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It is swapping from a coal-fuelled heating system to woodchip-fired boilers and the 10-tonne boiler was lowered by crane into the school yesterday.
Principal David Smyth said the school would use the wood-chip boiler for heating and later this month it would install another to provide heating and hot water at its hostel.
The project was funded through grants from the Ministry of Education ($750,000) and $50,000 from the Energy Efficiency and Conservation Authority (EECA).
"In my view, as an educational facility, we needed to promote clean air and sustainability by using a non-fossil fuel and to lead by example," Mr Smyth said.
Alexandra's air pollution problem was well documented and he did not want the school to add to it by using coal.
"This particular facility, the wood-chip boiler, also has an educational component.
"We've got a computer package that records a series of readings of emissions so we can use that for teaching," he said.
Bioenergy heating company Living Energy installed the equipment and managing director, Rob Mallinson, of Auckland, said Dunstan's system was one of first such installations in the South Island.
"We're delighted to be helping schools make a contribution to a cleaner, greener future and of course, reducing the strain on Government finances by providing lower operating costs," Mr Mallinson said.
The exercise went smoothly and it took less than two hours to lift the boiler and a two-tonne buffer tank into place.
The low-cost energy provided by wood-chip meant that the capital cost of the system would be paid back within 10 years.