Over the past several months I have written columns supporting investment in wind power, particularly offshore wind power. Such investment would position Maine to be a leader in this alternative energy source, taking advantage of our geography to tap into naturally strong and steady ocean off-shore winds.

Much R&D effort remains to make offshore wind viable. It is also clear that, at least in its early incarnations, offshore wind would be relatively expensive.

Nonetheless, it is an energy source we cannot afford to overlook, given Maine’s high dependency on fossil fuels.

Following each of the columns I have written on this subject, I have received e-mails from a high school friend, Harry “Dutch” Dresser, former faculty member of Gould Academy and now partner with (gubernatorial candidate) Les Otten in a wood pellet heating venture, called Maine Energy Systems.

Dutch pointed out that I should look more carefully at the potential of wood pellet boilers as an efficient, renewable energy alternative to oil-fired heating.

Dutch was persistent, and a couple of weeks ago, I made the trip to MESys’ facility in Bethel. It was an eye-opening experience.

Wood pellet heating technology, developed in Europe, now provides an efficient and attractive alternative to oil-fired technology. It is easy to handle, clean and largely maintenance free. The best of these boilers, developed in Austria, have supplanted oil as a source of new and replacement heating in that country.

In Europe, government decision-makers have favored fuel switching to pellet-fired heating over insulation/weatherization in their initial efforts to reduce oil consumption because the rate of return on investment was greater with fuel switching.

Given that Maine has 80 percent dependency on oil-fired heating and also an abundant wood supply for pellet-fired alternatives, it would seem that the state should look hard at pellet-fired heating.

In an analysis that MeSys presented to the Efficiency Maine Trust, the group charged with developing the state’s strategy to reduce oil-fired dependency, the state would save significantly more oil by providing incentives for the use of pellet heating rather than weatherization.

In the examples presented, an $18,000 investment per home in weatherization would save 414,000 gallons of oil versus a savings of 1.8 million gallons if the $18,000 were used to provide incentives for pellet conversion.

Annual savings per household would be $745 with weatherization and $990 with pellet conversion.

Moreover, the state economy would benefit from the development and use of a state-produced, renewable source of energy, wood pellets. In addition, the carbon footprint is significantly lower with pellet conversion as it is a highly efficient burn.

Dutch pointed out that the Austrian system is so well-developed that the homeowner’s only task is to occasionally empty an ash collector — a good organic fertilizer.

All of this sounds like a compelling argument, and yet MESys is selling relatively few of these boilers.

The reason is that this technology is significantly pricier than conventional oil-fired technology. Depending on the size of your house, an oil-fired boiler might cost $6,000 to $12,000 to install. A comparable pellet boiler would run $15,000 to $18,000.

For this technology to make real progress in displacing oil in Maine, a significant incentive, most likely in the form of a tax credit, is required.

A small energy tax credit is now available, but Dutch believes a tax credit of $3,000 to $6,000 would be required to spur the development of the pellet alternative here.

He and colleagues in the Maine Pellet Fuels Association have worked hard to convince the Efficiency Maine Trust that this would be an effective use of federal stimulus dollars. They are also working with Maine’s congressional delegation to obtain a significant federal tax credit for pellet conversions.

The analysis presented by MESys is certainly compelling if the state wants to significantly reduce oil dependency — and this clearly is a goal of the governor’s and of the Efficiency Maine Trust. Yet the draft recommendations of the trust, published last week, focus much more on energy conservation than on pellet conversion.

I believe energy conservation should be a significant part of Maine’s energy strategy. Yet it appears we are underestimating the potential of a parallel approach that could bring more bang for the buck — and provide an excellent use of one of Maine’s greatest natural resources — our timber industry.

As the next Legislature considers the Efficiency Maine Trust recommendations, I would hope they question the role of pellet conversion in this strategy. Of course if a certain Republican gubernatorial candidate is successful, pellet conversion will have a strong champion in Augusta in any case.

 

Ron Bancroft is an independent strategy consultant based in Portland. He can be contacted at: ron@bancroftandcompany.com