Hampshire County Council

Buildings, Land & Procurement Panel Item 13

16 July 2004

The use of `Wood Fired Boilers' in the Built Estate of

Hampshire County Council

Report by the Director of Property, Business and Regulatory Services

How the conclusion in this report fits with the Corporate Strategy

This scheme will impact on the delivery of the following Corporate Aims

Aim 2 - stewardship of the environment - by introducing an initiative to promote the use of renewable energy.

Aim 3 - achieving economic prosperity - by providing a market for locally produced wood fuel.

1

Summary

1.1

This report recommends that consideration be given to the installation of a "pilot" wood fired plant at Queen Elizabeth Country Park. Such a project is in line with both Central Government policy to promote the use of renewable energy and Aims 2 and 3 of Hampshire County Council Corporate Strategy. In common with many such alternative energy schemes such a project is not always viable from a conventional financial point of view but becomes so if other sustainability criteria are taken into account.

2

Background

2.1

For many years now Central Government has promulgated a policy to both develop and increase the use of "renewable" energy sources. The main forms of which are wind, solar, tidal, geothermal and biomass. Of these the two which are most appropriate for applications to the Built Estate are solar and biomass but these have hitherto been rejected on the grounds of conventional "financial payback" criteria.

2.2

However, the application of biomass has benefits not only for climate change as the fuel is "carbon neutral" but also offers development opportunities for the agriculture and forestry industries of Hampshire. Furthermore the installation of a "pilot scheme" would bring not only considerable educational benefits but also demonstrate Hampshire County Council as a national leader on this issue by:

· Contributing to renewable energy targets

· Creating and sustaining rural businesses and jobs

· Promoting sustainable woodland and countryside management

2.3

Following visits to a number of operational sites in England and Austria it is considered that the technical issues previously associated with biomass boilers have now been resolved and these are described in Section 4 below.

3.

The case for wood firing

3.1

In `simple payback' terms the cost of a wood firing installation would not meet conventional criteria as without supporting grants the "payback period" would, in this case be approximately 50 years. It is therefore generally accepted in the UK that the justification for such schemes has to be based on criteria other than purely financial.

3.2

The non-financial arguments for wood firing are as follows:

(i) The installation would reduce carbon dioxide emissions by approximately 600 tonnes (wood fuel is carbon neutral) over the design life of the boiler. Also it will save 15,000 cubic metres of gas per annum (approximately the volume of six full hot air balloons).

(ii) By not having to remove timber from site to other users savings could be made, albeit in this case the saving would accrue to the Forestry Commission and not Hampshire County Council who are a partner in the management of the Queen Elizabeth Country Park.

(iii) Contribute to national and regional renewable energy targets

(iv) Hampshire County Council would be taking a lead locally on a "sustainability" issue demonstrating renewable energy generation appropriate to a protected landscape.

(v) A secure source of fuel supply at agreed cost.

(vii) The significant "Public Relations" and education advantage to this site, which receives around 270,000 visitors each year (including 9,000 formal visits from school children). The site is also on the South Downs Way National Trail which it is estimated has 330,000 walkers per annum. This gives an enormous "shop window" opportunity for the County Council and its key partner, the Forestry Commission.

(viii) This "pilot" project would provide a sound basis on which future decisions on the use of wood fired boilers could be made for other Hampshire County Council properties and other potential local wood fuel users. It is also likely to encourage District Councils to proceed with similar projects.

(ix) Present opportunities in the medium term for the agriculture and forestry industries of Hampshire by establishing a local market for wood fuel

3.3

At a strategic level the points referred to in 3.2 above argue in favour of approval to this scheme. However another line to take would be to ask the question whether, given the costs and benefits of the project, if there is another "sustainability" project which could be selected which would have better credentials?

4.

4.1

The following issues have been researched in detail and are now considered resolved:

· Fuel supply - Biomass energy is defined as a fuel source derived from any recently living organism. In practice the form most readily available is "chipped" wood but unfortunately due to lack of demand there are at present no reliable supply chains available. However in the case of Queen Elizabeth Country Park some 1,000 tonnes of wood are surplus each year of which only 45 tonnes are required to heat the visitors centre. Representatives of the Forestry Commission have confirmed there are adequate supplies of wood fuel for the next twenty years.

· "Back-up" conventional plant - this is not a problem as the current gas fired boiler can be arranged to operate in parallel with the new wood fired plant.

· Manual attention to plant - normally this would be an issue but staff at Queen Elizabeth Country Park have confirmed that they are able to undertake the following tasks at no additional cost:

o Filling of local wood store

o De-ashing of boiler

o "Running repairs" to screw feeder plant

5.

Financial Issues

5.1

The total capital cost of the scheme is £140,000 of which £35,000 is for the boiler plant and associated automatic fuel feed. Wood fired boilers are approximately five times more expensive than equivalent gas ones. The remaining cost is to construct the new boiler house and fuel bunker and access for wood fuel delivery.

5.2

It is understood that there is a reasonable chance of a successful grant application which could vary in the best case from £70,000 (ie up to 50% of total costs) to the worst case of £17,500 (ie 50% of the cost of the boiler).

5.3

Even with the maximum grant available and assuming a differential rate of price increase between wood and natural gas fuels the "payback" period is in excess of 20 years which equates to the anticipated life of the boiler. Thus, in the best case scenario taken over 20 years, the scheme is financially "neutral" on conventional grounds.

6.

Conclusion

6.1

On a purely technical and financial basis there is no case for wood firing. However, in recognition of the "sustainability" merits of the project it is recommended that the Panel consider a wood fired boiler plant at Queen Elizabeth Country Park at a cost of £140,000 (and to seek grant funding) for recommendation to the Executive Member for Policy and Resources.

Recommendation(s)

That the Buildings, Land and Procurement Panel considers and advises the Executive Member for Policy and Resources on the installation of a pilot wood fired project at Queen Elizabeth Country Park

1.

Excavation and Earthwork

7,100

2.

Concrete Base and Enclosure with Glazed Aperture

29,200

3.

Roof Covering and Access

6,000

4.

External Boarding

6,000

5.

Finishes

2,700

6.

Fitting Out

2,000

7.

Mechanical & Electrical Services (including Boiler)

40,000

8.

Terrace Extension and Grass Crete paving

15,000

9.

Prelims

20,000

10.

Contingency and Price Risk

12,000

£ 140,000