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 Union
one 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.

DISTRICT ENERGY IN WEST UNION, IA 1

Table 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

DISTRICT ENERGY IN WEST UNION, IA 2

Preface

About the 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 Matters for Older and Historic Buildings

Our outcome-based code work will help individual buildings achieve aggressive energy
saving 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 are
driving 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

DISTRICT ENERGY IN WEST UNION, IA 3

energy improvements to
individual buildings. District ABOUT DISTRICT ENERGY
energy represents an
District energy refers to neighborhood-scale utilities that
opportunity to invest in
provide heating, cooling and domestic hot water within
renewable energy solutions a defined service area, and is an old concept stemming
for buildings with limited back to our earliest urban energy systems in the
space for new energy-saving beginning of the 20th Century. Energy is generated at a
devices or for which there central location by burning fuels such as natural gas,
biomass or garbage, tapping ground source or
would be unacceptable
geothermal energy, or capturing waste heat from
architectural impacts. District industrial processes, sewers or power plants.
energy systems are emerging
District energy was common in the early days of the
as a key strategy for
electric power industry when waste heat was captured
communities that want to from small electricity plants located close to city centers.
optimize their investment in The benefits of district energy were overlooked during
massive long-term reductions the latter half of the 20th Century, when energy and land
in greenhouse gas emissions were inexpensive and development was sprawling rather
than compact. Now, in the context of increasing
of their existing building
urbanization, energy insecurity and climate change
stock. mitigation, communities are tapping the potential of
many sources of urban waste heat, as well as lower-
Buildings are part of a carbon combustible fuels, to produce thermal energy.
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 their
needs for other resource and
infrastructure such as
sustainable storm water
management and waste water Image Credit: IBC Engineering, Inc.
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 in
Greening Existing Neighborhoods: A Primer for Policy Makers and Local
Officials which explores these concepts in detail.3 This case study of
Government Officials,
West 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.

2
See 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

DISTRICT ENERGY IN WEST UNION, IA 4

West Union,
Union, Iowa
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 its
location, nestled in the Mississippi River Valley and book-ended by trout streams,
affording it strong agricultural and recreational opportunities.

Aerial view of West

Union’s historic
downtown, which runs
from U.S. Highway
High way 18
south on Vine Street to
Plum Street, bordered
on the east by Walnut
Street. Vine Street is the
cultural and, at least
historically, economic
hub of the city.
Photo Credit: IDED

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.

West Union’s downtown

buildings are
predominately two
stories and range
range from
4,500-
4,500 -8,500 square feet,
and are brick structures
with wood timber spans
and wood windows.
These historic buildings
have facades typical of
downtowns in small
towns across the county.
Photo Credit: Jerry
Wadian

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

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

DISTRICT ENERGY IN WEST UNION, IA 5

 Fostering a Collaborative 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
MAIN STREET IOWA state and federal funding for a district
energy project. These successes have
The national Main Street Program began in 1977
as a component of the National Trust for Historic helped West Union develop a solid vision of
Preservation. It was established to address the itself as a community committed to
disinvestment and decline of traditional
downtowns across the country and provide
neighborhood development, sustainability,
needed organization, technical support, and and innovation.
funding to help communities keep their Main
Street as the social, cultural, and economic heart
of the community. Since 1980, the program has
operated through the National Trust Main Street
Formation of a Main Street District
Center and launched more than 2,000 affiliated
Main Street programs in 43 states In 2005, a group of local stakeholders came
together to talk about options for improving
In 1985, the Iowa Legislature adopted a Main
Street program based on the National Trust for and revitalizing the downtown. The last
Historic Preservation’s Main Street approach. Main significant improvements took place in the
Street Iowa is a component of the Iowa
1970’s, from which time the downtown has
Department of Economic Development and aims
to improve the social and economic well-being of experienced a steady decline in population
Iowa's communities. 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 “West Union realizes that urban

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
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)

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

DISTRICT ENERGY IN WEST UNION, IA 6

 bicycle, and public transportation users.7 However, the Green Streets Initiative is not
only focused on transportation infrastructure, the initiative’s holistic approach also
addresses issues such as historic preservation and stormwater best practices.

As part of this initiative, the State chose two pilot cities, including West Union, to
demonstrate transformative changes that could serve as examples for all of Iowa.8
West Union was selected because of several strengths – existing involvement in the
state Main Street program, similarity to other small Iowa towns, success in launching
other community programs, and timing – as it was about to begin a master planning
process.9

In March 2008, work began with community members to create and refine a shared
vision for the downtown. IDED selected the Conservation Design Forum (CDF)10 to lead
a 2-1/2 day conceptual design meeting where community leaders and the general
public could engage in the process at an early stage. This initial work produced
principles for a sustainable community vision. It is important to note that these
conversations took place at a time when much of the state was experiencing massive
flooding. This brought sustainability planning to the forefront – especially for West
Union – a city without a stormwater system.

COMPLETE STREETS
A complete street accommodates
multiple forms of transportation
rather than focusing solely on
automotive transportation, and thus
provides safe bike and pedestrian
systems and ample transit
opportunities. This approach also
strives to establish a more human
scale that emphasizes the comfort
of pedestrians. Cities across the U.S.
are taking steps to create these
complete streets as one key element
of their neighborhood revitalization
efforts. (See completestreets.org)

Example of a ‘complete street’ in Hamburg, NY. One element of West Union’s approach to
implementing its vision is bringing a complete street orientation
ori entation to its Main Street program.

7
The National Complete Streets Coalition has played a central role in the defining the model and
implementing complete streets projects across the country: http://www.completestreets.org/
8
Interview with Jeff Geerts, Special Projects Manager, Iowa Department of Economic
Development on 8-31-10

9
http://www.preservationnation.org/main-street/main-street-news/story-of-the-
week/2010/green-streets-in-iowa.html

10
http://www.cdfinc.com/

DISTRICT ENERGY IN WEST UNION, IA 7

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 Map of West Union ground source wells.
heating and cooling system on ground source Photo Credit: Conservation Design Forum
energy, 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 snow
and ice melt system.

12
Analysis 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 is
technically a ground source system. See definition of ‘ground source energy’ in glossary for
further information.

DISTRICT ENERGY IN WEST UNION, IA 8

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 Installation of district energy
construction.16 The project has garnered national pipes to an existing building.
Photo Credit: District Energy
attention for its innovative design.
St. Paul

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 energy
systems 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

DISTRICT ENERGY IN WEST UNION, IA 9

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 the
individual 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

DISTRICT ENERGY FUNDING SOURCES

Iowa Department of Economic Development – Community Development $1,000,000

Block Grant Program

US Department of Energy – Energy Efficiency and Conservation Block $1,000,000

Grant Competitive Award

EPA - Climate Showcase Community $ 500,000

18
Interview with Jeff Geerts, Special Projects Manager, Iowa Department of Economic
Development on 8-31-10
19
Interview with Robin Bostrom, Executive Director, Fayette County Economic
Development/Main Street West Union on 8-26-10

DISTRICT ENERGY IN WEST UNION, IA 10

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 OWNER ENGAGEMENT IN ENERGY PLANNING

Perspective – Costs
and Benefits
Building owners will face a
unique 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, while
some 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
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 Guaranteed
Loan Program (REAP) funding.

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

21
Interview with Jeff Geerts, Special Projects Manager, Iowa Department of Economic
Development on 8-31-10

DISTRICT ENERGY IN WEST UNION, IA 11

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) FAYETTE COUNTY COURTHOUSE
unsightly ductwork and
The County Courthouse makes an interesting example of
chases. the decisions faced by building owners. An initial analysis
of the financial impact of converting to the district energy
While building owners will system showed the system would not pay for itself
directly. However, the decision is complex, as connecting
face some upfront costs, would provide the building with the ability to install a
the system will offer new, more comfortable central heating and cooling
significant benefits over system that would replace window air conditioner units
and a gas-fired heating system.
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 The Fayette County Courthouse has a unique
financial analysis for each history. It was first constructed in 1857 but burned
down 15 years later by an escaping prisoner. It was
building to help the City rebuilt in 1874 and again burned, this time in 1922.
and building owners The current building is a three-story grey stone
understand the upfront Beaux Arts design by J. G. Ralston, and in 1981 was
added to the National Register of Historic Places.
costs and operating Photo Credit: Jerry Wadian
savings that would result
through connection to the
district energy system.

Environmental Benefit
Impacts on Greenhouse 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-water
radiators are common examples.

DISTRICT ENERGY IN WEST UNION, IA 12

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

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%

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 can
be 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.
GHGS AND SOURCES OF ENERGY
Large savings in energy use in a system like West
Union’s do not necessarily translate to equally large
reductions in greenhouse gas emissions. This is
because, although ground source energy is free,
renewable and clean, the heat pumps needed as part of
such a system run on electricity. The electricity grid
serving the region is very carbon intensive because of
the large proportion of coal in the electric mix
(www.epa.gov/cleanenergy/energy-and-you/how-
clean.html). As a result, the energy savings from
replacing natural gas heating are partly counteracted
by more carbon intensive power for the ground-source
heat pumps. For cooling, the energy savings do have
large emissions savings because current cooling is
provided by electric air conditioning systems.

23
Estimate is based on assumption that 80% of buildings will connect to the system. Even if
fewer than 80% connect, the GHG emissions reductions will still be around 30% because the
fixed 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 emission
intensity from Iowa was in 2005, which was 1.90 lbs of CO2e per kWh, but significant recent
investments in wind energy have reduced that to what the authors estimate to be approximately
1.60 lbs of CO2 (EPA). Each therm of natural gas emits approximately 12 lbs of CO2e (US DOE).

DISTRICT ENERGY IN WEST UNION, IA 13

LEARNING FROM WEST UNION

West Union’s district energy story is still unfolding, but already highlights several important
components to the process of integrating district energy into existing neighborhoods:

1. Economic and environmental sustainability are not mutually exclusive. West Union’s
project came to fruition as the result of seeking out solutions that sustain and grow the
local economy and capitalize on the community’s historic character, while also reducing
negative impacts on the environment. Working to unite these two goals led to an
innovative district energy system that is now a model for the nation.
2. Community-led process is essential to gaining local buy-in, and allows for a visioning
process that is inclusive of all stakeholders, and therefore more likely to last. The
coordinated approach brought together varied funding sources, a wide range of expertise
that was freely shared, and a critical mass of early adopters to lead the way. The
innovative solutions were beyond what any one organization could have done alone, and
the City’s status as an innovator and a leader is an important aspect to celebrate and use
as a tool to promote future participation by more building owners.
3. Engaging building owners requires providing them with hands-on information and
analysis. Various policies for incentivizing connection must be explored in order to secure
a critical mass of customers for an initial system.
4. Coordinated planning for system resilience rather than for single-purpose infrastructure
projects must be the overall goal. Most of West Union’s planning and public process
happened during the huge floods in Iowa in 2008, where the lack of storm drains in the
District made this project especially important, and raised the issue of whole system
performance as opposed to just seeing it as a street project. The district energy system, in
addition to improving building energy performance, has the potential to contribute other
benefits to the community, including curbing sprawl by reinvesting in the downtown, and
improving accessibility.
5. Source fuel environmental impacts must be considered. Any community considering
district energy must carefully analyze the fuel source options, especially the mix of fuels
powering the electricity grid, which has the potential to complicate the greenhouse gas
emission picture for any system relying on heat pumps.
6. Catalytic opportunities must be seized. Catalysts come in many forms -- specific events
that galvanize building owners to think about new options, or people who offer substantial
leadership over the course of the project. In West Union, a strong community process
prepared key stakeholders to respond effectively when district energy emerged as a
potential opportunity in a broader downtown revitalization and infrastructure project, and
stimulus grant funding became available.
7. Replicating West Union’s success without grant funding is challenging, but not
impossible. While the returns on West Union’s 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 benefits, such as 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. From this perspective, the economics
of district energy can become very compelling to any community.
8. Historic communities can be energy innovation leaders. Owners of historic buildings have
unique reasons to pursue district energy, because smaller older buildings that want to
retain their architectural character have fewer on-site options for pursuing aggressive
energy and carbon reduction strategies. West Union was able to leverage the existence of
a Main Street District and other successful community programs to achieve early
successes with the district energy project.

DISTRICT ENERGY IN WEST UNION, IA 14

Looking Forward
nd
On October 22 , 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 the
majority 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 to
connect.

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 analyze
the 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 several
factors, including final capital and operating costs, customer revenue projections, and cash-
flow requirements. Potentially, the City could set rates lower than its operating costs, and
offer 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 in
downtown 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 Authors

TOM 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 a
consultant 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 buildings
into 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.

DISTRICT ENERGY IN WEST UNION, IA 15

Glossary
BIOMASS – organic matter, usually plant material, which is grown or gathered to generate electricity
or produce heat, often through incineration. Grassy crops, wood and waste wood products, forest
residues (such as dead trees, branches and tree stumps), yard clippings, wood chips, and garbage are
common 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 conversion
technologies that release the energy directly into heat or electricity, or convert it to another form, such
as liquid biofuel or combustible biogas. See also ‘renewable energy’.

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

DOMESTIC HOT WATER – water for interior commercial (non-industrial) and residential uses; includes
tap 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 organizing
body that guides sustainability goals and solutions.

EMISSIONS – SEE ‘GREENHOUSE GAS EMISSIONS’

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

GREENHOUSE GAS (GHG) EMISSIONS – refers to the carbon, methane and other gases believed to
be 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. The
national 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 natural
gas: 117 pounds of CO2 per million BTU, or 0.12 pounds of CO2 per cubic foot of gas. Each therm (gas
heat) of natural gas leads to 11.7 lbs. of carbon dioxide emissions.

HEAT PUMPS – work by tapping the differential between ambient air temperature and the
temperature of an adjacent source (such as ground or water) in order to provide heating or cooling. For
example, a common use of a heat pump involves using the constant temperature of the ground to
provide 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, which
tap the high-temperature of the earth's core where it is readily accessible, the three terms tend to be
used interchangeably for any heat pump system that taps into the ground. Heat pumps can also be
used 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 bonds
and revenue stream bonds. GENERAL OBLIGATION BONDS are a common type of municipal bond
secured by a government's pledge to use its taxing power to repay bond holders. Bond holders have a
right to compel the borrowing government to exercise this authority to satisfy the obligation. Because
property owners are usually reluctant to risk losing their holding due to unpaid property tax bills, credit
rating agencies often consider a general obligation pledge to have very strong credit quality and
frequently assign them investment grade ratings. REVENUE BONDS are secured by project revenues
such as tolls, charges or rents from the specific facility (e.g. road, bridge, airport, sewage treatment
plant, district energy plant) that is built with the proceeds of the bond, and are often issued by special
authorities created for that particular project.

DISTRICT ENERGY IN WEST UNION, IA 16

RADIANT HEATING – a system by which "radiant energy" is emitted from a heat source and travels
through a warm element to heat objects in a room rather than heating the air. In many cases radiant
heating systems are more efficient than convection heating. Radiant heating systems come in a variety
of 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 generally
considered to be a ‘renewable’ fuel in the sense that new plant material can be re-grown to replace
what has been harvested. It is also considered to be a low-emission fuel source to the extent that
plants, as they grow, theoretically capture and sequester an amount of carbon that is equivalent to
what 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 building
and links the building to a larger utility system. A “stub” connection is not active but provides the
infrastructure and opportunity for the building to link into the larger utility system at a later point in
time.

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

DISTRICT ENERGY IN WEST UNION, IA 17

Acknowledgements:
The authors wish to thank the following people for their contributions and peer review
feedback:
Robin Bostrom, Executive Director, Main Street West Union
Jason Cooper, Senior Associate, Conservation Design Forum
Andrea Dono, Program Manager of Research and Training, National Trust Main Street Center,
National Trust for Historic Preservation
Patrice Frey, Deputy Director of Sustainability, National Trust for Historic Preservation
Jeff Geerts, Special Projects Manager, Iowa Department of Economic Development
Stan Gent, President/CEO, Seattle Steam Co.
Thom Guzman, Director, Iowa Downtown Resource Center
Brian Kuhn, Electrical Designer, IBC Engineering Services Inc.
Rhonda Sincavage, Associate Director Intergovernmental Affairs, National Trust for Historic
Preservation
Mary Thompson, Consultant and Trustee, National Trust for Historic Preservation
Bob Vagts, City Administrator, West Union Iowa

The work of the Preservation Green Lab would not be possible without the generous
support of the following foundations and individuals:
The Kresge Foundation
Charles Evans Hughes Memorial Foundation
City of Seattle
Rockefeller Brothers Fund
The Bullitt Foundation
The Norcliffe Foundation
Jessie Ball duPont Fund
4Culture
David L. Klein, Jr. Foundation
Kevin Daniels
Jonathan Rose
John Goodfellow
Ken Woodcock

About the Preservation Green Lab (PGL): 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, develop and promote strategic
policies for integrating the reuse and retrofitting of older and historic buildings into city and
state 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 network
of 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 information
visit www.PreservationNation.org

DISTRICT ENERGY IN WEST UNION, IA 18

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 2010
http://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

DISTRICT ENERGY IN WEST UNION, IA 19

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, IA 20