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A Steamy Situation: Biogen Idec and the Cambridge Steam System

Posted by Devin Cole  October 20, 2011 05:17 PM

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In 2003, Biogen Idec were faced with a difficult decision for their Kendall Square campus in Cambridge – lying between Broadway, Galileo Galilei Way, Binney Street, and the pedestrian walkway in extension of Sixth Street. They needed a reliable supply of steam for their batch production, and their supplier, Cambridge Steam System, was using boilers in excess of 40 years old at the Kendall Plant, is visible from the Red Line crossing the Bridge, next to Broad Canal. What's more, they didn't have the capital to modernize - . Having lost a batch due to unreliable steam supply, and having negotiated unsatisfactorily for 18 months, Biogen Idec decided to look into other avenues, including running their own supply.

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For a drug manufacturer to get involved with combined heat and power cannot have seemed right, but unreliable steam supply must have seemed even less attractive. So from January 2007 on, Biogen Idec has run its own power plant that produces both electricity and steam, a so-called combined heat and power (CHP) plant.

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As mentioned, the drug company cared more about having control over the steam supply needed for the drug production than about the economics of running their own combined heat and power plant. But for other larger organizations and for the general citizen, the economics of that decision may be interesting.

According to SourceOne, an energy management and consulting firm, the homegrown electricity and steam has cost Biogen Idec $13.8m less than purchasing from the utilities would have done over the almost 5 years of its operation. Jack Griffin of SourceOne explains that the actual cost of the home grown products includes energy procurement, staffing, maintenance, grid-support costs, etc., and the hypothetical cost of supply from the utilities assumes current market place costs of steam and electricity.

SourceOne and ERM were both involved with the planning and installation of Biogen Idec's CHP plant. Such energy management and consulting firms will point to the very general point here: Many power plants, such as Pilgrims in Plymouth, MA, produce both electricity and steam, but the steam is simply let into the atmosphere or the sea, and that is a total waste! By being more efficient, you can save money, and of course in the process also reduce the carbon footprint. SourceOne estimate that Biogen Idec's decision has resulted in a reduction in carbon dioxide emission of 25,000 tonnes a year.

But is it always a better idea to have inhouse CHP? From an engineering perspective: no. Larger plants supplying towns or even conurbations yield economies of scale, and they can also use different sources of energy (wind, solar, biomass, and coal) whenever that source is cheapest. Usually, such a setup is called district heating, and you can see an argument for it by the International District Energy Association here: http://www.youtube.com/watch?v=H3ef6dz8BGg&NR=1 ).

Of course, in 2003 Biogen Idec had no recourse to such a best engineering solution, and they were forced to take matters into their own hands. Cambridge Steam, the supplier that failed Biogen Idec, was acquired in 2005 by Veolia Energy North America, who have since “invested in excess of $10 million to enhance the Cambridge system, replacing old boilers, converting the heavy oil-fired operation into a natural gas-fired steam heating plant, and upgrading the distribution system, now monitored by a state-of-the-art control room.” Today Biogen Idec thus may have a local supplier of steam serving their needs. But eight years ago, when it mattered, they did not.

The $13.8m mentioned above amounts to a monthly saving of $240K a month – not much in a large corporation, but every little bit counts! And it is interesting to speculate just how much more Biogen Idec would benefit if a good infrastructure such as district heating were available.

This blog is not written or edited by Boston.com or the Boston Globe.
The author is solely responsible for the content.

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