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DOE contractor agrees to replace failed Biomass Steam Plant at ORNL

The U.S. Department of Energy has reached agreement with its
energy-savings contractor to replace the failed Biomass Steam Plant at
Oak Ridge National Laboratory with a new high-efficiency unit fueled by
natural gas.

Johnny Moore, DOE’s on-site manager at ORNL, said the
modified contract with Johnson Controls protects taxpayer interests and
should provide a long-term solution to the lab’s steam needs.

premise was we’ve got to have steam to deliver to the plant, and it was
our goal to come up with a solution that was of least cost to the
taxpayer,” Moore said in a telephone interview. He said he’s confident
that the decision to switch to a natural gas system will prove

DOE will contribute more than $5 million to Johnson
Controls’ contract account to help offset some of the costs incurred by
the contractor — estimated at about $20 million — due to the biomass
plant’s problems, lease of a temporary boiler, and the conversion to a
new system, Moore said. But the overall cost to DOE is largely
unaffected because the federal agency saved money by not paying
performance awards to Johnson Controls over the past year, he said.

Some parts of the existing plant, such as the modern control room, will not have to be replaced during the changeover.

2007, the Department of Energy signed a $90 million Energy Savings
Performance Contract with Johnson Controls, which was supposed to carry
out a number of “sustainability” projects to save money, use less energy
and be friendly to the environment. Under terms of the contract,
Johnson Controls would be responsible for financing and construction and
would be compensated from cost savings over a 20-year period.

contract’s big-ticket item was the Biomass Steam Plant, which replaced
the lab’s aged system that relied on fossil fuels to generate steam for
heat and other operations. The new steam-producing system, designed by
Nexterra, was fueled by wood chips, and it was greeted as a
technological advancement that would curb emissions and enhance the
energy lab’s green image. However, after its start-up in March 2012, the
steam plant only operated for about a year and a half. It was shut down
after system checks revealed that the walls of pipelines used to
transfer hot gases were thinning and posed a potential hazard.

Controls paid to install a temporary boiler system to provide steam at
ORNL while future options were discussed with DOE. According to Moore,
officials considered trying to fix the biomass plant but there were too
many uncertainties. The decision was made to go with a new
high-efficiency boiler that uses natural gas.

Moore said the new
system will actually save money on maintenance and operations, as well
as on fuel because natural gas is currently cheaper than wood chips. The
negatives are the additional cost of equipment and higher emissions,
although the greenhouse gases will still be lower than the old steam
plant the lab operated previously.

The DOE official said it will
take about a year to procure, install and test the new high-efficiency
system. In the meantime, the temporary boiler will continue to produce
steam for lab operations, he said.

The contractor provided a statement via email indicating it was satisfied with the newly negotiated agreement.

Controls continues to stand behind our commitments at Oak Ridge
National Laboratory. We worked out an agreement with the Department of
Energy to provide long-term plant operations at the lowest cost to
taxpayers that is energy efficient. Johnson Controls and the Department
of Energy have had a long-standing and mutually-beneficial business
relationship, and we are very pleased to continue to be a trusted

Moore declined to specify the long-term savings
associated with the new system, citing the variability of some costs —
such as the price of natural gas.

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