WINDSOR — An emerging green energy company has secured a $1 million state grant to generate an alternative fuel using wood chips.

The Massachusetts Department of Energy Resources this week awarded TTC Energy LLC the matching money toward the startup's $2.5 million investment in a facility to refine raw wood chips that can be burned in specialized heating systems.

TTC Energy founder Tim Crane, of Windsor, said the business will be located at the former sawmill on the Dalton Hardwood property just beyond the Dalton town line off Route 9 in Windsor.

"The building is ideal," he said. "It's big, and it's empty."

The money will be used to purchase equipment to process, handle and store dried wood chips, and two trucks able to pneumatically deliver the product.

Pending approval from Windsor town officials, TTC Energy should be up and running this fall, said Crane, who expects to eventually employ eight to 10 people when fully operational.

The $1 million grant was the single largest award from the nearly $2.9 million the state doled out to five Massachusetts businesses to pay for infrastructure projects that increase the availability of low-carbon, renewable heating fuels. The funding is through the Renewable Thermal Infrastructure Grant Program, an initiative focused on expanding the availability of renewable thermal technologies in the commonwealth.

"Supporting these technologies is an investment in our local economies, the sustainability of our energy future and expanding heating options to our residents and businesses," Gov. Charlie Baker said in a statement.

Grant recipients are required to match at least 50 percent of the project costs, which will result in about $6 million of infrastructure upgrades across the state.

Burning wood chips, a highly popular example of a biomass energy source, is controversial in some environmental circles, according to several websites. Opponents say biomass fuel isn't carbon neutral, as proponents claim, and could lead to deforestation.

Crane said land won't be clear-cut to produce the wood chips, which will come from unusable forest timber, chip waste at sawmills and mainly urban forests, such as tree-removal sites around power lines.

Wood chips are more advantageous than burning wood pellets, Crane said.

"Wood chips are used to make wood pellets; these are wood chips staying wood chips," he said. "They are more wood, less water content and combust more efficiently."

While burning wood chips still produces carbon, just as decaying trees in the forest do, Crane said it's better than the alternative of firing up a furnace with coal or oil.

Dick Lindsay can be reached at and 413-496-6233.