Too Interwoven to Fail?

Seattle Steam CEO Stan Gent sees the future of district-wide energy to be closely intertwined with sustainability.

Against the backdrop of luxury hotels, condos and high-rise
office buildings, the billowing plumes of smoke from Seattle Steam Co.’s
hulking industrial plant on Western Avenue seem out of place. But given its
purpose—to make steam and hot water for 200 downtown and First Hill
buildings—and the fact that heat is lost the farther it travels from where it’s
generated, the nearly 100-year-old facility couldn’t be in a better location.

From its plants in Pioneer Square on Post Avenue and the
main facility on Western, Seattle Steam delivers hot water and steam through an
18-mile network of high- and low-pressure pipes to customers such as the
Seattle Public Library’s main branch, the Four Seasons hotel, and the Olive 8
condominiums, as well as Swedish, Virginia Mason and Harborview medical
centers. This service eliminates the need for on-site air conditioning systems
and furnaces that must be maintained and take up valuable square footage.

Nor could timing be better to be in the steam business. Even
with the relatively cheap price of natural gas and petroleum relative to
periods in the recent past, building owners are looking to maximize their
energy dollars. With the possibility of state or federal taxes on carbon also
in the offing, energy consumers are bracing for even more belt tightening.

For Seattle Steam, a substantial part of that process began
in April 2008 when construction of a new biomass generator began to replace an
old natural gas-fired boiler. The $30 million unit, which runs primarily on
urban waste wood but can burn natural gas, oil and diesel as well, came online
last fall. Recognizing the inevitability of carbon pricing in the future, the
company is also trying to raise $75 million for  a natural gas-powered combined heat and power (CHP)
generator. The plan is to get an $18.75 million grant from the federal stimulus
program, and the company is in talks with an unnamed corporate partner to raise
the rest.

“It’s really trying to lower the cost of energy while
lowering the carbon,” explains CEO Stan Gent of his company’s $100 million
investments, which he says are smart business and environmental strategies.

Compared with natural gas, the primary fuel Seattle Steam
has used since it stopped burning coal in the 1950s, wood is cheaper and has a
smaller carbon footprint. The company estimates that converting to wood will
slash its carbon output by 50 percent, or about 45,000 metric tons per year.
According to

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