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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 Coffman Engineers, Inc. ii 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 Coffman Engineers, Inc. iii 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 Coffman Engineers, Inc. iv 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 Coffman Engineers, Inc. 1 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 Coffman Engineers, Inc. 2 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 Coffman Engineers, Inc. 3 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. Feasibility Assessment for Biomass Heating Systems Kiana, AK Coffman Engineers, Inc. 4 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. Feasibility Assessment for Biomass Heating Systems Kiana, AK Coffman Engineers, Inc. 5 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 Feasibility Assessment for Biomass Heating Systems Kiana, AK Coffman Engineers, Inc. 6 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 Feasibility Assessment for Biomass Heating Systems Kiana, AK Coffman Engineers, Inc. 7 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 Feasibility Assessment for Biomass Heating Systems Kiana, AK Coffman Engineers, Inc. 8 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 Coffman Engineers, Inc. 9 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 Coffman Engineers, Inc. 10 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 Coffman Engineers, Inc. 11 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 Feasibility Assessment for Biomass Heating Systems Kiana, AK Coffman Engineers, Inc. 12 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 Feasibility Assessment for Biomass Heating Systems Kiana, AK Coffman Engineers, Inc. 13 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. Feasibility Assessment for Biomass Heating Systems Kiana, AK Coffman Engineers, Inc. 14 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 Feasibility Assessment for Biomass Heating Systems Kiana, AK Coffman Engineers, Inc. 15 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 Coffman Engineers, Inc. 16 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. Feasibility Assessment for Biomass Heating Systems Kiana, AK Coffman Engineers, Inc. 17 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. Feasibility Assessment for Biomass Heating Systems Kiana, AK Coffman Engineers, Inc. 18 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 Feasibility Assessment for Biomass Heating Systems Kiana, AK Coffman Engineers, Inc. 19 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 Feasibility Assessment for Biomass Heating Systems Kiana, AK Coffman Engineers, Inc. 20 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 Feasibility Assessment for Biomass Heating Systems Kiana, AK Coffman Engineers, Inc. 21 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 Feasibility Assessment for Biomass Heating Systems Kiana, AK Coffman Engineers, Inc. 22 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 Feasibility Assessment for Biomass Heating Systems Kiana, AK Coffman Engineers, Inc. 23 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 Feasibility Assessment for Biomass Heating Systems Kiana, AK Coffman Engineers, Inc. 24 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. Feasibility Assessment for Biomass Heating Systems Kiana, AK Coffman Engineers, Inc. 25 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. Feasibility Assessment for Biomass Heating Systems Kiana, AK Coffman Engineers, Inc. 26 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 Feasibility Assessment for Biomass Heating Systems Kiana, AK Coffman Engineers, Inc. 27 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. Feasibility Assessment for Biomass Heating Systems Kiana, AK Coffman Engineers, Inc. 28 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 Feasibility Assessment for Biomass Heating Systems Kiana, AK Coffman Engineers, Inc. 29 Appendix A Site Photos Feasibility Assessment for Biomass Heating Systems Kiana, AK Coffman Engineers, Inc. 30 1. City Office Building 2. City Office Building - Interior 3. Community Building 4. Community Building - Interior 5. Fire Hall 6. Fire Hall – Interior Feasibility Assessment for Biomass Heating Systems Kiana, AK Coffman Engineers, Inc. 31 7. Clinic 8. Clinic - Hallway 9. City Warm Storage Building 10. City Warm Storage Building - Interior 11. School 12. School – Typical Classroom Feasibility Assessment for Biomass Heating Systems Kiana, AK Coffman Engineers, Inc. 32 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