The Coulee Region could save millions of dollars a year in energy costs, create more than a hundred jobs and slash carbon dioxide emissions by creating a market for wood pellet fuel, according to a new study.
Commissioned by the Mississippi River Regional Planning Commission, the study grew out of meetings in the Kickapoo River Valley after the floods of 2007 and 2008, where discussions focused on how to create a more resilient economy, said Greg Flogstad, director of the planning commission.
The area is dependent primarily on agriculture and tourism, but lacks a third “leg” for the stool.
“There wasn’t much being done with forest wood products,” Flogstad said.
Funded by $52,000 in grants from the federal Department of Commerce and the Wisconsin Department of Administration, the report is designed to outline a model of economic development
“The hope is to spur investments into renewable resource for energy, create better use of the resources we have, create hometown jobs,” Flogstad said. “The idea is to show it could be done. It’s just a regional economic development strategy.”
The study found that if one in five households and businesses in Vernon, Richland, Monroe and Crawford counties switched from higher-cost fuels such as propane, heating oil or electricity, they could save more than $2.6 million a year.
Expanded to the entire nine-county region stretching from Crawford County up to Pepin, that could result in $7.3 million in annual savings, said Greg Flogstad, director of the Mississippi Regional Planning Commission.
Just in the four-county study area, such a switch would support a small pellet plant, which could support about 82 direct jobs and have a potential $4 million impact on the regional economy, according to the study.
There are about 18,275 homes in the four-county area using expensive heating fuels, according to Census Bureau estimates. In the nine-county planning region, there are more than 51,000 such homes.
Even if only one in 10 households switched, the study suggests that would generate enough demand to support a small scale pellet plant.
There are eight wood pellet plants in Wisconsin, but the nearest is in Ladysmith, 136 miles north of La Crosse.
The study estimates it would cost about $6.2 million to get a full-scale plant up and running, though a small facility could be done for less than $500,000.
The region’s forests would provide an adequate supply of biomass, according to the study, which estimated that about half of the privately-owned woodland – the vast majority of the region’s forest – is not actively managed.
Barriers to change
Of course there are challenges, chief among them the up-front cost of switching and the greater convenience of heating with conventional fossil fuels.
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“I think what people should look at them as a supplemental heat source,” said Steve Miethke, owner of Warming Trends Inc., on Brice Prairie. “It’s going to take the burden off your whole-house system if you can strategically place a unit where you use your heat.”
Miethke, who has been selling pellet stoves – and pellets – since 1991, said the stoves have been increasingly attractive as propane costs have soared.
Wood pellet stoves typically cost between $1,600 to $4,000 and can be room heaters or furnaces connected to an existing system. A bag of pellets costs $4 to $5 and provides roughly the same heat as 3.5 gallons of propane, which last month was selling for about $2.09 a gallon.
Heating costs can vary depending on the fuel and source, but overall, wood pellets provide heat at about half the cost of electricity or fuel oil. At its peak price this winter, propane was roughly four times the cost of pellets.
Natural gas and catalytic wood stoves are cheaper to operate than pellet stoves but is not available in rural counties, where a third or more of the households use propane. In Buffalo County, two thirds of homes are heated with propane, electricity or heating oil.
The current distribution system is also a key barrier.
Typically, pellet users purchase fuel in 40-pound bags at a store, or have them delivered on one-ton pallets. They then have to haul the bags inside and feed them into the stove one at a time.
Flogstad said ideally a local producer could employ a method for bulk delivery like in Europe and New England, where suppliers are delivering pellets in bulk to basement hoppers, much like home fuel oil is delivered now.
In addition to cost savings – and local jobs – the report found a substantial switch to wood pellets could have environmental benefits as well.
Biomass is considered carbon neutral: the carbon dioxide released when they are burned are cycling existing carbon in the system, unlike fossil fuels which release new carbon into the atmosphere.
Switching 20 percent of the homes in the four-county area from propane, fuel oil or electricity to wood pellets would reduce carbon emissions by about 13 percent, or some 27,000 tons per year, the study estimates.
That’s roughly the equivalent of removing 5,000 cars from the road.
Flogstad said that would be icing on the cake.
“We’re trying to push the idea that we have this under-utilized forest resource that’s essentially wasting away,” he said. “We can utilize it for heat, jobs and improve the environment.”