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Biomass Furnaces for Heating Poultry Houses November 2008

Biomass Furnaces for Heating Poultry Houses November 2008. By Jim Wimberly Bio Energy Systems LLC Fayetteville, AR. Presentation Objective. … To provide a better understanding of how to evaluate a biomass-fired furnace system prior to purchase What are the key factors to evaluate?.

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Biomass Furnaces for Heating Poultry Houses November 2008

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  1. Biomass Furnaces for Heating Poultry HousesNovember 2008 By Jim Wimberly BioEnergy Systems LLC Fayetteville, AR

  2. Presentation Objective … To provide a better understanding of how to evaluate a biomass-fired furnace system prior to purchase • What are the key factors to evaluate?

  3. Presentation Overview • Understanding the problem…expensive propane consumption • Displacing propane with biomass • Technical considerations • Economics considerations • Other considerations

  4. Displacing Propane • The amount of energy required for space heating varies… • Within a flock

  5. Displacing Propane • The amount of energy required for space heating varies… • Within a flock • From flock to flock

  6. Displacing Propane • The amount of energy required for space heating varies… • Within a flock • From flock to flock • From year to year average = 6,000 (?) range high low 0 1 2 3 4 5 6 7 Gallons / year (thousands)

  7. Displacing Propane • Propane is convenient. • But it’s the #1 expense for growers -- and it’s getting more expensive… ~$2.20 in April 2008 residential @ Savoy wholesale

  8. Anticipating future propane prices? $4.93 Average annual escalation since ’98 = 14.4% $4 $3.29 Future escalation if @ 14.4% $3 $2 $ / gallon $1 0 1999 2002 2005 2008 2011 2014

  9. average = 6,000 range high low 0 1 2 3 4 5 6 7 Gallons / year (thousands) Displacing Propane • What’s a realistic target displacement level of propane? @ $2.20/gal, value of propane displaced  $11,200 / year @ 85% of total consumption, propane displaced  5,100 gal/yr 85% Total furnace system heat energy output required for a 40’x400’ house = ~250,000 Btu / hour

  10. Displacing Propane…conclusions • target displacement rate = 85% of propane consumed • target displaced quantity = 5,100 gallons/year • value of displaced propane = $11,200/year • required output size of furnace = 250,000 Btu/hour • note: these figures are for the assumed “typical” broiler house in northwest Arkansas

  11. What are the Key Selection Criteria for a Furnace? • Technically viable • Is it proven? • Will it stand up to conditions in a poultry house? • Economically feasible • Do the numbers work? • Is it a good investment? • Environmentally acceptable • Are there any significant issues that must be addressed? • The “hassle factor” • Does it require lots of TLC to keep it going? • How much maintenance will be needed?

  12. What’s included in a biomass furnace system? fuel storage, handling and in-feed combustor, including heat exchanger & ash management hot air distribution Flue Poultry House Heat Exchanger Auger to Hot Air Distribution System Hopper Combustion Chamber Instrumentation & controls

  13. Farm Options: Single-house system Furnace outside the poultry house Furnace inside the poultry house Heat distribution system Furnace Fuel supply

  14. System Options: Multi-house system

  15. What are the Primary Fuel Options? • Cordwood • Corn • Raw litter • Pelletized litter • Raw sawdust • Wood (& other) pellets • Baled biomass • *Coal* Pellet furnace; Prim, AR; 1995.

  16. Economics: Key Factors to Consider An economic analysis should be performed for each individual farm considering an investment in a bioenergy system • Price of propane • And the assumed annual escalation rate • Amount of propane displaced • Price of biomass fuel • System service life • System efficiency Pellet furnace; Savoy, AR; ~1998.

  17. Fuel Economics: example calculations of fuel costs @ 85% displ. = 8,400 x 93% = 5,100 x 91,000 / 1,000,000 = 464,000,000 / 7,800 / 2,000 = 30 / 0.65 = 46 x $140 = $6,400 / 464

  18. Economics: Sensitivities • Let’s look at key sensitivities for a wood pellet-fired system • First, let’s review the “base case” assumptions: • Current propane consumption = 6,000 gal / yr • Current propane cost = $2.20 / gal • Target propane displacement = 85% • Energy content of wood pellets = 7,800 Btu / lb • Overall system efficiency = 65% • Cost of wood pellets, delivered = $160 / ton • Capital cost, all-inclusive = $20,000 • Financing costs (20% dn, 7.5% APR, 5 yrs) = $3,000 • Service life = 10 years • Maintenance & utilities = $400 / year (with 8% AIF) • Inflation rate of propane = 7.0% per year • Inflation rate of pellets = 2.5% per year • Fuel support payment = $0

  19. $22 $17 $000 / year (@$160/ton) $11 $6 $0 Sensitivity: Pellets Required vs. System Efficiency $24,200 Conclusion: Overall system efficiency fundamentally affects the economics of the furnace systems 152 160 120 $12,100 76 80 $8,100 Tons / year 51 $6,100 38 $4,900 40 30 0 0% 20% 40% 60% 80% 100% Overall system efficiency For wood pellet fuel @ base-case assumptions

  20. $22 $17 $000 / year (@$160/ton) $11 $6 $0 Sensitivity: Pellets Required vs. System Efficiency $24,200 Conclusion: Overall system efficiency fundamentally affects the economics of the furnace systems 152 160 120 $12,100 76 80 $8,100 Tons / year 51 $6,100 38 $4,900 40 • Key factors affecting system efficiency: • Furnace design • Proper operation • Effective furnace maintenance • Effective maintenance of heat exchanger(s) 30 0 0% 20% 40% 60% 80% 100% Overall system efficiency For wood pellet fuel @ base-case assumptions

  21. Sensitivity: Economics vs. System Efficiency $100,000 $50,000 Net benefit (cost) 0 -$50,000 -$100,000 0% 20% 40% 60% 80% 100% Overall system efficiency For wood pellet fuel @ base-case assumptions

  22. Sensitivity: Economics vs. System Service Life $100,000 $50,000 Net benefit (cost) 0 -$50,000 -$100,000 4 7 10 13 16 Service Life, years For wood pellet fuel @ base-case assumptions

  23. Sensitivity: Economics vs. Capital Cost $100,000 $50,000 Net benefit (cost) 0 -$50,000 -$100,000 $10 $15 $20 $25 $30 capital cost (x000) For wood pellet fuel @ base-case assumptions

  24. Sensitivity: Economics vs. Biomass Fuel Cost $100,000 $50,000 Net benefit (cost) 0 -$50,000 -$100,000 $120 $140 $160 $180 $200 Cost of Wood Pellets, per ton delivered For wood pellet fuel @ base-case assumptions

  25. Sensitivity: Economics vs. Propane Consumption $100,000 $50,000 Net benefit (cost) 0 -$50,000 -$100,000 4,000 5,000 6,000 7,000 8,000 Average Current Propane Consumption, gallons / year For wood pellet fuel @ base-case assumptions

  26. Sensitivity: Economics vs. Propane Cost $100,000 $50,000 Net benefit (cost) 0 -$50,000 -$100,000 $1.40 $1.80 $2.20 $2.60 $3.00 Cost of Propane, per gallon For wood pellet fuel @ base-case assumptions

  27. Sensitivity: Inflation Rate for Propane 14.4% @ 6,000 gal / yr & 65% sys eff. & $160 / ton $100,000 $50,000 Net benefit (cost) 0 -$50,000 -$100,000 3% 5% 7% 9% 11% 13% Annual inflation rate of propane costs For wood pellet fuel @ base-case assumptions

  28. Sensitivity: Inflation Rate for Propane @ 6,000 gal / yr & 65% sys eff. & $160 / ton $100,000 $50,000 Net benefit (cost) 0 @ 4,000 gal / yr & 50% sys eff. & $200 / ton -$50,000 -$100,000 3% 5% 7% 9% 11% 13% Annual inflation rate of propane costs

  29. Economic Analyses … Conclusions • Key factors affect the economics of the system • Price of propane • And the assumed annual escalation rate • Amount of propane displaced • Price of biomass fuel • System service life • System efficiency • Some systems appear attractive, based on certain assumptions • Each situation requires making various assumptions and projections regarding future fuel prices • An economic analysis should be performed for each individual farm considering an investment in a bioenergy system

  30. Environmental Considerations • Air emissions: these farm-scale systems are not currently regulated. • Ash: • The ash needs to be effectively managed, regardless of fuel type. • In particular, litter-derived ash would need to be managed. • Essentially all of the P & K in the litter ends up in the ash • Benefits of dry heat • Reduced moisture levels in the house  lower ammonia levels • Better environment for the birds (& the operators) • Reduced mortality? • Improved feed conversion? • Shorter grow-out period? • Less Nitrogen in the air  more Nitrogen in the litter • higher quality litter (= higher $$$ litter) 6.8 pounds of H2O per gallon of propane burned

  31. Jim Wimberly BioEnergy Systems LLC Fayetteville, AR 479.527.0478 www.biomass2.com Pellet furnace demo; Durham, AR; 1995.

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