HomeMy WebLinkAboutFeasibility Assessment Biomass Heating Systems Pearlcreek Weller Two Rivers Salcha Schools Fairbanks Final Report CoffmanEngineers 07-28-2017-BIO
Feasibility Assessment for Biomass Heating Systems
at Pearl Creek, Weller, Two Rivers
and Salcha Elementary Schools
800 F Street, Anchorage, AK 99501
p (907) 276-6664 f (907) 276-5042
Lee Bolling, PE
FINAL REPORT – 7/28/2017
Feasibility Assessment for Biomass Heating Systems Fairbanks
Coffman Engineers, Inc. i
Contents
1. Executive Summary ........................................................................................................... 1
2. Introduction ...................................................................................................................... 2
3. Preliminary Site Investigation ............................................................................................ 4
BUILDING DESCRIPTIONS ................................................................................................................................................. 4
EXISTING HEATING SYSTEM .............................................................................................................................................. 4
AVAILABLE SPACE, STREET ACCESS, FUEL STORAGE AND SITE CONSTRAINTS .............................................................................. 5
4. Biomass System ............................................................................................................... 12
BIOMASS SYSTEM OPTIONS ............................................................................................................................................ 12
BIOMASS SYSTEM INTEGRATION ...................................................................................................................................... 13
5. Energy Consumption and Costs ........................................................................................ 14
ENERGY COSTS ............................................................................................................................................................ 14
CORD WOOD .............................................................................................................................................................. 14
WOOD PELLETS ........................................................................................................................................................... 14
HEATING OIL ............................................................................................................................................................... 14
ELECTRICITY ................................................................................................................................................................ 15
EXISTING FUEL OIL CONSUMPTION .................................................................................................................................. 16
BIOMASS SYSTEM CONSUMPTION ................................................................................................................................... 16
6. Preliminary Cost Estimating ............................................................................................. 18
7. Economic Analysis ........................................................................................................... 20
O&M COSTS .............................................................................................................................................................. 20
DEFINITIONS................................................................................................................................................................ 20
RESULTS ..................................................................................................................................................................... 22
SENSITIVITY ANALYSIS ................................................................................................................................................... 24
8. Forest Resource and Fuel Availability Assessments .......................................................... 26
FUEL AVAILABILITY ....................................................................................................................................................... 26
AIR QUALITY PERMITTING .............................................................................................................................................. 26
9. General Biomass Technology Information ........................................................................ 27
HEATING WITH WOOD FUEL ........................................................................................................................................... 27
TYPES OF WOOD FUEL .................................................................................................................................................. 27
HIGH EFFICIENCY WOOD PELLET BOILERS ......................................................................................................................... 28
HIGH EFFICIENCY CORDWOOD BOILERS ............................................................................................................................ 28
LOW EFFICIENCY CORDWOOD BOILERS ............................................................................................................................. 28
HIGH EFFICIENCY WOOD STOVES .................................................................................................................................... 29
BULK FUEL BOILERS ...................................................................................................................................................... 29
GRANTS ..................................................................................................................................................................... 29
Feasibility Assessment for Biomass Heating Systems Fairbanks
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 Fairbanks
Coffman Engineers, Inc. iii
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
CFM Cubic Feet per Minute
Eff Efficiency
F Fahrenheit
ft Feet
FNSB Fairbanks North Star Borough
FNSBSD Fairbanks North Star Borough School District
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 Fairbanks
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List of Figures
Figure 1 – Pearl Creek Elementary ................................................................................................................ 2
Figure 2 – Weller Elementary ....................................................................................................................... 2
Figure 3 – Two Rivers Elementary ................................................................................................................. 3
Figure 4 – Salcha Elementary ........................................................................................................................ 3
Figure 5 – Pearl Creek Site Layout ................................................................................................................ 6
Figure 6 – Weller Site Layout ........................................................................................................................ 8
Figure 7 – Two Rivers Site Layout ................................................................................................................. 9
Figure 8 – Salcha Site Layout....................................................................................................................... 11
Figure 9 – Viessmann RF-300 Wood Pellet Boiler ....................................................................................... 12
List of Tables
Table 1 – Executive Summary ....................................................................................................................... 1
Table 2 – Energy Comparison ....................................................................................................................... 1
Table 3 – Building Properties ........................................................................................................................ 4
Table 4 – Building Properties ........................................................................................................................ 4
Table 5 – Energy Comparison ..................................................................................................................... 14
Table 6 – Existing Fuel Oil Consumption ..................................................................................................... 16
Table 7 – Proposed Biomass System Fuel Consumption ............................................................................ 17
Table 8 – Estimate of Probable Cost ........................................................................................................... 19
Table 9 – Discount and Escalation rates ..................................................................................................... 20
Table 10 – Economic Definitions ................................................................................................................. 21
Table 11 – Economic Analysis Results ......................................................................................................... 22
Table 12 – Sensitivity Analysis – Pearl Creek .............................................................................................. 24
Table 13 – Sensitivity Analysis – Weller ...................................................................................................... 24
Table 14 – Sensitivity Analysis – Two Rivers ............................................................................................... 25
Table 15 – Sensitivity Analysis – Salcha ...................................................................................................... 25
Feasibility Assessment for Biomass Heating Systems Fairbanks
Coffman Engineers, Inc. 1
1. Executive Summary
Coffman performed a preliminary biomass feasibility assessment for the Fairbanks North Star Borough to
determine the technical and economic viability of biomass heating systems at four elementary schools in
the Fairbanks area of Alaska: Pearl Creek, Weller, Two Rivers and Salcha. The proposed biomass heating
systems are wood pellet boilers located in detached modules with heating pipes to the schools. A local
wood pellet supplier would deliver pellets to an adjacent wood pellet silo.
Due to the current low price of heating oil at $2.90/gal, the benefit to cost ratios for each school is less
than 1.0 and therefore the wood pellet systems at the schools are not economically justified at this time.
However, the price of heating oil can vary greatly over time and as heating oil prices rise these projects
can become economically viable. For example, when heating oil reaches $3.50/gal the wood pellet boiler
projects at Pearl Creek and Weller become economically justified.
The pellet boiler projects at Pearl Creek and Weller are more economic than at Two Rivers and Salcha.
The reason for this is the greater amount of heating oil that can be offset in the larger schools of Pearl
Creek and Weller, compared to the cost of the new pellet boiler system. Two Rivers and Salcha are less
economic due to the relatively small heating oil offset and high project costs.
A summary of each projects economic analysis is shown in the following table.
Table 1 – Executive Summary
Item Pearl Creek Weller Two Rivers Salcha
Project Capital Cost ($673,000) ($505,000) ($489,000) ($475,000)
Present Value of Project Benefits
(20-year life)
$1,027,021 $788,970 $462,500 $333,272
Present Value of Operating Costs
(20-year life)
($523,154) ($403,473) ($240,550) ($170,467)
Benefit / Cost Ratio of Project
(20-year life)
0.75 0.76 0.45 0.34
Net Present Value
(20-year life)
($169,133) ($119,503) ($267,050) ($312,195)
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 >20 years >20 years
The current energy prices in Fairbanks are shown in the following table. Wood pellets are less expensive
than heating oil and electricity on an energy basis.
Table 2 – Energy Comparison
Community Fuel Type Units Gross
BTU/unit
System
Efficiency $/unit Delivered
$/MMBTU
Fairbanks
Wood Pellets ton 16,600,000 80% $275 $20.71
Heating Oil gal 134,000 65% $2.90 $33.30
Electricity kWh 3,413 99% $0.20 $59.19
Feasibility Assessment for Biomass Heating Systems Fairbanks
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2. Introduction
A preliminary feasibility assessment was completed to determine the technical and economic viability of
biomass heating systems for four elementary schools in the Fairbanks area of Alaska: Pearl Creek, Weller,
Two Rivers and Salcha. The Fairbanks North Star Borough School District (FNSBSD) operates and maintains
the elementary schools, while the Fairbanks North Star Borough (FNSB) provides capital for constructing
the schools. The FNSB received a grant from the Fairbanks Economic Development Corporation (FEDC)
for the feasibility study of the schools.
Figure 1 – Pearl Creek Elementary
Figure 2 – Weller Elementary
Feasibility Assessment for Biomass Heating Systems Fairbanks
Coffman Engineers, Inc. 3
Figure 3 – Two Rivers Elementary
Figure 4 – Salcha Elementary
Feasibility Assessment for Biomass Heating Systems Fairbanks
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3. Preliminary Site Investigation
Building Descriptions
Each elementary school is occupied during the typical school day and was built with typical constructio n
methods for their vintage in the Fairbanks area. Energy audits were completed for all schools in 2012.
For each school, the square footage, date of construction, occupant characteristics and type of
construction is shown in the following table.
Table 3 – Building Properties
School Square
Footage
Year
Built
Occupants Type of Construction
Pearl
Creek 62,982 1983 500 students,
60 staff
CMU block and metal stud walls (R-19 to R-30) and
built-up flat roof with rigid insulation (R-60)
Weller 65,259 1983 540 students,
40 staff
CMU block and 2x8 stud walls (R-26) and built-up
roof with metal trusses (R-35)
Two
Rivers 22,200 1982 90 students,
20 staff
CMU block and 2x8 stud walls (R-25) and hot roof
with metal trusses (R-50)
Salcha 13,608 1963
88 students,
9 staff
2x6 and 2x12 stud walls (R-19 to R-28) and hot roof
(R-60). A major upgrade was made in 2015 that
improved building envelope.
Existing Heating System
All schools are heated with cast-iron sectional oil-fired boilers that serve air handlers, cabinet unit heaters,
and perimeter base board using glycol. Domestic hot water (DHW) is provided by standalone oil-fired hot
water heaters. All of the schools are controlled by direct digital control (DDC) systems that can be viewed
and controlled remotely by the FNSBSD. All of the boilers are 1980’s vintage and appear to be working in
adequate 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 – Building Properties
School Boiler Plant DHW Plant Fuel Tank
Pearl
Creek
Two Weil McLain Boilers,
Model BL-1386 S-W,
2,700 MBH Gross Output Each
Bock Hot Water Heater,
Direct-Fired,
85 gal
5,000-gal underground
fuel tank
Weller
Two Burnham Boilers,
Model BF-507,
1,116 MBH Gross Output Each
Bock Hot Water Heater,
Direct-Fired,
212 gal
5,000-gal underground
fuel tank
Two
Rivers
Two Burnham Boilers,
Model PF-505,
786 MBH Gross Output Each
Bock Hot Water Heater,
Direct-Fired,
135 gal
5,000-gal underground
fuel tank
Salcha
Two Burnham Boilers,
Model V-38,
438 MBH Gross Output Each
Bock Hot Water Heater,
Direct-Fired,
50 gal
3,000-gal underground
fuel tank
Feasibility Assessment for Biomass Heating Systems Fairbanks
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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
Annual Fuel Utilization Efficiency of the boiler system is estimated at 65% to account for typical oil boiler
inefficiencies, including short cycling, due to the age of the boilers.
Weller Elementary is unique in that it has a solar thermal system that provides supplemental heating to
the building’s DHW system.
Available Space, Street Access, Fuel Storage and Site Constraints
Each school has site constraints associated with available space, access, and fuel storage. Most of the
prime area around the schools are already in use as playgrounds, fields, parking lots, or view sheds from
classrooms.
Pearl Creek
Pearl Creek is the largest elementary school studied. The oil boilers are located in a basement room that
has limited access and no space for future biomass boilers or equipment. There are no other suitable
locations inside the school for biomass equipment. A detached biomass boiler module or addition is
required.
The school is built into a west facing hill, which limits access to the north of the building. There are also
buried fuel tanks and fire water tanks at the north of the building. The west of the building is the
playground and the entry way and garden are at the south of the building. Due to these constraints, the
proposed location of a new biomass boiler module is on a new gravel pad to the east of the building. A
new pellet silo would be on the gravel pad as well. A new gravel access driveway from the street would
be required. This location was used for the basis of estimate.
A secondary option is to locate the biomass boiler module to the north of the building, however,
significant excavation will be required due to the steep hill there.
A site layout of the major site constraints at Pearl Creek is shown on the following page.
Feasibility Assessment for Biomass Heating Systems Fairbanks
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Figure 5 – Pearl Creek Site Layout
UNDERGROUND
FUEL TANK AND
FIRE WATER TANK
UNDERGROUND WATER
TANK AND WELL
BASEMENT
MECHANICAL ROOM
GARDEN
PROPOSED PELLET BOILER
MODULE AND PELLET SILO
ON NEW GRAVEL PAD
PLAYGROUND
PLAYGROUND AND
VIEWS FROM
CALSSROOMS
Feasibility Assessment for Biomass Heating Systems Fairbanks
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Weller
The oil boilers at Weller Elementary are located on the second-floor mechanical room. There is no space
inside this mechanical room for a biomass boiler or equipment. There is an adjacent mechanical room
that contains water treatment equipment and is used as storage that has space that could be used for a
biomass boiler system. However, this room is far from exterior walls, making it very difficult to transfer
wood pellets from an exterior silo to the biomass boiler. Due to these constraints, a detached biomass
boiler module is proposed.
All the space surrounding the school is currently being used. The north and east sides of the school are
parking lots. The south side of the school is a grass field that is also the south view shed for two stories
of classrooms. The west side of the school is the playground. Any location of a new biomass boiler module
will impact any of these above locations. From a purely practical perspective, the most ideal location of
the biomass module would be on the west side of the school, as this would be the shortest piping run to
the school’s boiler room and easily accessible for pellet delivery. However, this location of the module
would take away a section of the playground.
The north and east parking lots are surrounded by steep hills that make building in these areas difficult.
The parking lot could also be used as a potential location, however trenching through the concrete parking
lot will add significant cost.
For this feasibility study, no specific location was selected because the final location will depend of the
priorities of the school. For cost estimating purposes, it is assumed the new biomass boiler module will
be on the west side of the school.
A site plan of the major site constraints at Weller is shown on the following page.
Feasibility Assessment for Biomass Heating Systems Fairbanks
Coffman Engineers, Inc. 8
Figure 6 – Weller Site Layout
PLAYGROUND
SOCCER FIELD
SOUTH VIEWS FROM
CLASSROOMS
SEPTIC LEACH
FIELD
SEPTIC SYSTEM
ACCESS HATCHES
STEEP HILL AROUND
PARKING LOT
SECOND FLOOR
MECHANICAL RM
Feasibility Assessment for Biomass Heating Systems Fairbanks
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Two Rivers
The oil boilers at Two Rivers Elementary are located on the first floor mechanical room. The mechanical
room has below grade walls because the school is built into a south facing hillside. The existing boiler
room is completely full of existing equipment and there is no available space for a new biomass boiler
system. A new biomass boiler module is required.
There is limited space around the school for a new biomass boiler module. The north side of the school
is a parking lot and has existing buried utilities and a maintenance access area. The west side of the
school is the main entry. The south side of the school is the playground, fields and southern views for
the classrooms. The only space that appears practical for a new module is to the east of the school,
adjacent to the driveway. A new gravel pad would be required for the module and the pellet silo. This
area is currently not in use and is relatively close to the existing mechanical room. There is a buried fuel
tank near the school that would have to be avoided during trenching of the heat piping from the module
to the school. A site plan of the major site constraints is shown below.
Figure 7 – Two Rivers Site Layout
MAIN ENTRY
PLAYGROUND, FIELDS
AND SOUTH VIEWS
FROM CLASSROOMS
BURIED UTILITIES BASEMENT
MECHANCIAL RM
POTENTIAL LOCATION OF
NEW PELLET BOILER
MODULE AND PELLET SILO
ON NEW GRAVEL PAD
Feasibility Assessment for Biomass Heating Systems Fairbanks
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Salcha
The oil boilers at Salcha Elementary are located in a first floor mechanical room, on the east side of the
building. There is no available space in the existing mechanical room for a new biomass boiler system.
A new biomass boiler module is required.
There is limited space and access around the school for a biomass boiler module. The parking lot is
small and offers limited access to only the west side of the school. The south side of the school has the
septic leach field. The school is surrounded by Nordic ski trails on the south, east, and north of the
school. The playground and parking lot on situated on the west side of the school. Due to these site
constraints, the only practical space for a new module and pellet silo is on the south side of the parking
lot. This will reduce the parking area at the school. Siting of the module and silo will be constrained by
the septic leach field, fire water pump house and power pole that exist in the area. A buried heat pipe
can be trenched from the module around the south side of the school to the exterior wall of the school’s
mechanical room. A buried fire water line, sewer line and fuel line exist in this area, so caution will be
required during trenching.
A site plan of the major site constraints at Salcha Elementary is shown on the following page.
Feasibility Assessment for Biomass Heating Systems Fairbanks
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Figure 8 – Salcha Site Layout
FIRE WATER PUMP
HOUSE
SEPTIC LEACH
FIELD
PLAYGROUND
NORDIC SKI
STADIUM
MECHANICAL
ROOM
MUSIC ROOM
SKI HUT
SKI TRAILS
SURROUND THE
SOUTH, EAST AND
NORTH OF SCHOOL
POTENTIAL
LOCATION OF NEW
PELLET BOILER
MODULE AND SILO
Feasibility Assessment for Biomass Heating Systems Fairbanks
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4. Biomass System
Biomass System Options
The biomass boiler system selected as the basis of design for the four elementary schools is a wood pellet
boiler. Wood pellets are the best fit for the schools because they are fully automated boilers that require
limited labor for operation and fuel handling. Cord wood boiler systems were not considered because
they require manual loading and firing of cord wood, which requires significant labor. Wood chip systems
were considered, but were not selected because of the availability of local wood pellets. The handling of
pellets is much easier than wood chips or cord wood.
For this study, a Viessmann RF-300 wood pellet boiler was selected. The boiler has been successfully
installed and operated in Alaska (at the Ketchikan Airport) and is a high-quality pellet boiler. The high
efficiency boiler can modulate down to 4:1 and has ultra-low emissions. It has automatic ignition and low
maintenance. Different boiler sizes were selected for each school. The 540kW (1,843 MBH) unit was
selected for Pearl Creek, the 220kW (750 MBH) selected for Weller, and the 150kW (512 MBH) unit
selected for Two Rivers and Salcha.
Figure 9 – Viessmann RF-300 Wood Pellet Boiler
The biomass boiler would be installed in an 11.5ft wide x 10ft high x 29ft long insulated module. The
module would be fabricated offsite and would include a thermal storage tank, pellet augers, cyclone
separator, pumps, piping and wiring for a fully complete system. The module would be shipped to
Fairbanks to be installed onsite. The module would be installed on a concrete pad with a pellet silo
Feasibility Assessment for Biomass Heating Systems Fairbanks
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adjacent to it. Polydome pellet silos that can store 8.5 tons of pellets each, were selected as the basis of
design because the local pellet supplier has had a good track record with these units.
The combustion efficiency of the pellet boiler can reach 85%. Using thermal storage will also help the unit
run at higher efficiencies during normal operation. For this study, an Annual Fuel Utilization Efficiency of
80% was used, to account for normal operations throughout the year.
Biomass System Integration
Integration for all four of the elementary schools will be very similar. The detached biomass boiler module
will house the pellet boiler and thermal storage tank. The pellet boiler and thermal storage tank are ASME
rated and will operate with glycol. A buried, insulated piping loop will transfer heat using glycol from the
boiler module to the school’s mechanical room. In the mechanical room, a new heat exchanger will
transfer heat from the pellet boiler loop to the school’s heating glycol return loop. The heat exchanger is
used to separate the school’s glycol from the pellet boiler’s glycol, to protect the school’s system from a
potential leak in the pellet boiler’s heat loop. Glycol is used for freeze protection. A new pump will be
required to pump glycol from the pellet boiler module to the school heat exchanger. The new pellet boiler
module will require an electrical connection to power the pellet boiler and associated equipment.
The existing hydronic systems in the schools are set to operate at 180°F heating glycol supply / 160°F
return, which the pellet boiler can reach. Controls for the new biomass systems can be integrated into
the existing DDC controls at each facility.
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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 pellets are cheaper than fuel oil on a $/MMBTU basis in the Fairbanks area.
Table 5 – Energy Comparison
Community Fuel Type Units Gross
BTU/unit
System
Efficiency $/unit Delivered
$/MMBTU
Fairbanks
Wood Pellets ton 16,600,000 80% $275 $20.71
Heating Oil gal 134,000 65% $2.90 $33.30
Electricity kWh 3,413 99% $0.20 $59.19
Cord Wood
Cord wood was evaluated as a biomass fuel, but was not considered viable due to the additional handling
requirements. In order to burn cord wood, a person is required to stack, move and fire cord wood daily,
if not multiple times per day. Cord wood was not considered viable because the FNSB wishes to have a
more automated biomass system that does not require additional labor.
Wood Pellets
The local wood pellet manufacturer is Superior Pellets, located in North Pole, AK, and sells bulk wood
pellets at $275/ton including delivery. According to Superior Pellets, the cost of bulk pellets has stayed
constant over the years and they do not anticipate large swings in pricing, such as is found with fuel oil.
Superior Pellets are at 5% moisture content and have an energy content of 8,300 BTU/lb (16,600,000
BTU/ton). A bulk pellet truck can deliver up to 15 tons of wood pellets to the school on a scheduled or as
needed delivery. Typically, an initial schedule is set up to determine the actual consumption of wood
pellets and then the schedule is modified after that. Superior Pellets has been using Polydome silos for
pellet storage in the Fairbanks area and has had good success with the units. For the basis of design, one
8.5-ton pellet silo is used for each school. The frequency of delivery will be different for each school
depending on consumption.
Heating Oil
The high price of fuel oil is the main economic driver for the use of lower cost biomass heating. Fuel oil is
currently purchased at $2.90/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.
Feasibility Assessment for Biomass Heating Systems Fairbanks
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Electricity
Electricity for the schools is provided by the Golden Valley Electric Association (GVEA). According to the
utility data provided by the school district the effective electricity rate at the schools is $0.20/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.
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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 the FNSB from 2016, and are shown in the following table. Pearl Creek and Weller are the largest
consumers of fuel oil.
Table 6 – Existing Fuel Oil Consumption
Building Fuel Type Annual
Consumption
Net
MMBTU/yr
Avg. Annual
Cost
Pearl Creek Elementary Heating Oil #1 15,100 gal 1,315.2 $43,790
Weller Elementary Heating Oil #1 11,600 gal 1,010.4 $33,640
Two Rivers Elementary Heating Oil #1 6,800 gal 592.3 $19,720
Salcha Elementary Heating Oil #1 4,900 gal 426.8 $14,210
Biomass System Consumption
It is estimated that the proposed biomass system at each school will offset approximately 95% of the
heating energy for the building. The remaining 5% 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 pellet boilers and BIN weather data for the area.
It is assumed that two existing oil boilers at each school were designed so that one boiler could reach the
peak heating load of the school, with the other boiler as a fully redundant back up. The pellet boilers were
selected at ¾ the size of one fuel oil boiler. The only exception is Salcha, where the pellet boiler was
selected as the same size as the oil boiler, because there was no smaller pellet boiler option. For Salcha,
it is assumed that the pellet boiler will offset 98% of the heating energy, with the remaining 2% coming
from the oil boiler during peaking times.
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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
Pearl Creek
Elementary
Wood Pellets 95% 1249.4 94 tons $25,873
$28,163 $15,627 Fuel Oil 5% 65.8 755 gal $2,190
Additional Electricity N/A N/A 500 kWh $100
Weller
Elementary
Wood Pellets 95% 959.8 72 tons $19,876
$21,628 $12,012 Fuel Oil 5% 50.5 580 gal $1,682
Additional Electricity N/A N/A 350 kWh $70
Two Rivers
Elementary
Wood Pellets 95% 562.7 42 tons $11,652
$12,688 $7,032 Fuel Oil 5% 29.6 340 gal $986
Additional Electricity N/A N/A 250 kWh $50
Salcha
Elementary
Wood Pellets 98% 418.3 31 tons $8,661
$8,995 $5,215 Fuel Oil 2% 8.5 98 gal $284
Additional Electricity N/A N/A 250 kWh $50
Note – Based on wood pellets at $275/ton, heating oil at $2.90/gal and electricity at $0.20/kWh.
Feasibility Assessment for Biomass Heating Systems Fairbanks
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6. Preliminary Cost Estimating
An estimate of probable costs was completed for installing the wood pellet boiler systems at each school.
The estimate is based equipment quotes and from previous projects in Alaska. Project and Construction
Management was estimated at 5%. Engineering design and permitting was estimated at 15% and a 15%
contingency was used. Since Fairbanks is on the highway system, an additional remote factor to account
for increased shipping costs was not included.
The main cost driver at all schools is the pre-manufactured biomass boiler module. As shown in the
following table, the cost of the modules range in price from around $290,000 to $390,000, depending on
boiler size.
Feasibility Assessment for Biomass Heating Systems Fairbanks
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Table 8 – Estimate of Probable Cost
School Pearl Creek Weller Two Rivers Salcha
Boiler Size 540kW 220kW 150kW 150kW
Category Description Cost Cost Cost Cost
Site Work Site Grading for Module and Silo $15,000 $4,000 $10,000 $4,000
Gravel Fill $10,000 $3,000 $5,000 $5,000
Module Foundation $5,000 $5,000 $5,000 $5,000
Pellet Silo Foundation $4,000 $4,000 $4,000 $4,000
Buried Utilities $8,000 $5,500 $5,000 $5,000
Subtotal $42,000 $21,500 $29,000 $23,000
Electrical Utilities Service Entrance $5,000 $4,500 $4,000 $3,000
Conduit and Wiring $6,000 $5,000 $4,000 $3,000
Subtotal $11,000 $9,500 $8,000 $6,000
Biomass Boiler Module Module (11.5' W x 10' H x 29' L) including
installation of Viessmann RF-300 Pellet
Boiler, controller, multi-cyclone, 880gal
ASME thermal storage tank, pellet auger,
interior piping, valves, electrical,
structural components for fully functional
boiler module. $342,594 $254,001 $238,680 $238,680
R-20 Module Insulation Package $23,850 $23,850 $23,850 $23,850
Insulated SS Chimney $3,982 $3,982 $3,982 $3,982
Commissioning and Training $5,200 $5,200 $5,200 $5,200
Shipping from Enderby, BC to Fairbanks $10,000 $10,000 $10,000 $10,000
Pellet Silo (8.5 Ton) $5,000 $5,000 $5,000 $5,000
Subtotal $390,626 $302,033 $286,712 $286,712
School Connection Heat Exchanger $12,000 $10,000 $8,000 $6,000
Insulated Pipe from School to Module $15,000 $8,000 $10,000 $10,000
Piping Tie-in to Boiler Room $14,000 $12,000 $10,000 $10,000
Subtotal $41,000 $30,000 $28,000 $26,000
Subtotal Material and
Installation Cost $484,626 $363,033 $351,712 $341,712
Project and Construction
Management
5% of subtotal
$24,232 $18,152 $17,586 $17,086
Subtotal $508,858 $381,185 $369,298 $358,798
Design Fees and
Permitting
15% of subtotal of materials and PM
$76,329 $57,178 $55,395 $53,820
Subtotal $585,187 $438,363 $424,693 $412,618
Contingency 15% of Materials, PM and Design $87,779 $65,755 $63,704 $61,893
Total Project Cost $672,966 $504,118 $488,397 $474,511
Total Budgetary Cost $673,000 $505,000 $489,000 $475,000
Feasibility Assessment for Biomass Heating Systems Fairbanks
Coffman Engineers, Inc. 20
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. 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 pellet costs in the Fairbanks region.
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 $600 per year. The
estimate is based on annual maintenance time for Viessman Wood Pellet 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.
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 Fairbanks
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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 Fairbanks
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Results
An economic analysis was completed to determine the simple payback, benefit to cost ratio, and net
present value of the proposed wood pellet boiler systems at the elementary schools. At each school, a
wood pellet boiler system would be located in a detached module and heating pipes would connect to
the new heat exchanger in the school’s mechanical room. The wood pellet boiler would supplement heat
for the existing oil boiler system. Pellet silos would be located next to the pellet boiler module, and filled
by a local pellet supplier.
Due to the low price of heating oil at $2.90/gal, the benefit to cost ratios for each school are less than 1.0.
Any project with a benefit to cost ratio less than 1.0 is not considered economically justified, and therefore
the wood pellet systems at the schools are not economically justified at this time.
However, historically the price of heating oil has varied greatly over time and as heating oil prices rise the
projects can become economically viable. For example, when heating oil reaches $3.50/gal the wood
pellet boiler projects at Pearl Creek and Weller become economically justified. This can be seen in the
sensitivity analysis on the next page.
The economic analysis shows that wood pellet boiler projects at Pearl Creek and Weller are more
economic than at Two Rivers and Salcha. The reason for this is the greater amount of heating oil that can
be offset in the larger schools of Pearl Creek and Weller, compared to the cost of the new pellet boiler
system. Two Rivers and Salcha are less economic due to the relatively small heating oil offset and high
project costs.
The results are shown in the table below. 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 Pearl Creek Weller Two Rivers Salcha
Project Capital Cost ($673,000) ($505,000) ($489,000) ($475,000)
Present Value of Project Benefits
(20-year life)
$1,027,021 $788,970 $462,500 $333,272
Present Value of Operating Costs
(20-year life)
($523,154) ($403,473) ($240,550) ($170,467)
Benefit / Cost Ratio of Project
(20-year life)
0.75 0.76 0.45 0.34
Net Present Value
(20-year life)
($169,133) ($119,503) ($267,050) ($312,195)
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 >20 years >20 years
There are other wood pellet boiler manufactures that may reduce overall project costs at the schools. To
see how this impacts the economics, a separate analysis was completed where the cost of the fabrication
of the biomass boiler module was reduced by 25% (which includes cost of the boiler, pumps, electrical,
etc.). The 20-yr benefit to cost ratios for each school with this updated cost are: Pearl Creek (0.91), Weller
Feasibility Assessment for Biomass Heating Systems Fairbanks
Coffman Engineers, Inc. 23
(0.93), Two Rivers (0.55), and Salcha (0.42). The economics improve slightly, but all benefit to cost ratios
are still below 1.0. For this prefeasibility study, the Viessman boiler basis of design is still used because it
gives a more conservative estimate of project costs. During the next phase of eng ineering design, the
project costs can be further refined.
Each school has site constraints that will affect the installation of the project. The projects at both Pearl
Creek and Two Rivers have the least impact compared to the other projects because the pellet boiler
modules can be installed in undeveloped locations to the east of the schools, but this will increase site
development costs. At Weller, the pellet boiler module will either impact the playground, fields or parking
lot depending on final location. Salcha has very limited space and the pellet module will impact the
parking lot area.
Feasibility Assessment for Biomass Heating Systems Fairbanks
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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
orange.
At a heating oil price of $3.50/gal and the current wood pellet price of $275/ton, the wood pellet boiler
projects at both Pearl Creek and Weller are economically justified. This can be seen in the following two
tables.
Table 12 – Sensitivity Analysis – Pearl Creek
B/C Ratios Wood Pellet Cost
$225/ton $250/ton $275/ton $300/ton $325/ton
Heating
Oil Cost
$2.75/gal 0.80 0.74 0.67 0.61 0.55
$3.00/gal 0.92 0.86 0.80 0.74 0.67
$3.25/gal 1.05 0.99 0.92 0.86 0.80
$3.50/gal 1.17 1.11 1.05 0.99 0.92
$3.75/gal 1.30 1.24 1.17 1.11 1.05
$4.00/gal 1.42 1.36 1.30 1.24 1.17
$4.25/gal 1.55 1.49 1.42 1.36 1.30
$4.50/gal 1.67 1.61 1.55 1.49 1.42
$4.75/gal 1.80 1.74 1.67 1.61 1.55
$5.00/gal 1.92 1.86 1.80 1.74 1.67
$5.25/gal 2.05 1.99 1.92 1.86 1.80
Table 13 – Sensitivity Analysis – Weller
B/C Ratios Wood Pellet Cost
$225/ton $250/ton $275/ton $300/ton $325/ton
Heating
Oil Cost
$2.75/gal 0.81 0.75 0.69 0.62 0.56
$3.00/gal 0.94 0.88 0.81 0.75 0.69
$3.25/gal 1.07 1.01 0.94 0.88 0.82
$3.50/gal 1.20 1.13 1.07 1.01 0.94
$3.75/gal 1.32 1.26 1.20 1.14 1.07
$4.00/gal 1.45 1.39 1.33 1.26 1.20
$4.25/gal 1.58 1.52 1.45 1.39 1.33
$4.50/gal 1.71 1.65 1.58 1.52 1.46
$4.75/gal 1.84 1.77 1.71 1.65 1.58
$5.00/gal 1.96 1.90 1.84 1.77 1.71
$5.25/gal 2.09 2.03 1.97 1.90 1.84
Feasibility Assessment for Biomass Heating Systems Fairbanks
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Two Rivers and Salcha become economically justified when heating oil prices reach $4.75/gal and
$5.75/gal, respectively, at the current wood pellet price of $275/ton. This can be seen in the following
two tables.
Table 14 – Sensitivity Analysis – Two Rivers
B/C Ratios Wood Pellet Cost
$225/ton $250/ton $275/ton $300/ton $325/ton
Heating
Oil Cost
$3.75/gal 0.79 0.76 0.72 0.68 0.64
$4.00/gal 0.87 0.83 0.79 0.76 0.72
$4.25/gal 0.95 0.91 0.87 0.83 0.80
$4.50/gal 1.03 0.99 0.95 0.91 0.87
$4.75/gal 1.10 1.07 1.03 0.99 0.95
$5.00/gal 1.18 1.14 1.10 1.07 1.03
$5.25/gal 1.26 1.22 1.18 1.14 1.11
$5.50/gal 1.34 1.30 1.26 1.22 1.18
$5.75/gal 1.41 1.37 1.34 1.30 1.26
$6.00/gal 1.49 1.45 1.41 1.38 1.34
$6.25/gal 1.57 1.53 1.49 1.45 1.42
Table 15 – Sensitivity Analysis – Salcha
B/C Ratios Wood Pellet Cost
$225/ton $250/ton $275/ton $300/ton $325/ton
Heating
Oil Cost
$3.75/gal 0.60 0.57 0.54 0.52 0.49
$4.00/gal 0.66 0.63 0.60 0.57 0.55
$4.25/gal 0.72 0.69 0.66 0.63 0.60
$4.50/gal 0.78 0.75 0.72 0.69 0.66
$4.75/gal 0.84 0.81 0.78 0.75 0.72
$5.00/gal 0.90 0.87 0.84 0.81 0.78
$5.25/gal 0.96 0.93 0.90 0.87 0.84
$5.50/gal 1.02 0.99 0.96 0.93 0.90
$5.75/gal 1.08 1.05 1.02 0.99 0.96
$6.00/gal 1.14 1.11 1.08 1.05 1.02
$6.25/gal 1.19 1.17 1.14 1.11 1.08
Feasibility Assessment for Biomass Heating Systems Fairbanks
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8. Forest Resource and Fuel Availability Assessments
Fuel Availability
For this study, the main fuel supplier is the local Fairbanks pellet manufacturer, Superior Pellets.
According to discussions with Superior Pellets, they are operating at 15% of capacity and can easily take
on 25,000 tons worth of orders without an issue. This is more than enough capacity to meet all the heating
demand for the schools studied. 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 Fairbanks
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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 Fairbanks
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High Efficiency Wood Pellet Boilers
High efficiency pellet boilers are designed to burn wood pellets cleanly and efficiently. These boilers utilize
pellet storage bins or silos that hold a large percentage of the building’s annual pellet supply. Augers or
vacuums transfer pellets from the silos to a pellet hopper adjacent to the pellet boiler, where pellets can
be fed into the boiler for burning. Pellets are automatically loaded into the pellet boiler and do not require
manual loading such as in a Garn cordwood boiler. The pellet boilers typically have a 3 to 1 turn down
ratio, which allows the firing rate to modulate from 100% down to 33% fire. This allows the boiler to
properly match building heat demand, increasing boiler efficiency. The efficiencies of these boilers can
range from 85% to 92% efficiency depending on firing rate.
High Efficiency Cordwood Boilers
High Efficiency Low Emission (HELE) cordwood boilers are designed to burn cordwood fuel cleanly and
efficiently. The boilers use cordwood that is typically seasoned to 25% moisture content (MC) or less and
meet the dimensions required for loading and firing. The amount of cordwood burned by the boiler will
depend on the heat load profile of the building and the utilization of the fuel oil system as back up. Two
HELE cordwood boiler suppliers include Garn (www.garn.com) and TarmUSA (www.woodboilers.com).
Both of these suppliers have units operating in Alaska. TarmUSA has a number of residential units
operating in Alaska and has models that range between 100,000 to 300,000 BTU/hr. Garn boilers,
manufactured by Dectra Corporation, are used in Tanana, Kasilof, Dot Lake, Thorne Bay, Coffman Cove
and other locations to heat homes, washaterias, schools, and community buildings.
The Garn boiler has a unique construction, which is basically a wood boiler housed in a large water tank.
Garn boilers come in several sizes and are appropriate for facilities using 100,000 to 1,000,000 BTUs per
hour. The jacket of water surrounding the fire box absorbs heat and is piped into buildings via a heat
exchanger, and then transferred to an existing building heating system, in-floor radiant tubing, unit
heaters, or baseboard heaters. In installations where the Garn boiler is in a detached building, there are
additional heat exchangers, pumps and a glycol circulation loop that are necessary to transfer heat to the
building while allowing for freeze protection. Radiant floor heating is the most efficient heating method
when using wood boilers such as Garns, because they can operate using lower supply water temperatures
compared to baseboards.
Garn boilers are approximately 87% efficient and store a large quantity of water. For example, the Garn
WHS-2000 holds approximately 1,825 gallons of heated water. Garns also produce virtually no smoke
when at full burn, because of a primary and secondary gasification (2,000 ºF) burning process. Garns are
manually stocked with cordwood and can be loaded multiple times a day during periods of high heating
demand. Garns are simple to operate with only three moving parts: a handle, door and blower. Garns
produce very little ash and require minimal maintenance. Removing ash and inspecting fans are typical
maintenance requirements. Fans are used to produce a draft that increases combustion temperatures
and boiler efficiency. In cold climates, Garns can be equipped with exterior insulated storage tanks for
extra hot water circulating capacity. Most facilities using cordwood boilers keep existing oil-fired systems
operational to provide heating backup during biomass boiler downtimes and to provide additional heat
for peak heating demand periods.
Low Efficiency Cordwood Boilers
Outdoor boilers are categorized as low-efficiency, high emission (LEHE) systems. These boiler systems are
not recommended as they produce significant emission issues and do not combust wood fuels efficiently
Feasibility Assessment for Biomass Heating Systems Fairbanks
Coffman Engineers, Inc. 29
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:
http://www.fs.fed.us/news/2012/releases/07/renewablewoods.shtml
Feasibility Assessment for Biomass Heating Systems Fairbanks
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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
Feasibility Assessment for Biomass Heating Systems Fairbanks
Coffman Engineers, Inc.
Appendix A
Site Photos
Feasibility Assessment for Biomass Heating Systems Fairbanks
Coffman Engineers, Inc.
Pearl Creek
1. West Elevation of Building 2. South Elevation of Building
3. North Elevation of Building 4. North Elevation of Building
5. East Elevation of Building 6. Generator
Feasibility Assessment for Biomass Heating Systems Fairbanks
Coffman Engineers, Inc.
7. Boilers 1 and 2 8. Boiler 2
9. Hot Water Heater 10. Fire Pumps
Feasibility Assessment for Biomass Heating Systems Fairbanks
Coffman Engineers, Inc.
11. Hydronic Pumps 12. Electrical Panels
13. Electrical Panels
Feasibility Assessment for Biomass Heating Systems Fairbanks
Coffman Engineers, Inc.
Weller
14. North Elevation of Building 15. Partial North Elevation of Building
16. Partial North and West Elevation of Building 17. Partial West Elevation of Building
18. South Elevation of Building 19. Partial East Elevation of Building
Feasibility Assessment for Biomass Heating Systems Fairbanks
Coffman Engineers, Inc.
20. Partial East Elevation of Building 21. Building Layout
22. Boilers and Water Heater 23. Well Water Storage Tanks
24. Generator 25. Hydronic Pumps
Feasibility Assessment for Biomass Heating Systems Fairbanks
Coffman Engineers, Inc.
26. Mechanical Room with Fire Water Tank 27. Parking Lot Head Bolt Electrical Panel
28. Main Electrical Disconnect 29. Electrical Panels
Feasibility Assessment for Biomass Heating Systems Fairbanks
Coffman Engineers, Inc.
Two Rivers
30. Partial South and East Elevation of
Building 31. South Elevation of Building
32. Partial South and West Elevation of Building 33. Partial East and North Elevation of Building
34. Partial East and North Elevation of Building 35. Partial East and North Elevation of Building
Feasibility Assessment for Biomass Heating Systems Fairbanks
Coffman Engineers, Inc.
36. Building Layout 37. Boilers and Water Heater
38. Boiler 1 39. Boiler 2
Feasibility Assessment for Biomass Heating Systems Fairbanks
Coffman Engineers, Inc.
40. Hot Water Heater 41. Generator
42. Hauled Water System 43. Well Water System
Feasibility Assessment for Biomass Heating Systems Fairbanks
Coffman Engineers, Inc.
44. Hauled Water Storage Tanks 45. Hydronic Pumps
46. Pump Motor and Disconnects 47. Electrical Panels for Pump Motors
Feasibility Assessment for Biomass Heating Systems Fairbanks
Coffman Engineers, Inc.
48. Fuel Oil Pump
Feasibility Assessment for Biomass Heating Systems Fairbanks
Coffman Engineers, Inc.
Salcha
49. West Elevation of Building 50. Partial South and West Elevation of Building
51. Partial East and South Elevation of Building 52. Partial East Elevation of Building
53. Partial East Elevation of Building 54. North Elevation of Building
Feasibility Assessment for Biomass Heating Systems Fairbanks
Coffman Engineers, Inc.
55. Partial West Elevation of Building 56. Building Layout
57. Boilers and Piping 58. Hot Water Heater
59. Electrical Panels for Pump Motors 60. AHU in second story Mech Room
Feasibility Assessment for Biomass Heating Systems Fairbanks
Coffman Engineers, Inc.
61. Boiler 1 62. Electric Generator
Feasibility Assessment for Biomass Heating Systems Fairbanks
Coffman Engineers, Inc.
Appendix B
Economic Analysis Spreadsheets
Pearl Creek Elementary SchoolFairbanks, AlaskaProject Capital Cost($673,000)Present Value of Project Benefits (20-year life)$1,027,021Present Value of Operating Costs (20-year life)($523,154)Benefit / Cost Ratio of Project (20-year life)0.75Net Present Value (20-year life)($169,133)Year 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 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$2.9015,100gal$43,790$45,980$48,278$50,692$53,227$55,888$58,683$61,617$64,698$67,933$71,329$74,896$78,641$82,573$86,701$91,036$95,588$100,367$105,386$110,655Biomass System Operating CostsWood Pellet Cost (Delivered)$275.0095%94.0tons($25,850)($26,367)($26,894)($27,432)($27,981)($28,540)($29,111)($29,694)($30,287)($30,893)($31,511)($32,141)($32,784)($33,440)($34,109)($34,791)($35,487)($36,196)($36,920)($37,659)Fossil Fuel$2.905%755gal($2,190)($2,299)($2,414)($2,535)($2,661)($2,794)($2,934)($3,081)($3,235)($3,397)($3,566)($3,745)($3,932)($4,129)($4,335)($4,552)($4,779)($5,018)($5,269)($5,533)Additional Electricity$0.20500kWh($100)($102)($104)($106)($108)($110)($113)($115)($117)($120)($122)($124)($127)($129)($132)($135)($137)($140)($143)($146)Operation and Maintenance Costs($600)($612)($624)($637)($649)($662)($676)($689)($703)($717)($731)($746)($761)($776)($792)($808)($824)($840)($857)($874)Additional Operation and Maintenance Costs for first 2 years($600)($612)$0$0$0$0$0$0$0$0$0$0$0$0$0$0$0$0$0$0Total Operating Costs($29,340)($29,992)($30,037)($30,710)($31,400)($32,108)($32,834)($33,578)($34,342)($35,126)($35,931)($36,756)($37,604)($38,474)($39,367)($40,285)($41,227)($42,195)($43,189)($44,211)Annual Operating Cost Savings$14,451 $15,988 $18,242 $19,983 $21,827 $23,781 $25,849 $28,038 $30,355 $32,806 $35,399 $38,139 $41,037 $44,099 $47,334 $50,752 $54,361 $58,173 $62,197 $66,444Accumulated Cash Flow$14,451 $30,438 $48,680 $68,663 $90,490 $114,270 $140,119 $168,158 $198,513 $231,320 $266,718 $304,857 $345,894 $389,993 $437,327 $488,078 $542,440 $600,612 $662,809 $729,253Net Present Value($658,970) ($643,901) ($627,207) ($609,452) ($590,624) ($570,708) ($549,691) ($527,557) ($504,292) ($479,881) ($454,308) ($427,558) ($399,614) ($370,460) ($340,078) ($308,451) ($275,562) ($241,391) ($205,921) ($169,133)Economic Analysis ResultsInflation RatesDescription Unit CostHeating Source ProportionAnnual Energy UnitsEnergy Units
Weller Elementary SchoolFairbanks, AlaskaProject Capital Cost($505,000)Present Value of Project Benefits (20-year life)$788,970Present Value of Operating Costs (20-year life)($403,473)Benefit / Cost Ratio of Project (20-year life)0.76Net Present Value (20-year life)($119,503)Year 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 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$2.9011,600gal$33,640$35,322$37,088$38,943$40,890$42,934$45,081$47,335$49,702$52,187$54,796$57,536$60,413$63,433$66,605$69,935$73,432$77,103$80,959$85,007Biomass System Operating CostsWood Pellet Cost (Delivered)$275.0095%72.0tons($19,800)($20,196)($20,600)($21,012)($21,432)($21,861)($22,298)($22,744)($23,199)($23,663)($24,136)($24,619)($25,111)($25,613)($26,126)($26,648)($27,181)($27,725)($28,279)($28,845)Fossil Fuel$2.905%580gal($1,682)($1,766)($1,854)($1,947)($2,044)($2,147)($2,254)($2,367)($2,485)($2,609)($2,740)($2,877)($3,021)($3,172)($3,330)($3,497)($3,672)($3,855)($4,048)($4,250)Additional Electricity$0.20350kWh($70)($71)($73)($74)($76)($77)($79)($80)($82)($84)($85)($87)($89)($91)($92)($94)($96)($98)($100)($102)Operation and Maintenance Costs($600)($612)($624)($637)($649)($662)($676)($689)($703)($717)($731)($746)($761)($776)($792)($808)($824)($840)($857)($874)Additional Operation and Maintenance Costs for first 2 years($600)($612)$0$0$0$0$0$0$0$0$0$0$0$0$0$0$0$0$0$0Total Operating Costs($22,752)($23,258)($23,151)($23,670)($24,202)($24,747)($25,307)($25,880)($26,469)($27,073)($27,693)($28,329)($28,982)($29,652)($30,340)($31,047)($31,773)($32,518)($33,284)($34,071)Annual Operating Cost Savings$10,888 $12,065 $13,937 $15,272 $16,688 $18,187 $19,774 $21,455 $23,233 $25,114 $27,103 $29,207 $31,431 $33,781 $36,265 $38,888 $41,659 $44,585 $47,675 $50,935Accumulated Cash Flow$10,888 $22,953 $36,889 $52,162 $68,849 $87,036 $106,811 $128,265 $151,498 $176,612 $203,715 $232,922 $264,353 $298,135 $334,399 $373,288 $414,947 $459,533 $507,207 $558,143Net Present Value($494,429) ($483,057) ($470,303) ($456,734) ($442,339) ($427,108) ($411,029) ($394,093) ($376,287) ($357,600) ($338,020) ($317,535) ($296,132) ($273,798) ($250,521) ($226,287) ($201,082) ($174,893) ($147,705) ($119,503)Economic Analysis ResultsInflation RatesDescription Unit CostHeating Source ProportionAnnual Energy UnitsEnergy Units
Two Rivers Elementary SchoolFairbanks, AlaskaProject Capital Cost($489,000)Present Value of Project Benefits (20-year life)$462,500Present Value of Operating Costs (20-year life)($240,550)Benefit / Cost Ratio of Project (20-year life)0.45Net Present Value (20-year life)($267,050)Year 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 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$2.906,800gal$19,720$20,706$21,741$22,828$23,970$25,168$26,427$27,748$29,135$30,592$32,122$33,728$35,414$37,185$39,044$40,996$43,046$45,199$47,459$49,831Biomass System Operating CostsWood Pellet Cost (Delivered)$275.0095%42.0tons($11,550)($11,781)($12,017)($12,257)($12,502)($12,752)($13,007)($13,267)($13,533)($13,803)($14,079)($14,361)($14,648)($14,941)($15,240)($15,545)($15,856)($16,173)($16,496)($16,826)Fossil Fuel$2.905%340gal($986)($1,035)($1,087)($1,141)($1,198)($1,258)($1,321)($1,387)($1,457)($1,530)($1,606)($1,686)($1,771)($1,859)($1,952)($2,050)($2,152)($2,260)($2,373)($2,492)Additional Electricity$0.20250kWh($50)($51)($52)($53)($54)($55)($56)($57)($59)($60)($61)($62)($63)($65)($66)($67)($69)($70)($71)($73)Operation and Maintenance Costs($600)($612)($624)($637)($649)($662)($676)($689)($703)($717)($731)($746)($761)($776)($792)($808)($824)($840)($857)($874)Additional Operation and Maintenance Costs for first 2 years($600)($612)$0$0$0$0$0$0$0$0$0$0$0$0$0$0$0$0$0$0Total Operating Costs($13,786)($14,091)($13,780)($14,088)($14,404)($14,728)($15,061)($15,401)($15,751)($16,110)($16,478)($16,856)($17,243)($17,641)($18,050)($18,469)($18,900)($19,343)($19,798)($20,265)Annual Operating Cost Savings$5,934 $6,615 $7,961 $8,740 $9,566 $10,440 $11,366 $12,347 $13,384 $14,482 $15,644 $16,872 $18,171 $19,544 $20,994 $22,527 $24,146 $25,856 $27,661 $29,567Accumulated Cash Flow$5,934 $12,549 $20,510 $29,250 $38,816 $49,256 $60,622 $72,969 $86,353 $100,836 $116,480 $133,352 $151,523 $171,067 $192,061 $214,588 $238,734 $264,590 $292,251 $321,818Net Present Value($483,239) ($477,004) ($469,718) ($461,953) ($453,701) ($444,958) ($435,716) ($425,969) ($415,711) ($404,935) ($393,634) ($381,800) ($369,426) ($356,505) ($343,030) ($328,992) ($314,383) ($299,195) ($283,421) ($267,050)Economic Analysis ResultsInflation RatesDescription Unit CostHeating Source ProportionAnnual Energy UnitsEnergy Units
Salcha Elementary SchoolSalcha, AlaskaProject Capital Cost($475,000)Present Value of Project Benefits (20-year life)$333,272Present Value of Operating Costs (20-year life)($170,467)Benefit / Cost Ratio of Project (20-year life)0.34Net Present Value (20-year life)($312,195)Year 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 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$2.904,900gal$14,210$14,921$15,667$16,450$17,272$18,136$19,043$19,995$20,995$22,044$23,147$24,304$25,519$26,795$28,135$29,542$31,019$32,570$34,198$35,908Biomass System Operating CostsWood Pellet Cost (Delivered)$275.0098%31.0tons($8,525)($8,696)($8,869)($9,047)($9,228)($9,412)($9,601)($9,793)($9,988)($10,188)($10,392)($10,600)($10,812)($11,028)($11,249)($11,474)($11,703)($11,937)($12,176)($12,419)Fossil Fuel$2.902%98gal($284)($298)($313)($329)($345)($363)($381)($400)($420)($441)($463)($486)($510)($536)($563)($591)($620)($651)($684)($718)Additional Electricity$0.20250kWh($50)($51)($52)($53)($54)($55)($56)($57)($59)($60)($61)($62)($63)($65)($66)($67)($69)($70)($71)($73)Operation and Maintenance Costs($600)($612)($624)($637)($649)($662)($676)($689)($703)($717)($731)($746)($761)($776)($792)($808)($824)($840)($857)($874)Additional Operation and Maintenance Costs for first 2 years($600)($612)$0$0$0$0$0$0$0$0$0$0$0$0$0$0$0$0$0$0Total Operating Costs($10,059)($10,269)($9,859)($10,066)($10,277)($10,493)($10,713)($10,939)($11,170)($11,406)($11,647)($11,894)($12,147)($12,405)($12,669)($12,939)($13,216)($13,499)($13,788)($14,084)Annual Operating Cost Savings$4,151 $4,652 $5,808 $6,384 $6,996 $7,643 $8,329 $9,056 $9,825 $10,639 $11,499 $12,410 $13,373 $14,390 $15,466 $16,602 $17,803 $19,071 $20,410 $21,824Accumulated Cash Flow$4,151 $8,802 $14,610 $20,994 $27,990 $35,633 $43,962 $53,018 $62,843 $73,482 $84,981 $97,391 $110,763 $125,154 $140,620 $157,222 $175,025 $194,096 $214,506 $236,329Net Present Value($470,970) ($466,586) ($461,271) ($455,598) ($449,564) ($443,163) ($436,390) ($429,242) ($421,712) ($413,796) ($405,488) ($396,784) ($387,678) ($378,164) ($368,237) ($357,891) ($347,120) ($335,918) ($324,279) ($312,195)Economic Analysis ResultsInflation RatesDescription Unit CostHeating Source ProportionAnnual Energy UnitsEnergy Units
Feasibility Assessment for Biomass Heating Systems Fairbanks
Coffman Engineers, Inc.
Appendix C
AWEDTG Field Data Sheets