FORT KENT, Maine — The local high school and university expect to see their fuel costs lowered by an estimated 80 percent after installing a biomass heating system with the help of a $2.6 million federal grant announced Friday.

The biomass system will heat a total of 11 buildings on the campuses of the University of Maine at Fort Kent and Fort Kent Community High School.

The U.S. Department of Agriculture’s Rural Development High Energy Cost grant is providing the bulk of the financing for the $3 million project, with UMFK and the SAD 27 school district putting up $383,164 in matching funds.

The heating system will be connected to the neighboring campuses by underground pipes through which water heated by the biomass furnace will travel. The infrastructure will provide space heating and domestic hot water for nine university buildings and two high school buildings, according to Virginia Manuel, state director of USDA Rural Development.

“I am thrilled that they received this funding,” she said Friday. “These high energy cost grants are few and far between and help reduce energy costs for residents of remote rural areas where the current cost of producing electricity is extremely high. The applicants have to prove that their average cost for energy exceeds 275 percent of the national average.”

Recipients use funds to improve energy generation, transmission or distribution facilities that serve communities where the grants are available to businesses, nonprofit entities, states, local governments and federally recognized Indian tribes.

Wilson Hess, president of UMFK, said Friday that the the heating plant will lower fuel costs by up to 80 percent, stimulate the local economy, enhance environmental sustainability and strengthen national security by reducing dependence on foreign oil. It also will reduce maintenance costs by displacing eight oil-fired boilers, with a single state-of-the-art boiler and help UMFK meet its climate neutrality obligations under the American College and University Presidents Climate Commitment.

This is the second time UMFK has received funds for a biomass project. Approximately six months ago, the college received a $500,000 grant from the state Department of Conservation to install another wood-to-energy system to heat its largest residence hall, The Lodge, and its athletics complex. That system will provide heat for 1.75 acres of floor space and is expected to save the campus nearly $1 million in the next decade.

“With this project, UMFK will complete the conversion of the entire campus from foreign oil to local biomass alternative fuel sources for heat and hot water needs,” Hess said Friday. “This will spur northern Maine’s growing wood pellet and biomass fuel by consuming over 1,300 tons of wood biomass annually. It will serve as a working environmental education example of local renewable fuel replacing imported nonrenewal oil, and it will dramatically reduce the university’s annual energy costs.”

Manuel also touted the use of locally sourced, environmentally friendly, climate-neutral, renewable biomass.

“Fort Kent is heavily forested all around, so the supply of wood chips should be plentiful,” she said.

Officials at UMFK said that wood chips are available at an “energy equivalent” price that is approximately 80 percent lower than the cost of heating oil. That would cut heating costs for the affected facilities and enable UMFK and SAD 27 to save $282,389 in the first year alone, based on a cost of $2.83 per gallon for fuel oil and $40 a ton for wood chips. The five-year savings would be nearly $1.8 million, assuming that oil prices increase 10 percent each year, officials estimated.

U.S. Sen. Susan Collins, who wrote to the USDA last September urging its support for the proposal, was excited to hear that UMFK and SAD 27 had received the grant.

“I am delighted to have helped secure this grant which will provide the funding to purchase and install a boiler to be used by the University of Maine and the neighboring school system buildings,” Collins said in a written statement issued Friday. “The savings generated from this project will be substantial. In this tough economic climate, projects like these are critical and create much needed rural jobs, as well as reduce state and local heating expenses.”

USDA Rural Development has area offices located in Presque Isle, Bangor, Lewiston and Scarborough, with a state office in Bangor.