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HomeMy WebLinkAboutAtch 1 - 2012 feasibility study Renewable Energy Feasibility Analysis Wastewater Treatment Plant City and Borough of Sitka Prepared by: Final Report July 2012 Alaska Energy Engineering LLC Blank Page Alaska Energy Engineering LLC Wastewater Treatment Plant Renewable Energy Feasibility Analysis 1 Table of Contents Section 1: Executive Summary 3  Introduction ........................................................................... 3  Heat Pump Technology ......................................................... 3  Life Cycle Cost Analysis ....................................................... 3  Section 2: Introduction 5  Introduction ........................................................................... 5  Heat Pump Benefits ............................................................... 5  Heat Pump Options ............................................................... 7  Section 3: Life Cycle Cost Methodology 9  Economic Factors .................................................................. 9  Operating Costs ..................................................................... 9  Energy Costs ....................................................................... 10  Section 4: Life Cycle Cost Analysis 13  Heating System Options ...................................................... 13  Life Cycle Cost Analysis ..................................................... 14  Appendix A: Schematic Diagrams  Appendix B: Sizing and Life Cycle Cost Calculations  Alaska Energy Engineering LLC Wastewater Treatment Plant Renewable Energy Feasibility Analysis 2 Blank page Alaska Energy Engineering LLC Wastewater Treatment Plant Renewable Energy Feasibility Analysis 3 Section 1 Executive Summary INTRODUCTION This report presents the findings of a Renewable Energy Feasibility Analysis for the Wastewater Treatment Plant (WWTP) in Sitka, Alaska. The intent of this analysis is to determine if there is economic incentive to invest in heat pump technologies to heat the building. The heating and ventilating systems at the WWTP have reached the end of their service lives and replacement is planned. This feasibility analysis evaluates whether the building should be converted to renewable energy heat pumps as part of the replacement project. HEAT PUMP TECHNOLOGY Heat pumps are desirable systems for buildings in Sitka. The technology is mature and has been adapted to heating dominated operating modes and cold climates. Benefits include:  High conversion efficiency  Extracts heat from the environment, significantly reducing the amount of purchased energy and the cost of long-term energy inflation  Powered by renewable hydroelectric power  Reduction in greenhouse gas emissions The following heat pump technologies were considered for the plant: ground source, seawater source, air source, and effluent source. The effluent source heat pump is preferred because it can be readily coupled to the plant recycled effluent which is a warmer heat source than the other options, providing superior conversion efficiency. The availability of hydroelectric power is central to the economics of a heat pump system. Sitka is experiencing load growth due to electric heating, which has resulted in diesel supplementation of the hydroelectric generation. It is likely that diesel supplementation will occur during the life of a heat pump system. The analysis takes this into account by using a proposed 9% per year rate increase for the first two years and 2.5% electric inflation in the remaining years. This rate of electric inflation greatly exceeds historic inflation that has been around 1% per year. LIFE CYCLE COST ANALYSIS The analysis compares the life cycle cost of the baseline system with an effluent heat pump system. The proposed replacement of the heating and ventilating systems provides an excellent opportunity to convert the building to heat pump technologies. A heat pump system cannot be retrofitted into the building unless the heating coils in the ventilation systems are also replaced. This is because the existing coils have a capacity based on 180°F boiler water; a heat pump can supply only 115°F heating water which will reduce the capacity of the coils. The analysis is based on the assumption that the ventilation systems will be replaced in conjunction with the heat pump installation so the systems can be designed for 115°F heating supply water from the heat pump. Alaska Energy Engineering LLC Wastewater Treatment Plant Renewable Energy Feasibility Analysis 4 Life Cycle Cost Comparison Heating System Construction Maintenance Energy Total LCC Baseline Fuel Oil Boilers $201,000 $147,000 $2,141,000 $2,489,000 Effluent Heat Pump System $810,000 $248,000 $451,000 $1,509,000 The economic comparison of the systems shows that the effluent heat pump has a much lower life cycle cost than the baseline system. The system produces significant energy savings which more than offsets its higher construction and maintenance costs. Summary For investment in a heat pump system to be preferred over the relatively lower construction cost of the traditional fuel oil boiler system—likely siphoning dollars from other priorities—the system should overwhelmingly have a lower life cycle cost. This is the case with the effluent heat pump system. This result occurs because the plant effluent can be easily tapped as an energy source using existing pipelines and pumps. The proposed upgrade of the heating and ventilating systems also reduces the cost of converting to a low-temperature heating system. Alaska Energy Engineering LLC Wastewater Treatment Plant Renewable Energy Feasibility Analysis 5 Section 2 Introduction INTRODUCTION This report presents the findings of a Renewable Energy Feasibility Analysis for the Sitka Wastewater Treatment Plant (WWTP) in Sitka, Alaska. The intent of this analysis is to determine if there is economic incentive to invest in heat pump technologies to heat the building. The analysis is performed by Jim Rehfeldt, P.E. of Alaska Energy Engineering LLC. This study compares the life cycle cost of upgrading the existing fuel oil boiler heating system or converting the buildings to heat pump heating. The options are evaluated using life cycle cost analysis, which compares construction, maintenance, and energy costs of the heating options over a 30-year period. The findings are highly sensitive to the economic factors and energy costs used for the analysis. Future energy inflation can significantly affect the findings, yet there is no one authority for these values. For this reason, a sensitivity analysis will be used where base case, low case, and high case values for electricity and fuel oil inflation are evaluated. Wastewater Treatment Plant The WWTP is currently heated by two fuel oil boilers and a hydronic heating system that supplies air handling unit heating coils, unit heaters, and baseboard convectors. Air handling units provide ventilation, air heating, and natural cooling to the plant and office areas. The existing HVAC systems have reached the end of their service lives and will be replaced in the near future. This offers an opportunity to integrate heat pumps into the building. The coils in the upgraded systems can be sized for 115°F heat pump water, easing integration of the heat pump with the building systems. The primary opportunity for a heat pump is to couple to the plant effluent. The water is much warmer than ground, air, and ocean sources and the quantity is sufficient to heat the building. This feasibility analysis evaluates whether the building should be converted to renewable energy heat pumps when the HVAC systems are upgraded. HEAT PUMP BENEFITS Community Benefits Heat pumps are desirable systems for residential and commercial buildings in Sitka. The technology is mature and has been adapted to heating dominated operating modes and cold climates. Some of the primary benefits include:  High conversion efficiency  Extracts heat from the environment, significantly reducing the amount of purchased energy and the cost of long-term energy inflation  Powered by renewable hydroelectric power  Reduction in greenhouse gas emissions Alaska Energy Engineering LLC Wastewater Treatment Plant Renewable Energy Feasibility Analysis 6 Heat pump heating efficiency typically ranges from 220-400%, depending upon the type of heat pump and the temperature of the heat source. An effluent coupled heat pump will have a 400% seasonal efficiency which will consume one unit of energy to extract three units of heat from the environment and supply four units to the building. In comparison, fuel oil and electric boiler plants have nominal seasonal efficiencies of 70% and 95%, respectively. Heat pumps are powered by electricity, which is predominately hydroelectric generated in Sitka. As such, they reduce greenhouse gas emissions when compared to fuel oil heated buildings. The same can be said for electric resistance heat, but there is an essential difference between the two. Heat pumps make efficient use of available hydroelectric resources, which meshes well with community sustainability goals to make efficient use of renewable energy. Electric resistance heat has a much lower efficiency, which has led to high load growth and depletion of the hydroelectric supply. Cost of Heat Comparison The following chart provides a 30-year heating cost comparison for fuel oil and electric heating options. The widening gap between the cost of fuel oil heat and the other sources is the primary driver for conversion to renewable energy sources. The conversion efficiency of heat pumps offers the greatest protection from future energy inflation. By transferring heat from the environment to the building, a heat pump requires less purchased energy to meet the load, and most importantly, significantly reduces the long-term effect of energy inflation. $0 $50 $100 $150 $200 $250 $300 2013 2015 2017 2019 2021 2023 2025 2027 2029 2031 2033 2035 2037 2039 2041$ / MMBtuYear Cost of Heat Comparison Fuel Oil Boiler Heat @ 6.6% Inflation Electric Boiler Heat @ 9% (Years 1‐2) and 2.5% (Years 3‐30) Inflation Effluent Heat Pump @ 9% (Years 1‐2) and 2.5% (Years 3‐30) Inflation Alaska Energy Engineering LLC Wastewater Treatment Plant Renewable Energy Feasibility Analysis 7 HEAT PUMP OPTIONS Potential heat pump technologies for heating and cooling the buildings include air-source, which extract heat from outside air, and water-source, which extract heat from the plant effluent, ground or an adjacent body of water such as the ocean. Both air-source and water-source heat pumps can produce hydronic heating water (water-side) or supply heat via ventilation air (air-side). They can also provide cooling, which is typically a small portion of overall energy consumption. The existing hydronic heating system operates on 180°F boiler water. A heat pump retrofit will supply a maximum of 115°F heating water, which detrimentally reduces the heat output of the existing heating units. If a heat pump system is retrofitted into the building, the existing heating units must be increased in size or additional heating capacity installed. The current plan to upgrade the HVAC systems will make the heat pump conversion much easier. The heating units for the upgraded systems can be sized for 115°F heating water by increasing their heat transfer area; only the incremental cost of larger heating units are included in this analysis. Options The following heat pump options were considered for the study: Plant Effluent Heat Pump System The system couples a water-to-water heat pump to the plant effluent. The effluent flows through a heat exchanger, which transfers the heat to the heat pump evaporator. The effluent is warmer than other heat sources and has sufficient heat capacity to meet the building heating load year-round. Ground Source Heat Pumps This system utilizes a loopfield to extract heat from the ground. The heat pump “lifts” the heat to a higher temperature for heating the building. Seawater Heat Pumps This system utilizes seawater as a heating source for the building. It is warmer than the ground during the winter, which improves heat pump efficiency. The seawater can be extracted from the sea via an intake or drawn from water wells located near the building. Air Source Heat Pumps Air source heat pumps extract heat from the ambient air to heat the building. Technology improvements have made them effective at heating in cold climates and capable of varying their output with the heating or cooling load. Cold climate air source heat pumps are not in wide use and there is no historic operating data to assess their real-time performance in Sitka’s temperate marine environment. They were recently installed in Blatchley Middle School, which offers the opportunity to gain valuable performance data for Sitka’s maritime climate. It is prudent to understand the following concerns when considering air- source heat pump technologies:  The outdoor unit extracts heat by cooling outside air. This can cause moisture in the air to condense and freeze on the coil surface. When the frost builds up and restricts air flow, the unit initiates a defrost cycle that sends heat to the outdoor coil to melt any frost accumulation. Optimization of defrost operation is essential to maximize equipment efficiency while operating in our unique maritime climate. While air-source heat pumps are successfully heating buildings in coastal Alaska, there is incentive to reduce defrosting operation through control strategy optimization. Alaska Energy Engineering LLC Wastewater Treatment Plant Renewable Energy Feasibility Analysis 8  The technology has evolved so that air source heat pumps can efficiently heat, even during cold weather, but we do not have long-term data on the long-term maintenance requirements imposed by our climate or the actual service life of outdoor units that are harshly exposed to maritime salt- laden air.  The capability to maintain heat pump systems, both in-house and through local refrigeration contractors, must be developed. This is true of all heat pumps, but more important for air source heat pumps that are outdoors and more affected by climate. As the use of these systems increases—a likely occurrence if current installations are successful—the capability to maintain them will be developed within our communities. To minimize exposure to salt-laden air, rain and blowing snow, the optimum location for the outdoor unit is within a louvered room which protects the equipment from the elements and mitigates noise. A successful arrangement is for the heat pump to draw air in through louvers and then discharged through an exhaust duct to the outdoors. Summary The wastewater effluent is a superior heat source over the other options. It has the lowest installation cost because the plant recycled effluent line runs right to the boiler room. In addition, the effluent is at a higher average temperature, which results in a higher efficiency than the ground or seawater coupled systems. The air source heat pump system is another option. However, it will require 6 outdoor units and 12 indoor hydronic heat exchangers to supply the required heating load. The high cost of installing and operating the system makes it unlikely to compare favorably with the effluent heat pump system. For these reasons, the analysis investigates coupling a water-to-water heat pump to the recycled effluent to heat the building. Alaska Energy Engineering LLC Wastewater Treatment Plant Renewable Energy Feasibility Analysis 9 Section 3 Life Cycle Cost Methodology The purpose of the feasibility analysis is to compare the life cycle cost of a renewable energy heating system for the building. The findings are highly sensitive to the economic factors, energy costs, and energy inflation used for the analysis. While future energy inflation often has the greatest impact, there is no authority for these values. For this reason, a sensitivity analysis is used where base case, low, and high values for electricity and fuel oil inflation are evaluated. ECONOMIC FACTORS The following economic factors are used in the analysis:  Economic Period: The economic period is set at 30 years with all costs based on 2013 construction.  Nominal Interest Rate: This is the nominal rate of return on an investment, without regard to inflation. The CBS estimates that the bond rate will be between 4 and 7%. The analysis uses a rate of return of 5.5%.  Inflation Rate: The Consumer Price Index has risen at a rate of 2.9% over the past 20-years. The State of Alaska predicts general inflation of 2.5-3% per year. The analysis is based on a 2.9% rate of inflation over the 30-year economic period. OPERATING COSTS Operating costs include maintenance and repair cost—on an annual and intermittent basis—and equipment replacement costs at the end of its expected service life. The costs are derived from industry standards for the long-term operation of the systems. Maintenance and Repair The heating systems will have the following maintenance and repair requirements. Heat pumps have higher maintenance requirements than the existing systems. It is assumed that maintenance will be performed by CBS facilities staff except where noted.  Fuel Oil Boilers: Requires daily inspections, monthly service, and annual cleaning of the firebox and a combustion test.  Water-to-Water Heat Pump: Requires daily inspections, monthly service, 3-month service, and annual cleaning of the heat transfer surfaces. In addition, a factory tune up is required every five years. It is assumed that the 3-month service, annual maintenance and factory tune-ups will be contracted out.  Pumps: Require annual lubrication and periodic replacement.  Effluent Heat Exchanger: Requires biannual cleaning. Alaska Energy Engineering LLC Wastewater Treatment Plant Renewable Energy Feasibility Analysis 10 Replacement The following heating and cooling equipment will require replacement at the end of its expected service life:  Water-to-Water Heat Pump: Expected service life of 18 years. ENERGY COSTS Fuel Oil Current Cost The CBS currently pays $3.76 per gallon for #2 heating oil. Future Inflation Base Fuel Oil Case: In recent years, fuel oil inflation has been very sporadic, with a decidedly upward trend in prices. Looking at oil prices over a longer period will smooth out the data and provides a longer-term assessment of future costs. Using this perspective over the past 25-years, fuel oil inflation has averaged 6.6% per year. The base case assumes that future fuel inflation will continue at this rate. High Fuel Oil Case: There is potential for world oil demand to increase due to increased consumption by developing countries and/or an expanding global economy. Disruption of the world oil supplies could also affect supply, causing prices to rise. The high case assumes these factors and others could cause fuel inflation to be higher than the base case at 8% per year. Low Fuel Oil Case: The U.S. Energy Information Agency predicts fuel oil inflation of 4.8% per year for the next 25-years. While this reference has historically under-predicted actual fuel oil inflation, it is possible that future fuel oil inflation may be lower than the base case due to: new technologies that increase oil field production; new sources such as oil sands; and efficiency gains that reduce global oil demand. These factors and others could lead to less demand which would result in fuel oil inflation lower than the base case at 4.8% per year. Electricity Current Cost Electricity is supplied by the CBS Electric Department. Power generation facilities include Blue Lake Hydro, Green Lake Hydro, and the Jarvis Street diesel plant. The building is billed under the General Services Rate, which charges for both electrical consumption (kWh) and peak electric demand (kW). Electrical consumption is the amount of energy consumed and electric demand is the rate of consumption. Electric demand is determined by averaging demand over a continuously sliding fifteen-minute window. The highest fifteen-minute average during the billing period determines the peak demand. The following table lists the electric charges: Alaska Energy Engineering LLC Wastewater Treatment Plant Renewable Energy Feasibility Analysis 11 General Services Rate Monthly Charge Rate Energy Charge per kWh First 500 kWh 14.17¢ Over 501 kWh 9.03¢ Demand Charge per kW $4.50 Future Inflation Over recent history, Sitka’s electricity inflation has been low, lagging general inflation. However, electric heating conversions have created load growth that has caused the utility to use more diesel supplementation to meet the load. Diesel supplementation last winter resulted in a 1.35¢ per kWh fuel surcharge. To reduce diesel supplementation, the dam at Blue Lake will be raised, increasing hydroelectric power production by 27%. The utility recently completed a rate design study that recommended raising rates to put the utility on firm financial footing. A 9% increase for the next two years is included in the analysis. Base Electric Case: Even with the Blue Lake expansion and proposed rate increase, electric heating loads are likely to continue to place demands on the hydroelectric generation facilities. Energy balance reports for Southeast Alaska communities show that heating loads are 175% greater than the non-heating load. While most of the heating load is currently met with fuel oil, only a small percentage of this large potential load needs to convert to electricity to place demands on the electric grid. In essence, future electricity prices may be tied to fuel oil inflation. The life cycle cost analysis uses an electric inflation of 2.5% to account for the impacts of future fuel oil to electric heat conversions. High Electric Case: If fuel oil prices continue to rise, load growth due to electric heating loads will increase. This scenario will result in greater diesel supplementation in the short-term and possible construction of additional hydroelectric generation as a long-term measure. Higher electric rates will result. The high case assumes these factors will result in an average electric inflation rate of 4%. Low Electric Case: The low case assumes that load growth does not deplete the hydroelectric surplus; electric rates continue at the historic inflation rate of 1%. Alaska Energy Engineering LLC Wastewater Treatment Plant Renewable Energy Feasibility Analysis 12 Summary The following table summarizes the energy and economic factors used in the analysis. A sensitivity analysis is also provided to determine how modest variations in energy inflation affect the results. The following table shows the base, high and low case energy inflation that is applied to the analysis. Summary of Economic and Energy Factors Factor Rate or Cost Nominal Discount Rate 5.5% General Inflation Rate 2.9% Electricity, 2013 10.9¢ per kWh Electricity Inflation 1 1%, 2.5% (base), 4% Fuel Oil $3.76 / gallon Fuel Oil Inflation 1 4.8%, 6.6% (Base), 8% 1. The inflation rates for electricity and fuel oil represent the base case and the low and high cases used for the sensitivity analysis. Alaska Energy Engineering LLC Wastewater Treatment Plant Renewable Energy Feasibility Analysis 13 Section 4 Life Cycle Cost Analysis The proposed upgrade of the HVAC systems provides an excellent opportunity to convert the building to heat pump technologies. Incorporating heat pumps will require added investment in the heat pumps and the couple to the environment, but the heating and ventilating systems can be readily designed for heat pump technologies with minimal added cost of construction. HEATING SYSTEM OPTIONS Baseline Heating System The baseline system replaces the existing heating plant in-kind. The upgraded plant will consist of two fuel oil boilers, primary loop with pumps, piping, and appurtenances, and secondary loop with building pumps, piping, and appurtenances. Effluent Heat Pump System The wastewater plant has a recycled effluent system that is used for equipment spray down and cleaning. The distribution piping is full size outside the boiler room and a reduced size line runs through the boiler room. Connection to the line will be outside the boiler room where the pipe is full size. Recycled effluent flow occurs by manually starting the recycled effluent pump and opening a valve at one of the hose stations in the plant. The recycled effluent system must be modified to be used as a heat source. The recycled effluent pump will require a new motor, variable frequency drive and controls so the pump operates automatically at optimum speed whenever the heat pump operates. The controls must also disable the heat pump whenever the recycled effluent is needed for cleaning (the system is used for short durations a few times each week). The recycled effluent will flow through the warm side of a stainless steel heat exchanger. An evaporator pump will circulate antifreeze through the cold side where it will gain heat for the heat pump. The heat pump will “lift” the heat to 115°F for distribution to the building. The heated water will be stored in a buffer tank. A fuel oil boiler will be utilized to provide redundancy and supplemental heat during cold weather. The heat pump and boiler are sized for 70% of the design load which provides redundancy without oversizing the system. If either heating units fails, the other will be able to heat the building. At this sizing, the heat pump will require 220 gpm of flow through the evaporator. The recycled effluent pump peak capacity of 200 gpm will be needed to supply sufficient heat at peak loads. A VFD will be installed to modulate the pump to vary the recycled effluent flow with heat pump output. The heat pump will be located in a separate room that will be positively pressurized to separate the equipment from the corrosive nature of the facility air. Since the heat pump output of 115°F is much lower than a design boiler supply temperature of 180°F, the ventilation system heating coils, unit heaters, cabinet unit heaters, and baseboard heaters must be replaced with higher capacity units. Alaska Energy Engineering LLC Wastewater Treatment Plant Renewable Energy Feasibility Analysis 14 LIFE CYCLE COST ANALYSIS The analysis compares the life cycle cost of the baseline HVAC system with an effluent source heat pump system. A conceptual diagram of the heat pump system is provided in Appendix A. Sizing and life cycle cost calculations are provided in Appendix B. Construction Costs The following table compares the cost of the systems. Construction Costs Construction Scope Cost Estimate Budget Increase Baseline Heating System $ 200,000 - Effluent Heat Pump System $ 810,000 $ 610,000 Assumptions Baseline Heating System: The fuel oil boilers have exceeded their service life and require replacement. Effluent Heat Pump System: It is assumed that a recycled effluent flow of 200 gpm will be continuously available for the heat pump. Peak and average flow data suggests that this is likely. The heat pump will be located in the space adjacent to the boiler room with the remaining heating equipment within the boiler room. Electrical Service: The electric service has sufficient spare capacity to supply the heat pump system loads. The analysis includes a cost estimate to install a separate sub-panel for the heat pump system. Operating Costs The following table summarizes the operating costs for each option. The basis for these costs is provided in the Life Cycle Cost Methodology Section. Operating Costs System Annual Cost 1 Life Cycle Cost 2 Baseline Heating System Maintenance and Repair $ 7,000 $ 150,000 Replacement - 0 Total $ 7,000 $ 150,000 Effluent Source Heat Pump System Maintenance and Repair $ 8,400 $ 180,000 Replacement - 70,000 Total $ 8,400 $ 250,000 1. Annual costs include regular and intermittent maintenance and repair costs that have been averaged over an annual basis. 2. Life cycle cost includes equipment replacement costs at the end of its service life. 3. Note: Negative values (in parenthesis) represent savings. Alaska Energy Engineering LLC Wastewater Treatment Plant Renewable Energy Feasibility Analysis 15 The baseline heating has the lowest operating costs because there is less equipment to maintain and the maintenance work is accomplished in-house. Energy Consumption and Costs Baseline Heating System The energy analysis is based on the fuel oil boiler supplying 100% of the heating load. Energy use of the building is predicted to be 10% lower due to efficiency improvement associated with upgrading the HVAC systems and controls. The boilers will supply heat to the building, natural cooling will provide cooling, and pumps will distribute the heat to the building. Effluent Source Heat Pump System The heat pump is sized for 70% of the design heating load and will supply 95% of the heat at a seasonal efficiency of 400%. This high efficiency is due to the relatively warm temperature of the effluent. The effluent source heat pump system benefits from a high conversion efficiency to have lower energy costs than the baseline system. In addition, electricity is predicted to inflate at less than half the rate of fuel oil which results in a life cycle cost savings of 75%. Energy Consumption and Costs Energy Costs Annual Energy Life Cycle Consumption 2013 Cost Energy Cost Baseline HVAC System Fuel Oil 15,000 gals $ 60,000 $ 2,130,000 Electricity 4,000 kWh 1,000 10,000 Total $ 61,000 $ 2,140,000 Effluent Source Heat Pump System Fuel Oil 840 gals $ 3,000 $ 120,000 Electricity 133,000 kWh 15,000 330,000 Total $ 18,000 $ 450,000 Life Cycle Cost Comparison A life cycle cost comparison of the options shows that the effluent source heat pump system has the lowest life cycle cost. A sensitivity analysis was applied to determine how modest variations in energy inflation affect the findings. The following adjustments were made:  To account for increasing fuel oil price volatility, fuel oil inflation (base = 6.6%) was varied from 8% to 4.8%.  To account for a possible drop or increase in the electric load, electricity inflation (base = 2.5%) was varied from 4% to 1%. Alaska Energy Engineering LLC Wastewater Treatment Plant Renewable Energy Feasibility Analysis 16 Life Cycle Cost Comparison Heating System Construction Maintenance Energy Total LCC Base Case: 6.6% Fuel Oil, 2.5% Electricity Baseline Fuel Oil Boilers $200,000 $150,000 $2,140,000 $2,490,000 Effluent Heat Pump System $810,000 $250,000 $450,000 $1,510,000 High Fuel Oil Case: 8% Fuel Oil, 2.5% Electricity Baseline Fuel Oil Boilers $200,000 $150,000 $2,660,000 $3,010,000 Effluent Heat Pump System $810,000 $250,000 $480,000 $1,540,000 Low Fuel Oil Case: 4.8% Fuel Oil, 2.5% Electricity Baseline Fuel Oil Boilers $200,000 $150,000 $1,640,000 $1,990,000 Effluent Heat Pump System $810,000 $250,000 $420,000 $1,480,000 High Electricity Case: 6.6% Fuel Oil, 4% Electricity Baseline Fuel Oil Boilers $200,000 $150,000 $2,140,000 $2,490,000 Effluent Heat Pump System $810,000 $250,000 $520,000 $1,570,000 Low Electricity Case: 6.6% Fuel Oil, 1% Electricity Baseline Fuel Oil Boilers $200,000 $150,000 $2,140,000 $2,490,000 Effluent Heat Pump System $810,000 $250,000 $400,000 $1,460,000 Note: Highlighted costs are lowest life cycle cost in each case. Energy costs are typically the largest component of the total life cycle cost of a heating system. While this is true here, the heat pump option has a much higher installed cost, which also factors greatly into overall life cycle cost. For any of the options to be preferred over the relatively lower construction cost of the baseline system—likely siphoning dollars from other priorities—the system should overwhelmingly have a lower life cycle cost. This is true of the effluent heat pump system. Alaska Energy Engineering LLC Appendix A Schematic Diagrams Alaska Energy Engineering LLC Appendix B Sizing and Life Cycle Cost Calculations Alaska Energy Engineering LLC Blank page Alaska Energy Engineering LLC Conceptual Sizing 25200 Amalga Harbor Road Tel/Fax: 907.789.1226 Juneau, Alaska 99801 jim@alaskaenergy.us Wastewater Treatment Plant BASELINE SYSTEM Sizing Existing Boilers Boiler Net MBH B-1 954 B-2 954 1,908 Existing Pumps GPM MBH Factor Boiler MBH 124 1,240 77% 955 Energy Consumption Fuel, gal Total kBtu Efficiency kBTU/gal Heat, kBTU Heat 16,700 2,312,950 68% 138.5 1,572,806 Efficiency gain 10% Use 15,030 2,081,655 68% 138.5 1,415,525 Pumps Unit HP % Load kW Hours kWh CP-1 3 50% 1.1 3,600 4,028 EFFLUENT SOURCE HEAT PUMP SYSTEM Sizing Heating Plant Load, MBH Factor Size, MBH kWh Tons COP kW Heat Pump 1,240 70% 868 - 72 3.0 85 B-1 1,240 77%955 147% 1,823 Pumps Pump GPM/ea Head whp effic bhp Boiler 110 10 0.3 65% 0.4 R. Effluent 200 50 2.5 65% 3.9 HP Evap 217 30 1.6 65% 2.5 HP Cond 217 30 1.6 65% 2.5 Effluent Heat Exchanger Flow Inlet Outlet Spec Heat Side gpm °F °F Btu/lb°F MBH Tons Effluent 200 44.0 37.9 1.00 612 51 Evaporator 217 36.0 42.0 0.94 -612 -51 Electric Loads Load Qty HP hm kW Heat Pump 1 - - 84.8 Evap Pump 1 3 91% 2.5 Cond Pump 1 3.0 91% 2.5 Total 90 Electric Service Capacity Volts Amps KVA PF kW 480 1,600 1,330 84% 1,117 Calculated Peak Load 105 Additional peak 20% Current peak demand 126 Available capacity 991 Heat Pump System 90 Spare Capacity 902 June 26, 2012 Page 1 Alaska Energy Engineering LLC Conceptual Sizing 25200 Amalga Harbor Road Tel/Fax: 907.789.1226 Juneau, Alaska 99801 jim@alaskaenergy.us Wastewater Treatment Plant June 26, 2012 Energy Analysis Ground Source Heat Pump Heat kBTU % Load HP kBTU 1,572,806 95% 1,494,166 Month % Load kBtu Source Temp COP kBtu kWh Jan 24% 358,600 45 3.9 91,996 26,962 Feb 20% 298,833 45 3.9 76,663 22,469 Mar 16% 239,067 45 3.9 61,330 17,975 Apr------ May------ Jun------ Jul------ Aug------ Sep------ Oct------ Nov 18% 268,950 50 4.3 62,004 18,172 Dec 22%328,716 48 4.1 79,545 23,313 100% 1,494,166 371,538 108,891 402% Fuel Oil Boiler Heat kBTU % Load Boiler kBTU Efficiency kBTU/gal Fuel, gals 1,572,806 5% 78,640 68% 138.5 835 Pumps Unit kW Hours kWh Boiler 0.3 100 32 R. Effluent 1.7 3,600 6,260 Evaporator 2.5 3,600 8,854 Condenser 2.5 3,600 8,854 23,999 AIR SOURCE HEAT PUMP Sizing Heating Plant Load, MBH Factor Size, MBH Tons COP kW Heat Pump 1,240 70% 868 - 72 3.0 85 B-1 1,240 77%955 147% 1,823 MBH/ea Number Total MBH Heat Pumps 160 6 960 HEX 80 12 960 Additional Electric Load MBH kW 868 254 Backup electric resistance heat Page 2 Alaska Energy Engineering LLC Conceptual Sizing 25200 Amalga Harbor Road Tel/Fax: 907.789.1226 Juneau, Alaska 99801 jim@alaskaenergy.us Wastewater Treatment Plant June 26, 2012 Energy Analysis Consumption kBtu Baseline Heating Load 1,572,806 System Efficiency Gain 10% Net Load 1,415,525 Month % Load kBtu Backup %Backup, kBtu Ave Temp COP kBtu kWh Jan 14% 198,174 5% 9,909 33 1.9 100,983 32,501 Feb 11% 155,708 5% 7,785 35 2.0 75,758 24,485 Mar 9% 127,397 5% 6,370 37 2.1 58,861 19,118 Apr 8% 113,242 5% 5,662 40 2.2 48,074 15,749 May 5% 70,776 5% 3,539 46 2.7 25,179 8,417 Jun 3% 42,466 5% 2,123 49 2.9 13,905 4,698 Jul 3% 42,466 5% 2,123 54 3.3 12,375 4,249 Aug 5% 70,776 5% 3,539 55 3.3 20,240 6,969 Sep 8% 113,242 5% 5,662 52 3.1 34,435 11,752 Oct 9% 127,397 5% 6,370 44 2.5 48,046 15,948 Nov 11% 155,708 5% 7,785 39 2.2 68,041 22,224 Dec 14%198,174 5%9,909 32 1.8 108,521 34,710 100% 1,415,525 70,776 614,419 200,819 219% kBtu Cooling Load 212,329 Month % Load kBtu Ave Temp COP kBtu kWh Jun 20% 42,466 49 4.0 10,675 3,129 Jul 40% 84,932 54 3.9 21,602 6,331 Aug 40%84,932 55 3.9 21,652 6,346 100% 212,329 53,930 15,806 394% Page 3 Alaska Energy Engineering LLC Summary 25200 Amalga Harbor Road Tel/Fax: 907-789-1226 Juneau, Alaska 99801 alaskaenergy@earthlink.net Wastewater Treatment Plant Heating System Optimization Analysis Baseline Economic Factors Economic Factors Energy Inflation Study Period (years) 30 Fuel Oil 6.6% Nominal Discount Rate 5.5% Electricity, Yrs 1-2 9.0% General Inflation 2.9% Electricity, Yrs 6-30 2.5% Base Case: 6.6% Fuel Oil, 2.5% Electricity Construction Maintenance Energy Total Baseline Fuel Oil Boilers $201,000 $147,000 $2,141,000 $2,489,000 Effluent Heat Pump System $810,000 $248,000 $451,000 $1,509,000 High Fuel Oil Case: 8% Fuel Oil, 2.5% Electricity Construction Maintenance Energy Total Baseline Fuel Oil Boilers $201,000 $147,000 $2,662,000 $3,010,000 Effluent Heat Pump System $810,000 $248,000 $480,000 $1,538,000 Low Fuel Oil Case: 4.8% Fuel Oil, 2.5% Electricity Construction Maintenance Energy Total Baseline Fuel Oil Boilers $201,000 $147,000 $1,643,000 $1,991,000 Effluent Heat Pump System $810,000 $248,000 $423,000 $1,481,000 High Electricity Case: 6.6% Fuel Oil, 4% Electricity Construction Maintenance Energy Total Baseline Fuel Oil Boilers $201,000 $147,000 $2,143,000 $2,491,000 Effluent Heat Pump System $810,000 $248,000 $515,000 $1,573,000 Low Electricity Case: 6.6% Fuel Oil, 1% Electricity Construction Maintenance Energy Total June 26, 2012 Present Worth Page 4 Alaska Energy Engineering LLC Life Cycle Cost Analysis 25200 Amalga Harbor Road Tel/Fax: 907.789.1226 Juneau, Alaska 99801 alaskaenergy@earthlink.net Wastewater Treatment Plant Baseline Fuel Oil Boilers Basis Economic Factors Energy Inflation Study Period (years) 30 Fuel Oil 6.6% Nominal Discount Rate 5.5% Electricity, Yrs 1-2 9.0% General Inflation 2.90% Electricity, Yrs 3-30 2.5% Real Discount Rate 2.5% Construction Costs Qty Unit Base Cost Year 0 Cost Demolition Remove boilers 1 ls 2,000.00 $2,000 Removing piping and appurtenances 1 ls 2,500.00 $2,500 Remove heating pumps 1 ls 750.00 $750 New Heating Plant Boiler, 954 MBH with appurtenances 2 ls 20,000.00 $40,000 Primary piping, pumps and appurtenances 1 ls 15,000.00 $15,000 Secondary loop and appurtenances 1 ls 12,000.00 $12,000 Chimney 1 ls 4,000.00 $4,000 Controls 16 pts 2,000.00 $32,000 Contingency Design contingency 20% $21,650.00 General Overhead & Profit 30% $38,970.00 Design fees 10% $16,887.00 Owner's project costs 8% $14,860.56 Total Construction Costs $201,000 Maintenance Costs Years Qty Unit Base Cost Present Value Maintenance and Repair Boiler Maintenance Daily: 5 minutes per day 1 - 30 22 hrs $60.00 $26,444 Monthly: 2 hours per month, ea 1 - 30 48 hrs $60.00 $58,585 Annual: 8 hours, 2x per year 1 - 30 32 hrs $60.00 $39,056 Parts Allowance 1 - 30 2 LS $150.00 $6,103 Pump maintenance 1 - 30 4 ea 200.00 $16,685 Total Annual Costs $147,000 Energy Costs Years Qty Unit Base Cost Present Value Fuel Oil 1 - 30 15,030 gals $4.01 $2,131,070 Electricity, Years 1-5 1 - 2 4,028 kWh $0.109 $922 Electricity, Years 6-30 3 - 30 4,028 kWh $0.13 $9,165 Total Energy Costs $2,141,000 $2,489,000 0 0 0 June 26, 2012 Year 0 0 0 0 0 Present Worth 0 0 0 0 Page 5 Alaska Energy Engineering LLC Life Cycle Cost Analysis 25200 Amalga Harbor Road Tel/Fax: 907.789.1226 Juneau, Alaska 99801 alaskaenergy@earthlink.net Wastewater Treatment Plant Effluent Heat Pump System Basis Economic Factors Energy Inflation Study Period (years) 30 Fuel Oil 6.6% Nominal Discount Rate 5.5% Electricity, Yrs 1-2 9.0% General Inflation 2.90% Electricity, Yrs 3-30 2.5% Real Discount Rate 2.5% Construction Costs Qty Unit Base Cost Year 0 Cost Recycled Effluent Recycled Effluent Pump Replace motor 1 ls $1,500.00 $1,500 Install VFD 1 ls $7,500.00 $7,500 Recycled effluent piping to heat exchanger 1 ls $1,200.00 $1,200 Heat exchanger and appurtenances, stainless steel 1 ls $25,000.00 $25,000 Recycled effluent discharge to influent well 100 lnft $40.00 $4,000 Heating System Boiler, 954 MBH with appurtenances 1 ls $20,000.00 $20,000 Primary piping, pumps and appurtenances 1 ls $30,000.00 $30,000 Secondary loop and appurtenances 1 ls $12,000.00 $12,000 Chimney 1 ls $4,000.00 $4,000 Heat pump room with ventilation 400 sqft $75.00 $30,000 868 MBH water-to-water heat pump 1 ls $140,000.00 $140,000 Evaporator pump, 3 HP and piping 1 ea $6,000.00 $6,000 Condenser pump, 3 HP and piping 1 ea $6,000.00 $6,000 Heating tank, 400 gallons 1 ls $10,000.00 $10,000 Distribution Increase AHU heating coil size 5 ea $3,000.00 $15,000 Replace baseboard heaters 12 lnft $60.00 $720 Replace cabinet unit heater 1 ea $1,750.00 $1,750 Replace unit heaters 16 ea $1,400.00 $22,400 DDC Controls Heating 24 pts $2,000.00 $48,000 Electrical Electric subpanel 1 ls $40,000.00 $40,000 Electrical, 3-phase power 3 ls $3,500.00 $10,500 Electrical, 1-phase power 1 ls $1,500.00 $1,500 Contingencies Design contingency 20% $87,414.00 General Overhead & Profit 30% $157,345.20 Design fees 10% $68,182.92 Owner's project costs 8% $60,000.97 Total Construction Costs $810,000 June 26, 2012 Year 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Page 6 Alaska Energy Engineering LLC Life Cycle Cost Analysis 25200 Amalga Harbor Road Tel/Fax: 907.789.1226 Juneau, Alaska 99801 alaskaenergy@earthlink.net Wastewater Treatment Plant Effluent Heat Pump System June 26, 2012 Maintenance Costs Qty Unit Base Cost Present Value Maintenance and Repair Heat Pump Daily: 5 minutes per day 1 - 30 30 hrs $60.00 $37,124 Monthly: 30 minutes per month 1 - 30 6 hrs $60.00 $7,323 Every Three Months: 30 minutes each 1 - 30 2 hrs $110.00 $4,475 Annual: 8 hours per year 1 - 30 8 hrs $110.00 $17,901 Contracted Tune-up: Every Five Years 5 - 5 1 ls $1,500.00 $1,291 Contracted Tune-up: Every Five Years 10 - 10 1 ls $1,500.00 $1,140 Contracted Tune-up: Every Five Years 15 - 15 1 ls $1,500.00 $1,006 Contracted Tune-up: Every Five Years 20 20 1 ls $1,500.00 $888 Contracted Tune-up: Every Five Years 25 25 1 ls $1,500.00 $784 Parts Allowance 1 - 30 1 LS $200.00 $4,068 Heat exchanger cleaning 1 - 30 16 hrs $60.00 $19,528 Recycled influent intake cleaning, 1 hour per month 1 - 30 12 hrs $60.00 $14,646 Boiler Maintenance Daily: 5 minutes per day 1 - 30 22 hrs $60.00 $26,444 Monthly: 1 hours per month 1 - 30 12 hrs $38.50 $9,398 Annual: 8 hours, 1x per year 1 - 30 8 hrs $38.50 $6,265 Parts Allowance 1 - 30 1 LS $150.00 $3,051 Pump maintenance 1 - 30 5 ea 200.00 $20,856 Replacement Heat pump replacement 18 - 18 1 ea 112,000.00 $71,474 Total Annual Costs $248,000 Energy Costs Qty Unit Base Cost Present Value Fuel Oil 1 - 30 835 gals $4.01 $118,393 Electricity, Years 1-5 1 - 2 132,891 kWh $0.109 $30,428 Electricity, Years 6-30 3 - 30 132,891 kWh $0.13 $302,332 Total Energy Costs $451,000 $1,509,000 Years Years Present Worth Page 7