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Home My WebLink AboutAhtna Regional Biomass Opportunities final  Ahtna Regional Biomass  Opportunities  REVIEW OF BIOMASS UTILIZATION OPPORTUNITIES:   And Village Links  William Wall. PhD     Alaska Wood Energy Associates      Ahtna Regional Biomass Opportunities    Alaska Wood Energy Associates 1    Table of Contents  EXECUTIVE SUMMARY 3  DOCUMENT PURPOSE 3  SCALES ADDRESSED 3  VILLAGES 3  AHTNA REGIONAL SCALE 4  RECOMMENDATIONS 5  PROGRAM DEVELOPMENT ACTIONS 5  PROJECT ACTIONS 5  REGION BIOMASS OVERVIEW 7  FOREST TYPES AND TIMBER 8  BOTTOMLAND SPRUCE‐POPLAR FOREST 8  UPLAND SPRUCE‐HARDWOOD FOREST 8  LOWLAND SPRUCE‐HARDWOOD FOREST 9  HIGH BRUSH 9  BIOMASS ENERGY POTENTIAL 9  REVIEW OF WOOD TO ENERGY TECHNOLOGIES 11  BACKGROUND 11  BIOMASS THERMAL 11  BIOMASS TO ELECTRIC 11  COMBINED HEAT/POWER 11  GASIFICATION 12  BIOMASS TO LIQUID FUELS (BTL) 13  TECHNOLOGY RECOMMENDATION 13  BIOMASS HEATING TECHNOLOGIES AND CONVERSION 14  RESIDENTIAL 14  COMMERCIAL 14  CORDWOOD BOILERS 14  CHIP BOILER 15  PELLET BOILER 16  BIOMASS PROCESSING FOR USE IN WOOD HEAT ENERGY MARKETS 16  WOOD CHIPS 16  WOOD DENSIFICATION 18  PELLETS 18  A BRIEF HISTORY OF MARKETS 18  BENEFITS OF PELLETS 19  THE MANUFACTURE OF PELLETS 20  WOOD BRIQUETTES 21  BRIQUETTE MARKETS 22    Ahtna Regional Biomass Opportunities    Alaska Wood Energy Associates 2  RESIDENTIAL 22  COMMERCIAL BOILERS 23  WOOD TORREFACTION 23  BIOCHAR 25  KEY COMPONENTS OF AN INTEGRATED WOOD ENERGY PROGRAM 25  SUSTAINABLE FOREST MANAGEMENT PROGRAM 25  SUSTAINABLE WOOD SUPPLY 26  INTEGRATED BIOMASS SUPPLY AND DISTRICT OR BUILDING HEATING TECHNOLOGIES 26  BUSINESS STRUCTURE AND ENERGY SALES AGREEMENT 26  VILLAGE AND BUILDING WOOD HEATING OPPORTUNITIES 27  COPPER RIVER BASIN HOUSING AUTHORITY 29  VILLAGES 30  HEATING OPPORTUNITIES BY VILLAGE 32  GULKANA 32  CHITINA 33  CANTWELL 33  MENTASTA LAKE 34  COPPER CENTER 34  TAZLINA 35  CHISTOCHINA 35  KEY ISSUES TO DEVELOPING A REGIONALLY INTEGRATED VILLAGE SCALE BIOMASS  PROGRAMS 37  RECOMMENDATIONS: AHTNA WOOD ENERGY PROGRAM 38  REGIONAL FUEL SUPPLY 38  RECOMMENDATIONS FOR ACTIONS 39  PROGRAM DEVELOPMENT ACTIONS 39  PROJECT ACTIONS 39  CENTRALIZED FACILITY OPTIONS 40  PHASED INTEGRATED BIOMASS UTILIZATION APPROACH 41          Ahtna Regional Biomass Opportunities    Alaska Wood Energy Associates 3    Executive Summary  Document Purpose  The purpose of this document is to review for Ahtna, Inc. the potential opportunities  for wood energy utilization in Ahtna region at the building/village scale and  regionally.  A description of various wood energy technologies is included.  A review  of village heat loads and opportunities to displace fossil fuel is also included as  potential for linking a regional approach from Ahtna to local approaches by villages.    The document should not be considered as a feasibility study, but a guidance  document that addresses various opportunities, along with the pros and cons and  integration of each.  The report should generally inform Ahtna and assist in  determining next steps and approaches that may be used for development and  utilization of their wood resources relative to energy.  Scales Addressed  There are essentially two levels of biomass utilization addressed in the document:   Building and village heating    Regional scale harvest and value added heating products produced from  Ahtna lands  Villages  Each village’s opportunities for displacement of fossil fuels with wood energy are  discussed for individual households as well as commercial buildings and potential  district heating systems.   The major commercial buildings in each village are  regional housing authority housing, schools, if present, and community buildings  such as the tribal hall, clinics or water facilities.   In order to develop a district‐ heating loop buildings must be within a critical distance to pipe.  Heating systems  can also be placed in individual buildings.   There are types of wood heating  technologies available and wood supply that can be utilized within the villages at the  household and district heating scales.  Households:     Wood stoves – using firewood or regionally made briquettes;   Pellet stoves – using local or imported pellets;    Small cord wood boilers – using cordwood.  Commercial buildings and district heating loops:   Cord wood boilers – using cordwood only;   Chip boilers – using regionally produced chips;   Pellet boilers – using regionally produced, or imported pellets.  A key issue to be addressed is whether each village will develop their opportunities  individually, or will work in coordination with Ahtna at a regional scale for  supplying biomass to the villages.   Also, business structure questions of who owns  and operates boilers at a commercial building or district heating loop scale will need  to be addressed.   Economies of scale can reduce operation costs by working among    Ahtna Regional Biomass Opportunities    Alaska Wood Energy Associates 4  villages to deliver various biomass products in a coordinated process within the  region.    Ahtna Regional Scale  Ahtna Regional Corporation has expressed interest in the potential the use of their  biomass resources by developing an integrated centralized plant in Glennallen.  The  plant would include a large wood boiler to support the plant and could be used for  supplying a district‐heating loop for a portion of Glennallen commercial buildings.   This plant could potentially produce several products in an integrated fashion that  could include:   Densified wood energy products – Pellets, Briquettes or both   District heat system for Glennallen using heat from the plant boiler   Grid quality electricity for partial supply of regional electrical needs   Export of biomass from the region in the form of chips, torrefied chips,  pellets or pucks.    Scale of production and economic viability of a selected type of plant will depend on  the identified long term secure markets or outlets for specific products.  Regional  markets include working with each village on supplying their needs for heating as  well as the potential development of additional commercial and household markets  within the region.  Total estimated regional residential (excluding commercial  buildings) heating oil use is about 1,733,244 gallons annually, costing approximately  $7mm (estimates from Alaska Energy Authority).  The Copper River Basin Regional  Housing Authority utilizes 85,000 gallons of heating fuel annually costing  approximately $300,000.  Export markets include a potential CHP plant in Valdez  and the potential for some military bases to convert to biomass energy for heat.   Various technologies for adding value to biomass are discussed in the report text.    Within the Ahtna region there are significant biomass resources potentially  available for utilization within the region or for export from the region.  However,  there is currently little infrastructure of forest roads and cost per ton of biomass  delivered could be high relative to normal industry standards expected from other  places where biomass is converted to value added products such as pellets or  briquettes.  A study of biomass availability on operable lands, and costs by the  Alaska DNR Forestry Department, predicted cost of delivered green tons of woody  biomass rages from $115 ‐ $135 per green ton.   Cost of delivered chips to the  Superior Pellet Mill is being negotiated at $50/ton.  Cost estimates for chips  delivered to Glennallen are in the $55‐70/ton range.    Most economically successful pellet plants rely on white chips without bark as a by‐ product of a regional forest products industry producing higher value saw logs and  mills expect costs of between $40‐$80 per green ton.  Within Ahtna Region, chips  will be produced as the primary product of wood harvest.    Ahtna Regional Biomass Opportunities    Alaska Wood Energy Associates 5  Recommendations   Program development actions   Follow‐up the last two energy summits discussion with proposed actions to  work with and support both dialogue projects with regional sister  organizations such as the housing authority and villages to coordinate  objectives for biomass use.      Develop an integrated energy strategy at the regional level linked to the local  scales.  This report makes several suggestions, however the primary fuel  type and supply system must be decided.      Encourage and support the villages and the housing authority in developing  feasibility studies for the various building and district heating opportunities;      Support the development of an integrated regional approach to a sustainable  wood supply for villages as well as ownership and operations of the various  systems; this does not necessarily mean ownership for Ahtna, but it could.   There is a need to help develop a business structure of ownership and  operations.       Once a prioritized conceptual strategy for energy development has been  established; develop a dynamic plan to begin implementation.  The dynamic  implementation plans will layout specific objectives, tasks, expertise needed,  funding strategies, feasibility studies, timetables and production outputs.       Project actions   Develop a chip boiler demonstration project at the Ahtna Office and adjacent  buildings.  Contract with current wood products operators in Kenny Lake or  other contractors to provide chips.   Chip specifications should be rigidly set  in the contract and coordinated between the specifications of the boiler and  the contractor.   Grinders will probably not produce adequate chips.   Moisture content should be specified.  The largest mistake made in chip  systems is to not have the chips match the boiler specs.      A second boiler demonstration project should be developed in partnership  with CRBRHA in a village.  The two largest housing facilities according to  data contained within this report are Chitina and Mentasta Lake.  Both  facilities use about 15,000 gallons of fuel annually and both are located in  villages with good configuration for developing district‐heating systems.   Mentasta Lake would, by far, be the best opportunity for displacing the most  overall fuel.     Ahtna should adapt a ‘wait and see’ approach to developing a pellet mill at  this time.  Superior Pellets in Fairbanks has a capacity 4 times current    Ahtna Regional Biomass Opportunities    Alaska Wood Energy Associates 6  installed capacity in the state market.   The mill is banking on growth in the  instate market.  Their biomass supply and cost structure is not assured at  this point.  But are negotiating a delivered cost of chips at $50/ton and may  have a cost advantage to the Copper River Basin area.      Cost of delivered biomass in the region should be accurately assessed.  The  DNR Forestry has estimated/modeled costs of a green ton of chips to be  $115‐135/ton delivered from state lands.  One of the ways of assessing this  cost is to work with contractors that are supplying chips to the  demonstration projects that are developed.       Work aggressively with potential biomass export customers such as Valdez  that have expressed interest in developing a large CHP system to determine  if there are any real potential biomass export markets in the state.  Sign an  MOU to work together on development of the project and the type of value‐ added biomass supply that could be developed within the region with the  type of boiler system to be developed.   Potential supply could be chips,  torrefied chips, pucks or pellets.  Coordination from the outset is key for a  successful project.    The concept of a centralized biomass conversion plant in Glennallen is an excellent  opportunity and should be kept in the planning phase.  Key to the financial success  of any conversion plant is guaranteed supply (which Ahtna has), but at a delivery  cost that is well understood and stable.  Second is a known market size that has  some stability.   The market is not well understood or developed as yet.  There are  two potential markets to support, within region villages and households, and export.   As discussed, chips are the starting point for any conversion business, so by starting  with chip boilers within the region, the chip market can be developed and costs  determined to develop a central facility.                              Ahtna Regional Biomass Opportunities    Alaska Wood Energy Associates 7  Region Biomass Overview    The Ahtna region covers an enormous expanse of land, spanning from the village of  Cantwell to the Canadian border in south‐central Alaska.  The area does have some  mountainous terrain and glaciers. The Ahtna land selected for this biomass use is  moderate to gentle terrain. The lands are in the most accessible portion of the  region and are adjacent to major transportation corridors. The Richardson, Glenn  and Denali highways provide access to port facilities and service industries at major  population centers. Ahtna maintains its headquarters in both Anchorage and  Glennallen. The town of Glennallen lies 160 miles by road from Anchorage. From  Glennallen, Fairbanks lies 230 road‐miles to the north and the Port of Valdez is 85  miles south of Glennallen along the Richardson Highway. The Alaska Railway passes  through the northwestern portion of the region near the town of Cantwell and leads  to the ports of Anchorage and Seward. The Anchorage‐Fairbanks Intertie high  voltage electrical power grid also passes by Cantwell.    The Ahtna Region contains the entire Copper River watershed, including the Chitina,  the Chistochina, the Gulkana, the Tazlina and portions of the Susitina and Tanana  watersheds. The Copper River system is the forth largest in Alaska, and is the most  extensively glacier‐influenced. The region includes about 24,000 square miles of  land, which is largely unexplored, but known to have rich deposits of copper, gold,  silver, lead, molybdenum, and platinum.     Ahtna, Inc. owns, in fee title, approximately 1,528,000 acres. These lands were conveyed in December 1998 from an entitlement of 1,770,000 acres. Most of the area is forested with low timber/lumber value stands. However, there are significant opportunities for biomass use in the region. The lands are timbered with different stand types as described below. Ahtna is in the process of developing a Forest Stewardship Plan and a more detailed inventory assessment to support long-term forest management. This Strategy Report will not address the ecologically sustainable amount of annual harvest as this information is being developed in other reports. The State DNR has just put out a report on volumes of timber and biomass on state lands in the region entitled FOREST  RESOURCES ON STATE FOREST LANDS IN THE COPPER RIVER BASIN: A  PRELIMINARY ESTIMATE. Forest stands range from 6 to 29 tons per acre. There is an abundance of biomass available, considering that adjacent BLM and State Land that would participate in a wood to energy conversion program. However, cost estimates of recovery green tons of biomass in the area is predicted to be quite high compared to normal biomass industry standards. A study of biomass availability, operable state lands and costs by the Alaska DNR Forestry Department, predicted cost of delivered green tons of woody biomass ranges from $115 - $135 per green ton.         Ahtna Regional Biomass Opportunities    Alaska Wood Energy Associates 8  FOREST TYPES AND TIMBER  The timber in the Ahtna region is typically small diameter White Spruce. Well‐ drained areas sometimes produce a reasonable percentage of saw logs or house  logs, though these are few. Historically, much of the local timber was used for pulp,  which means that it is compatible for use in biomass conversion to energy. The most  recent Ahtna inventories, 1995 through 1997, establish four basic timber types that  are used to describe the commercial value of the wood resource.    Bottomland Spruce‐Poplar Forest  This tall, relatively dense forest system primarily contains white spruce, locally  mixed with large cottonwood and balsam poplar. This forest type is found on level  to nearly level floodplains, low river terraces, and more deeply thawed south‐facing  slopes.  It is generally not found at elevations higher than 1,000 ft. (300 m.). Both  black cottonwood and balsam poplar quickly invade floodplains and grow rapidly.  Alaska paper birch and quaking aspen are also often early colonizers. These species  are, in turn, replaced by white spruce in the successional process. Where this type  occurs, a deep thawed layer overlies the permafrost, which controls the depth of  roots. Extensive stands of this timber type are found in the Copper River valleys.   This forest system has high potential for moose habitat and regenerates quickly  with disturbance.  It contains approximately 19 tons of biomass per acre.  Upland Spruce‐Hardwood Forest  This is a fairly dense, mixed forest composed of white spruce, Alaska paper birch,  quaking aspen, black cottonwood, and balsam poplar. Large areas of this system are  generally found on higher portions of the interior valleys, and on the more deeply  thawed, well‐drained southerly slopes at lower to mid‐elevations.  Forest  regeneration is quick and accomplished in many cases through coppice. These are  high production lands with the potential for fast re‐growth.  Rotation time is still to  be determined.  Regeneration for Spruce will be a bit more difficult on these mixed  stand sites.    In the interior eastern highlands, soils supporting the dominant species are well  drained, shallow to moderately deep gravelly loams, and silt loams. Black spruce  occupies sites with poor drainage. Such high water tables result from water  catchment basins in uneven terrain and from the presence of permafrost,  particularly on north‐facing slopes. Pure stands of white spruce and mixed stands of  black cottonwood and balsam poplar are likely to occur along streams. Combined  stands, including these species plus birch and aspen, but excluding black spruce, are  commonly found on well‐drained, south‐facing slopes. Hot, dry summers limit  moisture on such sites and inhibit growth. Following fire, birch commonly invades  on east‐ and west‐facing slopes, with quaking aspen following willow stages on most  south‐facing slopes. These young trees and associated shrubs provide especially  good moose browsing habitat for several years following fires or forest  management.        Ahtna Regional Biomass Opportunities    Alaska Wood Energy Associates 9  Lowland Spruce‐Hardwood Forest  This is a dense‐to‐open lowland forest of mixed evergreen and deciduous trees,  including pure stands of black spruce. It usually occurs on areas of shallow peat,  glacial deposits, outwash plains, and occurs on north‐facing slopes. The upper  valleys of the Copper River sustain extensive stands. Open forest stands with lichens  provide excellent winter range for caribou. Willows and other brush species furnish  shelter and browse for moose.  These stands have lower biomass volumes than the  stands mentioned above.   Regeneration will be quick for deciduous stands, but will  slowly convert back to black spruce.  Growth is slow because of ground  temperatures and permafrost.  High Brush  The dominant species in these dense‐to‐open deciduous brush systems range from  dense willows along streams to dense alder above timberline. This type occurs  between beach and forest, between tree line and alpine tundra, in avalanche paths  through forests, on floodplains, and in old forest burn areas. Trees, such as quaking  aspen, Alaska paper birch, and white spruce may be present but are widely  scattered. The high brush system occupies a great variety of soils—from poorly  drained with permafrost in low river valleys to well‐drained shallow upland soils on  moraines. It is also found on outwash and mountain slope soils with intermittent  permafrost. Species composition varies considerably with location. Floodplain  thickets comprise another subsystem that develops quickly on periodically flooded  river and stream alluvium. Such stands may reach 20 ft. (six m.) in height. In interior  portions of the region, particularly along parts of the Copper River valleys and in the  Mentasta Mountains, a birch‐alder‐willow thicket type is found near timberline.  Areas with frequent fire tend to support this forest type. Thickets may be as high as  five ft. (1.5 m.) to 15 ft. (five m.).   Although more costly to harvest, these types of  stands can produce large quantities of chipped biomass.    Biomass Energy Potential  Ahtna, Inc. owns a vast amount of “sustainable biomass energy” with a significant  portion accessible within 50 miles of Glennallen.  Cost of biomass transport to a  processing location will be the number one issue in developing a financially feasible  biomass to energy conversion program at a regional scale.  As feasibility of various  technology options are investigated, it will be important to get very good estimates  of harvesting, hauling and conversion costs of biomass prior to deciding the types of  projects that Ahtna may decide to invest in.    The annual sustainable harvest from Ahtna lands has not been determined as yet.   However, a Forest Stewardship Plan is being developed which will discuss  management strategies, issues and potential costs of wood delivery.  Harvesting and  transportation to a central facility may be accomplished for reasonable cost.  Developing roads will be quite costly if based solely on biomass production.  Ahtna’s  ownership has both summer and winter harvesting sites that can be selected so that  harvesting equipment will not negatively impact the location.  This will allow for    Ahtna Regional Biomass Opportunities    Alaska Wood Energy Associates 10  some year round harvest, except for break up in spring and perhaps a brief period in  the fall.  In addition, many of the stand types will regenerate readily and forest  thinning or development of irregularly shaped, structurally diverse regeneration  harvests will significantly increase moose habitat.    The AK State DNR has recently produced an inventory for the state forestlands in the region, entitled “Forest Resources on State Lands in the Copper River Basin”. The report gives an estimate of useable biomass from state lands and cost per green ton delivered to Glennallen. See graph below taken directly from the state report. Estimates for delivery from state lands is estimated to be $115-$135/ green ton, local foresters estimate $55-$70 per ton. An action item for development of the program is to assure that a realistic cost estimate for delivery of biomass is developed.              Figure 1.  Cost per green ton delivered to Glennallen, from State Report.                      Ahtna Regional Biomass Opportunities    Alaska Wood Energy Associates 11    Review of Wood to Energy Technologies    Background  This section of the report is a discussion of potential technologies and opportunities  to convert to energy or add value to woody biomass in the Ahtna Region.   This  section is not a feasibility study.  All financials in this section are general and for  information on potential capital costs and very general revenue streams.  No  attempt has been made to discuss production costs.    An overview of potential  applications in the Ahtna Region is discussed at the end of the review.  Biomass Thermal  The combustion of wood to create heat has been demonstrated in Europe at the  individual residence and district heating systems as one of the most cost effective  uses of converting wood to energy and displacing fossil fuels as the primary source  of heat. A major breakthrough in wood heating over the past several decades has  been the development of various sized wood boilers that can burn cordwood, pellets  or chips at efficiencies approaching 80% with low emissions.  Each of these three  different types of wood boilers or stoves has applications for which it is well suited  and can be scaled within limitations depending on the situation.  As the biomass  thermal market continues to grow in Alaska, opportunities for biomass utilization  will increase due to the high cost of fuel oil and propane.  There are four wood  products that can be used to generate heat and will be discussed in greater detail;  round cordwood or firewood, chips, pellets and briquettes.  Biomass to Electric   Most proposals for this type of application rely on conventional steam turbine  technology that typically operates at efficiencies of 20% or less. For this reason, the  use of wood exclusively for electricity is rarely viable except at large scales of 20‐ 30MWe.  With the evolving opportunities to utilize biomass in multiple added value  markets, this approach simply no longer makes economic sense.   Combined Heat/Power  The most common approach to using biomass for electrical generation is a system of  Combined Heat and Power. In these integrated systems 70% of the energy produced  is heat and only 20% can be used for electricity.  Thus, there needs to be a  commercial use for the heat, which may include kilns, dryers, or district heating  systems.  These plants generally do attain efficiencies of up to 60% if heat is used  year round.  However, this is currently the only potential approach to smaller scale  biomass‐to‐electric facilities and most are 2 Mega‐watts and larger.   These systems  typically run on chips or hog fuel.  Smaller scale CHP systems have not been fully  developed to the point they are reliable enough for village application.         Ahtna Regional Biomass Opportunities    Alaska Wood Energy Associates 12  Currently, most systems in the lower 48 are co‐located at a wood conversion facility  such as a lumber or pulp mill and use the lowest quality/cost materials such as bark  or hog fuel, made from logging slash, to fire a steam boiler and run a steam turbine.   The heat is used in the manufacturing process and has a commercial value.   Cost to  produce is between $.10 to $.15 KWH.  However, hog fuel costs are only $20‐40/ton.   Thus costs for this type of a plant in the Glennallen area would be significantly  higher than the referenced costs from the lower 48.  Gasification    Wood gasification is an old technology getting a lot of attention and new  engineering at small to mid‐size scales.   Gasification occurs in all efficient wood,  pellet or puck boilers, pellet stoves and high efficiency wood stoves.    Gasification is a process that converts biomass materials, such as wood or  agriculture biomass, into carbon monoxide and hydrogen by reacting the raw  material at high temperatures with a controlled amount of oxygen. The resulting gas  mixture is called synthesis gas or syngas and is itself a fuel. Gasification is a method  for extracting energy from many different types of organic materials.      The advantage of gasification is that using the syngas is potentially more efficient  than direct combustion of the original fuel because it can be combusted at higher  temperatures at the thermodynamic upper limit of efficiency. Clean syngas may be  burned directly in internal combustion engines to produce electricity, used to  produce methanol and hydrogen, or converted via the Fischer‐Tropsch process into  synthetic diesel fuel.   Clean syngas can be injected into diesel engines to displace up  to 70% of the fuel burned in the engine for electrical production.    Gasification of biomass is currently used on industrial scales to generate electricity.  However, almost any type of organic material can be used as the raw material for  gasification, such as wood, biomass, or even plastic waste.  Gasification relies on  chemical processes at elevated temperatures >700°C, which distinguishes it from  biological processes such as anaerobic digestion that produce biogas.    Three types of gasifier are currently available for commercial use with woody  biomass.  These include a fixed bed “up draft” gasifier, down draft fixed bed gasifier  and fluidized bed gasifier, described below.    The fixed bed "up draft" gasifier consists of a fixed matrix of biomass chips through  which the air flows in up through the matrix of hot biomass. The ash is either  removed dry or as a slag.  The nature of the gasifier means that the fuel chips must  have 15% or less moisture and be of the correct size to develop a permeable matrix.  The throughput for this type of gasifier is relatively low.  Since all tars must pass  through a hot bed of char in this configuration, tar levels are much lower than the  counter‐current type, but still require cleaning for use in engines or conversion to  other fuel types.      Ahtna Regional Biomass Opportunities    Alaska Wood Energy Associates 13  The down draft fixed bed gasifier is similar to the updraft type, but the gasification  agent gas flows downwards through the wood chips.  Heat needs to be added to the  upper part of the bed, either by combusting small amounts of the fuel or from  external heat sources. The produced gas leaves the gasifier at a high temperature,  and most of this heat is often transferred to the gasification agent added in the top of  the bed, resulting in energy efficiency similar to the updraft type.  Gas from this type  of gasifier requires cleaning before any use other than combustion.  The downdraft  advantage is that it will take a lot more versatile biomass input.    In the fluidized bed reactor, the fuel is fluidized in oxygen and steam or air. The ash  is removed dry or as heavy agglomerate. The temperatures are relatively low in dry  ash gasifiers, so the fuel must be highly reactive; low‐grade coals are particularly  suitable. The agglomerating gasifiers have slightly higher temperatures, and are  suitable for higher rank coals. Fuel throughput is higher than for the fixed bed, but  not as high as for the entrained flow gasifier. The conversion efficiency can be rather  low.   Recycling or subsequent combustion of solids can be used to increase  conversion. Fluidized bed gasifiers are most useful for fuels that form highly  corrosive ash that would damage the walls of slagging gasifiers. Biomass fuels  generally contain high levels of corrosive ash.  Biomass to Liquid Fuels (BTL)  Although not widely demonstrated in commercial production, there have been  substantial technical breakthroughs in the development of wood‐to‐liquid fuels.  Unlike conventional ethanol production, which is primarily produced from sugar  rich sources such as corn, wood fuel extraction requires heating wood to high  temperatures to breakdown cellulosic materials through pyrolysis. Refined  gasification and fast‐pyrolysis technologies have been demonstrated and fast‐ pyrolysis oils are being commercially produced.      The Fischer‐Tropsch process for converting wood syngas to various liquids is well  understood, but making it cost effective is still very difficult especially given the  volatile nature of the oil market.  Integrated technologies are evolving rapidly at  medium to large scales.  With the price of oil holding steady at around $70 per  barrel, commercialization of these technologies has slowed.   This report will not  explore all the variants or the potentials in this type of technology.  It is too early in  the development of these different potential conversion pathways and markets to  know which technologies will become the most cost effective at economy of scales  that make sense in Alaska and the Ahtna Region.  Potentials could be available and  mature over the next 5‐15 years depending on market incentives and price of  petroleum products.  Technology Recommendation    There are a number of emerging technologies for the conversion of woody biomass  to value added energy products including liquids, electricity and solid wood fuels.   At the time of this report, the authors’ advice is to focus on the most practical and    Ahtna Regional Biomass Opportunities    Alaska Wood Energy Associates 14  stable market approach to the use of biomass in the region.  The displacement of  fossil fuel as the primary heating fuel with the various forms of biomass for heat  would be a first step into any type of wood energy market.    Biomass Heating Technologies and Conversion  Residential  High efficiency wood stoves are of a new design and burn at high efficiencies of 70‐ 80% and low particulate emissions.  Older types of stoves burn at 40‐50%  efficiency.  All stoves burn best with “seasoned” firewood and can also burn  briquettes (discussed below).  The advantage is the newer stoves use less wood for  the same heat with low emissions.  The disadvantage is that they cost more than  older conventional stoves and they burn slower and more evenly.  Thus, there is no  initial burst of heat when starting the stove as in some older stove types.  Also, the  stove cannot be turned down to where they smolder.  Smoldering in closed stoves is  very inefficient burning and produces a large amount of particulate emissions.  The  disadvantages really are more of an educational issue, where the end user must  learn how to effectively use the new burn technology.      Pellet stoves are very efficient, up to 85%, and burn with very low emissions.    The  greatest advantage is the ability to fill a hopper and set a thermostat to control the  temperature and burn rate in a residence.  The only disadvantage is the cost of the  stove and the fuel source is more expensive than firewood.  However, the efficiency  and convenience is similar to fuel oil or propane for short periods of time.    Commercial  Commercial, in this case, is considered heating a commercial or public building or a  district heating system that heats multiple buildings or residences.  There are  essentially two types of boilers cordwood boilers and auto feed boilers.   Cordwood  boilers require hand feeding of round wood and auto feed boilers fire chips, pellets  or pucks.  Cordwood Boilers  Figure 2 is a cordwood boiler installation in Tanana, Alaska.  These two boilers heat  the city building, washeteria and the water plant and are economically feasible at  this scale.  The boilers use round cordwood and must be fired multiple times during  the day in very cold weather.  The advantages are that the boilers are low in capital  cost and are very robust with low maintenance costs.  This type of boiler is very  efficient and has very low emissions.  The disadvantages are that they must be hand  fired multiple times daily, there is a limit to the size of the district heating system  that can be developed and they lack control mechanisms.  To service multiple large  buildings would require too many boilers in tandem and require a significant  amount of daily labor.    Ahtna Regional Biomass Opportunities    Alaska Wood Energy Associates 15   Figure 2.  Cordwood boilers installed in Tanana, AK.  Chip Boiler  Figure 3 is a schematic of a very advanced chip fired gasification boiler.  These  boilers are extremely efficient and come in a variety of BTU outputs that can  support several scales of district heating systems displacing significant amounts of  fuel oil.  The advantages are they can be scaled to different size district heating  systems, they use chips from 25% ‐50% moisture, they are computer automated,  running similar to an engine 24/7, have a turn down ratio of 4:1 so can fluctuate  input and output automatically, can be remotely monitored, and require limited  maintenance.  The disadvantages are that the capital costs are relative high and  boilers require a feeding mechanism that will function at extreme low temperatures,  chip quality must match boiler feed mechanism specifications, and round wood  must be chipped and stored.   Figure 3.  Auto feed gasifying chip boiler.  Can also burn pucks.    Ahtna Regional Biomass Opportunities    Alaska Wood Energy Associates 16    Pellet Boiler  Figure 4 is a pellet boiler installed at a hospital in Oregon.  The boiler was installed  in a shipping container and set up on site in two days.  The large silo is for pellet  storage and auto feed into the boiler.   The pellet system is very similar to the chip  fired boiler system, but with some differences.   Pellets are more expensive than  chips for fuel, however the capital installation costs are less and the feed mechanism  in this particular installation is more robust than the chip system.   So a key issue in  selecting between chips and pellet boilers is a reliable source of fuel and costs.  With  a different type of feeding configuration the same boiler can use pucks, which are  less expensive than pellets.       Figure 4.  Pellet boiler installed in a container heating a hospital.  Biomass processing for use in Wood Heat Energy Markets  Wood Chips    Production of wood chips is the initial step in all applications of woody biomass  except cord wood production for firewood or cord wood boilers.   There are several  different approaches to production of chips with advantages and disadvantages to  each.  The most important rule in chip production is to match the production  method, chip quality and moisture content to the end use.  If this is not done, the end    Ahtna Regional Biomass Opportunities    Alaska Wood Energy Associates 17  product will be of lower quality and there will be significant cost increases and  problems with boiler and or densified wood products.    Production of chips in the woods, through whole tree or slash chipping, is one of the  least expensive methods for production of chipped biomass.   However, the chips  produced are 40‐50% moisture, contain bark and potentially leaves or needles.   These chips are not of the quality that can be made into pellets for residential  stoves.  If filtered to remove fines then these chips can be used in a chip boiler.   This  material can also be ground, dried and made into briquettes or pucks.      Chips for pellets for residential markets require a high quality white chip with little  or no bark.   This requires bringing in logs to a debarker and then chipped.  Chips  are then dried and run through a hammer mill to produce material that can be  pelletized.  Recognizing the cost, method and quality of chip production is critical to  the success of the entire energy production enterprise.  For instance, large tub  grinders cost less to run on a tonnage basis, but ground material will not work in a  chip boiler, but will work in a hog fuel boiler, typically used in large production  facilities.    Chip storage has several issues that must be understood and dealt with in designing  any processing or use of chips.  High moisture chips 25‐50% will mold, create their  own heat (potentially spontaneous combustion) and freeze in winter.  Covered  storage is critical as interim, and then a heated storage and feeding mechanism is  required at the boiler site.  The best way to deal with these issues is to season wood  to be chipped in the round until it contains less than 25% moisture, and only chip  enough wood for a 2‐3 months supply at a time.    As an example, a vendor for Woodsman Chippers developed the following hourly  operating cost for a midrange chipper.  Small material will yield a much lower  production than whole trees. This machine should produce around 10‐20 tons per  hour in the Glennallen area if constantly fed and using a feed table or expanded in  feed system.      Table1.  ESTIMATED CHIPPER OPERATING COST  Machine Maintenance‐‐Includes labor and materials for daily lubrication and  inspection.                     $32.65/hr    Fuel Costs ‐‐Fuel consumption for John Deere 275‐HP is estimated at 10 gallon per  hour at an estimated cost of $4.00 per gallon        $40.00/hr     Labor  Operator cost, including benefits (costs will vary depending on the  area).  Two (2) operators at $25.00/hour.                $50.00/hr       TOTAL OPERATING COST           $122.65/hr   Production Cost 10‐20 tons per/hour    $12.27 ‐ $6.13/ton    Ahtna Regional Biomass Opportunities    Alaska Wood Energy Associates 18      Wood Densification         Figure 5.  Example of commercial wood pellets    Pellets  A brief history of markets  Wood pellets have been widely used for the past few decades and have an  established market. There has also been strong penetration of pellet stoves into the  residential market.  The development of the modern U.S. wood pellet manufacturing  process began in the 1970’s.  Wood material is dried and pulverized, then squeezed  through a die, creating pressure that causes the lignin in the wood to plastify and  hold the cylindrical pellet together. The result is an energy‐dense material low in  moisture that is easy to handle, store, and transport.  However, pellets must be kept  dry, as they will absorb moisture and crumble.  Quality of the material used for  pellets must be high, with little bark, in order to meet the ash standards necessary  for residential stoves.  Commercial boilers can accept slightly higher ash contents in  pellets.    The first industrial wood pellet boiler was installed at the University of Idaho in the  mid 1970’s. Policies prompted many school districts to retrofit with pellet‐burning  boilers. By the 1980’s schools and factories were using pellet boilers and a high‐ efficiency residential pellet stove was invented. With a market, local independent  pellet mills can start up to serve the residential market for bagged pellets.    However, the significant reduction in the cost of oil caused the pellet market to  retreat significantly during the late ‘80s into the ‘90s.  Demand for pellets in the US  declined during this period and many pellet manufacturers stopped production.    In response to the Kyoto initiative, European governments required that renewables  be used in energy production and provided market incentives to increase use of  renewables.  As a result, the leading edge of the wood pellet industry shifted from  the U.S. to Europe in the late 90s.  The European Union demand for wood pellets will    Ahtna Regional Biomass Opportunities    Alaska Wood Energy Associates 19  continue to drive U.S. production, but will also limit the industry's profitability.  The  Europeans make significant amounts of pellets and know production costs.   The  expectation is that if Europe continues increasing its demand, potentially 8‐10 new  large‐scale pellet plants will be built in North America to meet that demand over the  next 20 years.  Europe maintains much higher and less volatile fossil fuel prices and  thus a more stable market for pellets.    In the US, when crude oil hit $140 a barrel in 2008, a new wave of wood pellet  manufacturing startups were initiated in the US. The economic stimulus package in  2009 rewarded purchasers of biomass‐fueled stoves. The political momentum has  helped to create further market incentives to use wood in pellet form as a heat  source.   However, ramped up pellet production, the reduction in the price of oil and  the economic downturn has idled several pellet plants and this last winter.  In 2010  there has been a major increase in pellet inventory that has not been sold (Figure 6).                               Figure 6.  Inventory of 2000 tons of wood pellets winter 2010.  Photo by: Matt Stensland   Benefits of Pellets  Despite the market volatility and contraction in the industrial pellet sector, the  pellet industry’s overall long‐term growth has been stable, and has occurred without  the subsidies bestowed on wind, solar, and ethanol.  The wood pellet market has had  time to become technologically mature. In terms of thermal heat, wood pellets rival  the efficiencies of any other renewable technology and fossil fuels.  Wood pellets  also have the added benefit of easy storage and feeding mechanisms, which allow  for thermostat regulated heating.  Wood pellet stoves are 75% ‐ 80% efficient, and  the unsubsidized cost per million BTUs of wood pellets is currently competitive with  natural gas. Wood pellets are considered carbon neutral and, when displacing fossil  fuels, are considered a strong net benefit.    Ahtna Regional Biomass Opportunities    Alaska Wood Energy Associates 20  The Manufacture of Pellets  Pellet plant feasibility is beyond the scope of this study.  This discussion is simply to  use general costs and product values to frame the potential for a small pellet plant  given the above discussion of the market maturity.  The capital costs of the plant  depend on the type of material used and production size.  Material with moisture  content of greater than 12% must be dried.  A biomass dryer can cost up to 40% of  the entire capital costs of a plant, but can be fired with hog fuel (low quality  biomass) depending on type and size of boiler installed.     In addition to capital cost, working capital will be required to overcome the time it  takes to achieve profitability in a plant.   Experience in the industry has  demonstrated that many pellet plants take 6 to 18 months to refine the process  before becoming profitable.  Gross approximation of capital costs of a three‐ tons/hour pellet plant, which is equivalent to approximately 12‐15,000 tons per  year, is $2.75 million for the equipment.  With land, engineering, permitting, and  additional costs due to being Alaska, a turn key pellet mill may cost $8‐$12 million.   The primary driver of production costs is the cost of the biomass material going into  the pellets.  In the lower 48 states, quality white chips without bark are $40‐80 per  ton.  In Alaska, the expectation from the State DNR report is from $115‐$135 for  chips.  However, in the report, there was no discussion regarding quality.  Chips  with bark will produce pellets of higher ash content and will be commercial grade,  but not residential grade.  Costs for white chips could be even higher than $135 per  ton.  Current retail value at $300‐400/ ton is a gross value of $3.6‐4.8 million,  annually, and wholesale price is $200 to $250/ton or $2.4 – 3.75 million gross.   Prices in Table 2 will require possibly an additional 25‐40% in Alaska and do not  include engineering, land, or green field permitting.    Approximate capital costs for 3‐ton/hour‐production pellet mill equipment in lower 48  states at 2005 prices are listed below.   This is about 12‐15,000 tons per year with 2 shifts  running full time.   A 35,000‐ton per year plant was priced at about $5‐7 million for  equipment.   Dryer        $615,000  Hammer Mill       $105,000  Pellet Machine       $250,000  Cooler          $17,000  Storage Conveyors, Separators     $378,000  Peripheral Equipment      $650,000  Buildings        $710,000  Total      $2,725,000         There are over 80 pellet mills in the US producing over 1.1 million tons of pellets  annually. Superior Wood Pellets is developing a pellet mill in the Fairbanks area that  will use local biomass, including waste from local small sawmills, urban wood waste  and local biomass.   Their success will depend on the cost of raw materials and    Ahtna Regional Biomass Opportunities    Alaska Wood Energy Associates 21  growth in retail sales of pellet stoves.   The Superior Pellet Fuel plant expects to  produce 500 tons per week and 25000 tons annually.  This is about 4 times the  current use market in Alaska.  A ton is equivalent to about 1.5 cords of wood and  will be sold for $295/ton from the mill.  Superior expects to sell through retailers  throughout the state.  A site visit and review of the financials for that plant  development would help Ahtna understand the economics, opportunities, and  problems associated with start up of a pellet plant in Alaska.      Table 2.  Western pellet plants.  Company Location Phone Bear Mountain Forest Products Inc. Cascade Locks, OR 541/374-8844 CNZ Corporation Sheridan, WY 307/672-9797 Confluence Energy Kremmling, CO (970)724-9839 Enchantment Biomass Products Ruidoso Downs, NM (505)378-5410 Eureka Pellet Mills Inc. Missoula, MT 406/543-0812 Forest Energy Corp. Show Low, AZ 928/537-1647 Lignetics, Inc. Sandpoint, ID 208/263-0564 Nature's Fuel Prineville, OR (541)337-0659 North Idaho Energy Logs, Inc. Bonners Ferry, ID (877)564-4897 Rocky Mountain Pellet Company, Inc. Walden, CO (888)501-3766 Southwest Forest Products, Inc. Phoenix, AZ (602)278-1009 Spur Mountain Timber, LLC Bountiful, UT (888)870-2250 Sunizona Greenhouses, Inc. Wilcox, AZ (520)824-3160 West Oregon Wood Products Columbia City, OR (503)397-6707     Wood Briquettes  Wood briquetting is the second method of wood densification.  Compressing dry,  shredded woody biomass under heat and pressure creates the briquettes. The result  is a high BTU, long‐burning; low emission, and low cost heating fuel.  Briquettes can  be made in several shapes including bricks, pucks and cylinders (similar to presto‐ logs).   End market use dictates the needed shape.  Different shapes can be produced  in the same plant by changing the compression molds.  Bricks and cylinders are  ideal for wood stoves.  Pucks are high quality fuel for small to large commercial  boilers (Figures 7,8,9).    Briquettes are different from pellets in several ways.   Briquettes are compacted  rather than extruded, which means reduced capital and production costs.   A wider  range of raw materials can be used in the process including ground residual slash,  sawdust, shavings and chips.  As with pellets the largest production expenses are  cost of raw material and drying the material to less than 12% moisture.  Briquettes  burn low in ash, but do not have the same market restrictions or expectation for  extremely low ash as pellets.  Whole tree chipping will work for making briquettes,  while it takes white chips of high quality to make pellets.        Ahtna Regional Biomass Opportunities    Alaska Wood Energy Associates 22     Figure 7.    Bear Mountain Forest Products Briquettes (from Bear Mountain website).       Figure 8.  Example of shaped briquettes and pucks.    Briquette Markets  Residential   Bricks and cylinders are excellent for fireplaces and especially high efficiency wood  stoves.  A combination high quality burn from briquettes and high efficiency wood  stoves creates such low emissions that EPA will allow use even on no‐burn days in    Ahtna Regional Biomass Opportunities    Alaska Wood Energy Associates 23  restricted air sheds.  Distribution of briquettes has been initiated at retail outlets  such as Lowes and Home Depot in some urban markets.  Briquettes are being  packaged either in boxes (Figure 7) or on one‐ton shrink‐wrapped pallets (Figure  9).  One pallet is approximately equal to a cord of firewood and is selling for  $250/ton in the lower 48 states.  Briquettes must compete with firewood in cost but  are cleaner, more efficient and actually have more BTU’s per ton than firewood.  No  markets have been developed in Alaska as yet.     Figure 9.  Pallet of briquettes approximately a ton or cord equivalent.    Commercial Boilers   At the commercial level, state and federal incentives and proposed legislation such  as the Renewable Electricity Standard, provide industrial and municipal entities,  schools, and businesses with financial support and motivation to convert from fossil  fuels to more efficient and less costly biomass boilers.  As more commercial boilers  come on line, the market for briquettes or pucks is expected to grow similar to the  pellet market.  Wood briquettes will be used in co‐fired coal plants for electrical  generation as CO2 emissions become more restrictive.  Wood pucks make ideal fuel  for boilers to heat green houses, fuel‐for‐schools and small industrial heating  applications such as district heating systems.  However, no markets are currently  established in Alaska.     Wood Torrefaction   Torrefaction is a thermo‐chemical treatment of biomass in the 400F to 570F degree  range. In this process, the biomass partly (especially the hemi‐cellulose)  decomposes, giving off various types of volatiles. The remaining torrefied biomass  (solid) has approximately 30% more energy content per unit of mass.  Normal dried  wood has approximately 8,700 Btu/lb.; torrefied wood has 11,000 Btu/lb.; and coal  has approximately 12,000 Btu/lb. Most of the volatile organic compounds, like  pinene and turpene, are driven off during torrefaction; as a result, less smoke is  produced when torrefied wood is burned and there is less danger of slagging a  boiler.   The volatile gas produced in the torrefaction process is burned and used as  the primary source of energy for the process.   Thus overall energy input is minimal.     Ahtna Regional Biomass Opportunities    Alaska Wood Energy Associates 24             Figure 10.  Wood chips that have gone through Torrefaction, Photo from Chris  Hopkins, University of North Carolina and Joe James, Agri‐Tech Producers, LLC    Torrefied wood takes up less space and is much cheaper to transport than wood.  Shipping biomass for any distance is not cost effective, especially if it has 40‐50%  moisture.  The purpose of densification in making pellets and briquettes is to reduce  moisture content and increase the energy density in wood, making it more cost  effective to ship greater distances.  Torrefied wood can also be made into pellets or  briquettes, with even greater energy density than regular pellets. As a result, it can  be shipped even longer distances, making production and shipping wood energy a  more profitable venture.  One study has found that long‐distance trade and logistics  of torrefied biomass were 30‐70% more economical than raw biomass.     Pellets, briquettes or pucks made from torrefied wood are significantly more  resistant to reabsorbing water. The drying process takes place during Torrefaction,  so there is no need for additional drying once chips are torrefied.  Like coal,  torrefied wood can be stored without cover.   It is extremely stable and can  withstand 1.5‐2 times the crushing force of wood pellets.  The decomposition that  occurs during torrefaction improves grindability to the extent that torrefied chips  can be co‐fired with coal at 10‐30% of the volume. Because it can be pulverized with  existing coal pulverizers, the capital costs necessary for co‐firing are reduced. This  same characteristic makes torrefied wood an ideal feedstock for converting biomass  to cellulosic ethanol, by making gasification easier.       At this stage of development, torrefied biomass has great potential for reducing the  costs of the biomass‐to‐energy production chain, primarily based on the reduced  cost of transportation. Two markets have the potential of spurring the development  of torrefaction plants. As utility companies are being required to reduce carbon  emissions by state renewable energy standards, more of them are investigating co‐ firing wood with coal. Their costs may be reduced significantly by using torrefied  biomass. Because torrefaction makes wood more portable and durable, European  energy companies will likely prefer torrefied pellets to regular pellets; this could  lead to a real boon in exports.   Ahtna has the potential to ship torrefied wood in the  form of chips, pellets or pucks to two primary markets, if these markets develop in  Valdez and Anchorage.     Ahtna Regional Biomass Opportunities    Alaska Wood Energy Associates 25    However, this technology is just now going into commercial phase.  Large‐scale  production has yet to occur.  And although quite promising, the technology is still  immature.  Torrefaction equipment is just this year being produced and processes  will need to be refined.   If the opportunity/markets develop to ship wood products  out of the Ahtna Region, this technology in combination with densification could  prove to be quite financially feasible.   At this time, however, it is a technology to  track over the next 3‐5 years as markets and processes mature.    Biochar  Biochar can be produced by pyrolysis or gasification systems. This is similar to the  Torrefaction process, but more complete.  Pyrolysis systems produce biochar by  baking biomass largely in the absence of oxygen. The process can become self‐ sustaining, as the syngas produced is combusted, releasing heat. Gasification  systems produce smaller quantities of biochar in a directly heated reaction vessel  with air introduced.  Gasification and pyrolysis production systems can be  developed as mobile or stationary units.   Biochar can be developed as a primary  product for using forest harvest residuals or it can be produced as a by‐product of  pyrolysis oils of biomass to liquids through gasification of woody biomass.    Biochar is considered a soil enhancer and carbon sequester.  It can prevent the  leaching of nutrients out of the soil and increase the available nutrients for plant  growth, increase water retention, and reduce the amount of fertilizer required.  In  addition, biochar has been shown to decrease N2O (Nitrous oxide) and CH4  (methane) emissions from soil, thus further reducing greenhouse gas emissions.       Biochar is a carbon sink when produced from plant material and added to soils.    Large amounts of CO2 are produced when vegetation decomposes.  Production of  biochar captures that carbon in a stable form and when added to soil the carbon can  be sequestered for 100‐1,000 years.   Future markets may develop as a better  understanding of the potential production and uses of biochar improve.  In addition,  as a carbon market evolves, value of biochar will increase.  This may remain a small  niche local market and is not a recommendation of this report at this time.  Key Components of an Integrated Wood Energy Program  Sustainable Forest Management Program  This component would need to be developed at the Ahtna Region scale.  Ahtna is  developing a forest stewardship plan and is fully aware of the need to manage their  forests in a sustainable manner.   Depending on how wood energy is developed in  the region, Ahtna has the opportunity to be a major supplier.  This will require the  development of harvest policies and agreements with villages, chip suppliers or  biomass converters, i.e. pellets or briquettes producers.  These harvest agreements  should be based on a sustainable forest management plan.    Ahtna Regional Biomass Opportunities    Alaska Wood Energy Associates 26  Sustainable wood supply  The basis for any sustainable wood energy program whether it is at the building,  village or regional scale, is a cost effective supply of woody biomass with  appropriate integration of conversion technologies.   The villages in the Ahtna  region are all on the road system and will have a relatively small biomass demand  even if district heating systems are developed.   This means that the economy of  scale for any one village to provide its own biomass is very small and will not  support the purchase of harvest equipment.  It makes most economic sense for the  villages to import their biomass, even if it is locally harvested on Ahtna land and  converted to the specific type of technology selected for the village.    The opportunity exists for development of a regional supplier to support the various  villages and other markets.  This would increase the economy of scale and keep the  price of a sustainable wood supply at an affordable cost.   The supply could be wood  chips, harvested and stored at a central facility and delivered on demand to district  heating systems in each of the villages.  Another option might include Ahtna, or a  partner, developing a wood pellet or briquetting facility.  It would support village‐ heating systems at the same time giving the facility a ready and stable market for  start up.    Integrated biomass supply and district or building heating technologies  To take best advantage of Ahtna’s biomass supply, it will be best to develop a  regional approach to biomass feedstock supply and types of technologies used at  buildings and in villages.  Ahtna and CRBRHA can play a major role in the  integration of wood energy technologies that maybe placed at major buildings, or as  district heating systems within villages.  It is critical not to have “supply‐stranded”  types of boilers.  For instance, if a decision is made to install chip‐fired boilers at  various locations, it will be necessary to have a long‐term contract for supply.   If a  decision is made to put in pellet boilers, supply can be purchased from outside the  region if local supplies are not developed or maintained.  Pellet and chip boilers can  both work with briquettes in the form of pucks.   The type of feeding mechanism and  storage is the critical part of the design, offering greater flexibility in feedstock.      Business structure and energy sales agreement  Development of an integrated business structure within the villages will be critical  to their long‐term sustainability.  We assume that for these projects to be  sustainable, a basic for‐profit business model is crucial to develop economic  incentives.     Key business decisions include:   Who owns and operates the boiler.   Potential operators are the local tribe, a  joint venture with Ahtna, the CRBRHA, a local entrepreneur, or an outside  regional contractor;     Development of a long‐term wood fuel contract;    Ahtna Regional Biomass Opportunities    Alaska Wood Energy Associates 27   Development of long‐term heat sales agreements based on the cost of fuel,  capital investments above grants, and the fluctuating cost of fuel oil.    Village and Building Wood Heating Opportunities  Figure 11 shows a flow diagram of all the potential pathways for a village and region  based wood energy process.  All processes typically start with the harvest of round  wood, which can then be stored in the round and allowed to season.   Cordwood can  then be fed directly into cord wood boilers for individual buildings or small district  heating systems.  All other potential uses of wood then start with chipping of the  round wood.  Chips can then be fed directly into chip boilers.  Highest efficiency is  achieved if wood is dried to at least 25% moisture.  Additional energy can be added  to the process to produce Torrified wood.  Both chips and Torrified chips can be  densified into briquettes or pellets.  Although emerging technology currently exits  for gasification, electrical production and biomass to liquids, these approaches are  not advisable for use in the Copper River Basin at this time.  Focus should be on the  heating and potential export opportunities.          Ahtna Regional Biomass Opportunities    Alaska Wood Energy Associates 28     Figure 11.  Wood energy flow chart for energy production from biomass.          Ahtna Regional Biomass Opportunities    Alaska Wood Energy Associates 29    Copper River Basin Housing Authority  The annual heating fuel used by the Copper River Basin Regional Housing Authority  (CRBRHA) by village installation is listed in Table 3.  The installations use  approximately 85‐90,000 gallons of fuel oil costing approximately $300,000  annually.   It would require approximately 850 green tons of chips to displace this  amount of fuel.  At $175/ton delivered, cost for fuel cost for heat using biomass  would be approximately $150,000 annually or half the cost of fuel oil at $3.50 per  gallon.  Fuel oil at $4/gallon costs approximately $35.83 per million BTUs.   Pellets  at $300/ton costs $22.85 per million BTUs.        Table 3.  Copper River Basin Regional Housing Authority annual heating fuel use.     2008  Average Gallons   fuel cost $3.50 2009  Office  $8,289.72  2368.49  $10,463.05   Carol Estates  $13,719.65  3919.90  $9,932.92   Chistochina  $21,996.44  6284.70  $14,189.12   Chitina  $52,544.64  15012.75  $35,742.76   Gakona  $27,252.72  7786.49  $20,894.92   Gulkana  $15,320.80  4377.37  $12,389.04   McKinley   $39,020.01  11148.57  $27,975.12   Mentasta  $55,086.34  15738.95  $49,466.99   Tazlina  $37,932.01  10837.72  $26,306.56   Wrangell   $27,408.00  7830.86  $16,850.30    Total    $298,570.33   85,305.81   $224,210.78       The CRBRHA is typically one of the largest heat users in each of the villages.  This  gives the opportunity, depending on village configuration, for either a stand‐alone  wood heat system to the housing authority or an integrated part of a district heating  system.  The question is not whether it makes sense to convert the various buildings  to wood heat, but rather what type of fuel, technology, and size of district heating    Ahtna Regional Biomass Opportunities    Alaska Wood Energy Associates 30  system is most efficient.  Below is a list of key questions that must be answered  while conducting a feasibility study on each building or within a village:  1. Who owns and maintains the boilers?  2. Can they be part of a village district heating system?  3. Which fuel makes the most sense economically and for ease of operation:  Stick, Chip, Pellet or Puck?  4. Which fuel can be supplied locally and by whom?  5. Should all the boilers installed by CRBRHA be the same fuel type or fit within  the villages where they are located?   Answers to these questions will help determine the approach that a feasibility study  will take.  CRBHA could decide to conduct a feasibility study on each installation or  all installations at the same time.  Villages  Each village has different heating opportunities based on the village layout and heat  loads.   For electricity, however, it makes the most sense for the all of the villages to  remain on grid, diesel, or hydropower rather than trying to convert to wood.  The  opportunity for district heating systems depends on the compactness of the village  and the potential heat loads that are within a connectable distance for hot water  piping.   There are four types of boilers and fuel, as discussed above, that could be  used in the various villages for commercial building or district heating, including  cord wood boilers, chip fired boilers and pellet boilers.  Each has advantages and  disadvantages.     Cord wood boilers are robust and, put in series, can heat several small  buildings; however, they are hand fed and have labor limitations for keeping  them going in extreme cold and outside of normal working hours.    Chip fired boilers are automated, robust and can heat large heating districts.   Fuel is inexpensive but feeding mechanisms are expensive to install.  Pellet fired boilers come in various sizes from individual buildings to  district heating systems.  Feeding mechanisms are less expensive than chips,  but fuel is much more expensive.  If pellets are readily available, this type of  boiler offers the ability to supply both individual houses as well as district  heating systems.   Briquettes can be made into bricks for wood stove use or pucks for auto  feed boilers.  Either pellet boilers or chip fired boilers can be fed with pucks  and rely on the correct type feeding mechanism.  Thus, both individual  homes and automated district heating systems or commercial buildings can  be heated with briquettes.     Several of the villages have already opted for pellet systems over the cordwood or  chips.   Wood chip systems are the least expensive fuel, but less convenient to store  and feed than pellets; and have higher initial capital cost than cord wood or pellets  at project construction.  All of the regional villages are on the road system and have  the opportunity to  “import” their wood (meaning not producing themselves) rather  than developing their own local wood production system.   The convenience, greater  flexibility in system size for pellets or briquettes for individual houses, individual    Ahtna Regional Biomass Opportunities    Alaska Wood Energy Associates 31  commercial buildings, and district heating system all in the same village is quite  practical.      Table 4.  Annual fuel use and cost per village for residential use.  Estimated by AEA. Does not include commercial buildings.      Table 4 expresses the total potential market for conversion of fuel oil to wood at the  residential scale and does not represent the potential market for district heating  systems in native communities.  Total household use of fuel oil in the region is 1.7  million gallons per year at a cost of approximately $7.1 million dollars.  It would  take approximately 17,500 tons of wood in various forms to displace the total fuel in  BTUs in residential housing.   An estimate of the commercial use by building in each  village is necessary to estimate the potential markets for district heating in each  village.   This could be determined in a village feasibility study.  COMMUNITY Annual Fuel Oil Usegals CURRENT   POPULATION Annual Cost Price/  Gal.  Cantwell    NA 218      NA NA       Chistochina             70,917 104      $339,000 $4.78    Chitina             87,835 110      $429,000 $4.93      Copper Center    212,751 452      $808,000 $3.80      Gakona    135,387 214      $514,000 $3.86   Gulkana    53,188 101      $202,000 $3.86       Mentasta Lake    49,964 126      $237,000 $4.75       Tazlina    95,093 186      $447,000 $4.70       Glennallen 327,797  $1,250,000 $3.80  Kenny Lake 230,480  $876,000 $3.80  Mendeltna 37,070  $141,000 $3.80  Nelchina 43,517  $165,000 $3.80  Silver Springs 74,141  $282,000 $3.80  Slana 117,658  $588,000 $5.00  Tolsona 14,506  $55,100 $3.80  Tonsina 54,800  $208,000 $3.80  Willow Crk    128,940  $606,000 $4.70  Total 1,733,244  $7,147,000     Ahtna Regional Biomass Opportunities    Alaska Wood Energy Associates 32  Heating opportunities by Village   Gulkana  The Village Council has installed a district heating system with 2 Garn stick fired  boilers for heat storage and, as a back up, 2 pellet boilers as the primary wood heat.    This is an excellent system with redundancy in fuel supply by using both pellet  boilers and stick‐fired boiler in series.    It also allows for heat storage in the Garn  boilers as a basis of the plant.  The area of the district heating system is shown in  figure 12.    The community has also started making their own pellets with a pellet mill that can  theoretically produce 1‐2 tons per hour of wood pellets but has not reached its  capacity as yet.  To date, the wood used to produce the pellets and the production of  pellets has been subsidized through grants for forest thinning around the village.    Although, an excellent way to initiate a project, economic sustainability has not been  demonstrated and will be critical for the model to function after grant monies are  exhausted.  Savings from displacement of fuel from the district heating system of the  primary tribal buildings should sustain the program.   A business model and  agreements to pay for heat are needed if not already in place.       Figure 12.  View of Gulkana area where district‐heating system exists.    Gakona  Gakona has a new clinic with a diesel fired hydronic heat system and one pellet  stove installed in a meeting room.   The Tribal Council has expressed interest in  converting that building to wood heat which could easily be done with a stick or  pellet fired boiler installed in series with the oil fired boilers as back up.   There is    Ahtna Regional Biomass Opportunities    Alaska Wood Energy Associates 33  also public housing owned and operated by the CRBRHA using approximately 7800  gallons of fuel annually.  CRBRHA has interest in converting this housing to wood  heat as well.  The distance between the clinic, the Tribal office and the housing is not  too far to create a district heating system.  However, having boilers at both the clinic  and public housing would be feasible as well.  Gakona expressed interest in  purchasing pellets from Gulkana and do not have an interest in supplying their own  wood.  Chitina  Chitina is currently heating their clinic with heat from their new powerhouse.   The  village has one more major opportunity for wood heating in the CRBRHA public  housing.  The housing complex uses approximately 15,000 gallons of fuel each year.  Chitina would make an excellent small district heating system connecting the  housing with various new village buildings (figure 13).  If an agreement were  reached for developing a sustainable supply of chips or pucks, then either would be  a less expensive long‐term fuel supply.  A pellet boiler could be converted to pucks if  the feeding mechanism is installed initially to handle both fuels.          Figure 13.  Chitina new village site with CRBRHA housing and tribal offices.    Cantwell    The primary opportunity for installed wood energy in Cantwell is at the school that  has the largest heat load.   The local forests are relatively new on Ahtna lands.  Thus,  pellet or puck importation would probably be the best option for a fuel supply.  As in    Ahtna Regional Biomass Opportunities    Alaska Wood Energy Associates 34  Chitna, a boiler at the school with the correct feeding mechanism could switch from  pellets to less expensive pucks.  Mentasta Lake  Mentasta Lake has one of the highest costs for delivered fuel oil and would be an  excellent opportunity to develop a district heating system, to service seven public  buildings, including the school located within the center portion of the community  (figure 14).   The economy of scale serving seven buildings will increase the  economic viability of the project and potential benefit to the village.   It may be  possible to pipe heat to the Mentasta Airstrip Subdivision, the Laundromat and the  CRBRHA housing from a central boiler site, which would be determined during a  feasibility study.  The CRBRHA facilities use an estimated 16,000 gallons of fuel  annually.   The boiler system could be pellet, chip or puck fuels. The choice of system  to be installed should be based on recognition of a sustainable supply.     Figure 14.  Mentasta Lake is an excellent opportunity for a district heat system.    Copper Center  Copper Center is a large but spread out community.  Figure 15 shows potential  commercial buildings that would have enough of a heat load to utilize a moderate  size district heating system.  Buildings include the CRNA offices, the Kluti‐Kaah  office and clinic, day care, gym and elder housing.        Ahtna Regional Biomass Opportunities    Alaska Wood Energy Associates 35   Figure 15.  Copper Center buildings for District Heating System.    Tazlina    The village is very spread out and review of maps suggests that a small district  heating system could be feasible at the Tazlina Village Council office and clinic.    Heating individual buildings could be viable with smaller wood heating units (figure  16).  The CRBRHA housing uses approximately 11,000 gallons of fuel annually and  would also be a candidate for wood heat installation.     Figure 16.  Tazlina tribal buildings for small district heat system.  Chistochina    The village has an opportunity to develop up to three small district heating systems.   The largest, seen in figure 17, could capture waste heat from the Alaska Power and  Telephone generator.  The heating system could potentially heat the school and the  MSTC offices.     Ahtna Regional Biomass Opportunities    Alaska Wood Energy Associates 36   Figure 17.  Area shown is potential for a district heating system in Chistochina with  potential to capture heat from the AP&T generators, building 5.          Figure 18 shows two additional potential small district heating systems.  Buildings on  the lower portion of the map are the water system, village office and clinic and the  community hall.  In the upper portion of the map are three unidentified residential  buildings. These appear to be adequate size to heat with a small heating system.  The  CRBRHA facilities in the village use approximately 6000 gallons of fuel for heat  annually. The village has expressed interest in moving forward and is exploring pellet  systems.      Ahtna Regional Biomass Opportunities    Alaska Wood Energy Associates 37    Figure 18.  Two small areas for district heating systems in Chistochina    Key Issues to developing a regionally integrated village scale  biomass programs     The following points are observations of needs for leadership at the regional level to  help villages make decisions regarding development of a biomass program for each  village and for the CRBRHA.   This discussion assumes that there would be greater  economy of scale and thus greater efficiency, and reduce overall costs, if the region  villages coordinate across the region on types of boiler systems installed   This is not  totally necessary and each village could develop their own system independently and  still save money on fuel in the long‐term.   Development of an integrated plan at the region scale linked to the village scale  for developing biomass supply to support similar types of technologies in the    Ahtna Regional Biomass Opportunities    Alaska Wood Energy Associates 38  villages.  The supply could be pellets, pucks or chips with a regional approach to  production and distribution.     Development of an integrated decision process by which regional villages can  develop biomass strategies that create a regional economy of scale for biomass  supply.  On‐going communications and discussions on specific objectives is  critical, as well as collaboration.  Ahtna and CRBRHA could lead this by  developing a pilot demonstration project, either in one of the villages or at the  Ahtna office building, or both.   Recent energy summits have started these  discussions.  Follow through by Ahtna and CRBRHA selecting specific wood  technologies integrated with a demonstration project would move the region  forward significantly.    Develop an understanding and a vision/plan of the efficient wood energy  technologies and how they can be integrated and made commercially viable at  the village, central hub (Glennallen), and region, including Valdez and statewide.        Recommendations: Ahtna Wood Energy Program  Regional Fuel Supply  Assuming a regional wood energy program is to be developed in the Ahtna Region,  one of the most important decisions facing Ahtna, the CRBRHA and the native  villages is the primary form of wood fuel that will be used.   As discussed above, a  stable supply of fuel is critical to success of any program regardless of scale.     Alternatives:   Pellets are the most expensive densified wood and will sell from the Superior  Pellet Mill in Fairbanks for $295/ton.   The retail price is unknown.  Pellets must  be kept dry but will feed both household pellet stoves as well as district heating  boilers.  A regional supplier could buy directly from the mill and deliver in bulk  to boiler facilities.   Briquettes are less expensive to make than pellets, but there is currently no  production in Alaska.  Different shaped briquettes can be made in the same mill.   Smaller pucks can be fed into pellet boilers as long as the proper feeding  mechanism is installed.   This is potentially one option for adding value to  biomass at a central location in Glennallen.   Wood Chips are the least expensive fuel and can be delivered to boiler facilities  for probably less than $150/ton.  They can only be used in chip‐fired boilers for  district heating systems and require dry storage.   However, chipping is the  beginning of any conversion process for biomass into value added energy  products.  Chips of 25% moisture content or less are preferable for boiler  installations but not required.  Installed chip boilers should have the ability to  burn up to 50% moisture chips.  A regional supplier would have to be developed  and supported if chip fired boilers are to be sustainable.  As a backup, chip  boilers have a very robust feeding mechanism and can be easily converted to  pucks or pellets if needed.  Chip specifications must meet boiler specifications.      Ahtna Regional Biomass Opportunities    Alaska Wood Energy Associates 39    Recommendations for actions    Program development actions   Follow‐up the last two energy summit discussions with proposed actions to  work with and support both dialogue projects with regional sister  organizations such as the housing authority and villages to coordinate  objectives for biomass use.      Develop an integrated energy strategy at the regional level, linked to the  local scales.  This report make several suggestions, however the primary fuel  type and supply system must be decided upon.      Encourage and support the villages and the housing authority in developing  feasibility studies for the various building and district heating opportunities;      Support the development of an integrated regional approach to a sustainable  wood supply for villages, as well as ownership and operations of the various  systems; this does not necessarily mean ownership for Ahtna, but it could.   There is a need to help develop a business structure of ownership and  operations.       Once a prioritized conceptual strategy for energy development has been  established, develop a dynamic plan to begin implementation.  The dynamic  implementation plans will develop specific objectives, tasks, expertise  needed, funding strategies, feasibility studies, timetables and production  outputs.       Project actions   Develop a chip boiler demonstration project at the Ahtna Office and adjacent  buildings.  Contract with current wood products operators in Kenny Lake or  other contractors to provide chips.   Chip specifications should be rigidly set  in the contract and coordinated between the specifications of the boiler and  the contractor.   Grinders will probably not produce adequate chips.   Moisture content should be specified.  The largest mistake made in chip  systems is to not have the chips being delivered match the boiler specs.      A second boiler demonstration project should be developed in partnership  with CRBRHA in a village.  The two largest housing facilities according to  data contained within this report are Chitina and Mentasta Lake.  Both  facilities use about 15,000 gallons annually and both are located in villages  with good configuration for developing district‐heating systems.  Mentasta    Ahtna Regional Biomass Opportunities    Alaska Wood Energy Associates 40  Lake would by far be the best opportunity for displacing the most overall  fuel.     Ahtna should adopt a wait and see approach to developing a pellet mill at  this time.  Superior Pellets in Fairbanks has a capacity 4 times current  installed capacity in the state market.   The mill is banking on growth in the  instate market.  Their biomass supply and cost structure is not assured at  this point, but negotiations are on‐going for a delivered cost of chips at  $50/ton and may have a cost advantage to the Copper River Basin area.      Cost of delivered biomass in the region should be accurately assessed.  The  DNR Forestry has estimated/modeled costs of a green ton of chips to be  $115‐135/ton delivered from state lands.  To assess the actual cost it would  be necessary to work with contractors that would be supplying chips to the  Ahtna demonstration projects as they are developed.       Work aggressively with potential biomass export customers such as Valdez  (that have expressed interest in developing a large CHP system) to  determine any real potential biomass export markets in the state.  Sign an  MOU to work on development of the project and coordinate the type of value  added biomass supply to be used within the region, along with the type of  boiler system to be developed.   Potential supply could be chips, torrefied  chips, pucks or pellets.  Coordination from the outset is key for a successful  project.     The concept of a centralized biomass conversion plant in Glennallen is an  excellent concept and opportunity and should be kept in the planning phase.   Key to the financial success of any conversion plant is guaranteed supply  (which Ahtna has) as well as a delivery cost that is stable and well  understood.  Secondly, a known market size that has some stability is  critical.   The market is not well understood or developed as yet.  There are  two potential markets to support, within region (villages and households)  and export.  As discussed, chips are the starting point for any conversion  business, so by starting with chip boilers within the region the chip market  can be developed and costs understood to develop a central facility.    Centralized Facility Options  Glennallen district heat system.  No matter the type of conversion facility to be  installed, a boiler will be a central part of the process.  This can serve as the basis  for a fairly large district heating system in Glennallen.  Developing a district  heating system will make the financials of developing a conversion facility  significantly better.  Combined heat and power generation.   Wood electrical generation is totally  dependent on cost of chips delivered to the facility and size in MW produced.   Ahtna has not had good reception from the Copper Valley Electric Coop when    Ahtna Regional Biomass Opportunities    Alaska Wood Energy Associates 41  approached with the concept of wood electrical generation.  In addition, there  are expectations that additional year round hydroelectric capacity will be  developed.  Wood electrical can compliment hydro if the hydro is seasonal; if  not, then hydro out‐competes wood in production cost.  Ahtna should be aware  of any significant incentives developed for production of electricity from wood.  Based on the current market, electricity from wood  does not appear to be  feasible.  Pellet Production.   As stated above, unless a very strong reliable export market  is found or developed, Ahtna should track the success of the Superior Pellet Mill  and its cost structure and develop a wait and see approach.   The Superior Mill  could have a cost advantage in using waste wood from other facilities, which  keeps initial supply costs lower than could be developed in the Ahtna Region.  Torrified Wood Chips.  If an export market to a specific facility is developed, such  as a large CHP system in Valdez, then torrefied chips could be the best value  added product for reduction of shipping costs and concentrating BTUs.  This  process probably would not be financially feasible for just supporting village  scale chip district heating systems.  The technology is under development in the  US with the first generation units running.  Improvements in efficiency will be  made over the next few years.   This process should be strongly considered if an  export market begins to develop.  Briquettes and Pucks.   Develop a feasibility study for a Briquette production  plant associated with a district heating system. Briquettes can be used in wood  stoves and are marketable at a similar cost of cordwood.  Pucks can be fed into  chip and pellet boilers if boilers are designed with the correct feeding  mechanisms.  A small briquette plant could produce both briquettes and pucks,  is scalable as a market is developed, and could have a pellet mill added if market  conditions are suitable.   Production costs for briquettes are significantly lower  than the cost for pellet production and can use lower quality whole tree chips or  logging slash.     Phased integrated biomass utilization approach    The purpose of a phased approach is to reduce financial risk, build capacity in the  biomass business, grow with and develop the regional and export markets, and  support the villages with their projects.      1. Develop 2 demonstration chip boiler projects, one at the Ahtna office and  another in Chitina or Mentasta Lake in partnership with CRBRHA;  2. Conduct a feasibility study for a Combine Heat and Power system at the 2  MwE with a district heating system in Glennallen, associated with a  Briquette/puck mill.   Expansion into pellets or torrefied chips could occur  as the biomass market unfolds in the region and state.   Size the operation to  link with current and future demands.   3. Conduct a market and cost analysis with regards to biomass export from the  region.   