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Home My WebLink AboutTazlina Biomass Prefeasibility Study - 2013 - REF Grant 708110Biomass Prefeasibility Study for Tazlina Tribal Council Prepared for Alaska Village Initiatives with funding from D 0 E by: Alaska Wood Energy Associates Greg Koontz, ME & Bill Wall, PhD TAZLINA LEVEL 2 BIOMASS FEASIBILITY Tazlina, Alaska Table of Contents 2013 Revisions Chip System Update SECTION 1 1 Executive Summary............................................................................................. 3 1.1 Background............................................................................................................................ 3 1.2 Small Scale Chip -fired Boilers.................................................................................................. 4 1.3 Project Scale........................................................................................................................... 5 1.4 Next Steps.............................................................................................................................. 5 SECTION 2 1 Comparisons: Biomass Boilers............................................................................. 8 2.1 Fuel Types and Handling......................................................................................................... 8 Stick-wood............................................................................................................................................8 WoodChips..........................................................................................................................................9 2.2 Batch -Fed vs Modulating Boilers........................................................................................... 10 Batch -Fed Boilers................................................................................................................................10 ModulatingBoilers.............................................................................................................................10 2.3 Integration of Biomass Systems into Existing Systems........................................................... 11 ModulatingBoilers.............................................................................................................................11 Batch -Fed Boilers................................................................................................................................11 2.4 Utilization Rate and Oil Displacement................................................................................... 12 SECTION 3 1 Comparisons: Inputs......................................................................................... 14 3.1 Resource Assumptions.......................................................................................................... 14 3.2 Resource Consumption......................................................................................................... 15 3.3 Cost Estimating / Project Costs............................................................................................. 16 3.3 Boiler Performance............................................................................................................... 16 3.4 Benefit Cost Ratio................................................................................................................. 16 Appendix 1. P&M Boiler Brochure........................................................................................ 18 Alaska Wood Energy Associates 2121 VERSION 1.0 TAZLINA LEVEL 2 BIOMASS FEASIBILITY Tazlina, Alaska SECTION 11 Executive Summary 1.1 Background 2013 Revisions Chip System Update Alaska Wood Energy Associates (AWEA) first published the results of a Level 2 feasibility study on the subject of biomass utilization in Tazlina in September of 2012. The performance model AWEA uses for these assessments compares boilers fueled by stick wood, wood chips, and wood pellets. However, one or more of these fuel sources is often not viable in a village for one reason or another. Pellets, for instance, are not available off the road system, at least not a price that would be viable. In other instances, the available biomass end -use equipment itself places a limitation on the viable fuel types. Biomass boilers are discussed in detail in Section 2, but in the past, the smallest chip -fired AWEA believed was appropriate for rural Alaska was sometimes simply too large for the application in a given village. In these cases, a chip -fired boiler could be used, but the cost of the equipment was so high, it was not financially viable. This was the case in Tazlina. The four buildings included in the study (collectively labeled the Tribal Complex) are not large, and even combined into a single heating plant, the heating load was simply too small for the line of biomass boilers (Wiessmann) that AWEA commonly uses in their analyses. This left stick -fired boilers, and because Tazlina is on the road system, pellet -fired boilers. Although smaller in capacity than the smallest Wiessmann boiler, the capacity of the smallest of the line of stick -fired boilers commonly available in Alaska (Garn) was also larger than the Tribal Complex required. So, while stick -fired boilers were a better fit than chip -fired boilers, they still had a financial payback that was excessive (see Figure 1.1 below). Pellet -fired boilers are available in very small capacities, and therefore it was possible to match a boiler very specifically to the heating load at Tazlina. Thus pellet boilers showed the best financial performance of any fuel type; however, the payback of 8.0 years, in conjunction with some of the issues related to pellets, meant that even the pellet -fired option was not compelling to Tazlina. See Figure 1.1, reproduced from the original study: 136 Tribal Complex Chip Stick Pellet savings $15,750 $16,738 $19,575 cost $324,201 $206,368 $156,169 NSP 20.6 yrs 12.3 yrs 8.0 yrs Figure 1.1 Alaska Wood Energy Associates 3121 VERSION 1.0 TAZLINA LEVEL 2 BIOMASS FEASIBILITY Tazlina, Alaska 2013 Revisions Chip System Update Wood pellets are fundamentally different than stick -wood or wood chips as a fuel; some of these differences are more relevant that others, depending on the village. • They are the most expensive form of biomass fuel • They are highly processed; they are formed from compressed sawdust and wood shavings that have been mechanically dried • As such, they cannot be produced locally in small villages, which have no steady source of sawdust and shavings Conversely, both stick wood and wood chips are almost always produced locally. They commonly produce local jobs, help manage local resources, and keep resource dollars in the village. 1.2 Small Scale Chip -fired Boilers The primary criterion required to re -visit this feasibility study would be a change in some "variable" that has the potential to make the project significantly more attractive to Tazlina. In this case, AWEA believes that the availability of a viable small scale chip -fired boiler meets this criterion. The key word is "viable" — small chip -fired boilers do exist, and have for many years. There are two primary reasons that AWEA did not consider the ones they were aware of as "viable" for use in rural Alaska: 1) They require wood chips with a moisture content of 35 percent (MC 35) or less. Wiessmann has two "model lines" or series of chip -feed boilers. The smaller series has a boiler that a capacity that would fit the Tribal Complex well — but the boilers in the smaller series require chips with MC 35 or less. Other smaller chip -fired boilers would not operate even at MC 35. It is possible to achieve MC 35 chips in rural Alaska, even without mechanical drying. However, it requires air drying for extended periods of dry weather, which are often few and far between. In addition, if something happened and the "dry chip" supply ran out, it could be weeks or months before a new supply of MC 35 chips was available. This is not an acceptable premise on which to building a new heating plant. 2) They were not sufficiently automated. In order to be a viable solution for a replacement to an oil boiler, ideally the boiler should be as easy to use and automatic as the oil boiler. No chip boiler quite meets this criterion, but at a minimum, AWEA requires that a chip -fired boiler: a) auto -start the boiler when heating demand requires heat b) modulate the fuel and air to maintain the hot water temperature c) be robust and simple to fix As they get larger and more sophisticated, chip -fired boilers often incorporate additional features that make them even more convenient and efficient — but AWEA considers the short list above to be the minimum requirements. Alaska Wood Energy Associates 4121 VERSION 1.0 TAZLINA LEVEL 2 BIOMASS FEASIBILITY 2013 Revisions Tazlina, Alaska Chip System Update The reason for re -visiting the Tazlina study, therefore, is that AWEA has become aware of a manufacturer with a newer line of small scale chip boilers that we believe meet these criteria. The State is also interested this new line of boilers, and the first one in Alaska is scheduled to be installed in Mentasta Lake soon. The manufacturer of this boiler is Portage and Main (P&M), of Canada. Their line of chip -fired boilers is called " BnviroChip". There are two boilers models in the line, the 500 and the 800; however, the 800 is a custom unit, and not UL listed, so only the model 500 will be considered here. Again, boilers are covered in detail in Section 2; The P&M 500 is covered in more detail there. The purpose of this revised report is to determine how the application of this boiler would affect the economics of a biomass heating project in Tazlina. 1.3 Project Scale As noted above, there were four buildings included in the original study, as there are in the revised study. The performance model AWEA uses automatically evaluates each building for an individual boiler, and then evaluates any grouping of buildings that the user chooses. In the case of this revised report, however, we are going to look only at a biomass heating plant that would include all four buildings; the Tribal Complex. Figure 1.2 below shows the four buildings that comprise the Complex, and their current annual oil consumption: Building Information, Part 1 oil ann Bldg No. Res include in gal ID ea ? Name Sc 1 Sc 2 Sc 3 Sc 4 each 1 1 Tribal Office 1,382 1 1 Community Hall 3,370 1 1 Tribal Clinic 919 4 1 1 Shop 2,407 5 6 1 1 Tribal Complex 8,078 7 Figure 1.2 1.4 Next Steps A number of things have changed since the publication of the original report, not least the emergence of a viable small-scale chip -fired boiler. There are three further Sections to this revised report, each deals with comparisons; these Sections elaborate on these changes in detail. One that deserves mention here is that as AWEA spends more time working in rural Alaska, we learn more about construction practices and costs in rural Alaska, and of course, material and fuel costs change constantly. Thus the economics presented here for stick and pellet -fired boilers will not match exactly the figures from the original report. Sections 2, 3, and 4 provide additional information on these changes. The P&M boiler represents such a significant change to the project viability for three reasons: Alaska Wood Energy Associates 5121 VERSION 1.0 TAZLINA LEVEL 2 BIOMASS FEASIBILITY Tazlina, Alaska 2013 Revisions Chip System Update 1) It can operate with wood chips up to MC 45. 2) The boiler is the "right size" for Tazlina, and while it meets the chip -boiler criteria above, it is simple and robust; this is reflected in a first cost that is much lower than any boiler in the Wiessmann line. 3) It automatically attempts to re -start based on a timer — if the boiler is still running, nothing happens. However, if the flame has "gone out" due to low load, it will re -start. This combined with thermal storage (see Section 2) means that it can usefully cover any load from zero to the maximum listed capacity — this maximizes the amount oil that can be displaced. Figure 1.3 below shows both the old and new results, side by side (the "old" results are replicated from Figure 1.1 above). From this point in the report going forward, results from the original report will be grayed out, while new results are in black. B6 Tribal Complex Tribal Complex Chip Stick Pellet Chip Stick Pellet savings $27,474 $16,579 $19,575 savings $15,750 $16,738 $19,575 cost $178,864 $202,224 $145,341 cost $324,201 $206,368 $156,169 NSP 6.5 yrs 12.2 yrs 7.4yrs NSP 20.6 yrs 12.3 yrs 8.0 yrs Figure 1.3 The "B6" (or Building 6) in the title block of both tables reflects the fact that the combination of the buildings occupies the sixth position in the analysis model (see Figure 1.2) — it has no other significance. For the stick -fired and pellet -fired options, the financials have gotten slightly better (nothing changed except some of the underlying resource and cost estimating assumptions, as noted above). For the chip - fired option, however, the use of the P&M 500 boiler reduced the net simple payback (NSP) by almost a factor of four. In this revised study, it emerges as the best option based on financial considerations. Because it uses wood -chips as a fuel, it also provides some of the additional benefits associated with wood chips listed above. Figure 1.4 provides additional project detail, for the chip -fired boilers only, with a comparison between the first analysis and this update of the report. Chip -Fired Boilers P&M Envirochip 10500 boiler 1 12 boiler 2 ffiTribal Complex boiler 3 current oil 8,078 gal chips req 116.4 GT boiler(s) $34,380 unit price $4.900 unit price $90 building $25,800 annual cost $39,580 annual cost $10,473 mechanical $65,817 electrical $5,300 proposed oil 0 electrical 8,165 kWh controls $10,256 unit price $4.900 unit price $0.200 project costs $37,311 annual cost $0 annual cost $1,633 total cost $178,864 oil displaced 8,078 gal harvest ann savings $27,474 fraction disp 1.000 acres 7.76 peryr NSP 6.5yrs Alaska Wood Energy Associates 6121 VERSION 1.0 TAZLINA LEVEL 2 BIOMASS FEASIBILITY Tazlina, Alaska 2013 Revisions Chip System Update Chip -Fired Boilers Wiessmann Pyrot 150 boiler 1 2 • boiler 2 • Tribal Complex boiler 3 current oil 3,ui3 gal cnips req b1.3 GI aoiier(s) $1b.2,t64 unit price $4.900 unit price $60 building annual cost $39,580 annual cost $3,076 mechanical $71,041 electrical $5,333 proposed oil 3,992 electrical 5,970 kWh controls $13,753 unit price $4.900 unit price $0.200 project costs $71,289 annual cost $19,560 annual cost $1,194 total cost $324,201 oil displaced 4,086 gal harvest ann savings $15,750 fraction disp 0.506 acres 3.49 peryr NSP 20.6yrs Figure 1.4 The three key values to take from Figure 4 are: 1) The P&M boiler displaces 100 percent of the oil vs about half for the Wiessmann; this significantly increases savings 2) The "revised" boiler -associated costs drop from—$163,000 to—$34,000. 3) The amount of wood chips (and harvest acres) required in the revised model more than doubles from the amount in the original model. The increase in wood -chips required is almost entirely due to the fact that in the revised model, the boiler displaces all of the oil, as opposed to about half. However, it must be said that the P&M boiler is significantly less efficient that the Wiessmann boiler (0.77 vs 0.85 — may not seem "significant, but it is). We encourage Tazlina in their fuels reduction practices to harvest both hardwoods and spruce and allow drying for one field season. This will reduce the moisture content by at least 20% bringing chip moisture to about 30%. This significantly increases the recoverable BTUs per ton of chips and allows the needles and leaves to fall off and out of the product stream going into the boiler. Two additional pieces of equipment will be required but have not been put into the financial models. These are a small commercial knife type micro chip chipper and a small bobcat for loading the hopper. There is so much variability in the opportunities for tribes to secure this equipment that we did not model it in the financials. However, the project has such strong financials that these two pieces of equipment will not significantly impact the benefit cost ratio. Alaska Wood Energy Associates 7121 VERSION 1.0 TAZLINA LEVEL 2 BIOMASS FEASIBILITY Tazlina, Alaska SECTION 2 1 Comparisons: Biomass Boilers 2.1 Fuel Types and Handling 2013 Revisions Chip System Update Stick -wood Stick wood consists of lengths of wood, cut to the length of the furnace or fireplace they are intended for. If the diameter of the wood is too large for the application, then the wood is split into pieces — this improves the burn and allows the use of larger wood. The standard unit of by which stick -wood is sold is the cord. In the lower 48, wood is commonly gathered, cut and split in the summer, and then covered and stockpiled for the winter. This allows the wood to "season" — it dries out and thus produces a cleaner, hotter burn. The useable heat content (BTU/lb or BTU/cord) increases as the moisture content drops. In rural Alaska, however, the scenario is often different. First, the heating season is much longer, so the amount of wood to be gathered is much larger. Second, access to wood is generally better in winter after the freeze begins than it is in summer. For that reason, stick -wood in Alaska is not likely to be as dry as it is in the lower 48, and will not burn as hot or clean. In terms of material handling for a boiler, stick -wood is handled manually. No one has yet come up with a small-scale boiler than can automatically feed stick -wood, in all its variations, into a boiler. While this manually feeding means there is no chance of a material handling failure, it requires a significant amount of labor (see below). It also affects how stick -fired systems operate (Section 2.2) and integrate with existing systems (Section 2.3). There is another aspect of stick -wood that affects local resources in rural Alaska — it can difficult to fully utilize the available wood resource. The furnaces into which stick wood is fed are cylindrical, and the diameters are not overly large — 25 to 40 inches for the line of boilers AWEA typically evaluates. The recommended wood diameter for these furnaces is 3 to 12 inches. While wood that is larger than 12 inches in diameter can be split, wood 3 inches and below constitutes a significant fraction of the wood resource that cannot easily be used. Smaller sections are also often highly branched, which makes loading the furnace very difficult unless the branches are manually stripped into more or less straight pieces. AWEA utilizes one line of stick -fired boilers in their analyses; the line manufactured by Gam. There a number of Garn boilers in Alaska. Garn has three sizes of boilers, detailed below. Pellets: Wood pellets are mechanically dried sawdust and shavings that are mechanically compressed into evenly sized pellets. They have extremely low moisture content (MC 5 or less), and are thus very "energy dense". They all virtually smooth, uniform in size, and thus "flow" almost like a thick liquid Alaska Wood Energy Associates 8121 VERSION 1.0 TAZLINA LEVEL 2 BIOMASS FEASIBILITY 2013 Revisions Tazlina, Alaska Chip System Update when handled. They almost never foul a material handling system — in some respects they are an ideal biomass fuel. Because of the low moisture content, the efficiency of pellet boilers is exceptionally high. Wood pellets are sold by the ton; in this case, the moisture content is so low that no one distinguishes between green tons and dry tons. However, the amount of processing required to make the pellets means they are expensive. The "raw materials", sawdust and shavings, are a generally the byproduct of lumber industry, the furniture industry, or both. For that reason, pellets are not generally produced in rural Alaska because almost no villages can produce the steady stream of sawdust and shavings required. Any village that uses them must therefore be on the road system, so that the pellets can be trucked in. Because of the high cost of pellets compared to chips, pellet -fired boilers are generally not manufactured in very large sizes — once the boiler gets to a certain size, the assumption is that the user is sophisticated enough to deal with wood chips, which are a cheaper fuel on a unit basis. Thus pellets boilers are generally designed for much lower capacities than chip boilers. The Froling P4 line of pellet boilers ranges in capacity from 35 to 200 kBTU/h in heating capacity — the Pyrotec line of Wiessmann chip -fired boilers ranges from 1,331 to 4,265 kBTU/h. Wood Chips In some respects, wood chips represent for rural Alaska a biomass fuel combination of some of the best aspects of stick -wood and pellets, and avoids some of the negative aspects: • Unlike stick -wood, virtually the entire wood resource can be chipped; this minimizes harvesting labor, transport cost, and resource wastage. • At the same time, chips can be produced locally with minimal processing; harvesting can be integrated into local resource and fire suppression planning, and collection and processing can increase local employment. • The cost is comparable on BTU basis to stick wood — is generally higher, but not by much. • Unlike pellets, chips do not rely on associated industries for the raw material; chips can be made from slash, trimmings, whole logs, clean construction debris, etc. • Chips handle almost as well as pellets — the more uniform they, the better they handle. This makes them appropriate for automatic feed systems such augers, etc. that allow the boiler to modulate to meet load (see next section below) • The minimum amount of processing required is the chipping itself. The P&M 500 boiler is designed to work well with a 2" minus chips (edge length in all three dimensions is 2 inches or less), but can handle variations in that spec. • In terms of handling, the issues that cause jams and failures are overs (generally long, stringy fibrous pieces) and saw dust (especially when wet, it can clog and jam systems). These can virtually eliminated by adding one step to the process; screening. Wood chips are sold by the ton, either green (GT) or bone dry (BDT). One ton of MC 50 wood chips equal 1.0 GT and 0.5 BDT — half of the weight is water and half is wood. Although wood chips are generally sold by the BDT to avoid the effects of variations in moisture content, in rural Alaska we are Alaska Wood Energy Associates 9121 VERSION 1.0 TAZLINA LEVEL 2 BIOMASS FEASIBILITY 2013 Revisions Tazlina, Alaska Chip System Update generally dealing with villages that harvest and process their own chips; they are not "sold" to a third party. For that reason, in our analyses, AWEA uses green tons, and we specify the wood specie(s) and moisture content of the chips. Because Tazlina is on the road system, they could in fact buy chips from a third parry (and likely would do so) — but we still base the analysis on GT. 2.2 Batch -Fed vs Modulating Boilers Batch -Fed Boilers The stick -wood fired boilers used in rural Alaska are batch -fed. The operator cleans out the ashes from the previous batch of wood, fills the furnace with wood, lights it, and waits for that "batch" of wood to burn. Garn indicates that a "burn" generally lasts 30 — 60 minutes. The heat from this burn must go somewhere, and because the burn rate does not depend on the actual heating load, there must be a means to store the heat. The furnace of a Garn boiler is surrounded by a large, integral water tank. The size of the furnace (and thus the amount of heat from the burn) is designed to heat the tank from a lower temperature to a higher one; in the case of Garn, the design is intended to raise the tank from 120 deg F to 200 deg F. The heating system pumps hot water from the tank to the building heating system as needed to meet the heating load, and returns cooler water (though still warm) to the tank. Thus the tank temperature gradually drops. When the tank temperature approaches 120 deg F, it is up to the operator to determine this is the case, and start a new burn. If this new burn does not occur, eventually the tank water gets too cool for the heating to use. This is a batch process, and the "control" (the rate and timing of burns) and material handling (feeding stick -wood) are entirely manual. The implications of variable temperature water to the heating system and of batch -fed fuel are discussed further in the 2.3 and 2.4. Modulating Boilers By contrast, modulating boilers systems have the ability not only to automate the feeding of fuel to the boiler, but also to vary the rate of fuel feed in response in the heating load. Within relatively tight limits, they maintain a constant hot water temperature. The set point for this hot water temperature can be changed with the seasons; but whatever the set point, a modulating boiler will regulate the fuel and air within the limits of the unit to maintain that set point. Chip -fired and pellet -fired boilers are modulating boilers. Because they modulate fuel to meet heating load, theoretically modulating boilers do not require any thermal storage (a water tank). However, even modulating biomass systems work best if they have some storage. Biomass boilers can only modulate output so fast — once the wood is on fire, it will eventually burn even if the heating load is decreasing. Conversely, when a surge in heating load occurs, it takes time to get new wood into the furnace and get it burning; a water storage tank helps the system even out these rapid load fluctuations. Finally, if the load gets so small the boiler shuts itself off, the tank takes up the slack unto the boiler auto -restarts. By combining a modulating boiler with sufficient thermal storage, one gets a system that modulates to handle any load from virtually zero up the maximum capacity of the boiler. Alaska Wood Energy Associates 10121 VERSION 1.0 TAZLINA LEVEL 2 BIOMASS FEASIBILITY 2013 Revisions Tazlina, Alaska Chip System Update 2.3 Integration of Biomass Systems into Existing Systems Modulating Boilers Oil -fired boilers are the norm is rural Alaska; these are modulating boilers that regulate the flow of oil to the burner to meet the hot water set point. Integrating a modulating biomass boiler into an existing oil- fired system is therefore simple. In the simplest form, one would simply install the biomass boiler in series with the oil -fired boiler(s), and upstream of the oil -fired boiler(s). This means that the cooler hot water return water from the heating system flows through the biomass boiler first, and then through the operating oil -fired boiler. Then one would stagger the boiler hot water set points. If the minimum hot water temperature required is 170 deg F, for example, the biomass boiler set point might be set at 180 deg F (water hotter than required causes no harm), and the oil -fired boiler set point would then be set at 170 deg F. As long as the biomass boiler has fuel and is functioning, it will generate 180 deg F water. Even if rapid load fluctuations cause the hot water temperature from the biomass boiler to vary, it would take a 10 deg F deviation to start the oil -fired boiler. In other words, as long as the hot water temperature from the biomass boiler is at least 170 deg F, then the oil -fired boiler will not fire — the "return" water is hotter than or equal to the supply set point, so the boiler does not fire. If for any reason, the biomass boiler fails or the heating load exceeds the capacity of the biomass boiler, then the hot water will drop below 170 deg F — at which point the oil fired boiler starts, and fires as required to maintain its own set point of 170 deg F. This is completely automatic and requires no operator intervention, and as long as the oil -fired boiler does not fail, it is fail-safe. The end -users would not even realize it had happened — they would still be getting hot water and heat. There is second, equally important implication of this set-up. Biomass boilers are expensive compared to oil -fired boilers. The goal of most biomass systems is to displace most, but necessarily all of the oil consumption in the selected buildings. If a biomass boiler can cover the heating load for 90 percent of the hours in a year, it probably makes no sense to buy the next bigger unit just to cover that last ten percent of the annual hours. The setup above allows one to size the biomass boiler based on the best combination of price and size. As noted above, if the installed boiler cannot keep up with the heating load, the hot water temperature will fall until it falls enough to start the oil -fired boiler, which will then make up the small amount of load the biomass boiler cannot cover. Because the biomass boiler "sees" the return heating water first, it will load up to 100 percent, and only then will the oil -fired boiler come on — the use of biomass is always maximized without having to size the boiler for 100 percent of the worst case heating load. Batch -Fed Boilers The set-up above is not practical with batch -fed boilers; they burn fuel without regard to the actual load, and store the excess heat in the surrounding hot water tank. Between burns, the tank temperature drops as low as 120 deg F before the next burn. If one attempted the same series boiler arrangement described Alaska Wood Energy Associates 11 1 21 VERSION 1.0 TAZLINA LEVEL 2 BIOMASS FEASIBILITY 2013 Revisions Tazlina, Alaska Chip System Update above with a Gam boiler, the oil -fired boiler would come on at 170 deg F, and the remain on until the next burn raised the tank temperature above 170 deg F - meanwhile, only 3/8ths of the heat of the biomass burn would have been utilized: (200 - 170) / (200 - 120) = 3/8. One could set the set point of the oil -fired boiler at 120 deg, except that in winter 120 deg F water is almost certainly not hot enough to allow the system to heat the building spaces. So a batch -fed biomass boiler can be set up in fail-safe mode upstream of an oil -fired boilers, but as the example above shows, the result would be that the utilization rate of the biomass boiler decreases significantly (see 2.4 for an explanation of utilization rate), and the resulting annual oil consumption for the building or buildings would be much higher than in a modulating boiler system. 2.4 Utilization Rate and Oil Displacement Utilization rate is a simple concept. A village pays for a piece of equipment, perhaps an expensive biomass boiler. Ideally, that equipment would run at 100 percent of capacity, 100 percent of the time - a utilization rate of 100 percent. Assuming the piece of purchased equipment is intended to save money, then the it would seem that the higher the utilization rate, the higher the return on the investment. However, in the case of a biomass boiler, there is a second factor that figures into the return on investment - how much oil consumption (as a fraction of annual consumption) does the biomass boiler displace. After all, this is how the biomass boiler generates savings, so oil displacement has to factor into return. In fact, sizing the biomass system to maximize return on investment is a balancing act between utilization rate and oil displacement. Figure 2.1 helps explain how utilization rate (UR) and oil displacement (Disp) influence savings and return on investment: High UR / Low Disp > Capacity = 0.15 Low UR / High Disp > Capacity = 0.95 % Heating load (Y) vs % OAT range (X) % Heating load (Y) vs % OAT range (X) 1.0 \ 1.0 un-used boiler capacity , 0.8 � 0.8 0.6 0.6 un-used boiler capacity 0.4 0.4 0.2 ___________ _ 0.2 biomass heat biomass heat 0.0 0.0L. 0.0 0.2 0.4 0.6 0.8 1.0 0.0 0.2 0.4 0.6 0.8 1.0 Figure 2.1 The Y axis is the percent of full heating load, and the X axis is the percent of the annual outside air temperature (OAT) range. If the village outside air temperature varied from -40 to 60 deg F in a year, the range would be 100 deg F, and each 1 % would correspond exactly with a 1 deg F change in OAT. The point is that at 0.0 on the X axis, that is the coldest OAT, and at 1.0 on the X axis, that is the hottest temperature in the village. Alaska Wood Energy Associates 12121 VERSION 1.0 TAZLINA LEVEL 2 BIOMASS FEASIBILITY 2013 Revisions Tazlina, Alaska Chip System Update The thick red line is an idealized heating load curve — as temperature rises, load decreases. At some OAT (assuming that domestic hot water (DHW) is being heated by the boilers), the space heating load disappears and only the DHW load is left (the flat portion of the load curve). The dashed blue line is the capacity of the biomass boiler, expressed as a percent of the maximum heating load. In the first graph, our "first attempt' at sizing the biomass boiler was to start with a biomass boiler that was quite small — the capacity is only 15 percent of the max heating load. As a result, the utilization rate is very good; we have almost achieved the goal of running the boiler at 100 percent of capacity 100 percent of the time. However, the system achieves very little displacement of oil, and thus not much in the way of dollar savings. This can be seen by looking at the area above the dashed blue line and below the red load curve; this is the portion of the heating load served by oil. In a purely oil -fired system, all of the area below the red line represents oil. In our first attempt, then, we have not really displaced very much of that oil, despite the very high utilization rate. Since displacing oil is what generates the dollar savings needed to pay for the boiler, we have not maximized the return on investment. In the second graph, the sizing of the boiler is taken to the opposite extreme. In this case, we have displaced all of the oil, except for the tiny triangle in the upper left — too small to even label it as "oil heat'. However, our utilization rate has dropped to about one-half; half of the boiler capacity we paid so much for sits unused over the course of the year. If we assume that the cost of wood is relatively stable, and the cost of the biomass boilers changes over time, but only slowly, then the "correct' balance between utilization rate and oil displacement depends almost entirely on the cost of oil in the village. A higher cost per gallon for oil argues for more oil displacement — the added savings can pay for the unused capacity. A low cost of oil argues for a higher utilization rate — better to minimize unused capacity and run the boiler as close to 100 percent as possible at all times. AWEA evaluates these factors in every village we work with to get the correct size of boierl This simple analysis explains why the availability of the P&M 500 boiler changes the economics of biomass heat so significantly for a village such as Tazlina. Although the P&M boiler can in this case displace in excess of 99 percent of the oil normally consumed in the Tribal Complex, the amount of excess capacity Tazlina would pay for is small enough that the savings from the oil can pay back the first costs in a reasonable amount of time. In the original analysis, the smallest available chip -fired boiler was so much larger than needed that even with 100 percent oil displacement, the savings could not pay for all that excess capacity. The examples above assume the biomass boiler runs whenever it can, as hard as the heating load allows it to run. There is one condition under which a lower utilization rate is unambiguously bad; when the biomass boiler is not running when it could/should be. In such a case, utilization rate drop and oil displaced drop at the same time — the oil fired boilers are running when the load could be met with biomass. Alaska Wood Energy Associates 13121 VERSION 1.0 TAZLINA LEVEL 2 BIOMASS FEASIBILITY 2013 Revisions Tazlina, Alaska Chip System Update If this occurs due to a mechanical failure, then not much can be done about it, except to fix the problem as fast as possible. If, however, it is a function of the biomass boiler or the biomass system, then it is worth examining whether the biomass boiler selected is the best fit for the application. The best example of this is the application of batch -fed boilers. The rate at which heat is extracted from the integral water tank varies with heating load, and thus with outside air temperature. On a hot day, a single burn might be sufficient for the whole day, or even two days. On a very cold day, the tank might have to re -charged four or five times a day. Ideally, a burn takes place right as the tank temperature reaches about 120 deg F, but the only way to know when that happens to manually check a thermometer (which could indoors, on a pipe, or outdoors, at the tank). Obviously, some if not most of the burns required to maintain tank temperature will occur at night, when it is very cold. As noted before, this means manually cleaning the ashes of the previous burn, and loading lighting the new fuel. Given the fact that the biomass system is backed up by oil, the temptation to skip a few burns or one per cold night will be very high. In such a case, both utilization rate and oil displacement drop, and the payback period on the biomass boiler gets longer. The higher the cost of oil per gallon, the more effect such lapses in utilization have on the project economics. SECTION 3 1 Comparisons: Inputs 3.1 Resource Assumptions The primary resource assumptions that must be made about any existing or proposed fuel are A) the cost of the fuel per unit, and B) the heat content of the fuel per unit. In terms of cost, the assumptions were slightly modified. The cost (and heat content) assumed for No. oil did not change from the original analysis, so only one version of this table is shown in Figure 3 below: Village Energy Cost /Properties OIL description value units heat content 134.00 kBTU/gal density 7.10 lb/gal sulfur content 50 ppm low village cost $4.90 per gal high village cost $4.90 per gal electrical energy to village $0.200 per kWh cost of rec heat to village per mmBTU cost of rec heat to DH Plant per kBTU Figure 3.1 Alaska Wood Energy Associates 14121 VERSION 1.0 TAZLINA LEVEL 2 BIOMASS FEASIBILITY Tazlina, Alaska 2013 Revisions Chip System Update For stick -wood and pellets, the assumed costs remained the same. For stick wood and wood chips, however, the heat content was assumed to be slightly lower in the revised report than in the original. In the original analysis, it was assumed that some of both the stick -wood and chips could be obtained at an average moisture content of 30 percent (MC 30), with the remainder at MC 35. In the revised analysis, it was assumed that all of the stick and chip fuel was at MC 35 — this slightly lowered the net useable heat of the fuel, and increased the number of cords/green tons required to generate the same amount of heat. At the same time, the cost of chips was revised based on more current data. The following tables (Figure 3.2) show both unit costs of the various fuels in the unit which they are sold, but also the unit costs in a common unit, millions of BTUs (mmBTU, as above): Wood Costs description value units wood chips, to DH $90.00 green ton stick wood, split, to DH $250.00 cord pellets, to DH $300.00 ton bricks, to DH ton Unit Energy Costs, comparison (to village, boiler eff accounted for) description value units low oil $43.53 per mmBTU high oil $43.53 per mmBTU electrical energy $58.62 per mmBTU recovered heat per mmBTU wood chips $9.20 per mmBTU stick wood $15.75 per mmBTU pellets $18.94 per mmBTU bricks per mmBTU bricks per mmBTU Wood Costs description value units wood chips, to DH $60.00 green ton stickwood, split, to DH $250.00 cord pellets, to DH $300.00 ton bricks, to DH ton Unit Energy Costs, comparison (to village, boiler eff accounted for) Figure 3.2 pellets $18.94 per mmBTU description value units low oil $43.53 per mmBTU high oil $43.53 per mmBTU electrical energy $58.62 per mmBTU recovered heat per mmBTU wood -chips $5.90 per mmBTU stick wood $15.60 per mmBTU Even with a unit cost wood chips that is 50 percent higher than in the original report, with the use of the P&M 500, a wood -chip based system now has the best payback. 3.2 Resource Consumption The primary resources consumed by the existing and proposed project are oil and wood for fuel. A secondary resource, in terms of system cost, is electricity. Figure 1.4 above shows the relevant data for oil and wood chips, original and revised. In the original report, the chip fired boiler displaced only about one half of the current oil consumption 4,086 gallons displaced out of 8,078 gallons total). This is because A) the Wiessmann boiler was much too large for the application, and B) we did not assume thermal storage, which allows the boiler to handle low load conditions. The chip -fired option was already quite expensive, and the larger the boiler, the more thermal storage is required, and the more than costs, and so on. With the P*M 500, the boiler is a Alaska Wood Energy Associates 15121 VERSION 1.0 TAZLINA LEVEL 2 BIOMASS FEASIBILITY 2013 Revisions Tazlina, Alaska Chip System Update better fit for the load to start with, and we did include thermal storage, so oil displace was 99 plus percent — only on an extremely cold Tazlina day would supplemental oil heat be required. In terms of wood chip consumption, as noted above, consumption increased due to three factors — in order of magnitude: 1) doubling the amount of oil displaced requires basically doubling the amount of wood consumed, 2) the P&M 500 is about 10 percent less efficient than the Wiessmann boiler, and 3) our resource assumptions slightly lowered net useable heat per ton of chips (see above). This resulted in an increase to 116.4 green tons per year from the original estimated of wood chip consumption of 51.3 GT per year. The figures for required acres of forest harvest are 7.76 and 3.49 acres per year, respectively. 3.3 Cost Estimating / Project Costs Leaving aside the obvious fact that the P&M 500 cost much less than the smallest Wiessmann chip -fired boiler, the cost estimating has not changed much between the two reports. Some line items have gone up in cost, others have come down, and for still others, we have better definition or more information on which to base our estimate. In general, however, both the stick -fired and pellet -fired options have increased since the original report by just about the amount one would expect based purely on inflation. The actual values of some of the larger project cost line items (original and revised) can be seen in Figure 1.4 above. 3.3 Boiler Performance The performance of the Garn (stick -fired) and Froling (pellet -fired) boilers has not changed since the original report. There are some differences between the original Wiessmann chip -fired boilers and the P&M 500 boiler. The Wiessmann is a more sophisticated, more automated line of boilers. They include automatic de- ashing, for instance. They can incorporate external emissions controls, such as flue gas recirculation (reduces NOx), and multiclones (reduce particulates and soot). They has a programmable control panel which has options to automatically include thermal storage in the control sequence, as well as integrating solar hot water (if available). It has more heating surface area per input BTU, so it is more efficient than the P&M 500. However, as noted above, the P&M 500 meets the primary criteria for installation in rural Alaska, the ability to auto -start (and re -start) the ability to modulate fuel and air to maintain a hot water set point. Thermal storage can be accommodated, but it must be done using external controls. The P&M is simpler, and slightly less efficient, but it nonetheless fits very well into the niche of a small scale chip -fired boiler. 3.4 Benefit Cost Ratio The benefit to cost ratio is an attempt to capture the value of the project over the lifetime of the project. A lifetime of 20 years is commonly used. The output of the calculations included is actually two numbers, the actual benefit/cost ratio, and the net present value (NPV) of the project. The project cost is a one-time event, but the savings accrue over the life of the project. Depending on the assumed inflation rate of the various fuel sources, the savings may actually increase each year (if, for instance, oil rises faster than biomass, as we have assumed). On the other hand, a dollar saved in year 20 Alaska Wood Energy Associates 16121 VERSION 1.0 TAZLINA LEVEL 2 BIOMASS FEASIBILITY Tazlina, Alaska 2013 Revisions Chip System Update is not worth a dollar today; it is worth the NPV of one dollar, at the assumed discount rate. The discount rate is the rate of return one assumes one could make if that dollar were invested in some other fashion — in a bank account, or on another project. The combination of one time and recurring costs, plus inflation and discounting means that it would be very useful if the lifetime benefits, divided by the lifetimes costs, could be boiled down to one number; the benefit to cost ratio. The current year is always year zero for the calculation, and it is generally assumed that construction would be completed in year one (or, for a long process or project, year two). The NPV of the project cost for a project completed in year one is almost, but not quite the same as the project cost; it has only been discounted one year. This is the COST part of the ratio. The BENEFIT is the NPV of the stream of savings (fuel savings, in this case) that the project generates over the 20 year lifetime. Divide the Benefit (in dollars) by the Cost (in dollars), and you get the dimensionless Benefit to Cost ratio; generally, any value over 1.00 is considered good, but different agencies have different target values. The NPV benefit is simply the NPV of the combined (savings minus cost) Cost and Savings cash flow over 20 years. In the year the project is constructed, the "savings stream" is negative, because the discounted project cost is much greater than the yearly savings — all other years, the savings are positive. Take the NPV of that cash stream, and that is the NPV benefit of the project. Unlike the ratio, this value only really tells one something useful when compared to another variant of the same project, or another project that would use the same initial cash input. The project with the higher NPV benefit (in dollars) is generally better. 1 Benefit to Cost Retla I Wood chips Twine dlacaunt rote for od 1 propane 0A30 dia-11 rum ror Mamase 0,010 p Ix fuel use and oast, current Iteabn canb uraGon predicted ene use i wst NPV cal- for 8tC Mat predicted prolect unit unit fuel hlontass unit net capital oil cost oust wgww cast Met cost useaga cost cost ssWngs benefit 1 j8,866 ... ........ ear.- usi Wsb 033 .• ....-�$,i�l �.85—�E71,486 6Wn 51,135,02y NPV • 3173.654 $806,976 ..... ..... ........... ... ... I.,._ ....... ... ..._. _.................._..._ W _._... ._............. .... _--- --- --- --- --- ----v._..----- --- --- _ Figure. 3.3 benefit to ... t ratio 0 570 NPV not bonoht 5"6.378 $176,743 — f620.032 • f448,378 Figure 3.3 demonstrates a very positive Benefit Cost ratio of 3.57 and a NPV net benefit of $446,378. Alaska Wood Energy Associates 17121 VERSION 1.0 TAZLINA LEVEL 2 BIOMASS FEASIBILITY Tazlina, Alaska Appendix 1. P&M Boiler Brochure Est. 1973 /* 2013 Revisions Chip System Update ENVIROmCHIP BURNERS CHIP HEATING WITH AN AUTOMATED SYSTEM �pq sk Portage & obtain chip burning Frlydronic heaters give long &t!m times beturem fills, use less wood than conventianal upaod boilers as the mood burning rate is controlled by metering in At f1mount of bio-mass chips. — Ift Alaska Wood Energy Associates 18121 VERSION 1.0 EFFICIENT & ECONOMICAL! REDUCE WQRR W 1 I leiltc &hanger withrever5e return 2" diameter fire tubes, [IL,;tmtec rounded bum 6Lmber. fire in t}w burn pot11Jld dle Willer tube, ut the heat exchanger_ Firehead isiaut'Cuunj.%A by molded, rvtrarLtry ciamenL SUPPORT LOCAL ECONOMY - NOT FOREIGN IMPO I. The highly efficient outdoor hydmr is heater has the ultimate in heal exchan r design (Revt3Yie return?" diameter fire tubes), Z. Water tubes above the fire to ertractmaximum heat before fluegasimn travel under a water baffle. The water baffle at the back of the firepat traps additional heat and fly ash. Flue gawe5 then travel through the twenty fire tubes. 3, kaund burn chamberand jacket. Cinund fireputiscrnn}'letelysurruunded by water�dcket. • Round provide, the bent orculation of water and has the least welds, • Knund fiit! pi eliminates side wall warping • Rou nd has less expanaton f cpmtrartign therefore le84 weld stra4s • R fund is velf circulatins. The relore no ct+ld or hot v oLs • Round gives the fire better flame ccmtatt with the metal, • Round haµ no c0riler4 fur ash hr nil in • Round. is the,&Lm t devign furtlutdonr water furnacua. • Round is ,tronger to last hmger, }uA as the. steam engines were rou nd to a reaM n. 4. Welds are dcauble fbuilerdvlei for total penetratiun. 5. Combu_htion binwer introducuus air through specially deigned slat~ in the teed head. furred air feed at the fir". t and in the exhau_St eriiure adean complete bum ut Lhe biomass fuel. fr. Stoker haK uuntrullable 1-ire Keep Made". 7- luhrisnn MN Aquastat cozitnlls water temp Lii Nvithin 1". Alsu has a high limit tiafety atluatStal- 8: 41i1 Speed contrulled teed rate. !Luger teed~ chip.~ intu the burn head. 4, i lrgh yunlil)' fan 4rrrtl�-N 16111 raverloai.l pnifEcted, hall-beanng motor, mcikW apatitur 41artt� for Ii1rJy Jite- I(h lire IlVad IS ya1rrt311rtdLd- by molded refrartnry amient- 11. V121 arnretteii, Iv Altar Poinuil 110 pti+L4'r'r 1-0n s Toa 3 phase 220 industrial motor. 13. orlprC-,4uIIzeij �lt_rlu-,low wale-rcuLS}Jl—Tit) Wei t!w ciliand k3u. tcxnpeualun! Cut Lllt. [-`IE' ntln PP0_- L3 n:irf tiV41etr V, We to Byer -a and nlr tipeadl, rptrator e wett5v b, required fu aperzkv, Stjridd rd fitetl ?.m-jtl_-ubjiYi piFwtan tic uurll to .lelivix the heat iglu the �m , ing_ Li i,• latIAku-slit p,rM pLai am u4diljr availahl- TAZLINA LEVEL 2 BIOMASS FEASIBILITY Tazlina, Alaska 2013 Revisions Chip System Update Wnadcl3rppW (ar luel is rdw praduvilm uce of a low -Wade wa.+re pnuducLWLWJJ luLE 1:17Lp91'0rnr- pr11rAV1!v b(IMI VitIWZ SAWLILLII]r uuiLx±r l%an,Lain); residwN. Wixin wiiW cWp.�are Erom 3jntiyaulk, [wj- am wau[Iy a w rtc di,lt nucE bu dL,powd of or sAd. Wwo the wmdcho.- mLnr imrn h3YVCAlnti,pE IL241in Iho wmd6-. thelower grade lr v.. art tx�.hn ruxime1 In a-ustainablc meAm, thus, iI wlU iiupmw Lbe overall Ixalth'ra,e lomsL 1 LTE'3re V.)fd tLlll,LmL,til-%urplu%wlMld n-m,]ue worn untimui Luc�.uwrnaI,,,uid lob, n� operatluirsLhatcculribettmd lur Ir43nw54 enetAkr M+lthuut ashV dirt[[ Empad on 63rLs1;• The costal blmnass fuel Is generally leas Than h,rl( the cosiof luel all on a blu basis. WhEleenyln,nrncol<il and sxelalbLruufiL4ate impuFtant. OEM) t1t MU11 unJeniable toz-on iordeading nn bi55u-Lnaschip haMlin;are ±L,t! m micalbenxIirti.Thenturwyspcntanbioutitsakceps,t u&y dollan drrulaling in your local emnimtiy and supports jobs in yaw local larear produrls indtiskm • 9erau9e hiamaxs ILIA lz lacallY pro,inaA, hm-vTm ed, and prooe_vsr[ir i is uu rre en and sw4ain.s joi.v hi LIe mPion's econ,urw. _ • EkornarAt,.mirgy WL— p.4 dollars;prut on tueE cal die IocalCMMM4-cnrnparc-d with tuvkl lull ,vs Lhxi* ■VWdi gelvraUyr;Ypnrl + • fuel dollars. rl 1 • it making ux or No-n ak;chipvfot IueL bk)nri;3nergy s1rLRr};lh-m the whnlu agtanaI VwLsl-xxxlucLsInd u,,Lr�. g W Inn U IY w k3Erd i nar ke N a nd im prov Eng die f ar-41 resau rce, alo ng w Lb c n i Ling jnln. • ,1lldwe ,hsand unnLmuiactivi1. m,alLdbybionu."propdc alsagmuratoiraporLantLial,sWu--,and liedrralbxmvenuel� 9 Alaska Wood Energy Associates 20121 VERSION 1.0 TAZLINA LEVEL 2 BIOMASS FEASIBILITY 2013 Revisions Tazlina, Alaska Chip System Update Benefits of owning a Portage & Main Outdoor Enviro-Chip Burner Gives you peace of mind, safety and convenience... • No fire hazard inside your home. • No messy fuel, ashes or smoke in your home. • No increase in fire insurance premiums unlike indoor stoves. • No risk of carbon monoxide poisoning. • The water temperature is electronically controlled with an aquastat, that has water temperature display features. • Surfaces are insulated or water cooled for safe operation. • Automatic feeding from the chip supply bin. Efficient and dependable... • Portage & Main Outdoor Water Furnaces have proven to be very efficient and reliable, built with time tested and proven design features. • It uses 1/3 to 1/2 less fuel than most conventional boilers. • The built-in multi -pass tube heat exchanger maximizes heat extraction from the flue gases. Provides societal and environmental benefits... • It minimizes the use of expensive fossil fuels such as natural gas, oil or electricity. PORTAGE & MAIN OUTDOOR WATER FURNACE: � Furnace Output Up to 278,884 BTUslhr r 800,000 BTUsthr Shipping Weight (Ibs) 2,600 4,500 Water Capacity (us gallons) 120 200 Chimney Size 6" 8" Fire Tube Heat Exchanger 20 tubes - 2" diameter 24 tubes - 2" diameter Furnace Height 72" 98" Furnace Width 48" 59" Furnace Length 57" 57" Ash Removal Ashpan 4.5' Ash Auger Haof load should be calculated. Many factors intluerrce the heating area - such as the insulation value or the structure, and the climate in which the furnaces operate. It is always best to calculate the number of BRh required per hour for your heating needs. Manufacturers reserve the right to make changes or modifications to products. Brochures are updated regularly, however for the most current Intoimation please see the websitec w .portageandmainballem.eom CALL DEALER FOR DETAILS: MAX. OUTPUT BTU'S LISTING BASED ON EPA REQUIRED TESTING Portage 8r Main Outdoor WaterFurnaceshave a long history of great performance thus earning them the name of •��i rrFir'r f��ur• �Jiirr-� /�J(�i Round firepot/ water jackets and 1 /4" cold rolled steels means less rislcof warping related problems. W44 cold rolled steel has the same corrosion properties as boiler plate. It is known for being a very "uniform" steel, ideally suited to forming without fatiguing. It is easy to shear, break and is "welder friendly." All parts are laser cut for precision fitting which also allows for the bevel to be accurately filled when welding. The weld strength is increased by boiler/ pipeline style double welds which take more time but is well worth it as it results fn total penetration which helps prevent weld corrosion, cracking and pin holes leaks. Chip beating system is built in North American for the tough Narth American conditions. North American Porta&e & Main Outdoor Water Fumam Distributor hve's Ape HEAT SMART PLUS e 9 R.R. #5, Site #16, Camp #114 d PRINCE ALBERT, SK S6V 5R3 yr 1-800-561-0700 www.portageandinainboilers.com Authorized Portage & Main Outdoor Water Furnace Dealer Alaska Wood Energy Associates 21121 VERSION 1.0