HomeMy WebLinkAboutBanner Wind NJUS Wind-to-Heat Feasibility Study - January 2020
January 27th, 2020
Banner Wind / Nome Joint Utility Systems
Wind-to-Heat Feasibility Study
Authors and Funders
This study is the result of a technical assistance request submitted by Nome Joint Utility
Systems and Nome Public Schools to Kawerak, Inc. in 2019. Sitnasuak Native Corporation
and Bering Straits Native Corporation, who own the Banner Wind Farm site and lease their
property to the City of Nome for power generation purposes, provided their written
support on this project. Kawerak’s Energy Program, funded by the Department of Energy –
Office of Indian Energy Intertribal Technical Assistance and Provider’s Network Program,
provided financial support for this feasibility study. The study was authored by Cold
Climate Housing Research Center, Dustin Madden, and Deerstone Consulting, LLC. Brian
Hirsch Ph.D., as contractors of Kawerak, Inc. and Alan Mitchell of Analysis North as a
subcontractor under Deerstone Consulting, LLC. The goal of this study is to provide
valuable information to the community of Nome so they can further weigh the benefits of
installing a wind-to-heat system that will save the community money and reduce the use of
diesel fuel. This project, if feasible, would maximize local clean energy while increasing the
cost effectiveness of community services, such as school programs.
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Background
Nome Joint Utility Systems (NJUS) provides electric and other utility services to all residents
of Nome, Alaska, including members of federally recognized Tribes and shareholders of
Alaska Native Corporations. NJUS is currently curtailing a significant amount of electricity
production from its two EWT 900 kW wind turbines due to the operational requirements of
its two 5.6 MW Wartsila diesel gensets and limited ability to store electrical energy.
Specifically, while operating, the Wartsila gensets are prevented from producing less than
about 2.8 MW regardless of system demand primarily because of air quality regulations,
even though there are times when the diesel gensets could be run at a much lower output
(with corresponding lower fuel consumption) and the wind power could support the rest of
the system load. This study analyzes the economics of installing a grid-controlled electric
boiler system at Nome Beltz High School to utilize the currently curtailed wind power to
provide heat for the school and save money by reducing the need to burn fuel oil.
Methodology
Data sources
NJUS provided three years of historical 1-minute SCADA (Supervisory Control and Data
Acquisition) data including system load, wind power production, diesel genset production,
as well as temperature and wind data from the data collection systems mounted on the
wind turbine towers. Initial data analysis showed one of the EWT anemometers was
malfunctioning, so its data was removed from the study.
In addition to this data, daily fuel consumption logs from the school were obtained and
entered into a spreadsheet by Kawerak staff. To get hourly variation in fuel consumption, a
remote time lapse camera was installed near the daily fuel tank meter reading. This data
was combined with Nome weather data and annual school fuel consumption data to
develop a time-sensitive heat load model for the school that corresponded with wind
energy production and heating demand.
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Procedure
Once this data was cleaned and formatted, the amount of curtailed wind power was
estimated with the following steps:
●Apply the manufacture-published wind turbine power curve and python modeling
library to estimate the amount of power that should have been produced on a
1-minute basis for all three years of wind anemometer data if the wind turbines
were fully operational and no wind curtailment occurred
●Use electric grid system load data and control logic (i.e., curtail when the diesel
genset load falls below 2.8 MW) to estimate the amount of wind power that is
being curtailed for all 1-minute intervals
Once the curtailed wind resource was estimated, it was then compared to the projected
heat load of the school. The amount of wind resource utilized at the school was limited
based on both the available school heat load and the capacity of the electric boiler being
modeled; a range of electric boiler sizes were analyzed. Given these factors, the total
heating fuel savings was estimated for each electric boiler size considered.
The results were averaged for all three years of wind, temperature, and electric system
load data. A 22% derate factor was applied to account for wind turbine system down-time,
based on the estimated 2018 downtime. (Note: less wind turbine system down-time would
yield even more wind energy that could be converted to heat under the proper conditions.)
Finally, a controls inefficiency derate factor of 5% was included at the end to account for
imperfect switching on and off of the electric boiler system. We believe both of these
derate factors are conservative and actual operations may yield more wind power (and
hence heating fuel displacement) than is evaluated in this analysis.
Economic estimates
The projected future economic savings were calculated based on the amount of estimated
heating fuel saved by using the curtailed wind. The following inputs were used:
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●Fuel price: $3.09 (data from Ken Morton showed a recent price of $2.91 plus an
$0.18 surcharge for delivery per gallon as described by Nome Beltz maintenance
staff)
●Discount rate: 3% real discount rate (typical rate used by the U.S. Department of
Energy
●Measure life: 13 years (20 year life for wind turbine, which has already been in
service for 7 years; with proper maintenance, the EWT wind turbines could last for
25 or more years instead of the projected 20, which would also provide additional
wind energy output for heat)
●Fuel escalation factors from Department of Energy
The capital costs of the electric boiler and the necessary utility system upgrades were
estimated based on discussions with Matt Bergan of Kotzebue Electric Association (KEA)
and Craig Wood of Alaska Native Tribal Health Consortium (ANTHC), both of whom were
intimately involved with the electric boiler installation in Kotzebue, as well as conversations
with Ken Morton of NJUS.
Results
Curtailed wind
We estimate that on average for the last three years NJUS has curtailed 1,945 MWh of wind
energy production annually. This estimate is similar to that provided by Saft consultants,
who estimated 1,784 MWh of wind curtailment based on a more limited data set and
without accounting for the faulty anemometer data on one of the turbines. Again, note that
this amount of curtailed wind energy would be even greater with less system downtime.
Figure 1 is a heat map visualization of average wind curtailment, showing which months
and which hours of the day exhibit peak curtailment. “Warm” colors highlight that the
majority of the curtailment happens between October and February between 8 am and 9
pm, which also corresponds with the peak heating season.
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Figure 1: Heatmap of Calculated Wind Curtailment (Hourly Average kW)
Projected economic benefits
The annual energy cost savings and the lifetime break-even cost were calculated for a
range of electric boiler sizes from 400 kW to 1,000 kW, with the results shown in Table 1.
The economic analysis in this report details the total system costs and benefits; how those
costs and benefits are split between the utility and the school district is a question for the
entities involved. The break-even cost is the total energy cost savings from installing the
electric boiler over the conservatively estimated 13 year life of the measure, accounting for
inflation, the time-value of money, and escalating fuel prices. Essentially, if you spent as
much as the break-even cost installing the boiler, controls, and any necessary
transformers, the economics would break even at 13 years, and if it could be installed for
less money, the difference between the break-even cost and the installed cost is the
estimated lifetime savings (on a present-value basis). Hence, the next step is to estimate
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system costs to determine if there is an estimated lifetime savings, which would provide
justification for the project.
Table 1: Annual and LIfetime Cost Savings from Electric Boiler by Size
Boiler size
(kW)
kWh used by
boiler
Annual $ savings from displaced
heating fuel
Break-even cost
(present value of
benefits)
400 623,836 $ 61,217 / year $ 728,940
450 661,196 $ 64,883 $ 772,594
500 688,302 $ 67,543 $ 804,267
600 716,519 $ 70,312 $ 837,239
700 726,680 $ 71,309 $ 849,111
800 729,403 $ 71,576 $ 852,293
900 729,993 $ 71,634 $ 852,982
1000 730,054 $ 71,640 $ 853,054
Projected system costs
Estimate #1 (Table 2 below) is based on the actual costs of the KEA’s wind-to-heat electric
boiler system, as reported by Craig Wood of ANTHC and Matt Bergan of KEA.
Table 2: Wind-to-heat Electric Boiler System Cost Estimates
Item Cost Source Supplier
450 kW Precision electric boiler $69,960 ANTHC Proctor Sales, Inc. (Anchorage)
Estimated boiler shipping from
Tennessee to Kotz $10,000 ANTHC Not given
Electric boiler installation costs $149,440 ANTHC
Consolidated Contracting &
Engineering (Anchorage)
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Control system $125,000 KEA
Electric Power Systems
(Anchorage)
Additional control hardware /
software $25,000 KEA
Electric Power Systems
(Anchorage)
Transformer purchase $25,000 KEA Not given
Transformer installation $25,000 KEA Not given
Total System Cost: $429,400
Estimate #2 (Table 3 below) uses the electric boiler costs from ANTHC but updates the
costs for the transformer installation and control system based on NJUS’s projections.
Table 3: Wind-to-heat Electric Boiler System Cost Estimates with NJUS
Modification
Item Cost Source Supplier
450 kW Precision electric boiler $69,960 ANTHC Proctor Sales, Inc. (Anchorage)
Estimated boiler shipping from
Tennessee to Kotz $10,000 ANTHC Not given
Electric boiler installation costs $149,440 ANTHC
Consolidated Contracting &
Engineering (Anchorage)
Control system
$150,000
NJUS
Additional control hardware /
software NJUS
Transformer purchase NJUS
Transformer installation NJUS
Total System Cost: $379,400
It should be noted that there are significant potential cost savings if Nome Beltz High
School can install the electric boiler system in-house, as that is the single most expensive
budget item in the entire system and was contracted out in the Kotzebue case.
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To perform our final economic analysis, we chose to use the known costs for the 450 kW
system installed in Kotzebue as the basis for estimating the economics of a system installed
in Nome. We then linearly extrapolated the price per kW of capacity for the boiler to
analyze a 700 kW boiler. We chose this 700 kW size boiler for two primary reasons: 1) it is
just below the size of the additional transformer that NJUS has in stock to install, and 2) the
additional capital costs of the boiler as compared to the 450 kW model are likely to be
significantly less than the projected additional lifetime savings of over $76,500 for this
larger system. These final projected costs are outlined in Table 4.
Table 4: Wind-to-heat 700 kW Electric Boiler System Cost Estimates with NJUS
Modification
Item Cost Source Supplier
700 kW electric boiler $108,800 ANTHC*
*Linear extrapolation of price
from ANTHC cost for 450 kW
boiler
Estimated boiler shipping $10,000 ANTHC Not given
Electric boiler installation costs $149,440 ANTHC
Consolidated Contracting &
Engineering (Anchorage)
Control system
$150,000
NJUS
Additional control hardware /
software NJUS
Transformer purchase NJUS
Transformer installation NJUS
Total System Cost: $418,240
NJUS provided additional boiler cost information which shows that there may be some
additional cost savings from a less expensive boiler. This engineering estimate should be
verified and if costs are ultimately lower would only serve to increase the economic benefit
of this project.
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Additional electric boiler analysis
Because of the significant amount of curtailed wind energy that would still remain after
installation of the first electric boiler, an additional analysis was conducted to provide a
rough estimate of the savings of adding in an additional electric boiler at another location
in Nome (such as the hospital or Rec Center). These results assume the first electric boiler
installed in the school is a 700 kW unit and also assume that the new load is the same as
the school load. The following table shows the incremental additional annual savings and
total break-even cost for installing a second boiler with the above assumptions:
Table 5: Additional Electric Boiler System Cost Estimates
Second boiler size
(kW)
Second boiler
annual kWh used
Additional annual $ savings from
displaced heating fuel
Incremental
break-even
cost
400 430,778 $42,272 $503,355
500 446,502 $43,815 $521,728
600 455,936 $44,741 $532,752
700 460,992 $45,237 $538,660
800 463,092 $45,443 $541,114
Conclusions
Overall, the economics of a wind-to-heat system with a grid-controlled electric boiler
system at the Nome Beltz high school are favorable. A 700 kW boiler is estimated to save
just over $71,000 per year, or $849,100 over the life of the system in present dollar values.
With an estimated installed cost of $418,240 (using a combination of ANTHC’s and NJUS’s
projected costs) this system would provide net benefits of approximately $430,860 in
today’s dollars over the system’s life, for a benefit cost ratio of slightly more than 2.0. These
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projected annual savings would lead to a simple payback for the project of slightly under 6
years. These economic benefits continue to improve if Nome Beltz maintenance staff can
install the electric boiler system for less than the $150,000 price tag that KEA paid.
A second electric boiler system has projected net benefits higher than break-even point for
the baseline scenario if a location could be found with an equal or greater required heat
load, and could potentially provide even higher economic benefits if the installation costs
could be decreased. There is a possibility of additional capital cost savings from installing
two systems at once due to decreased mobilization costs and redundant control
programming work. Further, if the wind turbines can perform with less downtime and/or
survive beyond a 20 year assumed life, there will be even more electricity to convert to heat
and potentially more net benefits for a second electric boiler.
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