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HomeMy WebLinkAboutVillage of Kaltag Biomass Energy Preliminary Fesability Assessment 08-19-2012-BIO1 Dalson Energy Inc. 308 G St. Ste 303 Anchorage, Alaska 99501 907-277-7900 8/19/2012 Preliminary Feasibility Assessment This preliminary feasibility assessment considers the potential for heating community buildings in Kaltag with woody biomass from regional forests and river logs. Biomass Energy Native Village of Kaltag Dalson Energy, Inc. – Kaltag Preliminary Feasibility Assessment 2 Table of Contents Project Summary .................................................................................................................................................................. 3 Summary of Findings .......................................................................................................................................................... 5 Wood fuel supply in Kaltag ................................................................................................................................................ 6 Biomass Energy Operations and Maintenance ................................................................................................................ 7 Biomass Harvest Plan ...................................................................................................................................................... 7 Operations Plan ................................................................................................................................................................ 9 Community Facilities Information .................................................................................................................................... 9 Tribal Buildings ................................................................................................................................................................ 9 Tribal Building .............................................................................................................................................................. 9 City Buildings ................................................................................................................................................................. 10 City Office ................................................................................................................................................................... 10 Washateria/Waterplant ............................................................................................................................................ 10 Community Hall ........................................................................................................................................................ 10 Firehall ......................................................................................................................................................................... 11 Clinic ............................................................................................................................................................................ 11 School ................................................................................................................................................................................... 11 Recommended technology and fuel requirements ....................................................................................................... 12 Washateria/Waterplant ................................................................................................................................................ 12 Tribal and City Office Cluster ...................................................................................................................................... 12 Kaltag School .................................................................................................................................................................. 13 Initial investment ............................................................................................................................................................... 14 City & Tribal Office Cluster .......................................................................................................................................... 15 Waterplant/ Washateria ............................................................................................................................................... 16 Kaltag School .................................................................................................................................................................. 17 Financial Analysis .............................................................................................................................................................. 18 Operating Costs & Annual Savings ............................................................................................................................. 19 City and Tribal Office ................................................................................................................................................ 19 Washateria/ Waterplant ........................................................................................................................................... 22 Kaltag School .............................................................................................................................................................. 25 Life cycle cost analysis (LCCA) for School ............................................................................................................. 28 Summary of Financial Analysis ............................................................................................................................... 29 Conclusion .......................................................................................................................................................................... 30 Supplement: Community Wood Heating Basics ........................................................................................................... 32 Dalson Energy, Inc. – Kaltag Preliminary Feasibility Assessment 3 Wood fuel as a heating option ......................................................................................................................................... 32 The nature of wood fuels .................................................................................................................................................. 32 The basics of wood-fueled heating .................................................................................................................................. 33 Available wood heating technology ................................................................................................................................ 36 Cordwood Boilers .......................................................................................................................................................... 36 Bulk Fuel Boilers ............................................................................................................................................................ 36 District heat loops .......................................................................................................................................................... 37 Figure 1: Land Ownership Surrounding Kaltag, AK ...................................................................................................... 6 Figure 2: Biomass stock and annual allowable cut surrounding Kaltag, AK .............................................................. 7 Figure 3: Illustration of Unmanaged Wood Harvesting Efforts .................................................................................... 8 Figure 4: Illustration of Planned Wood Harvest by Harvest Area and Time Period. ................................................ 8 Figure 5: Kaltag Washateria ................................................................................................................................................ 9 Figure 6: Kaltag community buildings. Washateria/ waterplant (8), City Hall (14), Tribal Hall (15), Clinic (12), Community Hall (13), Fire Hall (10), School (18). ........................................................................................................... 9 Figure 7: Kaltag Washateria/ Waterplant Gallons of Fuel by Month.................................................................................... 10 Figure 8: Cordwood ............................................................................................................................................................... 32 Figure 9: Wood briquettes, as a substitute for cordwood. Cross sections of these briquettes make “wafers” which can be automatically handled in biomass boiler systems. ............................................................................................................... 32 Figure 10: Ground wood chips used for mulch. .................................................................................................................... 32 Figure 11: Wood pellets ........................................................................................................................................................ 32 Project Summary Interior Regional Housing Authority (IRHA) and Tanana Chiefs Conference (TCC) contracted Dalson Energy to do a Pre-Feasibility Study for biomass heating of community buildings in the Native Village of Kaltag. Dalson Energy biomass specialists Thomas Deerfield and Wynne Auld visited the community on June 15, 2012 for the initial assessment. Deerfield and Auld made their assessment based on available data, interviews with local stakeholders and authorities, observations, and research and review of previous studies done in Kaltag. It was noted that there are several other studies and reports that address various aspects of biomass energy in Kaltag, including Forestry Resource assessments done by TCC Forester Will Putman and DNR Division of Forestry. Clare Doig of Forest and Land Management Inc. is also completing a forest management plan for the regional corporation, Gana’A-Yoo. These studies are the foundation for further evaluation of community heating with woody biomass in Kaltag, as exercised in this pre- feasibility assessment. This report was prepared by Thomas Deerfield, Wynne Auld, Louise Deerfield, and Clare Doig. Dalson Energy, Inc. – Kaltag Preliminary Feasibility Assessment 4 Contact and interviews with the following individuals in Kaltag assisted in some of the information gathering. Their contact information is as follows: City - City of Kaltag P.O. Box 9 Kaltag, AK 99748 Phone 907-534-2301 Fax 907-534-2236 Jackie Nicholas, City Manager, jdsnicholas@hotmail.com Tommy Neglaska, Washateria Manager, tommyneglaska@yahoo.com Tribe-- Kaltag Village, federally-recognized P.O. Box 129 Kaltag, AK 99748 Phone 907-534-2224 Fax 907-534-2299 E-mail kaltag@aitc.org Anne Esmailka, Tribal Administrator Violet Burnham, Mayor and Kaltag Rep. for Gana’a’Yoo Natural Resources Committee School—Kaltag School PO Box 30 Main Street Kaltag, AK 99748 Phone: (907) 534-2204 Fax: (907) 534-2227 Gale Bourne, YKSD Facilities, gbourne@yksd.com Nancy Mason, Principal/Teacher, nmason@yksd.com Bernice Moore, Secretary, bmoore@yksd.com Dalson Energy, Inc. – Kaltag Preliminary Feasibility Assessment 5 Summary of Findings The three projects examined are (1) Kaltag School, (2) Washateria/ Waterplant, and (3) City & Tribal Office Cluster. All of the candidate facilities identified could be served by HELE (high efficiency, low emission) cordwood boiler systems; or, alternatively, the the Kaltag School could be served by a wood chip system. There is strong technical feasibility for all projects examined. All projects could be heated by a cordwood boiler, with the Washateria and School projects being containerized units and the City and Tribal Office being a boiler installed in in the existing building. All projects would require a new fuel storage room. Alternatively, the Kaltag School could be heated by a semi-automated wood chip system instead of a cordwood boiler. The feasibility of this technology is subject to a Harvest Plan and Operations Plan, as well as the preferences of the School administration and maintenance personnel. The project’s success is critically dependent on a Biomass Harvest Plan and an Operations Plan. The need for these project Plans are discussed in this Pre-Feasibility Analysis. Dalson Energy provides this report to IRHA and TCC, and those agencies will determine the next steps forward. Dalson Energy, Inc. – Kaltag Preliminary Feasibility Assessment 6 Wood fuel supply in Kaltag Kaltag, with a population of 205 (2011 Alaska Census Estimate), is located 75 miles west of Galena and 335 miles west of Fairbanks. In 1990 Tanana Chiefs Conference completed a timber inventory of the ANCSA Native village lands around Kaltag. The village corporation, GANA-A'YOO, Limited, owns approximately 115,000 acres, of which approximately 23,000 acres are forested, holding an estimated 47.835 million cubic feet of saw timber and pole timber. Much of this material could be considered woody biomass suitable for wood fueled heating systems. Doyon, Limited, the regional corporation, is the other major landowner in the region, as indicated by Figure 1: Land Ownership Surrounding Kaltag, AK. While these inventory figures indicate a substantial timber resource, sites supporting tree growth are widely distributed and may be difficult to access because of the area characteristics and the lack of existing roads. The Village is located along a major river system with expansive low elevation wetlands, resulting in widely distributed higher elevation sites that support tree growth. Figure 1: Land Ownership Surrounding Kaltag, AK Dalson Energy, Inc. – Kaltag Preliminary Feasibility Assessment 7 Figure 2: Biomass stock and annual allowable cut surrounding Kaltag, AK from TCC Inventory The community of Kaltag also practices river logging. Dependability and volume of river-caught logs have not been documented. Community leaders in Kaltag suggested that firewood is the main residential heating fuel in Kaltag. The current market price, determined by TCC, is $275 per cord. There are 62 homes in Kaltag, using an estimated average of 5 – 7 cords per year. If the projects described in this study were undertaken, the community of Kaltag would harvest up to 290 additional cords and/or up to 150 green tons of wood per year, increasing their annual volume by about 50% from currently estimated usage. 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. Dalson Energy, Inc. – Kaltag Preliminary Feasibility Assessment 8 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. In Kaltag, harvest of Cottonwood for cordwood and/or Black Spruce for wood chips would not be expected to interfere with the supply of personal-use firewood, since these species are not preferred for home heating. Figure 3: Illustration of Unmanaged Wood Harvesting Efforts Figure 4: Illustration of Planned Wood Harvest by Harvest Area and Time Period. Dalson Energy, Inc. – Kaltag Preliminary Feasibility Assessment 9 Operations Plan In many Villages biomass boiler projects will depend on collaboration among a variety of entities, including contract wood cutters, forest landowners, the boiler technician, building owners and operators, and various governmental entities. A plan 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 community buildings in Kaltag considered for biomass heating are Tribal building, City Building, Washateria/Water-plant, and Kaltag School. The City and Tribal buildings are considered a cluster and evaluated as a single heat plant. The Clinic, Fire-hall, and Community Hall are adjacent to this cluster, but were not considered for biomass heating, for reasons discussed below. Tribal Buildings Tribal buildings include the Tribal Building. Tribal Building The Tribal Building also uses one (1) Buderus Boiler with a capacity of 120,000 btu/hr to heat about 3,500 sq. ft via hydronic baseboard heaters. The building has four zones. There is also an addition to the North side of the building that houses the boiler room. While the addition to the North side does not appear to be heated, it houses a separate boiler room that was observed to be extremely warm inside. There also may be maintenance issues with the controls, as the consultant observed that the boiler was firing even though it was over 65°F outside. Figure 5: Kaltag Washateria Figure 6: Kaltag community buildings. Washateria/ waterplant (8), City Hall (14), Tribal Hall (15), Clinic (12), Community Hall (13), Fire Hall (10), School (18). Dalson Energy, Inc. – Kaltag Preliminary Feasibility Assessment 10 City Buildings City Buildings include the City Office, Washateria/Water-plant, Fire-hall, Community Hall, and Clinic. City Office The City Building uses one (1) Buderus Boiler with a capacity of 106,000 btu/hr to heat 3,300 sq. ft. The City Building used 775 gallons in FY 2012. The building was reportedly recently weatherized. Washateria/Waterplant The Washateria/Water-plant is a single heating system providing space and domestic hot water for the Washateria as well as water heating for residences for a portion of uptown. The Washateria/ Water-plant is heated with three boilers: two (2) Weil McClain 76 model boilers, 416,000 BTU; and one (1) Weil McClain 213,000 BTU boiler. Heat loads often require one large and the small boiler to fire. The heat distribution system is in its second year of operation and is performing well. The Washateria/Water-plant was operated by Tommy Neglaska at the time of consultant’s visit. Mr. Neglaska meticulously maintained the facility and kept records of the fuel consumption. The fuel consumption for 2012 follows: Figure 7: Kaltag Washateria/ Waterplant Gallons of Fuel by Month Community Hall The Community Hall is heated only for events. It holds a Toyo-stove and a woodstove. Because it is not heated regularly, it was not considered for biomass heating. Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May TOTAL 131 77 232 220 330 687 654 919 792 812 561 381 5,796 Washateria/ Waterplant (gallons fuel oil #1) 0 200 400 600 800 1000 Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr MayGallons fuel Oil #1 Kaltag Washateria/Waterplant Gallons fuel oil by month Series1 Dalson Energy, Inc. – Kaltag Preliminary Feasibility Assessment 11 Firehall The Fire-hall is usually rented out and used by the Iditarod Race Organizers. However, the City has decided to close the Fire-hall this winter to reduce utility costs. Last year, the Fire-hall used 875 gallons of fuel oil. Because the Fire-hall is not expected to have any heat demand in the near future, it was not considered for biomass heating. Clinic A new Clinic is planned in Kaltag. Given the biomass resource base and local climatic conditions, it is strongly recommended that a biomass heating system, along with passive solar design, super- insulation, and protected artic entry be considered for the building design. This Clinic may also have the ability to cost-effectively integrate a District Heating system. The Consultants recommend that the designers of the Clinic consider clustering heat loads when designing the building. The location of the Clinic has already been chosen. Because a new Clinic is planned in Kaltag, the existing Clinic was not considered for biomass heating. School The Kaltag School was not toured during this visit, but information was gathered from the YKSD Facilities Department. The Kaltag School is a new school building with a newly engineered heating system. The School has a separate boiler building housing five (5) fuel oil boilers. Over the past five years, the School and adjacent buildings (such as teacher housing) have averaged 19,000 gallons per year of oil. The heat is distributed via hydronic heat pipes, and converted to hot air for heating some areas. Over the past five years, the average price per gallon was $3.10; AEA has projected the cost per gallon in 2012 to be $4.10 per gallon. Mr. Bourne of YKSD Facilities Department stressed the important of reliability from any heating source. Building Name Tribal Office City Office Washateria/ Waterplant School Annual Gallons (Fuel Oil #1) 775 gal/yr 1,294 gal/ yr 5,796 19,000 gal/ yr Building Usage During workdays only. No weekends. During workdays only. No weekends. Seven days per week. During the School year Heat Transfer Mechanism Hydronic Hydronic Hydronic Hydronic Heating infrastructure need replacement? No No Unknown No Maximum cords to heat the building 17 49 160 Dalson Energy, Inc. – Kaltag Preliminary Feasibility Assessment 12 Recommended technology and fuel requirements The suggested system design for all three projects is a pre-fabricated, modular, containerized wood biomass boiler unit. The suggested unit has been shown to be reliable and highly efficient. Because it is modular, it has a lower installation cost and offers financing advantages. Either cordwood or wood chips may be recommended as the system fuel, as described below. From initial surveys of the Kaltag area, it appears that Cottonwood and Black Spruce are relatively abundant species, although neither is preferred for personal-use cordwood for home heating. Cordwood could be manufactured from Cottonwood, using chainsaws and a log splitter. Chips could be manufactured from Black Spruce trees using a hand-fed chipper. If the harvest were properly planned, use of these fuels would not threaten the supply of cordwood available for home heating. Washateria/Waterplant For the Washateria/ Water-plant, a containerized HELE (high efficiency, low emissions) cordwood boiler is suggested. These types of systems are produced by GARN, TARM USA and others. These units have 120,000 – 700,000 BTU/hr output capacity and store 415,000 or more BTU in hot water tanks. One such unit, the GarnPac, has an output of about 350,000 BTU output and is currently being employed in Thorne Bay. This type of system is recommended because it has demonstrated reliability, uses an accessible fuel (cordwood), and meets the heat load requirements of the Washateria/ Water-plant. 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 FTE 1 (Full-time equivalent employee) per boiler. The Washateria/ Water-plant heat load is an estimated 150,000 – 275,000 btu/hr during the heating season. Correct boiler sizing could be subject to further feasibility study. For the purposes of this study, Dalson Energy modeled a biomass boiler capacity of 350,000 btu/hr for the Washateria / Water-plant, serving 90% of the heat load. Tribal and City Office Cluster The Tribal and City Office Cluster load is quite small, requiring only the equivalent of about 17 cords per year. Because the existing fuel oil usage is relatively small, the amount of savings from using biomass (cordwood) are also relatively small. The City and Tribal Office Cluster heat load is an estimated 50,000 – 105,000 btu/hr during the heating season. Correct boiler sizing could be subject to further feasibility study. For the purposes of this study, Dalson Energy modeled a pre-fabricated, containerized cordwood boiler with a capacity of 120,000 btu/hr for the Tribal & City Office Cluster. 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. Dalson Energy, Inc. – Kaltag Preliminary Feasibility Assessment 13 Kaltag School The Kaltag School’s heat load is the largest of any of the community buildings. The heat load is an estimated 200,000 btu/hr – 1,000,000 btu/hr. The Kaltag School could employ a cordwood boiler system, a small wood chip system, or a wood pellet system, depending on user’s preferences and access to biomass. Pellets would need to be imported from outside the Village, but woodchips and cordwood could be procured from local forests given an effective Harvesting Plan and investment in the appropriate equipment. One challenge is that wood chip systems are operationally more complex than wood pellet or cordwood systems, because they require multi-step wood fuel manufacturing. They also require more machinery to process fuel. To produce woodchips, the Community would need an effective way of harvesting, processing, and handling chips. Trees could be hand-felled and hand-fed into a grinder and then automatically fed into a storage bin or chip van. Saw log or cordwood quality segments could be separated and merchandised separately. Screens would be utilized to control chip size and consistency. Additionally, woodchip storage would need to be managed with a bobcat or other loading device to improve airflow and decrease moisture content. While the chip processing and handling infrastructure is more expensive, the Community would benefit from automated boiler operation and reduced operating costs, as well decreased pressure on the Cordwood supply and access to a wider range of tree species and sizes. If a cordwood boiler were employed, the system could use up to 160 cords per year of Cottonwood and other available species. If a wood chip boiler were employed, the system could use up to 250 tons of 40% MC chips. To complete this prefeasibility analysis, the Consultant has chosen a representational boiler, a 350 BTU/hr containerized cordwood boiler. Running at maximum capacity, this boiler would offset only a portion of the load of the School (estimated 40-50%). However, with an effective fuel harvesting and operations plan, it would probably be the most reliable wood heating system available to the Community. Also, an effective fuel harvesting and procurement plan could prioritize fuels that do not interfere with cordwood gathering. The buildings’ existing Fuel Oil infrastructure would be retained to meet peak demand and as back up in every project building. Dalson Energy, Inc. – Kaltag Preliminary Feasibility Assessment 14 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.  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.  Amortization costs: capital equipment and other infrastructure.2 When projects are grant financed, amortization does not apply.  Operations and Maintenance (O&M) labor.  Fossil fuel purchases and labor.3 Initial investment The City and Tribal Office Cluster has an estimated Capitalization Cost of $249,000. The Waterplant/ Washateria has an estimated Capitalization Cost of $257,000. The Kaltag School has an estimated Capitalization Cost of $277,000. This is for a system that will offset 40 % of the School’s fuel oil consumption. 2 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. Fuel Consumption Assumptions: 16.00 MMBTU/ Cord Cottonwood 0.1350 MMBTU per gallon Oil #1 10.32 MMBTU per ton of chips Annual Gallons Annual MMBTU Annual Cords (maximum) Annual wood chip demand (maximum) Cluster: City and Tribal Office 2,069 279 17 27 Washateria/ Waterplant 5,800 783 49 76 School 19,000 2,565 160 249 Dalson Energy, Inc. – Kaltag Preliminary Feasibility Assessment 15 See charts below for cost estimates and sources. Full feasibility analysis and/or bids would provide more detailed numbers. City & Tribal Office Cluster Biomass System Rating -- Btu/hr 120,000 Btu stored 160,000 footnote notes $ 7,560 (14 cds @ 20 sq. ft. / cd.) Pre-Fabricated Boiler System Base price A 93,000$ Shipping to hub B 20,000$ Bush delivery B 10,000$ Plumbing and electrical B 2,500$ B 4,500$ Building integration B 30,000$ $15,000 per building Heat loop 6,600$ $33 per ft, 200 ft. Subtotal-B&E Costs 167,560$ Contingency -- 20% 33,512$ Grand Total 201,072$ Soft Costs $ B 16,086$ 8% of B&E B 12,064$ 6% of B&E B pre-approved Equipment Commissioning and Training B 4,000$ Construction Management B 16,086$ 8% B&E Subtotal -- Soft Costs 48,236$ Recommended Project Budget -- Design and Construction Co 249,308$ footnote A Based on quotes from viable suppliers B Estimate A/E Design Services Fire Marshall Plan Review Building and Equipment Costs (B&E) $ Fuel Storage Building (fabricated building, gravel pad, $27/sf) Site Prep Project Management Dalson Energy, Inc. – Kaltag Preliminary Feasibility Assessment 16 Waterplant/ Washateria Biomass System Rating -- Btu/hr 350,000 Btu stored 415,000 footnote notes $ 21,060 (39 cds @ 20 sq. ft. / cd.) Pre-Fabricated Boiler System Base price A 100,000$ Shipping to Hub B 20,000$ Bush Delivery B 10,000$ Plumbing and electrical B 2,500$ B 4,500$ Integration (Wash + Waterplant)B 15,000$ Subtotal-B&E Costs 173,060$ Contingency -- 20% 34,612$ Grand Total 207,672$ Soft Costs $ B 16,614$ 8% of B&E B 12,460$ 6% of B&E B pre-approved Equipment Commissioning and Training B 4,000$ Construction Management B 16,614$ 8% B&E Subtotal -- Soft Costs 49,688$ Recommended Project Budget -- Design and Construction Cost 257,360$ footnote A Based on quotes from viable suppliers B Estimate Fire Marshall Plan Review Building and Equipment Costs (B&E) $ Fuel Storage Building (fabricated building, gravel pad, $27/sf) Site Prep Project Management A/E Design Services Dalson Energy, Inc. – Kaltag Preliminary Feasibility Assessment 17 Kaltag School Initial investment: Kaltag School Biomass System Rating -- Btu/hr 350,000 Btu stored 415,000 footnote notes C $ 24,300 (45 cds @ 20 sq. ft. / cd.) Pre-Fabricated Boiler System Base price A 100,000$ Shipping to Hub B 20,000$ Bush Delivery B 10,000$ Plumbing and electrical B 2,500$ B 4,500$ Integration B 15,000$ Subtotal-B&E Costs 176,300$ Contingency -- 20% 35,260$ Grand Total 211,560$ Soft Costs $ 15,000$ B 16,925$ 8% of B&E B 12,694$ 6% of B&E B pre-approved Equipment Commissioning and Training B 4,000$ Construction Management B 16,925$ 8% B&E Subtotal -- Soft Costs 65,543$ Recommended Project Budget -- Design and Construction Costs 277,103$ footnote A Based on quotes from viable suppliers B Estimate C 64 cords total consumption throughout year. Inventory management with 19 cords stored offsite. A/E Design Services Fire Marshall Plan Review Building and Equipment Costs (B&E) $ Fuel Storage Building (fabricated building, gravel pad, $27/sf) Site Prep Fuel procurement plan Project Coordination 18 Financial Analysis The following financial analyses make use of AEA’s financial Benefit: Cost model. Please note that the market price for household cordwood is reportedly determined by the TCC price, currently $300/cord. In the course of modeling this project, Dalson Energy has used $250/cord to represent the price per cord of Cottonwood and other non-preferred species, which is estimated to be more accessible than White Spruce and other preferred species. For each building, Dalson Energy estimated the percentage of heating oil offset by considering a heating degree day model of the buildings’ energy load. For the Kaltag School, a single 350,000 btu/hr boiler was assumed to offset 40-50% of the School’s heating oil. 19 Operating Costs & Annual Savings City and Tribal Office Project Description Community Nearest Fuel Community Region RE Technology Project ID Applicant Name Project Title Category Results NPV Benefits $71,126 NPV Capital Costs $242,046 B/C Ratio 0.29 NPV Net Benefit ($170,921) Performance Unit Value Displaced Electricity kWh per year - Displaced Electricity total lifetime kWh - Displaced Petroleum Fuel gallons per year 6,003 Displaced Petroleum Fuel total lifetime gallons 64,685 Displaced Natural Gas mmBtu per year - Displaced Natural Gas total lifetime mmBtu - Avoided CO2 tonnes per year 61 Avoided CO2 total lifetime tonnes 657 Proposed System Unit Value Capital Costs $249,308$ Project Start year 2013 Project Life years 25 Displaced Electric kWh per year - Displaced Heat gallons displaced per year 1,655 Displaced Transportation gallons displaced per year 0.00 Renewable Generation O&$ per BTU Electric Capacity kW 0 Electric Capacity Factor %0 Heating Capacity Btu/hr.120,000 Heating Capacity Factor %86 Base System Unit Value Diesel Generator O&M $ per kWh 0.033$ Diesel Generation Efficien kWh per gallon Parameters Unit Value Heating Fuel Premium $ per gallon 2.00$ Transportation Fuel Premi $ per gallon 1.00$ Discount Rate % per year 3% Crude Oil $ per barrel EIA Mid Natural Gas $ per mmBtu ISER - Mid Kaltag Rural Woody biomass heat Village of Kaltag Kaltag City and Tribal Hall Wood Heat 20 Annual Savings (Costs)Units 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Entered Value Project Capital Cost $ per year 249,308$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ Electric Savings (Costs)$ per year $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Heating Saving (Costs)$ per year ($138)$3,317 $3,391 $3,498 $3,648 $3,786 $3,915 $4,029 $4,130 $4,199 $4,269 $4,325 $4,372 Transportation Savings (Costs)$ per year $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Total Savings (Costs)$ per year ($138)$3,317 $3,391 $3,498 $3,648 $3,786 $3,915 $4,029 $4,130 $4,199 $4,269 $4,325 $4,372 Net Benefit $ per year ($249,446)$3,317 $3,391 $3,498 $3,648 $3,786 $3,915 $4,029 $4,130 $4,199 $4,269 $4,325 $4,372 Annual Savings (Costs)Units 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 PV Entered Value Project Capital Cost $ per year -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ $242,046 Electric Savings (Costs)$ per year $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Heating Saving (Costs)$ per year $4,406 $4,420 $4,413 $4,392 $4,354 $4,296 $4,220 $4,144 $4,062 $3,988 $9,332 $9,202 $71,126 Transportation Savings (Costs)$ per year $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Total Savings (Costs)$ per year $4,406 $4,420 $4,413 $4,392 $4,354 $4,296 $4,220 $4,144 $4,062 $3,988 $9,332 $9,202 $71,126 Net Benefit $ per year $4,406 $4,420 $4,413 $4,392 $4,354 $4,296 $4,220 $4,144 $4,062 $3,988 $9,332 $9,202 ($170,921) Heating Units 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Renewable Heat gallons displaced 1,655 1,655 1,655 1,655 1,655 1,655 1,655 1,655 1,655 1,655 1,655 1,655 1,655 Entered Value Renewable Heat Scheduled Rep$ per year 300$ 303$ 306$ 309$ 312$ 315$ 318$ 322$ 325$ 328$ 331$ 335$ 338$ Entered Value Renewable Heat O&M $ per year 7,563$ 7,639$ 7,715$ 7,792$ 7,870$ 7,949$ 8,028$ 8,109$ 8,190$ 8,272$ 8,354$ 8,438$ 8,522$ Entered Value Renewable Fuel Use Quantity (Bcords 14 14 14 14 14 14 14 14 14 14 14 14 14 Entered Value Renewable Fuel Cost $ per unit $250.00 $253 $255 $258 $260 $263 $265 $268 $271 $273 $276 $279 $282 Total Renewable Fuel Cost $ per year 3,491$ 3,535$ 3,570$ 3,606$ 3,642$ 3,679$ 3,715$ 3,752$ 3,790$ 3,828$ 3,866$ 3,905$ 3,944$ Remaining Fuel Oil (supplemen gallons remaining 414 414 414 414 414 414 414 414 414 414 414 414 414 Total Fuel Cost (supplement)$ per year 2,567$ 2,608$ 2,642$ 2,682$ 2,730$ 2,777$ 2,822$ 2,864$ 2,904$ 2,938$ 2,973$ 3,005$ 3,036$ Proposed Heat Cost $ per year 13,921$ 14,085$ 14,233$ 14,389$ 14,555$ 14,719$ 14,884$ 15,047$ 15,209$ 15,366$ 15,525$ 15,683$ 15,840$ Fuel Use gallons per year 2,069 2,609 2,609 2,609 2,609 2,609 2,609 2,609 2,609 2,609 2,609 2,609 2,609 Fuel Cost $ per gallon $6.20 $6.30 $6.38 $6.48 $6.60 $6.71 $6.82 $6.92 $7.02 $7.10 $7.18 $7.26 $7.34 Entered Value Fuel Scheduled Repairs $ per year 200$ 202$ 204$ 206$ 208$ 210$ 212$ 214$ 217$ 219$ 221$ 223$ 225$ Entered Value Fuel O&M $ per year 750$ 758$ 765$ 773$ 780$ 788$ 796$ 804$ 812$ 820$ 828$ 837$ 845$ Fuel Cost $ per year 12,833$ 16,442$ 16,655$ 16,909$ 17,214$ 17,508$ 17,790$ 18,058$ 18,310$ 18,526$ 18,744$ 18,948$ 19,141$ Base Heating Cost $ per year 13,783$ 17,402$ 17,624$ 17,887$ 18,203$ 18,506$ 18,799$ 19,076$ 19,339$ 19,565$ 19,793$ 20,008$ 20,212$ Proposed Base Dalson Energy, Inc. – Kaltag Preliminary Feasibility Assessment 21 Heating Units 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 PV Renewable Heat gallons displaced 1,655 1,655 1,655 1,655 1,655 1,655 1,655 1,655 1,655 1,655 1,655 1,655 Entered Value Renewable Heat Scheduled Rep$ per year 341$ 345$ 348$ 352$ 355$ 359$ 362$ 366$ 370$ 373$ 377$ 381$ $5,813 Entered Value Renewable Heat O&M $ per year 8,607$ 8,694$ 8,780$ 8,868$ 8,957$ 9,047$ 9,137$ 9,228$ 9,321$ 9,414$ 9,508$ 9,603$ $146,536 Entered Value Renewable Fuel Use Quantity (Bcords 14 14 14 14 14 14 14 14 14 14 14 14 Entered Value Renewable Fuel Cost $ per unit $285 $287 $290 $293 $296 $299 $302 $305 $308 $311 $314 $317 Total Renewable Fuel Cost $ per year 3,983$ 4,023$ 4,063$ 4,104$ 4,145$ 4,187$ 4,228$ 4,271$ 4,313$ 4,357$ 4,400$ 4,444$ Remaining Fuel Oil (supplemen gallons remaining 414 414 414 414 414 414 414 414 414 414 414 414 Total Fuel Cost (supplement)$ per year 3,065$ 3,090$ 3,111$ 3,129$ 3,145$ 3,158$ 3,167$ 3,176$ 3,185$ 3,195$ 4,227$ 4,227$ Proposed Heat Cost $ per year 15,997$ 16,151$ 16,303$ 16,454$ 16,603$ 16,750$ 16,895$ 17,041$ 17,188$ 17,339$ 18,512$ 18,655$ $272,203 Fuel Use gallons per year 2,609 2,609 2,609 2,609 2,609 2,609 2,609 2,609 2,609 2,609 2,609 2,609 Fuel Cost $ per gallon $7.41 $7.47 $7.52 $7.56 $7.60 $7.63 $7.65 $7.68 $7.70 $7.72 $10.21 $10.21 Entered Value Fuel Scheduled Repairs $ per year 228$ 230$ 232$ 235$ 237$ 239$ 242$ 244$ 246$ 249$ 251$ 254$ $3,875 Entered Value Fuel O&M $ per year 854$ 862$ 871$ 879$ 888$ 897$ 906$ 915$ 924$ 934$ 943$ 952$ $14,531 Fuel Cost $ per year 19,322$ 19,479$ 19,613$ 19,731$ 19,832$ 19,910$ 19,966$ 20,026$ 20,080$ 20,145$ 26,650$ 26,650$ $324,923 Base Heating Cost $ per year 20,403$ 20,571$ 20,715$ 20,845$ 20,957$ 21,046$ 21,114$ 21,186$ 21,250$ 21,327$ 27,845$ 27,856$ $343,329 Proposed Base 22 Washateria/ Waterplant Project Description Community Nearest Fuel Community Region RE Technology Project ID Applicant Name Project Title Category Results NPV Benefits $212,483 NPV Capital Costs $249,864 B/C Ratio 0.85 NPV Net Benefit ($37,381) Performance Unit Value Displaced Electricity kWh per year - Displaced Electricity total lifetime kWh - Displaced Petroleum Fuel gallons per year 6,003 Displaced Petroleum Fuel total lifetime gallons 145,000 Displaced Natural Gas mmBtu per year - Displaced Natural Gas total lifetime mmBtu - Avoided CO2 tonnes per year 61 Avoided CO2 total lifetime tonnes 1,472 Proposed System Unit Value Capital Costs $257,360$ Project Start year 2013 Project Life years 25 Displaced Electric kWh per year - Displaced Heat gallons displaced per year 5,220 Displaced Transportation gallons displaced per year 0.00 Renewable Generation O&$ per BTU Electric Capacity kW 0 Electric Capacity Factor %0 Heating Capacity Btu/hr.350,000 Heating Capacity Factor %86 Base System Unit Value Diesel Generator O&M $ per kWh 0.033$ Diesel Generation Efficien kWh per gallon Parameters Unit Value Heating Fuel Premium $ per gallon 2.00$ Transportation Fuel Premi $ per gallon 1.00$ Discount Rate % per year 3% Crude Oil $ per barrel EIA Mid Natural Gas $ per mmBtu ISER - Mid Washateria/ Waterplant Kaltag Rural Woody biomass heat Village of Kaltag 23 Annual Savings (Costs)Units 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Entered Value Project Capital Cost $ per year 257,360$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ Electric Savings (Costs)$ per year $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Heating Saving (Costs)$ per year $9,455 $9,746 $9,940 $10,213 $10,589 $10,937 $11,262 $11,554 $11,813 $11,997 $12,182 $12,338 $12,468 Transportation Savings (Costs)$ per year $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Total Savings (Costs)$ per year $9,455 $9,746 $9,940 $10,213 $10,589 $10,937 $11,262 $11,554 $11,813 $11,997 $12,182 $12,338 $12,468 Net Benefit $ per year ($247,905)$9,746 $9,940 $10,213 $10,589 $10,937 $11,262 $11,554 $11,813 $11,997 $12,182 $12,338 $12,468 Annual Savings (Costs)Units 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 PV Entered Value Project Capital Cost $ per year -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ $249,864 Electric Savings (Costs)$ per year $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Heating Saving (Costs)$ per year $12,572 $12,626 $12,628 $12,600 $12,533 $12,417 $12,256 $12,099 $11,926 $11,774 $24,504 $24,216 $212,483 Transportation Savings (Costs)$ per year $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Total Savings (Costs)$ per year $12,572 $12,626 $12,628 $12,600 $12,533 $12,417 $12,256 $12,099 $11,926 $11,774 $24,504 $24,216 $212,483 Net Benefit $ per year $12,572 $12,626 $12,628 $12,600 $12,533 $12,417 $12,256 $12,099 $11,926 $11,774 $24,504 $24,216 ($37,381) Heating Units 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 Renewable Heat gallons displ 5,220 5,220 5,220 5,220 5,220 5,220 5,220 5,220 5,220 5,220 5,220 5,220 5,220 5,220 Entered Value Renewable Heat Scheduled Rep$ per year 500$ 505$ 510$ 515$ 520$ 526$ 531$ 536$ 541$ 547$ 552$ 558$ 563$ 569$ Entered Value Renewable Heat O&M $ per year 12,361$ 12,485$ 12,610$ 12,736$ 12,863$ 12,992$ 13,122$ 13,253$ 13,385$ 13,519$ 13,654$ 13,791$ 13,929$ 14,068$ Entered Value Renewable Fuel Use Quantity (Bcords 44 44 44 44 44 44 44 44 44 44 44 44 44 44 Entered Value Renewable Fuel Cost $ per unit $250.00 $253 $255 $258 $260 $263 $265 $268 $271 $273 $276 $279 $282 $285 Total Renewable Fuel Cost $ per year 11,011$ 11,121$ 11,232$ 11,345$ 11,458$ 11,573$ 11,688$ 11,805$ 11,923$ 12,043$ 12,163$ 12,285$ 12,407$ 12,531$ Remaining Fuel Oil (supplementgallons rema 580 580 580 580 580 580 580 580 580 580 580 580 580 580 Total Fuel Cost (supplement)$ per year 3,597$ 3,655$ 3,702$ 3,759$ 3,827$ 3,892$ 3,955$ 4,014$ 4,070$ 4,119$ 4,167$ 4,212$ 4,255$ 4,295$ Proposed Heat Cost $ per year 27,469$ 27,766$ 28,054$ 28,354$ 28,668$ 28,982$ 29,296$ 29,608$ 29,920$ 30,227$ 30,536$ 30,846$ 31,155$ 31,464$ Fuel Use gallons per y 5,800 5,800 5,800 5,800 5,800 5,800 5,800 5,800 5,800 5,800 5,800 5,800 5,800 5,800 Fuel Cost $ per gallon 6.20$ 6.30$ 6.38$ 6.48$ 6.60$ 6.71$ 6.82$ 6.92$ 7.02$ 7.10$ 7.18$ 7.26$ 7.34$ 7.41$ Entered Value Fuel Scheduled Repairs $ per year 200$ 202$ 204$ 206$ 208$ 210$ 212$ 214$ 217$ 219$ 221$ 223$ 225$ 228$ Entered Value Fuel O&M $ per year 750$ 758$ 765$ 773$ 780$ 788$ 796$ 804$ 812$ 820$ 828$ 837$ 845$ 854$ Fuel Cost $ per year 35,974$ 36,552$ 37,025$ 37,589$ 38,269$ 38,921$ 39,550$ 40,143$ 40,705$ 41,185$ 41,669$ 42,123$ 42,553$ 42,954$ Base Heating Cost $ per year 36,924$ 37,512$ 37,994$ 38,568$ 39,257$ 39,919$ 40,558$ 41,162$ 41,734$ 42,224$ 42,719$ 43,183$ 43,623$ 44,035$ Proposed Base Dalson Energy, Inc. – Kaltag Preliminary Feasibility Assessment 24 Heating Units 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 PV Renewable Heat gallons displ 5,220 5,220 5,220 5,220 5,220 5,220 5,220 5,220 5,220 5,220 5,220 5,220 Entered Value Renewable Heat Scheduled Rep$ per year 569$ 575$ 580$ 586$ 592$ 598$ 604$ 610$ 616$ 622$ 629$ 635$ $9,688 Entered Value Renewable Heat O&M $ per year 14,068$ 14,209$ 14,351$ 14,494$ 14,639$ 14,786$ 14,933$ 15,083$ 15,234$ 15,386$ 15,540$ 15,695$ $239,497 Entered Value Renewable Fuel Use Quantity (Bcords 44 44 44 44 44 44 44 44 44 44 44 44 Entered Value Renewable Fuel Cost $ per unit $285 $287 $290 $293 $296 $299 $302 $305 $308 $311 $314 $317 Total Renewable Fuel Cost $ per year 12,531$ 12,657$ 12,783$ 12,911$ 13,040$ 13,171$ 13,302$ 13,435$ 13,570$ 13,705$ 13,843$ 13,981$ Remaining Fuel Oil (supplemen gallons rema 580 580 580 580 580 580 580 580 580 580 580 580 Total Fuel Cost (supplement)$ per year 4,295$ 4,330$ 4,360$ 4,386$ 4,409$ 4,426$ 4,439$ 4,452$ 4,464$ 4,478$ 5,925$ 5,925$ Proposed Heat Cost $ per year 31,464$ 31,771$ 32,075$ 32,378$ 32,681$ 32,980$ 33,279$ 33,580$ 33,883$ 34,192$ 35,936$ 36,236$ $535,479 Fuel Use gallons per y 5,800 5,800 5,800 5,800 5,800 5,800 5,800 5,800 5,800 5,800 5,800 5,800 Fuel Cost $ per gallon 7.41$ 7.47$ 7.52$ 7.56$ 7.60$ 7.63$ 7.65$ 7.68$ 7.70$ 7.72$ 10.21$ 10.21$ Entered Value Fuel Scheduled Repairs $ per year 228$ 230$ 232$ 235$ 237$ 239$ 242$ 244$ 246$ 249$ 251$ 254$ $3,875 Entered Value Fuel O&M $ per year 854$ 862$ 871$ 879$ 888$ 897$ 906$ 915$ 924$ 934$ 943$ 952$ $14,531 Fuel Cost $ per year 42,954$ 43,304$ 43,600$ 43,864$ 44,088$ 44,261$ 44,387$ 44,520$ 44,638$ 44,783$ 59,245$ 59,245$ $729,556 Base Heating Cost $ per year 44,035$ 44,396$ 44,703$ 44,978$ 45,213$ 45,397$ 45,535$ 45,679$ 45,809$ 45,966$ 60,440$ 60,452$ $747,962 Proposed Base 25 Kaltag School Project Description Community Nearest Fuel Community Region RE Technology Project ID Applicant Name Project Title Category Results NPV Benefits $414,583 NPV Capital Costs $269,032 B/C Ratio 1.54 NPV Net Benefit $145,551 Performance Unit Value Displaced Electricity kWh per year - Displaced Electricity total lifetime kWh - Displaced Petroleum Fuel gallons per year 6,003 Displaced Petroleum Fuel total lifetime gallons 475,000 Displaced Natural Gas mmBtu per year - Displaced Natural Gas total lifetime mmBtu - Avoided CO2 tonnes per year 61 Avoided CO2 total lifetime tonnes 4,821 Proposed System Unit Value Capital Costs $277,103$ Project Start year 2013 Project Life years 25 Displaced Electric kWh per year - Displaced Heat gallons displaced per year 7,600 Displaced Transportation gallons displaced per year 0.00 Renewable Generation O&$ per BTU Electric Capacity kW 0 Electric Capacity Factor %0 Heating Capacity Btu/hr.350,000 Heating Capacity Factor %86 Base System Unit Value Diesel Generator O&M $ per kWh 0.033$ Diesel Generation Efficien kWh per gallon Parameters Unit Value Heating Fuel Premium $ per gallon 2.00$ Transportation Fuel Premi $ per gallon 1.00$ Discount Rate % per year 3% Crude Oil $ per barrel EIA Mid Natural Gas $ per mmBtu ISER - Mid Kaltag School Kaltag Rural Woody biomass heat Village of Kaltag 26 Units 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Project Capital Cost $ per year 277,103$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ Electric Savings (Costs)$ per year $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Heating Saving (Costs)$ per year $19,196 $19,675 $20,011 $20,465 $21,068 $21,632 $22,162 $22,644 $23,080 $23,406 $23,735 $24,022 $24,273 Transportation Savings (Costs)$ per year $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Total Savings (Costs)$ per year $19,196 $19,675 $20,011 $20,465 $21,068 $21,632 $22,162 $22,644 $23,080 $23,406 $23,735 $24,022 $24,273 Net Benefit $ per year ($257,907)$19,675 $20,011 $20,465 $21,068 $21,632 $22,162 $22,644 $23,080 $23,406 $23,735 $24,022 $24,273 Units 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 PV Project Capital Cost $ per year -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ $269,032 Electric Savings (Costs)$ per year $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Heating Saving (Costs)$ per year $24,484 $24,625 $24,691 $24,712 $24,678 $24,574 $24,405 $24,242 $24,056 $23,902 $42,504 $42,153 $414,583 Transportation Savings (Costs)$ per year $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Total Savings (Costs)$ per year $24,484 $24,625 $24,691 $24,712 $24,678 $24,574 $24,405 $24,242 $24,056 $23,902 $42,504 $42,153 $414,583 Net Benefit $ per year $24,484 $24,625 $24,691 $24,712 $24,678 $24,574 $24,405 $24,242 $24,056 $23,902 $42,504 $42,153 $145,551 Heating Units 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Renewable Heat gallons displ 7,600 7,600 7,600 7,600 7,600 7,600 7,600 7,600 7,600 7,600 7,600 7,600 7,600 Entered Value Renewable Heat Scheduled Rep$ per year 500$ 505$ 510$ 515$ 520$ 526$ 531$ 536$ 541$ 547$ 552$ 558$ 563$ Entered Value Renewable Heat O&M $ per year 12,361$ 12,485$ 12,610$ 12,736$ 12,863$ 12,992$ 13,122$ 13,253$ 13,385$ 13,519$ 13,654$ 13,791$ 13,929$ Entered Value Renewable Fuel Use Quantity (Bcords 64 64 64 64 64 64 64 64 64 64 64 64 64 Entered Value Renewable Fuel Cost $ per unit $250 $253 $255 $258 $260 $263 $265 $268 $271 $273 $276 $279 $282 Total Renewable Fuel Cost $ per year 16,031$ 16,192$ 16,353$ 16,517$ 16,682$ 16,849$ 17,017$ 17,188$ 17,360$ 17,533$ 17,708$ 17,886$ 18,064$ Remaining Fuel Oil (supplemen gallons rema 11400 11400 11400 11400 11400 11400 11400 11400 11400 11400 11400 11400 11400 Total Fuel Cost (supplement)$ per year 70,708$ 71,844$ 72,773$ 73,882$ 75,218$ 76,499$ 77,735$ 78,903$ 80,006$ 80,950$ 81,902$ 82,794$ 83,638$ Proposed Heat Cost $ per year 99,600$ 101,026$ 102,246$ 103,649$ 105,283$ 106,865$ 108,405$ 109,879$ 111,292$ 112,549$ 113,817$ 115,029$ 116,194$ Fuel Use gallons per y 19,000 19,000 19,000 19,000 19,000 19,000 19,000 19,000 19,000 19,000 19,000 19,000 19,000 Fuel Cost $ per gallon 6.20$ 6.30$ 6.38$ 6.48$ 6.60$ 6.71$ 6.82$ 6.92$ 7.02$ 7.10$ 7.18$ 7.26$ 7.34$ Entered Value Fuel Scheduled Repairs $ per year 200$ 202$ 204$ 206$ 208$ 210$ 212$ 214$ 217$ 219$ 221$ 223$ 225$ Entered Value Fuel O&M $ per year 750$ 758$ 765$ 773$ 780$ 788$ 796$ 804$ 812$ 820$ 828$ 837$ 845$ Fuel Cost $ per year 117,846$ 119,741$ 121,289$ 123,136$ 125,363$ 127,498$ 129,559$ 131,504$ 133,343$ 134,916$ 136,503$ 137,991$ 139,396$ Base Heating Cost $ per year 118,796$ 120,700$ 122,258$ 124,115$ 126,351$ 128,497$ 130,567$ 132,523$ 134,372$ 135,955$ 137,552$ 139,051$ 140,467$ Proposed Base Dalson Energy, Inc. – Kaltag Preliminary Feasibility Assessment 27 Heating Units 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 PV Renewable Heat gallons displ 7,600 7,600 7,600 7,600 7,600 7,600 7,600 7,600 7,600 7,600 7,600 7,600 Entered Value Renewable Heat Scheduled Rep$ per year 569$ 575$ 580$ 586$ 592$ 598$ 604$ 610$ 616$ 622$ 629$ 635$ $9,688 Entered Value Renewable Heat O&M $ per year 14,068$ 14,209$ 14,351$ 14,494$ 14,639$ 14,786$ 14,933$ 15,083$ 15,234$ 15,386$ 15,540$ 15,695$ $239,497 Entered Value Renewable Fuel Use Quantity (Bcords 64 64 64 64 64 64 64 64 64 64 64 64 Entered Value Renewable Fuel Cost $ per unit $285 $287 $290 $293 $296 $299 $302 $305 $308 $311 $314 $317 Total Renewable Fuel Cost $ per year 18,245$ 18,428$ 18,612$ 18,798$ 18,986$ 19,176$ 19,367$ 19,561$ 19,757$ 19,954$ 20,154$ 20,355$ Remaining Fuel Oil (supplementgallons rema 11400 11400 11400 11400 11400 11400 11400 11400 11400 11400 11400 11400 Total Fuel Cost (supplement)$ per year 84,427$ 85,115$ 85,697$ 86,215$ 86,656$ 86,995$ 87,243$ 87,505$ 87,738$ 88,023$ 116,448$ 116,448$ Proposed Heat Cost $ per year 117,310$ 118,326$ 119,240$ 120,093$ 120,873$ 121,555$ 122,148$ 122,759$ 123,344$ 123,985$ 152,770$ 153,133$ $1,993,748 Fuel Use gallons per y 19,000 19,000 19,000 19,000 19,000 19,000 19,000 19,000 19,000 19,000 19,000 19,000 Fuel Cost $ per gallon 7.41$ 7.47$ 7.52$ 7.56$ 7.60$ 7.63$ 7.65$ 7.68$ 7.70$ 7.72$ 10.21$ 10.21$ Entered Value Fuel Scheduled Repairs $ per year 228$ 230$ 232$ 235$ 237$ 239$ 242$ 244$ 246$ 249$ 251$ 254$ $3,875 Entered Value Fuel O&M $ per year 854$ 862$ 871$ 879$ 888$ 897$ 906$ 915$ 924$ 934$ 943$ 952$ $14,531 Fuel Cost $ per year 140,712$ 141,859$ 142,828$ 143,692$ 144,426$ 144,992$ 145,405$ 145,841$ 146,229$ 146,704$ 194,080$ 194,080$ $2,389,925 Base Heating Cost $ per year 141,794$ 142,951$ 143,931$ 144,806$ 145,551$ 146,128$ 146,553$ 147,001$ 147,400$ 147,887$ 195,274$ 195,286$ $2,408,331 Proposed Base 28 Life cycle cost analysis (LCCA) for School District:Yukon Koyukuk School:Kaltag School Project: Kaltag School chip boiler Project No. NA Study Period:20 Discount Rate: 3.50% Alternative #1 (low)Alternative #2 (high) Initial Investment Cost 332,195$ 398,508$ O&M and Repair Cost 588,985$ 914,198$ Replacement Cost 121,621$ 133,783$ Residual Value (78,655)$ (86,521)$ Total Life Cycle Cost 964,146$ 1,359,967$ GSF of Project 14,749 14,749 Initial Cost/ GSF 22.52$ 27.02$ LCC/ GSF 65.37$ 92.21$ Life Cycle Costs of Project Alternatives 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 $588,985 36,457$ 37,003$ 37,558$ 38,122$ 38,694$ 39,274$ 39,863$ 40,461$ 41,068$ 41,684$ 42,309$ 42,944$ 43,588$ 44,242$ 44,906$ 45,579$ 46,263$ 46,957$ 47,661$ 48,376$ Replacement $121,621 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 242,000$ Residual $78,655 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 156,508$ Discount Rate 3.50%398,508$ Gen'l Inflation for O&M 1.50% NPV O&M $914,198 40,102$ 40,102$ 40,704$ 41,314$ 41,934$ 42,563$ 43,201$ 43,849$ 44,507$ 45,175$ 45,852$ 46,540$ 47,238$ 47,947$ 48,666$ 49,396$ 50,137$ 50,889$ 51,652$ 52,427$ Replacement $133,783 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 266,200$ Residual $86,521 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 172,159$ Alt. 1 Alt 2 Dalson Energy, Inc. – Kaltag Preliminary Feasibility Assessment 29 Summary of Financial Analysis Estimated System Description (abbreviated) NPV Benefits PV B/C Ratio Simple Payback Kaltag City and Tribal Office One (2) 120,000 btu containerized cordwood boiler $71,000 $249,000 0.29 75 Kaltag Washateria/ Waterplant One 350,000 btu containerized cordwood boiler $212,400 $257,300 0.85 26.5 Kaltag School One 350,000 btu containerized cordwood boiler, offsetting 40% of fuel oil load $414,500 $277,000 1.54 14.1 30 Conclusion The village of Kaltag has significant opportunities for biomass heating, owing to the high cost of fuel oil, community capacity for operating and maintaining heating systems, and existing heat loads that could be adequately served by containerized biomass heating units. One of the most significant assets to any potential biomass project is the dedicated services of maintenance personnel in the Community. There is strong technical feasibility for biomass heating of the Washateria and Kaltag School. All projects could be heated by containerized cordwood boiler systems. All projects would require a new fuel storage room. Additionally, the Kaltag School could be heated by a semi-automated wood chip system instead of a cordwood boiler. The feasibility of this technology is subject to a Harvest Plan and Operations Plan, as well as the preferences and capacity of the School administration and maintenance personnel. Of the projects identified, the Kaltag School appears to have the strongest financial feasibility, based on amount of heating oil usage. Additionally, because the project’s success is critically dependent on both Harvest and Operations Plan, Dalson Energy strongly recommends developing these Plans prior to project development. Finally, Dalson Energy recommends that a request in any grant application include funding for O&M training from the system manufacturer for the first two years of operation. This training would improve the efficiency of O&M and also offer the opportunity to train new maintenance personnel if necessary. Dalson Energy, Inc. – Kaltag Preliminary Feasibility Assessment 31 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. Dalson 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. – Kaltag Preliminary Feasibility Assessment 32 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 exercising local resource management. Most Interior villages are particularly vulnerable to high energy prices because the region has over 13,500 heating degree days 4 (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. 4 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 11: Wood pellets Figure 10: Ground wood chips used for mulch. Figure 9: Wood briquettes, as a substitute for cordwood. Cross sections of these briquettes make “wafers” which can be automatically handled in biomass boiler systems. Figure 8: Cordwood Dalson Energy, Inc. – Kaltag Preliminary Feasibility Assessment 33 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 serve 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. – Kaltag Preliminary Feasibility Assessment 34 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 associated 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. However, 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 products 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. – Kaltag Preliminary Feasibility Assessment 35 important because it influences peak demand. For example, 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 projects, 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. – Kaltag Preliminary Feasibility Assessment 36 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 burn 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, and 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. 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 Binder 34,000 BTU – 34 MMBTU BINDER USA contact@binder-boiler.com Note: These lists are representational of available systems, and are not inclusive Dalson Energy, Inc. – Kaltag Preliminary Feasibility Assessment 37 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 system 5: • 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. 5 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.