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Adapting the Upper Austrian Model to the U.S. Market

Feb 12, 2015

In late November of 2014 BERC organized and led a small delegation of representatives from Vermont’s energy, environmental, and economic sectors to Upper Austria. Vermont Energy Investment Corporation (VEIC) Executive Director Scott Johnstone and I were joined by state officials from the Department of Forests, Parks, and Recreation, the Agency of Commerce and Community Development, the Public Service Department, and five representatives of Vermont’s wood heating industry on the trip.

This delegation was part of a broad initiative to increase the use of modern wood heating in Vermont; a key strategy for meeting the state’s goal to source 90% of all its energy from renewables by 2050. A target has been set to meet 35% of Vermont’s total space heating needs with wood fuel by the year 2030 and this trip was a vital first step toward developing a comprehensive strategy to meet this ambitious objective.

Vermont’s Modern Wood Heating Landscape

We have a number of programs in place to promote modern wood heating in Vermont including a pellet boiler incentive from the VEIC-administered energy efficiency utility, Efficiency Vermont, and an additional rebate offering administered by the Renewable Energy Resource Center, also a project of VEIC, and funded by the Clean Energy Development Fund. We have also seen significant growth in the adoption of modern wood heating on the commercial and industrial side. Today, more than 54 Vermont schools are now heated with wood; a new district heating plant is now on-line in Montpelier, VT; and numerous projects are in the pipeline to install woodchip and pellet fueled heating systems in multi-family affordable housing complexes. Over the last 15 years BERC has played an essential role in these programs and projects.

Why Upper Austria?

Upper Austria has been hugely successful at establishing and growing a flourishing and robust modern wood heating market. The Upper Austrian Energy Agency (or OÖ Energiesparverband) has developed a cohesive program which combines technology, business models, efficiency, environmental sustainability, and renewable energy, to create a streamlined implementation process. In addition to this coordinated approach, they have wood heat-friendly policies in place which encourage the stimulation of their modern wood heating economy.

With approximately half the total land area and forested land area of Vermont and more than two times the population, Upper Austria is meeting over 40% of their thermal energy needs with wood fuel. In comparison, Vermont leads the nation with only 15% of all space heating sourced from wood.

The connection between Vermont and Upper Austria was initially established by VEIC’s late co-founder Blair Hamilton who recognized the importance of better incorporating wood fuel into Vermont’s thermal energy portfolio and the opportunity to learn from Upper Austria’s successes. Blair sent a group of VEIC staff to Austria in 2009 to begin building relationships and developing a knowledge base. Scott Johnstone has continued to support Blair’s vision for collaboration, encouraging BERC to maintain and strengthen a connection with the Austrian state.

The delegation was formed following the signing of a Memorandum of Understanding by Vermont Governor Peter Shumlin and Upper Austrian Governor Josef Pühringer in 2013, which called for on-going collaboration regarding the advancement of wood heating in each respective state. This “sister state” relationship has grown over the past year and was strengthened further during our visit as we met with agency and industry leaders to discuss enhanced trade, information sharing, and strategy development.

Strategies for Change

In preparation for our trip we developed an action plan documenting our goals for the delegation. We established three key objectives: gain valuable first-hand knowledge; develop concrete and specific tactics for applying lessons learned; and expand business to business exchange between Austrian wood heat equipment manufacturers and distributors and Vermont companies seeking to expand their offerings. As a result of the delegation, three new business to business relationships have already been forged between Vermont and Upper Austrian companies and further progress will be made in the near future.

During the trip we identified a number of key pieces of the Upper Austrian model that we need to focus on in Vermont and beyond. One clear lesson learned was the importance of woodchip and pellet fuel quality standards. BERC has already begun work to develop national standards that will help the market by increasing woodchip fuel quality and consistency to improve boiler performance, efficiency, and emissions. Another lesson learned was the importance of comprehensive strategies that integrate policy, regulation, market education, and technical support. We as a delegation recognize that moving forward we need to better coordinate our efforts and ensure that our work aligns to achieve the 35% goal while focusing on the sustainability and health of Vermont’s forests, the growth of our local economy, and the reduction of our dependence on fossil fuels.

We’re working in a small market with a rural landscape, cold winters, expensive heating requirements, and a wealth of forest resources. As the national leader in using wood fuel for space heating we have a valuable opportunity to replicate a functional European model, adapt it to the U.S. market, and create an exportable strategy for many other regions in North America.