HomeMy WebLinkAbout(Attachment B) Final Gulkana Wood Heat Study Sept 2008GULKANA VILLAGE COUNCIL
Community Facilities
Central Wood Heating:
Preliminary Economic Study
Prepared By:
CE2 Engineers, Inc.
Anchorage, Alaska
September 2008
Cordwood Fuel in
Wood-Fired Hydronic
Heater
Ionia, Alaska
Gulkana Village Council Central Wood Heating Preliminary Economic Study
September 2008 i CE2 Engineers, Inc.
TABLE OF CONTENTS
INTRODUCTION ............................................................................................................. 1
WOOD-FIRED HYDRONIC HEATER SYSTEM DESCRIPTION .................................... 1
DESIGN ASSUMPTIONS ............................................................................................... 2
ECONOMIC ANALYSIS METHODOLOGY ..................................................................... 3
RESULTS OF ECONOMIC ANALYSIS ........................................................................... 4
PRESENT VALUE OF COSTS ....................................................................................... 6
DISCUSSION AND CONCLUSIONS .............................................................................. 7
APPENDICES
Appendix A: Cost Analysis Spreadsheet For 5% Annual Oil Cost Increase
Appendix B: Cost Analysis Spreadsheet For 10% Annual Oil Cost Increase
Gulkana Village Council Central Wood Heating Preliminary Economic Study
September 2008 1 CE2 Engineers, Inc.
INTRODUCTION
The State of Alaska Energy Authority – Rural Energy Group (AEA/REG) requested CE2
Engineers, Inc. (CE2) to perform a simplified economic analysis for comparing the cost
of heating five Gulkana Village Council community buildings at Gulkana Village with fuel
oil versus locally obtained firewood. The five buildings are:
• The proposed Washeteria/Water Plant (Construction planned in 2009)
• The Library
• The existing Community Hall
• The existing Tribal Office
• The proposed Clinic/Multi-Use Facility (construction planned in 2009)
This report will examine a scenario for using firewood to heat the facilities. Several key
assumptions were made in this analysis:
• A central wood heating system was planned to meet the buildings’ heating
needs, with the existing heating oil system serving as a backup.
• A cordwood-fired system was selected, which could be switched out to a bulk
biomass fuel system at a later date if the market for bulk biomass fuel develops.
WOOD-FIRED HYDRONIC HEATER SYSTEM DESCRIPTION
The wood-fired hydronic heater would be set up in a separate building, and would
consist of two Garn® Model 3200 wood-fired heaters, with a total water capacity of
6,400 gallons. This boiler is sized to provide 60% of the peak building load with a six-
hour interval between firings. The water capacity of the boiler is sized so that it would
serve as a thermal storage bank for the facility, and would require intermittent firing. In
this configuration, it is anticipated that the wood-fired boiler would meet 85% of the
buildings’ heating needs.
The boiler would be connected to the separate buildings with buried, insulated piping
and would interface with the intended heating systems through a heat exchanger. This
Gulkana Village Council Central Wood Heating Preliminary Economic Study
September 2008 2 CE2 Engineers, Inc.
arrangement would transfer heat with separate building and wood heating system
hydronic heating fluids, so as to prevent a catastrophic failure in the building heating
system due to a piping break inside or outside the building envelope.
DESIGN ASSUMPTIONS
Based upon existing site data, the following parameters were established for this
analysis:
• Heating index was determined to be 14,000 °F Days, based upon weather data
from the Gulkana Airport.
• 97.5% Design Temperature: -45.7°F.
• Fuel oil consumption for the existing and proposed buildings was estimated at
17,227-gallons of #1 heating oil.
• Fuel oil heating value is 134,000-BTU/gallon.
• Efficiency for the oil-fired boilers is set at 77%.
• The cost of fuel oil is based upon delivered fuel oil to the Gulkana Village
Council, and is presently $4.57/gallon. The annual increase in fuel oil cost was
set at 5%. The price of fuel oil is difficult to predict, due to the volatility of crude
oil prices in the world market. For the purposes of this study, a 5% annual
increase in fuel oil cost was considered conservative, and would not skew the
results toward wood heat. A 10% increase scenario was also calculated and is
included in Appendix B.
• The current cost of electricity paid by the Gulkana Village Council was
determined to be 68.52 cents per kilowatt-hour.
• Cordwood was considered to be all spruce, 30% moisture content, by wet basis,
which is achievable by air-drying a year ahead. The net wood energy content is
8100 BTU/lb, dry weight, or 16.16 million BTU/cord, wet basis.
• The cost of cordwood was set at $200/cord, based upon conversations with local
woodcutters. The cost increase for cordwood was set at 3.5% per year, which is
about 1% above the present inflation rate of 2.5%. Presently, there is a BIA
Gulkana Village Council Central Wood Heating Preliminary Economic Study
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sponsored firebreak clearing program for three years, so cordwood is free, but
the $200/cord figure was still included in the analysis to be realistic.
• The wood-fired hydronic heaters would be fired to 200°F and drawn down to
150°F before refiring.
• Storage capacity of the wood-fired hydronic heating system was set at 6-hours at
a 60% of peak building load.
• Wood-fired boiler efficiency was set at 75%, which was based upon actual testing
of Garn® boilers.
• The wood heating season was set at 8 months.
• Labor for stoking was figured at 2 hr/day for 5 days/week and 1 hr/day on
Saturdays and Sundays, for a total of 415-hr stoking per heating season.
Contract labor rate for stoking was set at $20/hr, which would follow the inflation
rate of 2.5% per annum.
• For economic analysis, the real interest rate was set at 3%.
ECONOMIC ANALYSIS METHODOLOGY
A Microsoft Excel spreadsheet was developed to compare the cost of oil heat versus
wood heat. A copy of the spreadsheet, using a conservative 5% annual fuel cost
escalation factor, is shown in Appendix A. Steps in the analysis were as follows:
1. Based upon annual fuel oil use, heating index, boiler efficiency, and fuel cost, it
was determined that the net amount of heat needed was 2,308-million BTU/year.
2. 80% to 90% of this heat at 60% peak load would be provided by cordwood. At a
boiler efficiency of 75%, this translated to 147 cords of wood per year, or
approximately 214 green tons of cordwood.
3. This would require about 978 stokings per year for the wood-fired hydronic
heaters.
4. Electricity cost for running the wood-fired boiler combustion air fans was
calculated to be $940/year.
5. O&M cost of $600/year was estimated for firebrick replacement.
Gulkana Village Council Central Wood Heating Preliminary Economic Study
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6. The spreadsheet was used to compare 2008 values of costs on a 20-year
horizon.
7. Fuel costs per million BTU were compared for fuel oil and cordwood.
8. The present value of oil heat vs. wood heat was compared over a 5-, 10-, and
20-year span.
9. Net boiler output vs. stoking intervals was analyzed to see how they varied over
heat output rates.
RESULTS OF ECONOMIC ANALYSIS
Operating costs for oil heat and wood heat are compared in Table 1, below.
Table 1 – Comparison of Operating Costs for Oil Heat and Wood Heat
Wood Heat System Oil Heat System Oil Heat Wood Heat Annual
Savings
using
Wood Heat
Labor Wood O& M Fuel Oil Fuel Oil O&M $4.57/gal $200/cord
Cost Cost Cost Cost Cost N/A Cost/Yr Cost/Yr
Year ($2008) ($2008) ($2008) ($2008) ($2008) ($2008)($2008) ($2008) ($2008)
2008 $8,304 $24,948 $1,540 $11,809 $78,727 $0 $78,727 $46,600 $32,127
2009 $8,512 $25,821 $1,578 $12,400 $82,664 $0 $82,664 $48,310 $34,354
2010 $8,724 $26,724 $1,618 $13,020 $86,797 $0 $86,797 $50,086 $36,711
2011 $8,942 $27,660 $1,658 $13,671 $91,137 $0 $91,137 $51,931 $39,206
2012 $9,166 $28,628 $1,699 $14,354 $95,694 $0 $95,694 $53,847 $41,846
2013 $9,395 $29,630 $1,742 $15,072 $100,478 $0 $100,478 $55,839 $44,640
2014 $9,630 $30,667 $1,785 $15,825 $105,502 $0 $105,502 $57,908 $47,594
2015 $9,871 $31,740 $1,830 $16,617 $110,777 $0 $110,777 $60,058 $50,720
2016 $10,118 $32,851 $1,876 $17,447 $116,316 $0 $116,316 $62,292 $54,024
2017 $10,371 $34,001 $1,923 $18,320 $122,132 $0 $122,132 $64,614 $57,518
2018 $10,630 $35,191 $1,971 $19,236 $128,239 $0 $128,239 $67,027 $61,211
2019 $10,896 $36,423 $2,020 $20,198 $134,651 $0 $134,651 $69,536 $65,115
2020 $11,168 $37,697 $2,071 $21,207 $141,383 $0 $141,383 $72,143 $69,240
2021 $11,447 $39,017 $2,122 $22,268 $148,452 $0 $148,452 $74,854 $73,598
2022 $11,733 $40,382 $2,175 $23,381 $155,875 $0 $155,875 $77,672 $78,202
2023 $12,027 $41,796 $2,230 $24,550 $163,669 $0 $163,669 $80,603 $83,066
2024 $12,327 $43,259 $2,286 $25,778 $171,852 $0 $171,852 $83,649 $88,203
2025 $12,636 $44,773 $2,343 $27,067 $180,445 $0 $180,445 $86,818 $93,627
2026 $12,951 $46,340 $2,401 $28,420 $189,467 $0 $189,467 $90,112 $99,354
2027 $13,275 $47,962 $2,461 $29,841 $198,940 $0 $198,940 $93,539 $105,401
$214,131 $707,515 $41,337 $392,487 $2,605,204 $2,605,204 $1,349,446 $1,257,766
Gulkana Village Council Central Wood Heating Preliminary Economic Study
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In the first year, the cost of wood heat is approximately 59% of oil heating costs (for
2008: $46,600 wood / $78,727 oil), so the net savings is about 41% for 2008. As the
cost of oil heat climbs more rapidly than wood heat, the savings become significantly
larger. In Year 2027, the cost of wood heat is approximately 47% of the cost for oil
heating (for 2027: $93,539 wood / $198,940 oil), so the net savings climbs to
approximately 53% for 2027. Note that the increase in cost for oil is very conservatively
set at 5% per year for this study, and the increase in cost for cordwood is set at 3.5%
per year.
A graphical view of costs of oil heat versus wood heat is seen below, using an annual
fuel oil cost increase of 5%.
Figure 1 – Annual Operating Costs for Oil Heat and Wood Heat
With a 5% Annual Oil Cost Increase
$0
$50,000
$100,000
$150,000
$200,000
$250,000
Oil Heat vs. Wood Heat Annual Costs ($2008 dollars)
Oil Heat $4.57/gal
Wood Heat $200/cord
A scenario was also run using an annual oil cost increase of 10%. A graphical view of
costs of oil heat versus wood heat using the 10% increase is shown in Figure 2, on the
next page.
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Figure 2 – Annual Operating Costs for Oil Heat and Wood Heat
With a 10% Annual Oil Cost Increase
$0
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
Oil Heat vs. Wood Heat Annual Costs ($2008 dollars)
Oil Heat $4.57/gal
Wood Heat $200/cord
Wood heat costs for the first year were 59% of the oil heating costs. With a 10% cost
increase in oil, the savings get dramatic. After 10 years, wood heat is 39% of oil heat
cost. After 20 years, wood heat is only 28% of the oil heat cost.
PRESENT VALUE OF COSTS
The present value of costs of oil and wood heat was compared over a 5-, 10-, and 20-
year span. Table 2, below, shows these costs.
Table 2 – Present Value of Costs for Oil and Wood-Fired Heating Systems
5% Annual Oil Cost Increase
Present value of costs
20-year 10-year 5-year
Oil Heat $1,846,419 $834,709 $397,304
Wood System $966,959 $466,283 $229,204
Wood Costs/Oil Costs 52% 56% 58%
Gulkana Village Council Central Wood Heating Preliminary Economic Study
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As shown in Table 2, the cost of wood heat becomes more favorable the longer the time
horizon, from 42% savings in a 5-year horizon to 48% in a 20-year horizon.
A scenario was also run on the spreadsheet using an annual increase of 10% for fuel oil
cost. The present value of costs is shown in Table 3, below.
Table 3 – Present Value of Costs for Oil and Wood-Fired Heating Systems
10% Annual Oil Cost Increase
Present value of costs
20-year 10-year 5-year
Oil Heat $3,064,580 $1,045,936 $437,769
Wood System $1,149,683 $497,967 $235,274
Wood Costs/Oil Costs 38% 48% 54%
As shown in Table 3, the cost of wood heat becomes more favorable the longer the time
horizon, from 46% savings in a 5-year horizon to 62% savings in a 20-year horizon. A
copy of the spreadsheet analysis using the 10% cost escalation factor is provided in
Appendix B.
DISCUSSION AND CONCLUSIONS
Using cordwood and hand stoking a wood-fired boiler system at the Gulkana Village
Council building facilities appears to be an economically viable alternative to the existing
system of oil-fired boilers and oil furnaces.
For wood heat, labor costs are approximately 19% of the wood heat costs. This is
inherent in the proposed system using a manually stoked wood-fired boiler. Some
automation could be done in the firebox loading process, which could reduce this labor
cost. More highly automated systems of loading and firing, such as automatic wood
stokers with chip systems could be considered, but choices of wood firing method then
become differences in philosophy; automation versus complexity of operation, and must
be explored separately.
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September 2008 8 CE2 Engineers, Inc.
Capital costs have not been considered at this stage of analysis. The cost of the
heating plant will have to be considered, and this will vary by how much wood is to be
stored on-site under a roof. A heating plant with a one-month supply of wood will cost a
lot less than a heating plant with a 1-year supply of wood on site.
For wood to be a viable source of heat, it will have to be dried to about 30% moisture
content, which is a realistic level. Higher moisture content drives up the net cost of wood
heat considerably, making it less attractive as an alternative heat source to oil, as a
significant amount of the wood burned is used to drive out the moisture.
Depending upon the time horizon examined, wood heat will save 42% to 48% of the
normal operating costs of oil heat at the facility, assuming a very conservative 5%
annual increase in the cost of oil. This is a significant savings for the Gulkana Village
Council, and would greatly decrease its exposure to the uncertainties of heating oil
prices. It would also circulate money inside the community, which would provide
increased employment and revenue to citizens and local wood supply contractors.
Gulkana Village Council Central Wood Heating Preliminary Economic Study
September 2008 CE2 Engineers, Inc.
APPENDICES
Gulkana Village Council Central Wood Heating Preliminary Economic Study
September 2008 CE2 Engineers, Inc.
Appendix A
Cost Analysis Spreadsheet For 5% Annual Oil Cost Increase
GULKANA VILLAGE COUNCIL BUILDINGSWOOD HEAT ANALYSIS USING 5% ANNUAL FUEL COST ESCALATIONWood-Fired Hydronic Heater Simple Economic AnalysisWood Heat Data:flu temp 270 FAverage MC30%amb temp70FFuel Oil Data:Cost of wood:$200/cord$/cord1 cord =100 Cubic Ft SWEApprox. Annual Fuel Cons:17,227gallons 1 Cubic Ft SWE: 30.5 OD lbsEst'd Recovered Heat Avail:0gallons Wood Energy Content: 8100 Btu/lb (OD)Net Annual Fuel Consump:17,227gallons Wood used per year: 147 cordsFuel Energy Content: 134,000Btu/gallon #1Wood used per year: 94 (BDT)Cost of Oil$4.57/gal$/gallon Btu/lb wood @ MC: 30.0%5295Btu/lbTotal Annual Cost of Heat $78,727 per yearNet Annual Cost of Oil: $78,727 per year cost of oil usedCost of wood: $29,350$/YearTotal Annual Energy Use: 2,308 MMBtu/year Annual Wood Energy Use: 2,370 MMBtu/year - Gross into BurnerNet Annual Oil Energy Use: 2,308 MMBtu/yrnet of Recvd HtWood Boiler Efficiency75%Oil Boiler Efficiency77%Wood Energy Content: 16.15 MMBtu/cord - wet basisNet Annual Oil Boiler Output: 1,777 MMBtu/year Wood Weight at MC: 30.0% 1.46 tons/green cordWood Weight at MC: 30.0% 214 green tons/yearHeating Degree Days:14000F-Days/yr97.5% Design Temp:-45.7FQ peak: (NET into water) 586 MBh Based on HDD and Approx. Annual Fuel Consumption0.6 x Q peak: (into water) 351 MBh Estimate 80% - 90% of Fuel Oil Saved at 60% of Peak LoadQ from Recvd Heat:0MBh From HRU.XLS spreadsheetWood Boiler System:351MBh Wood Boiler Peak Heat into waterMax Storage Temp:200F Assume 200F is maximum Storage water temperatureMin Storage Temp:150F Assume 150F is minimum useable heating temperatureDelta-T 50 FStorage Capacity:6HrsTime to lower Storage Capacity (gals) by50FQty of wood Req'd:0.22 cordsQty Wood to raise Storage Capacity by50F 351 outputStorage Capacity Req'd:5056GalsAt 351MBh for6hrsTotal Btu's Stored:2108MBh NOTE: About .15 cords will fit into the fire box based on 0.15cords/stokeGross Btu's (Into firebox):2422MBtu fire box volume of 38 cu. ft. and cord volume of 4' x 4' x 8'Wood System Operation Burn Time (hr) 2 HrNumber of Boilers:2GARNsWood Burner Output:908MBh - into waterBoiler InputBoiler OutputAnnual Wood Energy Use: 2,370 MMBtu/year (into Burner)Fuel Oil 34.10$ $/MMBtu $44.29 $/MMBtu Boiler energy input/stoking: 2.4 MMBtu/stoking into burner/GARNWood 12.38$ $/MMBtu $16.51 $/MMBtu # Stokings/year 978 # Stokings/year (total) Months/year8approx. Manhours/stoking: 0.18hrs/stokingPER GARN (not used directly) Manhours/year:415(see stoking labor section below)Present value of costs Cost of labor ($/hr)1.17OH Rate (Not used) 20-year10-year5-year Cost of labor ($/hr)$20.00(contract labor) Oil Heat $1,846,419 $834,709 $397,304 Cost/yr contract worker $8,304Wood System $966,959 $466,283 $229,204 Electric Blower Energy:0.75HP /GARN Wood Costs/Oil Costs 52% 56% 58%Page 1 of 39/30/2008
GULKANA VILLAGE COUNCIL BUILDINGSWOOD HEAT ANALYSIS USING 5% ANNUAL FUEL COST ESCALATION Fan Runtime:2.5hrs/firing assume 30 minutes longer than wood takes to burn Energy Consumption: 1.4 kWh/firing/GARN Cost of Electricity:$0.686per kWhOil Heat Wood HeatLabor Wood O& M Fuel Oil Fuel Oil O&M$4.57/gal $200/cord Fan Energy Cost: $940Total all units Cost Cost Cost Cost Cost N/ACost/Yr Cost/YrWood Sys Maintenance Year($2008)($2008)($2008)($2008)($2008)($2008)($2008)($2008)($2008) Fire brick cost$6002008 $8,304 $24,948 $1,540 $11,809 $78,727 $0 $78,727 $46,600 $32,127Total O&M Cost: $1,5402009 $8,512 $25,821 $1,578 $12,400 $82,664 $0 $82,664 $48,310 $34,3542010 $8,724 $26,724 $1,618 $13,020 $86,797 $0 $86,797 $50,086 $36,711Wood Equipment Cost$02011 $8,942 $27,660 $1,658 $13,671 $91,137 $0 $91,137 $51,931 $39,206Heat Load met by GARN85%2012 $9,166 $28,628 $1,699 $14,354 $95,694 $0 $95,694 $53,847 $41,8462013 $9,395 $29,630 $1,742 $15,072 $100,478 $0 $100,478 $55,839 $44,640Oil system O&M cost /yr*$02014 $9,630 $30,667 $1,785 $15,825 $105,502 $0 $105,502 $57,908 $47,594* Note: Sunk cost, not included in comparison 2015 $9,871 $31,740 $1,830 $16,617 $110,777 $0 $110,777 $60,058 $50,720Real Interest rate:3.00%2016 $10,118 $32,851 $1,876 $17,447 $116,316 $0 $116,316 $62,292 $54,0242017 $10,371 $34,001 $1,923 $18,320 $122,132 $0 $122,132 $64,614 $57,518Real Fuel Oil Price Increase:5.00%2018 $10,630 $35,191 $1,971 $19,236 $128,239 $0 $128,239 $67,027 $61,211Real Wood Price Increase:3.50%2019 $10,896 $36,423 $2,020 $20,198 $134,651 $0 $134,651 $69,536 $65,115Rate of Inflation:2.50%2020 $11,168 $37,697 $2,071 $21,207 $141,383 $0 $141,383 $72,143 $69,2402021 $11,447 $39,017 $2,122 $22,268 $148,452 $0 $148,452 $74,854 $73,5982022 $11,733 $40,382 $2,175 $23,381 $155,875 $0 $155,875 $77,672 $78,2022023 $12,027 $41,796 $2,230 $24,550 $163,669 $0 $163,669 $80,603 $83,0662024 $12,327 $43,259 $2,286 $25,778 $171,852 $0 $171,852 $83,649 $88,2032025 $12,636 $44,773 $2,343 $27,067 $180,445 $0 $180,445 $86,818 $93,6272026 $12,951 $46,340 $2,401 $28,420 $189,467 $0 $189,467 $90,112 $99,3542027 $13,275 $47,962 $2,461 $29,841 $198,940 $0 $198,940 $93,539 $105,401GIVEN: $214,131 $707,515 $41,337 $392,487 $2,605,204 $2,605,204 $1,349,446 $1,257,766Number of Boilers: 2 EAGARN Model No.: 3200 6,400 Gallons total boiler volumeMax Boiler Temp 200 FMin Boiler Temp 150 FBuilding Heat Required (MBh) 351MBh - into waterGross Wood Btu's/Stoking (MBtu):4,845 MBtu - Gross wood energyGross Wood Btu's/hr (MBH):2,422 MBh - GrossTime to burn out one Stoking (Hr): 2.0 Hr - burn time check, compare to cell B33Net Wood Burner ouput/hr (MBH):1,816.8 MBh - into waterPeak+200M btu/hrPeak + 100 M btu/hrPeak btu/hrPeak-100 M btu/hrPeak-200M btu/hrNET Boiler Output (MBh)786 686 586 486 386BOILER FIRING INTERVALTime to Heat (Hr)2.6 2.4 2.2 2.0 1.9Stokings Req'd (Firings)1.3 1.2 1.1 1.0 0.9Time to Cool (Hr)3.4 3.9 4.6 5.5 6.9Time to Heat + Cool (Hr)6.0 6.3 6.7 7.5 8.8Avg Stoking Interval (Hr)4.6 5.3 6.2 7.5 9.4Wood Heat System Oil Heat SystemAnnual Savings using Wood HeatPage 2 of 39/30/2008
GULKANA VILLAGE COUNCIL BUILDINGSWOOD HEAT ANALYSIS USING 5% ANNUAL FUEL COST ESCALATIONSTOKING LABORHeating season 8 mo x 4.33 wk/mo = 34.6 weeksWeekday stoking labor 2 hr/d x 5 d/wk x 34.6 wk =346.0 hr/heating seasonSaturday stoking labor 1 hr/d x 1 d/wk x 34.6 wk =34.6 hr/heating seasonSunday stoking labor 1 hr/d x 1 d/wk x 34.6 wk =34.6hr/heating seasonTotal Stoking Labor Time 415.2 hr/heating seasonASSUMPTIONSNOTES4. Firing rates are based upon using 2 each Garn 3200 boiler (6400 gal water capacity).1. Labor time can be significantly reduced by use of equipment, such as a skid steer loader to help position pallets or skids of firewood for stoking.7. Wood fuel cost is expected to rise at a lower rate than that of fuel oil. In this case, it has been fixed at 1% above the rate of inflation, or 3.5% per annum in this analysis.8. Wood fuel is assumed to replace 85% of the oil consumption at the facility.2. There should be a year's worth of wood on hand to ensure the 30% moisture content. The moisture content of wood fuel up to 40% can drive up the equivalent cost of wood significantly.5. Firewood is assumed to be all local spruce, dried to 30% moisture content.6. Firewood is assumed to be 100 cu ft per cord, which includes cordwood bark.3. Labor rate is based upon an estimated rate of $20/hour, with 2 hr/day stoking on weekdays, 1 hr/day on Saturdays, and 1 hr/day on Sundays.2. Wood price estimate is from discussions with local consumers. Going rate is estimated at $200/cord. The village can get cordwood from village corp or Ahtna, Inc. land holdings.1. Fuel oil cost is based upon September 2008 price of #1 heating oil that the community received from Fisher's Fuel, Inc.Oil Heat vs. Wood Heat Annual Costs ($2008 dollars)$0$50,000$100,000$150,000$200,000$250,00020082009201020112012201320142015201620172018201920202021202220232024202520262027Oil Heat $4.57/galWood Heat $200/cordPage 3 of 39/30/2008
Gulkana Village Council Central Wood Heating Preliminary Economic Study
September 2008 CE2 Engineers, Inc.
Appendix B
Cost Analysis Spreadsheet With 10% Annual Oil Cost Increase
GULKANA VILLAGE COUNCIL BUILDINGSWOOD HEAT ANALYSIS USING 10% ANNUAL FUEL COST ESCALATIONWood-Fired Hydronic Heater Simple Economic AnalysisWood Heat Data:flu temp 270 FAverage MC30%amb temp70FFuel Oil Data:Cost of wood:$200/cord$/cord1 cord =100 Cubic Ft SWEApprox. Annual Fuel Cons:17,227gallons 1 Cubic Ft SWE: 30.5 OD lbsEst'd Recovered Heat Avail:0gallons Wood Energy Content: 8100 Btu/lb (OD)Net Annual Fuel Consump:17,227gallons Wood used per year: 147 cordsFuel Energy Content: 134,000Btu/gallon #1Wood used per year: 94 (BDT)Cost of Oil$4.57/gal$/gallon Btu/lb wood @ MC: 30.0%5295Btu/lbTotal Annual Cost of Heat $78,727 per yearNet Annual Cost of Oil: $78,727 per year cost of oil usedCost of wood: $29,350$/YearTotal Annual Energy Use: 2,308 MMBtu/year Annual Wood Energy Use: 2,370 MMBtu/year - Gross into BurnerNet Annual Oil Energy Use: 2,308 MMBtu/yrnet of Recvd HtWood Boiler Efficiency75%Oil Boiler Efficiency77%Wood Energy Content: 16.15 MMBtu/cord - wet basisNet Annual Oil Boiler Output: 1,777 MMBtu/year Wood Weight at MC: 30.0% 1.46 tons/green cordWood Weight at MC: 30.0% 214 green tons/yearHeating Degree Days:14000F-Days/yr97.5% Design Temp:-45.7FQ peak: (NET into water) 586 MBh Based on HDD and Approx. Annual Fuel Consumption0.6 x Q peak: (into water) 351 MBh Estimate 80% - 90% of Fuel Oil Saved at 60% of Peak LoadQ from Recvd Heat:0MBh From HRU.XLS spreadsheetWood Boiler System:351MBh Wood Boiler Peak Heat into waterMax Storage Temp:200F Assume 200F is maximum Storage water temperatureMin Storage Temp:150F Assume 150F is minimum useable heating temperatureDelta-T 50 FStorage Capacity:6HrsTime to lower Storage Capacity (gals) by50FQty of wood Req'd:0.22 cordsQty Wood to raise Storage Capacity by50F 351 outputStorage Capacity Req'd:5056GalsAt 351MBh for6hrsTotal Btu's Stored:2108MBh NOTE: About .15 cords will fit into the fire box based on 0.15cords/stokeGross Btu's (Into firebox):2422MBtu fire box volume of 38 cu. ft. and cord volume of 4' x 4' x 8'Wood System Operation Burn Time (hr) 2 HrNumber of Boilers:2GARNsWood Burner Output:908MBh - into waterBoiler InputBoiler OutputAnnual Wood Energy Use: 2,370 MMBtu/year (into Burner)Fuel Oil 34.10$ $/MMBtu $44.29 $/MMBtu Boiler energy input/stoking: 2.4 MMBtu/stoking into burner/GARNWood 12.38$ $/MMBtu $16.51 $/MMBtu # Stokings/year 978 # Stokings/year (total) Months/year8approx. Manhours/stoking: 0.18hrs/stokingPER GARN (not used directly) Manhours/year:415(see stoking labor section below)Present value of costs Cost of labor ($/hr)1.17OH Rate (Not used) 20-year10-year5-year Cost of labor ($/hr)$20.00(contract labor) Oil Heat $3,064,580 $1,045,936 $437,769 Cost/yr contract worker $8,304Wood System $1,149,683 $497,967 $235,274 Electric Blower Energy:0.75HP /GARN Wood Costs/Oil Costs 38% 48% 54%Page 1 of 39/30/2008
GULKANA VILLAGE COUNCIL BUILDINGSWOOD HEAT ANALYSIS USING 10% ANNUAL FUEL COST ESCALATION Fan Runtime:2.5hrs/firing assume 30 minutes longer than wood takes to burn Energy Consumption: 1.4 kWh/firing/GARN Cost of Electricity:$0.686per kWhOil Heat Wood HeatLabor Wood O& M Fuel Oil Fuel Oil O&M$4.57/gal $200/cord Fan Energy Cost: $940Total all units Cost Cost Cost Cost Cost N/ACost/Yr Cost/YrWood Sys Maintenance Year($2008)($2008)($2008)($2008)($2008)($2008)($2008)($2008)($2008) Fire brick cost$6002008 $8,304 $24,948 $1,540 $11,809 $78,727 $0 $78,727 $46,600 $32,127Total O&M Cost: $1,5402009 $8,512 $25,821 $1,578 $12,990 $86,600 $0 $86,600 $48,900 $37,7002010 $8,724 $26,724 $1,618 $14,289 $95,260 $0 $95,260 $51,355 $43,905Wood Equipment Cost$02011 $8,942 $27,660 $1,658 $15,718 $104,786 $0 $104,786 $53,978 $50,808Heat Load met by GARN85%2012 $9,166 $28,628 $1,699 $17,290 $115,265 $0 $115,265 $56,783 $58,4822013 $9,395 $29,630 $1,742 $19,019 $126,791 $0 $126,791 $59,786 $67,006Oil system O&M cost /yr*$02014 $9,630 $30,667 $1,785 $20,921 $139,470 $0 $139,470 $63,003 $76,467* Note: Sunk cost, not included in comparison 2015 $9,871 $31,740 $1,830 $23,013 $153,417 $0 $153,417 $66,454 $86,964Real Interest rate:3.00%2016 $10,118 $32,851 $1,876 $25,314 $168,759 $0 $168,759 $70,158 $98,6012017 $10,371 $34,001 $1,923 $27,845 $185,635 $0 $185,635 $74,139 $111,496Real Fuel Oil Price Increase:10.00%2018 $10,630 $35,191 $1,971 $30,630 $204,199 $0 $204,199 $78,421 $125,777Real Wood Price Increase:3.50%2019 $10,896 $36,423 $2,020 $33,693 $224,618 $0 $224,618 $83,031 $141,587Rate of Inflation:2.50%2020 $11,168 $37,697 $2,071 $37,062 $247,080 $0 $247,080 $87,998 $159,0822021 $11,447 $39,017 $2,122 $40,768 $271,788 $0 $271,788 $93,355 $178,4342022 $11,733 $40,382 $2,175 $44,845 $298,967 $0 $298,967 $99,136 $199,8312023 $12,027 $41,796 $2,230 $49,330 $328,864 $0 $328,864 $105,382 $223,4822024 $12,327 $43,259 $2,286 $54,263 $361,750 $0 $361,750 $112,134 $249,6162025 $12,636 $44,773 $2,343 $59,689 $397,925 $0 $397,925 $119,440 $278,4862026 $12,951 $46,340 $2,401 $65,658 $437,718 $0 $437,718 $127,350 $310,3682027 $13,275 $47,962 $2,461 $72,223 $481,490 $0 $481,490 $135,922 $345,568GIVEN: $214,131 $707,515 $41,337 $678,375 $4,511,119 $4,511,119 $1,635,333 $2,877,794Number of Boilers: 2 EAGARN Model No.: 3200 6,400 Gallons total boiler volumeMax Boiler Temp 200 FMin Boiler Temp 150 FBuilding Heat Required (MBh) 351MBh - into waterGross Wood Btu's/Stoking (MBtu):4,845 MBtu - Gross wood energyGross Wood Btu's/hr (MBH):2,422 MBh - GrossTime to burn out one Stoking (Hr): 2.0 Hr - burn time check, compare to cell B33Net Wood Burner ouput/hr (MBH):1,816.8 MBh - into waterPeak+200M btu/hrPeak + 100 M btu/hrPeak btu/hrPeak-100 M btu/hrPeak-200M btu/hrNET Boiler Output (MBh)786 686 586 486 386BOILER FIRING INTERVALTime to Heat (Hr)2.6 2.4 2.2 2.0 1.9Stokings Req'd (Firings)1.3 1.2 1.1 1.0 0.9Time to Cool (Hr)3.4 3.9 4.6 5.5 6.9Time to Heat + Cool (Hr)6.0 6.3 6.7 7.5 8.8Avg Stoking Interval (Hr)4.6 5.3 6.2 7.5 9.4Wood Heat System Oil Heat SystemAnnual Savings using Wood HeatPage 2 of 39/30/2008
GULKANA VILLAGE COUNCIL BUILDINGSWOOD HEAT ANALYSIS USING 10% ANNUAL FUEL COST ESCALATIONSTOKING LABORHeating season 8 mo x 4.33 wk/mo = 34.6 weeksWeekday stoking labor 2 hr/d x 5 d/wk x 34.6 wk =346.0 hr/heating seasonSaturday stoking labor 1 hr/d x 1 d/wk x 34.6 wk =34.6 hr/heating seasonSunday stoking labor 1 hr/d x 1 d/wk x 34.6 wk =34.6hr/heating seasonTotal Stoking Labor Time 415.2 hr/heating seasonASSUMPTIONSNOTES1. Fuel oil cost is based upon September 2008 price of #1 heating oil that the community received from Fisher's Fuel, Inc.2. Wood price estimate is from discussions with local consumers. Going rate is estimated at $200/cord. The village can get cordwood from village corp or Ahtna, Inc. land holdings.3. Labor rate is based upon an estimated rate of $20/hour, with 2 hr/day stoking on weekdays, 1 hr/day on Saturdays, and 1 hr/day on Sundays.2. There should be a year's worth of wood on hand to ensure the 30% moisture content. The moisture content of wood fuel up to 40% can drive up the equivalent cost of wood significantly.4. Firing rates are based upon using 2 each Garn 3200 boiler (6400 gal water capacity).5. Firewood is assumed to be all local spruce, dried to 30% moisture content.6. Firewood is assumed to be 100 cu ft per cord, which includes cordwood bark.7. Wood fuel cost is expected to rise at a lower rate than that of fuel oil. In this case, it has been fixed at 1% above the rate of inflation, or 3.5% per annum in this analysis.8. Wood fuel is assumed to replace 85% of the oil consumption at the facility.1. Labor time can be significantly reduced by use of equipment, such as a skid steer loader to help position pallets or skids of firewood for stoking.Oil Heat vs. Wood Heat Annual Costs ($2008 dollars)$0$100,000$200,000$300,000$400,000$500,000$600,00020082009201020112012201320142015201620172018201920202021202220232024202520262027Oil Heat $4.57/galWood Heat $200/cordPage 3 of 39/30/2008