HomeMy WebLinkAboutFeasibility Assessment Biomass Heating Mentasta Tribal Clinic Final Report Coffman 09-17-2018-BIO
Feasibility Assessment for Biomass Heating Systems
at Mentasta Tribal Office Building and Clinic
800 F Street, Anchorage, AK 99501
p (907) 276-6664 f (907) 276-5042
Lee Bolling, PE
David Nicolai, PE
FINAL REPORT – 9/17/2018
Feasibility Assessment for Biomass Heating Systems Mentasta
Coffman Engineers, Inc. i
Contents
1. Executive Summary ........................................................................................................... 1
2. Introduction ...................................................................................................................... 2
3. Preliminary Site Investigation ............................................................................................ 3
BUILDING DESCRIPTIONS ................................................................................................................................................. 3
EXISTING HEATING SYSTEM .............................................................................................................................................. 3
AVAILABLE SPACE, STREET ACCESS, FUEL STORAGE AND SITE CONSTRAINTS .............................................................................. 4
4. Biomass System ................................................................................................................. 5
EXISTING BIOMASS SYSTEM .............................................................................................................................................. 5
BIOMASS SYSTEM OPTIONS .............................................................................................................................................. 7
BIOMASS SYSTEM INTEGRATION ........................................................................................................................................ 8
5. Energy Consumption and Costs ........................................................................................ 10
ENERGY COSTS ............................................................................................................................................................ 10
CORD WOOD .............................................................................................................................................................. 10
WOOD CHIPS .............................................................................................................................................................. 10
HEATING OIL ............................................................................................................................................................... 11
ELECTRICITY ................................................................................................................................................................ 11
EXISTING FUEL OIL CONSUMPTION .................................................................................................................................. 12
BIOMASS SYSTEM CONSUMPTION ................................................................................................................................... 12
6. Preliminary Cost Estimating ............................................................................................. 13
7. Economic Analysis ........................................................................................................... 14
O&M COSTS .............................................................................................................................................................. 14
DEFINITIONS................................................................................................................................................................ 14
RESULTS ..................................................................................................................................................................... 16
SENSITIVITY ANALYSIS ................................................................................................................................................... 17
8. Forest Resource and Fuel Availability Assessments .......................................................... 18
FUEL AVAILABILITY ....................................................................................................................................................... 18
AIR QUALITY PERMITTING .............................................................................................................................................. 18
9. General Biomass Technology Information ........................................................................ 19
HEATING WITH WOOD FUEL ........................................................................................................................................... 19
TYPES OF WOOD FUEL .................................................................................................................................................. 19
HIGH EFFICIENCY WOOD PELLET BOILERS ......................................................................................................................... 20
HIGH EFFICIENCY CORDWOOD BOILERS ............................................................................................................................ 20
LOW EFFICIENCY CORDWOOD BOILERS ............................................................................................................................. 20
HIGH EFFICIENCY WOOD STOVES .................................................................................................................................... 21
BULK FUEL BOILERS ...................................................................................................................................................... 21
GRANTS ..................................................................................................................................................................... 21
Feasibility Assessment for Biomass Heating Systems Mentasta
Coffman Engineers, Inc. ii
Appendices
Appendix A – Site Photos
Appendix B – Economic Analysis Spreadsheets
Appendix C – AWEDTG Field Data Sheets
Feasibility Assessment for Biomass Heating Systems Mentasta
Coffman Engineers, Inc. iii
Abbreviations
ACF Accumulated Cash Flow
AGSD Alaska Gateway School District
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
BTU/hr BTU per hour
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)
kW Kilowatt(s)
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
TPY Tons per Year
V Volts
W Watts
Feasibility Assessment for Biomass Heating Systems Mentasta
Coffman Engineers, Inc. iv
List of Figures
Figure 1 – Tribal Office Building .................................................................................................................... 2
Figure 2 – Clinic ............................................................................................................................................. 2
Figure 3 – Site Layout .................................................................................................................................... 4
Figure 4 – Existing wood chip storage building (left) and chip boiler building (right). ................................. 5
Figure 5 – Existing 7-yd chip bin .................................................................................................................... 6
Figure 6 – Existing Portage & Main chip boiler (left) and thermal storage tank (right). .............................. 6
Figure 7 – Portage & Main Enviro-Chip B500 Wood Chip Boiler .................................................................. 7
Figure 8 – Biomass boiler system schematic (11/21/2014 drawings) .......................................................... 8
List of Tables
Table 1 – Executive Summary ....................................................................................................................... 1
Table 2 – Energy Comparison Overview ....................................................................................................... 1
Table 3 – Building Characteristics ................................................................................................................. 3
Table 4 – Boiler Equipment ........................................................................................................................... 3
Table 5 – Energy Comparison ..................................................................................................................... 10
Table 6 – Existing Fuel Oil Consumption ..................................................................................................... 12
Table 7 – Proposed Biomass System Fuel Consumption ............................................................................ 12
Table 8 – Estimate of Probable Cost ........................................................................................................... 13
Table 9 – Discount and Escalation rates ..................................................................................................... 14
Table 10 – Economic Definitions ................................................................................................................. 15
Table 11 – Economic Analysis Results ......................................................................................................... 16
Table 12 – Sensitivity Analysis – Heating Oil Price vs Wood Chip Price ...................................................... 17
Table 13 – Sensitivity Analysis – Wood Chip Price vs Project Cost ............................................................ 17
Feasibility Assessment for Biomass Heating Systems Mentasta
Coffman Engineers, Inc. 1
1. Executive Summary
Coffman performed a preliminary biomass feasibility assessment for the Mentasta Tribal Office Building
and Clinic to determine the technical and economic viability of biomass heating systems. The proposed
biomass heating system is a wood chip boiler system that would be located in a detached building and a
buried heating loop would deliver heat to both the Tribal Office and Clinic. Wood chips would be stored
at the existing wood chip storage building in Mentasta.
The benefit to cost ratio for the project is 1.02. Any project with a benefit to cost ratio greater than 1.0 is
considered economically justified, and therefore the Mentasta project is economically justified.
Depending on the relationship with the Alaska Gateway School District (AGSD) the chips may remain a
free resource, resulting in an even better benefit to cost ratio of 1.20. When chip prices are $65/ton at
the high end, the benefit to cost ratios drop to 0.92 and the project is not economically viable.
A summary of the project’s economic analysis is shown in the following table.
Table 1 – Executive Summary
Item Results at $41/ton
Wood Chip Price
Project Capital Cost ($313,000)
Present Value of Project Benefits (20-year life) $412,661
Present Value of Operating Costs (20-year life) ($92,504)
Benefit / Cost Ratio of Project (20-year life) 1.02
Net Present Value (20-year life) $7,158
Year Cash Flow is Net Positive First Year
Payback Period
(Year Accumulated Cash Flow > Project Capital Cost) 20 years
The current energy prices in Mentasta are shown in the following table. Wood chips are less expensive
than heating oil and electricity on an energy basis.
Table 2 – Energy Comparison Overview
Community Fuel Type Units Gross
BTU/unit
System
Efficiency $/unit Delivered
$/MMBTU
Mentasta
Wood Chips ton 12,000,000 75% $41 $4.56
Heating Oil gal 134,000 75% $2.55 $25.37
Electricity kWh 3,412 99% $0.37 $109.54
Feasibility Assessment for Biomass Heating Systems Mentasta
Coffman Engineers, Inc. 2
2. Introduction
A preliminary feasibility assessment was completed to determine the technical and economic viability of
biomass heating systems for the Tribal Office Building and Clinic located in Mentasta, Alaska. The
Mentasta Traditional Council operates and maintains both facilities. The Traditional Council was awarded
a biomass pre-feasibility study of these two buildings from the Fairbanks Economic Development
Corporation (FEDC).
Figure 1 – Tribal Office Building
Figure 2 – Clinic
Feasibility Assessment for Biomass Heating Systems Mentasta
Coffman Engineers, Inc. 3
3. Preliminary Site Investigation
A site visit of the Mentasta Tribal Office and Clinic was completed by Coffman on July 12, 2018.
Building Descriptions
The two buildings are located adjacent to each other on a large gravel pad on the west edge of the
community. The Tribal Office Building was constructed in 2015 and the Clinic was just completed in
January 2018. The Clinic is not yet occupied so utility usage for the facility is either for maintaining
minimum temp levels for facility preservation or for electrical loads used by the construction contractor.
For each facility, the square footage, date of construction, occupant characteristics and type of
construction is shown in the following table.
Table 3 – Building Characteristics
Building Square
Footage
Year
Built
Occupants Type of Construction
Tribal
Office 2,500 2015
7 employees,
M-F
9am-4:30pm
Wood Framed 2x6 stud walls (R-19) and Sloped cold
roof (R-30 insulation) with an attic
Clinic 2,500 2018
(Forecasted)
5 employees,
M-F
8am-2pm
Wood Framed 2x6 stud walls (R-19) and Sloped cold
roof (R-30 insulation) with an attic
Existing Heating System
Both buildings are heated with oil-fired boilers that serve air handlers, cabinet unit heaters, and perimeter
base board using 50% propylene glycol. Domestic hot water (DHW) is provided by sidearm hot water
heaters. All of the heating zones are controlled by line voltage thermostats, with the thermostat in the
space served, and the zone valves all adjacent to the boiler. All of the boilers are recent and appear to be
well-maintained and kept in good condition. There were no specific maintenance issues reported during
the site visit. The following table shows the heating capacities of the boiler plants.
Table 4 – Boiler Equipment
Building Boiler Plant DHW Plant Fuel Tank
Tribal
Office
One Energy Kinetics Frontier
Boiler, Model System 2000 EK-1F,
1.0 GPH Input
121 MBH Gross Output
40 Gallon Sidearm,
Energy Kinetics
300-gal aboveground
fuel tank
Clinic
One Energy Kinetics Frontier
Boiler, Model System 2000 EK-1F,
1.0 GPH Input
121 MBH Gross Output
40 Gallon Sidearm,
Energy Kinetics
500-gal aboveground
fuel tank
The boilers, central pumps and hot water heaters are located in mechanical rooms. The combustion
efficiency of the boilers is unknown, as no combustion test reports were available. For this study, the
Feasibility Assessment for Biomass Heating Systems Mentasta
Coffman Engineers, Inc. 4
Annual Fuel Utilization Efficiency of the boiler system is estimated at 75% to account for typical new, well-
maintained oil boiler inefficiencies, including short cycling.
Available Space, Street Access, Fuel Storage and Site Constraints
Both buildings are in a large clearing with few site constraints and ample space for access and fuel storage.
Both buildings are similar in construction and size. The large clearing does have some site constraints with
septic systems and leach fields installed that serve the buildings. In between the two facilities is a wellhead
that provides domestic water to both buildings. The well equipment for both facilities is located in the
crawl space of the Tribal Council Building.
Neither building has available space inside for the installation of a biomass boiler. A detached biomass
boiler module or small outbuilding is required. Space is available for a boiler building and biomass fuel
storage system. However, the village already has a wood chip storage facility on the other side of town,
so the desire is to save costs by sharing the existing wood chip storage facility. In discussions with the local
staff, if a wood chip system is installed for these new facilities, they could store chips for these facilities
and transport them from the existing chip shed to the clinic boiler building.
Figure 3 – Site Layout
Tribal Office Building Clinic
Large Gravel Pad
Feasibility Assessment for Biomass Heating Systems Mentasta
Coffman Engineers, Inc. 5
4. Biomass System
Existing Biomass System
Mentasta already has an existing wood chip biomass heating system that serves the school, old clinic, old
post office and rec center on the east end of the community. Wood chips are stored in a large metal
building on a concrete pad. Chips are transported by a front-end loader to the chip boiler building, which
has a shed roof cover over a Portage & Main 7-yard chip bin. The chip bin automatically feeds chips via
an auger to a Portage & Maine Enviro-Chip-B500 chip boiler located inside the boiler building.
Figure 4 – Existing wood chip storage building (left) and chip boiler building (right).
Inside the boiler building, the wood chip boiler sends hot water to a 1,100 gal insulated thermal storage
tank. From there the hot water is sent to a brazed plate heat exchanger that delivers heat to an insulated
and buried piping loop with 50% propylene glycol to the buildings.
Feasibility Assessment for Biomass Heating Systems Mentasta
Coffman Engineers, Inc. 6
Figure 5 – Existing 7-yd chip bin
Figure 6 – Existing Portage & Main chip boiler (left) and thermal storage tank (right).
The Portage & Main boiler system reportedly works well and is a reliable unit. However, it was reported
that there are two design issues that should be implemented on future installations:
1. The 7-yard chip bin is located outside in the elements and therefore the hydraulic fluid and
controller will freeze up during winter, causing the unit to stop working. Electric heat blankets
were added after the fact to stop this issue, but electric heat is expensive. A preferred option
would be to fully enclose the bin with insulated walls, and provide a garage door for bin access.
The enclosed bin storage can then be heated using a boiler loop or other means.
2. Reportedly, the thermal storage tank takes over 24 hrs to come up to temperature before there
is useable heat for the district system. A smaller tank around 600 gal, may be a better fit because
it will take only around 12 hrs to come up to temp. It is recommended that the existing tank
temperatures be datalogged and analyzed to verify performance.
Feasibility Assessment for Biomass Heating Systems Mentasta
Coffman Engineers, Inc. 7
Biomass System Options
Due to the success and local knowledge of the operation and maintenance of the Portage & Main chip
boiler system at Mentasta, using the same system for the Tribal Office and Clinic makes a lot of sense and
would most likely be a very successful installation. The boiler operator is familiar with operating and
maintaining this type of system and the Portage & Main boiler is a relatively low-cost chip system
compared to other manufacturers. Additionally, the Portage & Main system has proved to be a reliable
boiler for the community. Wood chips are also readily available and there is already a wood chip storage
building for bulk storage of chips. It is also an advantage that the existing system works well with the
locally available wood chips, which might not be the case with a new system.
Due to these factors, the biomass boiler system selected as the basis of design for the Tribal Office and
Clinic is the Portage & Main Enviro-Chip B500 boiler with 7-yard chip bin. The B500 boiler has an output
of 500,000 BTU/hr at high fire rate and is shown in the figure below.
Figure 7 – Portage & Main Enviro-Chip B500 Wood Chip Boiler
During review of the Clinic engineering drawings it was discovered that a detached wood chip boiler
building was already designed to serve the Tribal Office and Clinic. The drawings are titled “Mentasta
Clinic” by CTA Architects/Engineers, dated 11/21/2014, and are available by the Mentasta Traditional
Council. The design uses a Portage & Main B500 chip boiler, a 650-gal thermal storage tank and district
heat exchanger. The biomass boiler schematic is shown on the next page for reference.
Feasibility Assessment for Biomass Heating Systems Mentasta
Coffman Engineers, Inc. 8
Figure 8 – Biomass boiler system schematic (11/21/2014 drawings)
It is recommended that these engineering drawings be revisited to verify loads and other relevant design
parameters, and then the drawings could be updated for the detached biomass boiler building using the
lessons learned from the existing Mentasta chip boiler installation. Any engineering firm could take the
existing drawings and provide an updated design package.
It is proposed that the Portage & Main chip bin be enclosed in a separate heated space, with an insulated
garage door that can open for feeding of the chip bin. The garage door would be elevated so that the
bottom of the garage door would be at the same elevation as the chip bin. The Portage & Maine boiler,
thermal storage tank, district heat exchanger and pumps would be located inside the detached boiler
building as well. The approximate dimensions of the biomass boiler building (including space for the
enclosed 7-yard bin) is around 20ft x 16ft.
Wood chips would be stored at the existing wood chip storage building on the east side of town and
hauled over using a front-end loader to the proposed biomass boiler building. This was recommended by
the Mentasta boiler operator so that additional money would not be needed for more chip storage in the
town. In the future, a smaller chip storage facility near the Tribal Office and Clinic could be added if it was
needed. For this study, a new wood chip storage building was not included for the clinic boiler facility.
The combustion efficiency of the wood chip boiler can reach 80%. Using thermal storage will also help
the unit run at higher efficiencies during normal operation. For this study, an Annual Fuel Utilization
Efficiency of 75% was used, to account for normal operations throughout the year.
Biomass System Integration
Integrating the biomass boiler system to the Tribal Office and Clinic can be accomplished by the use of
insulated buried piping running 50% propylene glycol between the facilities and the boiler building. A
district heat exchanger located in the detached biomass boiler building will take heat from the chip boiler
and thermal storage tank and deliver it to the buried piping loop. The buried piping will run across the
gravel pad to the Tribal Office and the Clinic, and will connect to the return side of the existing oil-fired
boilers. The oil boilers will only run in the event that the biomass boiler cannot meet the full heat demand.
The existing hydronic systems in the Tribal Office and Clinic are set to operate at 170°F heating glycol
supply / 150°F return, which the wood chip boiler can reach.
An additional heat exchanger could be added before the heating loop connection to the buildings, which
allows the building heating systems to still operate in the event that the buried pipe gets damaged or the
system is down for maintenance. However, adding an additional heat exchanger adds cost to the project
Feasibility Assessment for Biomass Heating Systems Mentasta
Coffman Engineers, Inc. 9
and reduces the overall thermal performance of the biomass heating system. The 2014 drawings of the
biomass system do not use this additional heat exchanger at the buildings. For this study, the additional
heat exchangers are not used, but could be added if desired. The final design should take into
consideration operational parameters and risk tolerance to determine if the heat exchangers should be
included in the system design.
The biomass boiler building will also require an electrical power connection to power the chip boiler,
pumps, lights, and associated equipment.
Feasibility Assessment for Biomass Heating Systems Mentasta
Coffman Engineers, Inc. 10
5. Energy Consumption and Costs
Energy Costs
The table below shows the energy comparison of different fuel types in the community. 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, wood chips are cheaper than fuel oil on a $/MMBTU basis in the Mentasta area.
Table 5 – Energy Comparison
Community Fuel Type Units Gross
BTU/unit
System
Efficiency $/unit Delivered
$/MMBTU
Mentasta
Wood Chips ton 12,000,000 75% $41 $4.56
Wood Chips ton 12,000,000 75% $65 $7.22
Heating Oil gal 134,000 75% $2.55 $25.37
Electricity kWh 3,412 99% $0.37 $109.54
Cord Wood
Cord wood was evaluated as a biomass fuel, but was not considered viable due to the additional handling
requirements and manual feeding. In order to burn cord wood, a person is required to stack, move and
fire the cord wood boiler daily, if not multiple times per day. Cord wood was not considered viable
because the community wishes to have a more automated biomass system that utilizes wood chips.
Wood Chips
Wood chips are currently provided to Mentasta by the Alaska Gateway School District (AGSD), which
operates the school in Mentasta. The largest source of chips is from fire remediation in the Tok area. The
AGSD processes logs into chips in a variety of places. The main location is in Tok at a 5-acre yard where
logs are chipped. Chip processing also occurs right where trees are cut, which minimizes handling and
reduces costs of the chips. The wood chip price varies. On the high side the wood chips are $65/ton.
Depending on the location of logs for chipping, the AGSD can produce chips even cheaper at $18/ton at
low end. For this study the average wood chip price of $41/ton was used. Chips are delivered using a
walking floor trailer that can deliver approximately 20 tons of chips in one load. After review of AGSD lab
reports, wood chips with 25% to 30% moisture content have around 6,000 BTU/lb, or around 12,000,000
BTU/ton.
Currently, the chips being delivered to the existing Mentasta chip system are delivered for free by the
AGSD. The Mentasta Tribal Council then heats the district system, which includes AGSD’s school, for free.
According to Scott Macmanus, AGSD Superintendent, they have learned a lot over the years of chipping
wood. Now, they cut chips only in October and November, because the sap has dropped down for winter.
When they chip green wood at this time of the year there is limited sap in the tree and they can produce
chips at 25% moisture content without doing any drying. These chips can be burned right away. If they
Feasibility Assessment for Biomass Heating Systems Mentasta
Coffman Engineers, Inc. 11
chip in the spring, the wood has 55% to 60% moisture content due to the sap content and they have to
dry the chips for 1 to 2 years. Wood chip boilers are sensitive to moisture content because as moisture
increases there is a reduction in heat output.
Heating Oil
The high price of fuel oil, creating of local jobs, and energy security are the main economic drivers for the
use of lower cost biomass heating. Fuel oil is currently purchased at $2.55/gal. The price of fuel oil has
fluctuated greatly over time, and currently appears to be at a lower price than in the recent past. The
wide variation of fuel oil prices is a disadvantage compared to more stably priced wood pellets. For this
study, the energy content of fuel oil is based on 134,000 BTU/gal, according to “Heating Values of Fuels”
by the UAF Cooperative Extension, 2009.
Electricity
Electricity for the buildings is provided by Alaska Power and Telephone. According to the utility data
provided, the effective electricity rate at the facilities is $0.37/kWh. The effective electricity rate is the
cost of all electric costs (demand, energy, customer charges) per kWH for a billing period. On a BTU basis,
electricity is the most expensive energy source. There are 3,412 BTU per kWh.
Feasibility Assessment for Biomass Heating Systems Mentasta
Coffman Engineers, Inc. 12
Existing Fuel Oil Consumption
An estimate of the buildings heating oil consumption was made based on annual heating oil data provided,
and are shown in the following table. The Clinic is not yet fully occupied, and so the heating oil
consumption was estimated based on mechanical equipment, building envelope construction and
anticipated usage.
Table 6 – Existing Fuel Oil Consumption
Building Fuel Type Annual
Consumption
Net
MMBTU/yr
Avg. Annual
Cost
Multi-Purpose Building Heating Oil #1 3,400 gal 341.7 $8,670
Clinic Heating Oil #1 3,500 gal 351.8 $8,925
Total Heating Oil #1 6,900 gal 693.5 $17,595
Biomass System Consumption
It is estimated that the proposed biomass system will offset approximately 98% of the heating energy for
the buildings. The chip boiler has a thermal output that is greater than both the oil boiler outputs of the
buildings combined, and therefore will carry the entire load. The oil boilers would be used only in the
event that the biomass boiler is down for maintenance and during regular boiler operation to keep them
in good working order.
Table 7 – Proposed Biomass System Fuel Consumption
Building Fuel Type
%
Heating
Source
Net
MMBTU/yr
Annual
Consumption
Energy
Cost
Total
Energy
Cost
Annual
Energy
Savings
Tribal Office
and Clinic
Wood Chips 98% 679.6 76 tons $3,096
$3,459 $14,136 Fuel Oil 2% 7.0 70 gal $179
Additional Electricity N/A N/A 500 kWh $185
Note – Based on wood chips at $41/ton, heating oil at $2.55/gal and electricity at $0.37/kWh.
Feasibility Assessment for Biomass Heating Systems Mentasta
Coffman Engineers, Inc. 13
6. Preliminary Cost Estimating
An estimate of probable costs was completed for installing the wood chip boiler systems in Mentasta. The
estimate is based equipment quotes and from previous projects in Alaska. A remote factor of 10% was
used to account for increased shipping and construction costs. Project and Construction Management
was estimated at 5%. Engineering design and permitting was estimated at 15% and a 25% contingency
was used.
Table 8 – Estimate of Probable Cost
Category Description Cost
Site Work Site Grading $2,000
Building Foundation $5,000
Buried Utilities $5,000
Subtotal $12,000
Electrical Utilities Service Entrance $3,000
Conduit and Wiring $3,000
Subtotal $6,000
Biomass Boiler Building Detached Boiler Building (16'x20') @ $200/SF $64,000
Enviro-Chip B500 Chip Boiler and 7-yard Chip Bin $28,000
Insulated SS Chimney $3,000
Thermal Storage Tank 600 gal $5,000
Heat Exchanger $3,000
Mechanical, Piping and pump allowance $30,000
Electrical allowance $25,000
Shipping to Mentasta $10,000
Subtotal $158,000
Building Connections Insulated Pipe to two Buildings $20,000
Piping Tie-in to two Boiler Rooms $10,000
Subtotal $30,000
Subtotal Material and
Installation Cost $206,000
Remote Factor 10% $20,600
Subtotal $226,600
Project and Construction
Management
5% $11,330
Subtotal $217,330
Design Fees and Permitting 15% $32,600
Subtotal $249,930
Contingency 25% $62,483
Total Project Cost $312,413
Total Budgetary Cost $313,000
Feasibility Assessment for Biomass Heating Systems Mentasta
Coffman Engineers, Inc. 14
7. Economic Analysis
The following assumptions were used to complete the economic analysis for this study.
Table 9 – Discount and Escalation rates
Real Discount Rate for Net Present Value Analysis 3%
Wood Fuel Escalation Rate 2%
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, and is used in this report. The
escalation rates used for the wood, heating oil, electricity and O&M rates are based on rates used in
previous Alaska Energy Authority funded biomass pre-feasibility studies. The wood fuel escalation rate
was set at 2%, since there has been limited change in chip costs in the Tok region.
A net present value analysis was completed using real dollars (constant dollars) and the real discount rate,
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 $1,500 per year. The
estimate is based on annual maintenance time for Portage & Main chip 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. The cost of operator labor is not included in the analysis. It is assumed that the operator
who runs the existing chip system will also run the proposed system.
Definitions
There are many different economic terms used in this study. A listing of all the terms with their definition
is provided below for reference.
Feasibility Assessment for Biomass Heating Systems Mentasta
Coffman Engineers, Inc. 15
Table 10 – 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 Mentasta
Coffman Engineers, Inc. 16
Results
An economic analysis was completed to determine the simple payback, benefit to cost ratio, and net
present value of the proposed wood chip boiler system at the Mentasta Tribal Office and Clinic. A wood
chip boiler system would be located in a detached building and heating pipes would deliver heat to the
Tribal Office and Clinic. Wood chips would be stored at the existing wood chip storage building in
Mentasta.
The benefit to cost ratio for the project is 1.02, based on a wood chip price of $41/ton. Any project with
a benefit to cost ratio greater than 1.0 is considered economically justified, and therefore the Mentasta
project is economically justified. Depending on the relationship with the Alaska Gateway School District
(AGSD) the chips may remain a free resource, resulting in an even better benefit to cost ratio of 1.20.
When chip prices are $65/ton at the high end, the benefit to cost ratios drop to 0.92 and the project is
not economically viable.
The results are shown in the table below for a variety of wood chip prices. Refer to Appendix B for the
economic analysis spreadsheets for greater detail. (Note: values shown in red and parenthesis are
negative numbers.)
Table 11 – Economic Analysis Results
Item
Wood Chip Price
Results at
$65/ton
Results at
$41/ton
Results at
$18/ton
Results at
$0/ton
Project Capital Cost ($313,000) ($313,000) ($313,000) ($313,000)
Present Value of Project Benefits (20-year life) $412,661 $412,661 $412,661 $412,661
Present Value of Operating Costs (20-year life) ($124,837) ($92,504) ($61,517) ($37,267)
Benefit / Cost Ratio of Project (20-year life) 0.92 1.02 1.12 1.20
Net Present Value (20-year life) ($25,176) $7,158 $38,144 $62,394
Year Cash Flow is Net Positive First Year First Year First Year First Year
Payback Period
(Year Accumulated Cash Flow > Project Capital Cost) >20 years 20 years 19 years 18 years
Feasibility Assessment for Biomass Heating Systems Mentasta
Coffman Engineers, Inc. 17
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
orange.
Table 12 – Sensitivity Analysis – Heating Oil Price vs Wood Chip Price
B/C Ratios Wood Chip Price
$18/ton $25/ton $45/ton $65/ton $85/ton $95/ton
Heating
Oil
Price
$2.00/gal 0.84 0.81 0.72 0.64 0.55 0.51
$2.25/gal 0.97 0.94 0.85 0.77 0.68 0.64
$2.55/gal 1.12 1.09 1.01 0.92 0.83 0.79
$2.75/gal 1.22 1.19 1.11 1.02 0.94 0.89
$3.00/gal 1.35 1.32 1.24 1.15 1.06 1.02
$3.25/gal 1.48 1.45 1.36 1.28 1.19 1.15
$3.50/gal 1.61 1.58 1.49 1.41 1.32 1.28
$3.75/gal 1.74 1.71 1.62 1.53 1.45 1.40
$4.00/gal 1.86 1.83 1.75 1.66 1.58 1.53
$4.25/gal 1.99 1.96 1.88 1.79 1.70 1.66
$4.50/gal 2.12 2.09 2.00 1.92 1.83 1.79
Note: Based on a project cost of $313,000.
A sensitivity analysis was also completed to show how the wood chip price and the project cost affects
the B/C ratios. Reducing project costs and reducing wood chip prices will further improve the economics
of the project.
Table 13 – Sensitivity Analysis – Wood Chip Price vs Project Cost
B/C Ratios Project Cost
($250,000) ($300,000) ($350,000) ($400,000) ($450,000)
Wood
Chip
Price
$0/ton 1.50 1.25 1.07 0.94 0.83
$18/ton 1.40 1.17 1.00 0.88 0.78
$20/ton 1.39 1.16 1.00 0.87 0.77
$30/ton 1.34 1.12 0.96 0.84 0.74
$40/ton 1.29 1.07 0.92 0.80 0.71
$50/ton 1.23 1.03 0.88 0.77 0.68
$60/ton 1.18 0.98 0.84 0.74 0.65
$65/ton 1.15 0.96 0.82 0.72 0.64
$70/ton 1.12 0.94 0.80 0.70 0.62
$80/ton 1.07 0.89 0.76 0.67 0.59
$90/ton 1.02 0.85 0.73 0.64 0.56
Note: Based on a heating oil price of $2.55/gal.
Feasibility Assessment for Biomass Heating Systems Mentasta
Coffman Engineers, Inc. 18
8. Forest Resource and Fuel Availability Assessments
Fuel Availability
For this study, the main fuel supplier is the AGSD. According to discussions with the superintendent, there
are more than enough available wood chip resources to supply chips to the proposed Mentasta project.
No further forest resource assessments were obtained.
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 similarly sized Garn wood fired boiler systems installed in Alaska have not
required air quality permits.
Feasibility Assessment for Biomass Heating Systems Mentasta
Coffman Engineers, Inc. 19
9. 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 Mentasta
Coffman Engineers, Inc. 20
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 Mentasta
Coffman Engineers, Inc. 21
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.
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.
http://www.rd.usda.gov/programs-services
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:
https://www.fs.fed.us/working-with-us/grants
Feasibility Assessment for Biomass Heating Systems Mentasta
Coffman Engineers, Inc. 22
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/Programs/RenewableEnergyFund
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/Programs/AEEE/Biomass
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/Programs/EETF1
The U.S. Forest Service also has grants available, such as the Wood Innovation Program. In 2018, there
was $8 million of grant money available to communities to expand and accelerate wood products and
wood energy markets.
https://www.fs.usda.gov/naspf/programs/wood-education-and-resource-center/2018-wood-
innovations-program-request-proposals
Department of Energy (DOE) funding options can be accessed at these links:
https://www.energy.gov/energy-economy/funding-financing
https://www.energy.gov/eere/wipo/energy-efficiency-and-conservation-block-grant-program
https://www.energy.gov/eere/funding/apply-eere-funding-opportunities
https://archive.epa.gov/greenbuilding/web/html/funding.html#general
Also, the Alaska Housing Finance Corporation (AHFC) and DOE have revolving loan funds that can be
used for energy improvements.
https://www.ahfc.us/efficiency/non-residential-buildings/energy-efficiency-revolving-loan-fund-aeerlp/
https://www.energy.gov/savings/energy-efficiency-revolving-loan-fund-program
Finally, clean energy grant programs in Alaska can be found at:
http://programs.dsireusa.org/system/program?fromSir=0&state=AK
Feasibility Assessment for Biomass Heating Systems Mentasta
Coffman Engineers, Inc.
Appendix A
Site Photos
Feasibility Assessment for Biomass Heating Systems Mentasta
Coffman Engineers, Inc.
Tribal Office Building
1. West Elevation of Building 2. South Elevation of Building
3. North Elevation of Building 4. East Elevation of Building
5. Fuel Storage 6. Boiler & Baseboard Heating Return
Feasibility Assessment for Biomass Heating Systems Mentasta
Coffman Engineers, Inc.
7. Boiler Burner 8. Hot Water Heater
9. Baseboard Heating Supply 10. Hydronic Pumps
Feasibility Assessment for Biomass Heating Systems Mentasta
Coffman Engineers, Inc.
11. Ventilation System 12. Electrical Panels
Feasibility Assessment for Biomass Heating Systems Mentasta
Coffman Engineers, Inc.
Clinic
13. North Elevation of Building 14. West Elevation of Building
15. South Elevation of Building 16. East Elevation of Building
17. Fuel Storage 18. Boiler & Hot Water Heater
Feasibility Assessment for Biomass Heating Systems Mentasta
Coffman Engineers, Inc.
19. Heat Exchanger 20. Boiler Burner
21. Medical Central-Vac 22. Radiant Floor
Feasibility Assessment for Biomass Heating Systems Mentasta
Coffman Engineers, Inc.
23. HRV Ventilator 24. Electrical Panels
25. Main Electrical Disconnect
Feasibility Assessment for Biomass Heating Systems Mentasta
Coffman Engineers, Inc.
Existing Biomass System East End of Town
26. 7-yard chip bin 27. Portage & Main Chip Boiler
28. Thermal Storage Tank 29. Chip bin Controls
Feasibility Assessment for Biomass Heating Systems Mentasta
Coffman Engineers, Inc.
30. Chip Storage East end of Town 31. Chip Storage
Feasibility Assessment for Biomass Heating Systems Mentasta
Coffman Engineers, Inc.
Appendix B
Economic Analysis Spreadsheets
Mentasta Tribal Office and ClinicMentasta, AlaskaProject Capital Cost($313,000)Present Value of Project Benefits (20-year life)$412,661Present Value of Operating Costs (20-year life)($92,504)Benefit / Cost Ratio of Project (20-year life)1.02Net Present Value (20-year life)$7,158Year Accumulated Cash Flow is Net PositiveFirst YearPayback Period (Year Accumulated Cash Flow > Project Capital Cost)20 yearsDiscount Rate for Net Present Value Analysis3%Wood Fuel Escalation Rate2%Fossil Fuel Escalation Rate5%Electricity Escalation Rate3%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$2.556,900gal$17,595$18,475$19,398$20,368$21,387$22,456$23,579$24,758$25,996$27,296$28,660$30,093$31,598$33,178$34,837$36,579$38,408$40,328$42,344$44,462Biomass System Operating CostsWood Chip Cost (Delivered)$41.0098%76.0tons($3,116)($3,178)($3,242)($3,307)($3,373)($3,440)($3,509)($3,579)($3,651)($3,724)($3,798)($3,874)($3,952)($4,031)($4,111)($4,194)($4,278)($4,363)($4,450)($4,539)Fossil Fuel$2.552%70gal($179)($187)($197)($207)($217)($228)($239)($251)($264)($277)($291)($305)($321)($337)($353)($371)($390)($409)($430)($451)Additional Electricity$0.37500kWh($185)($191)($196)($202)($208)($214)($221)($228)($234)($241)($249)($256)($264)($272)($280)($288)($297)($306)($315)($324)Operation and Maintenance Costs($1,500)($1,530)($1,561)($1,592)($1,624)($1,656)($1,689)($1,723)($1,757)($1,793)($1,828)($1,865)($1,902)($1,940)($1,979)($2,019)($2,059)($2,100)($2,142)($2,185)Additional Operation and Maintenance Costs for first 2 years($1,500)($1,530)$0$0$0$0$0$0$0$0$0$0$0$0$0$0$0$0$0$0Total Operating Costs($6,480)($6,616)($5,196)($5,307)($5,422)($5,539)($5,658)($5,781)($5,906)($6,035)($6,166)($6,301)($6,439)($6,580)($6,724)($6,872)($7,023)($7,178)($7,337)($7,500)Annual Operating Cost Savings$11,116 $11,858 $14,203 $15,061 $15,965 $16,917 $17,921 $18,977 $20,089 $21,261 $22,494 $23,793 $25,160 $26,598 $28,113 $29,707 $31,384 $33,150 $35,007 $36,962Accumulated Cash Flow$11,116 $22,974 $37,177 $52,238 $68,203 $85,121 $103,041 $122,018 $142,107 $163,368 $185,862 $209,655 $234,814 $261,413 $289,526 $319,233 $350,617 $383,767 $418,774 $455,736Net Present Value($302,208) ($291,031) ($278,033) ($264,651) ($250,880) ($236,711) ($222,140) ($207,160) ($191,763) ($175,943) ($159,693) ($143,005) ($125,873) ($108,288) ($90,243) ($71,731) ($52,743) ($33,271) ($13,307)$7,158Economic Analysis ResultsInflation RatesDescription Unit CostHeating Source ProportionAnnual Energy UnitsEnergy Units
Feasibility Assessment for Biomass Heating Systems Mentasta
Coffman Engineers, Inc.
Appendix C
AWEDTG Field Data Sheets
3,500 gal(Estimated)$2.50/gal121,000 BTU/h
R-21R-51Cold roof with fiberglass batt insulationand SIP Panel$0.377
$2.50/gal3,400 gal121,000 BTU/h
R-21Cold roof with fiberglass batt insulationR-51$0.377and SIP panel.