HomeMy WebLinkAboutFeasibility Assessment for Conversion1010
Preliminary Feasibility Assessment for Conversion
from Fossil Fuel Oil to Wood Heating
For The Craig High School, Craig, Alaska
Prepared for:
Mr. Jack Walsh,
Superintendent
Craig School
District
Prepared by:
Robert Deering &
Daniel Parrent,
Biomass Program
Managers
USDA Forest Service
Submitted 27 August 2013
This report is provided by the Alaska Wood Energy Development Task Group, supported by the Alaska
Energy Authority and the USDA Forest Service
1
EXECUTIVE SUMMARY:
Two wood heating options were evaluated for the conversion of the Craig High School from oil heat —
wood pellets and microchips (small, partially -dried wood chips). A sensitivity analysis was conducted for
the microchip option, analyzing economics at three different chip prices. In every scenario wood fuel
appears to have a substantially lower lifecycle cost than the oil -burning status quo.
Status Quo Pellet Chip -Low Chip -Medium Chip -High
Capital cost
0
$319,790
$502,850
$502,850
$502,850
Oil usage - 20 years (gal)
389,180
973
973
973
973
Oil Price(2014)
$4.05
$4.05
$4.05
$4.05
$4.05
Pellet usage - 20 years (tons)
N/A
3,133
N/A
N/A
N/A
Pellet Price
N/A
$325
N/A
N/A
N/A
Chip usage -20 years (tons).
N/A
N/A
194
194
194
Chip Price
N/A
N/A
$70
$125
$170
Totalfuelcost -20years
$3,139,295
$1,455,776
$503,371
$775,547
$998,237
Fuel cost savings-20 years)
0
$1,683,519
$2,635,924
$2,363,748
$2,141,059
Simple payback (years)
NA
13.3
8.2
9.9
12.0
Cumulative costs (20 years)
$3,299,295
$1,993,566
$1,249,021
$1,521,197
$1,743,887
NPV
$787,961
$1,284,378
$1,086,436
$924,483
Benefit/Cost Ratio
1.17
1.72
PROJECT DESCRIPTION:
In late 2012, organizations were invited to submit a Statement of Interest (S01) to the Alaska Wood
Energy Development Task Group (AWEDTG) seeking grant -funded pre -feasibility assessments for the
conversion of their facilities from fossil fuel heating to wood fueled heating. All of the facilities that
were submitted for assessments will receive them — however, the facilities in Southeast Alaska will
receive 'truncated' assessments conducted by Forest Service and AEA staff rather than contracted
consultants, in order to extend the limited available budget. AWEDTG representatives visited Craig in
March of 2013 and information was obtained for the school facility. Preliminary assessments were
made and challenges identified. Potential wood energy systems were considered for the project using
AWEDTG, USDA and AEA objectives for energy efficiency and emissions. Preliminary findings are
reported.
The community of Craig, Alaska is no stranger to wood -fired boilers in institutional settings. In 2008
they installed a wood -fired boiler system which heats the community's swimming pool, elementary, and
middle schools, utilizing wood chips sourced from the nearby Viking Lumber Company sawmill.
Given that the community is familiar with the wood energy concepts being evaluated in this report, and
that this is a truncated study, many of the typical rudimentary subjects of wood energy will be dispensed
with. This report will focus in on the key practical and economic elements associated with the
recommendations specific to the Craig High School conversion in accordance with the following Goals
and Objectives:
• Identify the Craig High School facility as a potential candidate for heating with wood
• Evaluate the suitability of the facility and site for installation of a wood -fired boiler
• Assess the type(s) and availability of wood fuel(s)
• Size and estimate the rough capital costs of suitable wood -fired system(s)
• Estimate the annual operation and maintenance costs of a wood -fired system
• Estimate the potential economic benefits from installing a wood -fired heating system
SITE DESCRIPTION:
The Craig High School is a 52,219 square foot building that contains offices, classrooms, commons,
library, gym, auditorium, shop, and mechanical support spaces. The building is occupied by 95 students
and 10 staff members. Heat is provided by two 3,270 MBH Weil McClain oil -fired boilers connected to a
hydronic heat distribution system consisting primarily of a number of heating coils in air handling units.
The area around the school is gentle hills and mostly wooded, with a housing development to the
southeast. Access to the Main Building is unencumbered. Identifying a suitable location for a wood
fired boiler should not be problematic.
Figure t - Craig High School
Current Conditions
Building Energy Usage — Energy performance of the Craig High School is substandard compared
to similar schools, according to a recent energy audit conducted under an AHFC program. The
audit identified numerous energy efficiency measures (EEMs) which could significantly reduce
thermal energy consumption at the school. For this reason, it's highly recommended that the
most significant EEMs be addressed prior to boiler replacement.
Heating EEMs—The State of Alaska's Renewable Energy Fund provides grants for projects such
as the one being considered here on a competitive basis. Communities that contribute their
own resources toward a portion of the project generally are more competitive for grant funding.
Community investments toward energy efficiency on the same building would be considered 'in -
kind' contributions toward the project, increasing the chances of successful grant selection, as
well as saving money through efficiency measures. The EEMs most relevant to the heating
system are listed below:
Energy Efficiency Measures (from
October 2011 AHFC Energy Audit)
EEM-1 thru 6: Building envelope
EEM-7: Turn Off Standby Boiler
EEM-8: Install Pipe Insulation
EEM-12: Optimize Gym AHU-5
EEM36-: Install Valves on Unit
Heaters
EEM-18: Optimize Auditorium AHU-3
EEM-20: Optimize Commons AHU-4
Oil
25 yr
25 yr
Savings
Cost
Savings
Net
(Gal/year)
$5,000
$125,000
$120,000
1,000 (Estimated values)
$200
$78,700
$78,500
674
$900
$46,000
$45,100
394
$55,000
$166,600
$111,600
1,016
$4,400
$9,500
$5,100
81
$62,800
$124,100
$61,300
491
$59,700 $98,200 $38,500 511
$288,000 $648,100 $460,100 4,167
Estimated boiler size & fuel consumption (post-EEM) — Determining the optimal size of the biomass
boiler is a matter of some uncertainty due to the oversized boilers currently installed in the school and
the extent of heat loss due to poor building envelope efficiency. The energy audit noted that the
current heating plant is approximate five times larger than would typically be installed in a school this
size. Biomass boilers are normally sized considerably less than 100% of the peak heating load in order to
assure efficient combustion during the majority of the heating season. For Craig, Alaska, that size would
likely be approximately 75% of the peak load, which would meet approximately 95% of the school's
heating energy needs. A more detailed boiler sizing assessment would need to be performed during the
design phase of the project. Assuming that the above EEMs are addressed, an appropriately sized
biomass boiler would be approximately 1 million BTU (MMBTU) or less.
An alternative configuration which might be considered is two smaller biomass boilers totaling some 1.2
MMBTU. This configuration provides for higher system efficiency by allowing the boilers to operate
closer to their peak loads during varying heating load situations, resulting in a higher percentage of the
building's heating oil usage to be displaced with biomass fuel. It also provides for additional system
redundancy. These advantages come at the price of higher capital cost, more space utilization demands,
possibly higher 0&M expenditures, and more complexity in integrating operations and controls. While a
multiple -boiler configuration warrants careful consideration during the design phase of the conversion
project, this study will assume that a single biomass boiler is deployed for purposes of the economic
analysis.
Fuel inflation rates & assumptions — Future fuel prices have a surprisingly large effect on the economic
viability of a biomass project. No one has a crystal ball when it comes to heating oil prices, and past
prices have been highly unpredictable and have fluctuated widely. Over the past twenty years (the
timeframe of this feasibility study), heating oil prices in Western states have increased approximately
6.75%faster than the general rate of inflation. The economic analysis spreadsheet which accompanies
this report allows for alternate inflation assumptions to be input to gauge the impacts on those
assumptions on the overall economics of the project.
Wood energy options - Prince of Wales Island is rich in wood energy alternatives.
Cordwood —The Craig High School is considered to be a poor match for the High School from an
operational labor cost and system integration standpoint. The High School requires high
temperature water, while cordwood systems integrate best with systems that utilize lower
temperature water in their heating systems. Trying to meet the demands of a high temperature
system would require frequent stoking of the cordwood boiler to maintain high temperatures, a
labor-intensive process. For those reasons cordwood will not be considered further in this
study.
Green chips— Undried wood chips, containing a moisture content of 50% or more (wet basis) are
readily available from the nearby Viking Lumber Company, which manufactures them in large
quantities for the pulp and paper industry. The City of Craig utilizes these chips for the existing
biomass boiler plant.
Green chips are an appropriate fuel for larger boiler systems, which are configured to 'pre -dry'
the fuel prior to combustion. But smaller boilers, such as are being considered for the Craig
High School, typically are not capable of efficiently burning green chips. For this reason, green
chips will not be considered further in this study.
Wood pellets — Pellet boilers offer many attractive advantages over green chip boilers, including
smaller form factor, higher efficiency, lower 0&M costs, better air emissions, and lower capital
costs. Bulk pellets are only available from off -island sources at this time. Tongass Forest
Enterprises in Ketchikan operates a small pellet mill which is capable of meeting the High
School's heating fuel needs at a competitive price to heating oil. Bulk pellets are also available
from suppliers in British Columbia and the Lower-48. There has been conjecture regarding the
possibility of a pellet mill being established on Prince of Wales Island in the future which should
result in significantly less expensive pellets if such a mill were to ever become a reality. Tongass
Forest Enterprises quoted a delivered price of $325 per ton ($23.50/MMBTU). This price can be
modified in the spreadsheet provided with this report.
Microchips —these chips are smaller and drier than a green pulp -grade chip, typically about 1.25
inches in maximum length and dried to approximately 25% moisture content. A microchip
offers many significant advantages when used in an application such as the Craig High School
boiler:
a. The chips can be utilized as an alternate fuel in many pellet boilers that would be
suitable for the High School, with little modification to the boilers, and with most of
the corresponding benefits of high efficiency, low 0&M, etc. that pellet boilers
enjoy.
b. While microchips are more expensive than green chips due to the extra energy
involved with drying and processing them to a reduced size, they are significantly
cheaper on a per -BTU basis than either wood pellets or heating oil. An estimated
delivered cost for microchips from Viking Lumber is $125 per ton ($12 per MMBTU),
though that cost could vary significantly once the dryer system is operational. The
drying rates established in the lease with the City of Craig (the owner of the rotary
drum dryer leased to Viking Lumber) is that drying would be provided to the general
public for $85 per ton, in addition to feedstock costs. With green chips currently
provided to the City for $30 per ton, the combined cost would be at most $115 per
ton. The price of microchips can be modified in the spreadsheet provided with this
report.
c. Microchips can be sourced from local feedstocks. Viking Lumber is installing a chip
dryer which will be able to produce a suitably dried chip. Viking Lumber officials
state that the size of their chips already meet the 1-1/4" specification, so dried chips
from Viking Lumber should usable in many commercial pellet boilers with little or no
pre-processing for size.
d. Because microchips have been partially dried, they eliminate problems associated
with freezing into clumps in storage, as well as problems with decomposition from
composting activity. The additional drying processing and screening results in less
likelihood of foreign debris contaminating the fuel to cause problems with fuel feed
augers and boiler combustion systems.
e. Dried microchips contain higher concentrations of energy than green chips both on
a weight and volume basis.
Microchips do entail certain considerations during design and operation:
a. Because they are a dried product, they must be protected from the weather once
produced. At MC20 their moisture content should remain stable when exposed to
the atmosphere as long as they're protected from precipitation or liquid
condensation.
b. Microchips will not have the same 'flow' characteristics as pellets when moving
them through the chip storage and boiler feed system, where gravity feed systems
combined with flexible augers have proven to be quite effective for pellets. This will
typically entail more significant (and expensive) auger systems than a pellet boiler
might use, with less flexibility in configuration and layout of the feed systems.
c. Microchips, with a moisture content of 20% or even higher, have less net energy per
ton than wood pellets, at a moisture content of about 5%, do. An additional 15% of
that ton is made up of water rather than wood, so less actual fuel is present.
Additionally, the water that s present must be evaporated during combustion,
which further erodes the available energy in that ton of chips. The end result of this
is that a pellet boiler must be de -rated by roughly 20% from its peak load, meaning
that a larger boiler may need to be selected to supply the necessary heating load.
d. Microchips have significantly less net energy per unit volume than do wood pellets
or oil. The chips are 'fluffier' than pellets (roughly 10 Ibs/cu. ft. vs.45 Ibs/cu. ft. for
pellets) and come nowhere near the energy density of heating oil. This will
necessitate larger fuel storage and/or more frequent deliveries. Fortunately, the
close proximity of Viking Lumber means that relatively frequent deliveries will not
be excessively costly.
Boiler Suppliers — For the purposes of this study, the boiler system will be assumed to be a pellet
boiler(s) which has the capability of also burning a microchip fuel. This is a competitive landscape in the
boiler market with numerous manufacturers offering suitable boilers in this output range. Several
boilers already have a presence in Alaska including the KOB/Veissmann from Austria, the Advanced
Combustion Technology Bioenergy (ACT Bioenergy) from Schenectady, NY, and the LEI Bioburner from
Madisonville, KY (no boilers yet in Alaska, but a dealer is established). Numerous other comparable
boilers are also available on the market. For the purposes of this analysis, a boiler quote from ACT
Bioenergy was used as it represents a mid -priced boiler system. The price of the boiler system can be
modified in the spreadsheet provided with this report.
Boiler Siting and Configuration —The existing boiler room in the High School houses two large oil -fired
boilers. If one of these boilers were to be removed, that would provide ample room for one or more
smaller biomass boilers. Additionally, this would allow the biomass boiler to utilize the existing boiler
exhaust stack and simplify the integration of the boiler(s) with the existing building hot water
distribution system. It would also negate the need to run glycol in the boiler system and separate it
from the building's system with a heat exchanger (assuming the building is currently not running glycol)
if the boiler were sited in a separate containerized system.
One challenge to siting the boiler in that location is the numerous electrical panels along the exterior
wall which would potentially interfere with any fuel feed system. Current electrical codes should be
consulted as well to ensure that noncompliance would not result if a boiler was located in front of those
panels.
An alternative site for the boiler would be in the unutilized shop classroom adjacent to the boiler room.
While this room is well located and has ample space for a boiler, it would need to be carefully reviewed
for fire code compliance and exhaust stack siting.
The final option for siting the boiler is to place it inside of a preconfigured containerized system. This
would allow for the placement of the boiler outside of the building, connecting the boiler to the
building's hot water distribution system via connecting tubing. The advantage of this system is that it
consumes virtually no space from inside the school. The container can serve as both the housing for the
boiler as well as the fuel storage bin. It also allows for the boiler system to be preconfigured and tested
at the factory and brought on site in a 'plug -and -play' status. This can significantly reduce installation
time and costs, and result in a less troublesome commissioning process.
Fuel handling and storage— In any of the boiler configurations, the fuel storage would be located
outside of the boiler room adjacent to the boiler room behind the school. Pellet storage is handled
rather simply with a vertical metal silo which connects to the boilers fuel feed system via a flexible auger
or pneumatic system. The pellets would be delivered to this silo in bulk, typically with a truck outfitted
with an auger feed system or with a pneumatic blower unit. Tongass Forest Enterprises utilizes an
auger -feed truck.
Chips require a more positive fuel feed system than a silo with a flex auger. Typically this involves some
sort of chip storage bin with a sweep arm, walking floor, or traveling auger arrangement. The City of
Craig's chip boiler utilizes a recessed walking floor bin. The chips move from the bin via a belt or auger
into the boiler's fuel feed system.
Chips are often delivered by trucks which dump the chips via gravity or a walking floor into the recessed
chip bin. Such is the configuration with the City s chip boiler system. The cost of building a recessed bin
at the High School would be significant, as would the cost of building a ramp fortrucks to back up prior
to dumping.
There are a wide variety of approaches to addressing the chip storage and unloading challenge. The
approach used in this analysis addresses both storage and chip delivery as an integrated system. It also
addresses the recurring problem of foreign material such as ice, dirt, and rocks contaminating the chips
in the City boiler due to the delivery trucks being used for multiple purposes besides chip hauling. This
solution relies on standard farm technology since the technologies for handling and storing agricultural
products are often easily transferrable to biomass applications.
Farm silage wagons carry significant volumes (30+ cubic yards) of chips and utilize a chain -drag live floor
to move the chips forward. At the front of the wagon one or more auger systems are utilized to loosen
the clumps of chips, which fall onto a transverse belt which conveys the chips out a side chute into the
boiler's chip handling system. This wagon feed system can be interlocked with the boiler's feed system
through a simple control connection. By disconnecting the wagon's control cable, the wagon would be
freed up to be transported to the Viking Mill (or other supplier on -island or in Ketchikan) for refilling. If
the High School owned two trailers, it could always have a full one ready to be 'hot -swapped' with the
empty one, allowing ample time for refilling the empty. Anew farm wagon custom configured for this
application would cost about $50,000. The price of the wagon can be modified in the spreadsheet
provided with this report.
There are obviously many different ways that fuel storage and delivery can be approached, so various
options should be carefully considered during the design phase of this project.
Project Economics — This analysis attempts to compare the capital and operational costs of the status
quo (oil boilers) option versus pellet and chip boiler options over a 20-year period. It assumes that
heating oil costs a reported $4.05 per gallon. The price of heating oil can be modified in the spreadsheet
provided with this report. The analysis also performs a sensitivity analysis on the price of chips since the
price of this fuel is somewhat uncertain at this time, comparing the economics at three prices (low,
medium, and high).
The various options are compared by cumulative annual cost as well as by net present value —
representing the aggregated costs over 20 years in a single 2013 value. The option with the lowest NPV
is the least cost option.
Note that the analysis assumes that biomass only displaces 95% of the oil usage, so 5% of the oil usage is
still included in the biomass option analyses.
10
$2,500,000.00
$2,000,000.00
$1,500,000.00
$1,000,000.00
$500,000.00
r Existing Oil Boiler - No Change
Option
IA Wood Pellet Boiler
Wood Microchip Boiler - Low
Cost Chip Option
Wood Microchip Boiler -
Medium Cost Chip Option
u Wood Microchip Boiler - High
Cost Chip Option
Figure 2 Present Value of Costs (smaller is better)
20 Year Cumulative Cost Chart
$3,500,000.00 - - -
i
$3,000,000.00 - - - - -
$2,500,000.00 - - - - -
$2,000,000.00 - - -
i
$1,500,000.00 - -- - - -
$1,000,000.00 -
$500,000.00 -- - — -
ti�~� voy6 vO,y3 voy4+ 'L�,�3
—Existing Oil Boiler- No !
Change Option
—Wood Pellet Boiler
—Wood Microchip Boiler -
Low Cost Chip Option
Wood Microchip Boiler -
Medium Cost Chip Option
--WoodMicrochipBoiler-
High Cost Chip Option
As shown in the Cumulative Cost chart, as the price of oil rises faster than the price of the other wood
fuels, the costs rapidly mount up. A sensitivity analysis was performed on the projected escalation rate
of oil (6.75%), and even when oil escalation approached 1%, it was still the most expensive option.
B/C Ratio — One of the goals of this study is to prepare the recipients to submit an application for a State
of Alaska Renewable Energy Fund grant. To that end, this analysis calculates the Benefit/Cost Ratio
required for that application.
The B/C Ratio calculation utilizes fuel price escalation assumptions established by the State of Alaska
which are based on U.S. Energy Information Agency price projections. The EIA price projections have
historically underestimated oil price inflation by a wide margin. For example, in 2001 oil was $28.21 per
barrel. At that time EIA was projecting that the price of crude in 2011 would be $27.28 per bbl. The
actual price turned out to be $102.70. This was not atypical of ETA's underestimates. Therefore, for the
purposes of the B/C Ratio the mandated EIA inflation estimates are used, but for the rest of the analysis
an oil inflation rate of 6.75% is used, which more accurately represents oil inflation over the past 20
years. However, even if the escalation rate of oil is set to zero percent, some of the microchip options
still have a lower lifecycle cost than the status quo.
Other Considerations — The following issues bear further analysis or investigation during later phases of
this project:
Air Emissions —The Alaska Energy Authority requires that any boilers which receive RE grant
funding must demonstrate independent third party emissions testing for the type of fuel which
will be burned in it. Before any boiler selection is made, it's strongly recommended that AEA be
consulted with to confirm that the boiler manufacturer has satisfied the testing requirement.
Testing information must be requested from the boiler manufacturer as AEA does not track
manufacturer -specific information.
Air Emissions ll— While the area surrounding the High School is largely wooded and
undeveloped, there is a residential area to the south of the school which is on the slope above
the school. Pellet and microchip boilers are clean -burning devices but they still do produce
some particulate emissions which can be unhealthy at higher concentrations. Reducing
exposure to these emissions is imperative, and the following strategies can be utilized:
a. Implement all of the EEMs identified in the Energy Audit. This will reduce the heat
lost from the school, and thus reduce the amount of fuel that needs to be burned to
replace it.
b. Select and install a low -emitting boiler which has been third -party tested in
accordance with AEA's standards.
12
c. Perform an emissions analysis as part of the design. The design firm can contract
with an emissions specialist which can evaluate the site and the meteorological data
and make recommendations regarding things like boiler exhaust stack height.
d. Operate the boiler in accordance with the manufacturer's instructions, performing
all scheduled maintenance and using quality fuel.
Fuel Security — Currently Viking Lumber is the obvious source of chip fuel for the school. But
given the decline of the forest products industry in Southeast Alaska, it's conceivable that Viking
could shut down at some future time. Even in that eventuality, a pellet/chip boiler is viable.
Assuming that Tongass Forest Enterprises is still in operation, either chips or pellets can be
sourced from Ketchikan. Other mills on POW are also capable of producing an acceptable chip
fuel with some investment in equipment. In the worst case scenario, pellets would need to be
sourced from out of state, but given current price disparities, even imported pellets would enjoy
a significant price advantage over heating with oil.
Project Financing— A project like this typically would be funded one of three ways:
a. Government grants— Similarto the City of Craig biomass boiler, which received a
number of grants totaling in excess of $1,000,000 towards design and construction,
the Craig School District could elect to pursue grants for this project. The financial
projections for the project are fairly positive and this project may prove to be
competitive for grants from the Alaska Renewable Energy program or elsewhere.
Note that grants are highly competitive and the pool of 'free' money is shrinking.
The economic benefits of this project are such that there's little justification in
waiting — each year lost waiting represents another year of significant lost savings.
b. Bank Loans —The projected cash flows resulting from the savings from this project
are substantial and more than adequate to pay for the amortized costs of a project
loan.
c. AHFC Loans —The EEM portion of this project is likely to be largely eligible for low -
interest loans for the Alaska Housing Finance Corporation, the same entity that paid
for the energy audit.
In addition to the above financing options, there may be others such as ESCO-funded
projects which are third -party financed but paid for from the savings of the project.
Conclusions— Conversion to biomass appears to be an excellent opportunity for the Craig High School.
Every biomass option compares very favorably with the status quo and all of them 'pay ofF within 5 to 8
years. The pellet option enjoys a significant early advantage due to its lower capital costs for fuel
storage, but the microchip options all ultimately yield lower costs, even at the extraordinarily high chip
option of $170 per ton.
13
Building efficiency improvements go hand -in -hand with converting to biomass fuel. The recent AHFC
energy audit identified numerous opportunities for improvements to the building's thermal energy
performance. Some of these improvements can be accomplished by inhouse staff, and it's been
reported that many already have been completed; other improvements will require a financial
investment to hire specialized contractors. Not only will these improvements result in lower energy
costs, but they will also allow for lower capital expenditures on the boiler conversion by reducing the
required size of the boiler and fuel storage. The energy audit identified many EEMs related to electrical
savings, such as lighting change -outs, but the focus of the improvements in this context should be on the
EEMs that improve the building's thermal energy performance, as identified on Page 5 above.
The B/C Ratio suggests that this project would compete well for RE Fund grant money. With first -year
savings of between $25,000 and $61,000, in some options those savings exceed the cost of fuel. The
analysis suggests that microchips yield immediate annual savings adequate to pay for the amortized
costs of borrowing money to finance 100% of the boiler and the EEM improvements. As the savings of
using chips increase with the growing price of oil, the financial benefits of converting to biomass become
more compelling.
14
,Z.
lk
Figure 5 Outside boiler room/Shop classroom • fuel storage location out here?
16
Status Quo Pellet Chip -Low Chip -Medium
Capital Cost
0
$319,790
$502,850
$502,850
Oil usage - 20 years (gal)
389,180
973
973
973
Oil Price(2014)
$4.05
$4.05
$4.05
$4.05
Pellet usage - 20 years (tons)
N/A
3,133
N/A
N/A
Pellet Price
N/A
$325
N/A
N/A
Chip usage - 20 years (tons)
N/A
N/A
194
194
Chip Price
N/A
N/A
$70
$125
Total fuel cost - 20 years
$3,139,295
$1,455,776
$503,371
$775,547
Fuel cost savings-20 years)
0
$1,683,519
$2,635,924
$2,363,748
Simple payback (years)
NA
13.3
8.2
9.9
Cumulative costs (20 years)
$3,299,295
$1,993,566
$1,249,021
$1,521,197
NPV
$787,961
$1,284,378
$1,086,436
Benefit/Cost Ratio
1.17
1.72
973
$4.05
N/A
N/A
194
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$1,743,887
$924,483
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Wood Microchip Boiler - Medium Cost Chip Option
Contingency % 5.00% Micrf
Construction Management % 8.00% Moisture Content
20%
Boiler Efficiency 77.00%
Chip BTU/ton 1 13,760,000
Cost per ton
Annual chip consumption in tons 1 191:
One Time Costs 20142015 2016
Bidding & Permits $ 8,000 $ - $
Design Services $ 60,000
1 MMBTU Boiler $ 177,000 -
Chip storage & handling $ 125,000 -
Installation $ 50,000 -
Construction Management $ 35,600
TOTAL Capital Costs S 502.850
Annual Operations & Maintenance
Oil O&M (1-disp %)
Wood Microchips
Oil (1-disp %)
Net Annual
Cumulative
Savings
11,740
400
PV $ 1,278,809
NPV $ 1,08F,436
400
50,923
11,740
400
42,097
626,468
55,688
ochip Properties
Net BTU/ton Net Boiler Eff.
10,595,200 1 77%
2017 2018 2019 2020 2021 2022 2023
11,740
11,740
11,740
11,740
11,740
11,740
11,740
400
400
400
400
400
400
400
26,101
26,750
27,416
28,098
28,796
29,513
30,247
4,792
5,114
5,459
5,827
6,219
6,638
7,085
43,032
44,005
45,014
46,064
47,156
48,291
49,472
669,501
713,505
758,520
804,584
851,739
900,030
949,502
$ 60,800 $
66,283
$ 72,164
$ 78,469 $
85,227 $
92,471 $
100,233
2024 2025 2026 2027 2028 2029 2030
11,740 11,740 11,740 11,740 11,740 11,740 11,740
400 400 400 400 400• 400 400
30,999
31,770 32,561 33,371 34,201 35,052 35,924
108,549 $ 117,457 $ 126,998 $ 137,215 $ 148,155 $ 159,868 $ 172,405
11,740
11,740
11,740
400
400
400
36,817
37,733
38,672
11,936
12,740
13,598
60,893
62,613
64,410
185,824 $ 200,185 $ 215,552