HomeMy WebLinkAboutCollaboration AGSD-APTAn Opportunity for Collaboration
District Heating of 5 State-Owned and Community Buildings in Tok, Alaska
Alaska Gateway School District Alaska Power & Telephone
In 2010, the Alaska Gateway School District in Tok, Alaska installed a 5.5 MMBTU Hurst N65
steam biomass boiler and small steam/electric generator with the goal of reducing utility costs.
The biomass energy plant utilizes local forest resources to reduce costs, hedge against fluctuations
in fuel oil prices, create jobs, reduce fire hazard, and retain energy dollars locally. Ultimately,
though, the plant is a mechanism to put more resources into educating students by saving money.
The biomass plant produces steam which passes through a turbine, and then serves the heat load
of the School. There is always additional useable heat energy, which is currently rejected using
radiators. The School can also operate the plant as a stand-alone heat plant if demand is
sufficient.
The Alaska Gateway School District has been exploring a way to use excess heat from its system to
serve several community buildings, including the Senior Center, Clinic, Volunteer Fire
Department, DNR-Forestry, and Department of Transportation buildings, collectively using the
equivalent of 36,900 gallons of fuel oil #1.
Simultaneous to the School’s investigation, AP&T has been assessing the viability of a biomass
combined heat and power (CHP) plant, sized at 2+ Megawatts. The plant would produce enough
energy to heat many of the community buildings in the area, including the buildings being
considering by Alaska Gateway School District.
In recent discussions, Alaska Gateway School District and AP&T proposed the following platform
for collaboration:
The primary mission of the School is to educate students, not to operate as a utility.
Energy projects have been a mechanism to put more dollars into education.
The primary mission of AP&T is to profitably provide utility services – historically only
electricity – to area customers.
An exchange of the value of heat for electricity may be favorable to the School and the
Utility. Heat energy could also be provided at reduced costs to end users. The project
would provide value in three ways:
1. Offset electricity costs to AGSD, which is the value of heat delivered to 5 State
and Community Buildings
2. Reduced heat costs to 5 State and Community Buildings
3. Value to AP&T, via the net profit of the value of electricity delivered to AGSD at
the retail rate (cost + profit), minus the cost of production (cost)
Offset electricity costs to AGSD: The stated heat loop could access a heat market
of about $154,000 per year (approximately 36,900 gallons at average retail rate of
$4.15 per gallon). If energy savings of 20% were offered to end users, the value of
this heat market is $123,000 per year. Meanwhile, the School pays more than
$350,000 per year on electricity. O&M costs, such as operating the heat loop,
would also have to be considered. Additional heat markets may be accessible.
Reduced heat costs to 5 State and Community Buildings: The heat customers
(Clinic, Sr. Center, DOT, DNR, and Volunteer Fire Department) would collectively
save about $30,000 in year 11 – with a NPV of approximately $440,000 over 25 year
lifetime of the project, excluding O&M costs2. Effectively all of these dollars would
be put back into public service.
Value to AP&T: AP&T would derive value from the project by net metering
electricity at the retail rate (cost + overhead & profit).
Volume Current
Market Value
Value
Year 1
Offset electricity costs to AGSD 36,900 gallons $154,000
($4.15 / gal)
$123,000
($3.30 /
gal)
Reduced heat costs to 5 State and
Community buildings 36,900 gallons $154,000
($4.15 /gal)
$30,000
($3.30/gal)
Value to AP&T Approx.
236,000 kWh $123,000 TBD
The School has limited maintenance and personnel staff for utility services, and little
desire to provide those services, while AP&T is has designated maintenance and personnel
staff for utility services, including maintenance, meter reading, customer support, and
billing and receiving.
Small stand-alone steam-driven generators require significant operator support.
1 See following charts.
2 Such costs include pumping costs, administration, and other O&M. These costs are TBD.
The School may be able to provide heat to the stated entities at a lower capital cost than
AP&T, because of proximity to the end users.
The project risk is very low. Heat distribution systems, including recovery units, pipe
distribution infrastructure, and heat exchangers are fully commercial, reliable, and low
maintenance. The School biomass plant will continue to operate to serve the School
regardless of the heat loop project. Excess heat is available regardless of the heat loop
project.
Project Status:
This project is currently in the concept phase. The School and AP&T have identified the
opportunity for collaboration and are interested in exploring grant funding opportunities for the
project. Capital costs have not yet been identified, but are expected to be $1 million -- $2 million.
Excluding O&M Costs, preliminary financial analysis of this project indicates an NPV exceeding $2
Million.
Contacts:
Todd Pogue, Superintendent, Alaska Gateway School District
Tom Ervin, V.P. Telecom Engineering & Operations, (907) 883-5101 x 119
Dave Stancliff, Public Relations Consultant to AP&T, (907) 360 7438
Thomas Deerfield, Dalson Energy, President, (907) 277-7900
Wynne Auld, Dalson Energy, Biomass Energy Specialist, (907) 280-8800
Present Value of Biomass Heat Loop
The following charts display the Present Value of heat that will offset fossil fuel heating in 5 State-Owned and Community Buildings.
The project provides value in three ways:
1. Offset electricity costs to AGSD, which is the value of heat delivered to 5 State and Community Buildings, at 20% savings over current
fuel oil costs
2. Reduced heat costs to 5 State and Community Buildings, which is 20% savings over current fuel oil heat costs
3. The net profit of the value of electricity delivered to AGSD at the retail rate (cost + profit), minus the cost of production (cost)
Heating Units 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Fuel Use -- Community Buildings gallons per year 36,900 36,900 36,900 36,900 36,900 36,900 36,900 36,900 36,900 36,900 36,900 36,900 36,900
Fuel Price -- Community Buildings $ per gallon 4.18$ 4.28$ 4.37$ 4.47$ 4.59$ 4.71$ 4.83$ 4.93$ 5.04$ 5.12$ 5.21$ 5.29$ 5.37$
Fuel Price (@ 20% savings)$ per gallon 3.34$ 3.43$ 3.49$ 3.58$ 3.67$ 3.77$ 3.86$ 3.95$ 4.03$ 4.10$ 4.17$ 4.24$ 4.30$
Fuel Scheduled Repairs $ per year tbd -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$
Fuel O&M $ per year tbd -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$
Base Fuel Cost -- Community Buildings $ per year 154,094$ 157,980$ 161,151$ 164,939$ 169,507$ 173,887$ 178,112$ 182,100$ 185,867$ 189,086$ 192,332$ 195,375$ 198,247$
Fuel Savings (@ 20% savings) -- Community Buildings 30,819$ 31,596$ 32,230$ 32,988$ 33,901$ 34,777$ 35,622$ 36,420$ 37,173$ 37,817$ 38,466$ 39,075$ 39,649$
Retail Rate -- $ per kWh $0.57 $0.59 $0.60 $0.62 $0.63 $0.65 $0.66 $0.68 $0.69 $0.71 $0.72 $0.73 $0.74
Cost of Production -- $ per kWh tbd
AGSD: Value of Biomass Heat $ per year 123,275$ 126,384$ 128,921$ 131,951$ 135,606$ 139,110$ 142,490$ 145,680$ 148,694$ 151,269$ 153,866$ 156,300$ 158,598$
Community Building: Value of Biomass Heat $ per year 30,819$ 31,596$ 32,230$ 32,988$ 33,901$ 34,777$ 35,622$ 36,420$ 37,173$ 37,817$ 38,466$ 39,075$ 39,649$
AP&T: Value of Net Metering $ per year
TOTAL Value of Biomass Heat Loop 154,094$ 157,980$ 161,151$ 164,939$ 169,507$ 173,887$ 178,112$ 182,100$ 185,867$ 189,086$ 192,332$ 195,375$ 198,247$
Base
Heating Units 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 PV
Fuel Use -- Community Buildings gallons per year 36,900 36,900 36,900 36,900 36,900 36,900 36,900 36,900 36,900 36,900 36,900 36,900 76,000 -
Fuel Price -- Community Buildings $ per gallon 5.45$ 5.51$ 5.56$ 5.61$ 5.65$ 5.68$ 5.70$ 5.73$ 5.75$ 5.77$ 5.84$ 5.90$ 5.28$ 5.33$
Fuel Price (@ 20% savings)$ per gallon 4.36$ 4.41$ 4.45$ 4.49$ 4.52$ 4.54$ 4.56$ 4.58$ 4.60$ 4.62$ 4.67$ 4.72$ 4.22$ 4.26$
Fuel Scheduled Repairs $ per year -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ $0
Fuel O&M $ per year -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ $0
Base Fuel Cost -- Community Buildings $ per year 200,934$ 203,271$ 205,243$ 206,996$ 208,483$ 209,621$ 210,444$ 211,314$ 212,083$ 213,031$ 215,419$ 217,841$ 400,963$ -$ $2,206,790
Fuel Savings (@ 20% savings) -- Community Buildings 40,187$ 40,654$ 41,049$ 41,399$ 41,697$ 41,924$ 42,089$ 42,263$ 42,417$ 42,606$ 43,084$ 43,568$ 80,193$ -$
Retail Rate -- $ per kWh $0.75 $0.76 $0.77 $0.77 $0.78 $0.78 $0.78 $0.79 $0.79 $0.79 $0.80 $0.81 $0.73
Cost of Production -- $ per kWh
AGSD: Value of Biomass Heat $ per year 160,748$ 162,617$ 164,194$ 165,597$ 166,786$ 167,697$ 168,355$ 169,051$ 169,666$ 170,425$ 172,335$ 174,273$ 320,770$ -$ $1,765,432
Community Building: Value of Biomass Heat $ per year 40,187$ 40,654$ 41,049$ 41,399$ 41,697$ 41,924$ 42,089$ 42,263$ 42,417$ 42,606$ 43,084$ 43,568$ 80,193$ $441,358
AP&T: Value of Net Metering $ per year $0
TOTAL Value of Biomass Heat Loop 200,934$ 203,271$ 205,243$ 206,996$ 208,483$ 209,621$ 210,444$ 211,314$ 212,083$ 213,031$ 215,419$ 217,841$ 400,963$ $2,206,790
Base