HomeMy WebLinkAboutNative Village of Anvik Biomass Energy 04-09-2012-BIO0
Biomass Energy
Native Village of Anvik
D a l s o n E n e r g y I n c .
3 0 8 G S t . S t e 3 0 3
A n c h o r a g e , A l a s k a 9 9 5 0 1
907-2 7 7 -7900
4 / 9 / 2 0 1 2
Preliminary Feasibility
Assessment
This preliminary feasibility assessment considers the
potential for heating municipal buildings in Anvik with
wood.
Dalson Energy Inc. – Anvik Preliminary Feasibility Assessment 1
Table of Contents
Project Summary ........................................................................................................................................ 2
City: City of Anvik ...................................................................................................................................... 3
Tribe: Anvik Village, federally-recognized................................................................................................. 3
Summary of Findings ................................................................................................................................ 4
Wood fuel supply in Anvik ...................................................................................................................... 5
Biomass Energy Operations and Maintenance ............................................................................................. 6
Biomass Harvest Plan ................................................................................................................................ 6
Operations Plan......................................................................................................................................... 7
Community Facilities Information .......................................................................................................... 7
City Building, Washateria, Clinic, and Tribal Hall Cluster .......................................................................... 7
Blackwell School ..................................................................................................................................... 9
Recommended technology and fuel requirements ............................................................................. 10
Economic feasibility ................................................................................................................................. 12
Initial investment ................................................................................................................................. 12
School ................................................................................................................................................. 12
Blackwell School .................................................................................................................................. 13
District ................................................................................................................................................. 14
Operating Assumptions ...................................................................................................................... 15
Operating Costs & Annual Savings ................................................................................................... 16
Financial metrics .................................................................................................................................. 18
Simple payback period .................................................................................................................... 18
Present Value .................................................................................................................................... 18
Net Present Value............................................................................................................................. 19
Internal Rate of Return .................................................................................................................... 19
Life cycle cost analysis (LCCA) for School ................................................................................... 19
Conclusion ................................................................................................................................................ 21
Supplement: Community Wood Heating Basics ......................................................................................... 23
Wood fuel as a heating option .................................................................................................................... 23
The nature of wood fuels ........................................................................................................................ 23
The basics of wood-fueled heating ........................................................................................................ 24
Dalson Energy Inc. – Anvik Preliminary Feasibility Assessment 2
Available wood heating technology ...................................................................................................... 27
Cordwood Boilers ................................................................................................................................ 27
Bulk Fuel Boilers .................................................................................................................................. 27
District heat loops ................................................................................................................................ 28
Figure 1: Satillite View of Anvik, AK. ..................................................................................................... 5
Figure 2: Map of Corporate Land Ownership Surrounding Anvik, AK. ........................................... 5
Figure 3: Illustration of Unmanaged Wood Harvesting Efforts .......................................................... 6
Figure 4: Illustration of Planned Wood Harvest by Harvest Area and Time Period. ...................... 6
Figure 5: Aerial view of Anvik, Alaska, at the Yukon River. ........................................................................... 7
Figure 6: Map of Anvik. Buildings considered for biomass heating. City Building (6), Washateria
(7), Clinic (8), Tribal Hall (9) and Blackwell School (16). ...................................................................... 8
Figure 7: Anvik City Office and Washateria .......................................................................................... 9
Figure 8: Anvik Tribal Hall ............................................................................................................................. 9
Figure 9: Tribal Hall ................................................................................................................................... 9
Figure 10: Cordwood ................................................................................................................................... 23
Figure 11: Ground wood chips used for mulch. .......................................................................................... 23
Figure 12: Wood briquettes, as a substitute for cordwood. Cross sections of these briquettes make
“wafers” which can be automatically handled in biomass boiler systems. ................................................ 23
Figure 13: wood pellets ............................................................................................................................... 23
Project Summary
Dalson Energy was contracted by the Interior Regional Housing Authority (IRHA) and
Tanana Chiefs Conference (TCC) to do a Pre-Feasibility Study (Pre-FS) for a Biomass
Heating System for the Native Village of Anvik.
The IRHA/TCC Scope of Work stated that a study should be done to assess the pre-
feasibility biomass heating for candidate facilities.
Dalson Energy biomass specialists Thomas Deerfield and Jason Hoke visited the
community on September 20, 2011 for the initial assessment. Deerfield and Hoke made
their assessment based on available data, interviews with local stakeholders and
authorities, observations, and research and review of previous studies done in Anvik.
This report was prepared by Thomas Deerfield, Wynne Auld, Jason Hoke, Louise
Deerfield, Tom Miles and Clare Doig.
Dalson Energy Inc. – Anvik Preliminary Feasibility Assessment 3
Contact and interviews with the following individuals in Anvik assisted in some of the
information gathering. Their contact information is as follows:
City: City of Anvik
P.O. Box 50
Anvik, AK 99558
Phone: 907-663-6328
Fax: 907-663-6321
E-mail:
Christine_Elswick@yahoo.com
Tribe: Anvik Village, federally-recognized
P.O. Box 10, Anvik, AK 99558
Phone: 907-663-6322
Fax: 907-663-6357
E-mail: anviktribal@hotmail.com
Anvik Tribal Council Environmental Office
Contact: Nathan Elswick, Environmental Coordinator
P.O. Box 8, Anvik, AK 99558
Phone: 907-663-6323
Fax: 907-663-6404
Email: atc.environmental@hotmail.com
Dalson Energy Inc. – Anvik Preliminary Feasibility Assessment 4
Summary of Findings
Currently, many of Anvik’s municipal buildings are excellent prospects for biomass
heating. Containerized HELE (high-efficiency low-emission) cordwood boilers are
suggested as an expedient way to develop biomass heating plants in Anvik. The two
identified projects are (1) the Blackwell School, and (2) a small District heating system
with the Washateria as its hub, also serving the City Building, Clinic, and Tribal Hall.
If both the School and District heating projects move forward, joint investment in chip
harvesting and handling equipment may be warranted. A wood chip boiler or multi-
fuel chip/ cordwood boiler could serve both projects.
The project’s success is critically dependent on a Biomass Harvest Plan and an Operations
Plan. These two project plans are discussed in this Pre-Feasibility Analysis. The
Consultant strongly recommends developing these Plans prior to project development.
Boiler
Size
(btu/hr)
Capital
Cost
Annual
Operations
Cost, Yr. 1
Annual
Cash
Savings,
Yr. 1
Simple
Payback,
Yrs.
NPV IRR
Blackwell
School
350,000 $298,000 $41,300 $29,600 10.0 $479,000 9%
District 350,000 $385,500 $44,500 $25,800 14.9 $417,000 4%
The next step is to present the findings of this pre -feasibility study to IRHA and TCC.
As service providers to the Village of Anvik, they will help determine the next steps
forward.
Dalson Energy Inc. – Anvik Preliminary Feasibility Assessment 5
Wood fuel supply in Anvik
Anvik , with a population of 79 (2011 Labor Department Estimate) is located on the
Anvik River, west of the Yukon River approximately 34 miles north of Holy Cross. The
local Native village corporation Deloy Ges, Inc. owns 92,160 acres surrounding the
community. Doyon, Limited, the regional corporation owns lands adjacent to Deloy
Ges, Inc. lands. No forest inventory information is available for this area, however from
satellite imagery, it is evident that surrounding areas support both spruce and
hardwood species of trees that is suitable for firewood or fuel for a biomass heating
system.
Figure 1: Satillite View of Anvik, AK.
Figure 2: Map of Corporate Land Ownership Surrounding Anvik, AK.
Dalson Energy Inc. – Anvik Preliminary Feasibility Assessment 6
Biomass Energy Operations and Maintenance
Biomass Harvest Plan
Wood cutting is a subsistence activity in almost all interior villages adjacent to forest
land. This subsistence resource must be carefully managed or biomass energy projects
may be detrimental to the Community.
If biomass harvests are unmanaged, the natural tendency is to harvest the most
accessible wood supply first, as illustrated below. The effect is increased scarcity and
rising harvest cost, and, consequently, biomass fuel costs, for both the project and
household woodcutters. This puts community members’ energy security and the
project’s success at risk.
The project’s success depends on a well-developed and executed Harvest Plan. The
Harvest Plan accounts for the biomass harvests over the project lifetime, at least 20
years. It may also designate areas for Personal Use (household wood cutting). The
Harvest Plan also describes how who is responsible for executing the Harvest Plan, and
how access will be managed. See figure 4 below.
Figure 3: Illustration of Unmanaged Wood Harvesting Efforts
Figure 4: Illustration of Planned Wood Harvest by Harvest Area and Time Period.
Dalson Energy Inc. – Anvik Preliminary Feasibility Assessment 7
Because the project’s success is critically dependent on a Biomass Harvest Plan, the
Consultant strongly recommends developing this Plan prior to project development.
Operations Plan
In many Villages biomass boiler projects will depend on collaboration among a variety
of entities, including contract wood cutters, the boiler technician, building owners and
operators, forest landowners, and various governmental entities.
A strategy for collecting biomass, paying wood suppliers, allocating costs among heat
users, and operating and maintaining the boiler and heat distribution system is crucial
to the project’s success. Persons responsible for each task must be identified.
Because the project’s success is critically dependent on an Operations Plan, the
Consultant strongly recommends developing this Plan prior to project development.
Community Facilities Information
The institutional heating opportunities considered for this report were the Blackwell
School, City building, Washateria, Clinic, and Tribal Building.
The City building, Washateria, and Clinic are clustered in an area approximately 200 ft.
x 60 ft. The Tribal Hall is across the road from the cluster, approximately 180 ft. away.
The Blackwell School is southeast of this area. Please see Figure 6.
City Building, Washateria, Clinic, and Tribal Hall Cluster
The City Hall building is approximately 1800 sq. ft. and uses approximately 900 gallons
of fuel oil #1 per year. Currently, the City Hall uses heat from the Washateria boiler.
The City Hall also has it’s own
designated heat system, a Wiel McClain
P-66HE Series 3 boiler. At the moment,
that boiler is mostly dormant because the
City Hall draws most of its heat from the
Washateria. The City Hall is occupied
during the work week, and the thermostat
is turned down to about 60 degrees
Farenheit on the weekends. However, at
the time of inspection, a control valve was
not functioning properly and the heat
system needed to be turned on/off
Figure 5: Aerial view of Anvik, Alaska, at the Yukon River.
Dalson Energy Inc. – Anvik Preliminary Feasibility Assessment 8
Figure 6: Map of Anvik. Buildings considered for biomass heating. City
Building (6), Washateria (7), Clinic (8), Tribal Hall (9) and Blackwell
School (16).
Photo Credit: Alaska Division of Community and Regional Affairs
manually.
The Washateria and water
treatment plant is an estimated
960 sq. ft. building outfitted
with two (2) 268,000 btu/hr
Peerless (JO-5PFI-WUP)
boilers. The system produces
hot water that is distributed via
radiant floor and baseboard
heaters. Additionally, a 700-
gallon Hurst Ace Buehuler
boiler (VG30045190) heats
domestic hot water. The
Washateria uses approximately
7,000 gallons of fuel oil #1 per
year. This figure includes oil
used to heat the City Hall. The
Washateria operates 7 days
per week, 10 hours per day.
Built in 1997, the Clinic is a
relatively new 1200 sq. ft. facility served by a small Burnham boiler and Togo heater.
The Clinic also distributes hydronic heat via baseboards, using approximately 900
gallons of fuel oil #1 per year. The Clinic operates 5 days per week.
The Tribal Hall is an approximately 3,800 sq. ft. building outfitted with one (1) Buderus
G115/5WS Fuel Oil boiler rated at 136,000 btu/hr. Additionally, the Tribal Hall uses a
Blaze King woodstove and two (2) Toyo Laser 73 heaters, each rated for a maximum for
40,000 btu/hr. The log building, which was completed in 2010, has partial in-floor
radiant heating and some baseboard heaters. However, additional zones are needed in
the entry way and main room to meet full heat demand from the central boiler. The
Tribal Hall operates 5 days per week and uses approximately 1,100 gallons of fuel oil #1
per year.
Together, the four buildings comprising this building cluster use approximately 10,000
gallons of fuel oil#1 per year. They are all partially or fully heated by hydronic heating
systems. Therefore, a small, biomass-powered district heating system could provide
heat to the central heating systems at all four buildings.
Dalson Energy Inc. – Anvik Preliminary Feasibility Assessment 9
Figure 8: Anvik Tribal Hall
Blackwell School
The Blackwell School, part of the Iditarod
Area School District, serves
approximately 19 K-12 students. The
School is heated by two (2) Weil McLain
boilers (PS 851-M120) rated at 400,000 btu
each. The boilers are redundant, with
only one operating at any given time. In
1998 the School was outfitted with a
domestic hot water heat (DHW)
exchanger to DHW with the central
boilers. All space heating and DHW is
accomplished with 9,000 – 10,000 gallons
per year.
During the Consultant’s site visit, there
were issues with the building
temperature controls. Some spaces,
particularly the gym, were unnecessarily
warm.
Building Name City
Building
Washateria Clinic Tribal Hall Blackwell
School
Annual Gallons (Fuel Oil #1) 7,000 900 1,100 9,500
Building Usage Year-round Year-round Year-round Year-round Year-round
Heat Transfer Mechanism Hydronic Hydronic Hydronic Hydronic Hydronic
Heating infrastructure need
replacement?
No No No No No
Each of these buildings may have separate domestic hot water heaters from the space
heating system. The School uses a heat exchanger from the space-heating boiler to heat
Figure 9: Tribal Hall
Figure 7: Anvik City Office and Washateria
Dalson Energy Inc. – Anvik Preliminary Feasibility Assessment 10
domestic hot water. The analysis that follows assumes that project development will
design the project so that the domestic hot water systems draw heat from the biomass
systems. However, further analysis should be undertaken to determine if this is actually
the best option. The volume and frequency of domestic hot water use, as well as
existing domestic hot water heating infrastructure, are the most important components
of that future analysis.
Recommended technology and fuel requirements
The recommended system design is a pre-fabricated, modular, containerized wood
biomass-fueled boiler unit. At a scale of the Blackwell School and District, the preferred
system is a cordwood boiler. However, if both the Blackwell School and District were to
install biomass heating systems, the preferred scale may well be one or two woodchip-
fired boilers with shared chip harvesting, processing, and handling infrastructure. The
Village already has a 966 loader, D-8 dozer, and dump trucks.
Containerized cordwood boiler systems are sold by GARN, TARM USA and others. The
GarnPac has about 350,000 BTU output and is currently being developed in Thorne Bay.
This type of system design is recommended because it has demonstrated reliability,
uses an accessible fuel, and it is a modular unit and therefore has lower installation cost,
as well as advantages to a granting or lending agency. The consultants recommend
adding providers of these units, Garn/Dectra, TARM, Greenwood, and similar system
manufacturers, to the list of potential vendors of equipment.
Containerized wood chip systems are sold by TARM USA, KOB, and others. TARM has
two boilers that are particularly applicable to interior heating projects: the Froling TX -
150 is a small-scale woodchip or pellet system that pre-dries chips prior to combustion.
The Froling Turbomatic is small-scale chip boiler that can burn cordwood in cases of
emergency. The Turbomatic is not currently distributed in the USA, but may be soon.
These units are also available as modularized containerized systems.
To complete this prefeasibility analysis, the consultants have chosen a representational
boiler, the GarnPac containerized unit. One (1) GarnPac boiler (or equivalent systems)
could service the Blackwell School. One (1) GarnPac boiler (or equivalent systems)
could service the City Hall, Washateria, Clinic, and Tribal Hall. The existing Fuel Oil
systems would be retained to meet peak demand and as back-up in every project
building.
Dalson Energy Inc. – Anvik Preliminary Feasibility Assessment 11
Other communities operating HELE cordwood boilers of a similar size, such as Dot
Lake and Ionia, report 2 cordwood stokings per day and 0.125 – 0.5 FTE1 (Full-time
equivalent employee) per boiler.
Initial project development costs for a wood heating system costs may include:
Capital costs: boiler, hydronic pipe and other hardware, wood storage shelter,
fuel-handling equipment, shipping costs.
Engineering: storage design, plumbing integration, fuel-handling infrastructure.2
Permitting: no permits required. In lieu of permits, all regulations must be met.
Installation: Site work, installation, and integration into existing system.
Fuel storage: storage building, firewood chutes, or preparation of existing
storage room.
System building: (if required).
Ongoing operational costs may include:
Financing: Principal and interest payments from project debt, or profits from
project equity investment. In Village projects, financing costs likely do not apply.
Wood fuel purchases.
1 Nicholls, David. 2009. Wood energy in Alaska—case study evaluations of selected facilities. Gen. Tech. Rep. PNW-
GTR-793. Portland, OR: U.S. Department of Agriculture, Forest Service, Pacific Northwest Research Station. 33 p.
2 Not all projects require engineering design.
Fuel Consumption
Assumptions:
16.2 MMBTU/ Cord White Spruce
0.1250 MMBTU per gallon Oil #1
Annual
Gallons
Annual
MMBTU
Annual
Cords* for
Biomass/
Oil system
Annual Fuel Oil
gallons for Biomass/
Oil system
Blackwell School 10,000 1,250 67 1,244
District 9,000 1,125 66 1,212
City Hall
Washateria 875
Clinic 900 113
Tribal Office 1,100 138
* Based on Dalson Energy Heating Degree Day data model
7,000
Dalson Energy Inc. – Anvik Preliminary Feasibility Assessment 12
Amortization costs: capital equipment and other infrastructure.3 When projects
are grant financed, amortization does not apply.
Operations and Maintenance (O&M) labor.
Fossil fuel purchases and labor.4
Economic feasibility
Initial investment
School
The Blackwell School has an estimated Capitalization Cost of $298,000.
The District, including City Hall, Washateria, Clinic, and Tribal Office has an estimated
Capitalization Cost of $385,000.
See charts below for cost estimates and sources. Full feasibility analysis and/or bids
would provide more detailed numbers.
3 Cash and accrual basis are two different accounting methods for project investment. Accrual accounting
amortizes project investment over the project lifetime (―lifecycle costs‖). This method results in monies to
reinvest in new equipment at the end of its lifetime. Cash basis is simply on the dollars spent to operate,
maintain, and finance the project.
8 The existing oil heat infrastructure will be retained for supplement heat and back-up. Therefore, the
fossil fuel system has ongoing O&M costs, albeit lower than if used as the primary heat source.
13
Blackwell School
Blackwell School
System Size (estimated net BTU/ hr)350,000
Capitalization costs Footnote
Capital equipment
GarnPac FOB Minnesota, qty. (1)100,000$ A A Dectra Corp estimate
Freight 15,000$ B B Crowley & Lynden Transport estimates, 4/17/12
Boiler Integration 50,000$ C C Dalson Energy estimate
subtotal 165,000$
Commissioning and training 4,000$ D D Alaskan Heat Technologies estimate
Project Management and Design
Engineering/ design 50,000$ E E Dalson Energy estimate
Permitting 2,000$ F F Dalson Energy estimate
Project Management 50,000$ G G Dalson Energy estimate
sub-total 271,000$
Contingency (10%)27,100$
Total 298,100$
Footnotes
Dalson Energy Inc. – Anvik Preliminary Feasibility Assessment 14
District
District
System Size (estimated net BTU/ hr)350,000
Capitalization costs Footnote
Capital equipment
GarnPac FOB Minnesota 100,000$ A A Dectra Corp estimate
Freight 15,000$ B B Crowley & Lynden Transport estimates 4/17/12
Boiler Integration 50,000$ C C Dalson Energy estimate
District heat loop 54,500$ D D RET Screen analysis.
subtotal 219,500$
Commissioning and training 4,000$ E E Alaskan Heat Technologies estimate
Project Management and Design
Engineering/ design 75,000$ F F Dalson Energy estimate
Permitting 2,000$ G G Dalson Energy estimate
Project Management 50,000$ H H Dalson Energy estimate
sub-total 350,500$
Contingency (10%)35,050$
Total 385,550$
Footnotes
15
Operating Assumptions
The following assumptions are embedded in all financial analyses in this assessment. They include crucial project
variables, such as the price of fuel oil, wood fuel, and labor operating costs. See chart below.
Assumptions for project buildings School District Footnotes Footnotes
Total MMBTU per year 1,250 1,125 A A Estimates of annual fuel gallon useage, from year 2011
% load served by wood fuel 87%87%B B Dalson Energy HDD analysis
% load served by fuel oil 13%13%C C Dalson Energy HDD analysis
Total Cordwood per year (cords)67 66 D D Dalson Energy HDD analysis
Total Fuel Oil #1 per year (gal)1,244 1,212 E E Dalson Energy HDD analysis
Price per cord 300$ 300$ F F Survey
Price per gallon 7$ 7$ G G Survey
Biomass labor hours per year 600 780 H H
Oil labor hours per year 45 45 I I Dalson Energy estimate
Price per hour of labor 18 18 J J Survey
Biomass preventative maintenance supplies cost 66$ 66$ K K
Oil nozzles and filters 250$ 250$ L L Dalson Energy estimate
Biomass boilers (lifetime operating hours)60,000 60,000 M M Dalson Energy estimate
Biomass boilers (operating hours per year)3,000 3,000
Biomass refractories (lifetime operating hours)45,000 45,000 N N
Oil boiler (lifetime operationg hours)60,000 60,000 O O Dalson Energy estimate
Electricity ($/kWh)0.58$ 0.58$ P P Estimated $0.63/kWh
Electricity Consumption (biomass system)1,800 1,800 Q Q
Amount financed
Term
Rate
Estimated 1 kWe consumption per hour for boiler fan when
operating. Estimated 1800 hours uptime for School and
District.
Subject to full feasibility study
Estimated 3 hours per day, 300 days per year per boiler.
Consistent with Dot Lake and Ionia Ecovillage cordwood
boiler labor requirements.
Information from Alaskan Heat Technologies. Chemicals max
at $250/ yr. Gasket kit at $75. Refractory replaced every 15
years at $500 -- $1,000.
Based on Information from Alaskan Heat Technologies. Entire
refractory replacement after 15 years of operation
16
Operating Costs & Annual Savings
The following analyses estimate the operating costs and annual savings. These financial summaries do not include any
financing costs but they do include amortization of project equipment, known as lifecycle costs. Lifecycle costs are
accrued over the project lifetime and, when the equipment has fulfilled its useful life, monies has been accounted for to
purchase the next system. Accrual-based accounting is standard practice.
Special attention should be given to designing an investment and operating structure that suits the system owners and
operators. Third party financing, ownership, and O&M (Operations and Maintenance) services may be available. The
selected technology provider should provide the training services to equip any daily operator with t he knowledge and
skills to safely and reliably operate the biomass system.
Savings are calculated on both a cash and accrual basis.
Biomass
Oil 70,000 Wood fuel 20,100$
Labor 810$ Labor 10,800$
Supplies 250$ Preventative maintenance supplies 66$
Lifecycle 1,500$ Electricity 1,044$
Lifecycle 14,905$
Financing subject to feasibility
Fuel Oil (supplement)
Oil 8,708$
Labor 405$
Supplies 250$
Lifecycle 195$
Total Annual O&M Costs (accural basis)72,560$ Total Annual O&M Costs (accural basis)56,473$ 16,087$ Accrual
Total Annual O&M Costs (cash basis) 71,060$ Total Annual O&M Costs (cash basis) 41,373$ 29,687$ Cash
Annual Savings
O&M Costs Fuel Oil O&M Costs: Biomass + Fuel Oil (supplement)
Blackwell School
Dalson Energy Inc. – Anvik Preliminary Feasibility Assessment 17
Biomass
Oil 69,300 Wood fuel 19,800$
Labor 810$ Labor 14,040$
Supplies 250$ Supplies 66$
Lifecycle 2,750$ Electricity 1,044$
Lifecycle 19,278$
Financing subject to feasibility
Fuel Oil (supplement)
Oil 8,484$
Labor 810$
Supplies 250$
Lifecycle 358$
Total Annual O&M Costs (accural basis)73,110$ Total Annual O&M Costs (accural basis)64,129$ 8,981$ Accrual
Total Annual O&M Costs (cash basis) 70,360$ Total Annual O&M Costs (cash basis) 44,494$ 25,866$ Cash
Annual Savings
O&M Costs Fuel Oil O&M Costs: Biomass + Fuel Oil (supplement)
District
18
Financial metrics
The following financial analyses are entirely reliant on the preceding assumptions and
O&M models. These same models can be refined to reflect more sophisticated financial
profiles if additional study is warranted.
Simple payback period
Present Value
The prefeasibility Scope of Work does not allow building a full economic model with
escalation rates of fuel, labor, and supplies cost. Present value analysis is completed on
the basis of the savings demonstrated in this section.
School District
Initial Investment 298,100$ 385,550$
Cash savings, Year 1 29,687$ 25,866$
Simple Payback (Years)10.0 14.9
SIMPLE PAYBACK
5.50%
10
Initial investment 298,100$ Initial investment 385,550$
29,687$ 25,866$
School District
Interest Rate per Month 0.46%0.46%
Number of Payments in project lifetime 120 120
Payment per month (2,484)$ (3,213)$
Future Value (cash value of new project)29,687$ 25,866$
Payments at end of period = 0 0 0
Present Value $211,751 $281,108
Equation Values
Future value (cash value of new project)
Assumptions
Present Value
School
Interest Rate
Term (years)
Future value (cash value of new project)
District
19
Net Present Value
The prefeasibility Scope of Work does not allow building a full economic model with escalation rates of fuel, labor, and supplies cost.
Net present value analysis is completed on the basis of the savings demonstrated in Year 1, generally inflating at 1.5% per year.
Internal Rate of Return
The prefeasibility Scope of Work does not allow building a full economic model with escalation rates of fuel, labor, and supp lies cost.
IRR analysis is completed on the basis of the savings demonstrated in this section.
Life cycle cost analysis (LCCA) for School
3.50%
1.50%
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 NPV
School 29,687$ 30,132$ 30,584$ 31,043$ 31,508$ 31,981$ 32,461$ 32,948$ 33,442$ 33,944$ 34,453$ 34,969$ 35,494$ 36,026$ 36,567$ 37,115$ 37,672$ 38,237$ 38,811$ 39,393$ $479,614
District 25,866$ 26,254$ 26,648$ 27,047$ 27,453$ 27,865$ 28,283$ 28,707$ 29,138$ 29,575$ 30,018$ 30,469$ 30,926$ 31,389$ 31,860$ 32,338$ 32,823$ 33,316$ 33,815$ 34,323$ $417,883
Discount Rate
General Inflation Rate
Net Present
Value
1.50%
Year 0 1 2 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 IRR
School (298,100)$ 29,687$ 30,132$ 31,043$ 31,508$ 31,981$ 32,461$ 32,948$ 33,442$ 33,944$ 34,453$ 34,969$ 35,494$ 36,026$ 36,567$ 37,115$ 37,672$ 38,237$ 38,811$ 39,393$ 9%
District (385,550)$ 25,866$ 26,254$ 27,047$ 27,453$ 27,865$ 28,283$ 28,707$ 29,138$ 29,575$ 30,018$ 30,469$ 30,926$ 31,389$ 31,860$ 32,338$ 32,823$ 33,316$ 33,815$ 34,323$ 4%
General Inflation RateInternal Rate of Return
District:Iditarod
School:Kuskokwim School
Project: Biomass Boiler
Project No. NA
Study Period:20
Discount Rate: 3.50%
Life Cycle Costs of Project Alternatives
Blackwell School
Dalson Energy Inc. – Anvik Preliminary Feasibility Assessment 20
Alternative #1 (low)Alternative #2 (high)
Initial Investment Cost 271,000$ 298,100$
O&M and Repair Cost 718,842$ 708,854$
Replacement Cost 50,257$ 75,385$
Residual Value 25,128$ 15,077$
Total Life Cycle Cost 1,065,226$ 1,097,415$
GSF of Project 29,916 29,916
Initial Cost/ GSF 9.06$ 9.96$
LCC/ GSF 35.61$ 36.68$
YEAR 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Discount Rate 3.50%
Gen'l Inflation for O&M 1.50%
NPV
O&M $718,842 44,494$ 45,162$ 45,839$ 46,527$ 47,225$ 47,933$ 48,652$ 49,382$ 50,122$ 50,874$ 51,637$ 52,412$ 53,198$ 53,996$ 54,806$ 55,628$ 56,463$ 57,309$ 58,169$ 59,042$
Replacement $50,257 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 100,000
Residual $25,128 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 50,000
Discount Rate 3.50%
Gen'l Inflation for O&M 1.50%
NPV
O&M $708,854 44,494$ 44,494$ 45,162$ 45,839$ 46,527$ 47,225$ 47,933$ 48,652$ 49,382$ 50,122$ 50,874$ 51,637$ 52,412$ 53,198$ 53,996$ 54,806$ 55,628$ 56,463$ 57,309$ 58,169$
Replacement $75,385 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 150,000
Residual $15,077 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 30,000
Alt. 1
Alt 2
21
Conclusion
The village of Anvik has significant opportunities for biomass heating, owing to the high cost of fuel
oil, accessible cordwood supply, and existing institutional heat loads that could be adequately served
by one or more biomass boilers.
Cordwood is an accessible and sustainable biomass supply in the Village so long as a Biomass
Harvest Plan is appropriately developed and executed. Because the project’s success is critically
dependent on a Biomass Harvest Plan, the Consultant strongly recommends developing this Plan prior
to project development. Additionally, because the project’s success is critically dependent on an
Operations Plan, the Consultant strongly recommends developing this Plan prior to project
development.
The two projects examined in this pre-feasibility analysis, a small district heat loop and the School,
both show positive NPV and cash savings, which suggests that development may be warranted.
However, the School is most easily adaptable to the biomass system and serves as the single largest
heat load, in addition to representing the most attractive financial profile.
If both the District and School project moved forward, it may well be worthwhile to consider a small
chip boiler and shared woodchip manufacturing equipment. This would alleviate increased pressure
on the cordwood supply. Technology that can burn multi-fuels, such as chips and cordwood, may be
preferred. It must be noted that a woodchip system would require additional hardware —a chipper
and woodchip drying and conveyance system.
Some work will have to be done to adapt the load centers with the hydronic heat loop, and these
adaptations have not been fully assessed. Additionally, hot water boilers will need to be connected to
the district heat loop.
Dalson Energy Inc. – Anvik Preliminary Feasibility Assessment 22
Consultant/Authors of this report:
Dalson Energy is a Renewable Energy Consulting and Technology Research firm based in
Anchorage. Dalson staff and partners have decades of experience in construction project
management, project development consulting and renewable energy technology research. Dalso n
teams with licensed engineers, architects and designers in Alaska, Canada and Lower 48.
Dalson Energy has worked with Alaska Energy Authority, Alaska Center for Energy & Power,
University of Alaska Fairbanks, Washington State CTED (Community Trade & Economic
Development) and California Energy Commission on biomass energy technology research.
Dalson’s President, Thomas Deerfield, has been involved in biomass energy RD&D since 2001,
winning grants and managing projects with NREL (National Renewable Energy Labs), USFS (US
Forest Service), and CEC (California Energy Commission).
Thomas managed the field-testing of biomass CHP systems, including the first grid-connected
biomass gasification CHP system in the US. (2007). Thomas coordinated the design and creation of
the first prototype Biomass ―Boiler in a Box‖ in Alaska, in 2010. That Garn -based system is now
deployed in Elim, in the Bering Sea region.
Thomas founded Shasta Energy Group (SEG), a 501c3 nonprofit, and managed wind energy research,
biomass energy feasibility studies, energy efficiency for buildings, and hydronic heating system
research design and development (RD&D). He also initiated a rural economic development think
tank and has engaged his writing skills to assist many other renewable energy project initiatives.
Wynne Auld is a Biomass Energy Specialist with Dalson Energy. She focuses on assessing and
developing woody biomass energy projects. Over the past few years, she has supported the business
development of integrated biomass energy campuses in Oregon and Idaho, especially related to their
energy initiatives. Her efforts have included marketing Campus biomass heating products to major
wholesalers and retail buyers, and planning and developing Campus sort yards and small-scale CHP.
Wynne also specializes in assisting commercial and municipal building managers in assessing the
feasibility of biomass heating, and implementing their projects. She works to ensure vibrant rural
communities through sustainable natural resource utilization.
Dalson Energy Inc. – Anvik Preliminary Feasibility Assessment 23
Supplement: Community Wood Heating Basics
Wood fuel as a heating option
When processed, handled, and combusted appropriately, wood fuels are
among the most cost -effective and reliable sources of heating fuel for
communities adjacent to forestland.
Compared to other heating energy fuels, wood fuels are characterized by
lower energy density and higher associated transportation and handling
costs. This low bulk density results in a shorter viable haul distance for
wood fuels compared to fossil fuels. However, this ―limit‖ also creates an
advantage for local communities to utilize locally-sourced wood fuels, while
simultaneously retaining local energy dollars and excercising local resource
management.
Most Interior villages are particularly vulnerable to high energy prices
because the region has over 13,500 heating degree days5 (HDD) per year –
160% of Anchorage’s HDDs, or 380% of Seattle’s HDDs. For many
communities, wood-fueled heating lowers fuel costs. For example,
cordwood sourced at $250 per cord is just 25% of the cost per MMBTU as
fuel oil #1 sourced at $7 per gallon. Besides the financial savings, local
communities benefit from the multiplier effect of circulating fuel money in
the community longer, more stable energy prices, job creation, and more
active forest management.
In all the Interior villages studied, the community’s wood supply and
demand are isolated from outside markets. Instead, the firewood market is
influenced by land ownership, existing forest management and ecological
conditions, local demand and supply, and the State of Alaska Energy
Assistance program.
The nature of wood fuels
Wood fuels are specified by moisture content, granulometry, energy density,
ash content, dirt and rocks, and fines and coarse particles. Each of these
characteristics affects the wood fuel’s handling characteristics, storage
requirements, and combustion process. Fuels are considered higher quality if they have lower
moisture, ash, dirt, and rock contents; consistent granulometry; and higher energy density.
5 Heating degree days are a metric designed to reflect the amount of energy needed to heat the
interior of a building. It is derived from measurements of outside temperature.
Figure 10: Cordwood
Figure 11: Ground wood chips
used for mulch.
Figure 12: Wood briquettes, as a
substitute for cordwood. Cross
sections of these briquettes make
“wafers” which can be automatically
handled in biomass boiler systems.
Figure 13: wood pellets
Dalson Energy Inc. – Anvik Preliminary Feasibility Assessment 24
Many types of fuel quality can be used in wood heating projects so long as the infrastructure
specifications match the fuel content characteristics. Typically, lower quality fuel will be the lowest
cost fuel, but it will require more expensive storage, handling, and combustion infrastructure, as well
as additional maintenance.
Projects in interior Alaska must be designed around the availability of wood fuels. Some fuels can be
manufactured on site, such as cordwood, woodchips, and briquettes. The economic feasibility of
manufacturing on site can be determined by a financial assessment of the project; generally speaking,
larger projects offer more flexibility in terms of owning and operating harvesting and manufacturing
equipment, such as a wood chipper, than smaller projects.
It is unlikely that interior communities will be able to manufacture pellets, from both a financial,
operational, and fuel sourcing perspective. However, some interior communities may be able to
manufacture bricks or firelogs made from pressed wood material. These products can substitute for
cordwood in woodstoves and boilers, while reducing supply pressure on larger diameter trees than
are generally preferred for cordwood. At their simplest, brick presses are operated by hand, but
require chipped, dry fuel.
The basics of wood-fueled heating
Biomass heating systems fit into two typical categories: first, stoves and fireplaces that heat space
directly through convection and radiation by burning cordwood or pellets; second, hydronic systems
where the boiler burns cordwood, woodchips or pellets to heat liquid that is distributed to radiant
piping, radiators or heat exchangers. The heated liquid is distributed out to users, then returned to
the heat source for re-heating.
Hydronic systems are appropriate for serving individual buildings, or multiple buildings with
insulated piping called heat loops. Systems that serv e multiple buildings are called district heating
loops. District heating is common in Europe, where larger boilers sometimes serve entire villages.
Biomass boilers are dependent on the compatibility of the chosen fuel, handling system, and
combustion system. General categories for typically available biomass fuel systems follow:
Batch load solid chunk boiler
Semi-automated or fully-automated chipped or ground biomass boilers
Fully-automated densified-fuel boiler, using pellets, bricks, or pucks
The system application is typically determined by size of heat load, available wood fuels, and
available maintenance personnel. General categories for heat load and wood fuel follow:
Loads < 1 MMBTU often use cordwood or pellet boilers
Loads > 1MMBTU often use pellet or woodchip boilers
Loads > 10MMTU often use hog-fuel (mixed ground wood)
Dalson Energy Inc. – Anvik Preliminary Feasibility Assessment 25
Each wood fuel type has different handling requirements and is associated with different emission
profiles. For example, industrial systems greater than 10 MMBTU often require additional particulate
and emission controls because of the combustion properties of hog-fuel.
One category of system that is particularly appropriate for remote rural communities is cordwood
boilers. Cordwood boilers are batch-loaded with seasoned cordwood. A significant advantage to
cordwood is that very little infrastructure is needed to manufacture or handle the heating fuel. At its
most basic, cordwood can be ―manufactured‖ with a chainsaw (or handsaw) and an ax, and residents
of rural communities are often accustomed to harvesting wood to heat their homes and shops.
Harvesting in most Interior villages is accomplished with ATV’s, river skiffs, sleds and dog teams,
and snow machines. Since cordwood systems are batch loaded by hand, they do not require
expensive automated material handling systems. Covered storage is required; such storage may be as
simple as an existing shed or a vented shipping container, rather than newly constructed storage
structures.
Challenges to cordwood include higher labor costs a ssociated with manual loading. Some LEHE (low
efficiency, high emission) technologies such as Outdoor Wood Boilers (OWBs) have been criticized
for their high emissions and excessive wood consumption.
Cordwood systems are typically less than 1 MMBTU. Howev er, if needed, some types of cordwood
boilers can be ―cascaded,‖ meaning multiple boilers can meet heat demand as a single unit. However,
above a certain heat load, automated material handling and larger combustion systems become
viable.
Woodchip systems can be automated and thereby less labor intensive. However, woodchip systems
have significantly higher capital costs than both cordwood and pellet systems. Additionally, a
reliable stream of woodchips typically depends on a regionally active forest product s manufacturing
base in the area, and active forest management. In most Interior communities, institutional heating
with woody biomass does not justify the purchase of log trucks, harvesting, handling, and
manufacturing equipment.
Pellet systems are the most automated systems, and have lower capital equipment costs than
woodchip systems. Lower costs are due to the smaller size of required infrastructure and simplified
handling and storage infrastructure. However, pellet fuel and other densified fuels tend to be more
expensive than other wood fuels, and require reliable access to pellet fuels.
For any system, the mass of feedstock required annually is determined by three parameters:
1) Building heat load
2) Net BTU content of the fuel
3) Efficiency of the boiler system
Building heat loads are determined by square footage, orientation and usage, as well as energy
efficiency factors such as insulation, moisture barriers and air leakage. Usage is particularly
Dalson Energy Inc. – Anvik Preliminary Feasibility Assessment 26
important because it influences peak demand. For ex ample, a community center which is used only a
few times per month for events, and otherwise kept at a storage temperature of 55 d. F, would have a
much different usage profile than a City Office which is fully occupied during the work day and
occasionally during evenings and weekends.
Building heat load analysis, including the building usage profile, is a particularly important part of
boiler right-sizing. A full feasibility analysis would conduct analyses that optimize the return on
investment (ROI) of systems. Typically, optimizing a biomass project’s ROI depends on a
supplementary heating system, such as an oil fired system, to meet peak demand and prevent short -
cycling of the biomass boiler. Full feasibility analyses may not be necessary for small pro jects,
especially for those employing cordwood boilers.
Biomass boiler efficiencies vary from 60% to 80%, depending on the manufacturer and the field
conditions of the equipment. The efficiency is strongly influenced by the BTU value and MC
(moisture content) of the fuel. Wood fuels with greater than 50% MC generally result in lower
efficiency systems, because some energy is used to drive off moisture from the fuel during the
combustion process. The reduction in energy output is mathematically equal; 50% MC generally
means 50% reduction in potential BTU value.
Like other combustion-based energy systems, woody biomass boilers produce emissions in the
combustion process. Compared to fossil fuels (coal, natural gas, and fuel oil), wood fuel emissions
are low in nitrogen oxides (NOx); carbon monoxide (CO, a product of incomplete combustion); sulfur
dioxide (SO2); and mercury (Hg). Because these compounds are all products of the forest and CO
would release naturally during the process of decay or wildfire, they generally do not concern
regulatory agencies. For emission control agencies, the real interest is particulate matter (PM)
emissions, which affect the air quality of human communities. Some wood systems are extremely
sophisticated, producing less than 0.06 lb/ MMBTU of PM.
Effective methods of PM control have been developed to remove most of the particles from the
exhaust air of wood combustion facilities. These include introduction of pre-heated secondary air,
highly controlled combustion, and PM collection devices.
Biomass boiler systems typically integrate a hot water storage tank, or buffer tank. The storage tank
prevents short cycling for automated boilers and improves efficiency and performance of batch -fired
systems, by allowing project buildings to draw on the boiler’s hot water long after the combustion
process. The GarnPac boiler design incorporates hot water storage into the boiler jacket itself, storing
approximately 2,200 gallons of hot water. Other boilers are typically installed with a separate hot
water storage tank.
Dalson Energy Inc. – Anvik Preliminary Feasibility Assessment 27
Available wood heating technology
This section will focus generally on manufacturers of the types of technology discussed previously.
Cordwood Boilers
High Efficiency Low Emission (HELE) cordwood boilers are designed to bur n cordwood fuel cleanly
and efficiently.
Cordwood used at the site will ideally be seasoned to 25% MC (moisture content) and meet the
dimensions specified by the chosen boiler. The actual amount of cordwood used would depend on
the buildings’ heat load profile, and the utilization of a fuel oil system as back up.
The following table lists three HELE cordwood boiler suppliers, all of which have units operating in
Alaska. Greenwood and TarmUSA, Inc. have a number of residential units operating in Alaska, an d
several GARN boilers, manufactured by Dectra Corporation, are used in Tanana, Kasilof, Dot Lake,
Thorne Bay and other locations to heat homes, Washaterias, and Community Buildings.
HELE Cordwood Boiler Suppliers
Vendor Btu/hr ratings Supplier
Tarm 100,000 to 198,000 Tarm USA
www.tarmusa.com
Greenwood 100,000 to 300,000 Greenwood
www.greenwoodusa.com
GARN 250,000 to 700,000 Dectra Corp.
www.dectra.net/garn
Note: These lists are representational of available systems, and are not inclusive
of all options.
Bulk Fuel Boilers
The term ―bulk fuel‖ refers to systems that utilize wood chips, pellets, pucks, or other loose
manufactured fuel. Numerous suppliers of these boilers exist. Since this report focuses on village-
scale heating, the following chart outlines manufacturers of chip and pellet fuel boilers < 1 MMBTU.
HELE Bulk Fuel Boiler Suppliers
Vendor Btu/hr ratings Supplier
Froling
35,800 to 200,000; up to 4 can be
cascaded as a single unit at
800,000 BTU
Tarm USA
www.tarmusa.com
KOB 512,000 – 1,800,000 BTU (PYROT
model)
Ventek Energy Systems Inc.
peter@ventekenergy.com
Dalson Energy Inc. – Anvik Preliminary Feasibility Assessment 28
Binder 34,000 BTU – 34 MMBTU BINDER USA
contact@binder-boiler.com
Note: These lists are representational of available systems, and are not inclusive
The following is a review of Community Facilities being considered for biomass heating. The
subsequent section will recommend a certain type of biomass heating technology, based on the
Facility information below.
District heat loops
District heat loops refers to a system for heating multiple buildings from a central power plant. The
heat is transported in a piping system to consumers in the form of hot water or steam.
These are the key factors that affect the cost of installing and operating a district heating system6:
Heat load density.
Distance between buildings. Shorter distances between buildings will allow use of smaller
diameter (less expensive) pipes and lesser pumping costs.
Permafrost. In the Interior, frozen soil could affect construction costs and project feasibility.
Aboveground insulated piping may be preferred to underground piping, such as the
cordwood system recently installed in Tanana, Alaska.
Piping materials used. Several types of tubing are available for supply and return water. Pre-
insulated PEX tubing may be the preferred piping material for its flexibility and oxygen
barrier.
District loop design. Water can be piped in one direction (i.e., one pipe enclosed) or two
directions (two pipes enclosed) for a given piping system. Design affects capital costs and
equality of heat distribution.
Other considerations. Pump size, thermal load (BTUs per hour), water temperature, and
electrical use are other variables.
For the purposes of this study, the consultants have chosen to estimate the costs of district heat loops
using the RET Screen, a unique decision support tool developed with the contribution of numerous
experts from government, industry, and academia. The software, provided free-of-charge, can be
used worldwide to evaluate the energy production and savings, costs, emission reductions, financial
viability and risk for various types of Renewable-energy and Energy-efficient Technologies (RETs),
including district heat loops from biomass.
6 Nicholls, David; Miles, Tom. 2009. Cordwood energy systems for community heating in Alaska—an
overview. Gen. Tech. Rep. PNW-GTR-783. Portland, OR: U.S. Department of Agriculture, Forest
Service, Pacific Northwest Research
Station. 17 p.