District Energy in West Union, IA
Transcription
District Energy in West Union, IA
District Energy in West Union, IA INTEGRATING A NEW DISTRICT ENERGY SYSTEM INTO A HISTORIC MAIN STREET COMMUNITY Preservation Green Lab, National Trust for Historic Preservation Center for Sustainable Business Practices, University of Oregon OCTOBER 2010 West Union, a small town in northeast Iowa, is in the midst of an ambitious plan to redefine its downtown core. A key part of that plan involves creation of an innovative district energy system based on renewable ground-source thermal energy – making West Union one of the first communities in the nation to choose district energy as an energy performance strategy in an existing neighborhood of historic buildings. District energy provides an innovative energy solution for small-scale older and historic buildings that may not be able to integrate aggressive energy efficiency or on-site renewable energy generation within their property boundaries for reasons of both physical capacity (such as size and structure) and financial feasibility. This case study explores the essential elements of integrating new district energy systems in established neighborhoods, so that other communities can identify similar opportunities to improve energy performance and foster investment in already compact communities that contribute to reduced resource consumption. DISTRICT ENERGY IN WEST UNION, IA 1 Table of Contents Preface ...................................................................................................... 4 The Preservation Green Lab Why District Energy Matters West Union, Iowa .................................................................................... 5 Fostering a Collaborative New Vision ............................................... 6 Formation of a Main Street District Iowa’s ‘Green Streets’ Initiative Emergence of District Energy in West Union .................................. 8 Funding Sources Economic Performance of the System The Building Owner Perspective – Costs and Benefits .................. 11 Environmental Benefit .......................................................................... 12 Impacts of Greenhouse Gas Emissions Reductions Learning from West Union................................................................... 14 Looking Forward ................................................................................... 15 Glossary ................................................................................................... 16 Appendix 1: Additional Resources ..................................................... 19 Appendix 2: System Details................................................................ 20 DISTRICT ENERGY IN WEST UNION, IA 2 Preface About the Preservation Green Lab The National Trust for Historic Preservation believes historic preservation can – and should – be an important component of any sustainable development effort. The conservation and improvement of our existing built resources, including reuse of older and historic buildings, greening the existing building stock, and reinvestment in older communities, is crucial to reducing carbon emissions associated with the built environment. Launched in March of 2009, the Seattle-based Preservation Green Lab (PGL) was established with the mission to further the scientific understanding of the value of our existing building stock and develop and promote strategic policies for integrating the reuse and retrofitting of older and historic buildings into city and state sustainability efforts. The PGL’s current projects include: • An analysis of the implications for existing building reuse of the demolition and density components of San Francisco’s new Green Building Ordinance • Research that applies a life-cycle-assessment (LCA) approach to quantifying the environmental value of building reuse compared to new construction. • Research on the links between urban grain and pedestrian patterns, as well as broader issues at the interface of urban density and preservation. • A collaboration with the City of Seattle and the New Buildings Institute on a new national model for energy codes for existing and historic buildings that will pair accountability for actual performance outcomes with complete flexibility in how owners of these buildings can accomplish their energy retrofits. Why District Energy Matters for Older and Historic Buildings Our outcome-based code work will help individual buildings achieve aggressive energy saving and emission reductions targets in the most flexible, cost-effective way possible. However, many smaller older buildings will not achieve these goals without access to low-carbon district energy systems --neighborhood-scale utilities that are specifically created and financed to deliver energy services (heating, cooling, and hot water) to a collection of buildings within a defined service area. District energy systems are able to deliver energy from a variety of alternative low-carbon sources such as biomass, geothermal and recaptured waste heat. (See side bar ‘About District Energy’.) More than half of commercial buildings in the United States are less than 5,000 square feet in area, and 95 percent of them are less than 50,000 square feet.1 In general, the older the building stock in a community, the smaller the average building size. This is most evident in the traditional mixed-use “urban village” neighborhoods that are driving the rejuvenation of so many American cities (and likewise the traditional compact main street communities of rural areas). While the compact design and authentic character of these communities yield many sustainability benefits, the small size of their buildings can reduce the physical feasibility and economic viability of 1 http://www.eia.doe.gov/emeu/cbecs/cbecs2003/detailed_tables_2003/ Detailed_tables_2003.html DISTRICT ENERGY IN WEST UNION, IA 3 energy improvements to individual buildings. District energy represents an opportunity to invest in renewable energy solutions for buildings with limited space for new energy-saving devices or for which there would be unacceptable architectural impacts. District energy systems are emerging as a key strategy for communities that want to optimize their investment in massive long-term reductions in greenhouse gas emissions of their existing building stock. ABOUT DISTRICT ENERGY District energy refers to neighborhood-scale utilities that provide heating, cooling and domestic hot water within a defined service area, and is an old concept stemming back to our earliest urban energy systems in the beginning of the 20th Century. Energy is generated at a central location by burning fuels such as natural gas, biomass or garbage, tapping ground source or geothermal energy, or capturing waste heat from industrial processes, sewers or power plants. District energy was common in the early days of the electric power industry when waste heat was captured from small electricity plants located close to city centers. The benefits of district energy were overlooked during the latter half of the 20th Century, when energy and land were inexpensive and development was sprawling rather than compact. Now, in the context of increasing urbanization, energy insecurity and climate change mitigation, communities are tapping the potential of many sources of urban waste heat, as well as lowercarbon combustible fuels, to produce thermal energy. Buildings are part of a community, and resource sharing is a common practice in communities, from sharing public spaces to water to electricity grids. Increasingly, cities and building owners both will be compelled to look to district-level solutions to meet their clean energy needs, and to meet their needs for other resource and infrastructure such as sustainable storm water Image Credit: IBC Engineering, Inc. management and waste water recycling. The aggregation of energy demand and the customer service model established for district energy can serve as the foundation for these other “eco-district” services and infrastructure projects.2 The PGL has recently produced a policy paper titled The Role of District Energy in Greening Existing Neighborhoods: A Primer for Policy Makers and Local Government Officials, Officials which explores these concepts in detail.3 This case study of West Union, Iowa is an important real-life illustration of the benefits and challenges of integrating new district energy systems into neighborhoods of smaller and historic buildings with multiple owners. 2 See Glossary and Additional Resources for more information on ‘eco-districts’. 3 http://www.preservationnation.org/issues/sustainability/green-lab/additionalresources/District-Energy-Long-Paper.pdf DISTRICT ENERGY IN WEST UNION, IA 4 West Union, Union, Iowa West Union has a population of just over 2,500 residents and a traditional downtown with many older and historic buildings. It is the county seat for Fayette County and is located within a two-hour drive of larger urban centers like Cedar Rapids and Waterloo, Iowa. The community has abundant natural resources, by virtue of its location, nestled in the Mississippi River Valley and book-ended by trout streams, affording it strong agricultural and recreational opportunities. Aerial view of West Union’s historic downtown, which runs from U.S. Highway High way 18 south on Vine Street to Plum Street, bordered on the east by Walnut Street. Vine Street is the cultural and, at least historically, economic hub of the city. Photo Credit: IDED The majority of buildings along the six-block downtown core date from the 1890’s to early 1900’s. A few of West Union’s buildings are listed on the National Register of Historic Places but so far the district has not been registered.4 A recent market study indicates that several downtown buildings have undergone recent renovations and improvements, as the community has sought to revitalize downtown as a focal point for commerce.5 While the downtown has seen a significant decline in retail activity over the past 20 years due to competition from suburban development, the business district is filled with professional service firms, banks, a post office, several restaurants and cafes, and a feed supply store, many of them locally-owned. West Union’s downtown buildings are predominately two stories and range range from 4,5004,500 -8,500 square feet, and are brick structures with wood timber spans and wood windows. These historic buildings have facades typical of downtowns in small towns across the county. Photo Credit: Jerry Wadian 4 Interview with Jeff Geerts, Special Projects Manager, Iowa Department of Economic Development on 8-31-10 5 http://www.preservationnation.org/main-street/main-street-news/story-of-theweek/2010/green-streets-in-iowa.html DISTRICT ENERGY IN WEST UNION, IA 5 Fostering a Collaborative New Vision Starting around 2005, a series of innovative sustainability and community development programs were implemented in West Union with each success building on the last. First, a Main Street program was established in West Union, then the City was selected as a pilot city by the Iowa Green Streets initiative, next the city gained funding for a Complete Streets project, and finally, West Union developed the concept and secured state and federal funding for a district MAIN STREET IOWA energy project. These successes have The national Main Street Program began in 1977 helped West Union develop a solid vision of as a component of the National Trust for Historic Preservation. It was established to address the itself as a community committed to disinvestment and decline of traditional neighborhood development, sustainability, downtowns across the country and provide and innovation. needed organization, technical support, and funding to help communities keep their Main Street as the social, cultural, and economic heart of the community. Since 1980, the program has operated through the National Trust Main Street Center and launched more than 2,000 affiliated Main Street programs in 43 states Formation of a Main Street District In 2005, a group of local stakeholders came together to talk about options for improving In 1985, the Iowa Legislature adopted a Main and revitalizing the downtown. The last Street program based on the National Trust for Historic Preservation’s Main Street approach. Main significant improvements took place in the Street Iowa is a component of the Iowa 1970’s, from which time the downtown has Department of Economic Development and aims experienced a steady decline in population to improve the social and economic well-being of Iowa's communities. and economic activity. The City and County hoped to reverse these trends, and facilitated the creation of a Main Street program in West Union.6 Redeveloping the Main Street District has been a collaborative effort between Fayette County, the City of West Union, West Union Chamber of Commerce and Main Street Iowa. This theme of collaboration is woven throughout West Union’s revitalization effort and has been essential to the City’s success in engaging the public and seeking funding. Iowa’s ‘Green Streets’ Initiative “West Union realizes that urban areas are part of, not separate from, the natural cycles of the prairie. And will serve as a model and outdoor classroom to communities that want to improve their economic viability through sustainable green infrastructure. Water is treated as a resource instead of an obstacle. (West Union website) In 2007, the Iowa Department of Economic Development (IDED) launched its ‘Green Streets’ Initiative to instill smart planning principles and sustainable design practices into all of its programming and build local capacity to understand and implement sustainable practices. One component of the initiative promotes the ‘complete streets’ model as a tool for improving livability and sustainability. ‘Complete streets’ is a nationally recognized standard of developing streets that serve all modes of transportation with a focus on improving safety and accessibility for pedestrian, 6 http://www.iowalifechanging.com/community/mainstreetiowa/default.aspx DISTRICT ENERGY IN WEST UNION, IA 6 bicycle, and public transportation users.7 However, the Green Streets Initiative is not only focused on transportation infrastructure, the initiative’s holistic approach also addresses issues such as historic preservation and stormwater best practices. As part of this initiative, the State chose two pilot cities, including West Union, to demonstrate transformative changes that could serve as examples for all of Iowa.8 West Union was selected because of several strengths – existing involvement in the state Main Street program, similarity to other small Iowa towns, success in launching other community programs, and timing – as it was about to begin a master planning process.9 In March 2008, work began with community members to create and refine a shared vision for the downtown. IDED selected the Conservation Design Forum (CDF)10 to lead a 2-1/2 day conceptual design meeting where community leaders and the general public could engage in the process at an early stage. This initial work produced principles for a sustainable community vision. It is important to note that these conversations took place at a time when much of the state was experiencing massive flooding. This brought sustainability planning to the forefront – especially for West Union – a city without a stormwater system. COMPLETE STREETS A complete street accommodates multiple forms of transportation rather than focusing solely on automotive transportation, and thus provides safe bike and pedestrian systems and ample transit opportunities. This approach also strives to establish a more human scale that emphasizes the comfort of pedestrians. Cities across the U.S. are taking steps to create these complete streets as one key element of their neighborhood revitalization efforts. (See completestreets.org) Example of a ‘complete street’ in Hamburg, NY. One element of West Union’s approach to implementing its vision is bringing a complete street orientation ori entation to its Main Street program. 7 The National Complete Streets Coalition has played a central role in the defining the model and implementing complete streets projects across the country: http://www.completestreets.org/ 8 Interview with Jeff Geerts, Special Projects Manager, Iowa Department of Economic Development on 8-31-10 9 http://www.preservationnation.org/main-street/main-street-news/story-of-theweek/2010/green-streets-in-iowa.html 10 http://www.cdfinc.com/ DISTRICT ENERGY IN WEST UNION, IA 7 The visioning exercise engaged a diverse group of stakeholders to think more broadly about the goals of the West Union project. Representatives from U.S. Department of Agriculture, several State of Iowa departments (Public Health, Cultural Affairs, Natural Resources, Transportation, and Agriculture and Land Stewardship), along with local officials and organizations sought common ground and shared opportunities to create a highly visible and innovative project, for which funding was provided in a July 2008 City Council resolution to issue municipal bonds. Emergence of District Energy in West Union With a handful of innovative programs in place and a citizenry freshly committed to sustainability and neighborhood development, West Union’s conversation turned to district energy. The idea to develop district energy in West Union first emerged through an initial interest in heating sidewalks and streets to manage stormwater and serve as an amenity during the long, icy winters.11 The idea of heated sidewalks was eventually abandoned as the community considered the costs and complexities, but the idea of a district energy system gained traction as a component of the larger downtown plans, particularly as the idea of a ground- source system for heating and cooling emerged. West Union chose to base their district Map of West Union ground source wells. Photo Credit: Conservation Design Forum heating and cooling system on ground source energy, which uses shallow geothermal wells to tap the ground’s stable temperatures. The thermal energy is clean, renewable and free, however such systems still require significant investment to build, and electricity is required to transfer heat through the system on an ongoing basis. (To get a full description of West Union’s system, please see Appendix 2.) The City considered various fuel source alternatives –looking at wind power in particular- for the district energy system before determining that ground source was the most appropriate option.12 West Union experiences harsh winters, and the associated high heating demand makes a ground source system an efficient and sustainable system.13, 14 11 Biomass, solar and gas were all considered as energy sources to supplement the district snow and ice melt system. 12 Analysis showed that there was insufficient wind power in the region. 13 Note that ground source energy is distinct from ‘geothermal’ energy. West Union’s system is technically a ground source system. See definition of ‘ground source energy’ in glossary for further information. DISTRICT ENERGY IN WEST UNION, IA 8 The new district energy system is unique in many aspects. It is one of the first in the country to install a new district energy system in an existing neighborhood of historic properties. The system is also unique in its flexibility for building owners – the system will provide a ‘stub line’ to each building, making it easy for owners to connect.15 Though the City is contemplating offering a onetime incentive to building owners who connect to the new system, there is no mandate to connect nor penalty for not doing so. This approach allows building owners to consider their unique circumstances and upgrade only as they see a financial, functional, or environmental benefit for doing so. Finally, the system is unusual in its configuration, distributing individual heat pumps to every building rather than centralizing the system with a few large heat pumps. This decision gives priority to flexibility and reflects two factors: the relatively small size of the overall system, and the more passive approach to getting building owners to connect to the system at the time of initial construction.16 The project has garnered national attention for its innovative design. Installation of district energy pipes to an existing building. Photo Credit: District Energy St. Paul The overall Main Street district is comprised of 60 buildings and a total floor area of 330,000 square feet.17 The majority of these buildings currently have forced air heating and cooling, with stand-alone gas-fired furnaces and electric air conditioning units. Buildings will need to update their existing systems in order to link to the district energy system, and the cost and required updates will be unique for each building. Buildings with newer HVAC systems will face the lowest costs in updating their system. The new system is intended to lower operating costs and improve functionality for local businesses, which could aid in attracting and retaining businesses in the Main Street district. The district energy system will be a City-owned asset, in part because of the specific financing arrangements available through grants secured for the project 14 West Union’s use of ground source represents just one of many energy source alternatives for district systems. Some district energy systems use heat pumps to tap into other sources of stable thermal mass. In Vancouver, BC, for example, a new district heating system is tied to the municipal sewer system to harnesses the waste heat. This energy source offers even greater advantages than ground source by virtue of having higher temperature, a single point of access (as opposed to multiple wells), and utilizing a waste stream. In other cases, district energy systems use combustion of renewable products such as waste wood or other forms of ‘biomass’ or harness wind and solar power, in order to reduce fossil fuel dependence and greenhouse gas emissions. 15 See glossary for definition of a ‘stub line’ 16 See Appendix 2 – System Design 17 West Union Feasibility Report by IBC Engineering for IDED DISTRICT ENERGY IN WEST UNION, IA 9 and because the project is small and may not be attractive to private utility companies in the early stages of its operations. Funding sources Preliminary cost estimates for the ground source wells and distribution infrastructure for the entire district total about $2.4 million, with additional costs associated with the individual building connections and in-building heat pumps (which will be better understood when the system has an initial set of buildings to connect to the system). The first phase of construction, costing about $650,000, will cover excavation and installation of the system infrastructure going under the road and sidewalks, including stubbing to each building. In the second phase the geothermal wells will be built. West Union has secured $2.5 million in competitive grant funding from multiple sources. Additionally, the City of West Union used general obligation bonds to fund approximately $4 million of the larger streetscape project, taking advantage of historically low bond rates. Success in securing grants and outside funding allowed West Union to eliminate the need for a special assessment district (i.e. taxation of property owners) and made the financial analysis for the district energy system much more attractive. The IDED, DOE, and EPA funds are focused on supporting the innovative application of district scale ground source heat pump technology in the downtown core of a small community, neatly matching an innovative idea with a proven technology. 18 Furthermore, the benefits from the technology were reasonably easy to estimate and demonstrated a strong financial argument for the project. All these factors created excellent conditions for competitive grant funding.19 DISTRICT ENERGY FUNDING SOURCES Iowa Department of Economic Development – Community Development Block Grant Program $1,000,000 US Department of Energy – Energy Efficiency and Conservation Block Grant Competitive Award $1,000,000 EPA - Climate Showcase Community $ 500,000 18 Interview with Jeff Geerts, Special Projects Manager, Iowa Department of Economic Development on 8-31-10 19 Interview with Robin Bostrom, Executive Director, Fayette County Economic Development/Main Street West Union on 8-26-10 DISTRICT ENERGY IN WEST UNION, IA 10 Economic Performance of the System With grant funds roughly equal to the capital cost of the district energy system, the early, basic financial analysis shows the project will have an excellent payback for the city. Without grant funding on this scale, however, the business case is less straightforward. While the returns on the project, as a simple financial investment, would most certainly be negative in the absence of the grant funding, this perspective does not properly consider broader, less tangible but nevertheless quantifiable benefits, such as a lower cost of building ownership, reduced risk from fuel price variability, lower greenhouse gas emissions and a long-term community asset which can be expanded over time. The Building Owner Perspective – Costs and Benefits Building owners will face a unique decision of whether to connect. Preliminary analysis suggests that those who connect will save between 40 and 70 percent of their heating costs and 30 to 50 percent of cooling costs.20 Anticipated up-front connection costs vary based on the current heating and cooling systems in the buildings. Many buildings have newer forced air systems, while some may still have their original radiators. These systems should be able to connect directly to a new heat pump, with a cost estimated to range between $10,000$15,000, and reclaim the space currently taken up by boilers or furnaces.21 Other buildings may have badly outdated and inefficient distribution systems, in which case the anticipated costs will be higher, but the OWNER ENGAGEMENT IN ENERGY PLANNING Building owners were actively engaged in energy planning in West Union. In the summer of 2009, IDED and Blackhills Energy (the local natural gas provider) worked together to perform free energy audits for local businesses. Over 75 properties participated citywide and 80 percent of those properties were located in the Main Street District. All participating buildings undertook a range of efficiency upgrades, replacing doors, caulking windows and replacing energy intensive equipment. In addition to the utility audit incentive, IDED set aside funds to create a matching grant program for efficiency and renewable energy upgrades that provides up to $2,000 of matching funds for building upgrades, including the upgrades required for connection to the district energy system. In the beginning of the district energy project a large outreach initiative was undertaken, with door to door canvassing and pamphlets. Outreach efforts, considerable grant funding, and potential for cost savings convinced many buildingowners of the value in connection to the system. Since the outreach effort, approximately 16 buildings – about 25% of buildings and over 100,000 sq. ft. of space- have committed to connect. This number will grow as more buildings perform the financial analysis required to demonstrate significant energy and cost savings. In addition to outreach, IDED has provided grant writing to several building owners to allow them to pursue USDA Rural Energy for America Program Guaranteed Loan Program (REAP) funding. 20 Iowa Green Streets Pilot Project: A Sustainable Vision for West Union Iowa, prepared for IDED by Conservation Design Forum, Fall 2011 21 Interview with Jeff Geerts, Special Projects Manager, Iowa Department of Economic Development on 8-31-10 DISTRICT ENERGY IN WEST UNION, IA 11 heat pump interface to the district energy system will provide the option to install new hydronic (radiator or infloor radiant) heating and cooling systems22 and avoid (or rip out) FAYETTE COUNTY COURTHOUSE unsightly ductwork and The County Courthouse makes an interesting example of chases. the decisions faced by building owners. An initial analysis While building owners will face some upfront costs, the system will offer significant benefits over time in addition to operating costs, such as enhanced reliability (buildings will be able to retain their existing systems as back-up) and insulation from natural gas price swings. of the financial impact of converting to the district energy system showed the system would not pay for itself directly. However, the decision is complex, as connecting would provide the building with the ability to install a new, more comfortable central heating and cooling system that would replace window air conditioner units and a gas-fired heating system. IDED is working to assist building owners in their decision-making process. One key next-step in this effort is to conduct a financial analysis for each building to help the City and building owners understand the upfront costs and operating savings that would result through connection to the district energy system. The Fayette County Courthouse has a unique history. It was first constructed in 1857 but burned down 15 years later by an escaping prisoner. It was rebuilt in 1874 and again burned, this time in 1922. The current building is a three-story grey stone Beaux Arts design by J. G. Ralston, and in 1981 was added to the National Register of Historic Places. Photo Credit: Jerry Wadian Environmental Benefit Impacts on Greenhouse Gas Emissions For West Union, a key component of the planning process and a requirement for some funding sources was an analysis of the greenhouse gas emissions (GHGs) of the district energy system. Preliminary analysis at a whole system scale indicates that individual 22 Hydronic heating uses water as the heat-transfer medium in heating. Steam and hot-water radiators are common examples. DISTRICT ENERGY IN WEST UNION, IA 12 buildings will see a 31% reduction in greenhouse gas emissions.23 This however, will ultimately depend on the actual fuel source used to create the electricity that serves West Union’s heat pumps. As wind power becomes an increasingly large proportion of Iowa’s grid, power to the heat pumps will become cleaner, and carbon reductions resulting from the district energy system will increase accordingly. GREEN HOUSE GAS EMISSIONS24 Conventional GHG Emissions (Annual) 1,151 metric tons CO2e District GHG Emissions (Annual) 797 metric tons CO2e GHG Savings (Annual) 354 metric tons CO2e GHG Percentage Savings (Annual) 31% In contrast, there are limits to improving the GHG profile of natural gas, which today fires most of West Union’s heating systems. Aside from small efficiency gains that can be made with equipment improvements, the potential to reduce GHG emissions with natural gas systems is limited. The coordinated local utility that will be formed in this process has the potential to change West Union’s energy profile in other ways too. By building a relationship between building owners, the district can make bulk purchases of green power on GHGS AND SOURCES OF ENERGY behalf of all of its customers. If Large savings in energy use in a system like West 100% green energy is Union’s do not necessarily translate to equally large purchased for the heat pumps, reductions in greenhouse gas emissions. This is then the greenhouse gas because, although ground source energy is free, renewable and clean, the heat pumps needed as part of savings could theoretically such a system run on electricity. The electricity grid reach 100%, and could further serving the region is very carbon intensive because of change the grid through the large proportion of coal in the electric mix (www.epa.gov/cleanenergy/energy-and-you/howmarket demand. clean.html). As a result, the energy savings from Institutionalizing a replacing natural gas heating are partly counteracted coordinated approach to by more carbon intensive power for the ground-source heat pumps. For cooling, the energy savings do have dealing with energy issues large emissions savings because current cooling is empowers the district to solve provided by electric air conditioning systems. issues that individually would be unmanageable. 23 Estimate is based on assumption that 80% of buildings will connect to the system. Even if fewer than 80% connect, the GHG emissions reductions will still be around 30% because the fixed energy costs are small compared to the building energy use. 24 Assumes the greenhouse gas intensity of Iowa’s electricity grid is 1.60 lbs of CO2e per kWh, which is higher than the national average of 1.33 lbs of CO2e (EPA). The last data set of emission intensity from Iowa was in 2005, which was 1.90 lbs of CO2e per kWh, but significant recent investments in wind energy have reduced that to what the authors estimate to be approximately 1.60 lbs of CO2 (EPA). Each therm of natural gas emits approximately 12 lbs of CO2e (US DOE). DISTRICT ENERGY IN WEST UNION, IA 13 LEARNING FROM WEST UNION West Union’s district energy story is still unfolding, but already highlights several important components to the process of integrating district energy into existing neighborhoods: 1. 2. 3. 4. 5. 6. 7. 8. Economic and environmental sustainability are not mutually exclusive. West Union’s project came to fruition as the result of seeking out solutions that sustain and grow the local economy and capitalize on the community’s historic character, while also reducing negative impacts on the environment. Working to unite these two goals led to an innovative district energy system that is now a model for the nation. Community-led process is essential to gaining local buy-in, and allows for a visioning process that is inclusive of all stakeholders, and therefore more likely to last. The coordinated approach brought together varied funding sources, a wide range of expertise that was freely shared, and a critical mass of early adopters to lead the way. The innovative solutions were beyond what any one organization could have done alone, and the City’s status as an innovator and a leader is an important aspect to celebrate and use as a tool to promote future participation by more building owners. Engaging building owners requires providing them with hands-on information and analysis. Various policies for incentivizing connection must be explored in order to secure a critical mass of customers for an initial system. Coordinated planning for system resilience rather than for single-purpose infrastructure projects must be the overall goal. Most of West Union’s planning and public process happened during the huge floods in Iowa in 2008, where the lack of storm drains in the District made this project especially important, and raised the issue of whole system performance as opposed to just seeing it as a street project. The district energy system, in addition to improving building energy performance, has the potential to contribute other benefits to the community, including curbing sprawl by reinvesting in the downtown, and improving accessibility. Source fuel environmental impacts must be considered. Any community considering district energy must carefully analyze the fuel source options, especially the mix of fuels powering the electricity grid, which has the potential to complicate the greenhouse gas emission picture for any system relying on heat pumps. Catalytic opportunities must be seized. Catalysts come in many forms -- specific events that galvanize building owners to think about new options, or people who offer substantial leadership over the course of the project. In West Union, a strong community process prepared key stakeholders to respond effectively when district energy emerged as a potential opportunity in a broader downtown revitalization and infrastructure project, and stimulus grant funding became available. Replicating West Union’s success without grant funding is challenging, but not impossible. While the returns on West Union’s project, as a simple financial investment, would most certainly be negative in the absence of the grant funding, this perspective does not properly consider broader benefits, such as lower cost of building ownership, reduced risk from fuel price variability, lower greenhouse gas emissions and a long-term community asset which can be expanded over time. From this perspective, the economics of district energy can become very compelling to any community. Historic communities can be energy innovation leaders. Owners of historic buildings have unique reasons to pursue district energy, because smaller older buildings that want to retain their architectural character have fewer on-site options for pursuing aggressive energy and carbon reduction strategies. West Union was able to leverage the existence of a Main Street District and other successful community programs to achieve early successes with the district energy project. DISTRICT ENERGY IN WEST UNION, IA 14 Looking Forward nd On October 22 , 2010, West Union held a groundbreaking ceremony and work on district energy is now underway. The entire project is estimated to take 18 months, with the majority of construction occurring in 2011. The distribution piping will be laid first, in conjunction with the street rebuilding project. The geothermal wells will be constructed once this first phase is complete and then the system will be ready for building owners to connect. At the time of this case study, additional financial analysis is being undertaken to more fully understand the economic performance of the system, both from a community (and utility) perspective and for individual buildings that will connect to the system. The City anticipates that building owners will face lower operating costs, but each building has yet to analyze the cost implications compared to their current energy services. This more detailed analysis is essential to West Union in advance of decisions related to utility ownership, governance and rate setting. The process by which rates will be determined will be based on several factors, including final capital and operating costs, customer revenue projections, and cashflow requirements. Potentially, the City could set rates lower than its operating costs, and offer a basic operating subsidy as a benefit to the building owners. Every additional owner that chooses to connect will improve the long-term financial performance of the system, and all of these benefits could increase the attractiveness of further private reinvestment in downtown properties and businesses, further justifying the investment. West Union’s story is still unfolding, and we anticipate making updates to this case study to document their progress and derive further learning from their example. About the Authors TOM OSDOBA is the Director of the Center for Sustainable Business Practices at the Lundquist College of the University of Oregon, and was formerly the director of sustainability at the City of Vancouver, BC, where he was responsible for creating the Southeast False Creek (Olympic Village) Neighborhood Energy Utility. He led efforts in Portland and Seattle to shape new policies and programs to support district energy system development, and is currently working as a consultant to Climate Solutions to help a handful of cities in the Pacific Northwest become pioneers in creating the policies and programs that can show other cities how to transform their energy systems. HENDRIK VAN HEMERT is an MBA candidate (2011) in the Center for Sustainable Business Practice at the Lundquist College of Business at the University of Oregon. His primary areas of interest are energy efficiency finance and small scale renewable energy development. As a Graduate Research Fellow in the Center for Sustainable Business Practices, he assists small and medium sized communities transition to a new energy economy with a focus on reduced greenhouse gas emissions, increased energy security and increased economic development. Prior to pursuing his MBA, Hendrik worked in the office of then Anchorage Mayor Matt Claman. LIZ DUNN is the Executive Director of the Seattle-based Preservation Green Lab, which works to further the scientific understanding of the value of our existing building stock, develop and promote strategic policies for integrating the reuse and retrofitting of older and historic buildings into city and state sustainability efforts, and provide best practices for retrofitting older and historic buildings. Liz is also the principal of Dunn & Hobbes LLC, a Seattle-based developer of urban adaptive reuse projects. LINDSEY GAEL is the Research Fellow for the Preservation Green Lab. She conducts research on building reuse, district-level energy solutions, density, and livability metrics. With a background in sociology and planning, she is particularly interested in the social and environmental implications of neighborhood character. Prior to joining the Green Lab, Lindsey worked for Smart Growth America, where she supported national campaigns on vacancy, smart growth, and transportation. DISTRICT ENERGY IN WEST UNION, IA 15 Glossary BIOMASS – organic matter, usually plant material, which is grown or gathered to generate electricity or produce heat, often through incineration. Grassy crops, wood and waste wood products, forest residues (such as dead trees, branches and tree stumps), yard clippings, wood chips, and garbage are common elements used as biomass. A ‘BIOMASS FACILITY’ processes biomass in order to create energy or refine a product that can be used for energy. Facilities use a variety of conversion technologies that release the energy directly into heat or electricity, or convert it to another form, such as liquid biofuel or combustible biogas. See also ‘renewable energy’. COMPLETE STREETS – roadways that are designed and operated to enable safe, attractive, and comfortable access and travel for all users. A 'Complete Street’ is designed in such a way that pedestrians, bicyclists, motorists and public transport users of all ages and abilities are able to safely and comfortably move along and across a street through use of sidewalks, bike lanes, crosswalks and other features. Proponents claim that Complete Streets also create a sense of place and improve social interaction, while generally improving adjacent land values. DOMESTIC HOT WATER – water for interior commercial (non-industrial) and residential uses; includes tap water and other kitchen, bathroom and laundry water demands. a neighborhood or district with a broad commitment to accelerate neighborhoodscale sustainability. Eco-districts are usually more innovative and committed to implementing sustainability measures than surrounding traditional neighborhoods and usually have an organizing body that guides sustainability goals and solutions. ECO-DISTRICT – EMISSIONS – SEE ‘GREENHOUSE GAS EMISSIONS’ GEOTHERMAL AND GROUND-SOURCE ENERGY – geothermal energy is power extracted from heat stored in the earth and involves drilling deep into the earth’s core to access consistent high temperatures. It uses heat directly from geothermal sources like hot springs, geysers and volcanic hot spots. The term ‘geothermal’ is often used more broadly and somewhat inaccurately to include ground source energy, where shallow geothermal wells or horizontal pipes are used to tap the ground’s stable temperatures. In geothermal systems, much deeper wells are drilled into the earth in areas with tectonic activity and other geothermal systems. See ‘Heat pumps’ for more explanation of the differences between geothermal and ‘ground-source’ or ‘geo-exchange’ energy systems. GREENHOUSE GAS (GHG) EMISSIONS – refers to the carbon, methane and other gases believed to be detrimental to air quality and to have long-term negative effects on climate, that are typically released when fossil fuels such as coal, natural gas or oil are combusted to create energy or heat. The national average emissions factor for electricity is 1.37 pounds CO2 per kilowatt-hour. In other words, every kilowatt-hour of electricity saved keeps 1.5 to 2 pounds of CO2 out of the atmosphere. For natural gas: 117 pounds of CO2 per million BTU, or 0.12 pounds of CO2 per cubic foot of gas. Each therm (gas heat) of natural gas leads to 11.7 lbs. of carbon dioxide emissions. HEAT PUMPS – work by tapping the differential between ambient air temperature and the temperature of an adjacent source (such as ground or water) in order to provide heating or cooling. For example, a common use of a heat pump involves using the constant temperature of the ground to provide a base temperature for delivering heat to buildings. This approach is called 'ground-source' or 'geo-exchange' heating, and although not technically the same as ‘geothermal’ energy sources, which tap the high-temperature of the earth's core where it is readily accessible, the three terms tend to be used interchangeably for any heat pump system that taps into the ground. Heat pumps can also be used to capture waste heat sources from nearby liquids such as sewer systems or lakes (for cooling). HYDRONIC HEATING - SEE ‘RADIANT HEATING’. MUNICIPAL BONDS – the two most common types of municipal bonds are general obligation bonds and revenue stream bonds. GENERAL OBLIGATION BONDS are a common type of municipal bond secured by a government's pledge to use its taxing power to repay bond holders. Bond holders have a right to compel the borrowing government to exercise this authority to satisfy the obligation. Because property owners are usually reluctant to risk losing their holding due to unpaid property tax bills, credit rating agencies often consider a general obligation pledge to have very strong credit quality and frequently assign them investment grade ratings. REVENUE BONDS are secured by project revenues such as tolls, charges or rents from the specific facility (e.g. road, bridge, airport, sewage treatment plant, district energy plant) that is built with the proceeds of the bond, and are often issued by special authorities created for that particular project. DISTRICT ENERGY IN WEST UNION, IA 16 RADIANT HEATING – a system by which "radiant energy" is emitted from a heat source and travels through a warm element to heat objects in a room rather than heating the air. In many cases radiant heating systems are more efficient than convection heating. Radiant heating systems come in a variety of forms including under-floor heating systems (can be electric or hydronic), wall heating systems, radiant ceiling (overhead) panels, and overhead gas fired radiant heaters. typically refers to energy which comes from natural resources such as sun, wind, tides, rivers and geothermal heat, which are naturally replenished. Biomass is also generally considered to be a ‘renewable’ fuel in the sense that new plant material can be re-grown to replace what has been harvested. It is also considered to be a low-emission fuel source to the extent that plants, as they grow, theoretically capture and sequester an amount of carbon that is equivalent to what is released into the atmosphere when they are combusted as fuel. RENEWABLE ENERGY – STUB LINE – refers in this case to a capped pipe (could also be wiring) that is brought in to a building and links the building to a larger utility system. A “stub” connection is not active but provides the infrastructure and opportunity for the building to link into the larger utility system at a later point in time. UTILITY – often referred to as a ‘public utility’, is typically an organization that builds, operates and maintains an essential infrastructure service such as power, water, sewer or waste collection on a district- or city-wide basis. Utilities may be owned and operated by local government, by private companies, or by community cooperatives. A ‘utility service model’ or ‘utility customer model’ is a customer relationship whereby a customer pays for and receives such services from a utility provider (as opposed to providing it for themselves). DISTRICT ENERGY IN WEST UNION, IA 17 Acknowledgements: The authors wish to thank the following people for their contributions and peer review feedback: Robin Bostrom, Executive Director, Main Street West Union Jason Cooper, Senior Associate, Conservation Design Forum Andrea Dono, Program Manager of Research and Training, National Trust Main Street Center, National Trust for Historic Preservation Patrice Frey, Deputy Director of Sustainability, National Trust for Historic Preservation Jeff Geerts, Special Projects Manager, Iowa Department of Economic Development Stan Gent, President/CEO, Seattle Steam Co. Thom Guzman, Director, Iowa Downtown Resource Center Brian Kuhn, Electrical Designer, IBC Engineering Services Inc. Rhonda Sincavage, Associate Director Intergovernmental Affairs, National Trust for Historic Preservation Mary Thompson, Consultant and Trustee, National Trust for Historic Preservation Bob Vagts, City Administrator, West Union Iowa The work of the Preservation Green Lab would not be possible without the generous support of the following foundations and individuals: The Kresge Foundation Charles Evans Hughes Memorial Foundation City of Seattle Rockefeller Brothers Fund The Bullitt Foundation The Norcliffe Foundation Jessie Ball duPont Fund 4Culture David L. Klein, Jr. Foundation Kevin Daniels Jonathan Rose John Goodfellow Ken Woodcock About the Preservation Green Lab (PGL): Launched in March of 2009, the Seattle-based Preservation Green Lab (PGL) was established with the mission to further the scientific understanding of the value of our existing building stock, develop and promote strategic policies for integrating the reuse and retrofitting of older and historic buildings into city and state sustainability efforts, and provide best practices in retrofitting older and historic buildings. About the National Trust for Historic Preservation: The National Trust for Historic Preservation provides leadership, education, advocacy and resources to a national network of people, organizations and local communities committed to saving places, connecting us to our history and collectively shaping the future of America’s stories. For more information visit www.PreservationNation.org DISTRICT ENERGY IN WEST UNION, IA 18 APPENDIX 1: Additional Resources Preservation Green Lab, National Trust for Historic Preservation Center for Sustainable Business Practices, University of Oregon The Role of District Energy in Greening Existing Neighborhoods: A Primer for Policy Makers and Local Government Officials Executive Summary | Full Paper | September 2010 http://www.preservationnation.org/issues/sustainability/green-lab/policyinnovation.html Metropolis magazine, September 2010 Preservation and Sustainability: The District Approach, Julia Levitt http://www.metropolismag.com/pov/20100922/preservation-and-sustainability-thedistrict-approach New Energy Cities, Climate Solutions Energizing Cities: New Models for Driving Clean Energy Investment, May 2010 http://www.newenergycities.org/ International District Energy Association (IDEA) website: http://www.districtenergy.org/ Other District-Scale Sustainability Policy Efforts: • • • • • • Portland Sustainability Institute (PoSI) EcoDistrict initiative – a collaborative platform for fostering innovation in the region, with a focus on creating business models for districtscale utilities such as energy, water, storm water, etc. 25 International Living Building Institute’s “Living Building 2.0” standard26 -- scale-jumping from the original Living Building standard for individual buildings to one that recognizes district-wide performance, generation, and infrastructure. Living City Block (Denver, CO and Washington, D.C.), and FortZed (Fort Collins, CO) - energy district initiatives targeted at existing and historic neighborhoods that look to achieve performance beyond the scale of individual buildings.27 LEED ND - applies the green building rating framework on the neighborhood level. Washington State “Climate Benefit District” – a legislative proposal and framework for districts to create their own taxation and financing mechanisms for infrastructure and energy performance improvements.28 Climate Solutions ‘New Energy Cities’ program – supports Pacific Northwest cities working to pioneer new clean energy strategies such as distributed renewable energy, nextgeneration energy infrastructure, and new financing opportunities. 29 25 http://www.pdxinstitute.org/index.php/ecodistricts 26 www.ilbi.org/the-standard/version-2-0 27 www.livingcityblock.org 28 http://mithun.com/knowledge/article/climate_benefit_district/ 29 http://climatesolutions.org/solutions/initiatives/NES DISTRICT ENERGY IN WEST UNION, IA 19 APPENDIX 2: System Details West Union’s district energy system will use ground source energy to provide heating in the winter and cooling in the summer. Geothermal wells will tap into the stable temperature (55 degrees Fahrenheit) of the earth’s crust and use the temperature differential combined with efficient heat pumps in each building, to provide heating and cooling. Preliminary analysis suggests that through ground source energy, building owners will save between 40 and 70 percent of their heating costs and 30 to 50 percent of cooling costs. The efficiency of the system rests on utilizing the constant thermal temperature of the ground, rather than starting with either much colder or hotter ambient air for heating or cooling. The City-owned district will provide all of the shared components of the system including: • Vertical wells with heat exchangers installed in the courtyard of the County Courthouse (Council Chambers, City Hall, March 29, 2010). • Distribution system involving underground piping throughout the Main Street District. • A liquid medium in the piping to transfer the energy from the wells to customers (i.e., a water and glycol mixture). • Stubs to each building to provide the opportunity to connect to the system Meters and flow monitoring equipment (depending on rate structure). Each building would provide the following elements in order to connect to the system: • One or more heat pumps (either water-to-water for hydronic systems or water-to-air for forced air systems) suitable for extended range operation. • Connection to the distribution system outside of the buildings, using the stub line provided. • Access to the BTU meters, to measure energy consumption and facilitate rate-setting and customer billing. • Internal heating and cooling distribution infrastructure, whether it be new ductwork or new hydronic (radiator or in-floor radiant) system, or retrofit of the existing HVAC system. DISTRICT ENERGY IN WEST UNION, IA 20