HomeMy WebLinkAbout9. Dalson Feasibility StudyThis feasibility assessment considers the potential for heating the Galena Base
Steam Plant with woody biomass from regional forests.
Biomass Energy Feasibility Study HEATING WITH WOOD AT THE GALENA BASE STEAM PLANT
Dalson Energy Inc.
308 G St. Ste 303
Anchorage, Alaska 99501
907-277-7900
8/21/2012
Funding for this report was provided by Louden Tribal Council
2 | Page
Contents
Project Summary ........................................................................................................................................ 3
Summary of Findings ................................................................................................................................ 4
Forest resource ......................................................................................................................................... 4
Project Configuration ................................................................................................................................ 5
General Feasibility ..................................................................................................................................... 5
Next Steps ................................................................................................................................................. 5
Statement of Need ........................................................................................................................................ 7
Review of Regional Biomass Energy Projects ............................................................................................... 8
Select Woodchip Heating Projects, Capital Cost ....................................................................................... 8
Forest Resource Assessment ...................................................................................................................... 10
Harvest Contract ..................................................................................................................................... 12
Existing Facilities, Galena Base Steam Plant ............................................................................................... 13
Boilers & District Heating System ........................................................................................................... 13
Electric Supply and Demand ................................................................................................................... 16
Current Fuel Oil Consumption ................................................................................................................ 17
Boiler Sizing and Biomass Required ............................................................................................................ 18
Biomass energy technologies ..................................................................................................................... 23
Biomass Heat Technologies .................................................................................................................... 23
Combined Heat and Power (CHP) ........................................................................................................... 23
Project Site .................................................................................................................................................. 24
Recommended site configuration ........................................................................................................... 24
Fuel Storage Facilities ............................................................................................................................. 25
Boiler and Ancillary Equipment .............................................................................................................. 26
Ash Disposal ................................................................................................................................................ 26
Harvesting Equipment and Operations ....................................................................................................... 27
Galena Forest Operations ....................................................................................................................... 27
Financial Analysis ........................................................................................................................................ 32
Capital Expenditure (CAPEX) ................................................................................................................... 32
3 | Page
Benefit Cost Analysis ............................................................................................................................... 33
Project Development Process ..................................................................................................................... 33
Specific Recommendations for Galena ................................................................................................... 33
Stakeholder Organization and Decision Making ................................................................................. 33
Project Timeline ...................................................................................................................................... 34
Conclusion ................................................................................................................................................... 35
Appendices .................................................................................................................................................. 36
Appendix A – Case Studies ...................................................................................................................... 36
Appendix B – Example Fuel Supply Contract .......................................................................................... 36
Appendix C – Technology and Wood Fuel Specifications ....................................................................... 36
Appendix D – Map ................................................................................................................................... 36
Appendix E—Alternative Project Configurations .................................................................................... 36
Appendix F—Existing Base Steam Plant Fuel Oil Records ....................................................................... 36
Appendix G – Financial Analysis .............................................................................................................. 36
References .................................................................................................................................................. 37
Figure 1: Capital Costs, Select Biomass Boiler Project. Galena project size shaded in blue. ...................... 10
Figure 2: Poplar stand in vicinity of Galena, and Forester Clare Doig of Forest & Land Management, Inc..
.................................................................................................................................................................... 12
Figure 3: Galena Base Steam Plant district heating loop. Blue buildings are heated by the Steam Plant.
Red buildings are connected to, but not currently heated by, the Steam Plant. Map produced by Phil
Koontz. ........................................................................................................................................................ 14
Figure 5: Heat Loss -- Insulation Thickness 2 inches ................................................................................... 15
Figure 6: Comparative Cost of Fuel Oil vs. Wood Fuels .............................................................................. 18
Figure 7: Stars mark project buildings: Blue Star – Existing Base Steam Plant; Green Star – site for new
construction; Yellow Star—Building 1700. Red Star – Building 1769 (proposed boiler room, chip bin, chip
storage, equipment storage); Purple polygon—potential area for log yard. ............................................. 25
Project Summary
The Louden Tribal Council contracted Dalson Energy Inc. to do a Feasibility Study for biomass energy in
Galena. Based on an initial consultation meeting with the project stakeholders, Dalson Energy personnel
focused the study on a biomass heating project at the Base Steam Plant, located on the former Air Force
base. The primary customer for heat produced at this plant is the Galena City School District.
4 | Page
Dalson Energy biomass specialists Thomas Deerfield and Wynne Auld visited the community May 8 – 10,
and June 13-14 for site assessment. Clare Doig of Forest & Land Management, Inc. also visited Galena on
June 13 -14 to assess the local timber resources and discuss forest management planning with the local
Native village corporation, Gana’A-Yoo Limited, which is the major landowner in the immediate vicinity
of Galena.
Deerfield and Auld made their assessment based on existing reports, available data, and interviews with
local stakeholders and authorities, including the City of Galena, Louden Tribal Council, Galena School
District, Gana’A-Yoo Limited, and facility managers and operators.
There are several other studies and ongoing projects that address various aspects of energy systems in
Galena. Among the most pertinent of such studies is a Forest Stewardship Plan being prepared for Gana-
A’Yoo Limited by Clare Doig of Forest & Land Management, Inc. The Louden Tribal Council has also
contracted with Geographic Resource Solutions, Inc. to develop a forest inventory for all ownerships
within a 25 mile radius of Galena; the purpose of this inventory is to verify the potential volumes of
wood biomass available from all lands within an assumed economically viable radius of Galena.
Contact information of pertinent parties follows:
City - City of Galena
P.O. Box 149
Galena, AK 99741
Phone: 907-656-1301
Greg Moyer, City Manager
Tribe—Louden Tribal council
100 Front Street
Galena, AK 99741
March Runner, Tribal Administrator
Phil Koontz, project contact
School—Galena City School District
PO Box 299
Galena, AK 99741
Phone: (907) 656-1205
Chris Reitan, Superintendent
Summary of Findings
Forest resource
Available information suggests that there are sufficient forest resources to provide the woody biomass
fuel needed for this project. Louden Tribal Council has commissioned a forest inventory of all lands
5 | Page
within 25 miles of Galena, the results of which are expected in late 2012. The local Native village
corporation, Gana-A’ Yoo Limited, owns lands adjacent to Galena which could provide sufficient woody
biomass for the life of this project, if appropriate agreements are engaged between the land/timber
owner and the entity managing this project.
Project Configuration
The recommended project design is a 4-7 MMBTU biomass boiler producing up to 20 psi steam. The
system would use whole tree wood chips < 40% moisture content. Energy efficiency measures are
recommended prior to sizing the boiler.
The project facilities would include a log yard, boiler room, chip bin, long term storage, equipment
storage, and heat loop interconnection. The project would:
Develop 4-6 acres near existing Building 1769 for decking logs, and for some chipping operations
Employ the Building 1769 for the boiler, chip bin, and loader storage
Employ a separate bay in existing Building 1769 for long-term storage of chips (4-6 weeks). Use a
reclaim system to convey fuel between long term storage and chip bin.
Construct an inner building envelope around the boiler room and chip bin, to avoid heating the
entire building.
Install a main steam line to connect to the existing main steam line, and install appropriate
controls to coordinate the operation of the biomass facility and existing Base Steam Plant
General Feasibility
The operation is determined to be technically feasible.
Economic analysis of a harvesting and chipping operation has not been completed as part of this study.
Instead, a range of reasonable values of biomass fuel have been assumed in the biomass energy
economic assessment, with the low value of $90/ green ton and a high value of $275/ green ton.
The combination of a lack of timber harvesting infrastructure (roads, equipment) and the relatively small
scale 1, make it imperative that more detailed analysis of harvesting and processing options be
conducted.
The capital cost of the biomass energy project is estimated to be about $2.7 million. Economic
assessments of the biomass energy operation modeled at $175/ green ton suggest a positive NPV and a
B/C ratio exceeding 7.0. The project is considered feasible and recommended to proceed to design/
build, if the district is financially and operationally prepared to operate a biomass heat energy system.
Next Steps
The next step is to organize the pertinent parties and persons, and to negotiate a harvest contract.
Simultaneously, the next step is to secure project design and build monies. Specifically, Dalson Energy
recommends the applicant apply for a Design/ Build grant through AEA’s Round 6 Renewable Energy
1 The scale is relatively small when the volume of woody biomass needed is compared to the productive capacity
of most harvesting and chipping equipment
6 | Page
Feasibility Fund. Dalson Energy recommends that the Design and Build components be separated so that
AEA can fund them independently if elected.
7 | Page
Statement of Need
Galena is a remote, off-road town on the Yukon River, home to 500 residents and 300+ students through
GILA School District. It is accessible by barge or plane in the summer, and by plane only in the winter
(local transport by snow machine and dog sled). Winter temperatures regularly drop below -40°F.
One of the hubs of the Community is the GILA School District, which is located at the former US Air
Force Base. The Base officially closed in 2010, and all real estate was transferred to the City of Galena.
Since then, the City of Galena has operated a fossil fuel-oil fired steam heating facility, the Galena Base
Steam Plant, which serves 16 buildings on the former Base, many of which are occupied by GILA.
Last year, the Galena Base Steam Plant used approximately 230,000 gallons of fuel oil #1. At $5.60 per
gallon, the value of this fuel was approximately $1,288,000 ($41.48/ MMBTU). Last year, heat customers
of the Steam Plant purchased heat measured as 2.911 million gallons of condensate. At $0.098 per
gallon2 ($3.27/ MMBtu), the revenue provided to the City for heat production was approximately
$300,300. According to these calculations, the revenues of heat production were approximately
$987,000 less than the value of the fuel oil (other O&M costs excluded).
Louden Tribal Council, the City of Galena, and GILA School District have expressed a need to lower the
utility costs of the district heating system, and a vision to use locally-sourced, sustainable energy
resources to create jobs and economic development in Galena.
From this need and vision originated this study, a feasibility of biomass heat at the Galena Steam Base
Plant. The project is a 4 – 7 MMBTU biomass boiler located in Galena, AK, using woody biomass
harvested and processed from local forests. The system will serve the existing steam district heat loop
which serves 16 buildings, the majority of which are occupied by GILA School District. A highly reliable,
robust heating system is needed.
Typically, a community approaches a biomass energy project according to the following steps:
1. Recognition of the potential for using biomass for energy
2. Review of similar installations in the region
3. Research applicable air quality regulations
4. Research the availability of biomass fuel
5. Analyze the potential and cost effectiveness of burning biomass
6. Decide whether to install a biomass system
7. Set up the project structure for installing a wood energy system
8. Select a biomass system
9. Install and commission the selected system
10. Maintain the system for peak performance3
The Community of Galena is currently undertaking Steps 2, 3, 4, and 5.
2 $0.098 per gallon, according to “GILA Steam Condensate Usage FY 2012,” email correspondence with Chris Reitan
and Phil Koontz, June 18, 2012.
3 Maker, Timothy M. “Wood Chip Heating Systems.” Biomass Energy Resource Center. 2004. Pg. 5.
8 | Page
Review of Regional Biomass Energy Projects
Using woody biomass for institutional heating is relatively new in Alaska and generally in the Western
U.S., but is well-established as a commercial heating source in the Northeastern U.S. and many
European countries, especially Austria and Scandinavian countries.
In the Western U.S., the recent movement toward institutional heating with wood was launched by the
“Fuels for Schools” program, designed and administered through the US Department of Agriculture. The
program targeted heating schools in the Northern and Intermountain Regions (Idaho, Montana, North
Dakota, Utah, Wyoming), with the broader focus of developing commercial uses for small diameter and
underutilized woody material to reduce fire hazard. There are currently 14 schools heating with wood as
a result of the Fuels for Schools program, in addition to more than 7 institutions heating with wood in
Oregon.
Fuels for Schools projects are good case studies for Galena. Like Galena, Fuels for Schools projects are
operated by schools and are targeted toward using otherwise unmerchantable timber from regional
forests. Also, like Galena, in some cases the schools have limited options for wood fuel procurement. A
circumstance common to many remote Alaskan communities is the abundance of timber resources
which, due to their remote location, do not support a wood products industry with the associated
infrastructure. This situation requires that an entire supply chain of biomass fuel be developed for any
wood energy project. A variety of case studies from the aforementioned projects are included in
Appendix A.
Reviewing and understanding Alaskan projects is particularly important. Feedback from project
champions is included in the process of reviewing technology, Appendix C.
The following charts review specifications from select projects in the region.
Select Woodchip Heating Projects, Capital Cost
Technology and price ranges are represented in the table below.4 The Galena project is estimated at 4
MMBTU. Based on the projected cost trend, the Galena project would cost $1.4 -- $4 million. However,
none of the projects listed below are off-road communities, and only a few of the projects were
completed in climate zones similar to Galena.
4 Some table information from T.R. Miles “Feasibility Assessment for Wood Heating,” June 25, 2006.
9 | Page
Characteristics of Existing Biomass Boiler Woodchip Projects
Facility Name Location Boiler Size
(MMBTUh output) Project Type
Wood
Fuel
Type
Total Project
Cost
Alaska Gateway
School Tok, AK
5.5 MMBTU
plus electric
generator
Stand-alone steam
boiler & turbine, tied to
existing hot water
system
chips $4,000,000
Delta Greeley
School District Delta, AK 5 MMBTU
boiler
Stand-alone boiler
building tied to existing
hot water system
chips $2,800,000
City of Craig
Craig, AK 4 MMBTU
Stand-alone boiler
building tied to existing
hot water systems
chips $1,400,000
Thompson Falls
School District Thompson
Falls, MT 1.6 MMBTU
Stand-alone boiler
building tied to existing
steam system
chips $455,000
Glacier High
School Kalispell, MT 7 MMBTU
New facility with
integrated wood chip
and natural gas hot
water system
chips $480,000
Victor School
District Victor, MT 2.6 MMBTU
Stand-alone boiler
building tied to existing
steam system
chips $615,000
Philipsburg
School District Philipsburg,
MT 3.87 MMBTU
Stand-alone boiler
building tied to existing
hot water system
chips $684,000
Darby School
District Darby, MT 3 MMBTU
Stand-alone boiler
building tied to existing
hot water systems
chips $970,000
Council School
District
Council, ID 1.875 MMBTU
Stand-alone boiler
building tied to new
heat pump system chips
Incorporated
into
performance
contract
Kellogg School
District Kellogg, ID 2 MMBTU
Stand-alone boiler
building tied to existing
hot water system chips
Incorporated
into
performance
contract
White Pine
School District
Ely, NV 3 MMBTU
Stand-alone boiler
building tied to existing
steam system chips
Incorporated
into
performance
contract
UM Western Dillon, MT 14 MMBTU Addition to existing
steam system chips $1,400,000
Boulder County
Parks and Open
Space
Longmount,
CO 3.3 MMBTU
New building
construction chips $1,034,000
10 | Page
Figure 1: Capital Costs, Select Biomass Boiler Project. Galena project size shaded in blue.
Variations in capital cost are primarily due building costs and heat distribution costs. For example, Delta
Greely required high cost chip storage in boiler building. Steam systems are also more expensive than
hot water systems. Steams systems greater than 15 psi are designated high pressure systems and have
greater capital costs as well as O&M costs than steam systems less than 15 psi.
Forest Resource Assessment
The Tanana Chiefs Conference has conducted several timber inventory projects on Native corporation
lands in the vicinity of Galena. In June 2012, that inventory information was re-analyzed to produce an
estimate of the air dried tons (20-25% MC) of biomass in log form available from Gana-A’ Yoo Limited
land within various radii of Galena, and also an estimate of the delivered cost of those logs. The
estimate of “Total Cost $/Ton” is for wood chips delivered to Galena; $20 dollars per ton has been
added to the original analysis to account for the cost of chipping. This is the best available estimate as of
June 2012; however, it must be remembered that this is information developed in a modeling exercise
using a GIS system and is therefore general in nature, and may be a more appropriate estimate for a
larger scale project – it may or may not reflect actual conditions for a specific harvest unit, or specific
harvesting conditions. Estimates of delivered biomass costs modeled for other off-the-road system
communities have arrived at costs of $175-$200/ton. The actual cost of delivered biomass will depend
on the specific equipment configuration, harvest location, timing of harvest operations, and weather.
$0
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
$3,500,000
$4,000,000
$4,500,000
0 2 4 6 8 10 12 14 16Capital CostMMBTU
1.6
2.6
3
3
3.3
3.87
4
5
5.5
7
14
11 | Page
Other ownerships, such as the BLM, Military, and USFWS were included in the analysis; however the
military volumes are relatively low, and the BLM and USFWS volumes occur farther from Galena.
The species of trees to be targeted for this biomass project should be balsam poplar (cottonwood),
aspen, and birch. Both white and black spruce will be utilized when it occurs in harvest units. When
spruce logs suitable for house logs or saw logs are harvested, they should be sold for the higher value
product, rather than chipped. The market value of house logs or saw logs will likely exceed the cost of
harvesting, resulting in a positive financial return to the project.
Summary of the results of the Tanana Chiefs Conference biomass analysis:*
AAC - Tons/year percentage by ownership
Total Cost Total AAC Native State of
$/Ton air -dry tons (Tons/Year) Acreage Gana -A' Yoo Allotments Doyon Alaska
$60-$80 117,101 2,775 4,158 95% 0% 5% 0%
$80-$100 577,037 13,658 22,751 68% 2% 20% 11%
$100-$120 990,710 25,179 42,110 35% 2% 41% 17%
$120-$140 1,460,404 42,656 66,090 34% 2% 40% 15%
$140-$160 1,788,112 55,749 95,042 23% 2% 39% 20%
Proximity AAC - Tons/year percentage by ownership
to Galena Total AAC Native State of
(miles) air -dry tons (Tons/Year) Acreage Gana -A' Yoo Allotments Doyon Alaska
0-1 mile 16,382 471 983 100% 0% 0% 0%
1-2 miles 85,510 2,129 4,114 100% 0% 0% 0%
2-3 miles 113,535 2,820 5,167 89% 0% 10% 0%
3-4 miles 150,166 3,774 6,444 75% 2% 25% 0%
4-5 miles 204,301 4,885 8,576 65% 4% 20% 13%
5-6 miles 251,391 5,729 10,745 41% 3% 32% 24%
*Note:
AAC: Annual Allowable Cut
Air-dry tons: Estimated 20% to 25% moisture content
$20/ton added for estimated chipping cost
12 | Page
Figure 2: Poplar stand in vicinity of Galena, and Forester Clare Doig of Forest & Land Management, Inc..
Harvest Contract
The success of any biomass energy project depends on long-term biomass fuel supply agreements from
landowners. Dalson Energy recommends that Louden Tribal Council, the City of Galena, and GILA School
District act as a single entity in coordinating a harvest contract(s). This coordination should start by
approaching the most significant landowner in the project area, Gana-A’Yoo Limited, through a formal,
written request, submitted as soon as possible.
The request should be made for a contract to allow harvest of a specific amount of timber on a specific
area. The projected amount needed per year is up to 2,500 tons. Over the 20 year project lifetime, the
contract would allow for up to 50,000 tons, commencing in the fall of 2013. The harvest areas would be
designated by Gana-A’Yoo Limited.
Such a contract would include provisions to protect both parties, including:
1) Documentable procedures for measuring and accounting for the amount of wood harvested and
payment schedules.
2) Performance guarantees, liability and property damage insurance
3) Provisions for inspections of harvest areas by Landowner and contract compliance enforcement.
The request should also emphasize awareness of the need to not incentivize competition with
residential firewood gatherers, or encourage trespass and timber theft.
13 | Page
Fuels for Schools program has a typical fuel supply contract, some aspects of which would apply to the
project. The example supply contract is included in Appendix B.
With regard to formal organization of the Council, City, and District, a number of legal arrangements are
possible. One of these entities could be contracted to perform wood procurement services to the other
entities, or a new organizational structure could be formed altogether. In any case, Dalson Energy
recommends a Single Point of Contact be appointed to represent all three entities to perform harvest
contract(s).
Existing Facilities, Galena Base Steam Plant
Boilers & District Heating System
The old Air Force base is primarily heated by the Central Steam Plant (Building #1499). Within the Steam
Plant, steam generation is performed by three low pressure fire tube steam boilers, all Clever Brooks
CB100X-400Z, with air atomizing, fully modulating, automatic burners. The boilers are rated at 16,735
MBH input and 150 PSIG; they operate at 14 -- 20 PSIG.
Currently a single boiler can meet the district’s heat demand. Heat generated in the Central Steam Plant
is the primary source of heat for both space heating and domestic hot water across the district, which is
comprised of about 15 buildings. The primary customer is the GILA School District, with about 85% of
metered heat being charged to GILA5.
In recent years a variety of consultants have reviewed the existing heating system. One engineering
firm, PDC Engineering, recommended replacing burners on the existing boilers, some upgrades for
unattended operation, control valves to allow off-line boiler isolation, improvements to plant auxiliary
systems (such as boiler feedwater), new controls and upgraded fire alarm and suppression systems.
These upgrades were intended to improve efficiency, reduce risk, and reduce operating costs by
enabling remote monitoring from the City power plant.6, 7
5 Phone conversation with Phil Koontz, April 2012.
6 Email correspondence with Steve Theno, PDC Engineers. June 15, 2012.
7 PDC Engineering also suggested considering redesigning the existing heating system in a variety of ways. First,
consider installing hydronic boilers in a few of the main buildings (e.g. Composite Building, Two Seasons, and
Ptarmagin Hall, which comprise 60% of district heat load), and linking the boilers with a new hydronic distribution
loop. The new line would have better heat storage capacity and back-up capacity. However, this design would have
significant upfront capital costs, and require pumping heated water to serve project buildings.
14 | Page
Figure 3: Galena Base Steam Plant district heating loop. Blue buildings are heated by the Steam Plant. Red buildings are
connected to, but not currently heated by, the Steam Plant. Map produced by Phil Koontz.
Steam heat is currently distributed by a district heating system. There are few known specifications for
the heat system, and the resources allotted for this study do not include time to survey the network.
However, the following information is known:
• There are some segments of pipe which are known to be un-insulated or under-insulated. Pipe
should be insulated according to certain recommended specifications for the climate zone. Only
some of the pipe are accessible.
• Condensate charged to each facility is known. During the 2011 – 2012 School Year, customers
consumed steam in the equivalent of 2,911,293 gallons, for a total of 24,192,293 pounds of
steam.
15 | Page
The configuration and amount of insulation on the steam lines is unknown. Therefore, the potential
energy savings from properly insulating the steam lines are unknown. However, the diameter and length
of the heat distribution lines can be estimated from the site map, Figure 5. Local maintenance staff 8
suggested that the line’s average insulation thickness may be about 2”.
Although an analysis of the payback on insulation improvements is outside the scope of the study, it is
well documented that insulation usually the most cost effective way to reduce energy costs, particularly
in regions with Galena’s climate and fuel costs. Improved insulation also affects the biomass project
directly in a number of ways, as summarized below:
• Sizing a biomass boiler is particularly important, since these boilers have larger turn down ratios
than their fuel oil counterparts, and take longer to start and stop. Where there are opportunities
for improved efficiency on the downstream side, the Consultant recommends evaluating and
undertaking these opportunities before sizing the biomass boiler plant.
• High pressure steam boilers (> 15 psi) are much more expensive to purchase and operate and
maintain than low pressure steam boilers (< 15 psi). If it is possible to reliably heat the system
with a low pressure boiler, it should be the preferred choice. Efficiency improvements may be
significant enough to reduce the pressure rating of the boiler.
8 Phone conversation with Kim Eschenhower, July 31, 2012, 10:00 a.m.
Figure 4: Heat Loss -- Insulation Thickness 2 inches
16 | Page
In addition to improving the steam lines insulation, Dalson Energy recommends the School aggressively
identify opportunities to take buildings offline, adjust control settings or change operating hours, and/or
further weatherize buildings to reduce heat demand. The value of this energy efficiency and
conservation work is very likely the most effective way to reduce heating costs.
Electric Supply and Demand
Electricity for the entire community is supplied from the City power plant. There are six diesel
generators, all of which are operable. There is no SCADA system (remote monitoring) in use. Peak
demand is 1,100 – 1,200 kW in the winter, but less than 500 kW in the summer.
Electricity to the Base is supplied via a 23 kV transformer and transmission line. Electricity to the Base
Steam Plant has been generally reliable. Power outages occur only occasionally, and typically last 15 –
20 minutes.
There are three generators on site at the Base, but only one is operational – a Cat 750 kW unit. The base
electrical generator is not used at this time. The base generator is not able to supply electricity to the
Old and New Galena townsites without switchgear upgrades.
The current electric rate is $0.67/kWh. The Base biomass project will be charged for electricity at this
rate.
17 | Page
Current Fuel Oil Consumption
The current system uses about 230,000 gallons fuel oil #1 per year. Over the past 5 years, fuel oil usage declined as buildings were taken offline
(441K in year 2005, 405K in 2006, 347K in 2007, 3238K in 2008, and 250K in 2009). In 2011 – 2012, the system used 232,943 gallons of fuel oil
#1. In future years, fuel consumption is expected to be 230,000 gallons per year or less.
In 2012 records, daily fuel oil consumption varied from 500 -- 1,357 gallons of fuel oil #1 per day. Daily peak demand for steam is about
16,000,000 lbs per day, which required 1,378 gallons of fuel oil #1. Over 50% of this load of load is demanded during 4 months, November 1 –
February 29 9.
On an hourly basis, the steam plant operates from an estimated 2.1 – 9 MMBTU/hr. Last year, winter lows regularly pushed the steam boilers to
7 MMBTU/hr peak demand. During the last heating season (August 2011- May 2012), peak demand occurred on January 2, 2012 at 4 a.m, when
the boiler produced 6,723 lbs. of 20 psig steam.
Fuel oil records by day are included in Appendix F.
9 Records obtained from Base Steam Plant manager, Kim Eschenhower. May and June 2012.
0
200
400
600
800
1000
1200
1400
1600
1800
8/8/20118/11/20118/14/20118/17/20118/20/20118/23/20118/26/20118/29/20119/1/20119/4/20119/7/20119/10/20119/13/20119/16/20119/19/20119/22/20119/25/20119/28/201110/1/201110/4/201110/7/201110/10/201110/13/201110/16/201110/19/201110/22/201110/25/201110/28/201110/31/201111/3/201111/6/201111/9/201111/12/201111/15/201111/18/201111/21/201111/24/201111/27/201111/30/201112/3/201112/6/201112/9/201112/12/201112/15/201112/18/201112/21/201112/24/201112/27/201112/30/20111/2/20121/5/20121/8/20121/11/20121/14/20121/17/20121/20/20121/23/20121/26/20121/29/20122/1/20122/4/20122/7/20122/10/20122/13/20122/16/20122/19/20122/22/20122/25/20122/28/20123/2/20123/5/20123/8/20123/11/20123/14/20123/17/20123/20/20123/23/20123/26/20128/8/20118/11/20118/14/20118/17/20118/20/20118/23/20118/26/20118/29/20119/1/20119/4/20119/7/20119/10/20119/13/20119/16/20119/19/20119/22/20119/25/20119/28/201110/1/201110/4/2011Gallons per day
2011-2012 Records
Gallons per day
RECORDS
18 | Page
Boiler Sizing and Biomass Required
Typically biomass boilers are sized smaller than peak demand, and fossil fuel boilers meet peak load and act as back up.
The exact boiler sizing should be completed by engineers in the design process.
It appears that, given the existing load and the potential for improved heat loop efficiency, a boiler sized 4 – 7 MMBTU
would be most appropriate.
The amount of biomass required to satisfy heat demand will depend on a number of variables, including the species of
wood, moisture content, and other factors. The biomass heating system’s turn-down ratio is quite important; this metric
is the ratio of full capacity to partial capacity under which the equipment is able to operate efficiently. Since no steam
will be stored, the turn down ratio is one of the most important elements in determining the amount of load to be
served by the biomass heating system. Typically, this figure will be 4:1 or 3:1, meaning a 6 MMBTU system could
comfortably operate at 2 MMBTU output, for example.
There are a number of metrics to measure “heating values,” such as high heating value (HHV), gross heating value
(GHV), recoverable heating value (RHV), and deliverable heating value (DHV) that may be applied to project analysis at
various stages (Parrent, 2008).
This report used Poplar at 40% moisture content (MC), calculated on the green wet weight basis as the representative
fuel. This is based on the relative abundance of Poplar in the area and that natural regeneration via coppice sprouting
that will occur after harvest.
The manufactured fuel will be whole tree wood chips with bark, up to 40% MC. Balsam Poplar has an oven dry calorific
value of 0.008853 btu/ lb (18.5 MJ/kg); an ash value of 1.8% dry basis, and an ash fusion temperature (melting point) of
2,435°F (1,335°C).
Figure 5: Comparative Cost of Fuel Oil vs. Wood Fuels
Fuel RVH (btu)Conversion
Efficiency DVH (btu)Price per unit $ per MMBTU
(delivered)
5.60$ 52.2$
6.08$ 56.7$
6.59$ 61.5$
$70 13.07$
$100 18.67$
$130 24.28$
$70 8.66$
$100 12.38$
$130 16.09$
*
**
Comparative Cost of Fuel Oil vs. Wood Fuels
Parrent, Dan. "Preliminary Feasibility Assessment of High Efficiency, Low Emission
Wood Heating in Tok, Alaska." Juneau Economic Development Council. 2008.
Fuel Oil #1 (per
gallon)135,000 80%107,200
White Spruce
(per ton, 40% MC)*7.65 million 70%5.355 million
Ince, Peter J. "How to Estimate Recoverable Heat Energy in Wood or Bark Fuels."
USDA Forest Products Laboratory. 1979.
Poplar wood with a energy value of 9,630 btu/oven dry lb.
Poplar
(per ton, 40% MC)**11.56 million 70%8.08 million
19 | Page
20 | Page
The following chart was completed 10 using operating data provided by the Galena Base Steam Plant.
Galena Base Biomass Boiler
Heat Capacity MMBtu 4.0 6.0 8.0
Fuel MC % <40 <40 <40
Fuel heating
value, as fired MMBTU/ton 8.08 8.08 8.08
Maximum fuel
required
tons/ hr
(40% MC) 0.50 0.74 0.99
Maximum fuel
required cu ft / hr 50 74 99
10 Dalson Energy first obtained gallons of fuel oil #1 used per day over the 2011-2012 operating season. Then, using real peak hourly load data for 5
days provided by the Galena Base Steam Plant, Dalson estimated the daily peak load throughout the operating season. Next, Dalson compared the
daily peak load (estimated) and total daily load (actual) throughout 2011-2012 operating season to estimate the load that could be provided by the
biomass systems of certain sizes.
21 | Page
0.00
50.00
100.00
150.00
200.00
250.00
8/8/20118/12/20118/16/20118/20/20118/24/20118/28/20119/1/20119/5/20119/9/20119/13/20119/17/20119/21/20119/25/20119/29/201110/3/201110/7/201110/11/201110/15/201110/19/201110/23/201110/27/201110/31/201111/4/201111/8/201111/12/201111/16/201111/20/201111/24/201111/28/201112/2/201112/6/201112/10/201112/14/201112/18/201112/22/201112/26/201112/30/20111/3/20121/7/20121/11/20121/15/20121/19/20121/23/20121/27/20121/31/20122/4/20122/8/20122/12/20122/16/20122/20/20122/24/20122/28/20123/3/20123/7/20123/11/20123/15/20123/19/20123/23/20123/27/20128/10/20118/14/20118/18/20118/22/20118/26/20118/30/20119/3/20119/7/20119/11/20119/15/20119/19/20119/23/20119/27/201110/1/2011Projected MMBTU per day
6 MMBTU biomass plant with oil peak
Daily Biomass Demand
6 MMBTU system
Daily Oil Demand
6 MMBTU system
0.002.004.006.008.0010.0012.0014.0016.00
8/8/20118/11/20118/14/20118/17/20118/20/20118/23/20118/26/20118/29/20119/1/20119/4/20119/7/20119/10/20119/13/20119/16/20119/19/20119/22/20119/25/20119/28/201110/1/201110/4/201110/7/201110/10/201110/13/201110/16/201110/19/201110/22/201110/25/201110/28/201110/31/201111/3/201111/6/201111/9/201111/12/201111/15/201111/18/201111/21/201111/24/201111/27/201111/30/201112/3/201112/6/201112/9/201112/12/201112/15/201112/18/201112/21/201112/24/201112/27/201112/30/20111/2/20121/5/20121/8/20121/11/20121/14/20121/17/20121/20/20121/23/20121/26/20121/29/20122/1/20122/4/20122/7/20122/10/20122/13/20122/16/20122/19/20122/22/20122/25/20122/28/20123/2/20123/5/20123/8/20123/11/20123/14/20123/17/20123/20/20123/23/20123/26/20128/8/20118/11/20118/14/20118/17/20118/20/20118/23/20118/26/20118/29/20119/1/20119/4/20119/7/20119/10/20119/13/20119/16/20119/19/20119/22/20119/25/20119/28/201110/1/201110/4/2011Estimated Daily Biomass Demand, 6 MMBTU system
(tons)
Daily Biomass Demand
(tons)
0
200
400
600
800
1000
1200
1400
1600
8/8/20118/12/20118/16/20118/20/20118/24/20118/28/20119/1/20119/5/20119/9/20119/13/20119/17/20119/21/20119/25/20119/29/201110/3/201110/7/201110/11/201110/15/201110/19/201110/23/201110/27/201110/31/201111/4/201111/8/201111/12/201111/16/201111/20/201111/24/201111/28/201112/2/201112/6/201112/10/201112/14/201112/18/201112/22/201112/26/201112/30/20111/3/20121/7/20121/11/20121/15/20121/19/20121/23/20121/27/20121/31/20122/4/20122/8/20122/12/20122/16/20122/20/20122/24/20122/28/20123/3/20123/7/20123/11/20123/15/20123/19/20123/23/20123/27/20128/10/20118/14/20118/18/20118/22/20118/26/20118/30/20119/3/20119/7/20119/11/20119/15/20119/19/20119/23/20119/27/201110/1/2011Estimated Daily Volume Biomass, 6 MMBTU system
(cu. ft.)
Daily Volume Biomass, in cu. ft.
(stored at 20 lbs / cu ft)
22 | Page
$-
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
8/8/20118/11/20118/14/20118/17/20118/20/20118/23/20118/26/20118/29/20119/1/20119/4/20119/7/20119/10/20119/13/20119/16/20119/19/20119/22/20119/25/20119/28/201110/1/201110/4/201110/7/201110/10/201110/13/201110/16/201110/19/201110/22/201110/25/201110/28/201110/31/201111/3/201111/6/201111/9/201111/12/201111/15/201111/18/201111/21/201111/24/201111/27/201111/30/201112/3/201112/6/201112/9/201112/12/201112/15/201112/18/201112/21/201112/24/201112/27/201112/30/20111/2/20121/5/20121/8/20121/11/20121/14/20121/17/20121/20/20121/23/20121/26/20121/29/20122/1/20122/4/20122/7/20122/10/20122/13/20122/16/20122/19/20122/22/20122/25/20122/28/20123/2/20123/5/20123/8/20123/11/20123/14/20123/17/20123/20/20123/23/20123/26/20128/8/20118/11/20118/14/20118/17/20118/20/20118/23/20118/26/20118/29/20119/1/20119/4/20119/7/20119/10/20119/13/20119/16/20119/19/20119/22/20119/25/20119/28/201110/1/201110/4/2011Projected Fuel Costs
per day ($), 6 MMBTU Biomass
Daily Biomass
(at $175/ ton)
Daily Oil
(@ $5.63/ gal)
23 | Page
Biomass energy technologies
As part of the Scope of Work, Dalson Energy was asked to consider all appropriate biomass thermal options, and
consider biomass CHP options. Biomass energy technologies must be evaluated on a total value basis, not simply the
lowest price. Reliability issues – and associated operating costs – are common concerns for biomass heating systems.
Matching fuel to the boiler fuel specifications, as well as consistency of fuel, is crucial to project success.
Biomass Heat Technologies
Applicable biomass heat technologies are direct combustion and gasification. Direct combustion takes place in fixed bed,
fluidized bed, or, at an industrial scale, moving grate boiler. Due to the scale of projects in Galena, the available
commercial technology that best applies is a fixed bed boiler or small moving grate.
Fixed bed furnaces supply combustion air from below the grate and above the grate. Ash is pushed off the grate removal
by incoming fuel. A variety of grates can be used, including fixed, moving, rotating, and vibratory grates.
In the gasification process, part of the biomass is burned to heat the remainder and convert the solid biomass to
combustible gas. Producer gas, or wood gas, is released from the biomass material, and can be used in a variety of ways.
To produce heat, producer gas is burned in a combustion chamber. To generate electricity, the biomass is burned in an
internal combustion engine.
Dalson Energy recommends evaluating the following characteristics of a technology in the selection process:
appropriateness of the technology to the biomass fuel available and the energy demands at the steam base plant;
proven, commercial technology; the vendor’s strong reputation for service, especially in rural Alaska; product warranty;
vendor and manufacturing company “track record”; remote monitoring capability; robustness of the system (fewer
moving parts while maintaining high efficiency is preferred), and availability of spare parts. All other things being equal,
boiler technology may be preferred that has similar design to the existing steam plant boilers, which are firetube, for
O&M reasons.
Both steam and hot water boilers and gasifiers were considered for the Galena project. Commercial steam systems
include: Messersmith, King Coal, Chiptec, Decton, Hurst, Blue Flame Stoker, and Biomass Combustion Technologies.
Commercial hot water systems include most of the technologies stated above, and KOB/ Viessman. Of these
technologies, the following are known to be installed in Alaska: Messersmith, King Coal, Chiptec, Decton, Hurst, KOB/
Viessmann. Additionally, Binder and KOB/ Viessman are installed in rural and remote applications in the Northwestern
Territories of Canada.
Please see Appendix C for all Supplier information and documentation.
Combined Heat and Power (CHP)
There are no known commercially viable CHP technologies at the scale Galena demands, <1.5 MW that are not
associated with very large heat demands (e.g. >20 MMBtuh). The most widely-proven biomass electricity technology
uses a biomass boiler and steam turbine to generate electricity. This technology can be used at almost any scale, but
generally is prohibitively expensive at sizes < 2 MW, in both capital cost and operating and maintenance (O&M) costs.
Additionally, steam turbines at this scale can have very low efficiency 10 – 15% efficiency (22-34,000 Btu/kWh),
compared with large biomass plants at 22-24% efficiency (15,000 Btu/kWh). This low efficiency necessitates a large
thermal load to capture the value of the heat produced in the process. On a 1 MW electric turbine, the amount of
available thermal energy is about 14 MMBTU/hr.
24 | Page
One technology that may eventually be applicable to a biomass heating system of the scale in Galena is organic rankine
cycle generators (ORC). These generators are manufactured at relatively small scales, often less than 250 kWe. ORC
generators use the difference in temperature to boil a refrigerant, which spins a turbine or a twin screw. The refrigerant
recondenses and then returns to the heat source. Please see the paper on ORC in biomass plants, in Appendix C. ORC
systems can be expensive if a continuous demand for waste heat is not available.
The key to cost-effective generation from ORC generators is either a very inexpensive heat source, (such as geothermal
or waste heat), or a valuable use for the excess heat produced to run the ORC, since 15-20% of the energy in the heat
carrier( e.g. thermal oil) is converted to electricity, 2% is lost and 78% is available as captured “waste” heat) . In some
instances, biomass can be a very inexpensive source of heat (< $20/green ton, or $3 per MMBTU), usually when
obtained as residuals from a sawmill or pulp plant. .In Galena, wood fuel costs are relatively expensive. Please see the
forest resource section.
Most ORC systems researched are considered pre-commercial in North America. One primary concern is pumping costs
(parasitic load) that undercut net electric generation, and generally require and additional separate generator. All
commercial units state parasitic load of the unit.
Project Site
A biomass project is comprised of a number of components, each requiring unique sites and locations:
• Harvesting equipment and operations
• Chip manufacturing operations
• Fuel Storage Facility
• Boiler room & boiler appliance
• Fuel handling equipment
• A chimney
• Any necessary gas cleaning devices
• Ash disposal equipment
• Controls to optimize operation
• Driveways necessary for access
• Equipment storage (warm storage)
• Connection to the existing heat district system
Recommended site configuration
The recommended site configuration is the following:
Develop 4-6 acres near Building 1769 for decking logs, and for some chipping operations
Employ Building 1769 for the boiler, chip bin, and loader storage
Employ a separate bay in Building 1769 for long-term storage of chips (4-6 weeks). Use a reclaim system to
automatically convey fuel between long term storage and chip bin.
Construct an inner building envelope around the boiler room and chip bin, to avoid heating the entire building.
Install a main steam line to connect to the existing main steam line, and install appropriate controls to
coordinate the operation of the biomass facility and existing Base Steam Plant
25 | Page
The configuration is discussed below. Alternative configurations are discussed in Appendix E.
Figure 6: Stars mark project buildings: Blue Star – Existing Base Steam Plant; Green Star – site for new construction; Yellow Star—Building 1700.
Red Star – Building 1769 (proposed boiler room, chip bin, chip storage, equipment storage); Purple polygon—potential area for log yard.
Fuel Storage Facilities
Both long term and short term storage facilities are needed. Over the course of 1 year, the project will need a maximum
of 230,000 cu. ft. of fuel.
Fuel will be stored in several different ways:
Harvested and decked logs, seasoned in the woods
Decked logs and logging slash piled in the yard adjacent to the site
Wood chips stored in a long-term storage facility
Wood chips in the chip bin, within the boiler room
With this scheme, a chipper can regularly manufacture wood chips for the facility from logs decked in the adjacent yard.
In many cases, the chipper will be able to chip right into the storage bin, without any additional handling required.
During the coldest part of the year, the project will draw on a reserve of fuel, also stored in building 1769, using a large
front end loader to load a chip trailer.
As a precaution, fire prevention considerations should be incorporated into the design of the log yard. Consultation with
the State Fire Marshall will be a necessary step in the design process. In some cases there may be required clear space
between log decks and buildings. The existing tanks and infrastructure adjacent to the yard may need to be removed.
Consultation with the Fire Marshall is the next step in the design process.
26 | Page
Building 1769 was chosen for the following reasons:
It is large enough capacity to comfortably hold a chip bin, boiler room, and long term chip storage, in addition to
warm storage for a loader
The roof, floor, and structure appear to be in good condition
The East and South garage doors are large enough to accommodate most equipment
It is reported that the foundation was excavated 11 feet and backfilled, providing protection from permafrost
It has easy access to heat from the existing utilidor, if heat is needed
It has easy access to the utilidor to run a main steam line from the biomass facility to the existing Base Steam
Plant
The existing building shell can be employed, avoiding some construction costs
It is accessible for wood fuel deliveries
The building will need the following retrofits:
Core sampling of pad to ensure suitability
Drain system
Building envelope around boiler room
Sprinkler systems, for fire suppression
Dust curtain between chip bin and boiler space
Boiler and Ancillary Equipment
Boiler vendors generally supply a number of ancillary devices in addition to the boiler itself, including the following:
• Boiler appliance
• Fuel handling equipment for chip bin
• Screens (recommended)
• Any necessary gas cleaning devices
• Ash disposal equipment
Often, the following are supplied by the general contractor:
• Boiler room construction or retrofit
• Controls to optimize operation
• A chimney
• Fire protection devices
A review of the quotes supplied in Appendix C indicates specific project components supplied by individual vendors.
Ash Disposal
Every ton of green biomass produces about 25 pounds of ash. At 2,500 tons of biomass per year, the project is expected
to produce about 31 tons of ash annually.
When only virgin wood is combusted, there are no toxic residues. Ash can safely be spread back in the forest as a soil
amendment.
27 | Page
All of the systems considered have automatic de-ashing from the boiler itself. Handling with wheeled carts or a small
loader will then be necessary.
Harvesting Equipment and Operations
Without existing commercial harvesting and chipping operations in Galena, the project manager will need to pay
particular attention to developing the harvest contract and fuel manufacturing operations. Fuel sourcing and quality is
one of the cornerstones of the project. It is also one of the most commonly cited reasons for system downtime and
higher than anticipated maintenance costs among existing regional project maintenance personnel. Please review the
project case studies, Appendix A.
Harvesting and equipment operations are considered separate capital and operating expenditures from the biomass
heat plant.
Galena Forest Operations
The following will need to be done to secure a supply of timber in preparation for a biomass harvesting operation:
1. Secure a written timber sale contract with the owner of the land and timber.
2. Locate and mark on the ground the roads, landings, and unit boundaries for the harvest unit(s).
3. Prepare a map of the harvest units showing road locations, landings, streams, terrain features and harvest unit
boundaries.
4. File a Detailed Plan of Operations with the State of Alaska Division of Forestry.
Once the timber sale contract has been secured, and the harvest units have been mapped, a suitable logging contractor
can be selected, either by a competitive bidding process or by negotiation. A written logging and biomass delivery
contract would then be prepared and signed.
Equipment that will be necessary for a harvesting operation includes:
Feller/buncher: Tracked excavator with shears or saw (the Hitachi EX 110 and shears located in Galena may be suitable).
Tracked skidder: Such as a Caterpillar 527 with grapples, or similar sized machine. This machine will be utilized for
building roads, as well as skidding logs and trees from the feller buncher to the landing. The Cat 517 and 527 tracked
28 | Page
skidders are no longer manufactured, however used machines are available, and can be re-built to Caterpillar
specifications.
Chipper: A mobile chipper mounted on wheels or tracks, such as the Bandit 1850, capable of chipping whole trees.
Several different configurations of this machine are possible – including the equipment to allow it to be self-loading.
Tracked log loader: (The Hitachi EX 110 equipped with log grapples would be suitable) for loading the chipper.
Chip hauling Truck: Either a hook-lift truck with 3 or more 30-40 cubic yard bins, or two (or more) large dump trucks with
30-40 cubic yard capacity.
29 | Page
Primary considerations in the selection of equipment include:
1) Except for the trucks, prefer tracks over rubber tires; (a) for lower ground pressure and less soil disturbance, (b)
large tires require specialized equipment and skills for changing and repair which may not be available in remote
locations.
2) Appropriately size the equipment for the most typical size of trees to be processed. Less horse power generally
means less fuel consumption.
3) The harvesting operation in Galena will generally require less production than the capacity of the equipment;
therefore, wherever one piece of equipment can perform two functions (such as skidding and road building, or
felling and loading the chipper) at separate times with different attachments, the project should be scheduled to
accomplish this.
4) Large dump trucks (such as shown above or hook-lift trucks with bins) have the advantage of requiring lower
quality roads than traditional chip truck and trailer combinations.
5) Falling and skidding material to the landing will probably be accomplished six months to a year before the actual
chipping, to allow time for the trees to dry and lose their green needles and leaves.
6) Some advantages of chipping over grinding include: a) chipping cuts the wood instead of tearing it, requiring less
horsepower (lower cost) and producing a uniform fuel product; b) chipping poplar will cut the wood, whereas
grinding may result in a fuzzy product; c) chipping frozen wood will be less energy intensive than grinding it; and
d) some chipper models have knives that can be sharpened on the machine.
Chipping in the woods would facilitate the recovery of more biomass in the form of tops and limbs, however because of
the small scale of operations relative to the capacity of the Chipper, locating the chipper at a log storage area near the
proposed wood biomass power plant and hauling the logs and logging slash to that location has several advantages: 1)
eliminate mobilizing the machine to the woods for very short periods of time, 2) eliminate security concerns about
leaving the untended machine in the woods for an extended period of time, 3) reduce the size of chip storage needed,
as the chipper will be near the power plant and chip storage area and can chip as material is needed and weather
conditions are favorable.
The chipper will need to be able to accommodate up to 18” large end diameter whole logs. At twenty to twenty-five
tons per hour production rate, for this project the chipper will only need to operate about 125 hours for a year’s
production.
Harvesting scenario
30 | Page
Assuming an average of 25 tons per acre (based on TCC 1990 inventory), the annual acreage needed for harvest will be
approximately 100 acres. Depending on topography, density of the timber stand, and equipment configuration, access
road development, harvesting (falling, tree length yarding to the landing, and decking at the landing) could take three to
four months of continuous operation.
Harvesting operations will be conducted in the winter, with a few exceptions, to take advantage of the ability to use
snow roads rather than having to build more expensive gravel roads.
The material can be decked on the landing for drying and hauled to the chipper in Galena after it has been decked for six
to nine months. Some material can be decked in the vicinity of the chipper for chipping as needed.
Hauling of logs, as well as tops and limbs can be accomplished using large dump trucks, or more conventional log trucks.
The chipper can be set up to chip directly into the day bin at the power plant, directly into the chip storage building, or
into a chip trailer with walking floor for self- unloading into the day bin.
Where possible, using locally available equipment that has other applications will promote favorable economics for this
project. It is likely that the harvesting and delivery of logs to the chipping location can be accomplished with equipment
existing in Galena, or with minor additions, such as log handling grapples. The chipper, however, will have to be
acquired for this project, and will likely only be used for less than a month total time each year. The range of cost for
suitable chippers, from used to new is $150,000 to $350,000. Movement of chips from the chip storage area to the day
bin can be accomplished by loading the chips into a “live floor trailer” with a wheel loader, or chipping directly into the
self-unloading trailer.
Chip Manufacturing Operations
In order to develop a reliable estimate of harvesting costs, Dalson Energy recommends harvesting and processing one or
more test plots to obtain realistic harvesting and manufacturing data. The test plot analysis can be conducted similar to
the analysis recently conducted by DNR Tok Forestry 11, which was undertaken on several one-acre fixed plots of
harvested trees.
Local test plot analysis will focus on road construction, harvesting, and decking of material to be chipped later. A test of
chipping poplar can be accomplished somewhere else by contracting with a contractor that has a chipper and can
acquire poplar logs for chipping. (This may have to be done in Fairbanks or the Mat-Su Valley) In addition to the local
trials, information from other areas should be analyzed to gain knowledge and experience of manufacturing wood
energy fuels from Poplar species in Interior Alaska. Specifically, tests need to be done chipping green, seasoned, and
11 The objectives of the analysis included:
Simulate full production of biomass wood energy operation. Whole tree grinding operation of decked trees to get
production per hour, production per day, cost per ton, cost per day.
Determine production and cost of chipping with the chipper.
Determine cost of transportation.
Determine green and dry weight of total volume per each one acre in selected (representative) timber type.
Determine the cost per ton green and dry for mechanical feller buncher for each one acre deck.
Determine the cost of per ton green and dry for grapple skidding for each one acre deck.
31 | Page
frozen Poplar. Operators in Tok, Alaska likely have the capacity to conduct the tests using a grinder, however the
machine chosen for the test should be as close as possible to the chipping technology to be used in Galena.
In the case of Galena, the manufactured fuel will likely be whole tree wood chips with bark, up to 40% moisture content
(MC). Targeted fuel is mainly Poplar, with some Aspen and Black Spruce. Project engineers and boiler vendors should be
informed of the species and energy density of the biomass fuel.
Regardless of specifications, quality chips are consistent in dimensions and moisture content. Typically the size varies
from 1” x 1” x 1/8” to 2 ¼” x 2 ¼” x ¼” and moisture content varies from 25 – 45%. Most heating systems can handle
some oversized material, but oversized or irregular materials can cause downtime, such as bridging fuel and jamming
augers.
Please see Appendix C for a chart that displays chip specifications for specific vendors considered in this report.
32 | Page
Financial Analysis
Capital Expenditure (CAPEX)
Biomass System
Brand and Model #
Rating -- Btu/hr 6,000,000
Btu stored n/a
footnote notes
Boiler System
Base price for boiler + fuel handling unit A 800,000$
Shipping to Hub B 40,000$
Bush delivery 40,000$
C 180,000$
35,000$
D 60,000$
Interior Construction (Contractor + Local Labor)B 4,000$
Plumbing, HVAC, Fire Protection, Electric (Contractor + Local Labor)B 234,300$
B 125,000$
E 300,000$
Subtotal-B&E Costs 1,818,300$
Contingency -- 25% 454,575$
Grand Total -- Boiler Facilities 2,272,875$
Soft Costs $
F 50,000$
1,500$
2,500$
G 75,000$
218,196$ 12% of B&E
4,000$
Construction Management 145,464$ 8% of B&e
Subtotal -- Soft Costs 496,660$
Recommended Project Budget -- Design and Construction Costs 2,769,535$
footnote
A Based on recent budgetary quotes from potential equipment vendors
B
C Based on budgetary quotes for material handling system for boiler
D
E
F
G Estimate
Long term wood chip storage -- reclaim system
Long term storage holding structure construction
Woodchip Screens (see below cost breakout)
Biomass system installation
Estimated 750 feet with 6" line, using existing utilidor. $400/ft.
Based on budgetary quote from viable supplier
Estimate based on Alaskan projects of similar size
A/E Design Services
Fire Marshall Plan Review
Connection to the steam line main
Technology Training
Estimated $20,000 plus $40,000 for delivery and install
Building and Equipment Costs (B&E) $
Site Retrofit
Harvest & Operations Plan
Project Coordination
Office Technology and Current Software (computer & Microsoft Office)
33 | Page
Additional capital is needed for Harvesting and Fuel Manufacturing equipment. Most of the necessary equipment is
available in Tok, but some key pieces of equipment will have to be purchased. The cost of buying, leasing, or contracting
the use of harvesting and fuel manufacturing equipment is not included in the financial analysis of the biomass boiler
project. Instead, the biomass boiler project assumes the price of wood fuel ($/green ton). This price is intended to
incorporate equipment amortization, O&M, and other equipment costs.
Benefit Cost Analysis
Financial Analysis was completed using a benefit cost ratio model developed by Alaska Energy Authority. The model
employed is version “Renewable Energy Grant, Round 5 BASE.” Please see Appendix G, Financials.
Project Development Process
Specific Recommendations for Galena
If the Community of Galena decides to move forward with a biomass project (Step 6), the following process would be
applicable to Galena’s particular situation:
I. Finish Feasibility Study
II. Review findings and decide whether or not to move forward
III. If the Community decides to move forward, submit a Grant to AEA’s Round 6 Renewable Energy Fund process
(due September 24, 2012). The Grant should apply for money for design/ build, with a distinct budget and set of
deliverables for each component. This allows AEA to fund distinct project components, depending on their
program targets and budget.
IV. Issue an RFP for the scope of project funded by AEA Grant
Stakeholder Organization and Decision Making
For the Community of Galena to decide whether or not to move forward (Step II), the decision-makers and stakeholders
of a biomass heating project need to organize themselves. The key stakeholder groups are the City of Galena (Base
steam plant owner/operator), GILA School District (primary user of heat from the Base steam plant), Louden Tribal
Council, and Gana’a-Yoo (large landowner with closest proximity to project site).
A successful project will require strong contractual agreements and relationships among the parties from the beginning
of the project and ongoing at the project development. This may actually prove more difficult than the technical aspects
Harvest Equipment
Chipper, new $287,000
Excavator with Falling Head, reconditioned $200,000
Tracked, Grapple Skidder, reconditioned 250,000$
Shipping to Hub 40,000$
Bush delivery 40,000$
Log Yard Preparation 200,000$
Subtotal 1,017,000$
Contingency -- 25%254,250$
Grand Total -- Harvest and Fuel Manufacturing 1,271,250$
Harvest and Fuel Manufacturing Costs
34 | Page
of contractual agreements and project development. Coordination among the stakeholder groups is founded on the
following principles:
• The GILA School District provides valuable services to communities, in particular to Native people, in the Interior
• The ongoing operations of the GILA School District depend on affordable utility costs, including heat energy
• Biomass heat energy is one accessible and affordable resource to the project
• The success of a biomass energy project depends on long-term biomass fuel supply agreements from
landowners
• The success of a biomass energy project depends on long-term heat customers
• The success of a biomass energy project depends on reliable and skilled operations and coordinated
management of the biomass energy facility
Project Timeline
If Design/ Build is funded by AEA’s Round 6 Renewable Energy Grants, the Galena project could be developed according
to the following timeline.
35 | Page
PROJECT TASK Target Date
• Stakeholder organization through legal and verbal agreements
Current
• Initiate harvest contract
o Submit Letter of Inquiry to Gana’A-Yoo Limited and
other applicable landowners
Current
• Fuel Study
o Harvest Test Plot to refine operating procedures and
financial model (time motion study using local
equipment) – should be carefully documented.
o Negotiate harvest contract(s)
August-September
2012
• Apply for funding for project design/ build (AEA Grant Round 6)
September 2012
• Project Development
o Identify and retain owner representative
o Refine project conceptual design
o Negotiate and execute wood fuel harvest and delivery
contracts with local contractors
o RFQ for engineering, and retain engineering firm for full
design
o RFQ for equipment
o Equipment procurement
o Construction, installation, start-up
When funding is
obtained
• Begin wood fuel harvest February 2013
• Operation & Maintenance August 2013
• Maintenance Ongoing
Conclusion
The Galena Steam Base Plant represents an extraordinary opportunity to switch to renewable woody biomass fuels
sourced from surrounding forests. The project is technically and financially feasible. Additionally, it appears that local
coordination and mutual benefit among Stakeholder groups is strong. This project is complex because it requires setting
up and operating a timber harvest and wood chip production in addition to the wood boiler. However, the Stakeholder
groups seem capable and dedicated to such an operation, and have initiated conversation with pertinent local
landowners. The project is recommended to proceed to the next stage of development.
36 | Page
Appendices
Appendix A – Case Studies
Appendix B – Example Fuel Supply Contract
Appendix C – Technology and Wood Fuel Specifications
Appendix D – Map
Appendix E—Alternative Project Configurations
Appendix F—Existing Base Steam Plant Fuel Oil Records
Appendix G – Financial Analysis
37 | Page
About the Consultant
Dalson Energy is a Renewable Energy Consulting and Technology Research firm based in Anchorage. Dalson staff and
partners have decades of experience in construction project management, project development consulting and
renewable energy technology research. Dalson teams with licensed engineers, architects and designers in Alaska,
Canada and Lower 48.
Dalson Energy has worked with Alaska Energy Authority, Alaska Center for Energy & Power, University of Alaska
Fairbanks, Washington State CTED (Community Trade & Economic Development) and California Energy Commission on
biomass energy technology research.
Dalson’s President, Thomas Deerfield, has been involved in biomass energy RD&D since 2001, winning grants and
managing projects with NREL (National Renewable Energy Labs), USFS (US Forest Service), and CEC (California Energy
Commission).
Thomas managed the field-testing of biomass CHP systems, including the first grid-connected biomass gasification CHP
system in the US. (2007). Thomas coordinated the design and creation of the first prototype Biomass “Boiler in a Box” in
Alaska, in 2010. That Garn-based system is now deployed in Elim, in the Bering Sea region.
Thomas founded Shasta Energy Group (SEG), a 501c3 nonprofit, and managed wind energy research, biomass energy
feasibility studies, energy efficiency for buildings, and hydronic heating system research design and development
(RD&D). He also initiated a rural economic development think tank and has engaged his writing skills to assist many
other renewable energy project initiatives.
Wynne Auld is a Biomass Energy Specialist with Dalson Energy. She focuses on assessing and developing woody biomass
energy projects. Over the past few years, she has supported the business development of integrated biomass energy
campuses in Oregon and Idaho, especially related to their energy initiatives. Her efforts have included marketing
Campus biomass heating products to major wholesalers and retail buyers, and planning and developing Campus sort
yards and small-scale CHP.
Wynne also specializes in assisting commercial and municipal building managers in assessing the feasibility of biomass
heating, and implementing their projects. She works to ensure vibrant rural communities through sustainable natural
resource utilization.
Clare E. Doig, CF, with Forest & Land Management, Inc., has been managing timber harvest operations, preparing forest
management plans, appraising timber, participating in feasibility studies of harvesting and processing operations, and
managing forest lands in Alaska since 1979. References
Parrent, Dan. “Preliminary Feasibility Assessment for High Efficiency, Low Emission Wood Heating In Tanacross, Alaska.”
June 2008. Pg. 8.
38 | Page