Pellet Heat for the Pink Building

The pink, six-story Ketchikan Federal Building is a landmark in the
southeastern Alaskan community of Ketchikan, population 8,000. When it
came time to replace the original 1938-vintage steam radiators—the kind
that clank and bang all winter long—the building not only got a more
efficient hydronic heating system, but a state-of-the-art pellet boiler
to match.

As the first pellet boiler among 1,500 federal
buildings managed by the General Services Administration, the Pink
Building (as it is known locally) has become a case study. The GSA’s
Green Proving Ground Program asked the National Renewable Energy
Laboratory to study the potential for biomass heating in other federal
buildings. The study shows positive results for pellet heating systems
and identified 150 buildings as possible candidates for biomass heating
across the nation. That was in spite of the fact that NREL found the
payback for Ketchikan boiler system was going to be much longer than
ideal, at an estimated 30 years, due to the high cost of removing and
replacing the original steam-heat radiators and installing a back-up oil
boiler. Of the total $4.7 million project cost, NREL researchers
estimated $450,000 was directly associated with the biomass heating
system. Another factor increasing this system’s payback was the
installation of an oversized pellet boiler and the relative high cost of
pellets due to the remote location.

“This was a new technology
for us, we’re learning,” explains Jim Langlois, Alaska-based property
manager.  “This is what it was all about.” Planned before he became
property manager, he explains the America Recovery and Investment Act
helped move the project forward. The retrofit was completed in January
2012 and, after a year’s operating experience, NREL conducted efficiency
testing at the site and evaluated the lessons learned. 

NREL’s
efficiency tests were done during an unusually warm period in the winter
of 2013, when daytime highs were in the mid-50s. Even though the boiler
was running at just 45 percent of full load, NREL calculated an 85.6
percent efficiency factor, verifying the manufacturer’s claims. NREL’s
overall assessment was quite positive: “The biomass system works well,
needs very little maintenance or attention of any kind, and performs
well within the efficiencies put forth by the vendor. These biomass hot
water heating systems are efficient, cleaning burning and provide a
reliable source of renewable energy.”

The biggest issue
identified in the Ketchikan installation is that at 1 MMBtu per hour
output, the pellet boiler is oversized with a system capacity factor of
about 13 percent, according to the report.  “Since there was a large
amount of capital expended for a system that is often idle or at low
load, the payback is high at approximately 30 years. Additionally, the
payback is calculated using the most current price for pellets in the
area, which is approximately $250 per ton.”  The report goes on to say
that in other installations, the backup oil-heating system, as required
in federal buildings, could help meet peak heating demand. “A typical
rule of thumb is to design the system output for 60 percent of the peak
load,” the report says, while adding that a higher percentage may be
warranted in areas with a flatter heating load profile.

Points for Evaluation
While
detailing the Ketchikan installation, the NREL researchers discuss the
technology and multiple points applicable to other potential
installations. “This type of technology has been commercially available
for many years,” the report says, describing pellet boilers as a mature
technology. “However, small biomass systems that require little operator
attendance are relatively new.”  Other points made in favor of pellet
heating include:

• The availability of multiple vendor sources should aid competitive pricing.
• Biomass fuel pricing has remained stable compared to fossil fuel.
•
Recent improvements in biomass systems and the implementation of pellet
fuels has made the required maintenance and operational attendance
minimal.
The report also makes a number of observations and recommendations:
•
Biomass heating systems be considered for buildings with hydronic
heating, as the conversion from steam heat to hydronic is not likely to
offer a reasonable payback. Generating steam with biomass on a small
scale is feasible, although hot water systems are more common and less
expensive.
• Deployment economics will vary from building to
building depending primarily on the size of the biomass system, the
hours of operation throughout the year and fuel costs. Candidate
buildings will have a substantial heating load and an extended heating
season.
• Energy savings due to the difference in efficiencies between the old and new technologies can be an advantage.
•
A major consideration will be the proximity to fuel sources. Several
suppliers that are relatively close would be preferable, since relying
upon a single supplier could introduce supply risk. Also, transportation
comprises a large percentage of fuel cost. A current rule of thumb is
that transportation cost is about 15 cents per ton-mile and, if the
project is remote, bad roads and high fuel prices could double the
transportation cost.
• Candidate buildings will be located where natural gas is expensive or not available.

Unique Location
Ketchikan
is also a case study in how each location will be unique. The community
is located on the coast of a large island in Southeast Alaska, 679
miles north of Seattle and 235 miles south of Juneau.  Average low
temperatures during January and February are just under freezing and
record lows hover around 0 degrees Fahrenheit. While Ketchikan may not
meet the criteria for extreme cold, it does meet the criteria for
lacking inexpensive natural gas for heat. “Everything here is brought in
by barge or airplane,” Langlois explains. The federal building
typically required 9,000 gallons of fuel oil each winter. In contrast,
the new, efficient pellet boiler required just 83 tons of pellets for
the first fiscal year. That was not for an entire heating season,
though, but rather from startup in January 2012 through Sept. 30.
Initially,
bulk pellets were brought up from the lower 48 which added substantial
transportations cost, but Langlois reports the Ketchikan Federal
Building now has a contract with a local pellet producer.

Tongass
Forest Enterprises is a new pellet producer, starting quite small to
meet the initial limited local demand—the federal building, the city
library and a handful of others. The company specializes in producing
custom building products, such as flooring, trim, paneling and decking,
and it manufactures outbuildings like saunas and small green houses. It
works in four woods that come from the Tongass National Forest, 
including Sitka spruce, western hemlock, yellow and red cedar.

“We
build up enough sawdust and make pellets,” says Larry Jackson, owner.
The pellet operation runs one 1-ton-per-hour unit that, if it ran 200
production days a year, would produce roughly 2,000 tons annually. “It’s
not profitable,” Jackson says, but it has helped turned a liability
into a positive, taking a waste stream and making a new product. “Right
now, we’re running 10 percent capacity because we don’t have the demand.
We’re trying to grow with demand in the region.”  All of the business
is bulk, delivered in a used feed truck the company located in Iowa.

Fostering
the growth of a pellet industry was one of the initial goals of the
project, Langlois adds. “Southeast Alaska is trying to develop a pellet
mill industry. There’s a push here and people are being proactive in
trying to get this going. If we can establish fuel suppliers locally, it
generates jobs.”

Read More: Wood Pellet Boilers