A bird’s-eye view of Portland and Bend, Ore.; Bellevue and Renton, Wash.; and other fast-growing Northwest cities reveal large cranes — glaring signs of urban infill projects that could breathe new life into city centers.

As the infrastructure for streets, sidewalks, sewers, energy, transportation and other necessary arteries are sewn into the fabric of new neighborhoods, cities and developers are coming up with innovative public-private partnerships to meet the needs of future tenants. 

Fluctuating energy prices and a looming carbon market have led some cities, including Portland, to consider district heating and cooling systems. A district heating plant can benefit current and future tenants by providing higher efficiencies, more predictable energy costs and less pollution than localized boilers.

Such systems meet the needs of residential and commercial buildings by producing hot water, steam or chilled water at a central plant and then distributing the energy through underground pipes to buildings connected to the system. Individual buildings don’t need boilers, chillers or cooling towers, but can meet their heating, water heating and air-conditioning needs with the energy produced at the central plant.

Once used in customer buildings, the water is often returned to the central plant to be reheated and re-chilled and then re-circulated through the closed-loop piping system.

Portland-based Midtech Energy is partnering with St. Paul, Minn.-based Market Street Energy Co. to investigate the feasibility of constructing a district heating system that would utilize water from the Willamette River to heat and cool buildings in Portland’s North Pearl and South Waterfront urban renewal districts. Rather than building a closed-loop system, it would send water back to the Willamette River — which raises concerns from some Portland residents.

“People think we are going to thermally pollute the river,” says John Sorenson, president of Midtech Energy. “We can’t do that because DEQ [Department of Environmental Quality] regulations will absolutely prevent that from happening.”

Formed in 1998, Market Street Energy financed a biomass-based combined heat and power (CHP) plant for St. Paul District Energy, a nonprofit utility that sells power from St. Paul’s downtown district heating system. Completed in April 2003, it is the largest biomass-based CHP plant serving a district energy system in the U.S.

Sorenson says time is of the essence when it comes to laying the groundwork for a district heating system in Portland. It makes the most economic sense to install the underground pipes during the construction phase of a development, rather than as a retrofit — although he says retrofitting existing buildings to connect to a district heating system is not hard to do.

“For new construction, for the folks that are not in the ground yet, it cuts down on their initial costs of buildings because they don’t need to put in their own heating and cooling systems,” Sorenson says. “Over a period of time, all of those systems have to be maintained, upgraded and replaced. Those costs are avoided with district energy.”

The city of Portland’s Office of Sustainable Development (OSD) also plans to release a Request for Proposals for a feasibility study of multiple district heating and cooling technologies, according to OSD’s Tom Osdoba. The city plans to investigate many types of technologies, including heat recovery systems, super efficient natural gas boilers, biomass, co-generation, as well as piping water from the Willamette, Osdoba says. “We have concerns about whether or not it will be feasible to use river water,” he says.

Midtech Energy’s feasibility study is expected to be completed by early December, according to Sorenson. To put such a system into place, Midtech Energy would need to endure a one-and-a-half-year permitting phase, and the construction phase would take a minimum of one year, according to Sorenson. Midtech Energy would lay the pipes and create the groundwork for the system and then sell it to a nonprofit organization similar to St. Paul District Energy, which would then sell the energy to businesses in the area.

“The successful models that we’ve looked at use that model,” Sorenson says.

There are 10 independently owned district heating systems in the U.S., including the system owned by Seattle Steam. Seattle Steam, founded in 1893 as the Seattle Steam Heat and Power Co., has 18 miles of pipes under the streets of downtown Seattle. Its biggest customers are Swedish Medical Center, Harborview Medical Center and Virginia Mason Medical Center, which use the steam for heat and sterilization.

There are 15 municipally owned district heating systems in the U.S., including the Eugene Water & Electric Board in Eugene, Ore. The city of Klamath Falls, Ore., operates a district heating system that heats 14 government buildings, including the county museum, fire station, post office, city hall, library, courthouse and jail. The system has now expanded to include non-government buildings, such as churches and small businesses, for a total of around 26 buildings.

Midtech Energy is not the first company to promote central cooling and heating in the city of Portland. Real estate developer Gerding Edlen incorporated a central chilling plant in its Brewery Blocks redevelopment. Portland General Electric operates the district cooling system that serves all of the Brewery Blocks buildings.

Sorenson says a number of Portland developers, including Gerding Edlen, have told him if he builds it, they will connect to a district heating system.

“It’s a huge price to pay for this very large set of pipes in the ground,” Sorenson says. “But it’s a known cost. Gas and electric are unpredictable, but thermal is very predictable, and the contracts are usually set over a period of 20 years. So it’s the predictability that’s the inducement.”