MSU Extension

Using woody materials to heat or cool water that is circulated through a piping network is not a new technology although there are many advancements in the operation of these technologies. A single modern heating plant can heat and cool many buildings or a single building. Schools and health care facilities are particularly good fits in many cases.

There are around 70,000 boilers in Michigan, according to the Michigan Department of Energy. Only about 150 of these are advanced wood-based thermal facilities, most in the forest products industry. Additionally, there are 130 boilers that predate 1981, that are off the natural gas grid. Some of these facilities could benefit from converting to wood chip systems.

Roughly 40 percent of Michigan’s total energy expenditures is for heating and cooling. This is called thermal energy. The Michigan Statewide Wood Energy Team (SWET) has assembled a growing series of case studies about facilities that use wood to heat and/or cool their buildings. There are at least a half-dozen schools, most in the Upper Peninsula. This team serves as an information source about wood-based thermal energy, not electricity production and not transportation fuels.

The shortest payback for wood-based conversions are facilities currently off the natural gas grid that currently use propane, fuel oil or electricity as their source of heat. However, there are examples where wood is competitive even with today’s natural gas prices but the paybacks are longer, assuming that natural gas prices remain stable for the next couple of decades.

The capital costs of converting to a wood chip system are higher than simply replacing an aging fossil fuel boiler, but lower operating costs make-up the difference over a period of years (payback). The capital cost will depend upon many factors unique to each site. Conversion to wood chip thermal often comes with a number of energy conservation upgrades. So, savings come from lower fuel costs, improved efficiency and decreased energy use. 

Much of northern New England is moving quickly to wood-based thermal energy, both wood chips and wood pellets. The industry is beginning to be an important driver in their regional economy, keeping energy dollars circulating in the region. In the more advanced renewable energy economies of many northern European countries, wood energy is already a major driver. The technologies are sustainable economically, environmentally, and socially.

Advanced wood-based thermal energy systems are at least as reliable as fossil fuel systems, with an equivalent amount of maintenance. While monetary costs are often lower than fossil fuels, and wood chip pricing is considerably more stable, there are non-monetary benefits that are important to some institutions.

Advanced wood-based thermal energy is sustainable, locally-derived energy, that contributes to local economies in a sustainable manner. Much of Michigan already has the infrastructure to support increased wood-based thermal operations.

Carbon released from burning wood is the same carbon that was recently taken-up by forests from the atmosphere. It does not affect the carbon balance. When sustainably managed forests remain intact, a healthy wood energy economy contributes to increased carbon sequestration in the form of long-lived, higher quality wood products.

Adding another market for wood products increases the ability to better manage forests which, in turn, contributes to greater environmental services, such as wildlife habitat diversity, forest health, and soil and water protection. This is sometimes counter-intuitive.  Forest industries contribute to keeping forests as forests, as opposed to conversion to homes, sprawl, or agriculture. Land use changes are, by far, greater threats to forest resources than forest industries.

Whether you are a homeowner or an institutional decision-maker, considering wood-based thermal energy should be part of due diligence when thinking about heating and cooling needs over the next 30 to 40 years.