HomeMy WebLinkAboutHughes Biomass Pre Feasibility 20121
Dalson Energy Inc.
308 G St. Ste 303
Anchorage, Alaska 99501
907-277-7900
8/19/2012
Preliminary Feasibility Assessment
This preliminary feasibility assessment considers the potential for
heating community buildings in Hughes with woody biomass from
regional forests and river logs.
Biomass Energy Village of Hughes
Table of Contents
Project Summary .................................................................................................................................................................. 3
Summary of Findings .......................................................................................................................................................... 3
Wood fuel supply in Hughes ............................................................................................................................................. 4
Biomass Energy Operations and Maintenance ................................................................................................................ 6
Biomass Harvest Plan ...................................................................................................................................................... 6
Operations Plan ................................................................................................................................................................ 7
Community Facilities Information .................................................................................................................................... 8
City & Tribal Office ...................................................................................................................................................... 8
Old Clinic ...................................................................................................................................................................... 8
Washateria/ Waterplant ............................................................................................................................................. 8
School ................................................................................................................................................................................. 8
Recommended technology and fuel requirements ......................................................................................................... 9
Initial investment ........................................................................................................................................................... 10
Financial Analysis .............................................................................................................................................................. 12
Summary of Financial Analysis ............................................................................................................................... 17
Conclusion .......................................................................................................................................................................... 18
Supplement: Community Wood Heating Basics ........................................................................................................... 20
Wood fuel as a heating option ......................................................................................................................................... 20
The nature of wood fuels .................................................................................................................................................. 20
The basics of wood-fueled heating .................................................................................................................................. 21
Available wood heating technology ................................................................................................................................ 23
Cordwood Boilers .......................................................................................................................................................... 24
Bulk Fuel Boilers ............................................................................................................................................................ 24
District heat loops .......................................................................................................................................................... 25
Figure 1: Land Ownership Surrounding Hughes, AK.................................................................................................... 5
Figure 2: Hughes Timber from TCC Inventory, 1987 ..................................................................................................... 5
Figure 3: Illustration of Unmanaged Wood Harvesting Efforts .................................................................................... 6
Figure 4: Illustration of Planned Wood Harvest by Harvest Area and Time Period. ................................................ 7
Figure 5: Hughes Washateria ............................................................................................................................................. 7
Figure 6: Cordwood ........................................................................................................................................................... 20
Figure 7: Ground wood chips used for mulch. .............................................................................................................. 20
Figure 8: Wood briquettes, as a substitute for cordwood. Cross sections of these briquettes make “wafers”
which can be automatically handled in biomass boiler systems. ................................................................................ 20
Figure 9: Wood pellets ....................................................................................................................................................... 20
Project Summary
Interior Regional Housing Authority (IRHA) and Tanana Chiefs Conference (TCC) contracted Dalson
Energy to do a Pre-Feasibility Study (Pre-FS) for biomass heating of community buildings in the
Native Village of Hughes.
Dalson Energy biomass specialist Wynne visited the community on August 23-24, 2012 for the initial
assessment. Auld made their assessment based on available data, interviews with local stakeholders
and authorities, observations, and research and review of previous studies done in Hughes.
It was noted that there is at least one other study completed that addresses various aspects of biomass
energy in Hughes: a Forestry Resource assessments done by TCC Forester Will Putman and DNR
Division of Forestry.
This report was prepared by Thomas Deerfield, Wynne Auld, Louise Deerfield, and Clare Doig.
Contact and interviews with the following individuals in Hughes assisted in some of the information
gathering. Their contact information is as follows:
City - City of Hughes
P.O. Box 45010
Hughes, AK 99745
Phone 907-889-2206
Fax
Wilmer Beetus, Mayor and Chief
Thelma Nikolai, Grants Writer
Arlo Beetus, Washateria/ Waterplant Manager – (907) 889-2244
Tribe-- Hughes Village, federally-recognized
P.O. Box 45029
Hughes, AK 45029
Phone 907-889-2239
Fax 907-889-2239
Wilmer Beetus, Chief and Mayor
Janet Bifelt, Administrator
School—Hughes School
Al Shirrell 907-889-2204
Summary of Findings
Biomass Heating on a commercial-scale in the Community of Hughes is financially challenged by
small heat loads and relatively long payback terms, along with high equipment delivery costs.
However, Hughes City and Tribal leaders expressed their desire to create jobs, use local renewable
resources, and circulate money from local wood fuel purchases.
For the purposes of this project, cordwood boilers were scoped as the appropriate technology. The
boilers could be transported in pre-fabricated, containerized boiler systems by river barge or by cargo
plane via Lynden Air Cargo. Recent low-river levels have made river barge deliveries unreliable.
The identified project is Cluster #1, a small district heating system serving the Washateria, Old Clinic,
and City and Tribal Office. The Cluster could be served by HELE (high efficiency, low emission)
containerized cordwood boiler system. The School was not examined because the School
Maintenance personnel declined the opportunity to participate in the Study.
Dalson Energy provides this report to IRHA and TCC. Those agencies will determine the next steps
forward.
Wood fuel supply in Hughes
Hughes, with a population of 79 (2011 Alaska Department of Labor Estimate), is located 115 air miles
northeast of Galena and 210 air miles northwest of Fairbanks on the Koyukuk River. The community
lies at approximately 66.048890.
In 1987 Tanana Chiefs Conference completed a timber inventory of the ANCSA Native village lands
around Hughes. The Village Corporation is K’oyitl’ots’ina Limited.
Doyon, Limited, the regional corporation, is the other major landowner in the region, as indicated by
Figure 1: Land Ownership Surrounding Hughes, AK.
Figure 1: Land Ownership Surrounding Hughes, AK.
Figure 2: Hughes Timber from TCC Inventory, 1987
Hughes (1987)
Acres Cubic Feet Board Feet
(thousands)
Pole timber Types: (4.5" - 10.5" d.b.h.)
White Spruce 5,231 8,675,000 21,592
Cottonwood 3,622 2,657,000 4,833
Hardwood 2,263 2,999,000 5,033
Mixed White Spruce/Cottonwood 655 888,000 2,001
Mixed White Spruce/Hardwood 908 2,156,000 4,351
Burned Hardwood 752 330,000 826
Subtotal 13,431 17,705,000 38,636
Note: For Hughes area - approximately 895 acres of forest land (some included
above) burned in 1981. As of 1987, another 697 acres were seedling/sapling
stage of growth. Total area burned in 1981 was 3,368 acres.
While these inventory figures indicate a substantial timber resource, sites supporting tree growth are
widely distributed and may be difficult to access because of the area characteristics and the lack of
existing roads. The Village is located along a major river system with expansive low elevation
wetlands, resulting in widely distributed higher elevation sites that support tree growth. These
factors impact the economics of fuel availability, which in turn impacts the size and fuel demand for a
wood fueled heating system in the community. Additional considerations include 1) the landowner’s
contractual agreement for harvest and compensation for the resource, 2) public acceptance of larger
scale timber harvest than has been experienced in recent history, and 3) total project (from timber
harvest to operation of the heating system) economic feasibility.
The community of Hughes also practices river logging and reportedly uses the river extensively for
transporting wood via rafts from areas up and down river. Dependability and volume of river-caught
logs have not been documented.
Community leaders estimated a total of about 35 households using an estimated average of 5 cords
per household. This information suggests community consumption of about 175 cords annually.
If the recommended project described in this study were undertaken, Cluster #1, the community of
Hughes would harvest about 40 additional cords of wood per year, increasing their annual volume
by about 22%.
Biomass Energy Operations and Maintenance
Biomass Harvest Plan
Wood cutting is a subsistence activity in almost all interior villages adjacent to forest land. This
subsistence resource must be carefully managed or biomass energy projects may be detrimental to
the Community.
If biomass harvests are unmanaged, the natural tendency is to harvest the most accessible wood
supply first, as illustrated below. The effect is increased scarcity and rising harvest cost, and,
consequently, biomass fuel costs, for both the project and household woodcutters. This puts
community members’ energy security and the project’s success at risk.
Figure 3: Illustration of Unmanaged Wood Harvesting Efforts
The project’s success depends on a well-developed and executed Harvest Plan. The Harvest Plan
accounts for the biomass harvests over the project lifetime, at least 20 years. It may also designate
areas for Personal Use (household wood cutting). The Harvest Plan also describes how who is
responsible for executing the Harvest Plan, and how access will be managed. Please see figure below.
Because the project’s success is dependent on a Biomass Harvest Plan, the Consultant strongly
recommends developing this Plan prior to project development.
The Consultant also notes that various entities in Hughes reported very different information about
access and availability of wood. The Chief/ Mayor and Washateria operator described access
managed mainly by social convention, for example, the effort of cutting a trail identifies a personal
use area at which no one else cuts, with social stigma as repercussions. The Consultant discussed the
magnitude of the proposed project compared to current harvesting practices, and discussed the
possibility of resource scarcity surrounding the village, and inquired about current policies with the
regional corporation. While no definitive conclusions were reached, it seemed apparent to the
Consultant that the Chief/ Mayor feels confident in the ability of procure wood using current
practices.
Operations Plan
In many Villages biomass boiler projects will depend on collaboration among a variety of entities,
including contract wood cutters, forest landowners, the boiler technician, building owners and
operators, and various governmental entities.
A plan for collecting biomass, paying wood suppliers,
allocating costs among heat users, and operating and
maintaining the boiler and heat distribution system is
crucial to the project’s success. Persons responsible for
each task must be identified.
Figure 5: Hughes Washateria
Figure 4: Illustration of Planned Wood Harvest by Harvest Area and Time Period.
Community Facilities Information
The community buildings in Hughes considered for biomass heating are City/ Tribal building, the,
the Washateria, Old Clinic, and the School. The City/ Tribal building, Washateria, and Old Clinic are
a cluster and evaluated as a single heat plant.
City & Tribal Office
The City & Tribal Building houses both City and Tribal staff, as well as USPS Post Office. The
building uses one (1) Energy Kinetics EK-1 114,000 btu/hr boiler, to heat about 1,000 sq. ft and heat
domestic hot water. The domestic hot water is heated via a Triangle Tube Phase III Indirect Fired
Water Heater. Last year, the building used 1,431 gallons of fuel oil #1. USPS reportedly pays half of
the cost, while the City and Tribe pay the other half. There was some leakage surrounding the boiler.
Old Clinic
The Old Clinic is located about 100’ from the City and Tribal Building. It is currently used for office
space, elder meals center, and other community gathering places. The building uses one (1) Energy
Kinetics EK-1 boiler, to heat about 700 sq. ft and heat domestic hot water. Because the nozzle size of
the boiler could not be identified, the Consultant could only conclude a range of btu values from
102,000 – 120,000 btu/hr. This building has separate domestic hot water and space heating systems.
This boiler also had some leaking on the ground surrounding it.
Washateria/ Waterplant
The Washateria/ Waterplant houses a range of energy systems to keep the City’s domestic water line
from freezing, to heat the space in the Washateria, and to run the washers and dryers in the
Washateria. The Washateria/ Waterplant building is approximately 680 sq. ft.
The water line has two water loops, both of which are heated by two (2) older Weil McClain boilers,
outfitted with new burners in recent years. These boilers are both rated at 144,000 btu/ hr. These
boilers also provide space heat to the Waterplant. The dryers obtain heat from one (1) 302,000 btu/hr
Burnham boiler, installed in 2005 according to the insignia on the side. The Washateria obtains hot
water from two (2) domestic hot water heaters, both Bock 277,000 btu/hr. These heaters were
installed in 2005 according to the insignia on the side.
Last year, the Washateria/ Waterplant used approximately 3,066 gallons of fuel oil. The area to the
South of the Washateria is ideal for a biomass heating plant, with proximity to other buildings and
road access. However, it is located in the floodplain area, along with the other Community Buildings
in Hughes.
School
The Johnny Oldman School is located directly adjacent to the City/ Tribal Office. The Consultant met
with the maintenance manager Al Shirrell outside the building. Shirrell expressed a strong
motivation to lower heat costs through improved building efficiency, but was very skeptical of access
to wood fuel, the cost of wood fuel, and the dependability of a wood fuel heating system. He
deferred to the Yukon-Kuskokwim School District facility’s manager, and then declined the
opportunity to engage the Consultant in considering the School for wood heating.
Building Name City/Tribal
Office
Old Clinic Washateria
Annual Gallons (Fuel Oil
#1)
1,431 780 3,066
Building Usage 24/7 24/7
There is a
thermostat here
but it is set to run
at a stable
temperature,
otherwise the
building would
reportedly not
stay warm
24/7
Heat Transfer Mechanism Hydronic Hydronic Hydronic
Recommended technology and fuel requirements
The recommended system design for is a containerized cordwood biomass boiler unit. The
recommended unit is reliable and highly efficient. Because of the relatively low heat load, Dalson
Energy suggests consideration of a cordwood boiler unit.
The City expressed that it would prefer to harvest White Spruce trees upriver, first ringing trees and
then harvesting dead and dry standing wood for cordwood. The City produces cordwood for sale
locally, and sets the price of the cordwood. Alternatively, the project could use Poplar trees from
nearby areas. From initial surveys of the Hughes area, it appears that Cottonwood is a relatively
abundant species, although it is generally not used as cordwood for home heating. If the harvest were
properly planned, the use of Cottonwood and Poplar would not threaten the supply of cordwood
available for home heating.
The heat load of the building examined is dense enough that the Consultant suggests consideration of
a single heating system served by a stand-alone cordwood heating system, “Cluster #1.” Based on
Heating Degree Day analysis, the Consultant estimates peak demand of Cluster #1 at 260,000 btu/hr.
10
Initial project development costs for a wood heating system costs may include:
Capital costs: boiler, hydronic pipe and other hardware, wood storage shelter, fuel-handling
equipment, shipping costs.
Engineering: storage design, plumbing integration, fuel-handling infrastructure.1
Permitting: no permits required. In lieu of permits, all regulations must be met.
Installation: Site work, installation, and integration into existing system.
Fuel storage: storage building, firewood chutes, or preparation of existing storage room.
System building: (if required).
Ongoing operational costs may include:
Financing: Principal and interest payments from project debt, or profits from project equity
investment. In Village projects, financing costs likely do not apply.
Wood fuel purchases.
Amortization costs: capital equipment and other infrastructure.2 When projects are grant
financed, amortization does not apply.
Operations and Maintenance (O&M) labor.
Initial investment
Cluster #1 has an estimated Capitalization Cost of $541,095.
See charts below for cost estimates and sources. Full feasibility analysis and/or bids would provide
more detailed numbers.
2 Cash and accrual basis are two different accounting methods for project investment. Accrual accounting amortizes
project investment over the project lifetime (“lifecycle costs”). This method results in monies to reinvest in new
equipment at the end of its lifetime. Cash basis is simply on the dollars spent to operate, maintain, and finance the project.
Fuel Consumption
Assumptions:
16 MMBTU/ Cord Cottonwood
0.1350 MMBTU per gallon Oil #1
Annual
Gallons
Annual
MMBTU
Annual
Cords
(maximum)
Washateria 3,066 414 26
Old Clinic 789 107 7
City/Tribal Office 1,432 193 12
Cluster #1 5,287 714 45
Biomass System
Rating -- Btu/hr 300,000
footnote notes
A $ 21,600 40 cds @ $27 / sq. ft.
Boilers
Base price B 95,000$
Shipping to hub city C 30,000$
Local delivery C 35,000$
Plumbing and electrical C 7,500$
Installation C 6,500$
6,000$
District loop & building integration C 68,750$
Subtotal-B&E Costs 270,350$
81,105$
Contingency -- 20% 70,291$
Grand Total 421,746$
Soft Costs $
35,000$
33,740$ 8% of B&E
50,610$ 12% of B&E
included in design
Equipment Commissioning and Training C included with boiler price
Subtotal -- Soft Costs 119,349$
Recommended Project Budget -- Design and Construction 541,095$
footnote
A
B Quote
C Containerized air shipment info obtained from Hughes Mayor 8 25 12
D Estimate
Fire Marshall Plan Review
A cord occupies 128 cu. ft. If the wood is stacked 6 1/2 feet high, the area required to store the wood is
20 sq. ft per cord.
Remote -- 30%
Harvest and Operations Plan
Building and Equipment Costs (B&E) $
Fuel Storage Building
Site prep
Project Management
A/E Design Services
Financial Analysis
Please note that the market price for household cordwood is reportedly determined by the City, who
reportedly sets the price for TCC, currently $400/cord.
For each building, Dalson Energy estimated the percentage of heating oil offset by considering a
heating degree day model of the buildings’ energy load. For Cluster #1, a 350,000 btu/hr boiler was
assumed to offset up to 90% of the Cluster’s fuel oil load.
The Consultant used fuel oil cost estimates from AEA’s Renewable Energy Fund Round 5 Diesel Fuel
Cost worksheet. The retail price in Hughes is reportedly $9/ gallon.
Biomass System
Rating -- Btu/hr 300,000
footnote notes
A $ 21,600 40 cds @ $27 / sq. ft.
Boilers
Base price B 95,000$
Shipping to hub city C 30,000$
Local delivery C 35,000$
Plumbing and electrical C 7,500$
Installation C 6,500$
6,000$
District loop & building integration C 68,750$
Subtotal-B&E Costs 270,350$
81,105$
Contingency -- 20% 70,291$
Grand Total 421,746$
Soft Costs $
35,000$
33,740$ 8% of B&E
50,610$ 12% of B&E
included in design
Equipment Commissioning and Training C included with boiler price
Subtotal -- Soft Costs 119,349$
Recommended Project Budget -- Design and Construction 541,095$
footnote
A
B Quote
C
D Estimate
Building and Equipment Costs (B&E) $
Fuel Storage Building
Site prep
Project Management
A/E Design Services
Containerized air shipment info obtained from Lynden Air Transport is $48,000. Dalson Energy chose to
use a river barge estimate of $35,000, which may become available in the future.
Fire Marshall Plan Review
A cord occupies 128 cu. ft. If the wood is stacked 6 1/2 feet high, the area required to store the wood is
20 sq. ft per cord.
Remote -- 30%
Harvest and Operations Plan
Note:
Air Freight was quoted as $48,000 from Anchorage to Hughes, or $35,000 from Fairbanks to Hughes.
River Barge estimate was unavailable at the time of this report
14
Project Description
Community
Nearest Fuel Community
Region
RE Technology
Project ID
Applicant Name
Project Title
Category
Results
NPV Benefits $153,308
NPV Capital Costs $525,335
B/C Ratio 0.29
NPV Net Benefit ($372,027)
Performance Unit Value
Displaced Electricity kWh per year -
Displaced Electricity total lifetime kWh -
Displaced Petroleum Fuel gallons per year 6,003
Displaced Petroleum Fuel total lifetime gallons 132,175
Displaced Natural Gas mmBtu per year -
Displaced Natural Gas total lifetime mmBtu -
Avoided CO2 tonnes per year 61
Avoided CO2 total lifetime tonnes 1,342
Proposed System Unit Value
Capital Costs $541,095$
Project Start year 2013
Project Life years 25
Displaced Electric kWh per year -
Displaced Heat gallons displaced per year 4,758
Displaced Transportation gallons displaced per year 0.00
Renewable Generation O&$ per BTU
Electric Capacity kW 0
Electric Capacity Factor %0
Heating Capacity Btu/hr.300,000
Heating Capacity Factor %86
Base System Unit Value
Diesel Generator O&M $ per kWh 0.033$
Diesel Generation Efficien kWh per gallon
Parameters Unit Value
Heating Fuel Premium $ per gallon 2.30$
Transportation Fuel Premi $ per gallon 1.00$
Discount Rate % per year 3%
Crude Oil $ per barrel EIA Mid
Natural Gas $ per mmBtu ISER - Mid
Hughes
Rural
Woody biomass heat
Village of Hughes
Cluster #1
15
Annual Savings (Costs)Units 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Entered Value Project Capital Cost $ per year 541,095$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$
Electric Savings (Costs)$ per year $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Heating Saving (Costs)$ per year $5,022 $5,533 $5,891 $6,374 $7,016 $7,616 $8,179 $8,690 $9,151 $9,493 $9,838
Transportation Savings (Costs)$ per year $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Savings (Costs)$ per year $5,022 $5,533 $5,891 $6,374 $7,016 $7,616 $8,179 $8,690 $9,151 $9,493 $9,838
Net Benefit $ per year ($536,073)$5,533 $5,891 $6,374 $7,016 $7,616 $8,179 $8,690 $9,151 $9,493 $9,838
Annual Savings (Costs)Units 2034 2035 2036 2037 PV
Entered Value Project Capital Cost $ per year -$ -$ -$ -$ $525,335
Electric Savings (Costs)$ per year $0 $0 $0 $0 $0
Heating Saving (Costs)$ per year $10,040 $9,856 $9,967 $10,080 $153,308
Transportation Savings (Costs)$ per year $0 $0 $0 $0 $0
Total Savings (Costs)$ per year $10,040 $9,856 $9,967 $10,080 $153,308
Net Benefit $ per year $10,040 $9,856 $9,967 $10,080 ($372,027)
Annual Savings (Costs)Units 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033
Entered Value Project Capital Cost $ per year -$ -$ -$ -$ -$ -$ -$ -$ -$ -$
Electric Savings (Costs)$ per year $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Heating Saving (Costs)$ per year $10,137 $10,396 $10,613 $10,752 $10,812 $10,821 $10,772 $10,645 $10,448 $10,257
Transportation Savings (Costs)$ per year $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Savings (Costs)$ per year $10,137 $10,396 $10,613 $10,752 $10,812 $10,821 $10,772 $10,645 $10,448 $10,257
Net Benefit $ per year $10,137 $10,396 $10,613 $10,752 $10,812 $10,821 $10,772 $10,645 $10,448 $10,257
16
Heating Units 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Renewable Heat gallons displaced per year 4,758 4,758 4,758 4,758 4,758 4,758 4,758 4,758 4,758 4,758 4,758
Entered Value Renewable Heat Scheduled Rep$ per year 300$ 303$ 306$ 309$ 312$ 315$ 318$ 322$ 325$ 328$ 331$
Entered Value Renewable Heat O&M $ per year 12,361$ 12,485$ 12,610$ 12,736$ 12,863$ 12,992$ 13,122$ 13,253$ 13,385$ 13,519$ 13,654$
Entered Value Renewable Fuel Use Quantity (Bcords 40 40 40 40 40 40 40 40 40 40 40
Entered Value Renewable Fuel Cost $ per unit $400.00 $404 $408 $412 $416 $420 $425 $429 $433 $437 $442
Total Renewable Fuel Cost $ per year 16,000$ 16,160$ 16,322$ 16,485$ 16,650$ 16,816$ 16,984$ 17,154$ 17,326$ 17,499$ 17,674$
Remaining Fuel Oil (supplemen gallons remaining 529 529 529 529 529 529 529 529 529 529 529
Total Fuel Cost (supplement)$ per year 3,637$ 3,725$ 3,795$ 3,881$ 3,984$ 4,082$ 4,177$ 4,267$ 4,351$ 4,422$ 4,494$
Proposed Heat Cost $ per year 32,298$ 32,672$ 33,033$ 33,410$ 33,808$ 34,205$ 34,602$ 34,995$ 35,387$ 35,768$ 36,154$
Fuel Use gallons per year 5,287 5,287 5,287 5,287 5,287 5,287 5,287 5,287 5,287 5,287 5,287
Fuel Cost $ per gallon $6.88 $7.04 $7.18 $7.34 $7.53 $7.72 $7.90 $8.07 $8.23 $8.36 $8.50
Entered Value Fuel Scheduled Repairs $ per year 200$ 202$ 204$ 206$ 208$ 210$ 212$ 214$ 217$ 219$ 221$
Entered Value Fuel O&M $ per year 750$ 758$ 765$ 773$ 780$ 788$ 796$ 804$ 812$ 820$ 828$
Fuel Cost $ per year 36,370$ 37,245$ 37,954$ 38,805$ 39,836$ 40,822$ 41,772$ 42,666$ 43,509$ 44,223$ 44,943$
Base Heating Cost $ per year 37,320$ 38,205$ 38,923$ 39,784$ 40,825$ 41,821$ 42,781$ 43,685$ 44,537$ 45,262$ 45,992$
Proposed
Base
Heating Units 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033
Renewable Heat gallons displaced per year 4,758 4,758 4,758 4,758 4,758 4,758 4,758 4,758 4,758 4,758
Entered Value Renewable Heat Scheduled Rep$ per year 335$ 338$ 341$ 345$ 348$ 352$ 355$ 359$ 362$ 366$
Entered Value Renewable Heat O&M $ per year 13,791$ 13,929$ 14,068$ 14,209$ 14,351$ 14,494$ 14,639$ 14,786$ 14,933$ 15,083$
Entered Value Renewable Fuel Use Quantity (Bcords 40 40 40 40 40 40 40 40 40 40
Entered Value Renewable Fuel Cost $ per unit $446 $451 $455 $460 $464 $469 $474 $478 $483 $488
Total Renewable Fuel Cost $ per year 17,851$ 18,029$ 18,209$ 18,392$ 18,576$ 18,761$ 18,949$ 19,138$ 19,330$ 19,523$
Remaining Fuel Oil (supplementgallons remaining 529 529 529 529 529 529 529 529 529 529
Total Fuel Cost (supplement)$ per year 4,561$ 4,625$ 4,683$ 4,734$ 4,776$ 4,813$ 4,843$ 4,866$ 4,881$ 4,897$
Proposed Heat Cost $ per year 36,538$ 36,921$ 37,302$ 37,679$ 38,051$ 38,420$ 38,787$ 39,149$ 39,506$ 39,869$
Fuel Use gallons per year 5,287 5,287 5,287 5,287 5,287 5,287 5,287 5,287 5,287 5,287
Fuel Cost $ per gallon $8.63 $8.75 $8.86 $8.95 $9.03 $9.10 $9.16 $9.20 $9.23 $9.26
Entered Value Fuel Scheduled Repairs $ per year 223$ 225$ 228$ 230$ 232$ 235$ 237$ 239$ 242$ 244$
Entered Value Fuel O&M $ per year 837$ 845$ 854$ 862$ 871$ 879$ 888$ 897$ 906$ 915$
Fuel Cost $ per year 45,614$ 46,246$ 46,834$ 47,339$ 47,759$ 48,128$ 48,433$ 48,657$ 48,807$ 48,966$
Base Heating Cost $ per year 46,674$ 47,317$ 47,915$ 48,431$ 48,862$ 49,242$ 49,558$ 49,793$ 49,955$ 50,125$
Proposed
Base
Summary of Financial
Analysis
Estimated System Description
(abbreviated)
NPV Benefits PV
Capital
Cost
B/C Ratio Simple Payback
Cluster #1 (Washateria, Old
Clinic, City/ Tribal Hall)
One (1) 300,000 btu cordwood
boiler, installed on site
$153,308 $525,335 0.29 94
Heating Units 2034 2035 2036 2037 PV
Renewable Heat gallons displaced per yea 4,758 4,758 4,758 4,758
Entered Value Renewable Heat Scheduled Rep$ per year 370$ 373$ 377$ 381$ $5,813
Entered Value Renewable Heat O&M $ per year 15,234$ 15,386$ 15,540$ 15,695$ $239,497
Entered Value Renewable Fuel Use Quantity (Bcords 40 40 40 40
Entered Value Renewable Fuel Cost $ per unit $493 $498 $503 $508
Total Renewable Fuel Cost $ per year 19,718$ 19,915$ 20,115$ 20,316$
Remaining Fuel Oil (supplemen gallons remaining 529 529 529 529
Total Fuel Cost (supplement)$ per year 4,910$ 4,928$ 4,978$ 5,030$
Proposed Heat Cost $ per year 40,232$ 40,602$ 41,010$ 41,422$ $632,003
Fuel Use gallons per year 5,287 5,287 5,287 5,287
Fuel Cost $ per gallon $9.29 $9.32 $9.42 $9.51
Entered Value Fuel Scheduled Repairs $ per year 246$ 249$ 251$ 254$ $3,875
Entered Value Fuel O&M $ per year 924$ 934$ 943$ 952$ $14,531
Fuel Cost $ per year 49,101$ 49,276$ 49,783$ 50,296$ $766,905
Base Heating Cost $ per year 50,272$ 50,458$ 50,977$ 51,502$ $785,311
Proposed
Base
18
Conclusion
The project examined in this report is financially challenged from high capital cost and relatively low
fuel oil consumption, with multiple building and systems interconnections. The cost of equipment
delivery by air escalates the capital costs.
Using AEA estimated prices for fuel oil, the project has a low B/C ratio (benefit/cost), although the
reported local rate for fuel oil is much higher ($9/gal) in Hughes than AEA estimates.
The project is technically feasible and it appears that there are motivated community leaders in
Hughes. Cordwood is an accessible and apparently sustainable biomass supply in the Village. A
Biomass Harvest Plan is suggested. More needs to be done to develop a harvest plan, fuel
procurement plan, and other strategies to manage the wood resource if usage grows beyond
historical levels.
Consultant/Authors of this report:
Dalson Energy is a Renewable Energy Consulting and Technology Research firm based in
Anchorage. Dalson staff and partners have decades of experience in construction project
management, project development consulting and renewable energy technology research. Dalson
teams with licensed engineers, architects and designers in Alaska, Canada and Lower 48.
Dalson Energy has worked with Alaska Energy Authority, Alaska Center for Energy & Power,
University of Alaska Fairbanks, Washington State CTED (Community Trade & Economic
Development) and California Energy Commission on biomass energy technology research.
Dalson’s President, Thomas Deerfield, has been involved in biomass energy RD&D since 2001,
winning grants and managing projects with NREL (National Renewable Energy Labs), USFS (US
Forest Service), and CEC (California Energy Commission).
Thomas managed the field-testing of biomass CHP systems, including the first grid-connected
biomass gasification CHP system in the US. (2007). Thomas coordinated the design and creation of
the first prototype Biomass “Boiler in a Box” in Alaska, in 2010. That Garn-based system is now
deployed in Elim, in the Bering Sea region.
Thomas founded Shasta Energy Group (SEG), a 501c3 nonprofit, and managed wind energy research,
biomass energy feasibility studies, energy efficiency for buildings, and hydronic heating system
research design and development (RD&D). He also initiated a rural economic development think
tank and has engaged his writing skills to assist many other renewable energy project initiatives.
Wynne Auld is a Biomass Energy Specialist with Dalson Energy. She focuses on assessing and
developing woody biomass energy projects. Over the past few years, she has supported the business
development of integrated biomass energy campuses in Oregon and Idaho, especially related to their
energy initiatives. Her efforts have included marketing Campus biomass heating products to major
wholesalers and retail buyers, and planning and developing Campus sort yards and small-scale CHP.
Wynne also specializes in assisting commercial and municipal building managers in assessing the
feasibility of biomass heating, and implementing their projects. She works to ensure vibrant rural
communities through sustainable natural resource utilization.
Supplement: Community Wood Heating Basics
Wood fuel as a heating option
When processed, handled, and combusted appropriately, wood fuels are
among the most cost-effective and reliable sources of heating fuel for
communities adjacent to forestland.
Compared to other heating energy fuels, wood fuels are characterized by
lower energy density and higher associated transportation and handling
costs. This low bulk density results in a shorter viable haul distance for
wood fuels compared to fossil fuels. However, this “limit” also creates an
advantage for local communities to utilize locally-sourced wood fuels,
while simultaneously retaining local energy dollars and exercising local
resource management.
Most Interior villages are particularly vulnerable to high energy prices
because the region has over 13,500 heating degree days 3 (HDD) per year –
160% of Anchorage’s HDDs, or 380% of Seattle’s HDDs. For many
communities, wood-fueled heating lowers fuel costs. For example,
cordwood sourced at $250 per cord is just 25% of the cost per MMBTU as
fuel oil #1 sourced at $7 per gallon. Besides the financial savings, local
communities benefit from the multiplier effect of circulating fuel money
in the community longer, more stable energy prices, local job creation,
and more active forest management.
In all the Interior villages studied, the community’s wood supply and
demand are isolated from outside markets. Instead, the firewood market is influenced by land
ownership, existing forest management and ecological conditions, local
demand and supply, and the State of Alaska Energy Assistance program.
The nature of wood fuels
Wood fuels are specified by moisture content, granulometry, energy density,
ash content, dirt and rocks, and fines and coarse particles. Each of these
characteristics affects the wood fuel’s handling characteristics, storage requirements, and combustion
process. Fuels are considered higher quality if they have lower moisture, ash, dirt, and rock contents;
consistent granulometry; and higher energy density.
3 Heating degree days are a metric designed to reflect the amount of energy needed to heat the
interior of a building. It is derived from measurements of outside temperature.
Figure 9: Wood pellets
Figure 8: Wood briquettes, as a
substitute for cordwood. Cross
sections of these briquettes make
“pucks” which can be automatically
fed into biomass boiler systems.
Figure 6: Cordwood
Figure 7: Ground wood chips
used for mulch.
Many types of fuel quality can be used in wood heating projects when 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 interior Alaska must be designed around the availability of wood fuels. Some fuels can be
manufactured on site, such as cordwood, woodchips, and briquettes. The economic feasibility of
manufacturing on site can be determined by a financial assessment of the project; generally speaking,
larger projects offer more flexibility in terms of owning and operating harvesting and manufacturing
equipment, such as a wood chipper, than smaller projects.
It is unlikely that interior communities will be able to manufacture pellets, from both a financial,
operational, and fuel sourcing perspective. However, some interior communities may be able to
manufacture bricks or fire-logs made from pressed wood material. These products can substitute for
cordwood in woodstoves and boilers, while reducing supply pressure on larger diameter trees than
are generally preferred for cordwood. At their simplest, brick presses are operated by hand, but
require chipped, dry fuel.
The basics of wood-fueled heating
Biomass heating systems fit into two typical categories: first, stoves and fireplaces that heat space
directly through convection and radiation by burning cordwood or pellets; second, hydronic systems
where the boiler burns cordwood, woodchips or pellets to heat liquid that is distributed to radiant
piping, radiators or heat exchangers. The heated liquid is distributed out to users, and then returned
to the heat source for re-heating.
Hydronic systems are appropriate for serving individual buildings, or multiple buildings with
insulated piping called heat loops. Systems that serve multiple buildings are called district heating
loops. District heating is common in Europe, where larger boilers sometimes serve entire villages.
Biomass boilers are dependent on the compatibility of the chosen fuel, handling system, and
combustion system. General categories for typically available biomass fuel systems follow:
Batch load solid chunk boiler
Semi-automated or fully-automated chipped or ground biomass boilers
Fully-automated densified-fuel boiler, using pellets, bricks, or pucks
The system application is typically determined by size of heat load, available wood fuels, and
available maintenance personnel. General categories for heat load and wood fuel follow:
Loads < 1 MMBTU often use cordwood or pellet boilers
Loads > 1MMBTU often use pellet or woodchip boilers
Loads > 10MMTU often use hog-fuel (mixed ground wood)
Each wood fuel type has different handling requirements and is associated with different emission
profiles. For example, industrial systems greater than 10 MMBTU often require additional particulate
and emission controls because of the combustion properties of hog-fuel.
One category of system that is particularly appropriate for remote rural communities is cordwood
boilers. Cordwood boilers are batch-loaded with seasoned cordwood. A significant advantage to
cordwood is that very little infrastructure is needed to manufacture or handle the heating fuel. At its
most basic, cordwood can be “manufactured” with a chainsaw (or handsaw) and an ax, and residents
of rural communities are often accustomed to harvesting wood to heat their homes and shops.
Harvesting in most Interior villages is accomplished with ATV’s, river skiffs, sleds and dog teams,
and snow machines. Since cordwood systems are batch loaded by hand, they do not require
expensive automated material handling systems. Covered storage is required; such storage may be as
simple as an existing shed or a vented shipping container, rather than newly constructed storage
structures.
Challenges to cordwood include higher labor costs associated with manual loading. Some LEHE (low
efficiency, high emission) technologies such as Outdoor Wood Boilers (OWBs) have been criticized
for their high emissions and excessive wood consumption.
Cordwood systems are typically less than 1 MMBTU. However, if needed, some types of cordwood
boilers can be “cascaded,” meaning multiple boilers can meet heat demand as a single unit. However,
above a certain heat load, automated material handling and larger combustion systems become
viable.
Woodchip systems can be automated and thereby less labor intensive. However, woodchip systems
have significantly higher capital costs than both cordwood and pellet systems. Additionally, a
reliable stream of woodchips typically depends on a regionally active forest products manufacturing
base in the area, and active forest management. In most Interior communities, institutional heating
with woody biomass does not justify the purchase of log trucks, harvesting, handling, and
manufacturing equipment.
Pellet systems are the most automated systems, and have lower capital equipment costs than
woodchip systems. Lower costs are due to the smaller size of required infrastructure and simplified
handling and storage infrastructure. However, pellet fuel and other densified fuels tend to be more
expensive than other wood fuels, and require reliable access to pellet fuels.
For any system, the mass of feedstock required annually is determined by three parameters:
1) Building heat load
2) Net BTU content of the fuel
3) Efficiency of the boiler system
Building heat loads are determined by square footage, orientation and usage, as well as energy
efficiency factors such as insulation, moisture barriers and air leakage. Usage is particularly
important because it influences peak demand. For example, a community center which is used only a
few times per month for events, and otherwise kept at a storage temperature of 55 d. F, would have a
much different usage profile than a City Office which is fully occupied during the work day and
occasionally during evenings and weekends.
Building heat load analysis, including the building usage profile, is a particularly important part of
boiler right-sizing. A full feasibility analysis would conduct analyses that optimize the return on
investment (ROI) of systems. Typically, optimizing a biomass project’s ROI depends on a
supplementary heating system, such as an oil fired system, to meet peak demand and prevent short-
cycling of the biomass boiler. Full feasibility analyses may not be necessary for small projects,
especially for those employing cordwood boilers.
Biomass boiler efficiencies vary from 60% to 80%, depending on the manufacturer and the field
conditions of the equipment. The efficiency is strongly influenced by the BTU value and MC
(moisture content) of the fuel. Wood fuels with greater than 50% MC generally result in lower
efficiency systems, because some energy is used to drive off moisture from the fuel during the
combustion process. The reduction in energy output is mathematically equal; 50% MC generally
means 50% reduction in potential BTU value.
Like other combustion-based energy systems, woody biomass boilers produce emissions in the
combustion process. Compared to fossil fuels (coal, natural gas, and fuel oil), wood fuel emissions
are low in nitrogen oxides (NOx); carbon monoxide (CO, a product of incomplete combustion); sulfur
dioxide (SO2); and mercury (Hg). Because these compounds are all products of the forest and CO
would release naturally during the process of decay or wildfire, they generally do not concern
regulatory agencies. For emission control agencies, the real interest is particulate matter (PM)
emissions, which affect the air quality of human communities. Some wood systems are extremely
sophisticated, producing less than 0.06 lb/ MMBTU of PM.
Effective methods of PM control have been developed to remove most of the particles from the
exhaust air of wood combustion facilities. These include introduction of pre-heated secondary air,
highly controlled combustion, and PM collection devices.
Biomass boiler systems typically integrate a hot water storage tank, or buffer tank. The storage tank
prevents short cycling for automated boilers and improves efficiency and performance of batch-fired
systems, by allowing project buildings to draw on the boiler’s hot water long after the combustion
process. The GarnPac boiler design incorporates hot water storage into the boiler jacket itself, storing
approximately 2,200 gallons of hot water. Other boilers are typically installed with a separate hot
water storage tank.
Available wood heating technology
This section will focus generally on manufacturers of the types of technology discussed previously.
Cordwood Boilers
High Efficiency Low Emission (HELE) cordwood boilers are designed to burn cordwood fuel cleanly
and efficiently.
Cordwood used at the site will ideally be seasoned to 25% MC (moisture content) and meet the
dimensions specified by the chosen boiler. The actual amount of cordwood used would depend on
the buildings’ heat load profile, and the utilization of a fuel oil system as back up.
The following table lists three HELE cordwood boiler suppliers, all of which have units operating in
Alaska. Greenwood and TarmUSA, Inc. have a number of residential units operating in Alaska, and
several GARN boilers, manufactured by Dectra Corporation, are used in Tanana, Kasilof, Dot Lake,
Thorne Bay and other locations to heat homes, Washaterias, and Community Buildings.
HELE Cordwood Boiler Suppliers
Vendor Btu/hr ratings Supplier
Tarm
100,000 to 198,000 Tarm USA www.tarmusa.com
Greenwood 100,000 to 300,000 Greenwood www.greenwoodusa.com
GARN 250,000 to 700,000 Dectra Corp. www.dectra.net/garn
Note: These lists are representational of available systems, and are not inclusive.
Bulk Fuel Boilers
The term “bulk fuel” refers to systems that utilize wood chips, pellets, pucks, or other loose
manufactured fuel. Numerous suppliers of these boilers exist. Since this report focuses on village-
scale heating, the following chart outlines manufacturers of chip and pellet fuel boilers < 1 MMBTU.
HELE Bulk Fuel Boiler Suppliers
Vendor Btu/hr ratings Supplier
Froling 35,800 to 200,000; up to 4 can be cascaded as
a single unit at 800,000 BTU
Tarm USA www.tarmusa.com
KOB 512,000 – 1,800,000 BTU (PYROT model) Ventek Energy Systems Inc.
peter@ventekenergy.com
Binder
34,000 BTU – 34 MMBTU BINDER USA
contact@binder-boiler.com
Note: These lists are representational of available systems, and are not inclusive
District heat loops
District heat loops refers to a system for heating multiple buildings from a central power plant. The
heat is transported in a piping system to consumers in the form of hot water or steam.
These are the key factors that affect the cost of installing and operating a district heating system 4:
• Heat load density.
• Distance between buildings. Shorter distances between buildings will allow use of smaller
diameter (less expensive) pipes and lesser pumping costs.
• Permafrost. In the Interior, frozen soil could affect construction costs and project feasibility.
Aboveground insulated piping may be preferred to underground piping, such as the
cordwood system recently installed in Tanana, Alaska.
• Piping materials used. Several types of tubing are available for supply and return water. Pre-
insulated PEX tubing may be the preferred piping material for its flexibility and oxygen
barrier.
• District loop design. Water can be piped in one direction (i.e., one pipe enclosed) or two
directions (two pipes enclosed) for a given piping system. Design affects capital costs and
equality of heat distribution.
• Other considerations. Pump size, thermal load (BTUs per hour), water temperature, and
electrical use are other variables.
For the purposes of this study, the consultants have chosen to estimate the costs of district heat loops
using the RET Screen, a unique decision support tool developed with the contribution of numerous
experts from government, industry, and academia. The software, provided free-of-charge, can be
used worldwide to evaluate the energy production and savings, costs, emission reductions, financial
viability and risk for various types of Renewable-energy and Energy-efficient Technologies (RETs),
including district heat loops from biomass.
4 Nicholls, David; Miles, Tom. 2009. Cordwood energy systems for community heating in Alaska—an
overview. Gen. Tech. Rep. PNW-GTR-783. Portland, OR: U.S. Department of Agriculture, Forest
Service, Pacific Northwest Research
Station. 17 p.