The U.S. Department of Energy has reached agreement with its energy-savings contractor to replace the failed Biomass Steam Plant at Oak Ridge National Laboratory with a new high-efficiency unit fueled by natural gas.
“Our premise was we’ve got to have steam to deliver to the plant, and it was our goal to come up with a solution that was of least cost to the taxpayer,” Moore said in a telephone interview. He said he’s confident that the decision to switch to a natural gas system will prove successful.
DOE will contribute more than $5 million to Johnson Controls’ contract account to help offset some of the costs incurred by the contractor—estimated at about $20 million—due to the biomass plant’s problems, lease of a temporary boiler, and the conversion to a new system, Moore said. But the overall cost to DOE is largely unaffected because the federal agency saved money by not paying performance awards to Johnson Controls over the past year, he said.
Some parts of the existing plant, including the main building and the modern control room, will not have to be replaced during the changeover.
In 2007, the Department of Energy signed a $90 million Energy Savings Performance Contract with Johnson Controls, which was supposed to carry out a number of “sustainability” projects to save money, use less energy and be friendly to the environment. Under terms of the contract, Johnson Controls would be responsible for financing and construction and would be compensated from cost savings over a 20-year period.
The contract’s big-ticket item was the Biomass Steam Plant, which replaced the lab’s aged system that relied on fossil fuels to generate steam for heat and other operations. The new steam-producing system, designed by Nexterra, was fueled by wood chips, and it was greeted as a technological advancement that would curb emissions and enhance the energy lab’s green image. However, after start-up in March 2012, the steam plant only operated for about a year and a half. It was shut down after system checks revealed that the walls of pipelines used to transfer hot gases were thinning and posed a potential hazard.
Johnson Controls paid to install a temporary boiler system to provide steam at ORNL while future options were discussed with DOE. According to Moore, officials considered trying to fix the biomass plant but there were too many uncertainties. The decision was made to go with a new high-efficiency boiler that uses natural gas.
Moore said the new system will actually save money on maintenance and operations, as well as on fuel because natural gas is currently cheaper than wood chips. The negatives are the additional cost of equipment and higher emissions, although the greenhouse gases will still be lower than the old steam plant the lab operated previously.
The DOE official said it will take about a year to procure, install and test the new high-efficiency system. In the meantime, the temporary boiler will continue to produce steam for lab operations, he said.
The contractor provided a statement via email indicating it was satisfied with the newly negotiated agreement.
“Johnson Controls continues to stand behind our commitments at Oak Ridge National Laboratory. We worked out an agreement with the Department of Energy to provide long-term plant operations at the lowest cost to taxpayers that is energy efficient. Johnson Controls and the Department of Energy have had a long-standing and mutually-beneficial business relationship, and we are very pleased to continue to be a trusted partner.”
Moore declined to specify the long-term savings associated with the new system, citing the variability of some costs — such as the price of natural gas.
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