The merits of wood versus coal-fired boilers have recently come under scrutiny in Otago.
It's great to see energy choices being debated locally. The Energy Efficiency and Conservation Authority (EECA) has supported a number of wood energy projects - in schools and industry - as a carbon neutral, low-emission and renewable heat source.
In our view, wood energy has numerous benefits - economic, social and environmental. But like any fuel, there are pros and cons. If the sole criteria is fuel cost, then wood is unlikely to stack up against coal, which is almost always cheaper to buy. Looking at the bigger picture however, wood can be more cost-effective.
Wood energy tested in schools
Between 2007 and 2010, EECA helped fund 31 schools to switch from coal to wood energy, under the Renewable Heating in Schools pilot, with the Ministry of Education. The aim was to test the feasibility of wood energy in schools.
It was acknowledged from the outset - including by the schools - that the ongoing cost of wood fuel was higher than coal. So, schools were recruited only where it was clear that continuing to burn coal was no longer feasible for them.
This was because the schools were faced with needing to invest significantly in repairing or replacing their coal boilers - either because boilers were at the end of their life, or because resource consent was due to expire, and gaining a new consent would require a costly upgrade to reduce pollution.
The Ministry of Education agreed to fund the difference in ongoing fuel costs, so there was no financial risk for the schools involved. In some schools, existing coal boilers were converted to run on wood pellets; in others, brand new boilers were installed - some running on wood chips and some on pellets.
The pilot results were extremely informative, and have helped EECA and the industry get a clearer view of the costs and benefits, as well as the best ways to manage these projects.
Findings showed several benefits
A key finding from the pilot was that wood chips are cheaper than pellets. Tahuna Intermediate in Dunedin and Dustan College in Alexandra installed purpose-built chip boilers. Often sourced from sawmillers, foresters or joineries, the wood chips are a cheaper fuel than pellets, and help these businesses dispose of wood waste, creating a local win-win.
Another finding was that coal-to-wood-pellet boiler conversions are always less efficient than purpose-built wood boilers. A new wood boiler (especially wood chip) will have a higher up-front cost but much lower operating cost due to its very high efficiency (up to 90%). EECA recommends that any school considering wood should consider the benefits of installing a new wood boiler, alongside the case for converting a coal boiler.
Is wood more costly?
The true cost of energy is not just the cost of the fuel and the operating costs. It includes the capital cost of the equipment such as replacement boilers, any emissions control equipment needed to avoid air pollution and meet regional air quality regulations.
In cities like Dunedin, emissions standards for new boilers are very stringent due to air quality issues. Emissions control equipment on a coal boiler can cost as much as the boiler itself. Switching to wood was often a low cost option when assessed on a ‘whole-of-life' economic basis - not just because it didn't need emissions control, but because ongoing operations, maintenance, and labour costs were lower.
Environmental and health impacts
Modern wood energy technology can produce 80% less particulate (PM10) emissions than coal. Some types of coal discharge heavy metals and/or sulphur to the air - as well as other pollutants that worsen air quality and can be harmful to human health.
Coal ash can be toxic, so needs careful disposal to prevent soil contamination. Wood produces only about a fifth of the volume of coal ash - and as a natural fertiliser can be simply spread on school grounds. Many of our pilot schools commented positively on the reduction in waste disposal costs, and found caretakers spent far less time cleaning boilers.
Wood energy is sustainable when it comes from plantation forests such as New Zealand's. It is carbon neutral so does not contribute to climate change (the CO2 released when burning wood is the same as that absorbed by the tree during its lifetime). Collectively, the 31 pilot schools are avoiding 3,300 tonnes of CO2 emissions a year. A desire to show environmental leadership is one of the reasons that schools in Southland, Otago, the Bay of Plenty and elsewhere have opted for wood without funding from EECA.
If schools rule out wood energy solely on the basis of its cost relative to coal, they may be overlooking a renewable fuel that can deliver far greater benefits over the long term - both to their school and their community.
The report on the Renewable Heating in Schools pilot project can be found on the EECA BUSINESS website.