HomeMy WebLinkAbout2 Pre-Feasibility Assessment_Update to Final Report 9-20-13
Pre-Feasibility Assessment for
Integration of Wood-Fired Heating Systems
Update to Final Report
September 20, 2013
Nenana City School District
City of Nenana
Nenana, Alaska
Presented by
CTA Architects Engineers
Nathan Ratz
Lars Construction Management Services
Rex Goolsby
For
Nenana School District
City of Nenana
Toghotthele Corporation
306 W. Railroad, Suite 104
Missoula, MT 59802
406.728.9522
www.ctagroup.com
CTA Project: FEDC_FAIRBANKS_NENANA
Update to Pre-Feasibility Assessment for Nenana School and City of Nenana
Integration of Wood-Fired Heating Systems Nenana, Alaska
CTA Architects Engineers i
September 20, 2013
TABLE OF CONTENTS
1.0 Update Summary ...................................................................................................... 1
Appendixes
Appendix A: Preliminary Estimate of Probable Cost for Option A.7 ............................. 1 page
Appendix B: Cash Flow Analysis for Option A.7 .......................................................... 1 page
Appendix C: Updated Overall Site Plan ....................................................................... 1 page
Update to Pre-Feasibility Assessment for Nenana School and City of Nenana
Integration of Wood-Fired Heating Systems Nenana, Alaska
CTA Architects Engineers Page 1 of 3
September 20, 2013
1.0 Update Summary
This is an update to the final report for the Pre-Feasibility Assessment for Integration of
Wood-Fired Heating Systems which was issued in July, 2012. That assessment was
commissioned to determine the preliminary technical and economic feasibility of
integrating a wood fired heating system at the Nenana School, School Administration,
School Warehouse, School Living Center, Nenana Native Council Day Care, Nenana Fire
Department, Nenana Water Plant, and the Meda Lord Senior Center in Nenana, Alaska.
This update addresses the cost and economic assumptions of that original report relative
to 2013, and includes a summary of information for an additional wood chip boiler option
the was developed. This update is intended to be used in conjunction with the original
report, as the background information and assumptions of the existing buildings and the
potential projects are not explicitly addressed in this update.
In the past year, the energy costs have essentially remained the same for electricity and
fuel oil, so the energy costs of the original report are still valid. The construction costs
have also not gone up significantly in the past year, so all the preliminary estimates of
probable cost are still valid. The economic assumptions of inflation rates have also
remained the same. Considering the costs were preliminary and a “broad brush” and 15%
contingency was used for the estimates, the 2012 report is still valid for use in September,
2013.
After the original report was issued, the School District has been in contact with the local
Alaska Department of Transportation facility in Nenana. The local DOT facility has
indicated potential interest in connecting to a district heating loop in Nenana to heat the
main shop building, especially if a loop to the student living center is installed. A new
wood chip boiler option A.7 was generated to evaluate the potential of adding this building
to the cluster of buildings around the school and a long loop to the student living center.
The following tables are based on the 2012 report and have been updated to remove data
from the Meda Lord Center, add Alaska DOT data, add option A.7, and remove options
B.1, and C.1. All data shown is from the 2012 report except for what was added in this
update. This was done so the new information could be in the same table as the original
data for easier comparison.
The following tables summarize the current fuel use and the potential wood fuel use:
Table 1.1 - Annual Fuel Use Summary
Fuel Avg. Use Current Annual
Facility Name Type (Gallons) Cost/Gal. Cost
School Fuel Oil 34,000 $3.60 $122,400
School Admin Fuel Oil 1,600 $3.60 $5,760
School Whse. Fuel Oil 4,200 $3.60 $15,120
Student Living
Center Fuel Oil 28,800 $3.60 $103,680
NNC Day
Care Fuel Oil 4,550 $3.60 $16,380
Water Plant Fuel Oil 10,700 $3.60 $38,520
Fire Dept. Fuel Oil 3,950 $3.60 $14,220
Alaska DOT Fuel Oil 5,300 $3.60 $19,080
Update to Pre-Feasibility Assessment for Nenana School and City of Nenana
Integration of Wood-Fired Heating Systems Nenana, Alaska
CTA Architects Engineers Page 2 of 3
September 20, 2013
Table 1. 2 - Annual Wood Fuel Use Summary
Chipped/
Fuel Cord Wood Ground
Oil Wood Pellets Wood
(Gallons) (Cords) (Tons) (Tons)
School (S) 34,000 297.1 270.9 373.8
School Admin (SA) 1,600 14.0 12.7 17.6
School Warehouse (SW) 4,200 36.7 33.5 46.2
School Living Center (SLC) 28,800 251.7 229.4 316.6
Nenana Native Council Day Care (DC) 4,550 39.8 36.2 50.0
City Water Plant (WP) 10,700 93.5 85.2 117.6
City Fire Dept (FD) 3,950 34.5 31.5 43.4
Alaska DOT (DOT) 5,300 46.3 42.2 58.3
S + SA 35,600 311.1 283.6 391.3
S + SA + SW 39,800 347.8 317.1 437.5
S + SA + SW + DC 44,350 387.6 353.3 487.5
S + SA + SW + DC + WP 55,050 481.1 438.6 605.2
S + SA + SW + DC + WP + FD 59,000 515.6 470.0 648.6
S + SA + SW + DC + WP + FD + SLC 87,800 767.3 699.5 1037.3
S + SA + SW + SLC 68,600 599.5 546.5 754.1
All Buildings (8 total) 83,100 813.7 741.7 1153
Note: Wood fuel use assumes offsetting 85% of the current energy use.
The wood chip boiler options reviewed were as follows:
Wood Chip Boiler Options:
A.1: Nenana School only.
A.2: Nenana School, Administration Building, and Warehouse.
A.3: Nenana School, Administration Building, Warehouse, and NNC Daycare.
A.4: Nenana School, Administration Building, Warehouse, NNC Daycare, and Water
Plant.
A.5: Nenana School, Administration Building, Warehouse, NNC Daycare, Water
Plant, and Fire Department.
A.6: Nenana School, Administration Building, Warehouse, and Living Center.
A.7: Nenana School, Administration Building, Warehouse, NNC Daycare, Water
Plant, Fire Hall, Student Living Center, and Alaska DOT Shop.
Update to Pre-Feasibility Assessment for Nenana School and City of Nenana
Integration of Wood-Fired Heating Systems Nenana, Alaska
CTA Architects Engineers Page 3 of 3
September 20, 2013
The following table summarizes the economic evaluation for each option:
Table 1.3 - Economic Evaluation Summary
Nenana Biomass Heating System
Year 1 NPV NPV
20
Yr
30
Yr
Project Operating 30 yr 20 yr B/C B/C ACF ACF YR
Cost Savings at 3% at 3% Ratio Ratio YR 20 YR 30 ACF=PC
A.1 $1,780,000 $59,208 $2,832,089 $1,616,943 0.91 1.59 $2,303,414 $4,911,172 18
A.2 $1,960,000 $72,175 $3,385,501 $1,940,341 0.99 1.73 $2,761,778 $5,862,829 17
A.3 $2,150,000 $81,506 $3,795,177 $2,177,730 1.01 1.77 $3,098,786 $6,569,425 16
A.4 $2,590,000 $99,342 $4,638,894 $2,656,188 1.03 1.79 $3,780,882 $8,035,572 16
A.5 $2,680,000 $106,772 $4,975,009 $2,849,249 1.06 1.86 $4,055,426 $8,617,079 16
A.6 $2,860,000 $112,808 $5,441,730 $3,085,014 1.08 1.90 $4,399,622 $9,458,385 16
A.7 $3,250,000 $167,579 $7,779,417 $4,451,092 1.37 2.39 $6,335,815 $13,478,318 14
The benefit to cost ratio (B/C) takes the net present value (NPV) of the net energy savings
and divides it by the construction cost of the project. A B/C ratio greater than or equal to
1.0 indicates an economically advantageous project.
Accumulated cash flow (ACF) is another evaluation measure that is calculated in this
report and is similar to simple payback with the exception that accumulated cash flow
takes the cost of financing and fuel escalation into account. For many building owners,
having the accumulated cash flow equal the project cost within 15 years is considered
necessary for implementation. If the accumulated cash flow equals project cost in 20
years or more, that indicates a challenged project. Positive accumulated cash flow should
also be considered an avoided cost as opposed to a pure savings.
Connecting the school with several nearby buildings with a wood fired district heating
system appears to be an economically viable project. With the current economic
assumptions, the school alone and the school combined with the administration building
and the school warehouse don’t quite meet the minimum 20 year B/C ratio of 1.0
However, when adding in the daycare, the water plant, and fire department, all these
incremental options have 20 year B/C ratios greater than 1.0. The additional energy
saved by connecting several buildings together offsets the significant additional cost of
underground piping and pumping costs. The best option was A.7 which connected the
school with the administration building, the school warehouse, the fire hall, the water plant,
the daycare, the student living center, and the DOT shop. Even with the significant piping
costs, the extra pumping energy, and the extra wood fuel needed to offset the heat loss of
the long pipe runs, this option remains the strongest relative to the other options.
The appendices include an estimate of probable cost and a cash flow analysis for the new
option A.7, and include an updated site plan which shows the potential routing of piping to
allow for connection to the DOT shop and the student living center.
APPENDIX A
Preliminary Estimate of Probable Cost
For Option A.7
Preliminary Estimates of Probable Cost
Biomass Heating Options
Nenana, AK
Chip Option A.7 - S + SA + SW + DC + WP + FH + SLC + DOT
Chip Storage/ Boiler Building:$270,000
Wood Heating & Wood Handling System: $325,000
Stack/Air Pollution Control Device: $180,000
Mechanical/Electrical within Boiler Building: $150,000
Underground Piping $630,000
School Integration $50,000
Warehouse and Administration Integration $51,000
Day Care Integration $44,000
Water Plant Integration $46,500
Fire Hall Integration $43,000
SLC Integration $47,500
DOT Integration $50,000
Subtotal:$1,887,000
30% Remote Factor $566,100
Subtotal:$2,453,100
Design Fees, Building Permit, Miscellaneous Expenses 15%: $367,965
Subtotal:$2,821,065
15% Contingency:$423,160
Total Project Costs 3,244,225$
CTA Architects Engineers Update to Final Report 9-20-2013
APPENDIX B
Cash Flow Analysis
For Option A.7
Nenana School + Admin + Warehouse + Daycare + Option A.7Water Plant + Fire Dept. + Student Living Center + DOTNenana, AlaskaWood Chip Boiler Date: September 20, 2013 Analyst: CTA Architects Engineers -Nathan Ratz EXISTING CONDITIONSSchool +City Daycare SLC DOT TotalExisting Fuel Type:Fuel Oil Fuel Oil Fuel Oil Fuel OilFuel Units:gal gal gal galCurrent Fuel Unit Cost:$3.60 $3.60 $3.60 $3.60 Estimated Average Annual Fuel Usage:54,450 4,550 28,800 5,300 93,100Annual Heating Costs:$196,020 $16,380 $103,680 $19,080 $335,160ENERGY CONVERSION (to 1,000,000 Btu; or 1 dkt)Fuel Heating Value (Btu/unit of fuel):134500 134500 134500 134500Current Annual Fuel Volume (Btu):7,323,525,000 611,975,000 3,873,600,000 712,850,000Assumed efficiency of existing heating system (%):80% 80% 80% 80% Net Annual Energy Produced (Btu):5,858,820,000 489,580,000 3,098,880,000 570,280,000 10,017,560,000WOOD FUEL COSTWood Chips$/ton: $75.00Assumed efficiency of wood heating system (%): 65% PROJECTED WOOD FUEL USAGEEstimated Btu content of wood fuel (Btu/lb) - Assumed 30% MC 6400 Tons of wood fuel to supplant net equivalent of 100% annual heating load.1,204Tons of wood fuel to supplant net equivalent of 85% annual heating load.1,02325 ton chip van loads to supplant net equivalent of 85% annual heating load.41 Project Capital Cost-$3,250,000 Project Financing InformationPercent Financed0.0%Est. Pwr Use 90000 kWh Type Hr/Wk Wk/Yr Total Hr Wage/Hr TotalAmount Financed$0 Elec Rate $0.280 /kWh Biomass System 4.0 40 160 $20.00 $3,200Amount of Grants$3,250,000 Other 0.0 40 0 $20.00 $01st 2 Year Learning 3.0 40 120 $20.00 $2,400Interest Rate5.00%Term10Annual Finance Cost (years)$0 19.4 years Net Benefit B/C Ratio$7,779,417 $4,529,417 2.39$4,451,092 $1,201,0921.37Year Accumulated Cash Flow > 0#N/AYear Accumulated Cash Flow > Project Capital Cost14Inflation FactorsO&M Inflation Rate2.0%Fossil Fuel Inflation Rate5.0%Wood Fuel Inflation Rate3.0%Electricity Inflation Rate3.0%Discount Rate for Net Present Value Calculation 3.0%Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year YearCash flow Descriptions Unit Costs HeatingSource ProportionAnnual Heating Source VolumesHeating Units 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 20 25 30Existing Heating System Operating CostsDisplaced heating costs $3.60 54450 gal $196,020 $205,821 $216,112 $226,918 $238,264 $250,177 $262,686 $275,820 $289,611 $304,091 $319,296 $335,261 $352,024 $369,625 $388,106 $495,333 $632,184 $806,845Displaced heating costs $3.60 4550 gal $16,380 $17,199 $18,059 $18,962 $19,910 $20,905 $21,951 $23,048 $24,201 $25,411 $26,681 $28,015 $29,416 $30,887 $32,431 $41,391 $52,827 $67,422Displaced heating costs $3.60 28800 gal $103,680 $108,864 $114,307 $120,023 $126,024 $132,325 $138,941 $145,888 $153,183 $160,842 $168,884 $177,328 $186,194 $195,504 $205,279 $261,994 $334,378 $426,761Displaced heating costs $3.60 5300 gal $19,080 $20,034 $21,036 $22,087 $23,192 $24,351 $25,569 $26,847 $28,190 $29,599 $31,079 $32,633 $34,265 $35,978 $37,777 $48,214 $61,535 $78,536Biomass System Operating CostsWood Fuel ($/ton, delivered to boiler site)$75.00 85% 1153 tons $86,507 $89,102 $91,775 $94,529 $97,365 $100,285 $103,294 $106,393 $109,585 $112,872 $116,258 $119,746 $123,339 $127,039 $130,850 $151,691 $175,851 $203,860Small load existing fuel$3.60 15% 8168 gal $29,403 $30,873 $32,417 $34,038 $35,740 $37,527 $39,403 $41,373 $43,442 $45,614 $47,894 $50,289 $52,804 $55,444 $58,216 $74,300 $94,828 $121,027Small load existing fuel$3.60 15% 683 gal $2,457 $2,580 $2,709 $2,844 $2,986 $3,136 $3,293 $3,457 $3,630 $3,812 $4,002 $4,202 $4,412 $4,633 $4,865 $6,209 $7,924 $10,113Small load existing fuel$3.60 15% 4320 gal $15,552 $16,330 $17,146 $18,003 $18,904 $19,849 $20,841 $21,883 $22,977 $24,126 $25,333 $26,599 $27,929 $29,326 $30,792 $39,299 $50,157 $64,014Small load existing fuel$3.60 15% 795 gal $2,862 $3,005 $3,155 $3,313 $3,479 $3,653 $3,835 $4,027 $4,228 $4,440 $4,662 $4,895 $5,140 $5,397 $5,667 $7,232 $9,230 $11,780Additional Operation and Maintenance Costs$3,200 $3,264 $3,329 $3,396 $3,464 $3,533 $3,604 $3,676 $3,749 $3,824 $3,901 $3,979 $4,058 $4,140 $4,222 $4,662 $5,147$5,683Additional Operation and Maintenance Costs First 2 years$2,400 $2,448Additional Electrical Cost $0.280$25,200 $25,956 $26,735 $27,537 $28,363 $29,214 $30,090 $30,993 $31,923 $32,880 $33,867 $34,883 $35,929 $37,007 $38,117 $44,188 $51,226 $59,385Annual Operating Cost Savings$167,579$178,360$192,247$204,330$217,090$230,562$244,787$259,802$275,650$292,375$310,023$328,644$348,288$369,010$390,865$519,352$686,561$903,701Financed Project Costs - Principal and Interest0000000000 Displaced System Replacement Costs (year one only)0Net Annual Cash Flow167,579 178,360 192,247 204,330 217,090 230,562 244,787 259,802 275,650 292,375 310,023 328,644 348,288 369,010 390,865 519,352 686,561 903,701Accumulated Cash Flow167,579 345,939 538,186 742,516 959,606 1,190,168 1,434,955 1,694,756 1,970,406 2,262,781 2,572,805 2,901,449 3,249,737 3,618,747 4,009,612 6,335,815 9,416,677 13,478,318Additional Power UseAdditional MaintenanceSimple Payback: Total Project Cost/Year One Operating Cost Savings:Net Present Value (30 year analysis):Net Present Value (20 year analysis):
APPENDIX C
Updated Overall Site Plan