Vermont’s Wood Heat Renaissance

The Green Mountain State is a national leader in community-scale wood heat, but it didn’t happen overnight.
By Anna Simet | June 27, 2014

As world oil prices were on the brink of collapse back in the mid-1980s, Vermont was seeing its first successful wood chip-to-heat school installation come to life.  Today, more than 40 schools in the small state of 625,000 people have adopted wood heat, and that’s just a snippet of the industry’s success story there.

Though Vermont is still very much considered an oil state—three quarters of energy consumed in the state is petroleum-based, and No. 2 heating oil still dominates home heating—its portfolio of biomass thermal projects is extensive. Besides 46 schools, there are more than 40 public buildings, multifamily complexes, college campuses and businesses that have installed wood chip heating systems, and more than 120 bulk residential pellet installations.

And it’s no coincidence that the origin of the word Vermont is thought to stem from the French phrase “les verts monts,” or green mountains. Nearly 80 percent of the state’s rolling terrain is covered by 4.6 million acres of forests, mostly privately owned, and that number is on the rise. In fact, the net growth of trees has exceeded removal since the first inventory in 1948, according to the Vermont Woodland Association.

At the same time, forestry activities in Vermont annually contribute nearly $3.5 billion to the state, and are a significant driver of the economy, including the workforce. A 2013 report from the Vermont Department of Forests, Parks and Recreation indicates that nearly 21,000 jobs in the state are directly impacted by Vermont’s forests.

The success of the state’s burgeoning biomass thermal industry is associated with its heavy reliance on expensive oil, sustainable forestry and the multifaceted advantages that this abundant natural resource offers. But without the individuals who have worked tirelessly for decades to advocate for, ieducate about and implement wood heat, those characteristics would be meaningless to the industry. Foresters, state agencies  and officials, environmental groups, nonprofits, equipment providers—and list goes on—have banded together to keep wood heat rolling, and it has resulted in the highest concentration of local, community-scale biomass thermal installations in the country. And for many, it’s not just a trend or profession, it’s a passion.

That’s the case for Tim Maker, who is one of a small handful of people who have been around since the beginning. Maker was the founding executive director of the Biomass Energy Resource Center, the nonprofit largely responsible for driving the industry in Vermont, and has played a significant role in seeing numerous projects in other states to success.

Success Maker

Maker has witnessed the evolution of wood heat in the state firsthand. Back then, it was a very small group of people working to illustrate some big ideas, he reflects. “At the start, you could count the people doing it on one hand,” he says. “All are still, to some capacity, involved to this day. There were just two vendors for equipment then, and they fiercely battled each other for each project that came up. That was a really important driver—it was somebody who really cared, and they were selling this stuff to make their livelihood.”

Maker, 68, says he retired from BERC and the industry in 2009, but it didn’t last long. “Things were still so interesting that I just couldn’t [retire], but maybe I can in a couple more years,” he jokes.
Now CEO of Community Biomass Systems, Maker, described by his colleagues as a wood energy pioneer who wrote the guidebook on intuitional wood heat systems, began his career in the industry in 1980 by working for a state energy audit program that was run through the University of Vermont Extension Service. When the program was defunded, Maker began his own consulting business, and at one point volunteered to be part of a small team advised by a local school board to determine a heating solution for the small, rural school. That’s where it all started.

 “We decided we’d look at everything, even renewables,” he says. “This was in 1985. We learned there were a couple wood chip heating plants in Vermont, and we observed them and ended up making a school board recommendation, which it took to the voters, and the bond vote passed unanimously. Nobody said no. We figured we were on to something.”

Soon after, Maker decided to work wood heat into his consulting business, which was initially more about efficiency than heating technologies. “I went on to be the project manager of about one school system per year over the next 12 to 15 years, and I wrote a book about it for the Northeast Regional Biomass Program, and that was what led me to this relationship with the state, which I had been sort of partnering with for years to create BERC.”

With a desire to package up Vermont’s wood heat successes and make it available outside of the country, the state energy office hired Maker to lay the groundwork for a nonprofit to do so, and BERC was founded in 2001. Maker took on the role of executive director six years after moving to a new position. At that point, the reins were handed off to Christopher Reccia, who is now commissioner of the Vermont Public Service Department.

Reccia, who has also worked in renewable energy since the early 1980s, says he’s always had an interest in utilizing alternatives to fossil fuels, and emphasizes the importance of sustainable forest management. “The metaphor I have is within a garden, if one only picks the vegetables and not the weeds, eventually he will end up with all weeds. We have a lot of low-grade wood, and if we keep taking out the timber only, we’ll have no market for the low-grade wood, and that’s all we’ll be left with. Using these low-grade wood resources helps provide added-value back to landowners.”

Reccia says the PSD was a partner on the well-known “Fuels for Schools” program, which provided a 30 percent rebate to schools making energy improvement and was one of the main drivers for the influx of installations, and has always been supportive of wood heat. Its comprehensive energy plan, enacted in 2011, calls for 90 percent renewables by 2050 in all sectors—electricity, thermal and transportation, and Reccia believes wood heat has a strong role to play in meeting that goal. “I think biomass, at scale, is a really important component of the thermal piece for us.”

The work of BERC and the popularity of wood heat installations at schools have provided a strong market for low-grade wood, and that success has reverberated down the supply chain. It’s allowed chipping businesses to flourish, Reccia says, and it’s also serving as an anchor use for loggers providing that fuel. “Combined with the fact that Vermont is 80 percent forested, it’s a natural fit.”

On top of the widespread economic benefits, many dollars are being saved. “When we first started, we usually saw a 30 to 35 percent fuel cost reduction from oil to wood chips,” Maker says. “At the peak, it had grown to an 80 percent cost savings. It’s eased back a little now, to about 70 percent, but that’s still the real driver.”

Foreseeing the Future

Growth of Vermont’s biomass energy industry has been steady over the decades, and though some slight changes may be on the horizon, the consensus is that isn’t going to change any time soon.
Since the 30 percent Fuels for Schools subsidy isn’t available, the rate of schools adopting wood heat technologies has slowed down, but that doesn’t mean a slow-down of the entire sector. “We have the beginnings of a vibrant pellet industry, pellets are starting to come into the smaller schools, and we have one pellet mill doing really innovative work. Their business model is to be small—they procure their feedstock from within 30 miles and sell their pellets within 30 miles, and that’s pretty unusual.”
 There are some financial incentives for people to switch to pellet boilers in smaller applications, and that’s starting to take off, Reccia says. “The price differential between a pellet installation and oil, gas or propane has been a little harder, but federal tax incentives have helped there.”

Reccia says he sees biomass energy use continuing to expand in Vermont, particularly using wood resources for thermal purposes, rather than large-scale, electric generation. “I think the efficient use of biomass, and the need to document sustainable harvesting practices is the most important factor to retain public acceptance and ensure the renewability of this resource over time,” he says. “That’s where some of the focus has been during the last several years. As carbon becomes more of an issue, being able to show that its low-carbon will be important, and again, that goes back to sustainability.”

Maker notes that the movement of colleges and large facilities transitioning to wood chip heat is really cost driven, rather than subsidy driven. “They’re really not getting any incentives from anybody. Maybe for a study, but after that, they’re doing it because the economics are so good. And there’s so much potential for community-scale district heating to take hold—one tremendous success has been the Montpelier district heating system just becoming operational now. They’re hard projects to develop and get going, but I’m hoping there will be more of that.”

Part of Vermont’s continued success will be showing other states that they can follow suit, and that wood heat technologies are no longer a new or unfamiliar approach to heating, in the opinion of BERC Executive Director Adam Sherman. “Vermont is demonstrating how you can combine best-in-class projects, policies, legislation and programmatic support to achieve critical mass thresholds of market transformation,” he says. “A real theme that’s come out of numerous biomass thermal conferences in the last year and a half is this notion of demonstration that it’s the new normal. It’s not fringe behavior, it’s not fringe technology. This is mainstream, and we have an opportunity to make it as normal as heating with oil, propane and natural gas. The technology is there, the economics are there, and we’re getting there with public understanding.”

The fact that Vermont remains the largest consumer of No. 2 heating oil—despite its widespread adaptation of wood heat—is something that will keep the industry moving forward. “That’s going to motivate us to get to the next level,” Sherman adds. “We’ll continue work here, and Vermont will be a proving ground for the build-out of the biomass heating fuel market. What works here can be exported and adapted to the rest of the country.”

Author: Anna Simet
Managing Editor, Biomass Magazine