Duluth's steam plant will be swapping out coal and natural gas for biofuel in the near future.

Earlier this week, the Duluth City Council authorized Duluth Energy Systems to enter into a five-year agreement with an Ottawa, Ontario-based company that produces a type of fuel oil it makes from wood waste.

Lee Torrens, president of Ensyn Fuels, said Duluth Energy Systems is his firm's first Minnesota customer, but he's optimistic it won't be the last. Initially, the fuel burned in Duluth will be produced at a plant in Renfrew, Ontario. However, Torrens said he hopes to eventually open a production facility in Minnesota, perhaps on the Iron Range or in Duluth, to serve a growing stateside market.

Ensyn also has customers for its renewable fuel oil product in Ohio, Maine and New Hampshire

In addition to selling to district energy systems, such as the one in Duluth, Torrens said Ensyn aims to do business with refineries.

Minnesota is an attractive setting for a number of reasons, Torrens said.

"Minnesota's got some refineries. It's got some district energy systems. It's got some wood. And it's got a business-friendly environment from our perspective. So it just looks like a great place for us," he said.

Torrens said Ensyn makes use of forest materials that often otherwise would go to waste.

"Our focus for wood is harvest residuals. It's essentially slash. So we're not going to impact the pulp business, because we don't want that wood, and we won't impact the lumber business, because we're not after that stuff. What we're really after is what's left after a typical harvest - typically tops, limbs and butts," he said.

Win-win

Not only will Ensyn help wean Duluth's steam plant from fossil fuels, it also is expected to save the facility and its customers money.

"It's really a win-win situation," said Terry Nanti, general manager of Duluth Energy Systems.

With the switch to a renewable product, the Duluth plant expects to cut its fuel costs by at least 10 percent.

But the conversion will take a while. The current plant is not equipped to handle a liquid fuel, so new burners, storage tanks, pipes and pumping equipment will need to be installed to feed its boilers. Nanti said the Minnesota Pollution Control Agency also will need to test and approve the facility's emissions using the new fuel, but based on the data he has seen from other operations, he's confident it will pass muster.

At best, Nanti expects the Duluth plant could begin using renewable fuel oil in about a year.

As part of a five-year biofuel purchase agreement, Ensyn has agreed to foot the $2 million cost of the conversion, including the modification of two more boilers so they also can operate on natural gas, allowing for greater flexibility.

When the work is completed, Nanti said, two of the plant's four boilers will be set up to run on renewable fuel oil, and all four boilers also will have the ability to burn coal or natural gas. So if prices fluctuate significantly, Duluth Energy Systems can opt for the lowest-cost alternative.

Nanti said the plant will need to supplement the biofuel with fossil fuels at times.

"We just won't be able to burn enough volume of it with two boilers to satisfy our needs on a 20-below January day. So we need the flexibility of coal or gas on the other boilers," he said.

Nanti said he expects the plant will burn just one-quarter of the coal it once did, when the modifications are complete. And if natural gas prices are low, he said the plant could go all year without coal.

Duluth Mayor Emily Larson credited the team at Ever-Green Energy, which manages the local steam plant, for making the connection with Ensyn.

"They are the ones helping to transition us into a district energy system," she said, referring to a pending project that will shift much of downtown Duluth from steam heat to a more-efficient closed-loop system relying on recirculating hot water.

"We have asked them to make this a priority, as managers of the plant that Duluth owns. Last year, we made the transition from 100 percent coal to using natural gas for a significant part of the year - probably about eight months of the year. And that simple move decreased our greenhouse gas emissions by 15 percent," Larson said.

"But of course, natural gas isn't a renewable, so we continued to look for other resources, and we're really excited that we found this, because we think this is something that: A) works currently to meet our steam plant needs and B) can be a tremendous tool when we get district energy," she said.

Larson also expressed interest in the prospect of bringing biofuel production to the region.

"It really speaks well to what I've always said about Duluth, which is that we're small enough to get things done and large enough to matter," she said.