Published in Energy
Vicinity Energy Inc. recently acquired the downtown Grand Rapids district energy system from Veolia North America. Vicinity Energy Inc. recently acquired the downtown Grand Rapids district energy system from Veolia North America. COURTESY PHOTO

New GR steam plant owner eyes expansion amid downtown growth

BY Sunday, July 05, 2020 02:19pm

GRAND RAPIDS — Since the late 1800s, downtown Grand Rapids has been equipped with a network of pipes that heat buildings with steam generated from a series of boilers across from Van Andel Arena.

Known as district energy, the concept is seeing a revitalization as a clean energy tool, particularly when the boilers that generate the steam are powered by renewable energy.

In Grand Rapids, officials with Vicinity Energy Inc. — which recently acquired the facility from Veolia North America — tout the efficiency rate of producing steam from the natural gas-powered boilers and potential capital cost savings for building owners in lieu of their own heating equipment.

Vicinity General Manager J.J. Loew, who took over the position last month, also sees room for growth by adding more customers to the system amid new downtown development. The operation serves roughly 130 downtown customers, and is one of Vicinity’s 18 networks in 11 cities.

“The continued expansion of downtown and where this infrastructure is relative to all of the developments going on makes it an opportunity for Grand Rapids to continue to leverage this energy efficient solution,” said Loew, who was previously a branch manager in Grand Rapids for KONE, a global elevator and escalator supplier. “We’ve got capacity to add a large number of buildings even with the system that’s in place now.”

Customers can use the steam directly or to power heat exchangers that heat water. Some customers also have steam-driven chillers that cool buildings, Loew said.

Vicinity Energy is effectively another utility option and can potentially eliminate or reduce the need for a natural gas connection.

The company also is considering adding a cooling component for customers, potentially increasing customers’ energy savings, and may add another plant “in some yet to be determined location.”

Since Vicinity Energy was created in January, “there’s an even deeper focus on what we can do for efficiency projects as well as capital expenditures and growing the infrastructure,” Loew said.

In late 2019, Antin Infrastructure Partners finalized its acquisition of Veolia’s U.S. district energy assets and renamed as Vicinity Energy. Veolia purchased the plant and infrastructure from Kent County in 2008.

Clean energy tool, cost savings

Grand Rapids is among dozens of U.S. cities, campuses and facilities that rely on a form of district energy for heating and cooling. The more than 100-year-old concept often was powered by coal power, the cheapest form of electricity for decades.

However, district energy managers increasingly see the potential for the technology to reduce cities’ carbon footprints, seeking alternative ways to power the steam generators.

Officials in St. Paul, Minn. are transitioning the city’s district energy plant off of coal this year to biomass. A developer in neighboring Minneapolis this year proposed a plan that would use aquifers to heat and cool some buildings as a way to reduce the city’s dependence on natural gas.

Loew said the “overall limited carbon footprint and overall efficiency … is one of the big drivers for more and more communities to be engaging with district energy.”

Vicinity Energy owns a waste-to-energy plant in Wisconsin, which Loew said is part of the company’s plan to seek options that can minimize its carbon footprint.

Cheri Holman, executive director of the U.S. Green Building Council of West Michigan, said the energy savings from steam versus natural gas can vary. Holman helps oversee the Grand Rapids 2030 District, which was announced in 2015 and aims to reduce energy usage in existing buildings by 50 percent over the next decade. Common approaches for doing so include efficient lighting and upgrading building controls.

“I wouldn’t jump to say (steam) is an energy reduction, but one thing I could point out about steam is it requires less of an upfront investment in equipment,” Holman said.

Sam Cummings, managing partner at CWD Real Estate Investment LLC, a major property owner in downtown Grand Rapids that rents office space at 50 Louis Street to Vicinity Energy, agrees on the capital cost savings.

“The benefit is clearly that the initial capital costs are significantly less when you’re hooking up to a community power plant versus having to install your own,” Cummings said.

However, he added that whether the steam network will deliver cost savings depends on the scenario. 

“Clearly, the independence” of controlling your own heating system onsite may be a drawback to joining the steam system. CWD owns properties both on and off the network.

“We are happy customers of theirs,” he said. 

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