District Heating System
A district heating system for Oujé-Bougoumou was conceived
of not by engineers or energy technicians nor for that matter
by people who had a vast background in the area of energy production
or alternative energy, but rather it was conceived of by the
people whose professional activity was community development.
From the point of view of what is beneficial to an aboriginal
community, such a system was found to be an enormously positive
tool in contributing to the development of the community's future
District Heating: What is it?
A district heating system is a way of providing energy for the
purpose of heating residences, institutions (school, clinic, administration
buildings, etc.) and commercial establishments utilizing a single
source of energy to produce heat which is distributed via a hot
water medium by underground pipes to all the buildings. One source
of producing energy replaces having each building individually heated
by conventional means such as oil furnaces or baseboard electric
heaters. The district heating system also provides the source for
domestic hot water.
District heating is not new. The Romans were the earliest user
of the concept and applied it to heat dwellings and also to heat
their renowned baths. The first modern district heating company
was established in Lockport, New York in 1878 by the Holly Steam
Combination Company. The company started with fourteen customers
and by 1880 the system included several factories. The distribution
network consisted of nearly three miles of steam piping. The early
distribution lines were iron pipe, wrapped with asbestos, felt and
paper buried approximately three feet in the ground in a wooden
box filled with sawdust.
By 1880 district heating became well established. The establishment
of many small electric utility companies in the United States to
serve the growing demand for electric power with the expansion of
the industrial revolution gave birth to district heating in the
northeastern United States. It was also found that the exhaust steam
produced in the process of generating electricity and normally vented
to the atmosphere could be sold to district heating consumers. These
systems were the earliest successful combined heat and power schemes.
Within a decade district heating had spread to a number of cities
across the United States with steam being the preferred energy transfer
The development of the hot water district heating system was primarily
a European concept designed to overcome the limitations of steam
systems. Today, the concept of district heating - and cooling -
is widely employed in many countries. In Europe, especially the
Scandinavian countries, large district heating systems are common.
and cooling systems have been primarily limited to university, military,
governmental and large industrial complexes.
In Canada, the first district heating system was established in
1924 to serve a small section of the City of Winnipeg's commercial
core. Other Canadian cities served today by steam district heating
systems include Toronto, Montreal, Ottawa and Vancouver. The only
two district heating systems in Canada that use the European concept
of hot water are at Lebreton Flats in Ottawa, installed in 1981,
and at Charlottetown, PEI, installed in 1987. Oujé-Bougoumou
represents the first village-wide application of a district heating
system in North America and also the continent's first village-wide
application of the system utilizing biomass as the fuel source and
hot water as the energy transfer medium.
The community first began to talk, in very conceptual terms, about
the possibility of a district heating system fuelled by biomass
in 1986. The concept developed as a consequence of the conjuncture
of two separate lines of thought.
On the main highway connecting Chibougamau to Chapais,
the two non-aboriginal towns in the region, and other towns further
west and south (including Waswanipi, Lebelsur-Quevillon, Miquelon,
Seneterre and Val d'Or), sits a large sawmill which specializes
in producing eight-feet long two-by-four lumber for the American
market. As with most mills of this size in Canada the mill site
contains a large beehive burner which burns wood waste (bark, cul,
etc.) twenty-four hours a day. This particular mill utilized the
practice of piling most of its waste sawdust in huge mounds at the
mill site, using only a very small portion for such things as fuelling
a lumber kiln.
visual presence of this waste represented two things for the Ouje-Bougoumou
Crees. It was, first of all, a constant reminder to them of the
rapacious logging that was stripping them of their land and making
it more difficult to carry out their traditional land-based activities.
In addition, it was a sad reflection on the manner in which natural
resources were typically exploited by industrial enterprises operating
in the region. For them, this meant taking only what is wanted for
commercial reasons and leaving the rest to rot - such a stark contrast
to the traditional aboriginal approach of harvesting only what is
required for use and finding a use for all parts of any items harvested
from the environment while wasting very little.
Second: It was around 1986 that the federal government
announced the closing of a number of Canadian Forces Bases in conjunction
with the establishment of a successor system to the Distant Early
Warning System built in the late 1950's. This meant that the Canadian
Forces Base located in Chibougamau, operating since the early 1960's,
was scheduled for closure. At that time, feeling optimistic that
a settlement of the Ouje-Bougoumou issue was just around the corner,
some of the community members visited the base for the purpose of
identifying equipment or facilities which perhaps could be obtained
at a reasonable price and be utilized in the new community. In addition
to the recreational facilities, fire engines, tables and chairs,
and other useful items, what also caught the eye of those who visited
the installation - virtually a small town unto itself - was the
presence of a district heating system.
The heating for the base's residential housing was provided by
a district heating system utilizing a diesel generator. It seemed
at first glance that such a system must be more economical than
having each housing unit with its own furnace. They immediately
wondered if such a system could work for a village of the kind being
contemplated by the Ouje-Bougoumou people. Further, instead of purchasing
and transporting at great distances the fuel required for such a
system would it not be possible to utilize, as an alternative source
of fuel, something locally and inexpensively available - like waste
sawdust, and doing something with that mountain of sawdust produced
annually? A little research confirmed not only that district heating
systems were feasible and quite common in the Scandinavian countries
with similar climates, but also that it could readily be adapted
to be fuelled by biomass.
The community then submitted a request to a federal program operating
at the time which was carrying out demonstration projects in the
area of energy efficiency in remote areas. The request was for funds
to carry out an initial study of the economic feasibility of installing
such a system in the new village. However, because the new Ouje-Bougoumou
village was to be situated near an existing hydroelectric grid,
it was deemed to be ineligible for the program's funding. Such an
analysis was nonetheless considered to be a critical first step
in permitting the community members to make a decision on whether
or not to proceed with the project.
It was not until after an agreement was reached with Quebec in
the fall of 1989 which laid the basis for the commencement of village
construction activities that some limited funds became available
to Ouje-Bougoumou to carry out various small research studies.The
first priority for the community at that time was to start building
as soon as possible in order to get those community members living
in the substandard conditions into decent housing. The first undertaking
was the installation of a water and sewer infrastructure system.
Upon completion of the planning, and during the completion of the
installation of the infrastructure system, the community members
approached a management and engineering firm with whom they had
some association to carry out a pre-feasibility analysis of a biomass
fuelled district heating system to determine whether or not it was
worthwhile for the community to undertake a more indepth analysis.
The firm was a conventional management firm with little direct experience
in district heating. The results of this pre-feasibility study suggested
that the cost of installing such a system would be so enormously
high as to be prohibitive.
The community leaders, having already begun speculating on the
potential benefits of such a system - benefits in terms of employment
and financial benefits from having energy dollars captured locally
- decided to obtain a second opinion.
It was at this time that initial contact was made with the Energy
Research Laboratory of the federal Department of Energy, Mines and
Resources (now Natural Resources Canada). The staff at the Laboratory,
under the direction of Michael Wiggin, had begun to develop some
considerable expertise in the area of district heating and district
cooling having been involved in a number of such projects in Canada.
They were involved in the development of the biomass fuelled district
heating system in downtown Charlottetown, Prince Edward Island,
as well as in the initial stages of potential projects in Kingston,
Toronto and Edmonton. They were also familiar with the latest technological
developments in the field and were acquainted with the companies
and individuals who possessed the most current expertise.
The staff of the Laboratory were eager to assist Ouje-Bougoumou
and offered to carry out another pre-feasibility assessment. A staff
researcher was immediately dispatched to Ouje-Bougoumou from Ottawa
where he saw the site of the new village, the development plans
and the quantity of available biomass. In a very short time the
pre-feasibility study concluded that the cost of installing such
a system was substantially less than initially estimated and that
it was well worth the community's while to give serious consideration
to having a complete feasibility assessment carried out.
In the course of their various projects, the staff of the Energy
Research Laboratory had become acquainted with the firm of Eltec/FVB
of Edmonton, Alberta. Eltec/FVB was established as a joint venture
between the consulting arm of Edmonton Power and a well-regarded
Swedish engineering firm with considerable experience in district
heating and cooling. The objective of the joint venture was to seek
out and to provide engineering assistance to potential district
heating and cooling projects in Canada. Owing to their vast experience
and expertise in the field, Michael Wiggin recommended that this
firm be selected to conduct the comprehensive feasibility study.
After a fruitless attempt to secure financial assistance for the
feasibility study from the Aboriginal Economic Program of the federal
Department of Industry, Science, and Technology, in the end, the
cost of conducting the feasibility study was shared between Ouje-Bougoumou
and the Department of Energy, Mines and Resources Canada.
feasibility study was completed in fairly short order. In a few
short weeks, the community began its deliberations over the feasibility
study. What it demonstrated was what the community had already suspected.
First, that in the short term, when compared against hydroelectric
heating or heating by oil, district heating is much more expensive.
Obviously the capital costs associated with the installation of
a biomass boiler plant and a network of distribution piping is much
more costly than installing baseboard heaters or oil-burning furnaces.
But secondly, and more importantly, in a relatively few short years,
the cost of heating and providing hot water to the community through
a district heating system caught up with the costs of conventional
systems and began showing substantial economic returns.
Comprehensive Cost-Benefit Analysis
For the community members, the cost-benefit perspective through
which they had begun to view this project was based on much more
than the simple short-term economic return. Instead, they had begun
to assess the feasibility of this system in terms of very long-term
and comprehensive benefits potentially available to the entire community.
In addition to looking at the short-term economic return they were
looking also at such things as environmental impacts, community
development, employment generation, impacts on their local housing
program and long-term generation of income for the community. It
was a grasp of these potential benefits to the community which was
the driving force behind the community's exploration of the feasibility
of the system.
Community representatives were in constant discussions with the
engineers who prepared the feasibility study, modifying assumptions,
altering forecasts and assessing the economic impacts of various
energy scenarios. The community leaders knew that they were approaching
decision time and they needed to make up their minds very soon whether
or not to proceed.
As part of the decision-making process the community appointed
a four-person delegation to go to Charlottetown, P.E.I, to observe
the operations of the biomass fuelled district heating system in
the downtown core. For the delegation who were on the trip this
represented the first tangible and direct experience with a district
heating system. Up to this point all the discussions had been more
or less theoretical. This visit permitted the delegation to gain
an understanding of the way in which such a system works so that
they could explain it in very graphic detail to their fellow community
members in Ouje-Bougoumou. The delegation returned to Ouje-Bougoumou
very enthusiastic about district heating. Their enthusiasm and the
information which they returned home with was a springboard which
raised the intensity of community discussions.
Important concerns began to be raised. What kind of environmental
emissions would be given off by the plant? What kind of back-up
would there be to the biomass boiler? What would happen if there
was a total breakdown of the system? Was the system sufficiently
simple that it could be operated and maintained by the local people
themselves? What would happen if there was no longer any sawdust
systems engineers provided satisfactory answers to all the community's
concerns. The community also initiated discussions with the local
sawmills to secure a guaranteed long-term supply of wood waste.
It was also brought to the community's attention that in Sweden
a specie of fast-growing poplar had been developed which matures
in three to five years. It was felt that in the long-term the community
would be much less vulnerable if it could provide its own supply
of biomass for its plant.
At the same time, the engineers raised another important consideration
with the community which had to be entered into the decision-making
process, and it concerned the nature of the community's housing.
In the interest of energy conservation and long-term economic benefit
the community had decided to build highly energy efficient housing.
The Canadian standard for energy efficient housing is R-2000 (insulation
value). The housing being built by Ouje-Bougoumou was rated higher
than this. In fact, the district heating engineers calculated that
the insulation value of the residential houses being built were
close to R-3000. This fact could have a very significant impact
on the economic feasibility of the district heating system. It meant
that because of their low rate of energy use the houses were contributing
less revenues to pay off the cost of the district heating system.
The critical question for the community was whether this additional
burden was sufficiently onerous so as to negate the potential benefits
associated with district heating.
In making its final decision the community members made a list
of all the potential long-term benefits associated with district
heating. Their list included the following:
- Capturing capital for internal circulation which otherwise would
leave the community. Energy dollars would be retained within the
village rather than being exported out. Future community development
projects could thus be financed internally.
- Ability to exercise control over a substantial portion of energy
costs which could not be done if heating were provided conventionally.
It was obvious that both hydroelectricity and oil were increasing
in cost and there was nothing which could be done about it. A
local district heating system would permit control over heating
energy and domestic hot water costs.
- Creation of some local employment. Someone would need to be
hired to operate the plant, obtain the biomass fuel and read the
meters. There was no employment associated with conventional heating.
- Long term relative reduction of heating energy costs.
- Beneficial impact on innovative local housing program. The district
heating system would result in a reduction of operating costs
of residential housing as the cost of heating energy decreases.
Under the community's housing program individual residents are
required to pay a fixed percentage of their income toward their
housing costs. This revenue will be used to cover operating costs
(energy, insurance, maintenance, etc.) and also to add to the
community's housing fund so that it will be able to build additional
future housing. By reducing the operating costs of the houses
a greater portion of the amounts paid by the residents will be
available for the purpose of future housing construction. To this
extent an important contribution is made to the community goal
of self-sufficiency in the area of housing.
The ability to control substantial operating costs of the houses
could make the difference between community self-sufficiency in
housing and perpetual housing shortages as experienced in most other
Native communities. The capacity to sustain the Housing Program
for the long-term also has enormous implications for future community-based
employment and income.
such factors as the highly energy efficient housing had a negative
economic impact on the system's economic feasibility it nonetheless
remained within a range whereby costs were recoverable within an
acceptable timeframe. The system would still remain a viable undertaking
which would generate revenues above and beyond what would be required
to repay the initial capital costs. In the end it was decided that
the potential long-term community benefits were worth the initial
capital investment. The key to understanding the community's decision
is that they viewed the district heating system as an integral part
of the future socio-economic development of the community, and thereby,
having an impact on local employment, on future community projects
and on their innovative housing program. They were not looking strictly
at short-term economic return.
had instead adopted a profoundly comprehensive view of community
economics and were convinced that the community as a whole would
reap substantial benefits from the installation of a district heating
Once having made the decision to proceed with the project the question
to address was the nature of the financing required to construct
it. It was felt that some of the negative impacts on the economic
feasibility of the system could be offset by contributions in the
form of grants. The community decided that they had an obligation
to contribute to their own future development by dedicating a substantial
amount of resources from its own funds. The community was also able
to secure important contributions from the Department of Natural
Resources Canada and from Hydro-Quebec.
Summary of Community Benefits
From a community planning perspective working in the context of
small community offers certain built-in advantages. Because of the
relative absence of the kind of complexity that is present in large
urban areas with their multiple interests and extensive stakeholders
on any issue it is possible to perceive the interrelationships of
various social and economic factors much more clearly. It is, therefore,
easier to assess and weigh the costs and the benefits of any potential
change on the community as a whole. A smaller community provides,
in a sense, a simplified microcosm of the socio-economic impacts
of any change. In this context, it was relatively easy for the Ouje-Bougoumou
community to determine the viability of proceeding with the district
- Reduction of total community energy consumption.
From its early inception the motivating drive behind
the development of district heating was the realization
that significantly lower consumption levels could
be obtained through economies associated with a common
- Recovery of energy from industrial waste. There
are several medium to large sawmills in the Chibougamau/Chapais
area of Quebec. At present, the waste from these mills
is either burned or stockpiled in the mill yard. Utilization
of this waste material and conversion into energy
represents a positive environmental development.
- Displacement of conventional heating energy sources.
In the absence of the type of district heating contemplated
in this project, the conventional fuel sources which
would be relied upon are fossil fuel and hydroelectricity.
- Increased community sensitivity to environmental
and conservation issues. This project will be an important
springboard for other innovative environmental measures
which the community may consider in the construction
of their new village.
- Reduction of cost of heating energy to users. The
economies associated with central district heating
will result in reduced costs of heating energy for
the residents of the community.
- Increased level of capital circulation in the community.
Dollars which otherwise would be "exported"
from the community to pay for heating energy to utility
companies or to fuel suppliers will now be captured
locally and thereby provide a positive benefit to
the community as a whole by providing a capacity to
finance future projects.
- Beneficial impact on innovative local housing program.
The district heating system will result in a reduction
of operating costs of residential housing as the cost
of heating energy decreases. Under the community's
housing program individual residents will be required
to pay a fixed percentage of their income toward their
housing costs. This revenue will be used to cover
operating costs and also to add to the community's
housing fund so that it will be able to build additional
future housing. By reducing the operating costs of
the houses a greater portion of the revenues paid
by the residents will be available for the purpose
of future housing construction. To this extent an
important contribution is made to the community goal
of self-sufficiency in the area of housing.
- Positive potential for use of excess capacity. In
the likely event that the system produces excess heating
capacity, the potential is present for innovative
economic uses of the energy which will have a positive
benefit on the community. Potential spin-off uses
for excess capacity include a greenhouse and aquaculture.
- Local employment. Unlike conventional sources of
heating energy, the district heating system has a
positive impact on the local employment situation,
both in the construction and operation of the system.
In a small community every job created has a very
significant economic multiplier effect on the local
- Contribution to an overall sense of community self-sufficiency.
The community members have as a goal the construction
of a village which operates successfully from the
point of view of both economics and the environment.
The district heating system represents an important
stride in achieving this goal.
- In addition to the direct and indirect benefits
to the Ouje-Bougoumou community both in the short
and in the long term, there are also important lessons
for other communities including those in larger urban
settings about the value of appropriate alternative
energy technology. These include:
- The district heating system which has been installed
gives concrete expression to the concept of sustainable
development. It is an excellent example of how heating
loads might be assembled to facilitate the use of
local energy sources, in this case, waste wood from
a local sawmill by local people. The use of local
resources combined with a community-owned energy generating
capacity ensures that energy expenditures are redirected
into the local economy, thus enhancing the viability
of the community.
- The project will serve as a concrete example of
how communities can enhance their economies through
technology innovation which is respectful of environmental
- A key component in combating global warming is the
use of renewable energy including biomass. The Ouje-Bougoumou
project uses waste wood as a base energy source thus
setting an example in the use of efficient alternative
- This project represents a demonstration of how the
use of alternative energy is related to overall community
For the Ouje-Bougoumou members the district heating system offers
an opportunity to realize long-term benefits for the community which
offset the shorter-term economic costs. In addition to generating
surplus revenues after the initial capital costs are paid, the ability
to control the cost of heating energy indefinitely will provide
enormous socio-economic benefits.