With energy consumption and energy cost on the rise, Oakland University commissioned Cogen Designs, Inc. and Controlled Performance, LLC to study the viability of a biomass alternative to natural gas for its campus heating needs.  The study focused on the evaluation of potential waste wood supplies, pricing and delivery options to the campus, several wood boiler technologies, the ability to displace a portion of the campus electric load, plant siting options, and economic viability of the wood alternative.

             It was determined that adequate urban wood waste is available in a 14 county area around the campus to reliably meet the fuel supply needs of this project.  The systems and modes of operation evaluated would consume between 30,000 to 66,000 green tons of wood per year depending upon the hours of operation and amount of electrical power production.  The 14 county area is estimated to produce approximately 1.7 millions tons of urban waste wood per year, with the majority going to a wood fueled power plant in Flint, Canadian greenhouses, landscape mulch, and landfills.  This project would consume 1.5 to 3% of the 14 county wood waste supply.  These volumes do not include agricultural residues or dedicated fuel crop production, either of which could provide some or all of this system’s fuel requirements in future years if they prove economical.

            Current pricing for urban waste is in the range of $25 - $30 per delivered ton, or roughly 1/3 the cost for the equivalent fuel value of natural gas.  A wood fuel cost of $28 per ton was used in the economic proformas of this study.

             Both steam and HTHW boiler options were evaluated.  Stoker boilers were generally found to be less expensive to build than fluidized bed systems.  Combined heat and power (CHP) systems could be used to take advantage of surplus boiler capacity during the summer months, to displace summer peak electrical power demands.  These CHP systems produced greater operating savings, although at the expense of higher capital cost.  None of the systems could produce power that was lower in cost than purchased power from Detroit Edison during Off Peak hours, although substantial operating savings could result from peak shaving.

             Capital cost requirements varied from $14 million for a HTHW stoker boiler system to $27 million for a fluidized bed high-pressure steam boiler with multiple steam turbine electric generators.  All scenarios included a new boiler building, fuel storage, handling, and emissions controls.  First year Operating Savings varied from $1.5 million for a simple HTHW system to $1.7 million for a full combined heat and power system operating in Peak Shaving mode.  The new operations for this new boiler plant included five new operators.  Stoker systems for HTHW production generated the most attractive Returns on Investment (10 – 10.5%) and Simple Payback (9.4 – 9.7 years).

             The greatest risk to project savings would be from a decreasing natural gas costs, while decreases in power cost or increases in wood cost had much smaller impacts on project savings and returns.  Capital cost risk is greatest from the potential impact of site-related issues, such as the resolution of drainage issues, high temperature HTHW (HTHW) piping, electrical interconnects, and truck delivery route infrastructure.  More detailed reviews of these civil and utility connection components along with the beginning of the air permitting process are the proposed next steps in the design process.

             Overall, a wood-based boiler system has the potential to produce significant operating savings for the University, based on reasonable expectations for future fuel and power prices.