Grand Marais biomass heating plant faces uncertain future

When it started out more than six years ago, the proposed Grand Marais Biomass District Heat Project was supposed to be a simple and sustainable way to use Cook County’s local forest resources to produce low-cost heat and hot water for a collection of the community's largest public, institutional and commercial buildings.

Those involved with planning the biomass project admit it was an ambitious task, one equipped with $1 million price tag just to research its feasibility, including some $355,000 spent in Cook County and Grand Marais tax-generated funds spent. After years of research and money spent, it appears the project is at best stalled.

According to George Wilkes, president of the Cook County Local Energy Project, the non-profit that spearhead the Biomass plan, the lack of local interest from major players, namely the North Shore Hospital, led to the apparent demise of the original biomass proposal.

CCLEP starting exploring the idea of bringing a biomass plant to Cook County back in 2009. Much of the original idea was based on successful community-scale biomass heating systems that the group found in Europe. Based on those biomass systems overseas, the idea was to construct a central boiler housed in a plant to be built in the Cedar Grove Business Park on the outskirts of Grand Marais. The boiler would be fed wood by-product or waste acting as fuel. This wood was to be transported from Hedstrom’s Lumber Mill and from the slash left at local and regional logging operations. After burning the woody debris, the boiler would heat water piped to businesses and public facilities around Grand Marais, where heat exchangers would capture the heat from hot water and transfer that heat to each building’s own heating system.

In order to achieve the goal of building the local biomass plant, vast amounts of research was necessary to explore the feasibility of such a project. So CCLEP contracted with Dovetail Partners, Inc. and FVB Energy to conduct the necessary research. In order to pay for these studies, CCLEP had to seek out grant funding and request local, state and federal entities to support the cause. And support the cause they did. As of December 2014, CCLEP collected more than $715,000 to research the project, including $355,000 from the Cook County 1-percent sales tax fund and $10,000 from the city of Grand Marais. Other revenue streams were provided to CCLEP from the United States Forest Service, the Minnesota Department of Agriculture and the Blandin Foundation.

After the initial research was complete, particularly that supplied by FVB consultants, it appeared the project would be a benefit to the region, not only by decreasing the need for fossil fuels in the region, but also by reducing heating costs in local buildings. After that, the project next needed to bring customers on board.

And this is where things got tricky.

In order to make a legitimate bonding request from the state legislature, the Grand Marais Biomass District Heat Project, as it was officially called, needed to have a collection of local businesses and entities literally sign contracts saying they were on board. These contracts were to be for 25 years and those who signed would have been locked into being biomass customers during that time. At the top of the list was the Cook County North Shore Hospital, which would have made up about one-third of the overall project with regard to distribution of heat and hot water from the biomass plant.

Before it was confirmed if the hospital would be on board in the early stages of researching the project, FVB, under the direction of CCLEP, spent hundreds of thousands of dollars investigating if the biomass project could work, where it would work and how it would work. These questions opened the door to perhaps the most important question of all: who would the plant serve?

During a public meeting held May 21, 2015, the Cook County North Shore Hospital Board officially declined to be involved with the biomass project. Hospital Director Kimber Wraalstad said, in the end, the numbers that appeared to make joining the Biomass project worthwhile simply didn’t add up.

After being denied by the hospital, Mark Spurr, who works for FVB and was involved the Grand Marais Biomass Heat Project, said the likelihood of the plan moving forward at this point is minimal.

Adding to the apparent demise of the biomass project was a loss of support from some of the county commissioners. Last summer, Commissioner Garry Gamble presented a resolution to the board that would have essentially withdrawn Cook County from further exploring a partnership with the proposed biomass plan.

Countless hours from both volunteers and individuals who were paid, including some on the local level, went into researching the Grand Marais Biomass District Heat Project. Had the project moved forward, constructing the plant would have cost an additional $13 million, perhaps more.

Grand Marais Mayor Jay Arrowsmith-Decoux said the hard work of individuals involved the biomass project should not be considered ill spent.

And regardless of how it ends, Wilkes admits it was an ambitious project with a big initial price tag.

WTIP’s Joe Friedrichs reports more on this story in the audio below.