase five times, and management jobs will double.

Higher wages mean Finland and Canada can no longer compete with Asia and Latin America when it comes to forestry, says Rhén. “It’s time for us to cooperate in research and development and technology transfer to create new markets for our boreal forest resources.”

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