HomeMy WebLinkAboutKiana Fesability Assessment for Biomass Heating Systems Final AWEDTG 8-23-2016-BIO
Feasibility Assessment for Biomass Heating Systems
Kiana, Alaska
800 F Street, Anchorage, AK 99501
p (907) 276-6664 f (907) 276-5042
Lee Bolling, PE
FINAL REPORT – 8/23/2016
Feasibility Assessment for Biomass Heating Systems Kiana, AK
Coffman Engineers, Inc. i
Contents
I. Executive Summary ............................................................................................................ 1
II. Introduction ...................................................................................................................... 2
III. Preliminary Site Investigation ........................................................................................... 3
PREVIOUS STUDIES ......................................................................................................................................................... 3
COMMUNITY MEETING ................................................................................................................................................... 3
BUILDING DESCRIPTION ................................................................................................................................................... 4
EXISTING HEATING SYSTEM .............................................................................................................................................. 4
BUILDING ENVELOPE ....................................................................................................................................................... 4
AVAILABLE SPACE ........................................................................................................................................................... 4
STREET ACCESS AND FUEL STORAGE ................................................................................................................................... 4
BUILDING OR SITE CONSTRAINTS ....................................................................................................................................... 5
PROPOSED DISTRICT HEATING SYSTEM ............................................................................................................................... 5
ENERGY AGREEMENT ...................................................................................................................................................... 8
BIOMASS SYSTEM INTEGRATION ........................................................................................................................................ 8
BIOMASS SYSTEM TECHNOLOGY ........................................................................................................................................ 9
IV. Energy Consumption and Costs ....................................................................................... 10
ENERGY COSTS ............................................................................................................................................................ 10
WOOD ENERGY ........................................................................................................................................................... 10
CORDWOOD ................................................................................................................................................................ 10
WOOD PELLETS ........................................................................................................................................................... 10
HEATING OIL ............................................................................................................................................................... 11
ELECTRICITY ................................................................................................................................................................ 11
EXISTING HEATING OIL CONSUMPTION............................................................................................................................. 11
BIOMASS SYSTEM CONSUMPTION ................................................................................................................................... 12
V. Preliminary Cost Estimating ............................................................................................. 13
VI. Economic Analysis .......................................................................................................... 16
O&M COSTS .............................................................................................................................................................. 16
DEFINITIONS................................................................................................................................................................ 16
RESULTS ..................................................................................................................................................................... 18
SENSITIVITY ANALYSIS ................................................................................................................................................... 19
VII. Heat Recovery Modifications at Water Treatment Plant................................................. 20
ENERGY CONSUMPTION ................................................................................................................................................ 20
HEAT RECOVERY UPGRADES ........................................................................................................................................... 21
PRELIMINARY COST ESTIMATE ........................................................................................................................................ 22
ECONOMIC ANALYSIS .................................................................................................................................................... 23
VIII. Forest Resource and Fuel Availability Assessments ....................................................... 24
FOREST RESOURCE ASSESSMENTS .................................................................................................................................... 24
AIR QUALITY PERMITTING .............................................................................................................................................. 24
IX. General Biomass Technology Information ....................................................................... 25
HEATING WITH WOOD FUEL ........................................................................................................................................... 25
TYPES OF WOOD FUEL .................................................................................................................................................. 25
HIGH EFFICIENCY WOOD PELLET BOILERS ......................................................................................................................... 26
Feasibility Assessment for Biomass Heating Systems Kiana, AK
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HIGH EFFICIENCY CORDWOOD BOILERS ............................................................................................................................ 26
LOW EFFICIENCY CORDWOOD BOILERS ............................................................................................................................. 26
HIGH EFFICIENCY WOOD STOVES .................................................................................................................................... 27
BULK FUEL BOILERS ...................................................................................................................................................... 27
GRANTS ..................................................................................................................................................................... 27
Appendices
Appendix A – Site Photos
Appendix B – Economic Analysis Spreadsheet
Appendix C – AWEDTG Field Data Sheet
Feasibility Assessment for Biomass Heating Systems Kiana, AK
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Abbreviations
ACF Accumulated Cash Flow
ASHRAE American Society of Heating, Refrigeration, and Air-Conditioning Engineers
AEA Alaska Energy Authority
AFUE Annual Fuel Utilization Efficiency
B/C Benefit / Cost Ratio
BTU British Thermal Unit
BTUH BTU per hour
CCF One Hundred Cubic Feet
CEI Coffman Engineers, Inc.
CFM Cubic Feet per Minute
Eff Efficiency
F Fahrenheit
ft Feet
GPM Gallons Per Minute
HP Horsepower
HVAC Heating, Ventilating, and Air-Conditioning
in Inch(es)
kWh Kilowatt-Hour
lb(s) Pound(s)
MBH Thousand BTUs per Hour
O&M Operations and Maintenance
MMBTU One Million BTUs
PC Project Cost
R R-Value
SF Square Feet, Supply Fan
TEMP Temperature
V Volts
W Watts
WTP Water Treatment Plant
Feasibility Assessment for Biomass Heating Systems Kiana, AK
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List of Figures
Figure 1 – Kiana, Alaska – Google Maps ....................................................................................................... 2
Figure 2 – City Warm Storage Building ......................................................................................................... 2
Figure 3 – Option 1 - Proposed Site Layout .................................................................................................. 6
Figure 4 – Option 2 - Proposed Site Layout .................................................................................................. 7
Figure 5 – Garn WHS-3200 Wood Boiler ....................................................................................................... 9
Figure 6 – Water Treatment Plant .............................................................................................................. 20
List of Tables
Table 1 – Executive Summary ....................................................................................................................... 1
Table 2 – List of Previous Biomass Related Studies ...................................................................................... 3
Table 3 – District Heat Options ..................................................................................................................... 5
Table 4 – Energy Comparison ..................................................................................................................... 10
Table 5 – Existing Fuel Oil Consumption ..................................................................................................... 11
Table 6 – Existing Oil Consumption of Each Option Without Biomass ....................................................... 11
Table 7 – Proposed Biomass System Fuel Consumption ............................................................................ 12
Table 8 – Estimate of Probable Cost – Biomass Option 1 ........................................................................... 14
Table 9 – Estimate of Probable Cost – Biomass Option 2 ........................................................................... 15
Table 10 – Inflation rates ............................................................................................................................ 16
Table 11 – Economic Definitions ................................................................................................................. 17
Table 12 – Economic Analysis Results ......................................................................................................... 18
Table 13 – Sensitivity Analysis – Biomass Option 1 .................................................................................... 19
Table 14 – Sensitivity Analysis – Biomass Option 2 .................................................................................... 19
Table 15 – WTP Oil Consumption ............................................................................................................... 20
Table 16 – WTP Energy Consumption with Upgrades ................................................................................ 21
Table 17 – Economic Analysis Results – WTP Upgrades ............................................................................. 23
Table 18 – Sensitivity Analysis – WTP Heat Recovery Upgrades ................................................................ 23
Feasibility Assessment for Biomass Heating Systems Kiana, AK
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I. Executive Summary
A preliminary feasibility assessment was completed to determine the technical and economic viability of
biomass heating systems for community buildings in Kiana, Alaska. The study evaluated a Garn style
cordwood boiler system that would supply supplemental heat to the community buildings. The high price
of heating oil is the main economic driver for the use of lower cost biomass heating.
Two biomass system options were evaluated. Biomass Option 1 will connect six community buildings (City
Warm Storage Building, City Office, Community Center, Fire Hall, Youth Center and Clinic) with a district
heat loop. A Garn cordwood boiler will be located in a new detached module located behind the City
Warm Storage Building. Due to the large project cost associated with connecting the buildings and the
relatively low heating oil savings, it was determined that Option 1 is not justified on a purely economic
basis at this time.
Biomass Option 2 will connect three buildings (City Warm Storage Building, Clinic and School) with a
district heat loop. To reduce costs, the Garn cordwood boiler is located inside the City Warm Storage
Building. It was determined that Option 2 is economically justified at this time, due to the fact that the
benefit to cost ratio of the project is greater than 1.0. An additional benefit is that the money used to
purchase cordwood will stay in the local community, which can create local job opportunities.
Upgrading the Kiana Water Treatment Plant’s heat recovery system was also evaluated in this study. It
was found that upgrading the heat recovery system is economically justified at this time. Upgrading the
heat recovery system has a larger benefit to cost ratio than the biomass options. The summary of the
results of the economic evaluation are shown in the table below.
Table 1 – Executive Summary
Item Biomass
Option 1
Biomass
Option 2
Water
Treatment
Plant Upgrades
Project Capital Cost ($872,000) ($552,000) ($391,000)
Present Value of Project Benefits (20-year life) $1,012,598 $3,844,001 $1,225,437
Present Value of Operating Costs (20-year life) ($446,880) ($3,073,300) ($402,301)
Benefit / Cost Ratio of Project (20-year life) 0.65 1.40 2.11
Net Present Value (20-year life) ($306,283) $218,701 $432,136
Year Cash Flow is Net Positive First Year First Year First Year
Payback Period
(Year Accumulated Cash Flow > Project Capital Cost) >20 years 16 years 11 years
If Kiana wishes to further pursue the biomass project, the next step is to complete a schematic level
engineering design and detailed cost estimate of the projects. An updated economic analysis can be
completed and Kiana can then decide if it is in its best interest to pursue funding to continue with final
design and construction.
Feasibility Assessment for Biomass Heating Systems Kiana, AK
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II. Introduction
A preliminary feasibility assessment was completed to determine the technical and economic viability of
a biomass heating system for selected community buildings of Kiana, Alaska. The biomass system is
proposed to be located at the City Warm Storage Building and would heat community buildings with a
district heating loop. The Kiana Water Treatment Plant was also evaluated for improvements to the
existing heat recovery system.
Figure 1 – Kiana, Alaska – Google Maps
Figure 2 – City Warm Storage Building
Feasibility Assessment for Biomass Heating Systems Kiana, AK
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III. Preliminary Site Investigation
Previous Studies
There have been multiple biomass and heat recovery related studies completed for Kiana and the nearby
region. These studies have looked at heat recovery improvements to the Water Treatment Plant, region
wide biomass resource inventory, and region wide biomass feasibility. These past studies were used in
developing this report and are listed below:
Table 2 – List of Previous Biomass Related Studies
Date Report Title Author
2010 Kiana Heat Recovery Study Alaska Energy and Engineering
(Prepared for ANTHC)
2013 NANA Region Native Allotment Forest
Inventory
Tanana Chiefs Conference, Forestry Program
(Prepared for Maniilaq)
2014
Biomass Project Feasibility and Design
Report – Northwest Arctic Borough – Upper
Kobuk Region
Tetra Tech
In general, the studies found that cordwood is a potentially viable energy resource in Kiana and that
improvements to the Water Treatment Plant’s heat recovery system are economically attractive.
Community Meeting
During the site visit, Coffman and a representative from the Alaska Energy Authority held a community
meeting regarding the biomass and energy efficiency opportunities in the community. Twenty
community members attended the meeting. Overall the community was very interested in biomass
opportunities and very interested in developing local jobs for harvesting cordwood and operating
biomass systems.
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Building Description
The City Warm Storage Building is a 2,400 square foot metal framed shop that was originally built in 1980.
In 2010 there was a major renovation that installed radiant floor heating, a new boiler and sheet rock to
the walls and ceiling. The building is used about 40 hours per week by one to two people. Currently,
there are no scheduled or planned renovations for the building.
Existing Heating System
The radiant floor of the City Warm Storage Building is heated by an Oil Miser boiler (OM-180, 124 MBH
Output, direct vent) a primary/secondary glycol loop. The boiler is located at the ground level at the back
of the building. A Modine Unit Heater (POR100B, 100 MBH Output) is mounted to the ceiling and provides
supplemental heat to the air in the building. Both the boiler and unit heater were inst alled during the
2010 renovation. Each unit has its own wall mounted thermostat.
The combustion efficiency of the existing fuel oil boiler is approximately 87% and the unit heater is 80%.
For this study, the Annual Fuel Utilization Efficiency of the oil fired equipment was estimated at 75% to
account for typical oil boiler inefficiencies, including short cycling.
There is routine maintenance of the boiler by the City of Kiana maintenance. The boiler and unit heater
appear to be in good shape and operating properly. No maintenance issues were reported to Coffman
during the site visit.
One 500 gal heating oil tank serves the building and is located on the south side of the building. There is
no additional spill containment present around the tank. Fuel oil in the tanks is only used for building
heating and is not used by other buildings.
There is no domestic water heating or air handling systems at the CWS.
Building Envelope
The City Warm Storage Building is a typical 40ft by 60ft metal frame warehouse building. It is estimated
to have R-13 wall and R-20 roof, made of foil faced fiberglass insulation. No design drawings of the
building were available. Two large overhead doors face the street. No windows are present in the
building.
Available Space
There is available space inside of the City Warm Storage Building for a biomass system. However, the City
of Kiana would prefer a new detached building to house a biomass boiler system. There is adequate space
located onsite behind the City Warm Storage Building for a new wood boiler building and a wood storage
structure. The existing gravel pad will need to be expanded at the site in preparation for the new
buildings.
Street Access and Fuel Storage
The City Warm Storage Building is located on a wide gravel road and can be easily accessed. Space for
wood storage exists behind the building, which can be easily accessed by the existing gravel pad.
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Building or Site constraints
There are no major building or site constraints that were found during the site visit. There are residential
buildings on three sides of the City Warm Storage Building, which would make it difficult to expand the
wood boiler system larger than the current lot size.
Proposed District Heating System
The City Warm Storage Building alone does not consume enough heating oil to make a viable biomass
project. In order to offset a larger amount of heating oil, a district heating system is proposed. Two
district loop options were investigated and are shown in the following table and figure. Both district loops
will utilize buried, insulated piping to transfer heat from a biomass boiler system to the buildings
connected to it.
Table 3 – District Heat Options
Map
# Building Name Option 1
Connection
Option 2
Connection Integration
23 City Warm Storage
Building Yes Yes Radiant Slab Return
27 Clinic Yes Yes Boiler Return and New Unit
Heater
28 Fire Hall Yes No New Unit Heater
29 Community Center Yes No New Unit Heater
30 City Office Yes No New Unit Heater
35 Youth Center Yes No New Unit Heater
21 Tribal Office No No Potential Future Connection
24 School No Yes Boiler Return and New Unit
Heater
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Option 1 will connect the City Warm Storage building, City Office, Community Center, Fire Hall, Youth
Center and Clinic to a district heat loop. The biomass boiler will be located in a new module located behind
the City Warm Storage Building.
Figure 3 – Option 1 - Proposed Site Layout
In the 2014 Tetra Tech study of nearby communities of Ambler, Kobuk and Shungnak, it was determined
that using biomass to offset each community’s school heating oil consumption would have an adverse
effect on wood availability for the rest of the community. This is because of the significant heating oil
consumption of the schools, compared to the rest of the community. Also, funding for the school does
not come from local resources, so the impact on the community would not be as great if heating oil offset
go to the school. Due to these reasons the school was not included in the Option 1 district heating system.
35
Proposed
Biomass Boiler
Building
Proposed
Heating Loop
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Option 2 connects the City Warm Storage Building, Clinic and School, which are the largest heating oil
consumers, to a district heat loop. To reduce costs, the biomass boiler will be located inside of the City
Warm Storage Building.
The Option 2 district loop was investigated because the economic analysis of Option 1 show that it is not
economically justified, at this time. In order to reduce installed costs, the number of buildings connected
to the district loop was reduced in Option 2. The school was connected to the loop in order to increase
heating oil offset by the biomass boiler. The goal is not to offset the majority of the school’s heating oil,
but rather provide supplemental heat to the school.
Figure 4 – Option 2 - Proposed Site Layout
The Tribal Office building was not included in either district heating loop for this analysis, but could be
connected in the future.
35
Biomass Boiler
inside City Warm
Storage Building
Proposed
Heating Loop
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Energy Agreement
For either biomass option, the Garn unit will deliver heat to multiple entities: City of Kiana, Maniilaq
(Clinic), and/or Northwest Arctic Borough School District (School). An agreement between these entities
will be needed in order allow the project to move forward.
For this economic analysis it is assumed that the entities would partner to fund, build and operate the
biomass plant. BTU monitoring would be used to measure the amount of heat that each entity has used
and each entity would be charged the BTU equivalent cord wood rate. This arrangement allows for the
most cost savings for each entity.
Another option is for the City to fund, build and operate the biomass plant independently and sell heat to
Maniilaq and/or the School District. The City would sell the heat to make a profit in order to pay for the
cost of building and operating the plant. BTU monitoring will be used. In this arrangement the City will
need to set a BTU price that makes the project attractive to the other entities, while still being able to
make enough profit to pay for project expenses.
Biomass System Integration
Heat from the biomass system would be integrated into each building in several ways, as shown in Table
3. Each building will utilize their own heat exchanger and pumps to deliver heat from the district heat loop
to either new unit heaters or tie into the existing boiler system.
In Option 1, new hydronic unit heaters will be installed in the City Office, Community Building, Fire Hall,
and Youth Center. The new unit heaters will reduce installation costs and reduce control system
complexity, compared with integrating into the existing boiler systems. Also, the new unit heaters can be
designed to utilize lower temperature supply water. The Clinic will have both a new hydronic unit heater
for the lobby area and a connection to the boiler return line. The biomass heat would tie into the City
Warm Storage Building’s radiant slab floor.
In Option 2, the connections for the Clinic and City Warm Storage Building will be the same as Option 1.
The School will have both a new hydronic unit heater in the gym and a connection to the boiler return
line.
It is assumed that an aggressive outdoor air supply water reset is added to the existing boiler systems of
the Clinic and School. This will allow the existing hydronic systems to operate at lower supply water
temperatures, which allows more heat to be extracted from the biomass boiler and reduces the amount
of times the biomass boiler needs to be fired.
Feasibility Assessment for Biomass Heating Systems Kiana, AK
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Biomass System Technology
Since cordwood is the local wood resource available in Kiana, the best biomass technology to implement
is a Garn boiler type system. For this study, a single Garn WHS-3200 wood boiler was used as the basis of
design. This unit has a 3,200-gallon water tank and is 7’4” wide x 7’8” high x 12’ long.
Figure 5 – Garn WHS-3200 Wood Boiler
In Option 1, the Garn boiler would be housed in a new 8’ wide x 20’ long insulated module located behind
the City Warm Storage Building. The module would contain circulation pumps, heat exchanger and
controls. The module and interior components could be pre-constructed offsite and shipped to Kiana for
installation.
In Option 2, the Garn boiler would be located inside the City Warm Storage Building in order to reduce
the costs of building a new module. The circulation pumps, heat exchanger and controls would also be
located in the building.
The Garn boiler would deliver heat to a heat exchanger, which would transfer heat to a buried piping loop
system with 50% propylene glycol. This loop would deliver heat through a direct buried, insulated pipe to
a new heat exchanger at each building.
The biomass system should be designed to allow for additional garn boilers to be added in the future, if
Kiana wishes to expand the project to offset further quantities of heating oil.
Feasibility Assessment for Biomass Heating Systems Kiana, AK
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IV. Energy Consumption and Costs
Energy Costs
The table below shows the energy comparison of different fuel types. The system efficiency is used to
calculate the delivered MMBTU’s of energy to the building. The delivered cost of energy to the building,
in $/MMBTU, is the most accurate way to compare costs of different energy types. As shown below,
cordwood is cheaper than fuel oil on a $/MMBTU basis.
Table 4 – Energy Comparison
Fuel Type Units Gross
BTU/unit
System
Efficiency $/unit Delivered
$/MMBTU
Cord Wood cord 15,900,000 75% $250 $20.96
Heating Oil #1 gal 134,000 75% $5.50 $54.73
Electricity kWh 3,413 99% $0.60 $177.57
Wood Energy
The gross energy content of a cord of wood varies depending on tree species and moisture content. Wet
or greenwood has higher moisture contents and require additional heat to evaporate moisture before the
wood can burn. Thus, wood with higher moisture contents will have lower energy contents. Seasoned
or dry wood will typically have 20% moisture content. According to the previous resource assessments in
the Kiana area, the wood species is primarily White and Black spruce. The 2014 Tetra Tech Biomass Study
estimates that the average heating value of Black spruce is 15.9 MMBTU/cord, which was used for the
calculations in Coffman’s analysis. To determine the delivered $/MMBTU of the biomass system, a 75%
efficiency for batch burning systems was assumed. This is based on Garn manufacturer documentation
and typical operational issues which do not allow firing 100% of the time.
Cordwood
Cord wood can be purchased by local wood cutters for approximately $300 to $350/cord. However, a
new road is planned to be constructed next year to access a new gravel pit for the expansion of the Kiana
airport. This new road will give access to a large area of forested land that could be used for harvest. The
City of Kiana estimates that with this new road, cord wood will be easier to harvest and the price will drop
to $250/cord. For this analysis it is assumed that the price for cord wood will be $250/cord. A sensitivity
analysis is completed to show how changing cord wood prices will affect the projects benefit to cost ratio.
Wood Pellets
There is no local wood pellet manufacturer or distributer in Kiana, which means that wood pellets would
have to be barged into the community. Wood pellets are typically sold in 40 pound bags and shipped by
the pallet (where 50 bags are loaded on a pallet). Each pallet is one ton of pellets. Wood pellets are
currently sold in Anchorage for $295/ton. The additional cost for shipping one ton of wood pellets by
barge to Kiana would be significantly more expensive, making pellets cost-prohibitive compared to
heating oil. Due to this factor, wood pellets were not considered as an economical fuel for this study.
Feasibility Assessment for Biomass Heating Systems Kiana, AK
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Heating Oil
The high price of fuel oil is the main economic driver for the use of lower cost biomass heating. Fuel oil is
shipped into Kiana by barge and currently costs approximately $5.50/gal. For this study, the energy
content of fuel oil is based on 134,000 BTU/gal, according to the UAF Cooperative Extension.
Electricity
Electricity is provided by the local power utility, Alaska Village Electric Cooperative (AVEC). The City of
Kiana receives a non-PCE rate of $0.60/kWh, which was used in this economic analysis.
Existing Heating Oil Consumption
Heating oil records for five city buildings were gathered for 2015 and are shown in the following table.
The Clinic is operated by Maniilaq and heating oil records were not available, so annual heating oil
consumption was estimated at 0.70 gallons per square foot. The heating oil consumption of the school
was verbally reported by onsite maintenance during the site visit.
Table 5 – Existing Fuel Oil Consumption
Building Fuel Type Annual
Consumption Net MMBTU/yr Avg. Annual Cost
City Office Building Heating Oil #1 950 gal 95.5 $5,225
Community Building Heating Oil #1 850 gal 85.4 $4,675
Fire Hall Heating Oil #1 600 gal 60.3 $3,300
Youth Activity Center Heating Oil #1 650 gal 65.3 $3,575
Warm Storage Heating Oil #1 1,300 gal 130.7 $7,150
Clinic Heating Oil #1 3,500 gal 351.8 $19,250
School Heating Oil #1 25,000 gal 2512.5 $137,500
The existing heating oil consumption for each district heating option is shown below.
Table 6 – Existing Oil Consumption of Each Option Without Biomass
Option Buildings Served Annual
Consumption
Net
MMBTU/yr
Avg. Annual
Cost
Option 1
City Warm Storage
Building, Community
Building, Fire Hall, Youth
Center, Clinic, City Warm
Storage Building
7,850 gal 788.9 $43,175
Option 2 Clinic, City Warm Storage
Building, School 29,800 gal 2994.9 $163,900
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Biomass System Consumption
For Option 1, it is estimated that the proposed biomass system will offset 85% of the heating energy for
the connected community buildings. The remaining 15% of the heating energy will be provided by the
existing oil boilers, Toyo stoves or unit heaters inside each building.
For Option 2, it is estimated that the proposed biomass system will offset 30% of the heating oil. The
remaining 70% of the heat will be provided by the existing oil boilers in the Clinic, School and City Warm
Storage Building.
The percentage of heating oil offsets is based on an analysis of the buildings’ annual heating oil
consumption, compared to temperature BIN data and the heat output of the Garn boiler. It is assumed
that the Garn WHS-3200 is loaded every 12 hours, which will produce 150,000 BTU/hr with return water
temperature of 125F per manufacturer documentation. More frequent loading is possible, which will
increase BTU output and allow additional heating oil offset during colder times of the year. Overall, it is
estimated that the Garn system will save approximately $22,160 and $30,094 in annual energy costs for
Option 1 and Option 2, respectively.
Table 7 – Proposed Biomass System Fuel Consumption
Biomass
Option Fuel Type % Heating
Source
Net
MMBTU/yr
Annual
Consumption
Energy
Cost
Total
Energy
Cost
Annual
Energy
Savings
Option 1
Cord Wood 85% 670.6 56 cords $14,058
$21,015 $22,160 Fuel Oil 15% 118.3 1,178 gal $6,476
Additional
Electricity N/A N/A 800 kWh $480
Option 2
Cord Wood 30% 898.5 75 cords $18,836
$133,806 $30,094 Fuel Oil 70% 2096.4 20,860 gal $114,730
Additional
Electricity N/A N/A 400 kWh $240
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V. Preliminary Cost Estimating
An estimate of probable costs was completed for installing the Garn boiler system and district heating
system for each option. The cost estimate is based upon equipment quotes and from previous cost
estimates created for similar projects. A 15% remote factor was used to account for increased shipping
and installation costs in Kiana. Project and Construction Management was estimated at 5%. Engineering
design and permitting was estimated at 15% and a 25% contingency was used.
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Table 8 – Estimate of Probable Cost – Biomass Option 1
Category Description Cost
Site Work Site Grading for Module $ 4,000
Foundation (Timbers and Anchors) $ 5,000
Buried Utilities $ 5,000
Subtotal $ 14,000
Electrical Utilities Service Entrance $ 4,000
Conduit and Wiring $ 4,000
Subtotal $ 8,000
Wood Boiler Building Insulated Module 8 ft x 20 ft $ 15,000
Garn Boiler WHS 3200 $ 45,000
Heat Exchanger $ 5,000
Installation, Piping & Materials $ 70,000
Fire Allowance $ 10,000
Controls Allowance $ 20,000
Electrical Allowance $ 10,000
Shipping $ 30,000
Subtotal $ 205,000
Heat Loop Distribution Excavation (Using Local Labor) $ 30,000
Insulated Arctic Pipe (With Supply and Return
Lines) $ 90,000
Sand Bedding $ 15,000
Heat Exchangers for Each Building $ 24,000
Circ Pumps for Each Building (2 each) $ 24,000
Building Piping $ 30,000
Unit Heaters $ 32,000
Clinic Boiler Connection $ 10,000
Shipping $ 20,000
Subtotal $ 275,000
Subtotal Material and
Installation Cost $ 502,000
Remote Factor 15% $ 75,300
Subtotal $ 577,300
Project and Construction
Management 5% $ 28,865
Subtotal $ 606,165
Design Fees and Permitting 15% $ 90,925
Subtotal $ 697,090
Contingency 25% $ 174,272
Total Project Cost $ 871,362
Budgetary Cost $ 872,000
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Table 9 – Estimate of Probable Cost – Biomass Option 2
Category Description Cost
Wood Boiler Install Garn Boiler WHS 3200 $ 45,000
Heat Exchanger $ 5,000
Installation, Piping & Materials $ 50,000
Fire Allowance $ 10,000
Controls Allowance $ 10,000
Electrical Allowance $ 10,000
Shipping $ 25,000
Subtotal $ 155,000
Heat Loop Distribution Excavation (Using Local Labor) $ 14,000
Insulated Arctic Pipe (With Supply and Return
Lines) $ 42,000
Sand Bedding $ 7,000
Heat Exchangers for Each Building $ 12,000
Circ Pumps for Each Building (2 each) $ 12,000
Building Piping $ 15,000
Unit Heaters $ 16,000
Clinic Boiler Connection $ 10,000
School Boiler Connection $ 10,000
Shipping $ 25,000
Subtotal $ 163,000
Subtotal Material and
Installation Cost $ 318,000
Remote Factor 15% $ 47,700
Subtotal $ 365,700
Project and Construction
Management 5% $ 18,285
Subtotal $ 383,985
Design Fees and Permitting 15% $ 57,598
Subtotal $ 441,583
Contingency 25% $ 110,396
Total Project Cost $ 551,978
Budgetary Cost $ 552,000
Feasibility Assessment for Biomass Heating Systems Kiana, AK
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VI. Economic Analysis
The following assumptions were used to complete the economic analysis for this study.
Table 10 – Inflation rates
Discount Rate for Net Present Value Analysis 3%
Wood Fuel Escalation Rate 3%
Fossil Fuel Escalation Rate 5%
Electricity Escalation Rate 3%
O&M Escalation Rate 2%
The real discount rate, or minimum attractive rate of return, is 3.0% and is the current rate used for all
Life Cycle Cost Analysis by the Alaska Department of Education and Early Development. This is a typical
rate used for completing economic analysis for public entities in Alaska. The escalation rates used for the
wood, heating oil, electricity and O&M rates are based on rates used in the Alaska Energy Authority
funded 2013 and 2014 biomass pre-feasibility studies. These are typical rates used for this level of
evaluation and were used so that results are consistent and comparable to the previous studies.
A net present value analysis was completed using real dollars (constant dollars) and the real discount rate,
as required per the Alaska Department of Education and Early Development Life Cycle Cost Analysis
Handbook.
O&M Costs
Non-fuel related operations and maintenance costs (O&M) were estimated at $700 per year. The
estimate is based on annual maintenance time for the Garn boiler. For only the first two years of service,
the maintenance cost is doubled to account for maintenance staff getting used to operating the new
system. Labor costs for daily stoking of the boiler are not included, as this is typically completed by a
maintenance person who is already hired by the organization that utilizes the boiler and stoking the boiler
would become part of their daily duties.
Definitions
There are many different economic terms used in this study. A listing of all of the terms with their
definition is provided below for reference.
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Table 11 – Economic Definitions
Economic Term Description
Project Capital Cost This is the opinion of probable cost for designing and constructing the
project.
Present Value of
Project Benefits
(20-year life)
The present value of all of the heating oil that would have been consumed
by the existing heating oil-fired heating system, over a 20-year period.
Present Value of
Operating Costs
(20-year life)
The present value of all of the proposed biomass systems operating costs
over a 20-year period. This includes wood fuel, additional electricity, and
O&M costs for the proposed biomass system and the heating oil required by
the existing equipment to supply the remaining amount of heat to the
building.
Benefit / Cost Ratio of
Project
(20-year life)
This is the benefit to cost ratio over the 20-year period. A project that has a
benefit to cost ratio greater than 1.0 is economically justified. It is defined
as follows:
𝐵𝑐𝑛𝑐𝑐𝑖𝑟 / 𝐵𝑛𝑟𝑟 𝑅𝑎𝑟𝑖𝑛= 𝑂𝑉(𝑂𝑟𝑛𝑖𝑐𝑐𝑟 𝐵𝑐𝑛𝑐𝑐𝑖𝑟𝑟)− 𝑂𝑉(𝑂𝑛𝑐𝑟𝑎𝑟𝑖𝑛𝑐 𝐵𝑛𝑟𝑟𝑟)
𝑂𝑟𝑛𝑖𝑐𝑐𝑟 𝐵𝑎𝑛𝑖𝑟𝑎𝑙 𝐵𝑛𝑟𝑟
Where:
PV = The present value over the 20-year period
Reference Sullivan, Wicks and Koelling, “Engineering Economy”, 14th ed.,
2009, pg. 440, Modified B-C Ratio.
Net Present Value
(20-year life)
This is the net present value of the project over a 20-year period. If the
project has a net present value greater than zero, the project is economically
justified. This quantity accounts for the project capital cost, project benefits
and operating costs.
Payback Period (Year
Accumulated Cash Flow
> Project Capital Cost)
The Payback Period is the number of years it takes for the accumulated cash
flow of the project to be greater than or equal to the project capital cost.
This quantity includes escalating energy prices and O&M rates. This quantity
is calculated as follows:
𝐼𝑛𝑟𝑟𝑎𝑙𝑙𝑐𝑐 𝐵𝑛𝑟𝑟≤∑𝑅𝑘
𝐽
𝑘=0
Where:
J = Year that the accumulated cash flow is greater than or equal to the
Project Capital Cost.
𝑅𝑘 = Project Cash flow for the kth year.
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Results
An economic analysis was completed for each option in order to determine the payback, benefit to cost
ratio, and net present value of the proposed Garn boiler system, as shown in the table below. Any project
with a benefit to cost ratio above 1.0 is considered economically justified.
Option 1 has a benefit to cost ratio of 0.65 over the 20-year study period, which does not make the project
justified on a purely economic basis. The main reasons for this low benefit to cost ratio is the high
installation costs associated with connecting numerous community buildings and the relatively low
amount of heating oil offset.
Option 2 has a benefit to cost ratio of 1.40 over the 20-year study period, which makes the project
economically justified. Installing the Garn boiler inside the City Warm Storage Building and only
connecting the three high heating oil consumers reduces the installation cost of the project while also
maximizing heating oil offset.
The Alaska Energy Authority is now using a 25-year life span for the Garn Boiler for the Renewable Energy
Fund applications. This means that the Garn will have five years of additional benefits after the 20-year
study period.
A cordwood storage building was not included in either option. Please refer to Appendix B for the
economic analysis spreadsheet for greater detail.
Table 12 – Economic Analysis Results
Item Biomass Option 1 Biomass Option 2
Project Capital Cost ($872,000) ($552,000)
Present Value of Project Benefits (20-year life) $1,012,598 $3,844,001
Present Value of Operating Costs (20-year life) ($446,880) ($3,073,300)
Benefit / Cost Ratio of Project (20-year life) 0.65 1.40
Net Present Value (20-year life) ($306,283) $218,701
Year Cash Flow is Net Positive First Year First Year
Payback Period
(Year Accumulated Cash Flow > Project Capital Cost) >20 years 16 years
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Sensitivity Analysis
A sensitivity analysis was completed to show how changing heating oil costs and wood costs affect the
benefit to cost (B/C) ratios of each project. As heating oil costs increase and wood costs decrease, the
projects becomes more economically viable. The B/C ratios greater than 1.0 are economically justified
and are highlighted in green. B/C ratios less than 1.0 are not economically justified and are highlighted in
red. The sensitivity analysis shows that Option 2 is economically justified over a much wider range in
cordwood prices and heating oil prices than Option 1.
Table 13 – Sensitivity Analysis – Biomass Option 1
B/C Ratios Cordwood Cost
$150/cord $200/cord $250/cord $300/cord $350/cord
Heating
Oil Cost
$3.50/gal 0.41 0.35 0.29 0.23 0.17
$4.00/gal 0.50 0.44 0.38 0.32 0.25
$4.50/gal 0.59 0.53 0.47 0.41 0.34
$5.00/gal 0.68 0.62 0.56 0.50 0.43
$5.50/gal 0.77 0.71 0.65 0.59 0.52
$6.00/gal 0.86 0.80 0.74 0.68 0.61
$6.50/gal 0.95 0.89 0.83 0.77 0.70
$7.00/gal 1.04 0.98 0.92 0.86 0.79
$7.50/gal 1.13 1.07 1.01 0.95 0.88
Table 14 – Sensitivity Analysis – Biomass Option 2
B/C Ratios Cordwood Cost
$150/cord $200/cord $250/cord $300/cord $350/cord
Heating
Oil Cost
$3.50/gal 0.90 0.77 0.64 0.50 0.37
$4.00/gal 1.09 0.96 0.83 0.69 0.56
$4.50/gal 1.28 1.15 1.02 0.88 0.75
$5.00/gal 1.47 1.34 1.21 1.07 0.94
$5.50/gal 1.66 1.53 1.40 1.26 1.13
$6.00/gal 1.85 1.72 1.59 1.45 1.32
$6.50/gal 2.04 1.91 1.78 1.64 1.51
$7.00/gal 2.23 2.10 1.97 1.83 1.70
$7.50/gal 2.42 2.29 2.16 2.02 1.89
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VII. Heat Recovery Modifications at Water Treatment Plant
During the site visit at Kiana, Coffman investigated the existing heat recovery system at the Water
Treatment Plant (WTP) and evaluated ways to improve the system. The existing heat recovery system
transfers heat from the nearby AVEC generator module through a buried, insulated arctic pipe. Heat is
transferred through several heat exchangers to tank water and well line loop water. The heat recovery
system is currently not connected to the WTP’s boiler loop for building heat. The Alaska Native Tribal
Health Consortium’s (AHTHC) Alaska Rural Utility Collaborative (ARUC) is in charge of operating and
maintaining the WTP. ANTHC was collaborated with to determine improvements and costs associated
with upgrading the heat recovery system.
Figure 6 – Water Treatment Plant
Energy Consumption
Based on energy data from the Alaska Native Tribal Health Consortium (AHTHC) for fiscal years 2014
through 2016, the WTP consumes approximately 9,500 gallons of heating oil annually.
Table 15 – WTP Oil Consumption
Building Name Fuel Type Annual
Consumption Net MMBTU/yr Avg. Annual
Cost
Water Treatment Plant Heating Oil #1 9,500 gal 954.8 $52,250
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Heat Recovery Upgrades
Based on coordination with ANTHC and the site visit, the following upgrades to the heat recovery system
are recommended:
1. Re-pipe and replace heat exchangers to allow for the utilization of heat by the entire heating
system and not just the raw water heat exchanger and water storage tank. This will involve
installing a new heat exchanger on the return side of the boiler loop. Heat exchanger size to be
verified.
2. Replace above ground heat recovery piping with similar size piping with 3” of insulation to
increase available energy and recharge the system with glycol. Sizing of piping to be verified.
3. Insulate exposed piping inside water plant to reduce heat loss and condensation buildup.
4. Modify the AVEC heat recovery module to increase available energy. This will involve adding
marine jackets to the diesel generators and upgrading the thermostatic valve. Coordination with
AVEC on appropriate upgrades will need to be completed.
Based on an analysis of AVEC’s generator fuel consumption from 2013 to 2016, it is estimated that the
modifications to the heat recovery system will allow a 90% offset of the WTP’s heating oil. According to
AVEC, the cost for heat recovery BTU’s is approximately 30% of the cost of heating oil. It is unclear if AVEC
is currently charging ARUC on heat recovery energy at this time. The savings associated with upgrading
the heat recovery system is shown below.
Table 16 – WTP Energy Consumption with Upgrades
Fuel Type % Heating
Source
Net
MMBTU/yr
Annual
Consumption
Energy
Cost
Total
Energy
Cost
Annual
Energy
Savings
Heat Recovery 90% 859.3 8,550 gal
Equivalent $14,108 $19,333 $32,918
Heating Oil 10% 95.5 950 gal $5,225
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Preliminary Cost Estimate
An estimate of probable costs was completed for the WTP heat recovery upgrades. A 15% remote factor
was used to account for increased shipping and installation costs in Kiana. Project and Construction
Management was estimated at 5%. Engineering design and permitting was estimated at 15% and a 25%
contingency was used.
Category Description Cost
WTP Work Add New Heat Exchanger to Return Side of Boilers $ 50,000
Replace Above Ground Heat Recover Piping with
insulated Arctic Pipe $ 75,000
Insulate Piping Inside Plant $ 50,000
Modify Heat Recovery Module and Install Marine Jackets $ 50,000
Subtotal Material and Installation Cost $ 225,000
Remote Factor 15% $ 33,750
Subtotal $ 258,750
Project and Construction
Management 5% $ 12,938
Subtotal $ 271,688
Design Fees and
Permitting 15% $ 40,753
Subtotal $ 312,441
Contingency 25% $ 78,110
Total Project Cost $ 390,551
Budgetary Cost $ 391,000
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Economic Analysis
An economic analysis of the WTP upgrades was completed using the same escalation factors used in the
biomass study. The benefit to cost ratio of the project is 2.11, which makes the project economically
justified. Compared with the proposed biomass project, the WTP heat recovery upgrade project has a
higher return on investment.
Table 17 – Economic Analysis Results – WTP Upgrades
Project Capital Cost ($391,000)
Present Value of Project Benefits (20-year life) $1,225,437
Present Value of Operating Costs (20-year life) ($402,301)
Benefit / Cost Ratio of Project (20-year life) 2.11
Net Present Value (20-year life) $432,136
Year Cash Flow is Net Positive First Year
Payback Period
(Year Accumulated Cash Flow > Project Capital Cost) 11 years
A sensitivity analysis was completed to show how changing heating oil costs and total project costs affect
the benefit to cost (B/C) ratios of the heat recovery project. The B/C ratios greater than 1.0 are
economically justified and are highlighted in green. B/C ratios less than 1.0 are not economically justified
and are highlighted in red. The sensitivity analysis shows that the heat recovery project is economically
justified over a wide range of project costs and heating oil costs.
Table 18 – Sensitivity Analysis – WTP Heat Recovery Upgrades
B/C Ratios Project Cost
($200,000) ($300,000) ($391,000) ($500,000) ($600,000)
Heating
Oil Cost
$3.50/gal 2.23 1.49 1.14 0.89 0.74
$4.00/gal 2.61 1.74 1.33 1.04 0.87
$4.50/gal 2.99 1.99 1.53 1.19 1.00
$5.00/gal 3.36 2.24 1.72 1.34 1.12
$5.50/gal 3.74 2.49 1.91 1.50 1.25
$6.00/gal 4.12 2.74 2.11 1.65 1.37
$6.50/gal 4.49 2.99 2.30 1.80 1.50
$7.00/gal 4.87 3.25 2.49 1.95 1.62
$7.50/gal 5.25 3.50 2.68 2.10 1.75
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VIII. Forest Resource and Fuel Availability Assessments
Forest Resource Assessments
Several Forest Resource Assessments have been completed in the Kiana area. Refer to Table 2 for a list
of the resource assessments.
It is recommended that a local biomass resource study be completed for both Kiana and the nearby
community of Noorvik, similar to the Tetra Tech report. A 25-mile radius around each community should
be studied to determine actual biomass resources available and what a sustainable harvest of wood will
be.
Air Quality Permitting
Currently, air quality permitting is regulated according to the Alaska Department of Environmental
Conservation Section 18 AAC 50 Air Quality Control regulations. Per these regulations, a minor air quality
permit is required if a new wood boiler or wood stove produces one of the following conditions per
Section 18 AAC 50.502 (C)(1): 40 tons per year (TPY) of carbon dioxide (CO2), 15 TPY of particulate matter
greater than 10 microns (PM-10), 40 TPY of sulfur dioxide, 0.6 TPY of lead, 100 TPY of carbon monoxide
within 10 kilometers of a carbon monoxide nonattainment area, or 10 TPY of direct PM -2.5 emissions.
These regulations assume that the device will operate 24 hours per day, 365 days per year and that no
fuel burning equipment is used. If a new wood boiler or wood stove is installed in addition to a fuel
burning heating device, the increase in air pollutants cannot exceed the following per AAC 50.502 (C)(3):
10 TPY of PM-10, 10 TPY of sulfur dioxide, 10 TPY of nitrogen oxides, 100 TPY of carbon monoxide within
10 kilometers of a carbon monoxide nonattainment area, or 10 TPY of direct PM-2.5 emissions. Per the
Wood-fired Heating Device Visible Emission Standards (Section 18 AAC 50.075), a person may not operate
a wood-fired heating device in a manner that causes black smoke or visible emissions that exceed 50
percent opacity for more than 15 minutes in any hour in an area where an air quality advisory is in effect.
From Coffman’s discussions with Patrick Dunn at the Alaska Department of Environmental Conservation,
these regulations are focused on permitting industrial applications of wood burning equipment. In his
opinion, it would be unlikely that an individual wood boiler would require an air quality permit unless
several boilers were to be installed and operated at the same site. If several boilers were installed and
operated together, the emissions produced could be greater than 40 tons of CO2 per year. This would
require permitting per AAC 50.502 (C)(1) or (C)(3). Permitting would not be required on the residential
wood fired stoves unless they violated the Wood-fired Heating Device Visible Emission Standards (Section
18 AAC 50.075). Recent Garn boiler systems installed in Alaska have not required air quality permits.
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IX. General Biomass Technology Information
Heating with Wood Fuel
Wood fuels are among the most cost-effective and reliable sources of heating fuel for communities
adjacent to forestland when the wood fuels are processed, handled, and combusted appropriately.
Compared to other heating energy fuels, such as oil and propane, wood fuels typically have lower energy
density and higher associated transportation and handling costs. Due to this low bulk density, wood fuels
have a shorter viable haul distance when compared to fossil fuels. This short haul distance also creates an
advantage for local communities to utilize locally-sourced wood fuels, while simultaneously retaining local
energy dollars.
Most communities in rural Alaska are particularly vulnerable to high energy prices due to the large number
of heating degree days and expensive shipping costs. For many communities, wood-fueled heating can
lower fuel costs. For example, cordwood sourced at $250 per cord is just 25% of the cost per MMBTU as
#1 fuel oil sourced at $7 per gallon. In addition to the financial savings, the local communities also benefit
from the multiplier effect of circulating energy dollars within the community longer, more stable energy
prices, job creation, and more active forest management.
The local cordwood market is influenced by land ownership, existing forest management and ecological
conditions, local demand and supply, and the State of Alaska Energy Assistance program.
Types of Wood Fuel
Wood fuels are specified by energy density, moisture content, ash content, and granulometry. Each of
these characteristics affects the wood fuel’s handling characteristics, storage requirements, and
combustion process. Higher quality fuels have lower moisture, ash, dirt, and rock contents, consistent
granulometry, and higher energy density. Different types of fuel quality can be used in wood heating
projects as 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 rural Alaska must be designed around the availability of wood fuels. Some fuels can be
harvested and manufactured on site, such as cordwood, woodchips, and briquettes. Wood pellets can
also be used, but typically require a larger scale pellet manufacturer to make them. The economic
feasibility of manufacturing on site is determined by a financial assessment of the project. Typically, larger
projects offer more flexibility in terms of owning and operating the wood harvesting and manufacturing
equipment, such as a wood chipper, splitter, or equipment to haul wood out of forest, than smaller
projects.
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High Efficiency Wood Pellet Boilers
High efficiency pellet boilers are designed to burn wood pellets cleanly and efficiently. These boilers utilize
pellet storage bins or silos that hold a large percentage of the building’s annual pellet supply. Augers or
vacuums transfer pellets from the silos to a pellet hopper adjacent to the pellet boiler, where pellets can
be fed into the boiler for burning. Pellets are automatically loaded into the pellet boiler and do not require
manual loading such as in a Garn cordwood boiler. The pellet boilers typically have a 3 to 1 turn down
ratio, which allows the firing rate to modulate from 100% down to 33% fire. This allows the boiler to
properly match building heat demand, increasing boiler efficiency. The efficiencies of these boilers can
range from 85% to 92% efficiency depending on firing rate.
High Efficiency Cordwood Boilers
High Efficiency Low Emission (HELE) cordwood boilers are designed to burn cordwood fuel cleanly and
efficiently. The boilers use cordwood that is typically seasoned to 25% moisture content (MC) or less and
meet the dimensions required for loading and firing. The amount of cordwood burned by the boiler will
depend on the heat load profile of the building and the utilization of the fuel oil system as back up. Two
HELE cordwood boiler suppliers include Garn (www.garn.com) and TarmUSA (www.woodboilers.com).
Both of these suppliers have units operating in Alaska. TarmUSA has a number of residential units
operating in Alaska and has models that range between 100,000 to 300,000 BTU/hr. Garn boilers,
manufactured by Dectra Corporation, are used in Tanana, Kasilof, Dot Lake, Thorne Bay, Coffman Cove
and other locations to heat homes, washaterias, schools, and community buildings.
The Garn boiler has a unique construction, which is basically a wood boiler housed in a large water tank.
Garn boilers come in several sizes and are appropriate for facilities using 100,000 to 1,000,000 BTUs per
hour. The jacket of water surrounding the fire box absorbs heat and is piped into buildings via a heat
exchanger, and then transferred to an existing building heating system, in-floor radiant tubing, unit
heaters, or baseboard heaters. In installations where the Garn boiler is in a detached building, there are
additional heat exchangers, pumps and a glycol circulation loop that are necessary to transfer heat to the
building while allowing for freeze protection. Radiant floor heating is the most efficient heating method
when using wood boilers such as Garns, because they can operate using lower supply water temperatures
compared to baseboards.
Garn boilers are approximately 87% efficient and store a large quantity of water. For example, the Garn
WHS-2000 holds approximately 1,825 gallons of heated water. Garns also produce virtually no smoke
when at full burn, because of a primary and secondary gasification (2,000 ºF) burning process. Garns are
manually stocked with cordwood and can be loaded multiple times a day during periods of high heating
demand. Garns are simple to operate with only three moving parts: a handle, door and blower. Garns
produce very little ash and require minimal maintenance. Removing ash and inspecting fans are typical
maintenance requirements. Fans are used to produce a draft that increases combustion temperatures
and boiler efficiency. In cold climates, Garns can be equipped with exterior insulated storage tanks for
extra hot water circulating capacity. Most facilities using cordwood boilers keep existing oil-fired systems
operational to provide heating backup during biomass boiler downtimes and to provide additional heat
for peak heating demand periods.
Low Efficiency Cordwood Boilers
Outdoor boilers are categorized as low-efficiency, high emission (LEHE) systems. These boiler systems are
not recommended as they produce significant emission issues and do not combust wood fuels efficiently
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or completely, resulting in significant energy waste and pollution. These systems require significantly
more wood to be purchased, handled and combusted to heat a facility as compared to a HELE system.
Additionally, several states have placed a moratorium on installing LEHE boilers because of air quality
issues (Washington). These LEHE systems can have combustion efficiencies as low as 25% percent and
produce more than nine times the emission rate of standard industrial boilers. In comparison, HELEs can
operate around 87% efficiency.
High Efficiency Wood Stoves
Newer high efficiency wood stoves are available on the market that produce minimal smoke, minimal ash
and require less firewood. New EPA-certified wood stoves produce significantly less smoke than older
uncertified wood stoves. High efficiency wood stoves are easy to operate with minimal maintenance
compared to other biomass systems. The Blaze King Classic high efficiency wood stove
(www.blazeking.com) is a recommended model, due to its built-in thermostats that monitor the heat
output of the stove. This stove automatically adjusts the air required for combustion. This unique
technology, combined with the efficiencies of a catalytic combustor with a built-in thermostat, provides
the longest burn times of any wood stove. The Blaze King stove allows for optimal combustion and less
frequent loading and firing times.
Bulk Fuel Boilers
Bulk fuel boilers usually burn wood chips, sawdust, bark or pellets and are designed around the wood
resources that are available from the local forests or local industry. Several large facilities in Tok, Craig,
and Delta Junction (Delta Greely High School) are using bulk fuel biomass systems. Tok uses a commercial
grinder to process woodchips. The chips are then dumped into a bin and are carried by a conveyor belt
to the boiler. The wood fuel comes from timber scraps, local sawmills and forest thinning projects. The
Delta Greely High School has a woodchip bulk fuel boiler that heats the 77,000 square foot facility. The
Delta Greely system, designed by Coffman engineers, includes a completely separate boiler building which
includes a chip storage bunker and space for storage of tractor trailers full of chips (so handling of frozen
chips could be avoided). Woodchips are stored in the concrete bunker and augers move the material on
a conveyor belt to the boilers.
Grants
There are state, federal, and local grant opportunities for biomass work for feasibility studies, design and
construction. If a project is pursued, a thorough search of websites and discussions with the AEA Biomass
group is recommended to make sure no possible funding opportunities are missed. Below are some
funding opportunities and existing past grants that have been awarded.
Currently, there is a funding opportunity for tribal communities that develop clean and renewable energy
resources through the U.S. Department of Energy. The Energy Department’s Tribal Energy Program, in
cooperation with the Office of Indian Energy, will help Native American communities, tribal energy
resource development organizations, and tribal consortia to install community or facility scale clean
energy projects.
http://apps1.eere.energy.gov/tribalenergy/
The U.S. Department of Agriculture Rural Development has over fifty financial assistance programs for a
variety of rural applications. This includes energy efficiency and renewable energy programs.
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http://www.rd.usda.gov/programs-services
The Department of Energy (DOE), Alaska Native programs, focus on energy efficiency and add ocean
energy into the mix. In addition, the communities are eligible for up to $250,000 in energy-efficiency aid.
The Native village of Kongiganak will get help strengthening its wind-energy infrastructure, increasing
energy efficiency and developing “smart grid technology”. Koyukuk will get help upgrading its energy
infrastructure, improving energy efficiency and exploring biomass options. The village of Minto will
explore all the above options as well as look for solar-energy ideas. Shishmaref, an Alaska Native village
faced climate-change-induced relocation, will receive help with increasing energy sustainability and
building capacity as it relocates.
http://energy.gov/articles/alaska-native-communities-receive-technical-assistance-local-clean-energy-
development
The city of Nulato was awarded a $40,420 grant for engineering services for a wood energy project by the
United States Department of Agriculture (USDA) and the United States Forest Service. Links regarding the
award of the Woody Biomass Utilization Project recipients are shown below:
http://www.fs.fed.us/news/2012/releases/07/renewablewoods.shtml
http://www.usda.gov/wps/portal/usda/usdahome?contentid=2009/08/0403.xml
Delta Junction was awarded a grant for engineering from the Alaska Energy Authority from the Renewable
Energy Fund for $831,203. This fund provides assistance to utilities, independent power producers, local
governments, and tribal governments for feasibility studies, reconnaissance studies, energy resource
monitoring, and work related to the design and construction of eligible facilities.
http://www.akenergyauthority.org/re-fund-6/4_Program_Update/FinalREFStatusAppendix2013.pdf
http://www.akenergyauthority.org/PDF%20files/PFS-BiomassProgramFactSheet.pdf
http://www.akenergyauthority.org/RenewableEnergyFund/RFA_Project_Locations_20Oct08.pdf
The Alaska Wood Energy Development Task Group (AWEDTG) consists of a coalition of federal and state
agencies and not-for-profit organizations that have signed a Memorandum of Understanding (MOU) to
explore opportunities to increase the utilization of wood for energy and biofuels production in Alaska. A
pre-feasibility study for Aleknagik was conducted in 2012 for the AWEDTG. The preliminary costs for the
biomass system(s) are $346,257 for the city hall and health center system and $439,096 for the city hall,
health center, and future washateria system.
http://www.akenergyauthority.org/biomasswoodenergygrants.html
http://www.akenergyauthority.org/BiomassWoodEnergy/Aleknagik%20Final%20Report.pdf
The Emerging Energy Technology Fund grand program provides funds to eligible applicants for
demonstrations projects of technologies that have a reasonable expectation to be commercially viable
within five years and that are designed to: test emerging energy technologies or methods of conserving
energy, improve an existing energy technology, or deploy an existing technology that has not previously
been demonstrated in Alaska.
http://www.akenergyauthority.org/EETFundGrantProgram.html
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Appendix A
Site Photos
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1. City Office Building 2. City Office Building - Interior
3. Community Building 4. Community Building - Interior
5. Fire Hall 6. Fire Hall – Interior
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7. Clinic 8. Clinic - Hallway
9. City Warm Storage Building 10. City Warm Storage Building - Interior
11. School 12. School – Typical Classroom
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13. School – Boiler Plant 14. School – Industrial Arts Classroom
15. Youth Center 16. Youth Center - Interior
17. Tribal Office 18. Tribal Office - Interior
Feasibility Assessment for Biomass Heating Systems Kiana, AK
Coffman Engineers, Inc. 33
19. Water Treatment Plant 20. Above Ground Well Loop Piping
connecting to Water Treatment Plant
21. Water Treatment Plant Boilers 22. Heat Recovery Lines Connecting to Water
Treatment Plant
Feasibility Assessment for Biomass Heating Systems Kiana, AK
Coffman Engineers, Inc.
Appendix B
Economic Analysis Spreadsheet
Kiana Garn System - Option 1Kiana, AlaskaProject Capital Cost($872,000)Present Value of Project Benefits (20 year life)$1,012,598Present Value of Operating Costs (20 year life)($446,880)Benefit / Cost Ratio of Project (20 year life)0.65Net Present Value (20 year life)($306,283)Year Accumulated Cash Flow is Net PositiveFirst YearYear Accumulated Cash Flow > Project Capital Cost>20 yearsDiscount Rate for Net Present Value Analysis3%Wood Fuel Escalation Rate3%Fossil Fuel Escalation Rate5%Electricity Escalation Rate3%O&M Escalation Rate2%YearYearYearYearYearYearYearYearYearYearYearYearYearYearYearYearYearYearYearYear1234567891011121314151617181920Existing Heating System Operating CostsExisting Heating Oil Consumption$5.507,850gal$43,175$45,334$47,600$49,980$52,479$55,103$57,859$60,752$63,789$66,979$70,328$73,844$77,536$81,413$85,484$89,758$94,246$98,958$103,906$109,101Biomass System Operating CostsCord Wood (Delivered to site)$250.0085%56.0cords($14,000)($14,420)($14,853)($15,298)($15,757)($16,230)($16,717)($17,218)($17,735)($18,267)($18,815)($19,379)($19,961)($20,559)($21,176)($21,812)($22,466)($23,140)($23,834)($24,549)Fossil Fuel$5.5015%1,178gal($6,479)($6,803)($7,143)($7,500)($7,875)($8,269)($8,682)($9,117)($9,572)($10,051)($10,554)($11,081)($11,635)($12,217)($12,828)($13,469)($14,143)($14,850)($15,592)($16,372)Additional Electricity$0.60800kWh($480)($494)($509)($525)($540)($556)($573)($590)($608)($626)($645)($664)($684)($705)($726)($748)($770)($793)($817)($842)Operation and Maintenance Costs($700)($714)($728)($743)($758)($773)($788)($804)($820)($837)($853)($870)($888)($906)($924)($942)($961)($980)($1,000)($1,020)Additional Operation and Maintenance Costs for first 2 years($700)($714)$0$0$0$0$0$0$0$0$0$0$0$0$0$0$0$0$0$0Total Operating Costs($22,359)($23,145)($23,233)($24,066)($24,930)($25,828)($26,761)($27,729)($28,735)($29,781)($30,867)($31,995)($33,168)($34,387)($35,654)($36,971)($38,340)($39,763)($41,243)($42,783)Annual Operating Cost Savings$20,816$22,188$24,367$25,915$27,549$29,275 $31,098 $33,022 $35,054 $37,198 $39,461 $41,849 $44,368 $47,026 $49,830 $52,787 $55,906 $59,195 $62,662 $66,318Accumulated Cash Flow$20,816$43,004$67,372$93,286$120,835 $150,111 $181,209 $214,231 $249,285 $286,483 $325,943 $367,792 $412,160 $459,186 $509,015 $561,802 $617,708 $676,902 $739,565 $805,883Net Present Value($851,790) ($830,876) ($808,576) ($785,551) ($761,787) ($737,270) ($711,984) ($685,916) ($659,050) ($631,372) ($602,864) ($573,513) ($543,300) ($512,210) ($480,227) ($447,332) ($413,508) ($378,737) ($343,002) ($306,283)Economic Analysis ResultsInflation RatesDescriptionUnit CostHeating Source ProportionAnnual Energy UnitsEnergy Units
Kiana Garn System - Option 2Kiana, AlaskaProject Capital Cost($552,000)Present Value of Project Benefits (20 year life)$3,844,001Present Value of Operating Costs (20 year life)($3,073,300)Benefit / Cost Ratio of Project (20 year life)1.40Net Present Value (20 year life)$218,701Year Accumulated Cash Flow is Net PositiveFirst YearYear Accumulated Cash Flow > Project Capital Cost16 yearsDiscount Rate for Net Present Value Analysis3%Wood Fuel Escalation Rate3%Fossil Fuel Escalation Rate5%Electricity Escalation Rate3%O&M Escalation Rate2%YearYearYearYearYearYearYearYearYearYearYearYearYearYearYearYearYearYearYearYear1234567891011121314151617181920Existing Heating System Operating CostsExisting Heating Oil Consumption$5.5029,800gal$163,900$172,095$180,700$189,735$199,221$209,183$219,642$230,624$242,155$254,263$266,976$280,325$294,341$309,058$324,511$340,736$357,773$375,662$394,445$414,167Biomass System Operating CostsCord Wood (Delivered to site)$250.0030%75.0cords($18,750)($19,313)($19,892)($20,489)($21,103)($21,736)($22,388)($23,060)($23,752)($24,464)($25,198)($25,954)($26,733)($27,535)($28,361)($29,212)($30,088)($30,991)($31,921)($32,878)Fossil Fuel$5.5070%20,860gal($114,730)($120,467)($126,490)($132,814)($139,455)($146,428)($153,749)($161,437)($169,508)($177,984)($186,883)($196,227)($206,039)($216,341)($227,158)($238,515)($250,441)($262,963)($276,111)($289,917)Additional Electricity$0.60400kWh($240)($247)($255)($262)($270)($278)($287)($295)($304)($313)($323)($332)($342)($352)($363)($374)($385)($397)($409)($421)Operation and Maintenance Costs($700)($714)($728)($743)($758)($773)($788)($804)($820)($837)($853)($870)($888)($906)($924)($942)($961)($980)($1,000)($1,020)Additional Operation and Maintenance Costs for first 2 years($700)($714)$0$0$0$0$0$0$0$0$0$0$0$0$0$0$0$0$0$0Total Operating Costs($135,120)($141,454)($147,365)($154,308)($161,586)($169,215)($177,213)($185,596)($194,385)($203,598)($213,257)($223,384)($234,002)($245,134)($256,805)($269,043)($281,876)($295,331)($309,440)($324,236)Annual Operating Cost Savings$28,780$30,641$33,335$35,427$37,635$39,967 $42,429 $45,028 $47,770 $50,665 $53,718 $56,940 $60,339 $63,924 $67,706 $71,693 $75,898 $80,331 $85,004 $89,931Accumulated Cash Flow$28,780$59,421$92,756$128,183$165,818 $205,785 $248,214 $293,242 $341,013 $391,677 $445,396 $502,336 $562,675 $626,600 $694,305 $765,998 $841,896 $922,227 $1,007,231 $1,097,162Net Present Value($524,058) ($495,176) ($464,670) ($433,194) ($400,729) ($367,257) ($332,759) ($297,213) ($260,601) ($222,902) ($184,095) ($144,158) ($103,070) ($60,808) ($17,350)$27,326 $73,246 $120,431 $168,908 $218,701Economic Analysis ResultsInflation RatesDescriptionUnit CostHeating Source ProportionAnnual Energy UnitsEnergy Units
Kiana WTP Heat Recovery UpgradesKiana, AlaskaProject Capital Cost($391,000)Present Value of Project Benefits (20 year life)$1,225,437Present Value of Operating Costs (20 year life)($402,301)Benefit / Cost Ratio of Project (20 year life)2.11Net Present Value (20 year life)$432,136Year Accumulated Cash Flow is Net PositiveFirst YearPayback Period (Year Accumulated Cash Flow > Project Capital Cost)11 yearsDiscount Rate for Net Present Value Analysis3%Wood Fuel Escalation Rate3%Fossil Fuel Escalation Rate5%Electricity Escalation Rate3%O&M Escalation Rate2%YearYearYearYearYearYearYearYearYearYearYearYearYearYearYearYearYearYearYearYear1234567891011121314151617181920Existing Heating System Operating CostsExisting Heating Oil Consumption$5.509,500gal$52,250$54,863$57,606$60,486$63,510$66,686 $70,020 $73,521 $77,197 $81,057 $85,110 $89,365 $93,833 $98,525 $103,451 $108,624 $114,055 $119,758 $125,746 $132,033Operating Costs with Upgraded Heat Recovery SystemHeat Recovery $1.6590% 8,550gal($14,108) ($14,531)($14,967)($15,416)($15,878) ($16,354) ($16,845) ($17,350) ($17,871) ($18,407) ($18,959) ($19,528) ($20,114) ($20,717) ($21,339) ($21,979) ($22,638) ($23,318) ($24,017) ($24,738)Heating Oil$5.5010%950gal($5,225)($5,486)($5,761)($6,049)($6,351)($6,669) ($7,002) ($7,352) ($7,720) ($8,106) ($8,511) ($8,937) ($9,383) ($9,853) ($10,345) ($10,862) ($11,406) ($11,976) ($12,575) ($13,203)Additional Electricity$0.60500kWh($300)($309)($318)($328)($338)($348) ($358) ($369) ($380) ($391) ($403) ($415) ($428) ($441) ($454) ($467) ($481) ($496) ($511) ($526)Operation and Maintenance Costs$0$0$0$0$0$0$0$0$0$0$0$0$0$0$0$0$0$0$0$0Additional Operation and Maintenance Costs for first 2 years$0$0$0$0$0$0$0$0$0$0$0$0$0$0$0$0$0$0$0$0Total Operating Costs($19,633) ($20,326)($21,045)($21,792)($22,567) ($23,371) ($24,205) ($25,072) ($25,971) ($26,904) ($27,873) ($28,880) ($29,925) ($31,010) ($32,138) ($33,309) ($34,525) ($35,789) ($37,102) ($38,467)Annual Operating Cost Savings$32,618$34,537$36,560$38,694$40,943$43,315 $45,815 $48,449 $51,226 $54,153 $57,236 $60,485 $63,908 $67,515 $71,314 $75,315 $79,530 $83,969 $88,643 $93,566Accumulated Cash Flow$32,618$67,154$103,714$142,408$183,351$226,666 $272,481 $320,931 $372,157 $426,310 $483,546 $544,031 $607,940 $675,454 $746,768 $822,083 $901,613 $985,582 $1,074,225 $1,167,792Net Present Value($359,333) ($326,779) ($293,321) ($258,942) ($223,624) ($187,348) ($150,097) ($111,850) ($72,589) ($32,295)$9,054 $51,477 $94,996 $139,631 $185,405 $232,338 $280,455 $329,778 $380,330 $432,136Economic Analysis ResultsInflation RatesDescriptionUnit CostHeating Source ProportionAnnual Energy UnitsEnergy Units
Feasibility Assessment for Biomass Heating Systems Kiana, AK
Coffman Engineers, Inc.
Appendix C
AWEDTG Field Data Sheet