was 13,434 trillion Btu, of which an estimated 11,212 trillion
Btu ( 84 percent) was for thermal purposes. Figure 5 summarizes
the breakdown of industrial thermal energy sources by fuel. The
predominant fuel is natural gas, providing 57 percent of total
fuel with coal at 12 percent; black liquor, 6 percent; biomass, 4
percent; and “other,” 17 percent. [Black liquor is the spent cook-
ing liquor from the kraft process when digesting pulpwood into
paper pulp. “Other” includes net steam (the sum of purchases,
generation from renewables, and net transfers) and other energy
that respondents indicated was used to produce heat and power.]
We estimate that greenhouse gas emissions by industry for
thermal energy production total 834 MMTCO2e, or 12 percent
of total U.S. energy-related greenhouse gas emissions. Of the
total emissions, 623 MMTCO2e are direct emissions from district
energy facilities, and 211 MMTCO2e are indirect emissions from
purchased electricity.
Major Renewable Thermal Energy
Opportunities
BIOMASS
The largest near-term opportunity for renewable thermal
energy production is biomass. Biomass is nonhazardous organic
material such as urban waste wood (e.g., tree trimmings), forest industry mill residues, residues from sustainable forest harvesting, agricultural residues, food waste, algae, energy crops,
animal waste and animal byproducts (including biogas and any
solid produced by micro-organisms).
Communities, universities and other energy users in the U.S.
have been investigating and implementing the potential for biomass and other local sources of sustainable energy. In Sweden
and other European countries, biomass has already become an
important energy source for district energy systems.
Increasing interest in biomass is driven by advances in technology, greenhouse gas emission goals, energy supply and price
stability, and the potential for significant spinoff employment in
fuel procurement and processing. Using biomass for energy also
can eliminate disposal problems for some materials and create
income. Residues from wood processors can be diverted from
landfills or incineration. Manure from livestock operations can
become an energy source instead of a disposal problem.
Solid biomass can be combusted directly in boilers to produce heat and/or power. Liquid or gaseous fuels can be produced from biomass for combustion in reciprocating engines
or gas turbines. Biomass can provide a constant, stable energy
supply, unlike wind and solar, and price stability, unlike oil and
natural gas.
GEOTHERMAL
Low- to medium-temperature geothermal resources can be
used to heat communities and some industrial processes in many
(primarily Western) states. During the 1990s, the Geothermal
Low-Temperature Resource Assessment Program identified 271
geothermal resource sites having a temperature of 122 degrees
F or above that are within 5 miles of a population center. These
co-located sites represent a population of 7. 4 million. Low- to
medium-temperature geothermal resources are not useful for
geothermal power production but are perfectly suited for supplying thermal energy.
NATURAL AIR CONDITIONING
Deep water cooling is a technology that uses cold water
drawn from deep sources such as lakes, seas, or underground
aquifers to provide cooling needs to buildings connected to a
district cooling system. There are a number of district cooling systems utilizing deep water cooling throughout the world, particularly in Sweden. For example, in Stockholm, the Baltic Sea is used
to air-condition downtown Stockholm.
Domestically, a deep lake water cooling system has been
implemented to air-condition the Cornell University campus. In
Toronto, the largest lake water cooling system in the world has
been developed using Lake Ontario as its water source.
Impact on Project Economics
Key technical and economic parameters for example
projects that would be eligible for the renewable thermal
energy production tax credit are summarized in table 1. These
parameters are based on recent thermal energy projects. Capital
costs are converted to annual costs assuming a weighted
average cost of capital of 9. 5 percent over 20 years ( 30 percent
equity at 15.0 percent return and 70 percent debt at 7. 2
percent interest.
Biomass
A range of sizes of biomass thermal-only facility scenarios
is shown in table 1. In the modeling of biomass projects, we
assume that the biomass fuel is open-loop and thus eligible for
half credit ($0.011/k Wh). Most of the expected implementation of
biomass facilities will be for supply of thermal energy to already-established district energy systems in downtown areas and
university campuses and in industrial facilities.
Biomass projects generating electricity already qualify for
the PTC in current law. Biomass CHP generates both electricity
and thermal energy. In the June 9 version of TREEA, a project
producing both electricity and thermal energy could only receive
the PTC for either of those outputs but not both. In the biomass
CHP case in table 1, if the PTC was applied to the electricity
output, annual costs would be reduced by 7 percent, whereas if
the PTC was applied to the thermal output, the cost reduction
would be 18 percent. If the PTC was applied to the combined
output, the total annual cost reduction would be 25 percent.
The PTC is projected to bring the cost of biomass
thermal energy down from $12.18/MMBtu to
$8.96/MMBtu.
In contrast, biomass thermal-only facilities would see
annual cost reductions ranging from 23 percent to 26 percent,
© 2010 International District Energy Association. ALL RIGHTS RESERVED.
