district energy in west union, iowa

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DISTRICT ENERGY IN WEST UNION, IA 1

District Energy in West Union, IA

INTEGRATING A NEW DISTRICT ENERGY SYSTEM INTO A HISTORIC MAIN

STREET COMMUNITY

Preservation Green Lab, National Trust for Historic Preservation

Center for Sustainable Business Practices, University of Oregon

OCTOBER 2010

West Union, a small town in northeast Iowa, is in the midst of an

ambitious plan to redefine its downtown core. A key part of that

plan involves creation of an innovative district energy system based

on renewable ground-source thermal energy – making West Unionone of the first communities in the nation to choose district energy

as an energy performance strategy in an existing neighborhood of

historic buildings. District energy provides an innovative energy

solution for small-scale older and historic buildings that may not be

able to integrate aggressive energy efficiency or on-site renewable

energy generation within their property boundaries for reasons of

both physical capacity (such as size and structure) and financial

feasibility. This case study explores the essential elements of

integrating new district energy systems in established

neighborhoods, so that other communities can identify similar

opportunities to improve energy performance and foster

investment in already compact communities that contribute to

reduced resource consumption.




Table of ContentsTable of ContentsTable of ContentsTable of Contents

Preface ...................................................................................................... 4

The Preservation Green Lab

Why District Energy Matters

West Union, Iowa .................................................................................... 5

Fostering a Collaborative New Vision ............................................... 6

Formation of a Main Street District

Iowa’s ‘Green Streets’ Initiative

Emergence of District Energy in West Union .................................. 8

Funding Sources

Economic Performance of the System

The Building Owner Perspective – Costs and Benefits .................. 11

Environmental Benefit .......................................................................... 12

Impacts of Greenhouse Gas Emissions Reductions

Learning from West Union ................................................................... 14

Looking Forward ................................................................................... 15

Glossary ................................................................................................... 16

Appendix 1: Additional Resources ..................................................... 19

Appendix 2: System Details ................................................................ 20




PrefacePrefacePrefacePreface

AboutAboutAboutAbout tttthe Preservation Green Labhe Preservation Green Labhe Preservation Green Labhe Preservation Green Lab

The National Trust for Historic Preservation believes historic preservation can – and

should – be an important component of any sustainable development effort. The

conservation and improvement of our existing built resources, including reuse of older

and historic buildings, greening the existing building stock, and reinvestment in older

communities, is crucial to reducing carbon emissions associated with the built

environment.

Launched in March of 2009, the Seattle-based Preservation Green Lab (PGL) was

established with the mission to further the scientific understanding of the value of our

existing building stock and develop and promote strategic policies for integrating the

reuse and retrofitting of older and historic buildings into city and state sustainability

efforts. The PGL’s current projects include:

• An analysis of the implications for existing building reuse of the demolition and

density components of San Francisco’s new Green Building Ordinance

• Research that applies a life-cycle-assessment (LCA) approach to quantifying the

environmental value of building reuse compared to new construction.

• Research on the links between urban grain and pedestrian patterns, as well as

broader issues at the interface of urban density and preservation.

• A collaboration with the City of Seattle and the New Buildings Institute on a new

national model for energy codes for existing and historic buildings that will pair

accountability for actual performance outcomes with complete flexibility in how

owners of these buildings can accomplish their energy retrofits.

Why District Energy MattersWhy District Energy MattersWhy District Energy MattersWhy District Energy Matters forforforfor Older and Historic BuildingsOlder and Historic BuildingsOlder and Historic BuildingsOlder and Historic Buildings

Our outcome-based code work will help individual buildings achieve aggressive energysaving and emission reductions targets in the most flexible, cost-effective way possible.

However, many smaller older buildings will not achieve these goals without access to

low-carbon district energy systems --neighborhood-scale utilities that are specifically

created and financed to deliver energy services (heating, cooling, and hot water) to a

collection of buildings within a defined service area. District energy systems are able to

deliver energy from a variety of alternative low-carbon sources such as biomass,

geothermal and recaptured waste heat. (See side bar ‘About District Energy’.)

More than half of commercial buildings in the United States are less than 5,000 square

feet in area, and 95 percent of them are less than 50,000 square feet.1 In general, the

older the building stock in a community, the smaller the average building size. This is

most evident in the traditional mixed-use “urban village” neighborhoods that aredriving the rejuvenation of so many American cities (and likewise the traditional

compact main street communities of rural areas). While the compact design and

authentic character of these communities yield many sustainability benefits, the small

size of their buildings can reduce the physical feasibility and economic viability of

1 http://www.eia.doe.gov/emeu/cbecs/cbecs2003/detailed_tables_2003/Detailed_tables_2003.html




ABOUT DISTRICT ENERGY

District energy refers to neighborhood-scale utilities that

provide heating, cooling and domestic hot water within

a defined service area, and is an old concept stemming

back to our earliest urban energy systems in the

beginning of the 20th Century. Energy is generated at a

central location by burning fuels such as natural gas,

biomass or garbage, tapping ground source or

geothermal energy, or capturing waste heat from

industrial processes, sewers or power plants.

District energy was common in the early days of the

electric power industry when waste heat was captured

from small electricity plants located close to city centers.

The benefits of district energy were overlooked during

the latter half of the 20th Century, when energy and land

were inexpensive and development was sprawling rather

than compact. Now, in the context of increasing

urbanization, energy insecurity and climate change

mitigation, communities are tapping the potential ofmany sources of urban waste heat, as well as lower-

carbon combustible fuels, to produce thermal energy.

Image Credit: IBC Engineering, Inc.

energy improvements to

individual buildings. District

energy represents an

opportunity to invest in

renewable energy solutions

for buildings with limited

space for new energy-saving

devices or for which there

would be unacceptable

architectural impacts. District

energy systems are emerging

as a key strategy for

communities that want to

optimize their investment in

massive long-term reductions

in greenhouse gas emissions

of their existing building

stock.

Buildings are part of a

community, and resource

sharing is a common practice

in communities, from sharing

public spaces to water to

electricity grids. Increasingly,

cities and building owners

both will be compelled to look

to district-level solutions to

meet their clean energy

needs, and to meet theirneeds for other resource and

infrastructure such as

sustainable storm water

management and waste water

recycling. The aggregation of

energy demand and the

customer service model established for district energy can serve as the foundation for

these other “eco-district” services and infrastructure projects.2

The PGL has recently produced a policy paper titled The Role of District Energy inThe Role of District Energy inThe Role of District Energy inThe Role of District Energy in

GGGGreening Existing Neighborhoods:reening Existing Neighborhoods:reening Existing Neighborhoods:reening Existing Neighborhoods: A Primer for Policy Makers and Local A Primer for Policy Makers and Local A Primer for Policy Makers and Local A Primer for Policy Makers and Local

Government OfficialsGovernment OfficialsGovernment OfficialsGovernment Officials, which explores these concepts in detail.3

This case study ofWest Union, Iowa is an important real-life illustration of the benefits and challenges of

integrating new district energy systems into neighborhoods of smaller and historic

buildings with multiple owners.

2See Glossary and Additional Resources for more information on ‘eco-districts’.

3 http://www.preservationnation.org/issues/sustainability/green-lab/additional-resources/District-Energy-Long-Paper.pdf




West UnionWest UnionWest UnionWest Union,,,, IowaIowaIowaIowa

West Union has a population of just over 2,500 residents and a traditional downtown

with many older and historic buildings. It is the county seat for Fayette County and is

located within a two-hour drive of larger urban centers like Cedar Rapids and

Waterloo, Iowa. The community has abundant natural resources, by virtue of itslocation, nestled in the Mississippi River Valley and book-ended by trout streams,

affording it strong agricultural and recreational opportunities.

The majority of buildings along the six-block downtown core date from the 1890’s to

early 1900’s. A few of West Union’s buildings are listed on the National Register of

Historic Places but so far the district has not been registered.4 A recent market study

indicates that several downtown buildings have undergone recent renovations and

improvements, as the community has sought to revitalize downtown as a focal point

for commerce.5 While the downtown has seen a significant decline in retail activity over

the past 20 years due to competition from suburban development, the business district

is filled with professional service firms, banks, a post office, several restaurants and

cafes, and a feed supply store, many of them locally-owned.

4 Interview with Jeff Geerts, Special Projects Manager, Iowa Department of EconomicDevelopment on 8-31-10

5 http://www.preservationnation.org/main-street/main-street-news/story-of-the-week/2010/green-streets-in-iowa.html

Aerial view of WestAerial view of WestAerial view of WestAerial view of WestUnion’s historicUnion’s historicUnion’s historicUnion’s historic

downtown, which runsdowntown, which runsdowntown, which runsdowntown, which runsfrom U.S. Highfrom U.S. Highfrom U.S. Highfrom U.S. Highway 18way 18way 18way 18

south on Vine Street tosouth on Vine Street tosouth on Vine Street tosouth on Vine Street toPlum Street, borderedPlum Street, borderedPlum Street, borderedPlum Street, borderedon the east by Walnuton the east by Walnuton the east by Walnuton the east by Walnut

Street. Vine Street is theStreet. Vine Street is theStreet. Vine Street is theStreet. Vine Street is thecultural and, at leastcultural and, at leastcultural and, at leastcultural and, at least

historically, economichistorically, economichistorically, economichistorically, economic

hub of the city.hub of the city.hub of the city.hub of the city.Photo Credit: IDEDPhoto Credit: IDEDPhoto Credit: IDEDPhoto Credit: IDED

West Union’s downtownWest Union’s downtownWest Union’s downtownWest Union’s downtownbuildings arebuildings arebuildings arebuildings arepredominately twopredominately twopredominately twopredominately twostories and rangstories and rangstories and rangstories and range frome frome frome from4,5004,5004,5004,500----8,500 square feet,8,500 square feet,8,500 square feet,8,500 square feet,and are brick structuresand are brick structuresand are brick structuresand are brick structureswith wood timber spanswith wood timber spanswith wood timber spanswith wood timber spansand wood windows.and wood windows.and wood windows.and wood windows.These historic buildingsThese historic buildingsThese historic buildingsThese historic buildingshave facades typical ofhave facades typical ofhave facades typical ofhave facades typical ofdowntowns in smalldowntowns in smalldowntowns in smalldowntowns in smalltowns across the county.towns across the county.towns across the county.towns across the county.Photo Credit: JerryPhoto Credit: JerryPhoto Credit: JerryPhoto Credit: JerryWadianWadianWadianWadian




“West Union realizes that urban

areas are part of, not separate

from, the natural cycles of the

prairie. And will serve as a model

and outdoor classroom to

communities that want to

improve their economic viability

through sustainable green

infrastructure. Water is treated as

a resource instead of an obstacle.

(West Union website)

MAIN STREET IOWA

The national Main Street Program began in 1977as a component of the National Trust for HistoricPreservation. It was established to address thedisinvestment and decline of traditionaldowntowns across the country and provideneeded organization, technical support, andfunding to help communities keep their MainStreet as the social, cultural, and economic heartof the community. Since 1980, the program hasoperated through the National Trust Main StreetCenter and launched more than 2,000 affiliatedMain Street programs in 43 states

In 1985, the Iowa Legislature adopted a MainStreet program based on the National Trust forHistoric Preservation’s Main Street approach. MainStreet Iowa is a component of the IowaDepartment of Economic Development and aimsto improve the social and economic well-being ofIowa's communities.

FosteringFosteringFosteringFostering aaaa Collaborative New VisionCollaborative New VisionCollaborative New VisionCollaborative New Vision

Starting around 2005, a series of innovative sustainability and community development

programs were implemented in West Union with each success building on the last.

First, a Main Street program was established in West Union, then the City was selected

as a pilot city by the Iowa Green Streets initiative, next the city gained funding for a

Complete Streets project, and finally, West

Union developed the concept and secured

state and federal funding for a district

energy project. These successes have

helped West Union develop a solid vision of

itself as a community committed to

neighborhood development, sustainability,

and innovation.

Formation of a Main Street District

In 2005, a group of local stakeholders cametogether to talk about options for improving

and revitalizing the downtown. The last

significant improvements took place in the

1970’s, from which time the downtown has

experienced a steady decline in population

and economic activity. The City and County

hoped to reverse these trends, and

facilitated the creation of a Main Street

program in West Union.6 Redeveloping the

Main Street District has been a collaborative effort between Fayette County, the City of

West Union, West Union Chamber of Commerce and Main Street Iowa. This theme of

collaboration is woven throughout West Union’s revitalization effort and has been

essential to the City’s success in engaging

the public and seeking funding.

Iowa’s ‘Green Streets’ Initiative

In 2007, the Iowa Department of Economic

Development (IDED) launched its ‘Green

Streets’ Initiative to instill smart planning

principles and sustainable design practices

into all of its programming and build local

capacity to understand and implement

sustainable practices. One component of

the initiative promotes the ‘complete

streets’ model as a tool for improving

livability and sustainability. ‘Complete

streets’ is a nationally recognized standard of developing streets that serve all modes

of transportation with a focus on improving safety and accessibility for pedestrian,

6 http://www.iowalifechanging.com/community/mainstreetiowa/default.aspx




The visioning exercise engaged a diverse group of stakeholders to think more broadly

about the goals of the West Union project. Representatives from U.S. Department of

Agriculture, several State of Iowa departments (Public Health, Cultural Affairs, Natural

Resources, Transportation, and Agriculture and Land Stewardship), along with local

officials and organizations sought common ground and shared opportunities to create

a highly visible and innovative project, for which funding was provided in a July 2008

City Council resolution to issue municipal bonds.

Emergence of District Energy in West Union

With a handful of innovative programs in place and a citizenry freshly committed to

sustainability and neighborhood development, West Union’s conversation turned to

district energy.

The idea to develop district energy in West

Union first emerged through an initial interest

in heating sidewalks and streets to manage

stormwater and serve as an amenity during

the long, icy winters.11 The idea of heated

sidewalks was eventually abandoned as the

community considered the costs and

complexities, but the idea of a district energy

system gained traction as a component of the

larger downtown plans, particularly as the

idea of a ground- source system for heating

and cooling emerged.

West Union chose to base their district

heating and cooling system on ground sourceenergy, which uses shallow geothermal wells

to tap the ground’s stable temperatures. The thermal energy is clean, renewable and

free, however such systems still require significant investment to build, and electricity

is required to transfer heat through the system on an ongoing basis. (To get a full

description of West Union’s system, please see Appendix 2.) The City considered

various fuel source alternatives –looking at wind power in particular- for the district

energy system before determining that ground source was the most appropriate

option.12 West Union experiences harsh winters, and the associated high heating

demand makes a ground source system an efficient and sustainable system.13, 14

11 Biomass, solar and gas were all considered as energy sources to supplement the district snowand ice melt system.

12Analysis showed that there was insufficient wind power in the region.

13 Note that ground source energy is distinct from ‘geothermal’ energy. West Union’s system istechnically a ground source system. See definition of ‘ground source energy’ in glossary forfurther information.

Map of West UnionMap of West UnionMap of West UnionMap of West Union ground sourceground sourceground sourceground source wells.wells.wells.wells.

Photo Credit: Conservation Design ForumPhoto Credit: Conservation Design ForumPhoto Credit: Conservation Design ForumPhoto Credit: Conservation Design Forum




The new district energy system is unique in many aspects. It is one of the first in the

country to install a new district energy system in an existing neighborhood of historic

properties. The system is also unique in its flexibility for building owners – the system

will provide a ‘stub line’ to each building, making it easy for owners to connect.15

Though the City is contemplating offering a one-

time incentive to building owners who connect to

the new system, there is no mandate to connect

nor penalty for not doing so. This approach allows

building owners to consider their unique

circumstances and upgrade only as they see a

financial, functional, or environmental benefit for

doing so. Finally, the system is unusual in its

configuration, distributing individual heat pumps to

every building rather than centralizing the system

with a few large heat pumps. This decision gives

priority to flexibility and reflects two factors: the

relatively small size of the overall system, and the

more passive approach to getting building owners

to connect to the system at the time of initial

construction.16 The project has garnered national

attention for its innovative design.

The overall Main Street district is comprised of 60

buildings and a total floor area of 330,000 square feet.17 The majority of these

buildings currently have forced air heating and cooling, with stand-alone gas-fired

furnaces and electric air conditioning units. Buildings will need to update their existing

systems in order to link to the district energy system, and the cost and required

updates will be unique for each building. Buildings with newer HVAC systems will face

the lowest costs in updating their system.

The new system is intended to lower operating costs and improve functionality for

local businesses, which could aid in attracting and retaining businesses in the Main

Street district. The district energy system will be a City-owned asset, in part because of

the specific financing arrangements available through grants secured for the project

14 West Union’s use of ground source represents just one of many energy source alternatives for

district systems. Some district energy systems use heat pumps to tap into other sources of

stable thermal mass. In Vancouver, BC, for example, a new district heating system is tied to the

municipal sewer system to harnesses the waste heat. This energy source offers even greater

advantages than ground source by virtue of having higher temperature, a single point of access

(as opposed to multiple wells), and utilizing a waste stream. In other cases, district energysystems use combustion of renewable products such as waste wood or other forms of ‘biomass’

or harness wind and solar power, in order to reduce fossil fuel dependence and greenhouse gas

emissions.

15 See glossary for definition of a ‘stub line’

16 See Appendix 2 – System Design

17 West Union Feasibility Report by IBC Engineering for IDED

Installation of district energyInstallation of district energyInstallation of district energyInstallation of district energypipes to an existing building.pipes to an existing building.pipes to an existing building.pipes to an existing building.Photo Credit: District EnergyPhoto Credit: District EnergyPhoto Credit: District EnergyPhoto Credit: District EnergySt. PaulSt. PaulSt. PaulSt. Paul




DISTRICT ENERGY FUNDING SOURCES

Iowa Department of Economic DevelopmentIowa Department of Economic DevelopmentIowa Department of Economic DevelopmentIowa Department of Economic Development –––– Community DevelopmentCommunity DevelopmentCommunity DevelopmentCommunity Development

Block Grant ProgramBlock Grant ProgramBlock Grant ProgramBlock Grant Program

$1,000,000$1,000,000$1,000,000$1,000,000

US Department of EnergyUS Department of EnergyUS Department of EnergyUS Department of Energy –––– Energy Efficiency and Conservation BlockEnergy Efficiency and Conservation BlockEnergy Efficiency and Conservation BlockEnergy Efficiency and Conservation Block

Grant Competitive AwardGrant Competitive AwardGrant Competitive AwardGrant Competitive Award

$1,000,000

EPAEPAEPAEPA ---- Climate Showcase CommunityClimate Showcase CommunityClimate Showcase CommunityClimate Showcase Community $ 500,000

and because the project is small and may not be attractive to private utility companies

in the early stages of its operations.

Funding sources

Preliminary cost estimates for the ground source wells and distribution infrastructure

for the entire district total about $2.4 million, with additional costs associated with theindividual building connections and in-building heat pumps (which will be better

understood when the system has an initial set of buildings to connect to the system).

The first phase of construction, costing about $650,000, will cover excavation and

installation of the system infrastructure going under the road and sidewalks, including

stubbing to each building. In the second phase the geothermal wells will be built. West

Union has secured $2.5 million in competitive grant funding from multiple sources.

Additionally, the City of West Union used general obligation bonds to fund

approximately $4 million of the larger streetscape project, taking advantage of

historically low bond rates.

Success in securing grants and outside funding allowed West Union to eliminate the

need for a special assessment district (i.e. taxation of property owners) and made the

financial analysis for the district energy system much more attractive. The IDED, DOE,

and EPA funds are focused on supporting the innovative application of district scale

ground source heat pump technology in the downtown core of a small community,

neatly matching an innovative idea with a proven technology. 18 Furthermore, the

benefits from the technology were reasonably easy to estimate and demonstrated a

strong financial argument for the project. All these factors created excellent conditions

for competitive grant funding.19


19 Interview with Robin Bostrom, Executive Director, Fayette County EconomicDevelopment/Main Street West Union on 8-26-10




OWNER ENGAGEMENT IN ENERGY PLANNING

Building owners were actively engaged in energy

planning in West Union. In the summer of 2009, IDED

and Blackhills Energy (the local natural gas provider)

worked together to perform free energy audits for local

businesses. Over 75 properties participated citywide and

80 percent of those properties were located in the Main

Street District. All participating buildings undertook a

range of efficiency upgrades, replacing doors, caulking

windows and replacing energy intensive equipment.

In addition to the utility audit incentive, IDED set aside

funds to create a matching grant program for efficiency

and renewable energy upgrades that provides up to

$2,000 of matching funds for building upgrades,

including the upgrades required for connection to the

district energy system. In the beginning of the district

energy project a large outreach initiative was

undertaken, with door to door canvassing and

pamphlets. Outreach efforts, considerable grant funding,

and potential for cost savings convinced many building-

owners of the value in connection to the system.

Since the outreach effort, approximately 16 buildings –

about 25% of buildings and over 100,000 sq. ft. of

space- have committed to connect. This number will

grow as more buildings perform the financial analysis

required to demonstrate significant energy and cost

savings.

In addition to outreach, IDED has provided grant writing

to several building owners to allow them to pursue

USDA Rural Energy for America Program GuaranteedLoan Program (REAP) funding.

Economic Performance of the System

With grant funds roughly equal to the capital cost of the district energy system, the

early, basic financial analysis shows the project will have an excellent payback for the

city. Without grant funding on this scale, however, the business case is less

straightforward. While the returns on the project, as a simple financial investment,

would most certainly be negative in the absence of the grant funding, this perspective

does not properly consider broader, less tangible but nevertheless quantifiable

benefits, such as a lower cost of building ownership, reduced risk from fuel price

variability, lower greenhouse gas emissions and a long-term community asset which

can be expanded over time.

The Building Owner

Perspective – Costs

and Benefits

Building owners will face aunique decision of whether to

connect. Preliminary analysis

suggests that those who

connect will save between 40

and 70 percent of their heating

costs and 30 to 50 percent of

cooling costs.20 Anticipated

up-front connection costs vary

based on the current heating

and cooling systems in the

buildings. Many buildings have

newer forced air systems, whilesome may still have their

original radiators. These

systems should be able to

connect directly to a new heat

pump, with a cost estimated to

range between $10,000-

$15,000, and reclaim the space

currently taken up by boilers or

furnaces.21 Other buildings may

have badly outdated and

inefficient distribution systems,

in which case the anticipated

costs will be higher, but the

20 Iowa Green Streets Pilot Project: A Sustainable Vision for West Union Iowa, prepared for IDEDby Conservation Design Forum, Fall 2011





FAYETTE COUNTY COURTHOUSE

The County Courthouse makes an interesting example ofthe decisions faced by building owners. An initial analysisof the financial impact of converting to the district energysystem showed the system would not pay for itselfdirectly. However, the decision is complex, as connectingwould provide the building with the ability to install anew, more comfortable central heating and coolingsystem that would replace window air conditioner unitsand a gas-fired heating system.

The Fayette County Courthouse has a uniquehistory. It was first constructed in 1857 but burneddown 15 years later by an escaping prisoner. It wasrebuilt in 1874 and again burned, this time in 1922.The current building is a three-story grey stone

Beaux Arts design by J. G. Ralston, and in 1981 wasadded to the National Register of Historic Places.Photo Credit: Jerry Wadian

heat pump interface to the district energy system will provide the option to install new

hydronic (radiator or in-

floor radiant) heating and

cooling systems22 and

avoid (or rip out)

unsightly ductwork and

chases.

While building owners will

face some upfront costs,

the system will offer

significant benefits over

time in addition to

operating costs, such as

enhanced reliability

(buildings will be able to

retain their existing

systems as back-up) and

insulation from natural

gas price swings.

IDED is working to assist

building owners in their

decision-making process.

One key next-step in this

effort is to conduct a

financial analysis for each

building to help the City

and building owners

understand the upfrontcosts and operating

savings that would result

through connection to the

district energy system.

Environmental Benefit

Impacts onImpacts onImpacts onImpacts on Greenhouse Gas EmissionsGreenhouse Gas EmissionsGreenhouse Gas EmissionsGreenhouse Gas Emissions

For West Union, a key component of the planning process and a requirement for some

funding sources was an analysis of the greenhouse gas emissions (GHGs) of the district

energy system. Preliminary analysis at a whole system scale indicates that individual

22 Hydronic heating uses water as the heat-transfer medium in heating. Steam and hot-waterradiators are common examples.




GHGS AND SOURCES OF ENERGY

Large savings in energy use in a system like WestUnion’s do not necessarily translate to equally largereductions in greenhouse gas emissions. This isbecause, although ground source energy is free,renewable and clean, the heat pumps needed as part ofsuch a system run on electricity. The electricity gridserving the region is very carbon intensive because ofthe large proportion of coal in the electric mix(www.epa.gov/cleanenergy/energy-and-you/how-clean.html). As a result, the energy savings fromreplacing natural gas heating are partly counteractedby more carbon intensive power for the ground-sourceheat pumps. For cooling, the energy savings do havelarge emissions savings because current cooling isprovided by electric air conditioning systems.

buildings will see a 31% reduction in greenhouse gas emissions.23 This however, will

ultimately depend on the actual fuel source used to create the electricity that serves

West Union’s heat pumps. As wind power becomes an increasingly large proportion of

Iowa’s grid, power to the heat pumps will become cleaner, and carbon reductions

resulting from the district energy system will increase accordingly.

GREEN HOUSE GAS EMISSIONS24

In contrast, there are limits to improving the GHG profile of natural gas, which today

fires most of West Union’s heating systems. Aside from small efficiency gains that canbe made with equipment improvements, the potential to reduce GHG emissions with

natural gas systems is limited.

The coordinated local utility that will be formed in this process has the potential to

change West Union’s energy profile in other ways too. By building a relationship

between building owners, the

district can make bulk

purchases of green power on

behalf of all of its customers. If

100% green energy is

purchased for the heat pumps,

then the greenhouse gas

savings could theoretically

reach 100%, and could further

change the grid through

market demand.

Institutionalizing a

coordinated approach to

dealing with energy issues

empowers the district to solve

issues that individually would

be unmanageable.

23 Estimate is based on assumption that 80% of buildings will connect to the system. Even iffewer than 80% connect, the GHG emissions reductions will still be around 30% because thefixed energy costs are small compared to the building energy use.

24 Assumes the greenhouse gas intensity of Iowa’s electricity grid is 1.60 lbs of CO2e per kWh,which is higher than the national average of 1.33 lbs of CO2e (EPA). The last data set of emissionintensity from Iowa was in 2005, which was 1.90 lbs of CO2e per kWh, but significant recentinvestments in wind energy have reduced that to what the authors estimate to be approximately1.60 lbs of CO2 (EPA). Each therm of natural gas emits approximately 12 lbs of CO2e (US DOE).

Conventional GHG Emissions (Annual) 1,151 metric tons CO2e

District GHG Emissions (Annual) 797 metric tons CO2e

GHG Savings (Annual) 354 metric tons CO2e

GHG Percentage Savings (Annual) 31%




Looking Forward

On October 22nd

, 2010, West Union held a groundbreaking ceremony and work on district

energy is now underway. The entire project is estimated to take 18 months, with themajority of construction occurring in 2011. The distribution piping will be laid first, in

conjunction with the street rebuilding project. The geothermal wells will be constructed

once this first phase is complete and then the system will be ready for building owners toconnect.

At the time of this case study, additional financial analysis is being undertaken to more fully

understand the economic performance of the system, both from a community (and utility)perspective and for individual buildings that will connect to the system. The City anticipates

that building owners will face lower operating costs, but each building has yet to analyzethe cost implications compared to their current energy services. This more detailed analysis

is essential to West Union in advance of decisions related to utility ownership, governance

and rate setting. The process by which rates will be determined will be based on severalfactors, including final capital and operating costs, customer revenue projections, and cash-

flow requirements. Potentially, the City could set rates lower than its operating costs, andoffer a basic operating subsidy as a benefit to the building owners. Every additional owner

that chooses to connect will improve the long-term financial performance of the system,

and all of these benefits could increase the attractiveness of further private reinvestment indowntown properties and businesses, further justifying the investment.

West Union’s story is still unfolding, and we anticipate making updates to this case study to

document their progress and derive further learning from their example.

About the AuthorsTOM OSDOBA is the Director of the Center for Sustainable Business Practices at the Lundquist

College of the University of Oregon, and was formerly the director of sustainability at the City of

Vancouver, BC, where he was responsible for creating the Southeast False Creek (Olympic

Village) Neighborhood Energy Utility. He led efforts in Portland and Seattle to shape new policies

and programs to support district energy system development, and is currently working as aconsultant to Climate Solutions to help a handful of cities in the Pacific Northwest become

pioneers in creating the policies and programs that can show other cities how to transform their

energy systems.

HENDRIK VAN HEMERT is an MBA candidate (2011) in the Center for Sustainable Business Practice

at the Lundquist College of Business at the University of Oregon. His primary areas of interest are

energy efficiency finance and small scale renewable energy development. As a Graduate

Research Fellow in the Center for Sustainable Business Practices, he assists small and medium

sized communities transition to a new energy economy with a focus on reduced greenhouse gas

emissions, increased energy security and increased economic development. Prior to pursuing his

MBA, Hendrik worked in the office of then Anchorage Mayor Matt Claman.

LIZ DUNN is the Executive Director of the Seattle-based Preservation Green Lab, which works to

further the scientific understanding of the value of our existing building stock, develop and

promote strategic policies for integrating the reuse and retrofitting of older and historic buildingsinto city and state sustainability efforts, and provide best practices for retrofitting older and

historic buildings. Liz is also the principal of Dunn & Hobbes LLC, a Seattle-based developer of

urban adaptive reuse projects.

LINDSEY GAEL is the Research Fellow for the Preservation Green Lab. She conducts research on

building reuse, district-level energy solutions, density, and livability metrics. With a background in

sociology and planning, she is particularly interested in the social and environmental implications

of neighborhood character. Prior to joining the Green Lab, Lindsey worked for Smart Growth

America, where she supported national campaigns on vacancy, smart growth, and transportation.




GlossaryBIOMASS – organic matter, usually plant material, which is grown or gathered to generate electricityor produce heat, often through incineration. Grassy crops, wood and waste wood products, forestresidues (such as dead trees, branches and tree stumps), yard clippings, wood chips, and garbage arecommon elements used as biomass. A ‘BIOMASS FACILITY’processes biomass in order to create

energy or refine a product that can be used for energy. Facilities use a variety of conversiontechnologies that release the energy directly into heat or electricity, or convert it to another form, suchas liquid biofuel or combustible biogas. See also ‘renewable energy’.

COMPLETE STREETS – roadways that are designed and operated to enable safe, attractive, andcomfortable access and travel for all users. A 'Complete Street’ is designed in such a way thatpedestrians, bicyclists, motorists and public transport users of all ages and abilities are able to safelyand comfortably move along and across a street through use of sidewalks, bike lanes, crosswalks andother features. Proponents claim that Complete Streets also create a sense of place and improve socialinteraction, while generally improving adjacent land values.

DOMESTIC HOT WATER – water for interior commercial (non-industrial) and residential uses; includestap water and other kitchen, bathroom and laundry water demands.

ECO-DISTRICT – a neighborhood or district with a broad commitment to accelerate neighborhood-scale sustainability. Eco-districts are usually more innovative and committed to implementing

sustainability measures than surrounding traditional neighborhoods and usually have an organizingbody that guides sustainability goals and solutions.

EMISSIONS – SEE ‘GREENHOUSE GAS EMISSIONS’

GEOTHERMAL AND GROUND-SOURCE ENERGY – geothermal energy is power extracted from heatstored in the earth and involves drilling deep into the earth’s core to access consistent hightemperatures. It uses heat directly from geothermal sources like hot springs, geysers and volcanic hotspots. The term ‘geothermal’ is often used more broadly and somewhat inaccurately to include groundsource energy, where shallow geothermal wells or horizontal pipes are used to tap the ground’s stabletemperatures. In geothermal systems, much deeper wells are drilled into the earth in areas with tectonicactivity and other geothermal systems. See ‘Heat pumps’ for more explanation of the differencesbetween geothermal and ‘ground-source’ or ‘geo-exchange’ energy systems.

GREENHOUSE GAS (GHG) EMISSIONS – refers to the carbon, methane and other gases believed tobe detrimental to air quality and to have long-term negative effects on climate, that are typically

released when fossil fuels such as coal, natural gas or oil are combusted to create energy or heat. Thenational average emissions factor for electricity is 1.37 pounds CO2 per kilowatt-hour. In other words,every kilowatt-hour of electricity saved keeps 1.5 to 2 pounds of CO2 out of the atmosphere. For naturalgas: 117 pounds of CO2 per million BTU, or 0.12 pounds of CO2 per cubic foot of gas. Each therm (gasheat) of natural gas leads to 11.7 lbs. of carbon dioxide emissions.

HEAT PUMPS – work by tapping the differential between ambient air temperature and thetemperature of an adjacent source (such as ground or water) in order to provide heating or cooling. Forexample, a common use of a heat pump involves using the constant temperature of the ground toprovide a base temperature for delivering heat to buildings. This approach is called 'ground-source' or'geo-exchange' heating, and although not technically the same as ‘geothermal’ energy sources, whichtap the high-temperature of the earth's core where it is readily accessible, the three terms tend to beused interchangeably for any heat pump system that taps into the ground. Heat pumps can also beused to capture waste heat sources from nearby liquids such as sewer systems or lakes (for cooling).

HYDRONIC HEATING - SEE ‘RADIANT HEATING’.

MUNICIPAL BONDS – the two most common types of municipal bonds are general obligation bondsand revenue stream bonds. GENERAL OBLIGATION BONDS are a common type of municipal bondsecured by a government's pledge to use its taxing power to repay bond holders. Bond holders have aright to compel the borrowing government to exercise this authority to satisfy the obligation. Becauseproperty owners are usually reluctant to risk losing their holding due to unpaid property tax bills, creditrating agencies often consider a general obligation pledge to have very strong credit quality andfrequently assign them investment grade ratings. REVENUE BONDS are secured by project revenuessuch as tolls, charges or rents from the specific facility (e.g. road, bridge, airport, sewage treatmentplant, district energy plant) that is built with the proceeds of the bond, and are often issued by specialauthorities created for that particular project.




RADIANT HEATING – a system by which "radiant energy" is emitted from a heat source and travelsthrough a warm element to heat objects in a room rather than heating the air. In many cases radiantheating systems are more efficient than convection heating. Radiant heating systems come in a varietyof forms including under-floor heating systems (can be electric or hydronic), wall heating systems,radiant ceiling (overhead) panels, and overhead gas fired radiant heaters.

RENEWABLE ENERGY – typically refers to energy which comes from natural resources such as sun,wind, tides, rivers and geothermal heat, which are naturally replenished. Biomass is also generallyconsidered to be a ‘renewable’ fuel in the sense that new plant material can be re-grown to replacewhat has been harvested. It is also considered to be a low-emission fuel source to the extent thatplants, as they grow, theoretically capture and sequester an amount of carbon that is equivalent towhat is released into the atmosphere when they are combusted as fuel.

STUB LINE – refers in this case to a capped pipe (could also be wiring) that is brought in to a buildingand links the building to a larger utility system. A “stub” connection is not active but provides theinfrastructure and opportunity for the building to link into the larger utility system at a later point intime.

UTILITY – often referred to as a ‘public utility’, is typically an organization that builds, operates andmaintains an essential infrastructure service such as power, water, sewer or waste collection on adistrict- or city-wide basis. Utilities may be owned and operated by local government, by privatecompanies, or by community cooperatives. A ‘utility service model’ or ‘utility customer model’ is acustomer relationship whereby a customer pays for and receives such services from a utility provider(as opposed to providing it for themselves).




Acknowledgements:

The authors wish to thank the following people for their contributions and peer reviewfeedback:Robin Bostrom, Executive Director, Main Street West UnionJason Cooper, Senior Associate, Conservation Design ForumAndrea Dono, Program Manager of Research and Training, National Trust Main Street Center,

National Trust for Historic PreservationPatrice Frey, Deputy Director of Sustainability, National Trust for Historic PreservationJeff Geerts, Special Projects Manager, Iowa Department of Economic DevelopmentStan Gent, President/CEO, Seattle Steam Co.Thom Guzman, Director, Iowa Downtown Resource CenterBrian Kuhn, Electrical Designer, IBC Engineering Services Inc.Rhonda Sincavage, Associate Director Intergovernmental Affairs, National Trust for Historic

PreservationMary Thompson, Consultant and Trustee, National Trust for Historic PreservationBob Vagts, City Administrator, West Union Iowa

The work of the Preservation Green Lab would not be possible without the generoussupport of the following foundations and individuals:

The Kresge FoundationCharles Evans Hughes Memorial FoundationCity of SeattleRockefeller Brothers FundThe Bullitt FoundationThe Norcliffe FoundationJessie Ball duPont Fund4CultureDavid L. Klein, Jr. FoundationKevin DanielsJonathan RoseJohn GoodfellowKen Woodcock

About the Preservation Green Lab (PGL): Launched in March of 2009, the Seattle-basedPreservation Green Lab (PGL) was established with the mission to further the scientificunderstanding of the value of our existing building stock, develop and promote strategic

policies for integrating the reuse and retrofitting of older and historic buildings into city andstate sustainability efforts, and provide best practices in retrofitting older and historic

buildings.

About the National Trust for Historic Preservation: The National Trust for Historic

Preservation provides leadership, education, advocacy and resources to a national networkof people, organizations and local communities committed to saving places, connecting us

to our history and collectively shaping the future of America’s stories. For more informationvisit www.PreservationNation.org




APPENDIX 1: Additional Resources

Preservation Green Lab, National Trust for Historic Preservation

Center for Sustainable Business Practices, University of Oregon

The Role of District Energy in Greening Existing Neighborhoods: A Primer for Policy Makers and

Local Government Officials

Executive Summary | Full Paper | September 2010http://www.preservationnation.org/issues/sustainability/green-lab/policy-

innovation.html

Metropolis magazine, September 2010

Preservation and Sustainability: The District Approach, Julia Levitt

http://www.metropolismag.com/pov/20100922/preservation-and-sustainability-the-

district-approach

New Energy Cities, Climate Solutions

Energizing Cities: New Models for Driving Clean Energy Investment, May 2010

http://www.newenergycities.org/

International District Energy Association (IDEA) website: http://www.districtenergy.org/

Other District-Scale Sustainability Policy Efforts:

• Portland Sustainability Institute (PoSI) EcoDistrict initiative – a collaborative platform for

fostering innovation in the region, with a focus on creating business models for district-

scale utilities such as energy, water, storm water, etc. 25

• International Living Building Institute’s “Living Building 2.0” standard26 -- scale-jumping

from the original Living Building standard for individual buildings to one that recognizes

district-wide performance, generation, and infrastructure.

• Living City Block (Denver, CO and Washington, D.C.), and FortZed (Fort Collins, CO)

- energy district initiatives targeted at existing and historic neighborhoods that look to

achieve performance beyond the scale of individual buildings.27

• LEED ND - applies the green building rating framework on the neighborhood level.

• Washington State “Climate Benefit District” – a legislative proposal and framework for

districts to create their own taxation and financing mechanisms for infrastructure and

energy performance improvements.28

• Climate Solutions ‘New Energy Cities’ program – supports Pacific Northwest cities working

to pioneer new clean energy strategies such as distributed renewable energy, next-

generation energy infrastructure, and new financing opportunities. 29

25 http://www.pdxinstitute.org/index.php/ecodistricts

26 www.ilbi.org/the-standard/version-2-0

27 www.livingcityblock.org

28 http://mithun.com/knowledge/article/climate_benefit_district/

29 http://climatesolutions.org/solutions/initiatives/NES




APPENDIX 2: System Details West Union’s district energy system will use ground source energy to provide heating in the

winter and cooling in the summer. Geothermal wells will tap into the stable temperature (55

degrees Fahrenheit) of the earth’s crust and use the temperature differential combined with

efficient heat pumps in each building, to provide heating and cooling. Preliminary analysis

suggests that through ground source energy, building owners will save between 40 and 70

percent of their heating costs and 30 to 50 percent of cooling costs. The efficiency of the

system rests on utilizing the constant thermal temperature of the ground, rather than starting

with either much colder or hotter ambient air for heating or cooling.

The City-owned district will provide all of the shared components of the system including:

• Vertical wells with heat exchangers installed in the courtyard of the County Courthouse

(Council Chambers, City Hall, March 29, 2010).

• Distribution system involving underground piping throughout the Main Street District.

• A liquid medium in the piping to transfer the energy from the wells to customers (i.e., a

water and glycol mixture).

• Stubs to each building to provide the opportunity to connect to the system Meters and flow

monitoring equipment (depending on rate structure).

Each building would provide the following elements in order to connect to the system:

• One or more heat pumps (either water-to-water for hydronic systems or water-to-air for

forced air systems) suitable for extended range operation.

• Connection to the distribution system outside of the buildings, using the stub line provided.

• Access to the BTU meters, to measure energy consumption and facilitate rate-setting and

customer billing.

• Internal heating and cooling distribution infrastructure, whether it be new ductwork or new

hydronic (radiator or in-floor radiant) system, or retrofit of the existing HVAC system.

district energy in west union, iowa

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