Although he was in the Twin Cities, Mark Spurr, president of FVB Energy Inc., a Swedish biomass consulting firm with 40 years of experience in biomass heating systems with offices in Sweden, the U.S., and Canada, appeared before the county board via Skype on Tuesday, February 4, 2014, taking questions from the county board about the potential for establishing a biomass heating plant for Grand Marais.
And much like the proposal, Spurr’s presence was filled with starts and stops as the Skype technology failed several times along the way.
Still, commissioners asked a variety of questions and Spurr provided good solid answers when he wasn’t digitally fading out.
Spurr is an engineer who has been working with the Cook County Local Energy Property (CCLEP) on the possible design and implementation of a biomass heating plant for Grand Marais.
The latest estimated cost to build the facility is $10 million. So far CCLEP has identified 18 potential customers that would be required to sign a 25-year agreement to purchase heat from the plant. Spurr said there would be no capital costs to the county or city of Grand Marais to build the plant, which would be operated by the Grand Marais Public Utility Commission (PUC).
The proposed biomass heating plant would be built in the Cedar Grove Business Park in Grand Marais and would supply hot water used to heat buildings. Each building supplied would also include an energy transfer station that would forward the water on to the next stop. The first initial customers are expected to use 27,000 million BTUs of annual heat, with a peak system demand at 13 million BTUs per hour. The plant’s ultimate capacity is about double the initial load.
The biomass heating plant would consist of a biomass boiler, exhaust stack, flue gas cleaning including an electrostatic precipitator and an ash removal system. A back-up hot water boiler would be fueled by propane and would be used when necessary. Spurr said that propane would run about 10 percent of the energy costs per year.
But the plant won’t be built if the county doesn’t include the courthouse and law enforcement center; if the school/YMCA opts out or if the hospital decides not to go with the program, said CCLEP spokesperson George Wilkes.
Bids for construction of the plant and infrastructure have gone out and it will be a month or two before Spurr receives them and can go over them. If the bids are too high, over the estimated $10 million price tag, it could be another deal breaker in putting up a biomass heating facility in Grand Marais, he said.
In 2012 CCLEP requested $355,000 (in two stages) from the 1 percent county sales tax to fund a business feasibility study, schematic design and full business plan. At that time CCLEP estimated the cost to build the heating plant and infrastructure to be $4.04 to $7.33 million, depending on what two configurations (plans) would be picked. In 2013 the cost to build was estimated at $9 million, and this year it has risen to $10 million, but until bids for construction come in, no one really knows what the price will be, said Spurr.
U.S. Forest Service Gunflint District Ranger Nancy Larson sent a letter of support for the biomass project. Part of what she wrote was, “Biomass as a fuel source has been and will continue to be generated from logging activities on the Superior National Forest. Treatment of suitable sites would contribute to implantation of the Superior National Forest Land and Resource Management Plan by helping achieve vegetation objectives, retaining and restoring healthy forest conditions, and reducing fuel load at critical locations around vulnerable communities.”
Questions from county board
Two commissioners, Bruce Martinson and Garry Gamble, submitted their questions to Spurr before the meeting and they had received replies back by the county board meeting. Some of those questions follow. Commissioner Bruce Martinson: If Cook County signs the 25-year commitment agreement, will Cook County be obligated only to use heat from the biomass plant and not other lower cost sources of fuel if available? Consultant Mark Spurr: The county could choose to use other fuels. However, in order to finance the District Heating System (DHS), the customer contracts include two types of charges: fixed capacity charges (to cover DHS fixed costs) and variable energy charges (to cover DHS variable costs). If the county chose to use other fuels, it would still have to pay the fixed DHS charges. Martinson: Why should the project proceed when one major objective at the start was to reduce the fuel on the ground for forest fire on the USFS and DNR land? [Martinson asked this in reference to the new plan to buy chips from Hedstrom Lumber rather than extract biomass from the area forests.] Spurr: If logging slash and waste trees from firewise clearing are used as a fuel source it is possible that the biomass district heating system would marginally help reduce wildfire risk by improving the economics of hazardous fuels removal and by generally supporting the area’s logging industry. Wildfire mitigation is only one of the community’s interests in implementing a biomass DHS. Others include: . Reduction of long-term energy cost. . Stabilization of energy costs (getting off the fossil fuel price rollercoaster) . Increased energy security by using local fuels rather than uncertain supplies transported long distance by rail, truck, barge or pipeline . Retention of energy dollars in the local economy, creating spin-off economic activity . Creations of local jobs . Reduced carbon emissions. Martinson: What liability will Cook County take on if Cook County becomes a customer with a 25-year commitment? Spurr: The county would be committed to paying the fixed capacity charges and energy charges based on metered heat consumption. Commissioner Garry Gamble: How will ongoing emissions be monitored and disclosed to the community to assure there are no health risks? Spurr: The plant is designed so that sampling for emissions measuring can take place, but it does not include continuous emissions monitoring, which is very expensive. Remember that the Minnesota Pollution Control Agency (MPCA) does not even require an air emission permit, much less continuous monitoring. Gamble: Are you confident smoke stack emissions will not have a negative impact on students attending school or guests visiting the new YMCA? Spurr: Yes. There are many biomass plants operating adjacent to occupied buildings. [Spurr referred Gamble to case studies supporting his point.] Gamble: How do you respond to those who claim that if the biomass plant is constructed in Grand Marais, you will have created the largest contributor to pollution in our community? Spurr: The biomass plant emissions will be very small relative to the current particulate emissions, which include significant current use of wood. Wood smoke is a common smell in Grand Marais during the winter, and it is being burned in inefficient, high-emission units. That is why the U.S. Environmental Protection Agency is proposing more stringent standards for new wood stoves.
Project slowed by funding setback
One recent set back was that funding for the biomass heating plant for Grand Marais wasn’t included in Governor Mark Dayton’s bonding bill as was expected. CCLEP member George Wilkes said he would attempt to find out why the language in support of the biomass plant was left out of the bill.
Without the money (it was hoped that the project would receive $4.5 million) from the governor’s bonding bill, other sources of financing will be sought and firm commitments need to be given by businesses and the county and city of Grand Marais to make this project go forward.
In December it was hoped that all of the questions and answers would be wrapped up by the end of January. Now, CCLEP has said that it might be two years before the biomass facility is built and up and running.
In the meantime, more question and answer sessions will be held with the school, hospital, and the city of Grand Marais. Until all of the questions are answered, biomass will certainly continue to generate heat, even if no facility is ever built.
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