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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.