HomeMy WebLinkAboutOuzinkie and Port Lions School Biomass Heating Final Report Coffman 08-23-2016-BIO
Feasibility Assessment for Biomass Heating Systems
Ouzinkie & Port Lions Schools
800 F Street, Anchorage, AK 99501
p (907) 276-6664 f (907) 276-5042
David Nicolai, PE
Lee Bolling, PE
FINAL REPORT – 8/23/2016
Feasibility Assessment for Biomass Heating Systems Ouzinkie and Port Lions Schools
Coffman Engineers, Inc. i
Contents
I. Executive Summary ............................................................................................................ 1
II. Introduction ...................................................................................................................... 2
III. Preliminary Site Investigation ........................................................................................... 4
COMMUNITY MEETING ................................................................................................................................................... 4
BUILDING DESCRIPTIONS ................................................................................................................................................. 4
EXISTING HEATING SYSTEM .............................................................................................................................................. 4
DOMESTIC HOT WATER................................................................................................................................................... 5
AIR HANDLING SYSTEM ................................................................................................................................................... 6
BUILDING ENVELOPE ....................................................................................................................................................... 6
AVAILABLE SPACE ........................................................................................................................................................... 6
STREET ACCESS AND FUEL STORAGE ................................................................................................................................... 8
BUILDING OR SITE CONSTRAINTS ....................................................................................................................................... 9
BIOMASS SYSTEM INTEGRATION ........................................................................................................................................ 9
BIOMASS SYSTEM OPTIONS .............................................................................................................................................. 9
IV. Energy Consumption and Costs ....................................................................................... 11
ENERGY COSTS ............................................................................................................................................................ 11
WOOD ENERGY ........................................................................................................................................................... 11
CORD WOOD .............................................................................................................................................................. 11
WOOD PELLETS ........................................................................................................................................................... 11
HEATING OIL ............................................................................................................................................................... 12
ELECTRICITY ................................................................................................................................................................ 12
EXISTING FUEL OIL CONSUMPTION .................................................................................................................................. 13
BIOMASS SYSTEM CONSUMPTION ................................................................................................................................... 13
V. Preliminary Cost Estimating ............................................................................................. 14
VI. Economic Analysis .......................................................................................................... 16
O&M COSTS .............................................................................................................................................................. 16
DEFINITIONS................................................................................................................................................................ 16
RESULTS ..................................................................................................................................................................... 18
SENSITIVITY ANALYSIS ................................................................................................................................................... 19
VII. Forest Resource and Fuel Availability Assessments ........................................................ 20
AIR QUALITY PERMITTING .............................................................................................................................................. 20
VIII. General Biomass Technology Information ..................................................................... 21
HEATING WITH WOOD FUEL ........................................................................................................................................... 21
TYPES OF WOOD FUEL .................................................................................................................................................. 21
HIGH EFFICIENCY WOOD PELLET BOILERS ......................................................................................................................... 22
HIGH EFFICIENCY CORDWOOD BOILERS ............................................................................................................................ 22
LOW EFFICIENCY CORDWOOD BOILERS ............................................................................................................................. 22
HIGH EFFICIENCY WOOD STOVES .................................................................................................................................... 23
BULK FUEL BOILERS ...................................................................................................................................................... 23
GRANTS ..................................................................................................................................................................... 23
Feasibility Assessment for Biomass Heating Systems Ouzinkie and Port Lions Schools
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Appendices
Appendix A – Site Photos
Appendix B – Economic Analysis Spreadsheets
Appendix C – AWEDTG Field Data Sheets
Feasibility Assessment for Biomass Heating Systems Ouzinkie and Port Lions Schools
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Abbreviations
ACF Accumulated Cash Flow
ASHRAE American Society of Heating, Refrigerating, 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
Feasibility Assessment for Biomass Heating Systems Ouzinkie and Port Lions Schools
Coffman Engineers, Inc. iv
List of Figures
Figure 1 – Ouzinkie and Port Lions, Alaska – Google Maps .......................................................................... 2
Figure 2 – Ouzinkie School – Bing Maps ....................................................................................................... 2
Figure 3 – Port Lions School – Google Maps ................................................................................................. 3
Figure 4 – Ouzinkie Proposed Site Layout..................................................................................................... 7
Figure 5 – Ouzinkie Panorama – Location Relative to School ....................................................................... 7
Figure 6 – Port Lions Proposed Site Layout .................................................................................................. 8
Figure 7 – Garn WHS-3200 Wood Boiler ....................................................................................................... 9
List of Tables
Table 1 – Executive Summary ....................................................................................................................... 1
Table 2 – Energy Comparison ..................................................................................................................... 11
Table 3 – Existing Fuel Oil Consumption ..................................................................................................... 13
Table 4 – Proposed Biomass System Fuel Consumption ............................................................................ 13
Table 5 – Estimate of Probable Cost for Each School ................................................................................. 15
Table 6 – Discount and Escalation rates ..................................................................................................... 16
Table 7 – Economic Definitions ................................................................................................................... 17
Table 8 – Economic Analysis Results ........................................................................................................... 18
Table 9 – Sensitivity Analysis – Ouzinkie ..................................................................................................... 19
Table 10 – Sensitivity Analysis – Port Lions ................................................................................................ 19
Feasibility Assessment for Biomass Heating Systems Ouzinkie and Port Lions Schools
Coffman Engineers, Inc. 1
I. Executive Summary
A preliminary feasibility assessment was completed to determine the technical and economic viability of
biomass heating systems at two schools for the Kodiak Island Borough School District (KIBSD), one located
in Ouzinkie and the second located in Port Lions, Alaska. The study evaluated a Garn style cordwood boiler
system that would supply the majority of heat to the schools. The high price of fuel oil is the main
economic driver for the use of lower cost biomass heating.
The proposed wood boilers would be located in detached modules and heating pipes would connect to a
new heat exchanger in the school’s mechanical room. The existing heating oil boiler would still
supplement heat in the schools during colder days during the heating season.
The proposed wood boilers are economically justified at this time, due to the fact that the benefit to cost
ratio of each project is greater than 1.0. Over a 20-year period, the heating oil savings from these projects
will more than pay for the capital cost of building the Garn system and the costs associated with
operations and maintenance and buying cordwood. An additional benefit is that the money used to
purchase cordwood will stay in the local community, which can create local job opportunities.
The summary of the results of the economic evaluation are shown in the table below.
Table 1 – Executive Summary
Item Ouzinkie School Port Lions School
Project Capital Cost ($392,000) ($392,000)
Present Value of Project Benefits (20-year life) $769,269 $756,579
Present Value of Operating Costs (20-year life) ($303,672) ($344,756)
Benefit / Cost Ratio of Project (20-year life) 1.19 1.05
Net Present Value (20-year life) $73,597 $19,823
Year Cash Flow is Net Positive First Year First Year
Payback Period
(Year Accumulated Cash Flow > Project Capital Cost) 18 years 20 years
If KIBSD wishes to further pursue these projects, the next step is to complete a schematic level engineering
design and detailed cost estimate of the project. An updated economic analysis can be completed and
KIBSD can then decide if it is in its best interest to pursue funding to continue to final design and
construction.
Feasibility Assessment for Biomass Heating Systems Ouzinkie and Port Lions Schools
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II. Introduction
A preliminary feasibility assessment was completed to determine the technical and economic viability of
biomass heating systems for the Ouzinkie School in Ouzinkie, Alaska and the Port Lions School in Port
Lions, Alaska. The location of the buildings is shown in Figures 1, 2 and 3.
Figure 1 – Ouzinkie and Port Lions, Alaska – Google Maps
Figure 2 – Ouzinkie School – Bing Maps
Feasibility Assessment for Biomass Heating Systems Ouzinkie and Port Lions Schools
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Figure 3 – Port Lions School – Google Maps
Feasibility Assessment for Biomass Heating Systems Ouzinkie and Port Lions Schools
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III. Preliminary Site Investigation
Community Meeting
Coffman attempted to coordinate a community meeting, however, community members were not
available to meet during the site visit. While onsite, Coffman met with the facility maintenance managers
at each school and discussed the biomass and energy efficiency opportunities at their building.
Building Descriptions
Ouzinkie
The school in Ouzinkie is a 16,900 sf facility that shows three distinct phases of construction. The oldest
section is the center section of the building that was part of the original school in Ouzinkie. An Alaska
Coastal Management Program map from 1981 shows the gym wing as completed, and in 2008, an aerial
photo shows the gym wing and office/classroom wing as existing construction. The school is used 6 days
a week during the school year, with an occupancy schedule of approximately 6am to 9pm. During the
summer, it is used once a week for community gym night. Approximately 20 students attend the school,
which is staffed by approximately 5 personnel. Energy Audits of Alaska was performing work in the region
immediately prior to the site visit by Coffman staff and may have performed an energy audit on the
Ouzinkie school.
Port Lions
Port Lions School is a 21,617 sf building built in 1988. The school is used 6 days a week during the school
year from approximately 6am to 9pm, and once a week during the summer for community gym night. The
2016-17 school year will have 14 students with 5 teachers/staff. Energy Audits of Alaska was conducting
energy audits in town prior to the site visit by Coffman staff, and it is our understanding they performed
an energy audit on the school.
Existing Heating System
Ouzinkie
Ouzinkie school is heated by two Weil McLain 580 boilers (3.75GPH input, 515MBH I=B=R output) that
were installed in 2008. The boilers deliver heating glycol to the school to address all heating requirements,
such as:
Heating coils in 7 air handling units
Perimeter baseboard throughout classrooms, offices, and library
Indirect hot water heaters
Unit heaters in the gym and kitchen storage
The boiler and central pumps are located in the boiler room, which has three exterior walls. The systems
run in a primary-secondary arrangement, with the secondary loop serving the entire building. Piping is
routed through the crawlspace and through the ceiling plenums. The combustion efficiency of the boilers
is approximately 88%. For this study, the Annual Fuel Utilization Efficiency of the boiler system is
estimated at 75% to account for typical oil boiler inefficiencies, including short cycling.
Feasibility Assessment for Biomass Heating Systems Ouzinkie and Port Lions Schools
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There is routine maintenance performed by KIBSD staff working out of Kodiak city. The boiler is in good
working order and was operating at the time of inspection.
A 5,200-gallon aboveground fuel tank is provided at the facility and provides oil for the emergency
generator as well.
Port Lions
The school in Port Lions is heated with two Weil McLain BL876WS boilers, rated for 4.9GPH each (552MBH
I=B=R output). They appear to be original construction to the building and are piped in primary-secondary
loops. A heating glycol system is used at the building and is connected to the following equipment:
Heating coils in 3 air handling units
Perimeter baseboard throughout the classrooms, offices, library, and multipurpose room
Unit heaters in the gym and support spaces
Boilers, circulation pumps, and other central equipment are located in the basement-level boiler room,
which has one exterior wall. All building heating piping is routed through the crawlspace and the ceiling
plenums. The combustion efficiency of the boilers is approximately 88%; however, in this study we used
the Annual Fuel Utilization Efficiency of 75% to account for typical oil boiler inefficiencies, such as short
cycling.
Regular maintenance is performed by KIBSD staff working and living in the village of Port Lions. The boiler
was in good working order and was in summer shutoff during the inspection.
The school is provided with a 1,100-gallon underground fuel tank. It supplies the boilers, an emergency
generator, and two oil-fired domestic water heaters. It is reported that the fuel tank is small for the size
of the school and requires frequent filling form the port tank farm.
Domestic Hot Water
Ouzinkie
Domestic hot water is provided through indirect hot water heaters and is used for showers, hand washing,
and in the kitchen. The office wing and kitchen is provided with an Amtrol WH-9LDW for water heating,
with a capacity of 26 gallons. The central, original construction and the gym wing are provided with two
Amtrol WH-7L Double Wall heaters, with 41 gallons each. Heating is provided from the building heating
glycol system.
Port Lions
The school’s domestic hot water is provided through two oil-fired hot water heaters and is used for
showers, hand washing, and in the kitchen. Two A.O. Smith COF-199-850 water heaters are provided with
a capacity of 86 gallons and an input rating of 199,000 BTUH. They each have a recovery capacity of 191
gallons per hour at a 100°F rise.
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Air Handling System
Ouzinkie
A total of 7 air handling units (AHUs) and one Makeup Air Unit (MAU) serves the Ouzinkie school with
fresh heated air. One air handling unit serves the gymnasium, the makeup air unit serves the shop spaces,
and the rest of the AHUs serve the classrooms, offices, and the library. One AHU was not accessible (under
the library) because the access door latch was not functioning.
Port Lions
Port Lions school is provided with three AHUs to supply heated fresh air. AHU-1 serves the classrooms,
AHU-2 serves the shop spaces, and AHU-3 serves the gymnasium. Exhaust fans provide ventilation for
shop equipment and restrooms.
Building Envelope
Ouzinkie
Each phase of construction utilizes 2x6 stud wall construction with a typical R-19 batt insulation. It is
estimated that the roof construction consists of R-30 insulation, typical to buildings of this era and type.
Roofing in all parts of the school is now a built-up hot roof system. There are windows provided
throughout the school that all appear to be of the same age, and are all double-paned glazing. Arctic
entries are provided at the main front entry only. The boiler room access is through a set of double doors
without a mullion. Drawings were not available to us except for a fire exit plan.
Port Lions
The school at Port Lions is a 2x6 stud wall construction and steel framing with a typical R-19 batt insulation.
The roof construction is metal, sloped, cold roof with an unknown amount of insulation, which is
estimated to provide an R-30 construction, typical to buildings of this era and type. Windows are provided
throughout the building and are double-paned, low-e glazing. Arctic entries are provided at every
entrance except for the shops and the boiler room.
Available Space
Ouzinkie
No available space inside the building can be used for biomass boilers. There is ample space on the site
for the installation of an outbuilding for biomass boilers and for wood storage. The space is directly across
the building boiler room, over an access road for the school. Piping can be routed aboveground or
belowground directly into the boiler room. See the photos below.
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Figure 4 – Ouzinkie Proposed Site Layout
Figure 5 – Ouzinkie Panorama – Location Relative to School
Location of Proposed
Biomass Building 5,200 Gal Aboveground
Fuel Oil Tank
5,200 Gal Aboveground
Fuel Oil Tank
Location of Proposed
Biomass Building
Feasibility Assessment for Biomass Heating Systems Ouzinkie and Port Lions Schools
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Port Lions
There is no space inside of the school building for a biomass system, so a new detached building will be
needed to house a biomass boiler system. Space is limited outside the building for a new biomass building.
The area around the school is heavily wooded, and is built on the slope of a hill. The only remaining area
that can be easily accessed is the east side of the school.
Figure 6 – Port Lions Proposed Site Layout
The proposed location sits across the gymnasium, over an access road looping the school. Piping from the
proposed building would route aboveground or underground into the gymnasium, through ceiling
plenums, to the boiler room and the rest of the school.
Street Access and Fuel Storage
Ouzinkie
The site at Ouzinkie is on a hill, in a heavily wooded section, with gravel road access and a gravel clearing
at the site. A gravel access road loops the building. There is ample space in the gravel clearing to the
northwest for a biomass building and for cordwood storage, which would likely require sheds or shelters
to allow for appropriate seasoning of wood.
Port Lions
Port Lions school is located on a hill, with gravel access roads and gravel clearings. There is a gravel access
road looping the school. Space for wood boilers is located to the east of the building in a clearing. There
Location of Proposed
Biomass Building
Gymnasium
Feasibility Assessment for Biomass Heating Systems Ouzinkie and Port Lions Schools
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is space available for both a biomass building and for sheds or shelters for cordwood to allow for
seasoning.
Building or Site constraints
Ouzinkie and Port Lions
Both sites are slightly sloping and have no wetlands or signs of historic structures. Both schools have a
gravel clearing available for use for biomass buildings and storage.
Biomass System Integration
Integration for both schools will be the same. Even though the existing hydronic systems are set to operate
at high temperatures (180°F heating glycol supply, 150°F return), the systems can be modified for use with
an aggressive outside temperature reset schedule. New, additional unit heaters will be provided in the
gyms and other select areas of the school, optimized for the low temperature supply water. The biomass
boiler connection will tie into the heating glycol return line into the boilers, so that the boilers minimize
their runtime. Controls for the new biomass systems can be integrated into the existing DDC controls at
each facility.
Biomass System Options
A Garn WHS-3200 wood boiler was evaluated for each school. Both would be installed in a detached
building. Piping from the detached buildings to the schools can be routed aboveground or belowground
for integration into the heating system.
Figure 7 – Garn WHS-3200 Wood Boiler
For this study, a single Garn WHS-3200 wood boiler was studied. This unit has a 3,200-gallon water tank
and is 7’4” wide x 7’8” high x 12’ long. The Garn boiler would be housed in an 8’ wide x 20’ long insulated
module. The module would contain a circulation pump, heat exchanger and controls. The module and
interior components could be pre-constructed offsite and shipped to the community for installation.
Feasibility Assessment for Biomass Heating Systems Ouzinkie and Port Lions Schools
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The Garn boiler would deliver heat to a heat exchanger inside the module, which would transfer heat to
a buried piping loop system with 50% propylene glycol. This loop would deliver heat through a direct
buried, insulated arctic pipe to a new heat exchanger in the school.
Feasibility Assessment for Biomass Heating Systems Ouzinkie and Port Lions Schools
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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 in both Ouzinkie and Port Lions.
Table 2 – Energy Comparison
Community Fuel Type Units Gross
BTU/unit
System
Efficiency $/unit Delivered
$/MMBTU
Ouzinkie
Cord Wood cord 16,000,000 75% $175 $14.58
Heating Oil gal 134,000 75% $4.00 $39.80
Electricity kWh 3,413 99% $0.52 $153.90
Port Lions
Cord Wood cord 16,000,000 75% $250 $20.83
Heating Oil gal 134,000 75% $4.66 $46.37
Electricity kWh 3,413 99% $0.17 $50.31
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.
Cord Wood
The Ouzinkie Tribal Council (OTC) operates a lumber mill in Ouzinkie and provides cordwood as a
byproduct of regular mill operations. Cordwood is sold to non-tribal-members at a rate of $175/cord. For
a bulk purchase, especially to a customer like the school, OTC has indicated that they would be amenable
to negotiating a lower rate. The cordwood cost at Port Lions was reported at $250/cord.
Wood Pellets
There is no local wood pellet manufacturer or distributor in Ouzinkie or Port Lions, which means that
wood pellets would have to be barged into the community. Wood pellets are typically sold in 40 lb bags
and shipped by the pallet (where 50 bags are loaded on a pallet). Each pallet is one ton of pellets. A study
in 2015 showed that wood pellets are currently sold in Anchorage for $295/ton. The cost for shipping one
ton of wood pellets by barge to Ouzinkie was quoted by two shipping companies. Costs are around
$413/ton from Anchorage and $444/ton from Seattle. It is assumed that shipping rates will be reduced by
15% if a substantial volume of pellets is shipped, due to economies of scale. For this report it is assumed
Feasibility Assessment for Biomass Heating Systems Ouzinkie and Port Lions Schools
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that shipping costs are $444/ton. The total cost of wood pellets will be $639/ton, which is more expensive
than heating oil on a BTU basis. Due to these factors, wood pellets were not considered as an economical
fuel for this study.
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 Ouzinkie by barge and currently costs approximately $4.00/gal. Fuel oil is also shipped to
Port Lions by barge and currently costs $4.66/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 for Ouzinkie is provided by the local government, the City of Ouzinkie. According to the utility
data provided by KIBSD, the building has an electricity rate of approximately $0.52/kWh. Electricity for
Port Lions is provided by the Kodiak Electric Association (KEA) at a rate of $0.17/kWh. This lower rate is
due to KEA’s access to lower cost hydropower and wind power, compared to diesel power generation.
Feasibility Assessment for Biomass Heating Systems Ouzinkie and Port Lions Schools
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Existing Fuel Oil Consumption
An estimate of the schools’ heating oil consumption was made based on annual heating oil data provided
by Kodiak Island School District from 2015. Actual heating oil bills were not provided for the study.
Table 3 – Existing Fuel Oil Consumption
Building Fuel Type Annual Consumption Net MMBTU/yr Avg. Annual
Cost
Ouzinkie School Heating Oil 8,200 gal 824.1 $32,800
Port Lions School Heating Oil 6,200 gal 623.1 $28,892
Biomass System Consumption
It is estimated that the proposed biomass system at each school will offset approximately 90% of the
heating energy for the building, by burning cordwood. The remaining 10% of the heating energy will be
provided by the existing oil boilers. This result is based on an analysis of the school’s annual heating oil
consumption, the heat output of the Garn boiler and BIN weather data for the area. It is assumed that
the Garn WHS-3200 is loaded every 12 hours, which will produce 150,000 BTU/hr with a 125F minimum
supply water temperature, 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,
the Garn system will save approximately $18,574 and $14,277 in energy costs annually at Ouzinkie and
Port Lions, respectively.
Table 4 – Proposed Biomass System Fuel Consumption
Building Fuel Type % Heating
Source
Net
MMBTU/yr
Annual
Consumption
Energy
Cost
Total
Energy
Cost
Annual
Energy
Savings
Ouzinkie
School
Cord Wood 90% 741.7 62 cords $10,816
$14,226 $18,574 Fuel Oil 10% 82.4 820 gal $3,280
Additional
Electricity N/A N/A 250 kWh $130
Port
Lions
School
Cord Wood 90% 560.8 47 cords $11,683
$14,615 $14,277 Fuel Oil 10% 62.3 620 gal $2,889
Additional
Electricity N/A N/A 250 kWh $43
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V. Preliminary Cost Estimating
An estimate of probable costs was completed for installing the Garn boiler system at each school. The
cost estimate is based equipment quotes and from previous cost estimates created for similar projects. A
10% remote factor was used to account for increased shipping and installation costs in Ouzinkie and Port
Lions. Project and Construction Management was estimated at 5%. Engineering design and permitting
was estimated at 15% and a 25% contingency was used. The cost estimate for each school is the same
because the same work will be completed at each school.
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Table 5 – Estimate of Probable Cost for Each School
Category Description Cost
Site Work Site Grading for Module $ 4,000
Gravel Fill $ 3,000
Foundation (Timbers and Anchors) $ 5,000
Buried Utilities $ 5,000
Subtotal $ 17,000
Electrical Utilities Service Entrance $4,000
Conduit and Wiring $4,000
Subtotal $8,000
Wood Boiler Module 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 $ 10,000
Electrical Allowance $ 10,000
Shipping $ 10,000
Subtotal $ 175,000
School Connection Heat Exchanger $ 4,000
Unit Heaters $ 12,000
Boiler Room Modifications $ 15,000
Facility Piping to Gym $ 5,000
Subtotal $ 36,000
Subtotal Material and Installation Cost $ 236,000
Remote Factor 10% $ 23,600
Subtotal $ 259,600
Project and Construction Management 5% $ 12,980
Subtotal $ 272,580
Design Fees and Permitting 15% $ 40,887
Subtotal $ 313,467
Contingency 25% $ 78,367
Total Project Cost $ 391,834
Total Budgetary Cost $ 392,000
Note: The cost estimate for each school is the same because the same work will be completed at each
school.
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VI. Economic Analysis
The following assumptions were used to complete the economic analysis for this study.
Table 6 – Discount and Escalation rates
Real 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 Ouzinkie and Port Lions Schools
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Table 7 – 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 in order to determine the simple payback, benefit to cost ratio, and
net present value of the proposed Garn boiler systems, as shown in the table below. At each school, the
Garn boiler would be located in a detached module and heating pipes would connect to the new heat
exchanger in the school’s mechanical room. The Garn would supplement heat for the existing oil boiler
system. New low temperature hydronic unit heaters would be installed in the school and served by the
Garn system to take advantage of lower heating water temperatures and overall higher wood boiler
efficiencies. The existing heating oil boiler would still be used to heat the rest of the facility and
supplement the pool water heating when needed. A cordwood storage building was not included in this
analysis.
The proposed Garn boiler projects have a benefit to cost ratio of 1.19 and 1.05, at Ouzinkie and Port Lions
respectively, over the 20-year study period, which makes the projects economically justified. Any project
with a benefit to cost ratio above 1.0 is considered economically justified. The main reason the project is
viable is because of the large quantity of heating oil savings compared to the relatively low price of
cordwood.
Over a 20-year period, the heating oil savings from these projects will more than pay for the capital cost
of building the Garn system and the costs associated with operations and maintenance and buying
cordwood. An additional benefit is that the money used to purchase cordwood will stay in the local
community, which can create local job opportunities.
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.
Please refer to Appendix B for the economic analysis spreadsheet for greater detail.
Table 8 – Economic Analysis Results
Item Ouzinkie School Port Lions School
Project Capital Cost ($392,000) ($392,000)
Present Value of Project Benefits (20-year life) $769,269 $756,579
Present Value of Operating Costs (20-year life) ($303,672) ($344,756)
Benefit / Cost Ratio of Project (20-year life) 1.19 1.05
Net Present Value (20-year life) $73,597 $19,823
Year Cash Flow is Net Positive First Year First Year
Payback Period (Year Accumulated Cash Flow > Project
Capital Cost) 18 years 20 years
If KIBSD wishes to further pursue these projects, the next step is to complete a schematic level engineering
design and detailed cost estimate of the project. An updated economic analysis can be completed and
KIBSD can then decide if it is in its best interest to pursue funding to continue to final design and
construction.
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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 the project. As heating oil costs increase and wood costs decrease, the
project 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.
Table 9 – Sensitivity Analysis – Ouzinkie
B/C Ratios Cordwood Cost
$150/cord $175/cord $200/cord $250/cord $300
Heating
Oil Cost
$3.50/gal 1.04 0.97 0.89 0.74 0.58
$3.75/gal 1.15 1.08 1.00 0.85 0.69
$4.00/gal 1.26 1.19 1.11 0.96 0.80
$4.25/gal 1.37 1.30 1.22 1.07 0.91
$4.50/gal 1.49 1.41 1.33 1.18 1.02
$4.75/gal 1.60 1.52 1.44 1.29 1.14
$5.00/gal 1.71 1.63 1.55 1.40 1.25
$5.25/gal 1.82 1.74 1.66 1.51 1.36
$5.50/gal 1.93 1.85 1.77 1.62 1.47
Table 10 – Sensitivity Analysis – Port Lions
B/C Ratios Cordwood Cost
$150/cord $175/cord $200/cord $250/cord $300
Heating
Oil Cost
$3.50/gal 0.88 0.81 0.75 0.62 0.49
$3.75/gal 0.97 0.91 0.84 0.71 0.58
$4.00/gal 1.06 1.00 0.93 0.80 0.68
$4.25/gal 1.16 1.09 1.03 0.90 0.77
$4.50/gal 1.25 1.18 1.12 0.99 0.86
$4.66/gal 1.31 1.24 1.18 1.05 0.92
$5.00/gal 1.44 1.37 1.31 1.18 1.05
$5.25/gal 1.53 1.46 1.40 1.27 1.14
$5.50/gal 1.62 1.56 1.49 1.36 1.23
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VII. Forest Resource and Fuel Availability Assessments
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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VIII. 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 p ellet 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 Ouzinkie and Port Lions Schools
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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.
Feasibility Assessment for Biomass Heating Systems Ouzinkie and Port Lions Schools
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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
Feasibility Assessment for Biomass Heating Systems Ouzinkie and Port Lions Schools
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Appendix A
Site Photos
Feasibility Assessment for Biomass Heating Systems Ouzinkie and Port Lions Schools
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Ouzinkie
1. East elevation of building 2. South and Partial East elevation of building
3. Partial West elevation of building 4. Partial West elevation of building
5. North and Partial East elevation 6. Site Access Road from main building entry
Feasibility Assessment for Biomass Heating Systems Ouzinkie and Port Lions Schools
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7. Boiler BT-1 8. Boiler BT-2
9. Domestic Hot Water Pumps and Heaters for
Gym
10. Domestic Hot Water Pumps and Heaters for
Office/Kitchen
11. 5,200 Gal Fuel Tank 12. Emergency Generator
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13. Electrical pole supply 14. Main electrical panel and Automatic Transfer
Switch
15. Building Layout
Feasibility Assessment for Biomass Heating Systems Ouzinkie and Port Lions Schools
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Port Lions
16. North and West elevations 17. West elevation of building
18. Partial South elevation of building 19. Partial South elevation of building
20. Partial South elevation 21. East elevation
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22. Partial North elevation 23. Building Layout (omits basement boiler level)
24. Boiler and Water Heater 25. Boilers and Water Heaters
26. Vent for 1,100 Gal Underground Fuel Tank 27. Emergency Generator
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28. Electrical supply 29. Main electrical panel and Automatic Transfer
Switch
Feasibility Assessment for Biomass Heating Systems Ouzinkie and Port Lions Schools
Coffman Engineers, Inc.
Appendix B
Economic Analysis Spreadsheets
Ouzinkie SchoolOuzinkie, AlaskaProject Capital Cost($392,000)Present Value of Project Benefits (20-year life)$769,269Present Value of Operating Costs (20-year life)($303,672)Benefit / Cost Ratio of Project (20-year life)1.19Net Present Value (20-year life)$73,597Year Accumulated Cash Flow is Net PositiveFirst YearPayback Period (Year Accumulated Cash Flow > Project Capital Cost)18 yearsDiscount Rate for Net Present Value Analysis3%Wood Fuel Escalation Rate3%Fossil Fuel Escalation Rate5%Electricity Escalation Rate2%O&M Escalation Rate2%YearYearYearYearYearYearYearYearYearYearYearYearYearYearYearYearYearYearYearYear1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20Existing Heating System Operating CostsExisting Heating Oil Consumption$4.008,200gal$32,800$34,440$36,162$37,970$39,869$41,862$43,955$46,153$48,461$50,884$53,428$56,099$58,904$61,849$64,942$68,189$71,598$75,178$78,937$82,884Biomass System Operating CostsCord Wood (Delivered to site)$175.0090%62.0cords($10,850)($11,176)($11,511)($11,856)($12,212)($12,578)($12,955)($13,344)($13,744)($14,157)($14,581)($15,019)($15,470)($15,934)($16,412)($16,904)($17,411)($17,933)($18,471)($19,026)Fossil Fuel$4.0010%820gal($3,280)($3,444)($3,616)($3,797)($3,987)($4,186)($4,396)($4,615)($4,846)($5,088)($5,343)($5,610)($5,890)($6,185)($6,494)($6,819)($7,160)($7,518)($7,894)($8,288)Additional Electricity$0.52250kWh($130)($133)($135)($138)($141)($144)($146)($149)($152)($155)($158)($162)($165)($168)($172)($175)($178)($182)($186)($189)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($15,660)($16,180)($15,990)($16,534)($17,097)($17,681)($18,286)($18,913)($19,563)($20,237)($20,936)($21,661)($22,413)($23,192)($24,001)($24,840)($25,710)($26,613)($27,551)($28,523)Annual Operating Cost Savings$17,140 $18,260 $20,172 $21,436 $22,772 $24,181 $25,669 $27,240 $28,898 $30,646 $32,492 $34,438 $36,492 $38,657 $40,941 $43,349 $45,888 $48,565 $51,387 $54,361Accumulated Cash Flow$17,140 $35,400 $55,571 $77,008 $99,779 $123,960 $149,630 $176,870 $205,768 $236,414 $268,906 $303,344 $339,836 $378,493 $419,433 $462,782 $508,670 $557,235 $608,622 $662,983Net Present Value($375,359) ($358,148) ($339,688) ($320,642) ($300,999) ($280,748) ($259,876) ($238,372) ($216,225) ($193,421) ($169,948) ($145,794) ($120,945) ($95,388) ($69,110) ($42,096) ($14,333)$14,194 $43,499 $73,597Economic Analysis ResultsInflation RatesDescriptionUnit CostHeating Source ProportionAnnual Energy UnitsEnergy Units
Port Lions SchoolPort Lions, AlaskaProject Capital Cost($392,000)Present Value of Project Benefits (20-year life)$756,579Present Value of Operating Costs (20-year life)($344,756)Benefit / Cost Ratio of Project (20-year life)1.05Net Present Value (20-year life)$19,823Year Accumulated Cash Flow is Net PositiveFirst YearPayback Period (Year Accumulated Cash Flow > Project Capital Cost)20 yearsDiscount Rate for Net Present Value Analysis2%Wood Fuel Escalation Rate3%Fossil Fuel Escalation Rate5%Electricity Escalation Rate2%O&M Escalation Rate2%YearYearYearYearYearYearYearYearYearYearYearYearYearYearYearYearYearYearYearYear1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20Existing Heating System Operating CostsExisting Heating Oil Consumption$4.666,200gal$28,892$30,337$31,853$33,446$35,118$36,874$38,718$40,654$42,687$44,821$47,062$49,415$51,886$54,480$57,204$60,064$63,068$66,221$69,532$73,009Biomass System Operating CostsCord Wood (Delivered to site)$250.0090%47.0cords($11,750)($12,103)($12,466)($12,840)($13,225)($13,621)($14,030)($14,451)($14,885)($15,331)($15,791)($16,265)($16,753)($17,255)($17,773)($18,306)($18,855)($19,421)($20,004)($20,604)Fossil Fuel$4.6610%620gal($2,889)($3,034)($3,185)($3,345)($3,512)($3,687)($3,872)($4,065)($4,269)($4,482)($4,706)($4,942)($5,189)($5,448)($5,720)($6,006)($6,307)($6,622)($6,953)($7,301)Additional Electricity$0.17250kWh($43)($43)($44)($45)($46)($47)($48)($49)($50)($51)($52)($53)($54)($55)($56)($57)($58)($60)($61)($62)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($16,082)($16,608)($16,423)($16,972)($17,540)($18,129)($18,738)($19,369)($20,023)($20,701)($21,402)($22,129)($22,883)($23,664)($24,473)($25,312)($26,181)($27,083)($28,017)($28,986)Annual Operating Cost Savings$12,810 $13,729 $15,430 $16,474 $17,578 $18,746 $19,980 $21,285 $22,663 $24,120 $25,660 $27,286 $29,003 $30,816 $32,731 $34,753 $36,886 $39,138 $41,515 $44,022Accumulated Cash Flow$12,810 $26,539 $41,969 $58,443 $76,022 $94,767 $114,747 $136,032 $158,695 $182,816 $208,475 $235,761 $264,764 $295,580 $328,311 $363,064 $399,950 $439,089 $480,603 $524,626Net Present Value($379,440.88) ($366,244.91) ($351,704.86) ($336,485.43) ($320,564.38) ($303,918.78) ($286,525) ($268,359) ($249,395) ($229,608) ($208,971) ($187,456) ($165,036) ($141,681) ($117,361) ($92,046) ($65,703) ($38,300) ($9,803)$19,823Economic Analysis ResultsInflation RatesDescription Unit CostHeating Source ProportionAnnual Energy UnitsEnergy Units
Feasibility Assessment for Biomass Heating Systems Ouzinkie and Port Lions Schools
Coffman Engineers, Inc.
Appendix C
AWEDTG Field Data Sheets