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Biomass Furnaces for Heating Poultry Houses
November 2008
By Jim Wimberly
BioEnergy 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?
Presentation Overview
Understanding the problem…expensive propane consumption
Displacing propane with biomass
Technical considerations
Economics considerations
Other considerations
Displacing Propane
The amount of energy required for space heating varies… Within a flock
-
1.00
2.00
3.00
4.00
5.00
6.00
7.00
8.00
1 49 97 145 193 241 289 337 385 433 481 529 577 625 673 721 769 817 865 913 961 1009 1057 1105 1153 1201 1249 1297
elapsed time (hours)
pro
pan
e co
nsu
mp
tio
n,
gal
/hr
Displacing Propane
The amount of energy required for space heating varies… Within a flock From flock to flock
-500
0
500
1,000
1,500
2,000
2,500
3,000
3,500
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38
flock number
gallo
ns o
f pro
pane
use
d pe
r flo
ck
house 1 house 2 house 3 house 4
Displacing Propane
The amount of energy required for space heating varies… Within a flock From flock to flock From year to year
0 1 2 3 4 5 6 7
Gallons / year (thousands)
low
high
range
average = 6,000 (?)
Displacing Propane
Propane is convenient. But it’s the #1 expense for growers -- and it’s getting more expensive…
-
$0.50
$1.00
$1.50
$2.00
$2.50
May-90 Jan-93 Oct-95 Jul-98 Apr-01 Jan-04 Oct-06 Jul-09
pe
r g
all
on
residential wholesale
-
$0.50
$1.00
$1.50
$2.00
$2.50
May-90 Jan-93 Oct-95 Jul-98 Apr-01 Jan-04 Oct-06 Jul-09
pe
r g
all
on
residential wholesale Savoy
~$2.20 in April 2008
wholesale
residential
@ Savoy
Anticipating future propane prices?
$4
2002 2005 2008 2011 2014
$3
$2
$1
01999
$ /
gal
lon
$3.29
Averageannual
escalation since ’98 =
14.4%Future
escalation if @ 14.4%
$4.93
Displacing Propane
What’s a realistic target displacement level of propane?
0 1 2 3 4 5 6 7
Gallons / year (thousands)
low
high
range
average = 6,000
@ 85% of total consumption, propane displaced 5,100 gal/yr
@ $2.20/gal, value of propane displaced $11,200 / year
85%
Total furnace system heat energy output required for a 40’x400’ house =
~250,000 Btu / hour
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
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?
What’s included in a biomass furnace system?
Heat Exchanger
CombustionChamber
Auger
Flue
Hopper
to Hot AirDistribution System
PoultryHouse
fuel storage, handling and in-feed combustor,
including heat exchanger & ash
management
hot air distribution
Instrumentation & controls
Farm Options: Single-house system
Furnace Fuel supply
Heat distribution system
Furnace outside the
poultry house
Furnace inside the
poultry house
System Options: Multi-house system
What are the Primary Fuel Options?
Pellet furnace;Prim, AR; 1995.
Corn
Raw litter
Pelletized litter
Wood (& other) pellets Baled biomass
*Coal*
Raw sawdust
Cordwood
Economics: Key Factors to Consider
Price of propane And the assumed annual escalation rate
Amount of propane displaced
Price of biomass fuel
System service life
System efficiency
An economic analysis should be performed for each individual
farm considering an investment in a
bioenergy system
Pellet furnace;Savoy, AR; ~1998.
energy content (HHV) 91,000 Btu/gal 8,400 Btu/lb
moisture content n/a 7%
energy content (LHV) 91,000 Btu/gal 7,800 Btu/lb
fuel consumed, gross 5,100 gal/year
energy required 464 MM Btu/yr 464 MM Btu/yr
fuel equivalent 5,100 gal/year 30 tons/yr
system efficiency 100% 65%
fuel required 5,100 gal/year 46 tons/yr
$/unit $2 /gal $140 /ton
$/year $11,200 /yr $6,400 /yr
$/MM Btu $24 /MM Btu $14 /MM Btu
LP wood pellets
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
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
For wood pellet fuel @ base-case assumptions
Sensitivity: Pellets Required vs. System Efficiency
160
20% 40% 60% 80% 100%
120
80
40
00%
Overall system efficiency
To
ns /
yea
r
5138
30
76
152$22
$17
$11
$6$00
0 /
yea
r (@
$16
0/to
n)
$0
$8,100$6,100
$4,900
$12,100
$24,200 Conclusion:Overall system efficiency fundamentally affects the economics of the furnace
systems
For wood pellet fuel @ base-case assumptions
Sensitivity: Pellets Required vs. System Efficiency
160
20% 40% 60% 80% 100%
120
80
40
00%
Overall system efficiency
To
ns /
yea
r
5138
30
76
152$22
$17
$11
$6$00
0 /
yea
r (@
$16
0/to
n)
$0
$8,100$6,100
$4,900
$12,100
$24,200 Conclusion:Overall system efficiency fundamentally affects the economics of the furnace
systems
Key factors affecting system efficiency:
Furnace design Proper operation Effective furnace
maintenance Effective maintenance of
heat exchanger(s)
For wood pellet fuel @ base-case assumptions
Sensitivity: Economics vs. System Efficiency
$100,000
20% 40% 60% 80% 100%
$50,000
0
-$50,000
-$100,0000%
Overall system efficiency
Net benefit (cost)
For wood pellet fuel @ base-case assumptions
Sensitivity: Economics vs. System Service Life
$100,000
4 7 10 13 16
$50,000
0
-$50,000
-$100,000
Service Life, years
Net benefit (cost)
For wood pellet fuel @ base-case assumptions
Sensitivity: Economics vs. Capital Cost
$100,000
$10 $15 $20 $25 $30
$50,000
0
-$50,000
-$100,000
capital cost (x000)
Net benefit (cost)
For wood pellet fuel @ base-case assumptions
Sensitivity: Economics vs. Biomass Fuel Cost
$100,000
$50,000
0
-$50,000
-$100,000$120 $140 $160 $180 $200
Cost of Wood Pellets, per ton delivered
Net benefit (cost)
For wood pellet fuel @ base-case assumptions
Sensitivity: Economics vs. Propane Consumption
$100,000
4,000 5,000 6,000 7,000 8,000
$50,000
0
-$50,000
-$100,000
Average Current Propane Consumption, gallons / year
Net benefit (cost)
For wood pellet fuel @ base-case assumptions
Sensitivity: Economics vs. Propane Cost
$100,000
$50,000
0
-$50,000
-$100,000$1.40 $1.80 $2.20 $2.60 $3.00
Cost of Propane, per gallon
Net benefit (cost)
For wood pellet fuel @ base-case assumptions
Sensitivity: Inflation Rate for Propane
$100,000
5% 7% 9% 11% 13%
$50,000
0
-$50,000
-$100,000
Annual inflation rate of propane costs
Net benefit (cost)
3%
14.4%@ 6,000 gal / yr& 65% sys eff.& $160 / ton
Sensitivity: Inflation Rate for Propane
$100,000
5% 7% 9% 11% 13%
$50,000
0
-$50,000
-$100,000
Annual inflation rate of propane costs
Net benefit (cost)
3%
@ 4,000 gal / yr& 50% sys eff.& $200 / ton
@ 6,000 gal / yr& 65% sys eff.& $160 / ton
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
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
BioEnergy Systems LLCFayetteville, AR
479.527.0478
www.biomass2.com
Jim Wimberly
Pellet furnace demo;Durham, AR; 1995.