HomeMy WebLinkAboutHoly Cross Biomass Preliminary Feasibility Assessment for Biomass Heating Systems 05-21-2012-BIO1
Biomass Energy
Holy Cross
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
5 / 2 1 / 2 0 1 2
Preliminary Feasibility
Assessment
This preliminary feasibility assessment considers the
potential for heating municipal buildings in Holy Cross with
wood.
Dalson Energy Inc. – Holy Cross Preliminary Feasibility Assessment 2
Table of Contents
Project Summary ........................................................................................................................................ 3
City: City of Holy Cross .............................................................................................................................. 4
Tribe: Holy Cross Village, federally-recognized......................................................................................... 4
Summary of Findings ................................................................................................................................ 4
Wood fuel supply in Holy Cross ............................................................................................................. 5
Biomass Energy Operations and Maintenance ............................................................................................. 6
Biomass Harvest Plan ................................................................................................................................ 6
Operations Plan......................................................................................................................................... 7
Community Facilities Information .......................................................................................................... 8
Holy Cross School ...................................................................................................................................... 8
Tribal Building ........................................................................................................................................... 8
Non-candidate Facilities ............................................................................................................................ 9
Recommended technology and fuel requirements ............................................................................. 10
Economic feasibility ................................................................................................................................. 12
Initial investment ................................................................................................................................. 12
School ................................................................................................................................................. 12
Holy Cross School ................................................................................................................................ 13
Tribal Hall ............................................................................................................................................ 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 ......................................................................................... 22
Wood fuel as a heating option .................................................................................................................... 22
The nature of wood fuels ........................................................................................................................ 22
Dalson Energy Inc. – Holy Cross Preliminary Feasibility Assessment 3
The basics of wood-fueled heating ........................................................................................................ 23
Available wood heating technology ...................................................................................................... 26
Cordwood Boilers ................................................................................................................................ 26
Bulk Fuel Boilers .................................................................................................................................. 26
District heat loops ................................................................................................................................ 27
Figure 1: Satellite Image of Holy Cross, AK. .......................................................................................... 5
Figure 2: Map of Corporate Land Ownership Surrounding Holy Cross, AK. .................................. 6
Figure 3: Illustration of Unmanaged Wood Harvesting Efforts .......................................................... 6
Figure 4: Illustration of Planned Wood Harvest by Harvest Area and Time Period. ...................... 7
Figure 5: Holy Cross School ....................................................................................................................... 7
Figure 6: Map of Holy Cross. Buildings considered for biomass heating. School (8), Washateria
(17), Clinic (8), Tribal Building (2). Other buildings of note include the Waterplant (18), Clinic
(21), Community Hall (15), and City Office (16). ................................................................................... 8
Figure 7: Aerial view of Holy Cross area forests ................................................................................. 10
Figure 8: Cordwood ..................................................................................................................................... 22
Figure 9: Ground wood chips used for mulch. ........................................................................................... 22
Figure 10: Wood briquettes, as a substitute for cordwood. Cross sections of these briquettes make
“wafers” which can be automatically handled in biomass boiler systems. ................................................ 22
Figure 11: wood pellets ............................................................................................................................... 22
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 Holy Cross.
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 22, 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 Holy
Cross.
This report was prepared by Thomas Deerfield, Wynne Auld, Jason Hoke, Louise
Deerfield, Tom Miles and Clare Doig.
Dalson Energy Inc. – Holy Cross Preliminary Feasibility Assessment 4
Contact and interviews with the following individuals in Holy Cross assisted in some of
the information gathering. Their contact information is as follows:
City: City of Holy Cross
P.O. Box 227
Holy Cross, AK 99602
Phone: 907-476-7139
Fax: 907-476-7141
E-mail: n/a
Tribe: Holy Cross Village, federally-recognized
P.O. Box 89, Holy Cross, AK 99602
Phone: 907-476-7124
Fax: 907-476-7132
E-mail: huge_paul007@hotmail.com
Summary of Findings
Currently, the Holy Cross School is excellent prospects for biomass heating. A
containerized HELE (high-efficiency low-emission) cordwood boiler is suggested as an
expedient way to develop a biomass heating plant in Holy Cross. Another prospect for
biomass heating is the Tribal Building.
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
Holy Cross
School
350,000 $298,000 $42,700 $20,800 14.3 $336,000 5%
Tribal Hall 170,000 $210,500 $15,100 $4,600 45 $75,000 -5%
The next step is to present the findings of this pre -feasibility study to IRHA and TCC.
As service providers to the Village of Holy Cross, they will help determine the next
steps forward.
Dalson Energy Inc. – Holy Cross Preliminary Feasibility Assessment 5
Wood fuel supply in Holy Cross
Holy Cross, with a population of 176 (2011 Labor Department Estimate) is located on
the Yukon River 420 miles southwest of Fairbanks. Deloycheet, Inc., the local Native
village corporation owns 138,240 acres surrounding the community, and Doyon,
Limited, the regional corporation owns adjacent 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. See Figure 1 and Figure 2.
Figure 1: Satellite Image of Holy Cross, AK.
Dalson Energy Inc. – Holy Cross Preliminary Feasibility Assessment 6
Figure 2: Map of Corporate Land Ownership Surrounding Holy Cross, AK.
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.
Figure 3: Illustration of Unmanaged Wood Harvesting Efforts
Dalson Energy Inc. – Holy Cross Preliminary Feasibility Assessment 7
Figure 5: Holy Cross School
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. Please see figure below.
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.
Figure 4: Illustration of Planned Wood Harvest by Harvest Area and Time Period.
Dalson Energy Inc. – Holy Cross Preliminary Feasibility Assessment 8
Figure 6: Map of Holy Cross. Buildings considered for biomass heating. School (8), Washateria (17), Clinic (8), Tribal
Building (2). Other buildings of note include the Waterplant (18), Clinic (21), Community Hall (15), and City Office (16).
Photo Credit: Alaska Division of Community and Regional Affairs
Community Facilities Information
The institutional heating
opportunities considered for this
report were the Holy Cross School,
Washateria, and Tribal building.
Also, a new Tribal Hall, which is
currently in the design phase, is also
considered. The Waterplant, Clinic,
Tribal Building, Community Hall,
and City Office were also given
preliminary consideration but were
not considered candidate facilities because of challenges discussed below.
Holy Cross School
The School building is approximately 8,750 sq. ft. and uses approximately 10,000
gallons of fuel oil #1 per year. Using an HDD model developed by the consultants, the
School uses a maximum of about 74 gallons on the coldest day of the year.
The current administration sees strong potential in wood heating if price and access can
be assured, and if strong Operations and Forest Management Plans can be developed.
Tribal Building
The Tribal Building is approximately 2,000 sq. ft. and uses approximately 3,000 gallons
of fuel oil #1 per year. The building is heated by a furnace and a toyostove. Using an
HDD model developed by the consultants, the Tribal Building uses a maximum of
about 22 gallons on the coldest day of the year.
Dalson Energy Inc. – Holy Cross Preliminary Feasibility Assessment 9
Non-candidate Facilities
The following buildings were note considered candidate buildings: Washateria,
Waterplant, Clinic, Community Hall, City Office, and new Tribal Hall. An explanation
follows.
The Washateria is approximately 1,100 sq. ft. building using approximately 700 gallons
of fuel oil #1 per year. This figure seems extremely low, but several sources supplied
this number. The low consumption may be due to being a very small Washateria, being
co-located with the water plant, and using an on-demand hot water heater. The
Washateria space is heated by a Toyostove Laser-73, while the Washateria water is
heated by a Toyotomi. Because of the very low fuel oil consumption of the Washateria,
a biomass project would probably not be economically feasible.
The Waterplant has been approved for a heat recovery project, which will recover waste
heat from the power plant. The system expects to save 6,000 gallons of fuel oil per year
and will be online in the Summer of 2012. The Water Plant’s existing heating system is
entirely separate from the Washateria’s heating system, although the two operations are
housed under one roof. Because the Water Plant has an alternative heating project, there
is no need to consider biomass heating.
The Clinic uses just 1,000 gallons per year. At this scale, it is unlikely that a biomass
heating system with a new boiler and storage facility would be economically feasible.
The Community Hall and City Office share a roofline. There is no central heating plant
in this building. The Clinic uses just 1,000 gallons per year of fuel oil. At this scale, it is
unlikely it is unlikely that a biomass heating system with a new boiler, storage facility,
and heat distribution system would be economically feasible. Instead, heating with a
wood stove is the recommended low cost fuel option. This may or may not be
operationally viable for the Community Hall and City Office.
A new Tribal Hall is in development, thanks to an HUD Grant and State funding. The
new building, which is currently being designed by CTA Architects, will be located
near the airport. The Tribal Hall will incorporate a biomass system. Because the Tribal
Hall already has biomass incorporated into its design, there is no need to consider the
potential for biomass heating here.
10
Building Name School Tribal Building
Annual Gallons (Fuel Oil #1) 10,000 3,000
Building Usage Year-round Year-round
Heat Transfer Mechanism Hydronic Hydronic +
Toyostoves
Heating infrastructure need replacement? No No
Recommended technology and fuel requirements
At the scale of the School, the recommended system design is a pre-fabricated, modular,
containerized wood biomass boiler unit.
Containerized cordwood boiler systems are sold by GARN, TARM USA and others. The
GarnPac has about 350,000 BTU output and is currently being employed in Thorne Bay.
This type of system design is recommended because it has demonstrated reliability,
uses an accessible fuel, cordwood, and it is a modular unit and therefore has lower
installation cost and financing advantages. The consultants recommend adding
providers of these units, Garn/Dectra, TARM, Greenwood, and similar system
manufacturers, to the list of potential equipment providers.
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 School. The fuel oil boiler
would be retained to meet peak
demand and as back up.
Figure 7: Aerial view of Holy Cross area forests
Dalson Energy Inc. – Holy Cross 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.
At the scale of the Tribal Hall, the recommended system is a smaller cordwood boiler,
Froling Turbo 3000, which is about half the size of the GarnPac unit. Like the GarnPac,
the Froling Turbo 3000 can be containerized by the manufacturer. However, for the
purposes of this study, an uncontainerized boiler and ancillary equipment was quoted
shipped to Anchorage, and assembled into a container in Alaska.
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.
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
Holy Cross School 10,000 1,250 63 1,551
Tribal Office 3,000 375 21 1,882
* Based on Dalson Energy Heating Degree Day data model
Dalson Energy Inc. – Holy Cross Preliminary Feasibility Assessment 12
Wood fuel purchases.
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 Holy Cross School has an estimated Capitalization Cost of $298,000.
The Tribal Office has an estimated Capitalization Cost of $210,500.
See charts below for cost estimates and sources. Full feasibility analysis and/or bids
would provide more detailed numbers.
3 Cash and accrual basis are two different accounting methods for project investment. Accrual accounting
amortizes project investment over the project lifetime (―lifecycle costs‖). This method results in monies to
reinvest in new equipment at the end of its lifetime. Cash basis is simply on the dollars spent to operate,
maintain, and finance the project.
8 The existing oil heat infrastructure will be retained for supplement heat and back-up. Therefore, the
fossil fuel system has ongoing O&M costs, albeit lower than if used as the primary heat source.
13
Holy Cross School
Holy Cross School
System Size (estimated net BTU/ hr)350,000
Capitalization costs Footnote
Capital equipment
GarnPac FOB Minnesota, qty. (1)100,000$ 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. – Holy Cross Preliminary Feasibility Assessment 14
Tribal Hall
Tribal Office
System Size (estimated net BTU/ hr)170,000
Capitalization costs Footnote
Capital equipment
Froling cordwood boiler + ancillary supplies 18,300$ A A TARMUsa
Boiler building/ conex 20,000$ B B Dalson energy estimate
Boiler installation 65,000$ C C Dalson Energy estimate
subtotal 103,300$
Commissioning and training 6,000$ E E Dalson Energy estimate
Project Management and Design
Engineering/ design 30,000$ F F Dalson Energy estimate
Permitting 2,000$ G G Dalson Energy estimate
Project Management 50,000$ H H Dalson Energy estimate
sub-total 191,300$
Contingency (10%)19,130$
Total 210,430$
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 Tribal Office Footnotes Footnotes
Total MMBTU per year 1,219 375 A A Estimates of annual fuel gallon useage, from year 2011
% load served by wood fuel 84%85%B B Dalson Energy HDD analysis
% load served by fuel oil 16%15%C C Dalson Energy HDD analysis
Total Cordwood per year (cords)63 18 D D Dalson Energy HDD analysis
Total Fuel Oil #1 per year (gal)1,551 282 E E Dalson Energy HDD analysis
Price per cord 325$ 325$ F F Survey
Price per gallon 6.25$ 6.25$ G G Survey
Biomass labor hours per year 600 300 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. Tribal Office boiler is half size of School.
Information from Alaskan Heat Technologies. Chemicals max at
$250/ yr. Gasket kit at $75. Refractory replaced every 15 years at
$500 -- $1,000.
Based on Information from Alaskan Heat Technologies. Entire
refractory replacement after 15 years of operation
16
Operating Costs & Annual Savings
The following analyses estimate the operating costs and annual savings. These financial summaries do not include any
financing costs but they do include amortization of project equipment, known as lifecycle costs. Lifecycle costs are
accrued over the project lifetime and, when the equipment has fulfilled its useful life, monies are available to purchase the
next system. Accrual-based accounting is standard practice.
Special attention should be given to designing an investment and operating structure th at suits the system owners and
operators. Third party financing, ownership, and O&M (Operations and Maintenance) services may be available. The
selected technology provider should provide the training services to equip any daily operator with the knowledge and
skills to safely and reliably operate the biomass system.
Savings are calculated on both a cash and accrual basis.
Biomass
Oil 62,500 Wood fuel 20,475$
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 9,694$
Labor 405$
Supplies 250$
Lifecycle 240$
Total Annual O&M Costs (accural basis)65,060$ Total Annual O&M Costs (accural basis)57,879$ 7,181$ Accrual
Total Annual O&M Costs (cash basis) 63,560$ Total Annual O&M Costs (cash basis) 42,734$ 20,826$ Cash
Annual Savings
O&M Costs Fuel Oil O&M Costs: Biomass + Fuel Oil (supplement)
Holy Cross School
Dalson Energy Inc. – Holy Cross Preliminary Feasibility Assessment 17
Biomass
Oil 18,750 Wood fuel 5,801$
Labor 810$ Labor 5,400$
Supplies 250$ Supplies 66$
Lifecycle 2,750$ Electricity 1,044$
Lifecycle 10,522$
Financing subject to feasibility
Fuel Oil (supplement)
Oil 1,764$
Labor 810$
Supplies 250$
Lifecycle 413$
Total Annual O&M Costs (accural basis)22,560$ Total Annual O&M Costs (accural basis)26,070$ (3,510)$ Accrual
Total Annual O&M Costs (cash basis) 19,810$ Total Annual O&M Costs (cash basis) 15,136$ 4,674$ Cash
O&M Costs Fuel Oil O&M Costs: Biomass + Fuel Oil (supplement)
Tribal Office
Annual Savings
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 Tribal Office
Initial Investment 298,100$ 210,430$
Cash savings, Year 1 20,826$ 4,674$
Simple Payback (Years)14.3 45.0
SIMPLE PAYBACK
5.50%
10
Initial investment 298,100$ Initial investment 210,430$
20,826$ 4,674$
School Tribal Office
Interest Rate per Month 0.46%0.46%
Number of Payments in project lifetime 120 120
Payment per month (2,484)$ (1,754)$
Future Value (cash value of new project)20,826$ 4,674$
Payments at end of period = 0 0 0
Present Value $216,869 $158,881
Equation Values
Future value (cash value of new project)
Assumptions
Present Value
School
Interest Rate
Term (years)
Future value (cash value of new project)
Tribal Office
19
Net Present Value
The prefeasibility Scope of Work does not allow building a full economic model with escalation rates of fuel, labor, and supp lies cost.
Net present value analysis is completed on the basis of the savings demonstrated in Year 1, generally inflating at 1.5% per year.
Internal Rate of Return
The prefeasibility Scope of Work does not allow building a full economic model with escalation rates of fuel, labor, and supp lies cost.
IRR analysis is completed on the basis of the savings demonstrated in this section.
Life cycle cost analysis (LCCA) for School
3.50%
1.50%
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 NPV
School 20,826$ 21,138$ 21,455$ 21,777$ 22,104$ 22,436$ 22,772$ 23,114$ 23,460$ 23,812$ 24,169$ 24,532$ 24,900$ 25,273$ 25,653$ 26,037$ 26,428$ 26,824$ 27,227$ 27,635$ $336,461
Tribal Office 4,674$ 4,744$ 4,815$ 4,888$ 4,961$ 5,035$ 5,111$ 5,188$ 5,265$ 5,344$ 5,425$ 5,506$ 5,588$ 5,672$ 5,757$ 5,844$ 5,931$ 6,020$ 6,111$ 6,202$ $75,514
Net Present
Value
Discount Rate
General Inflation Rate
1.50%
Year 0 1 2 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 IRR
School (298,100)$ 20,826$ 21,138$ 21,777$ 22,104$ 22,436$ 22,772$ 23,114$ 23,460$ 23,812$ 24,169$ 24,532$ 24,900$ 25,273$ 25,653$ 26,037$ 26,428$ 26,824$ 27,227$ 27,635$ 5%
Tribal Office (210,430)$ 4,674$ 4,744$ 4,888$ 4,961$ 5,035$ 5,111$ 5,188$ 5,265$ 5,344$ 5,425$ 5,506$ 5,588$ 5,672$ 5,757$ 5,844$ 5,931$ 6,020$ 6,111$ 6,202$ -5%
Internal Rate of Return General Inflation Rate
District:McGrath
School:Holy Cross School
Project: Biomass Boiler
Project No. NA
Study Period:20
Discount Rate: 3.50%
Life Cycle Costs of Project Alternatives
Holy Cross School
Dalson Energy Inc. – Holy Cross Preliminary Feasibility Assessment 20
Alternative #1 (low)Alternative #2 (high)
Initial Investment Cost 271,000$ 298,100$
O&M and Repair Cost 244,533$ 241,135$
Replacement Cost 50,257$ 75,385$
Residual Value 25,128$ 15,077$
Total Life Cycle Cost 590,918$ 629,697$
GSF of Project 29,916 29,916
Initial Cost/ GSF 9.06$ 9.96$
LCC/ GSF 19.75$ 21.05$
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 $244,533 15,136$ 15,363$ 15,593$ 15,827$ 16,065$ 16,306$ 16,550$ 16,798$ 17,050$ 17,306$ 17,566$ 17,829$ 18,097$ 18,368$ 18,644$ 18,923$ 19,207$ 19,495$ 19,788$ 20,085$
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 $241,135 15,136$ 15,136$ 15,363$ 15,593$ 15,827$ 16,065$ 16,306$ 16,550$ 16,798$ 17,050$ 17,306$ 17,566$ 17,829$ 18,097$ 18,368$ 18,644$ 18,923$ 19,207$ 19,495$ 19,788$
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 Holy Cross has some opportunity for biomass heating, but overall has few municipal
buildings of adequate scale and existing infrastructure to accommodate hydronic biomass heating.
However, very building burning 1,000 gallons of oil or less could be use a woodstove for radiant
heating from cordwood if space and other operational considerations permitted.
The Holy Cross School is the only building in Holy Cross with a significant heat load, an easily
adaptable existing heating system, and a strong financial profile. The Tribal Office also has an
opportunity for biomass heating but suffers from economies of scale.
Holy Cross has several existing energy initiatives—a waste heat recovery project in the Water Plant,
and a biomass boiler project in the new Tribal Hall. Because of existing plans, these buildings were
not considered in this study.
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, the School and the Tribal Building, 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.
Dalson Energy Inc. – Holy Cross Preliminary Feasibility Assessment 22
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 8: Cordwood
Figure 9: Ground wood chips
used for mulch.
Figure 10: Wood briquettes, as a
substitute for cordwood. Cross
sections of these briquettes make
“wafers” which can be automatically
handled in biomass boiler systems.
Figure 11: wood pellets
Dalson Energy Inc. – Holy Cross Preliminary Feasibility Assessment 23
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. – Holy Cross Preliminary Feasibility Assessment 24
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. – Holy Cross Preliminary Feasibility Assessment 25
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. – Holy Cross Preliminary Feasibility Assessment 26
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. – Holy Cross Preliminary Feasibility Assessment 27
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.