Office of Research and Development

National Risk Management Research Laboratory, Air Pollution Prevention and Control Division September 29, 2010

Rebecca Dodder and Dan Loughlin

OWB market assessment 

and scenario analysis 
Outline

1. General market trends

2. Engineering economic assessment

3. Scenario analysis with MARKAL

4. Device projections and spatial allocation

1
Part 1. General market trends

2
1. General market trends: 

Residential space heating

National

30%

11%

51%

10%

9%

55%

8%

2%

23%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1940 2000

New York

9%

52%

19%

33%

74%

5%

4% 1%

3%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1940 2000

National New York

1940 2000 1940 2000

Drivers?

-Convenience

* on demand

* limited storage

-Indoor air quality

-Infrastructure 

expansion

3
1. General market trends

EIA fuel use projections

4
1. General market trends

Fuel prices and heating demands

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

1998 2000 2002 2004 2006 2008 2010

Heating degree days

Year

Middle Atlantic Heating Degree Days

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1

1998 2000 2002 2004 2006 2008 2010

Energy Use (Quads)

Year

Middle Atlantic - Residential Fuel Use

Natural gas

Electricity

Oil

Wood
1. General market trends

Sales of OWBs

6

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

1998 2000 2002 2004 2006 2008 2010

Heating degree days

Year

Middle Atlantic Heating Degree Days
1. General market trends:

Competition with other fuels

Natural Gas

52% total

77% max

Wood

1% total

24% max

Fuel Oil

33% total

67% max

Electricity

9% total

32% max

7
1. General market trends: 

Take home messages

• The residential wood market share has diminished 

dramatically over the past 50 years

• Natural gas is the big winner. Where natural gas 

supplies are available, it typically is the fuel of choice

• Climate and energy security concerns are expected to 

level off the decline of residential wood use

• Residential wood is primarily used for secondary 

heating, but,

• Whole house heating with wood likely is increasing 

with the introduction and sale of OWBs

8
Part 2. Engineering economic 

assessment

9
2. Engineering economic assessment:

Approach

• Objective

– Improve understanding of competitiveness of OWBs relative to other technologies

– Gain insights for constructing OWB scenarios for MARKAL analysis

• Assumptions

– Comparing alternative technologies for 2500 sf home

– Heating demands from Syracuse heating cycle

– Device costs from market research

– Device efficiencies from project testing

– Fuel costs from EIA, market research

– Device lifetimes of 15 yrs

• Net present value calculation

Where: 

NPV is net present value of cost

CAP is the capital cost of the technology

ANN is the annual cost of the technology, in this case the cost of fuel

i is the interest or discount rate

n is the number of years that the annual payment is made

10
$0 

$20,000 

$40,000 

$60,000 

$80,000 

$100,000 

$120,000 

$140,000 

$- $50 $100 $150 $200 $250 $300 

Net Present Value of Cost

Wood Price ($/cord)

Sensitivity to Wood Price

Automated pellet boiler

Conventional OWB

Advanced OWB

Electric heat pump

Natural gas furnace

Fuel oil furnace

2. Engineering economic assessment: 

Sensitivity to wood price

11
$0 

$20,000 

$40,000 

$60,000 

$80,000 

$100,000 

$120,000 

$140,000 

$- $50 $100 $150 $200 $250 $300 

Net Present Value of Cost

Wood Price ($/cord)

Sensitivity to Wood Price

Automated pellet boiler

Conventional OWB

Advanced OWB

Electric heat pump

Natural gas furnace

Fuel oil furnace

"Free" wood 

supply

Typical 

green wood 

price

Range for 

seasoned 

wood price

$15/hr labor 

estimate w/o 

equipment 

cost

2. Engineering economic assessment:

Sensitivity to wood price, cont’d

12
$0 

$10,000 

$20,000 

$30,000 

$40,000 

$50,000 

$60,000 

$70,000 

$80,000 

$90,000 

0.20 0.30 0.40 0.50 0.60 0.70 0.80 0.90 

Net Present Value of Cost

OWB Efficiency

Sensitivity to OWB Operational Efficiency

Automated pellet boiler

Conventional OWB

Advanced OWB

Electric heat pump

Natural gas furnace

Fuel oil furnace

2. Engineering economic assessment:

Sensitivity to efficiency

13
$0 

$10,000 

$20,000 

$30,000 

$40,000 

$50,000 

$60,000 

$70,000 

$80,000 

$90,000 

0.20 0.30 0.40 0.50 0.60 0.70 0.80 0.90 

Net Present Value of Cost

OWB Efficiency

Sensitivity to OWB Operational Efficiency

Automated pellet boiler

Conventional OWB

Advanced OWB

Electric heat pump

Natural gas furnace

Fuel oil furnace

Efficiency rating for 

advanced OWB

Observed 

advanced OWB 

operational 

efficiency

2. Engineering economic assessment:

Sensitivity to efficiency, cont’d

14
$0 

$20,000 

$40,000 

$60,000 

$80,000 

$100,000 

$120,000 

$140,000 

$- $50 $100 $150 $200 $250 $300 

Net Present Value of Cost

Wood Price ($/cord)

Sensitivity to Wood Price

Automated pellet boiler

High efficiency indoor wood 

boiler

Conventional OWB

Advanced OWB

Electric heat pump

Natural gas furnace

Fuel oil furnace

"Free" wood 

supply

Typical 

green wood 

price

Range for 

seasoned 

wood price

$15/hr labor 

estimate w/o 

equipment 

cost

2. Engineering economic assessment:

Competition with high efficiency wood devices

15
2. Engineering economic assessment: 

Take home messages

• Natural gas is the least cost option for space heating

• OWBs are most competitive in areas:

–With low cost wood resources

–Where natural gas is not available (e.g., rural, low-density)

• OWBs can be cost-competitive with oil and electricity where 

wood resources are perceived to be “free,” although the 

perception of free and reality may be quite different

• The tested efficiencies of OWBs were much less than their 

rated efficiencies. This greatly impacted their competitiveness

• The hot water heating ability of OWBs does not greatly affect 

their competitiveness since water heating costs are typically 

much less than space heating

• Hot water storage may have the potential to improve 

efficiency of OWBs considerably (e.g., approaching the 

performance of the indoor high efficiency wood boiler)

• However, this analysis likely overstates OWB competitiveness 

since efficiencies will be even lower in shoulder seasons 16
Part 3. Scenario modeling with 

MARKAL

17
• Energy system optimization model

• Utilized 9-region model of US

–Focus on Mid-Atlantic Census Division (NY, NJ, PA)

–Modifications made for capturing a broader range of residential 

wood heating devices

–5-year model periods, 2000-2030 analyzed

• Wood heating units and wood supply

–Device cost and performance (efficiency, lifetime, etc)

–Wood supply divided into purchased and collected fuel wood 

• Scenario approach

–Difficult to capture actual wood heating market dynamics in an 

optimization framework

–Utilized “what if” scenarios for potential future market trends

–Assessed net impact on residential energy use & emissions

3. Scenario modeling with MARKAL: 

Model background

18
0

100

200

300

400

500

600

700

800

900

1000

2000 2005 2010 2015 2020 2025 2030

PJ useful energy

High Eff Pellet Boilers

High Eff Indoor Boilers

Advanced OWHH

Conventional OWHH

Newer Wood Stoves

Existing Wood Stoves

Electricity

Natural Gas

LPG

Kerosene

Heating Oil

3. Residential space heating market:

High OWHH “baseline” scenario

19
0

10

20

30

40

50

60

2005 2010 2015 2020 2025 2030

PJ useful energy

High Eff Pellet Boilers

High Eff Indoor Boilers

Advanced OWHH

Conventional OWHH

Newer Wood Stoves

Existing Wood Stoves

3. Wood space heating market:

High OWHH “baseline” scenario

20
3. Share of OWHH in total residential PM: 

High OWHH “baseline” scenario

Total residential PM emissions by fuel (ktonnes/yr) 

21

2005 2010 2015 2030

Wood 50.04 93.8% 58.87 95.1% 73.48 96.2% 56.26 96.1%

Heating Oil 2.91 5.5% 2.67 4.3% 2.57 3.4% 2.01 3.4%

Natural Gas 0.15 0.3% 0.14 0.2% 0.14 0.2% 0.14 0.2%

Kerosene 0.11 0.2% 0.10 0.2% 0.09 0.1% 0.06 0.1%

LPG 0.09 0.2% 0.08 0.1% 0.07 0.1% 0.05 0.1%

Electricity 0.07 0.1% 0.05 0.1% 0.05 0.1% 0.01 0.0%

TOTAL 53.37 61.91 76.40 58.53

OWHH 17.11 31.19 49.89 38.59

% of WOOD 34% 53% 68% 69%

% of TOTAL 32% 50% 65% 66%
3. Alternative scenarios for wood heat 

and OWHH market penetration

22

0

10

20

30

40

50

60

70

2005 2010 2015 2020 2025 2030

High Eff Pellet Boilers

High Eff Indoor Boilers

Advanced OWHH

Conventional OWHH

Newer Wood Stoves

Existing Wood Stoves

0

10

20

30

40

50

60

70

2005 2010 2015 2020 2025 2030

High Eff Pellet Boilers

High Eff Indoor Boilers

Advanced OWHH

Conventional OWHH

Newer Wood Stoves

Existing Wood Stoves

0

10

20

30

40

50

60

70

2005 2010 2015 2020 2025 2030

High Eff Pellet Boilers

High Eff Indoor Boilers

Advanced OWHH

Conventional OWHH

Newer Wood Stoves

Existing Wood Stoves

0

10

20

30

40

50

60

70

2005 2010 2015 2020 2025 2030

High Eff Pellet Boilers

High Eff Indoor Boilers

Advanced OWHH

Conventional OWHH

Newer Wood Stoves

Existing Wood Stoves
3. Total residential PM emissions

High OWHH “baseline” scenario

0

10

20

30

40

50

60

70

80

2005 2010 2015 2020 2025 2030

Emissions (ktonne/yr)

High Eff Pellet Boilers

High Eff Indoor Boilers

Advanced OWHH

Conventional OWHH

Newer Wood Stoves

Existing Wood Stoves

Electricity

Natural Gas

LPG

Kerosene

Heating Oil

23
0

10

20

30

40

50

60

70

80

2005 2010 2015 2020 2025 2030

Emissions (ktonne/yr)

High Eff Pellet Boilers

High Eff Indoor Boilers

Advanced OWHH

Conventional OWHH

Newer Wood Stoves

Existing Wood Stoves

Electricity

Natural Gas

LPG

Kerosene

Heating Oil

3. Total residential PM emissions

Intro of advanced units, slow phase out of older units

24
0

10

20

30

40

50

60

70

80

2005 2010 2015 2020 2025 2030

Emissions (ktonne/yr)

High Eff Pellet Boilers

High Eff Indoor Boilers

Advanced OWHH

Conventional OWHH

Newer Wood Stoves

Existing Wood Stoves

Electricity

Natural Gas

LPG

Kerosene

Heating Oil

3. Total residential PM emissions

Advanced units, with rapid phase out of older units

25
3. Total residential PM emissions

Rapid phase out + lower emissions on advanced units

0

10

20

30

40

50

60

70

80

2005 2010 2015 2020 2025 2030

Emissions (ktonne/yr)

High Eff Pellet Boilers

High Eff Indoor Boilers

Advanced OWHH

Conventional OWHH

Newer Wood Stoves

Existing Wood Stoves

Electricity

Natural Gas

LPG

Kerosene

Heating Oil

26
3. PM emissions trends

Increasing share of wood heat (shift from heating oil), with 

advanced OWHH and higher efficiency units introduced

0

10

20

30

40

50

60

70

80

2005 2010 2015 2020 2025 2030

Emissions (ktonne/yr)

High Eff Pellet Boilers

High Eff Indoor Boilers

Advanced OWHH

Conventional OWHH

Newer Wood Stoves

Existing Wood Stoves

Electricity

Natural Gas

LPG

Kerosene

Heating Oil

27
3. Comparison of PM emissions 

across set of scenarios

28

0

10

20

30

40

50

60

70

80

90

2005 2010 2015 2020 2025 2030

"Baseline"

Slow intro advanced

OWHH

High wood heat share

+ adv. Units

Rapid intro of

advanced

Rapid intro of

advanced + lower EF
• Efficiency of OWHHs is a critical factor

–Clear need for data on range of operational efficiencies

–To the extent that water storage can improve the efficiency of 

units, they are more competitive technologies

• The model generally “optimizes” toward wood stoves

–Substantially lower capital cost and “good” efficiencies relative 

to tested efficiencies of OWHHs

–However, does not capture important personal preferences for 

space heating characteristics

• Systems view of optimal use of “free wood”

–Renewable and possibly “free” but still a limited resource

• Water heating was included

–Indications are that only marginal reductions in water heating 

energy usage (and emissions) would occur (from the viewpoint 

of total residential energy demand)

3. Insights from MARKAL scenarios: 

market factors

29
• At the level of total residential PM emissions, type of fossil 

fuel displaced has very little impact

–Share of wood heat in total space heating is a key determinant 

of the total residential PM emissions profile

–Moreover, technology mix within the wood heat market a 

critical driver

• Rapid phase-out of the older OWHHs may help avoid high 

residential PM levels in the 2010-2015 period 

–Note that MARKAL is a 5-yr model period representation, and 

the year to year dynamics will be important

3. Insights from MARKAL scenarios: 

potential emissions trends

30
Part 4. Device projections and 

spatial allocation

31
4. County-level prospects for OWBs:

Factors influencing OWB penetration

Major factors:

–County character

• Fraction of housing units classed as exurban or rural

–Resource availability

• Historic fraction wood as primary fuel

–Market potential

• Historic fraction of oil as primary fuel

• Number of exurban and rural households

–Acceptance

• Existing bans or emission limits

32
4. County-level prospects for OWBs:

Confluence of factors

High

Medium

Low

Very Low

33
High OWB Potential Counties

County Fraction

Exurban 

+ Rural

Fraction 

Wood as 

Primary

Fraction 

Oil as 

Primary

# of HHs 

that are 

Exurban 

+ Rural

High 

Count in 

2015 

(77K total)

Note

Chenengo 0.66 0.16 0.49 15.5K 1,100

Clinton 0.54 0.12 0.44 18.0K 1,300

Columbia 0.65 0.07 0.60 19.0K 1,300

Delaware 0.74 0.17 0.53 20.9K 1,500

Essex 0.63 0.15 0.60 14.3K 1,000 Whiteface Mountain Base

Franklin 0.64 0.16 0.60 14.7K 1,100

Greene 0.73 0.08 0.69 19.3K 1.300

Hamilton 0.67 0.22 0.54 5.1K 400

Lewis 0.72 0.29 0.54 10.6K 800

Madison 0.54 0.10 0.37 15.3K 1,100

Orleans 0.57 0.08 0.34 9.5K 700

Otsego 0.62 0.14 0.54 17.3K 1,200

St. Lawrence 0.57 0.16 0.41 28.1K 2,000

Schoharie 0.76 0.15 0.58 11.8K 800

Schuyler 0.73 0.18 0.32 6.4K 500

Sullivan 0.63 0.07 0.67 28.4K 1,900

Tioga 0.60 0.13 0.44 12.7K 900

Ulster 0.57 0.06 0.63 47.4K 3,100

Washington 0.57 0.14 0.48 15.2K 1,100

How to do this

credibly?
4. County-level prospects for OWBs:

Using ICLUS land use as a surrogate

35

Apportion OWB emissions to grid cell based on

number of rural and exurban households 

ICLUS projections:

2000-2100

10-yr time-steps

Scenarios:

Baseline

A1, A2

B1, B2
• Very limited data with which to make device count and location 

projections

• Future sales are difficult to predict

–How is the potential market limited by...?

• siting considerations (setbacks, etc.)

• availability of “free” wood

• low valuation of time/labor

• public opinion (for and against) and how it is influenced by 

perception

• Most detailed county-level surveys were from around 2000, when 

OWB sales were much less than today

• Characterized primary heating fuel but not specific device

• Device projections are as much social science as they are 

engineering

4. County-level prospects for OWBs:

Take-home points

36
Additional background slides

37
0

10

20

30

40

50

60

70

80

90

2005 2010 2015 2020 2025 2030

PJ fuel input

High Eff Pellet Boilers

High Eff Indoor Boilers

Advanced OWHH

Conventional OWHH

Newer Wood Stoves

Existing Wood Stoves

u

0

10

20

30

40

50

60

70

80

2005 2010 2015 2020 2025 2030

PJ fuel input

High Eff Pellet Boilers

High Eff Indoor Boilers

Advanced OWHH

Conventional OWHH

Newer Wood Stoves

Existing Wood Stoves

v

0

10

20

30

40

50

60

70

80

90

2005 2010 2015 2020 2025 2030

PJ fuel input

High Eff Pellet Boilers

High Eff Indoor Boilers

Advanced OWHH

Conventional OWHH

Newer Wood Stoves

Existing Wood Stoves

w

0

10

20

30

40

50

60

70

80

90

2005 2010 2015 2020 2025 2030

PJ fuel input

High Eff Pellet Boilers

High Eff Indoor Boilers

Advanced OWHH

Conventional OWHH

Newer Wood Stoves

Existing Wood Stoves

x

0

20

40

60

80

100

120

140

2005 2010 2015 2020 2025 2030

PJ fuel input

High Eff Pellet Boilers

High Eff Indoor Boilers

Advanced OWHH

Conventional OWHH

Newer Wood Stoves

Existing Wood Stoves

y

0

20

40

60

80

100

120

140

2005 2010 2015 2020 2025 2030

PJ fuel input

High Eff Pellet Boilers

High Eff Indoor Boilers

Advanced OWHH

Conventional OWHH

Newer Wood Stoves

Existing Wood Stoves

z

0

10

20

30

40

50

60

70

80

2005 2010 2015 2020 2025 2030

PJ fuel input

High Eff Pellet Boilers

High Eff Indoor Boilers

Advanced OWHH

Conventional OWHH

Newer Wood Stoves

Existing Wood Stoves

ab

0

20

40

60

80

100

120

140

2005 2010 2015 2020 2025 2030

PJ fuel input

High Eff Pellet Boilers

High Eff Indoor Boilers

Advanced OWHH

Conventional OWHH

Newer Wood Stoves

Existing Wood Stoves

ac

0

20

40

60

80

100

120

140

2005 2010 2015 2020 2025 2030

PJ fuel input

High Eff Pellet Boilers

High Eff Indoor Boilers

Advanced OWHH

Conventional OWHH

Newer Wood Stoves

Existing Wood Stoves

38
t

0

10

20

30

40

50

60

70

80

90

2005 2010 2015 2020 2025 2030

Emissions (ktonne/yr)

High Eff Pellet Boilers

High Eff Indoor Boilers

Advanced OWHH

Conventional OWHH

Newer Wood Stoves

Existing Wood Stoves

Electricity

Natural Gas

LPG

Kerosene

Heating Oil

u

0

10

20

30

40

50

60

2005 2010 2015 2020 2025 2030

Emissions (ktonne/yr)

High Eff Pellet Boilers

High Eff Indoor Boilers

Advanced OWHH

Conventional OWHH

Newer Wood Stoves

Existing Wood Stoves

Electricity

Natural Gas

LPG

Kerosene

Heating Oil

v

0

10

20

30

40

50

60

2005 2010 2015 2020 2025 2030

Emissions (ktonne/yr)

High Eff Pellet Boilers

High Eff Indoor Boilers

Advanced OWHH

Conventional OWHH

Newer Wood Stoves

Existing Wood Stoves

Electricity

Natural Gas

LPG

Kerosene

Heating Oil

w

0

10

20

30

40

50

60

2005 2010 2015 2020 2025 2030

Emissions (ktonne/yr)

High Eff Pellet Boilers

High Eff Indoor Boilers

Advanced OWHH

Conventional OWHH

Newer Wood Stoves

Existing Wood Stoves

Electricity

Natural Gas

LPG

Kerosene

Heating Oil

x

0

10

20

30

40

50

60

70

2005 2010 2015 2020 2025 2030

Emissions (ktonne/yr)

High Eff Pellet Boilers

High Eff Indoor Boilers

Advanced OWHH

Conventional OWHH

Newer Wood Stoves

Existing Wood Stoves

Electricity

Natural Gas

LPG

Kerosene

Heating Oil

y

0

10

20

30

40

50

60

70

2005 2010 2015 2020 2025 2030

Emissions (ktonne/yr)

High Eff Pellet Boilers

High Eff Indoor Boilers

Advanced OWHH

Conventional OWHH

Newer Wood Stoves

Existing Wood Stoves

Electricity

Natural Gas

LPG

Kerosene

Heating Oil

z

0

10

20

30

40

50

60

2005 2010 2015 2020 2025 2030

Emissions (ktonne/yr)

High Eff Pellet Boilers

High Eff Indoor Boilers

Advanced OWHH

Conventional OWHH

Newer Wood Stoves

Existing Wood Stoves

Electricity

Natural Gas

LPG

Kerosene

Heating Oil

ab

0

10

20

30

40

50

60

2005 2010 2015 2020 2025 2030

Emissions (ktonne/yr)

High Eff Pellet Boilers

High Eff Indoor Boilers

Advanced OWHH

Conventional OWHH

Newer Wood Stoves

Existing Wood Stoves

Electricity

Natural Gas

LPG

Kerosene

Heating Oil

ac

0

10

20

30

40

50

60

2005 2010 2015 2020 2025 2030

Emissions (ktonne/yr)

High Eff Pellet Boilers

High Eff Indoor Boilers

Advanced OWHH

Conventional OWHH

Newer Wood Stoves

Existing Wood Stoves

Electricity

Natural Gas

LPG

Kerosene

Heating Oil

ad

39