Tom,
Interesting financial assessment, we have found during our own
development that most of your assumptions though to be way too
optimistic, at least in the Australian business environment. As an
example we had a Poultry client needing 100kWe, their commercial power
rate was 23c/kWhr and they used a little over 160mWhr/yr. They had
limited heat needs but were sourcing green sawdust and wood chip which
could be dried using the surplus heat from the gasifier, as well as a
unique bio-security opportunity that the presence of the gasifier
provided in disposal of dead birds, along with superior odor control and
improved shed environment through use of the biochar co-produced (none
of this valued in the proposal). The clients consultants determined we
could supply the complete turnkey system for <12c/kWhr (including buying
in fuel and labor). One of the electricity retailers then offered a
grid supply agreement fixed for 3 years at an average of 5.5ckWhr
including peak & shoulder rates, no capital outlay required. The result
being implementation of the gasifier solution was deferred. This type of
example has been repeated a number of times over the last 2 yrs.
At least we are good for competitive influence in the electricity
market... It has also taught us about the importance of the total value
proposition (VP), rather than simply focus on individual aspects like
electricity. http://en.wikipedia.org/wiki/Value_proposition
We cannot yet claim longevity in operational hours in commercial
environments with our own systems, it is coming but not independently
verifiable yet, notwithstanding even our original successful development
unit is still operable today 6 years on. From the outset though we have
striven to develop systems based on our own needs in small business.
That is simplicity, reliability, consistency whilst using real world
fuels being the key design drivers. We have done so on a broken shoe
string basis, so development designs when implemented were often sub
optimal from a long term operational view point because of budget
constraints, useful in testing core design elements but caution called
for in terms of a commercial implementation without beefing up a range
of components. Need 6mm steel sides? 2mm gets used because it was in
the seconds bin at the steel supplier for peanuts. Minimum refractory
thickness recommended would get shaved and shaved again. Need a purpose
designed fan? A cheap Chinese made "off the shelf" would be what we
would end up with (though we have have become adept at changing bearings
to quality C3 or C4 heat tolerant types). Build looks complex, or need
specialist fitters? Back to the drawings, tweak this, reshape that,
simple folds, easier seam welds etc etc.
It was at one level frustrating, but in hindsight now we realize what a
unique approach we ended up with, intense pressure to innovate solutions
and then innovate again. So much in design & fabrication gets over
engineered or becomes unnecessarily complex with add on "solutions"
treating the outputs of poor core designs, instead of fixing the core in
the first place. What we have done over the last seven years is work out
the real lower material limits and design parameters, not estimate them.
Along the way the designs have matured into ones suited for mass
fabrication.
If our drivers and work method was the plan then lean, mean and
functional has been the outcome.
This year and into early 2015 we have several systems going into
commercial settings under real world economic arrangements. That is non
subsidized in a tough economic and policy environment and at a discount
rate on Business as Usual (BaU). The VP being built around superior
waste re-purposing, integration with existing site management and work
force, avoided power & heating costs and external energy market
volatility resilience, finally new product opportunities that the
presence of a reliable gasifier generates. Most importantly matched with
a financial model based on "seamless" acquisition in requiring minimal
capital injection with the system being paid predominantly out of
existing operational budgets through lease arrangements (adding a little
more in the VP through leveraging tax policy), ultimately making the
decision for the client similar to comparing savings from changing
electricity supplier for example... In short not just maturing the
product designs but maturing our own business. Indeed the latter is I
think Spanners great strength.
These gasifier systems range from 15kWe to 500kWe capable modules, the
latter for 2MWe plants. All of these have survived the manipulations of
dodgy industry scam artists seeking to piggy back off our success
(claiming to have the design) or steal our IP, quite apart from
extensive technical & financial due diligence and in the case of the
industrial scale plant conducted at a much higher level than what what
might be the case for other options like combustion boiler systems, and
with regulatory authorities perched close to the shoulder. Indeed in one
case the large client company involved informed us (after exchanging
contracts locking us in as their suppliers) that two of the senior
managers sent to view the development plant were in fact under
instructions to report negatively, unless it was extraordinarily to a
level above and beyond what would be reasonable to ignore, in practice
backing such a decision against their future careers.
What other industry has such a tough sell?
Amongst all this is one 250kWe system which we have tentative agreement
with the client to use as a reference system for others to view, study
the performance of and publicly report. Will advise when this is fully
commissioned and available.
It would be nice after all the years to answer your original question
with more definition, it is the one criticism that we have suffered over
here that only more time will address since the commercial iterations
are only just now going out. We are nonetheless actively working towards
it, we know where we have come from, what we have been through and where
we are going, and the numbers presented on this list in terms of
alternative system cost and performance give us great hope for a place
in the future.
Kind regards,
Peter
On 21/09/2014 4:49 AM, Tom Miles wrote:
Larry,
Thanks for the information about the Borealis/Spanner. The general
question is, what are the economic circumstances that make small scale
gasification worthwhile?
If I understand the German farm market correctly there is, as you
indicate, a financial incentive to generate heat. Also I understand
that If you are on the grid and generate power in Germany you must
sell to the grid but you receive favorable rates.
Assume 6500 hrs/year
Spanner requires that you run the gasifier system at a minimum of 80%
capacity (i.e. no load following) to run reliably with no tars, etc.
80% x 6500 = 5,200 at full capacity equivalent.
5200 hours/8760hrs/yr = 59% capacity factor (% of potential full
load/year).
5200 hours x 100 kWhth = 520,000 kWhth/yr
5200 hrs x 45 kWe = 234,000 kWhe/yr
Assume that a customer is heating with oil or propane in New Hampshire
At $25-$34/MMBtu. Assume 80% efficiency or $31/MMBtu for oil and
$43/MMBtu for propane.
http://www.nh.gov/oep/energy/energy-nh/fuel-prices/index.htm
$31/MMBtu / 293 kW/MMBtu = $0.10/kWhth x 520,000 = $55,017/year
displaced oil
$43/MMBtu / 293 kW/MMBtu = $0.10/kWhth x 520,000 = $76,314/year
displaced propane
Electricity in NH is reported at $0.1531/kWh
$0.1531/kWh x 234,000 kWh/yr = $35,825/yr
Total potential heat and power offset $112,139/yr for propane and
$90,842/yr for oil.
The system could consume about 234,000 kg wood at 0.95 kg/kWhe (23%
efficiency), 222 tonnes or 244 short tons. Assume a delivered fuel
cost of $60/ton, or $15,000/year. So the gross benefit of the
gasifier-genset (with net metering) for a farm or nursery in New
Hamphsire would be about $97,000/year for propane and $76,000 for oil.
Assume about $8,000 for labor (10 hours/week x 40 weeks) and
$12,000/year for repairs (3% x $400,000). Total fuel, labor and
repairs $35,000. So that gives us a margin for ownership of
$77,000/year for propane and $56,000/yr for oil. So 6-8 years payback,
except that these small systems always cost a lot more than you think.
If we apply German conditions at EUR 1.40/litre for a diesel, USD
$1.79/l (1.28 USD/EUR), 10 kWh/l (36.4 MJ), 80% efficiency, heating
with diesel would cost about $0.224/kWh.
Electricity at EUR $0.20/kWh would cost USD $0.26/kWh (1.28 UD/EURO).
Gross benefits for substituting oil would be:
Thermal - $0.224/kWh th x 520,000kWh = USD $116,480
Electric - $0.26/kWh e x 234,000 = $60,840
Total $177,320
If you can use all the heat and sell all the power then benefits in
Germany are almost twice those in the US ($177,320/$90,842). If my
assumptions are reasonable the net payback would be about 3 years in
Germany compared with diesel.
I have heard that Spanner’s customer service is excellent. They
reportedly meet with owners (250+) once every three months. That is
unheard of in small scale gasification. It means that they can attend
to Thomas Koch’s “baby” when it cries. (Thomas told us that you must
be no more than 1 km away from your “baby” gasifier for every hour
that you can leave it without crying.)
These factors combine to make well supported small scale gasification
feasible in Germany. The US would seem to be a greater challenge. At
the industrial scale low cost oil and gas from fracking has killed a
lot of biomass projects. Will this be true of small scale systems? Or
will previous projections of increased prices for diesel and heating
oil favor biomass gasification?
Tom
*From:*Gasification
[mailto:[email protected]] *On Behalf Of
*Larry Gooder
*Sent:* Thursday, September 18, 2014 11:49 AM
*To:* [email protected]
*Subject:* SPAM: [Gasification] Borealis / Spanner RE2 CHP
Tom
Borealis Wood Power is the North American distributor of the Spanner
Holz-Kraft CHP that delivers 45kWe and 110 kWt
As to make a decent ROI we need to have the end user to have a need
for 6,500 hours or more of the demand.
Spanner RE2 is over the 250 unit mark in the European Union market and
the large majority of these are 7,000 plus hours/year customers.
And as noted some of the countries have a premium feed in tariff and
that helps on the electrical side, but the thermal has to be
considered first.
I get regular e-mails and phone inquiries from people who want to
explore generating electrical power using their wood chips, but when
asked what they are going to use the thermal for, they draw a blank,
as they were only considering the electrical side. Competing with more
expensive and highly fluctuating cost fuels as propane or oil there is
a good ROI and electrical generated heat comes in as well.
The overall efficiency of the plant, using wood chips with moisture
content of 13%, thermal efficiency: 56.1% and electrical efficiency of
23.3%.
Our full scale demonstration plant is running at our facility in
Burlington Ontario Canada (40 minutes from Toronto International
Airport) and welcome you to come and have some hands on experience.
Larry Gooder
Enthusiastically,
Larry Gooder
O: +1 905 319 0404 x 2
C: +1 519 671 6153
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Peter Davies
Director
ID Gasifiers Pty Ltd
Delegate River, Victoria
Australia
Ph: 0402 845 295
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