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HomeMy WebLinkAboutAttachment A, Pre-Feasibility Study Pre-Feasibility Assessment for Integration of Wood-Fired Heating Systems Revised Report August 13, 2012 AVCP Regional Housing Authority Complex Bethel, Alaska Presented by CTA Architects Engineers Jesse Vigil, Nick Salmon & Nathan Ratz Lars Construction Management Services Rex Goolsby For AVCP Regional Housing Authority In partnership with: Fairbanks Economic Development Corporation Alaska Wood Energy Development Task Group Funded by Alaska Energy Authority and U.S. Forest Service 306 W. Railroad, Suite 104 Missoula, MT 59802 406.728.9522 www.ctagroup.com CTA Project: FEDC_BETHEL Pre-Feasibility Assessment for AVCP-RHA Integration of Wood-Fired Heating Systems Bethel, Alaska CTA Architects Engineers i August 13, 2012 TABLE OF CONTENTS 1.0 Executive Summary ................................................................................................... 1 2.0 Introduction ............................................................................................................... 3 3.0 Existing Building Systems.......................................................................................... 3 4.0 Energy Use ............................................................................................................... 5 5.0 Biomass Boiler Size ................................................................................................... 6 6.0 Wood Fuel Use .......................................................................................................... 7 7.0 Boiler Plant Location and Site Access ....................................................................... 8 8.0 Integration with Existing Heating Systems ................................................................. 8 9.0 Air Quality Permits ..................................................................................................... 9 10.0 Wood Heating Options .............................................................................................. 9 11.0 Estimated Costs ........................................................................................................ 9 12.0 Economic Analysis Assumptions ............................................................................... 9 13.0 Results of Evaluation ............................................................................................... 10 14.0 Project Funding ....................................................................................................... 10 15.0 Summary ................................................................................................................. 11 16.0 Recommended Action ............................................................................................. 11 Appendixes Appendix A: Preliminary Estimates of Probable Cost ................................................ 1 pages Appendix B: Cash Flow Analysis ............................................................................... 1 pages Appendix C: Site Plan ................................................................................................. 2 page Appendix D: Air Quality Report ................................................................................. 9 pages Appendix E: Wood Fired Heating Technologies ........................................................ 3 pages Pre-Feasibility Assessment for AVCP-RHA Integration of Wood-Fired Heating Systems Bethel, Alaska CTA Architects Engineers Page 1 of 11 August 13, 2012 1.0 Executive Summary The following assessment was commissioned to determine the preliminary technical and economic feasibility of integrating a wood fired heating system at the AVCP Regional Housing Authority Complex. The review was conducted on the assumption that the complex would be served by a district heating loop. The following tables summarize the current fuel use and the potential wood fuel use: Table 1.1 - Fuel Use Summary Fuel Avg. Use Average Average Facility Name Type (Gallons) Annual Cost Cost/Gal. Complex Fuel Oil 60,000 $377,400 $6.29 Estimate for New Regional Headquarters Office / New Maintenance Facility Fuel Oil 7,766 $48,848.14 $6.29 Total Fuel Oil 67,766 $426,248.14 $6.29 Table 1.2 - Annual Wood Fuel Use Summary Chipped/ Fuel Cord Wood Ground Oil Wood Pellets Wood (Gallons) (Cords) (Tons) (Tons) Current Campus 60,000 524.4 478.0 781.7 Expanded Campus 7,766 67.9 61.9 101.2 Total 67,766 592.2 539.9 882.9 Note: Wood fuel use assumes offsetting 85% of the current energy use. Based on the available wood fuel and the estimated biomass boiler size, only a pellet option will be evaluated. Pellet Wood Boiler Option B.1: Central plant serving all buildings in the AVCP Regional Housing Authority Complex. The table on the following page summarizes the economic evaluation for this option: Pre-Feasibility Assessment for AVCP-RHA Integration of Wood-Fired Heating Systems Bethel, Alaska CTA Architects Engineers Page 2 of 11 August 13, 2012 Table 1.3 - Economic Evaluation Summary Bethel AVCP Regional Housing Authority 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 B.1 $3,400,000 $103,264 $6,570,870 $3,467,771 1.02 1.93 $5,016,876 $11,689,874 17 The AVCP Regional Housing Authority Complex appears to be a good candidate for the use of a district wood biomass heating system. With the current economic assumptions and the current fuel use the wood pellet boiler option has a B/C ratio of 1.02, which indicates an economically favorable project. NOTE: This report has been revised to address items requested by AVCP Regional Housing Authority, including a revised cash flow analysis. The change in fuel oil prices are equivalent to year 2.5 in the original cash flow analysis, resulting in minor changes in the B/C ratios. As a result, the B/C ratios in the report have not been recalculated. Pre-Feasibility Assessment for AVCP-RHA Integration of Wood-Fired Heating Systems Bethel, Alaska CTA Architects Engineers Page 3 of 11 August 13, 2012 2.0 Introduction The following assessment was commissioned to determine the preliminary technical and economic feasibility of integrating a wood fired heating system at the AVCP Regional Housing Authority Complex. The review was conducted on the assumption that the complex would be served by a district heating loop. 3.0 Existing Building Systems The AVCP Regional Housing Authority Complex that is located on Ptarmigan Road has 8 housing buildings, 2 office buildings, and 3 warehouses / maintenance facilities. The current heating system for the campus is a combination of heat loops and standalone systems. The table below indicates the current heating systems outputs and condition. Table 3.1 - Existing Heating System Summary Heat BTU/hr Condition Building System Output Lulu Heron Assisted Living Facility Boiler 1 764,000 Good Boiler 2 764,000 Good DHW 199,000 Good Office / Bunkhouse (District System) Boiler 1 145,000 Good Boiler 2 145,000 Good Building A-E (District System) Boiler 1 786,000 Fair Boiler 2 786,000 Fair 12-Unit Housing Addition Boiler 1 561,000 Good Boiler 2 561,000 Good DHW 1 315,000 Good DHW 2 315,000 Good DHW 3 315,000 Good Warehouse 1 Unit Heater 185,000 Good Warehouse 2 Unit Heater 185,000 Good New Regional Headquarters Office Boiler 1 1,023,000 Excellent (New) Boiler 2 1,023,000 Excellent (New) Lulu Heron Assisted Living Facility The Lulu Heron Assisted Living Facility is a wood framed building constructed in 1998. The single story facility consists of approximately 15,480 square feet. The space consists of 16-unit housing for elders and people with disabilities. In addition to the residential units there are also support spaces including steam rooms, laundry facilities, and community gathering rooms. Domestic hot water is provided by one fuel oil water heater rated at 199,000 BTUH input with 67 gallons of storage. Office / Bunkhouse (District Heat Loop) The Office and Bunkhouse facility consists of two separate wood framed buildings constructed in 2004. The Office building is approximately 3,160 square feet and the Pre-Feasibility Assessment for AVCP-RHA Integration of Wood-Fired Heating Systems Bethel, Alaska CTA Architects Engineers Page 4 of 11 August 13, 2012 Bunkhouse building is approximately 1,680 square feet. The combined facility is heated by two 145,000 Btu/hr output hot water boilers located in the Office building mechanical room. The heating water is then piped via utilidor to the Bunkhouse building for distribution. Domestic hot water is provided by an indirect-fired Amtrol Boilermate water heater with a 41 gallon storage capacity. Buildings A-E (District Heat Loop) The Building A-E facility consists of 4 apartment buildings and one office building constructed in 1987-1988. Building A and B are each approximately 5,220 square feet and contain 4 apartment units each. Buildings C and D are approximately 6,700 square feet and contain 6 apartment units each. Building E is approximately 9,760 square feet and currently contains administrative offices. When the New Regional Headquarters Office is completed the office will be renovated into a 30-bed dormitory for students attending Yuut Yaqunviat Pilot Training School and AVCP Regional Aircraft Maintenance School. The Building A-E facility is heated by two 786,000 Btu/hr output hot water boilers that are located in the Building E mechanical room. Two existing utilidors extend from Building E, one going to Building A and C, the other to Building B and D. Domestic hot water is provided by an indirect fired water heater with a 140 gallon storage capacity. 12-Unit Housing Addition The 12-Unit Housing Addition is a two story wood framed buildings constructed in 1998. The facility is approximately 12,500 square feet and is heated by two 561,000 Btu/hr output hot water boilers. Domestic hot water is provided by three fuel oil water heaters rated at 315,000 input each. There currently is a laundry facility located at one end of the building. The intent is that this will be moved to the New Regional Headquarters Office when it is completed. Warehouse 1 The warehouse is a metal building constructed in the mid-1990s. The facility is approximately 4,500 square feet and is heated by a 185,000 Btu/hr output fuel oil unit heater. There is no domestic hot water provided to the space. Maintenance Facility The warehouse is a metal building constructed in the mid-1990s. The facility is approximately 4,500 square feet and is heated by a 185,000 Btu/hr output fuel oil unit heater. Domestic hot water is provided by an electric water heaters rated at 4.5 KW input with a 30 gallon storage capacity. New Regional Headquarters Office / New Maintenance Facility The facilities are still under construction; however it is assumed they will be complete by the summer of 2012. The New Regional Headquarters Office is a two story, metal framed building containing approximately 34,000 square feet and is heated by two 1,023,000 Btu/hr output hot water boilers on the district heating system. Pre-Feasibility Assessment for AVCP-RHA Integration of Wood-Fired Heating Systems Bethel, Alaska CTA Architects Engineers Page 5 of 11 August 13, 2012 4.0 Energy Use The AVCP Regional Housing Authority purchases fuel oil in bulk and does not track individual building use. Also there are 2 additional buildings that are still under construction that fuel data was not available for. The following table summarizes the campus use and the estimated fuel use for the new buildings: Table 4.1 - Fuel Use Summary Fuel Avg. Use Average Average Facility Name Type (Gallons) Annual Cost Cost/Gal. Complex Fuel Oil 60,000 $377,400 $6.29 Estimate for New Regional Headquarters Office / New Maintenance Facility Fuel Oil 7,766 $48,848.14 $6.29 Total Fuel Oil 67,766 $426,248.14 $6.29 Electrical energy consumption will increase with the installation of the wood fired boiler system because of the power needed for the biomass boiler components such as draft fans and the additional pumps needed to integrate into the existing heating systems. The cash flow analysis accounts for the additional electrical energy consumption and reduces the annual savings accordingly. Pre-Feasibility Assessment for AVCP-RHA Integration of Wood-Fired Heating Systems Bethel, Alaska CTA Architects Engineers Page 6 of 11 August 13, 2012 5.0 Biomass Boiler Size The following table summarized the connected load of the heating equipment: Table 5.1 - Connected Boiler Load Summary Likely Peak System Output Load Peak MBH Factor MBH Lulu Heron Assisted Living Facility Boiler 1 Fuel Oil 764 0.66 504 Boiler 2 Fuel Oil 764 0.66 504 DHW Fuel Oil 199 0.66 131 Total 1140 Office / Bunkhouse Boiler 1 Fuel Oil 145 1.00 145 Boiler 2 Fuel Oil 145 0.66 96 Total 241 Bldg A-E Boiler 1 Fuel Oil 786 0.67 527 District System Boiler 2 Fuel Oil 786 0.67 527 Total 1053 12-Unit Housing Addition Boiler 1 Fuel Oil 561 1.00 561 Boiler 2 Fuel Oil 561 0.66 370 DWH Fuel Oil 315 1.00 315 DWH Fuel Oil 315 1.00 315 DWH Fuel Oil 315 1.00 315 Total 1246 Warehouse 1 Boiler Fuel Oil 185 1.00 185 Maintenance Facility Boiler Fuel Oil 185 1.00 185 New Regional Headquarters Boiler Fuel Oil 1023 0.60 614 Boiler Fuel Oil 1023 0.60 614 Total 1228 Total Of All Buildings 8072 5182 Typically a wood heating system is sized to meet approximately 85% of the typical annual heating energy use of the building. The existing heating systems would be used for the other 15% of the time during peak heating conditions, during times when the biomass heating system is down for servicing, and during swing months when only a few hours of heating each day are required. Recent energy models have found that a boiler sized at 50% to 60% of the building peak load will typically accommodate 85% of the boiler run hours. Pre-Feasibility Assessment for AVCP-RHA Integration of Wood-Fired Heating Systems Bethel, Alaska CTA Architects Engineers Page 7 of 11 August 13, 2012 Table 5.2 - Proposed Biomass Boiler Size Likely Biomass System Biomass Boiler Peak Boiler Size MBH Factor MBH Lulu Heron Assisted Living Facility 1140 0.6 684 Office / Bunkhouse 145 0.6 87 District Heat Loop 1053 0.6 632 12-Unit Housing Addition 1246 0.6 748 Warehouse 1 185 0.6 111 Maintenance Facility 185 0.6 111 New Regional Headquarters 1228 0.6 737 Campus District Heating System 5182 0.6 3109 6.0 Wood Fuel Use The types of wood fuel available in the area include cord wood and wood pellets. The estimated amount of wood fuel needed of each wood fuel type for each building was calculated and is listed below: Table 6.1 - Annual Wood Fuel Use Summary Chipped/ Fuel Cord Wood Ground Oil Wood Pellets Wood (Gallons) (Cords) (Tons) (Tons) Current Campus 60,000 524.4 478.0 781.7 Expanded Campus 7,766 67.9 61.9 101.2 Total 67,766 592.2 539.9 882.9 Note: Wood fuel use assumes offsetting 85% of the current energy use. The amount of wood fuel shown in the table is for offsetting 85% of the total fuel oil use. The moisture content of the wood fuels and the overall wood burning system efficiencies were accounted for in these calculations. The existing fuel oil boilers were assumed to be 80% efficient. Cord wood was assumed to be 20% moisture content (MC) with a system efficiency of 65%. Wood pellets were assumed to be 7% MC with a system efficiency of 70%. There is no wood harvesting or wood products industry in the area. Cord wood comes from up river. Since there is a large enough potential demand of pellets, it is viable to purchase pellets from plants in British Columbia, W ashington, or Oregon and barge them up to Bethel. The unit fuel costs for fuel oil and the different fuel types were calculated and equalized to dollars per million Btu ($/MMBtu) to allow for direct comparison. The Delivered $/MMBtu is the cost of the fuel based on what is actually delivered to the heating system, which Pre-Feasibility Assessment for AVCP-RHA Integration of Wood-Fired Heating Systems Bethel, Alaska CTA Architects Engineers Page 8 of 11 August 13, 2012 includes all the inefficiencies of the different systems. The Gross $/MMBtu is the cost of the fuel based on raw fuel, or the higher heating value and does not account for any system inefficiencies. The following table summarizes the equalized fuel costs at different fuel unit costs: Table 6.2 - Unit Fuel Costs Equalized to $/MMBtu Net Gross System System Delivered Gross Fuel Type Units Btu/unit Efficiency Btu/unit $/unit $/MMBtu $/MMBtu Fuel Oil gal 134500 0.8 107600 $5.50 $51.12 $40.89 $6.29 $58.46 $46.77 $7.00 $65.06 $52.04 Cord Wood cords 16173800 0.65 10512970 $550.00 $52.32 $34.01 $600.00 $57.07 $37.10 $650.00 $61.83 $40.19 Pellets tons 16400000 0.7 11480000 $400.00 $34.84 $24.39 $460.00 $40.07 $28.05 $520.00 $45.30 $31.71 Chips tons 10800000 0.65 7020000 N/A N/A N/A 7.0 Boiler Plant Location and Site Access None of the existing boiler rooms are large enough to fit a new biomass boiler so a new stand alone boiler plant would be required. The best location for a plant would be an addition to the new maintenance facility building. During the master planning of the campus by Larsen Consulting Group the future addition location has been identified and planned. Any type of biomass boiler system will require access by delivery vehicles. For pellet and chip boiler systems this would require an area for a trailer to turn around. The proposed plant location would allow for good access. 8.0 Integration with Existing Heating Systems Integration of a wood fired heating system varies from facility to facility. The 12 Unit Apartment, Buildings A through E, New Office Building, Lulu Assisted Living Center, Bunkhouse, and Office space would require the installation of new heating hot water supply and return pipes to connect to the existing boiler supply and return pipes. The Maintenance facility and Warehouse 2 would require the installation of new hot water unit heaters. The field visit confirmed the location of each boiler room and heating unit location in order to identify an approximate point of connection from a district heating loop to each existing building. Connections would typically be achieved with arctic pipe extended to the face of each building, and extended up the exterior surface of the building in order to penetrate Pre-Feasibility Assessment for AVCP-RHA Integration of Wood-Fired Heating Systems Bethel, Alaska CTA Architects Engineers Page 9 of 11 August 13, 2012 exterior wall into the boiler room or building. Once the heating water supply and return piping enters the existing boiler room it would be connected to existing supply and return lines in appropriate locations in order to utilize existing pumping systems within each building. 9.0 Air Quality Permits Resource System Group (RSG) has completed and air quality feasibility study for three new wood boilers in Bethel, Alaska. Bethel has favorable meteorology for dispersion of emissions. Prevailing winds would likely blow emissions towards the southeast. In addition, the proposed wood boilers will be small emission sources, whose sizes preclude them from state permitting requirements. Therefore, we do not suggest advanced emission control such as an ESP or baghouse. However, other design criteria have been suggested to minimize emissions and maximize dispersion. These projects may be subject to federal requirements. 10.0 Wood Heating Options The technologies available to produce heating energy from wood based biomass are varied in their approach, but largely can be separated into three types of heating plants: cord wood, wood pellet and wood chip/ground wood fueled. See Appendix E for these summaries. Based on the available wood fuel and the estimated biomass boiler size, only a pellet option will be evaluated. Pellet Wood Boiler Option B.1: Central plant serving all buildings in the AVCP Regional Housing Authority Complex. The wood pellet boiler option assumes a freestanding boiler building with adjacent free standing pellet silo. 11.0 Estimated Costs The total project costs are at a preliminary design level and are based on RS Means and recent biomass project bid data. The estimates are shown in the appendix. These costs are conservative and if a deeper level feasibility analysis is undertaken and/or further design occurs, the costs may be able to be reduced. 12.0 Economic Analysis Assumptions The cash flow analysis assumes fuel oil at $6.29/gal, electricity at $0.50/kwh, cord wood delivered at $600/cord, and wood pellets delivered at $460/ton. The fuel oil, electricity, and cord wood costs are based on the costs reported by the facility. Pellet costs were obtained from an engineering study investigating using pellet boilers at the AVCP Regional Housing Authority Complex. It is assumed that the wood boiler would supplant 85% of the estimated heating use, and the existing heating systems would heat the remaining 15%. Each option assumes the total project can be funded with grants and non obligated capital money. The following inflation rates were used: O&M - 2%, Fossil Fuel – 5%, Wood Fuel – 3%, Discount Rate for NPV calculation – 3%. The fossil fuel inflation rate is based on the DOE EIA website. Pre-Feasibility Assessment for AVCP-RHA Integration of Wood-Fired Heating Systems Bethel, Alaska CTA Architects Engineers Page 10 of 11 August 13, 2012 DOE is projecting a slight plateau with a long term inflation of approximately 5%. As a point of comparison, oil prices have increased at an annual rate of over 8% since 2001. The analysis also accounts for additional electrical energy required for the wood fired boiler system as well as the system pumps to distribute heating hot water to the buildings. Wood fired boiler systems also will require more maintenance, and these additional maintenance costs are also factored into the analysis. 13.0 Results of Evaluation The following table summarizes the economic evaluation for each option: Table 13.1 - Economic Evaluation Summary Bethel AVCP Regional Housing Authority 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 B.1 $3,400,000 $103,264 $6,570,870 $3,467,771 1.02 1.93 $5,016,876 $11,689,874 17 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. 14.0 Project Funding AVCP Regional Housing Authority may pursue a biomass project grant from the Alaska Energy Authority. AVCP Regional Housing Authority could also enter into a performance contract for the project. Companies such as Siemens, McKinstry, Johnson Controls and Chevron have expressed an interest in participating in funding projects of all sizes throughout Alaska. This allows the facility owner to pay for the project entirely from the guaranteed energy savings, and to minimize the project funds required to initiate the project. The scope of the project may be expanded to include additional energy conservation measures such as roof and wall insulation and upgrading mechanical systems. Pre-Feasibility Assessment for AVCP-RHA Integration of Wood-Fired Heating Systems Bethel, Alaska CTA Architects Engineers Page 11 of 11 August 13, 2012 15.0 Summary The AVCP Regional Housing Authority campus appears to be a good candidate for the use of a district wood biomass heating system. With the current economic assumptions and the current fuel use the wood pellet boiler option has a B/C ratio of 1.02, which indicates an economically favorable project. 16.0 Recommended Actions Most grant programs will likely require a full feasibility assessment. A full assessment would provide more detail on the air quality issues, wood fuel resources, and a schematic design of the boiler systems and system integration to obtain more accurate costs. It would be also in the best interest of AVCP Regional Housing Authority to evaluate if a wood biomass infrastructure could be developed to help lower the overall cost of the wood fuel. APPENDIX A Preliminary Estimates of Probable Cost Preliminary Estimates of Probable Cost AVCP-RHA Biomass Heating Options Bethel, AK Option B.1 - AVCP Housing Campus Biomass Boiler Building:$360,000 Wood Heating, Wood Handling System, & Pellet Silo:$470,000 Stack/Air Pollution Control Device:$100,000 Mechanical/Electrical within Boiler Building:$375,000 Underground Piping $275,000 12 Unit Apartment Integration $65,000 A to E Buildings Integration $72,000 New Office Building Integration $50,000 Bunkhouse Integration $37,000 Office Integration $37,000 Lulu Heron Assisted Living Center Integation $42,250 Maintenance Facility Integration $47,000 Warehouse 2 Integration $47,000 Subtotal:$1,977,250 30% Remote Factor $593,175 Subtotal:$2,570,425 Design Fees, Building Permit, Miscellaneous Expenses 15%: $385,564 Subtotal:$2,955,989 15% Contingency:$443,398 Total Project Costs 3,399,387$ APPENDIX B Cash Flow Analysis AVCP Regional Housing Authority ComplexOption B.1Bethel, AlaskaWood Pellet Boiler Date: August 13, 2012 Analyst: CTA Architects Engineers - Jesse Vigil & Nathan Ratz EXISTING CONDITIONSRHATotalExisting Fuel Type:Fuel Oil Fuel OilFuel OilFuel OilFuel Units:galgalgalgalCurrent Fuel Unit Cost:$6.78$6.78$6.78$6.78 Estimated Average Annual Fuel Usage:67,76667,766Annual Heating Costs:$459,453$0$0$0$459,453ENERGY CONVERSION (to 1,000,000 Btu; or 1 dkt)Fuel Heating Value (Btu/unit of fuel):134500 134500134500134500Current Annual Fuel Volume (Btu):9,114,527,000000Assumed efficiency of existing heating system (%):80%80%80%80% Net Annual Energy Produced (Btu):7,291,621,600000 7,291,621,600WOOD FUEL COSTWood Pellets$/ton: $460.00Assumed efficiency of wood heating system (%): 70% PROJECTED WOOD FUEL USAGEEstimated Btu content of wood fuel (Btu/lb) - Assumed 7% MC 8200 Tons of wood fuel to supplant net equivalent of 100% annual heating load.635Tons of wood fuel to supplant net equivalent of 85% annual heating load.54025 ton chip van loads to supplant net equivalent of 85% annual heating load.22 Project Capital Cost-$3,400,000 Project Financing InformationPercent Financed0.0%Est. Pwr Use15000 kWhTypeHr/Wk Wk/Yr Total Hr Wage/Hr TotalAmount Financed$0Elec Rate$0.500 /kWhBiomass System2.04080 $20.00 $1,600Amount of Grants$3,400,000 Other0.0400 $20.00 $01st 2 Year Learning2.04080 $20.00 $1,600Interest Rate5.00%Term10Annual Finance Cost (years)$0 25.9 yearsNet Benefit B/C Ratio$7,672,449$4,272,449 2.26$4,129,730$729,7301.21Year Accumulated Cash Flow > 0#N/AYear Accumulated Cash Flow > Project Capital Cost15Inflation FactorsO&M Inflation Rate2.0%Fossil Fuel Inflation Rate5.0%Wood Fuel Inflation Rate3.0%Electricity Inflation Rate5.0%Discount Rate for Net Present Value Calculation3.0%YearYearYearYearYearYearYearYearYearYearYearYearYear Year YearYearYearYearCash flow DescriptionsUnit Costs HeatingSource ProportionAnnual Heating Source VolumesHeating Units123456789101112131415202530Existing Heating System Operating CostsDisplaced heating costs $6.7867766 gal$459,453 $482,426 $506,547 $531,875 $558,469 $586,392 $615,712 $646,497 $678,822 $712,763 $748,401 $785,821 $825,112 $866,368 $909,686 $1,161,016 $1,481,783 $1,891,173Displaced heating costs $6.780 gal$0$0$0$0$0$0$0$0$0$0$0$0$0$0$0$0$0$0Displaced heating costs $6.780 gal$0$0$0$0$0$0$0$0$0$0$0$0$0$0$0$0$0$0Displaced heating costs $6.780 gal$0$0$0$0$0$0$0$0$0$0$0$0$0$0$0$0$0$0Biomass System Operating CostsWood Fuel ($/ton, delivered to boiler site)$460.0085%540 tons$248,347 $255,797 $263,471 $271,376 $279,517 $287,902 $296,539 $305,436 $314,599 $324,037 $333,758 $343,770 $354,083 $364,706 $375,647 $435,478 $504,838 $585,246Small load existing fuel$6.7815%10165 gal$68,918 $72,364 $75,982 $79,781 $83,770 $87,959 $92,357 $96,975 $101,823 $106,914 $112,260 $117,873 $123,767 $129,955 $136,453 $174,152 $222,268 $283,676Small load existing fuel$6.7815%0 gal$0$0$0$0$0$0$0$0$0$0$0$0$0$0$0$0$0$0Small load existing fuel$6.7815%0 gal$0$0$0$0$0$0$0$0$0$0$0$0$0$0$0$0$0$0Small load existing fuel$6.7815%0 gal$0$0$0$0$0$0$0$0$0$0$0$0$0$0$0$0$0$0Additional Operation and Maintenance Costs$1,600$1,632$1,665 $1,698 $1,732 $1,767$1,802 $1,838 $1,875 $1,912 $1,950 $1,989 $2,029 $2,070 $2,111 $2,331 $2,573$2,841Additional Operation and Maintenance Costs First 2 years$1,600$1,632Additional Electrical Cost $0.500$7,500 $7,875$8,269 $8,682 $9,116 $9,572 $10,051 $10,553 $11,081 $11,635 $12,217 $12,828 $13,469 $14,142 $14,849 $18,952 $24,188 $30,871Annual Operating Cost Savings$131,488$143,126$157,161$170,338$184,333$199,192$214,963$231,696$249,445$268,265$288,216$309,361$331,764$355,495$380,626$530,103$727,916$988,538Financed Project Costs - Principal and Interest0000000000 Displaced System Replacement Costs (year one only)0Net Annual Cash Flow131,488 143,126 157,161 170,338 184,333 199,192 214,963 231,696 249,445 268,265 288,216 309,361 331,764 355,495 380,626 530,103 727,916 988,538Accumulated Cash Flow131,488 274,614 431,775 602,113 786,446 985,638 1,200,601 1,432,297 1,681,742 1,950,007 2,238,223 2,547,584 2,879,348 3,234,843 3,615,468 5,950,147 9,172,140 13,565,080Additional 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 Site Plan AVCP HOUSINGLOMACK BUILDINGTUGKAR BUILDING1600'800'400'0SCALE: 1:800MISSOULA, MT(406)728-9522Fax (406)728-8287Date®BIOMASS PRE-FEASIBILITY ASSESSMENTBETHEL, ALASKABETHEL OVERVIEWSSFNHR07/24/2012FEDCJ:BethelNORTHREF.SITE PLAN OFFICE BUILDINGCURRENTLY UNDERCONSTRUCTIONAVCP HOUSING10'-0"180'-0"65'-0"175'-0"15'-0"PROPOSEDBOILER PLANT15'-0"92'-0"135'-0"130'-0"142'-0"25'-0"55'-0"150'-0"100'-0"200'100'50'0SCALE: 1:100MISSOULA, MT(406)728-9522Fax (406)728-8287Date®BIOMASS PRE-FEASIBILITY ASSESSMENTBETHEL, ALASKAAVCP HOUSINGSSFNHR07/24/2012FEDCJ:BethelSITE PLANNORTHREF.LEGENDPIPE ROUTINGBOILER ROOM APPENDIX D Air Quality Report   55 Railroad Row      White River Junction, Vermont 05001  TEL 802.295.4999      FAX 802.295.1006      www.rsginc.com  INTRODUCTION At your request, RSG has conducted an air quality feasibility study for three biomass energy installations in Bethel. Bethel is located in southwest Alaska on the Kuskokwim River and has a population of 6,000 people. The following equipment is proposed:  A 250,000 Btu/hr (heat output) cord wood boiler at the Tukgar Building.  A 3,100,000 Btu/hr (heat output) pellet boiler at the AVCP Housing Complex.  A 250,000 Btu/hr (heat output) cord wood boiler at the Lomack Building. STUDY AREA A USGS map of the study area is provided in Figure 1 below. As shown, the area is flat with much low‐lying areas along the Kuskokwin River. Relative to other sites in Alaska, the area is densely populated. Our review of the area did not reveal any significant emission sources or ambient air quality issues. To: Nick Salmon From: John Hinckley Subject: Bethel Cluster Feasibility Study Date: 24 July 2012 Bethel Air Quality Feasibility Study Resource Systems Group, Inc. 24 July 2012 page 2   Figure 1: USGS Map Illustrating the Study Area Bethel Air Quality Feasibility Study Resource Systems Group, Inc. 24 July 2012 page 3   Figure 1 shows CTA Architects’ plan of the location of the proposed biomass facility at the Tukgar Building and the surrounding buildings. As shown, two locations are being considered for the proposed biomass equipment. The site is relatively flat and relatively densely populated with one to two story tall buildings. The precise stack location and dimensions, and the biomass equipment specifications have not been determined. Figure 1: Overview of Tukgar Site Bethel Air Quality Feasibility Study Resource Systems Group, Inc. 24 July 2012 page 4   Figure 2 shows CTA Architects’ plan of the proposed biomass facility at the AVCP Building and the surrounding buildings. Most of the buildings are approximately one to two stories tall. A stand‐alone biomass facility is planned on the southeast corner of the site. The remote location of the facility will provide a dispersion buffer between the stack and the office buildings. Figure 2: Overview of AVCP Housing Site Bethel Air Quality Feasibility Study Resource Systems Group, Inc. 24 July 2012 page 5   Figure 3 shows CTA Architects’ plan of the proposed biomass facility at the Lomack Building and the surrounding buildings. Most of the buildings are approximately one to two stories tall. An addition is planned for the northern side of the building. Figure 3: Overview of Lomack Building Building Site Bethel Air Quality Feasibility Study Resource Systems Group, Inc. 24 July 2012 page 6   METEOROLOGY Meteorological data from Bethel, AK, was reviewed to develop an understanding of the weather conditions. As shown, there is a relatively low percentage of “calms” or times when the wind is not blowing.1 This data indicates only 1% of the year when calm winds occur, which suggests there will be minimal time periods when thermal inversions and therefore poor emission dispersion conditions can occur. Figure 4: Wind Speed Data from Bethel, AK 1 See: http://climate.gi.alaska.edu/Climate/Wind/Direction/Bethel/BET.html Bethel Air Quality Feasibility Study Resource Systems Group, Inc. 24 July 2012 page 7   Figure 5 is a wind rose developed from wind speed and direction data collected in Bethel.1 This shows prevailing winds are from the northeast (NNE and NE), meaning, they frequently blow towards the southeast. Average wind speeds are up to 12 miles per hour in those directions. This suggests emissions would typically be blown towards the southeast. Figure 5: Wind Rose Showing Wind Speed and Direction 1 See: http://climate.gi.alaska.edu/Climate/Wind/Direction/Bethel/BET.html Bethel Air Quality Feasibility Study Resource Systems Group, Inc. 24 July 2012 page 8   DESIGN & OPERATION RECOMMENDATIONS The following are suggested for designing this project:  Burn natural wood, whose characteristics (moisture content, bark content, species, geometry) ‐ result in optimal combustion in the equipment selected for the project.  Do not install a rain cap above the stack. Rain caps obstruct vertical airflow and reduce dispersion of emissions.  Construct the stack to at least 1.5 times the height of the tallest roofline of the adjacent building. Hence, a 20 foot roofline would result in a minimum 30 foot stack.  Operate and maintain the boiler according to manufacturer’s recommendations.  Perform a tune‐up at least every other year as per manufacturer’s recommendations and EPA guidance (see below for more discussion of EPA requirements)  Conduct regular observations of stack emissions. If emissions are not characteristic of good boiler operation, make corrective actions. These design and operation recommendations are based on the assumption that state‐of‐the‐ art combustion equipment is installed. STATE AND FEDERAL PERMIT REQUIREMENTS This project will not require an air pollution control permit from the Alaska Department of Environmental Quality given the boilers’ relatively small size and corresponding quantity of emissions. However, this project will be subject to new proposed requirements in the federal “Area Source Rule” (40 CFR 63 JJJJJJ). A federal permit is not needed. However, there are various record keeping, reporting and operation and maintenance requirements which must be performed to demonstrate compliance with the requirements in the Area Source Rule. The proposed changes have not been finalized. Until that time, the following requirements are applicable:  Submit initial notification form to EPA within 120 days of startup.  Complete biennial tune ups per EPA method.  Submit tune‐up forms to EPA. Please note the following:  Oil and coal fired boilers are also subject to this rule.  Gas fired boilers are not subject to this rule.  More requirements are applicable to boilers equal to or greater than 10 MMBtu/hr heat input. These requirements typically warrant advanced emission controls, such as a baghouse or an electrostatic precipitator (ESP). The compliance guidance documents and compliance forms can be obtained on the following EPA web page: http://www.epa.gov/boilercompliance/ Bethel Air Quality Feasibility Study Resource Systems Group, Inc. 24 July 2012 page 9   SUMMARY RSG has completed an air quality feasibility study for three new wood boilers in Bethel, Alaska. The boilers are not subject to state permitting requirements, but are subject to federal requirements. Design criteria have been suggested to minimize emissions and maximize dispersion. We do not suggest advanced emission controls (ESP, baghouse) for the following reasons: 1. Bethel has favorable meteorology for dispersion of emissions. 2. The wood boilers will be relatively small emission sources. 3. There are no applicable federal or state emission limits. 4. The Bethel area is relatively rural with no significant emission sources. Given the prevailing winds, we recommend wherever possible to construct boiler stacks on the south to southwest sides of buildings. While not mandatory, we recommend exploring the possibility of a cyclone or multi‐cyclone technology for control of fly ash and larger particulate emissions. We also recommend developing a compliance plan for the aforementioned federal requirements. Please contact me if you have any comments or questions. APPENDIX E Wood Fired Heating Technologies WOOD FIRED HEATING TECHNOLOGIES CTA has developed wood-fired heating system projects using cord wood, wood pellet and wood chips as the primary feedstock. A summary of each system type with the benefits and disadvantages is noted below. Cord Wood Cord wood systems are hand-stoked wood boilers with a limited heat output of 150,000- 200,000 British Thermal Units per hour (Btu/hour). Cord wood systems are typically linked to a thermal storage tank in order to optimize the efficiency of the system and reduce the frequency of stoking. Cord wood boiler systems are also typically linked to existing heat distribution systems via a heat exchanger. Product data from Garn, HS Tarm and KOB identify outputs of 150,000-196,000 Btu/hr based upon burning eastern hardwoods and stoking the boiler on an hourly basis. The cost and practicality of stoking a wood boiler on an hourly basis has led most operators of cord wood systems to integrate an adjacent thermal storage tank, acting similar to a battery, storing heat for later use. The thermal storage tank allows the wood boiler to be stoked to a high fire mode 3 times per day while storing heat for distribution between stoking. Cord wood boilers require each piece of wood to be hand fed into the firebox, hand raking of the grates and hand removal of ash. Ash is typically cooled in a barrel before being stock piled and later broadcast as fertilizer. Cordwood boilers are manufactured by a number of European manufacturers and an American manufacturer with low emissions. These manufacturers currently do not fabricate equipment with ASME (American Society of Mechanical Engineers) certifications. When these non ASME boilers are installed in the United States, atmospheric boilers rather than pressurized boilers are utilized. Atmospheric boilers require more frequent maintenance of the boiler chemicals. Emissions from cord wood systems are typically as follows: PM2.5 >0.08 lb/MMbtu NOx 0.23 lb/MMbtu SO2 0.025 lb/MMbtu CO2 195 lb/MMbtu Benefits: Small size Lower cost Local wood resource Simple to operate Disadvantages: Hand fed - a large labor commitment Typically atmospheric boilers (not ASME rated) Thermal Storage is required Page 1 Wood Pellet Wood pellet systems can be hand fed from 40 pound bags, hand shoveled from 2,500 pound sacks of wood pellets, or automatically fed from an adjacent agricultural silo with a capacity of 30-40 tons. Pellet boilers systems are typically linked to existing heat distribution systems via a heat exchanger. Product data from KOB, Forest Energy and Solagen identify outputs of 200,000-5,000,000 Btu/hr based upon burning pellets made from waste products from the western timber industry. A number of pellet fuel manufacturers produce all tree pellets utilizing bark and needles. All tree pellets have significantly higher ash content, resulting in more frequent ash removal. Wood pellet boilers typically require hand raking of the grates and hand removal of ash 2-3 times a week. Automatic ash removal can be integrated into pellet boiler systems. Ash is typically cooled in a barrel before being stock piled and later broadcast as fertilizer. Pellet storage is very economical. Agricultural bin storage exterior to the building is inexpensive and quick to install. Material conveyance is also borrowed from agricultural technology. Flexible conveyors allow the storage to be located 20 feet or more from the boiler with a single auger. Emissions from wood pellet systems are typically as follows: PM2.5 >0.09 lb/MMbtu NOx 0.22 lb/MMbtu SO2 0.025 lb/MMbtu CO2 220 lb/MMbtu Benefits: Smaller size (relative to a chip system) Consistent fuel and easy economical storage of fuel Automated Disadvantages: Higher system cost Higher cost wood fuel ($/MMBtu) Page 2 Page 3 Wood Chip Chip systems utilize wood fuel that is either chipped or ground into a consistent size of 2-4 inches long and 1-2 inches wide. Chipped and ground material includes fine sawdust and other debris. The quality of the fuel varies based upon how the wood is processed between the forest and the facility. Trees which are harvested in a manner that minimizes contact with the ground and run through a chipper or grinder directly into a clean chip van are less likely to be contaminated with rocks, dirt and other debris. The quality of the wood fuel will also be impacted by the types of screens placed on the chipper or grinder. Fuel can be screened to reduce the quantity of fines which typically become airborne during combustion and represent lost heat and increased particulate emissions. Chipped fuel is fed from the chip van into a metering bin, or loaded into a bunker with a capacity of 60 tons or more. Wood chip boilers systems are typically linked to existing heat distribution systems via a heat exchanger. Product data from Hurst, Messersmith and Biomass Combustion Systems identify outputs of 1,000,000 - 50,000,000 Btu/hr based upon burning western wood fuels. Wood chip boilers typically require hand raking of the grates and hand removal of ash daily. Automatic ash removal can be integrated into wood chip boiler systems. Ash is typically cooled in a barrel before being stock piled and later broadcast as fertilizer. Emissions from wood chip systems are typically as follows: PM2.5 0.21 lb/MMbtu NOx 0.22 lb/MMbtu SO2 0.025 lb/MMbtu CO2 195 lb/MMbtu Benefits: Lowest fuel cost of three options ($/MMBtu) Automated Can use local wood resources Disadvantages: Highest initial cost of three types Larger fuel storage required Less consistent fuel can cause operational and performance issues