Public Energy Alternatives
Business Plan: Wood chip gasifier
(Deliverable 5.2)
Period of publishing 6th reporting period
Organization
1 Characterics of deliverable 5.2 ... 3
2 Business plan: Wood chip gasifier ... 4
2.1 Summary of the business plan ... 4
2.2 Description of the technology and business concept ... 4
2.2.1 Introduction ... 4
2.2.2 Technical principle of the front base gasifier ... 4
2.2.3 Detailed description of the process ... 5
2.2.4 Lay-out of the process ... 7
2.2.5 Partners of the project ... 7
2.3 Financial aspects and market analysis ... 8
2.3.1 Cost-benefit-analysis ... 8
2.3.2 Budget ... 9
2.4 Technology usage, chances and risks ... 9
3 Liiketoimintasuunnitelma Vähäkankaan koulun lämmöntuotannolle ... 11
3.1 Yhteenveto ... 11
3.2 Teknologian kuvaus ja liiketoimintakonsepti ... 12
3.2.1 Johdanto ... 12
3.2.2 Kaasuttimen tekninen toimintaperiaate ... 12
3.2.3 Prosessin yksityiskohtainen kuvaus ... 13
3.2.4 Prosessin Lay-out ... 14
3.2.5 Projektin yhteistyökumppaneita ... 15
3.3 Taloudelliset näkökulmat ja markkina-analyysi ... 15
3.3.1 Kustannus-hyöty -analyysi ... 15
3.3.2 Budjetti ... 16
1 Characterics of deliverable 5.2
Deliverable description
WORK PACKAGE N°: 5 DELIVERABLE N°: 5.2
DESCRIPTION ACCORDING TO PROJECT APPLICATION
New financing models for sustainable regional energy production to prepare a sound financing system for new facilities of different dimensions, findings will be published in the Baltic Energy Compendium. This shall be complemented by the search for investors as not all activities can be carried out by the regions and municipalities themselves. Searching for and committing of investors will be professionalized and made available for the overall economic development of the regions in the frame of WP5. In the end, agreements for co-investments of municipalities and private investors will be made, e.g. in form of public private partnerships. The possibilities of this will be identified and experiences shared on transnational level with the project partners.
Result Code: 4.4
TYPE OF DELIVERABLE: Business Plans
SIZE / FORM OF DELIVERABLE: 20 pages, 1 business model per region LANGUAGES OF DELIVERABLE:
2.1 Summary of the business plan
The business plan was written for a case of wood chip gasifier. Wood chip gasifier is a renewable energy solution to replace oil in heating of Vähäkangas school in located in Ylivieska town in Northern Finland. Existing heating solution is using oil as a fuel. Business concept is based on the idea, that replacing oil with wood chips is profitable in Finnish business conditions.
Target group of the project is large. The most important organisations and groups to benefit from the investment are
- Ylivieska municipality: Saving energy costs
- Local youth: Seeing a great example of a local environmentally solution in practice
- Local university and other public and private organisations: Creating and testing a new business concept and analysing its domestic and global potential to create new jobs
2.2 Description of the technology and business concept
2.2.1 Introduction
The purpose of the pilot investment is to increase utilization of local renewable energy sources and to reduce emission to the air. Several existing heating systems in the region use light oil, which need to be replaced by a renewable energy solutions. Other important aspects are reduction of heating costs and development of suitable new technologies with good. Regarding criteria mentioned above, new types of front base gasification technologies seem to be the best options for Ylivieska sub region.
2.2.2 Technical principle of the front base gasifier
Front base gasifier is a technology, where gasification process and incineration of syngas take place in the same unit. Fuel is gasified in the combustion chamber with the preliminary air input. Syngas from gasification flows to the fire channel that can be situated directly in the upper part of combustion chamber or in immediate vicinity of it. Secondary air is leaded to the fire canal, where syngas blends with oxygen and burns completely. Tars in syngas do not effect on operational efficiency of the gasifier as burning of the gas happens in the same unit, where it was produced.
Picture: Air supply in the boiler in two stages: primary air into gasification stage and secondary air into fire channel. 1
Because of their high efficiency and compact design, these front base gasifiers can be used in single-family house, school or industrial halls. Accumulator installation makes it possible to run the gasifier boiler on full load. On full load efficiency of the process is about 95 %. The temperature of outgoing water is 85 C.
Picture: Front base gasifier -unit. 2
combustion area
Picture 3. The primary and secondary air zones. 3
3. The secondary combustion air is blown directly into the flame. Thanks to the in-built lambda probe, which continuously monitors the flue gas values, the boiler reacts to changes in fuel quality ensuring optimum combustion and low emission values. The Lambda probe controls supplement of primary and secondary air that guarantees complete combustion, even in partial load operation.
4. Flue gases flow through the vertical tube heat exchanger that is equipped with cleaning spirals. Gases give up heat to boiler water and at the same time rotate cleaning spirals. So heat exchanger surface stay clean all the time that enables high level of efficiency and low fuel consumption.
5. Fan leads out smokes and maintain required pressure in the unit.
6. The combustion and fly ash auger automatically into the ash bin via the ash discharge screw.
7. Process is equipped with central control unit that allows controlling heating process without disturbing it. Input of feedstock, air dozing, ash removal, cleaning of the grates and heat exchangers happens automatically. Automatic control minimizes the need of the manual maintenance and guarantee optimal operating of the front base gasifier.
3
2.2.4 Lay-out of the process
Process is planned to be compact solution so that it is optimal for using it also in existing buildings near residential areas. Technical parameters and lay-out of the gasifier are shown in the table below and in the pictures next page.
Technical parameters for the front base gasifier mm
A Length 1555
B Width (maximum for access) 920
C Height 1725
D Flue pipe diameter 180
E Height - Inlet hopper door 320
F Width - Inlet hopper door 600
G Height for flue gas – centre line 1200 H Height for flow/return connection 1505
2.2.5 Partners of the project
Investment is realized in close co-operation of different partners. The most important ones are
2.3 Financial aspects and market analysis
2.3.1 Cost-benefit-analysis
Demonstration wood chip gasification plant is planned to Vähäkangas school in Ylivieska. School is located in a village about 10 km outside of Ylivieska town centre and there is no access to district heating network. At the moment heating is based on two old oil boilers. Details of typical consumption of fuel and energy are shown in table below.
Table: Details of Vähäkangas school energy consumption Existing heating
solution
Light fuel oil boiler unit Energy consumption 270 000 kWh/year Oil consumption 27 000 l/year
There are several options considered as possible investments for the school. According to analysis done during year 2011, wood chip gasifier is the most efficient in economical ways giving the best payback period for the investment. Also using local chips for heating creates jobs elsewhere in the society. Use of low value wood for energy production also means better productivity to forests which increases the income of the local forest owners. Use of renewable energy also enhances the quality of environment, which can be seen as qualitative benefit for the project. Municipality of Ylivieska can save up to 10 000 €/year in energy costs thanks to this pilot-investment.
Table: Cost-benefit analysis of the demonstration investment and its options. The values are based on the local conditions in Ylivieska sub region during year 2011.
Heating type Fuel costs / year Other variable costs / year Saved fuel and other variable costs / year Investment price Payback period, years
Light fuel oil 27 000 € 1 283 € --
0 € (existing) -- Wood chip gasifier 6 600 € 2 300 € 19 383 € 70 300 € 3,6 Geothermal energy 11 000 € 1 261 € 16 022 € 250 000 € 15,6 Pellet heating 13 000 € 1 600 € 13 683 € 50 000 € 3,7 Direct electricity 33 000 € 100 € -4 817 € 15 000 € N/A
2.3.2 Budget
Total budget for the demonstration investment is 70 300 EUR. Breakdown of the budget is shown in table below. Share of the PEA financing for the total costs of the project is 50 %. Rest of the budget will be covered by the municipalities in Ylivieska sub-region.
In addition to investment budget, 2000 EUR is used to arrange a study tour and workshop in Ylivieska. Event will take place after completing the investment. PEA project partners, local experts and representatives from other domestic and international organisations are invited. During the study tour the most important experiences and expertise is transferred to the whole Baltic Sea Region. Costs of the study tour and workshop are covered from WP 2 / Communication by each project partner. There is no manpower needed during usage of the plant due to automatic solutions. Some checks are needed regularly, but those are done by existing technical staff.
Budget line Value
Wood chip gasifier boiler and
istallation 29 300 €
Accumulator 3 500 €
Wood chip storage 21 000 €
Installation works 11 500 €
Other costs (e.g. waste, water) 5 000 €
Total investment cost 70 300 €
PEA dlv 5.11 financing 35 000 € Share of financing / PEA dlv 5.11 50 % Transfer of experiences and expertice
with partners and experts in Baltic Sea Region: Extra study tour and workshop
in Ylivieska 2 000 €
Total demonstration project cost 72 300 €
Demonstration investment is a proof-of-concept case for the whole Baltic Sea Region. The demonstration investment proves that new types of gasification based bioenergy heating systems are suitable in environmental, economic and technical way. Proof-of-concept case builds the capacity to convince the local decision makers about benefits of wood chip gasifiers and renewable energy in general. This can lead to an investment program around the whole Baltic Sea Region meaning realization of tens of similar kind of investments.
example for the youth in the area how renewable energy can be a good solution for their everyday life.
Picture: Vähäkangas school
Some parts of the technology solution are new. The project includes some amount of technical risks. These can be reduced by doing the checks and start-up properly and following technical criteria of the plant. Commercially solutions are very solid, since the client is the municipality (school) and it will stay for sure several years from now.
