implementation of a woodchip-based heating system for ... · arilje, a review of the technical...

Feasibility Study

Implementation of a Woodchip-based

Heating System for Public Buildings in

Arilje, Serbia

Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH Dag-Hammerskjöld Weg 1-5

Postfach/ P.O.Box 518065760 Eschborn

February 2015

2

Copyright ® 2015

Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH, Belgrade, Serbia DKTI-Programme „Feasibility Study for a Woodchip-based Heating System in Arilje, Serbia”

This study has been elaborated on behalf of GIZ DKTI by 8.2 Consulting AG Author: Dipl.-Ing. Joachim Kohrt

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Executive Summary

The municipality of Arilje is planning to set up a local district heating system and to connect fourteen municipal facilities to it. The buildings are located in a close spatial context and therefore offer good prerequisites for the establishment of a district heating grid.

The construction and installation of the plant shall take place at the same time as the renewal of the town’s sewage system. This allows minimizing costs at least in the public sector.

Based on the densely wooded surroundings of Arilje, the procurement of biomass from the region is expected to be unproblematic. The biomass plant shall be supplied by regionally based companies. This will create new jobs in the region and thus a strengthening of the region.

The existing boilers for heat supply are, with the exception of two, all old, inefficient and need to be exchanged

shortly in order to ensure the ongoing heat supply of the buildings.

The fuels used are not particularly environmentally friendly; electric energy and lignite have an adverse envi-ronmental impact. About a third of the fuels used is mazut. It is actually no longer permitted as fuel for space heating, but it is still tolerated. LPG is used only in the newly built boiler systems and is a more expensive fuel.

The construction of a biomass boiler system in conjunction with a local heating grid is an economical alternative

to the installation of new boilers in each building. The production costs for heat from biomass are about 25% lower compared to those related to the heat production from individual boilers. The project can provide over €

1.000.000 within a 15 years period of direct savings in the municipal budget including new investment,

capital, operation and fuel costs.

The CO2 emissions for heating of the analysed buildings would be reduced by 75%.

Since this is one of the first biomass power plants in the region, the biomass heating system in Arilje may exert a strong signal to other municipalities and thus is considered a flagship project for the region.

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Index

1� Introduction ............................................................................................................................ 8�

2� Arilje ........................................................................................................................................ 8�

2.1� Location and Topography .................................................................................................... 8�

2.2� Project Description .............................................................................................................. 8�

3� Description of Buildings ....................................................................................................... 9�

3.1� Heating Demand and Usage Patterns ................................................................................ 9�

3.2� Municipal Facilities ............................................................................................................ 10�

3.2.1� Building #1 Workshop ....................................................................................................... 10�

3.2.2� Building #2 High School .................................................................................................... 10�

3.2.3� Building # 3 Radio Station ................................................................................................. 10�

3.2.4� Building # 4 & 5 Hospital ................................................................................................... 11�

3.2.5� Building # 6 & 7 Elementary School & School Kitchen ..................................................... 12�

3.2.6� Building # 8 Administration of Justice ............................................................................... 13�

3.2.7� Building # 9 Municipality .................................................................................................... 13�

3.2.8� Building # 10 Service Center ............................................................................................. 13�

3.2.9� Building # 11 Electro Service ............................................................................................ 14�

3.2.10� Building # 12 Bank ........................................................................................................ 14�

3.2.11� Building # 13 & 13.1 Kindergarten ................................................................................ 14�

3.3� Overview of the Heating Demand and the Given Cost ..................................................... 15�

4� Heating Cost in Serbia ........................................................................................................ 16�

4.1� Fuels .................................................................................................................................. 16�

4.1.1� Mazut (Heavy Fuel Oil) ...................................................................................................... 16�

4.1.2� Lignite (Brown Coal) .......................................................................................................... 17�

4.1.3� Electrical Energy for Heating ............................................................................................. 17�

4.1.4� LPG and light oil ................................................................................................................ 17�

4.1.5� Biomass / Wood ................................................................................................................ 17�

4.1.6� Carbon Dioxide Emission .................................................................................................. 18�

5� Existing Heating Systems ................................................................................................... 19�

5.1� Existing Boiler System ....................................................................................................... 19�

5.2� Cost Estimation for the Replacement of Boilers................................................................ 19�

5.3� Operational Cost for the Existing Heating System ............................................................ 20�

6� Boiler and Fuel Storage ...................................................................................................... 21�

6.1� Wood Chip Boiler .............................................................................................................. 21�

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6.1.1� Storage of the Wood Chips ............................................................................................... 22�

6.2� Heat Grid ........................................................................................................................... 23�

6.3� Connection to the Biomass Boiler System ........................................................................ 24�

6.4� Connection to the Buildings............................................................................................... 24�

6.5� Biomass as a Fuel ............................................................................................................. 24�

7� Grid and Boiler Design ........................................................................................................ 26�

7.1� Energetic Balance and Load Curve .................................................................................. 26�

7.2� Heating Grid ...................................................................................................................... 27�

7.3� Invest Biomass Plant ......................................................................................................... 28�

7.4� Cost Estimation for Heating Grid ....................................................................................... 31�

7.5� Design of the Grid Pump and Calculation of the Power Requirement .............................. 33�

7.6� Calculation of Heat Loss ................................................................................................... 33�

7.7� Cost Estimation ................................................................................................................. 34�

7.7.1� Cost Estimation Substations ............................................................................................. 34�

7.7.2� Cost Estimation for the Comparative Measure ................................................................. 35�

7.7.3� Operational Cost of a Biomass Heating Grid .................................................................... 36�

7.7.4� Balancing Expenditure and Income .................................................................................. 38�

7.7.5� Comparison of the Heat Rates .......................................................................................... 38�

7.8� Cash Forecasting .............................................................................................................. 40�

7.8.1� Investment / Credit ............................................................................................................ 43�

7.9� Sensitivity .......................................................................................................................... 43�

7.9.1� Sensitivity of Investment Costs ......................................................................................... 43�

7.9.2� Sensitivity of current and future fuel Costs ........................................................................ 43�

Appendices ................................................................................................................................... 46�

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Index of Figures

Figure 3-1: Workshop ..................................................................................................................... 10�

Figure 3-2: High School .................................................................................................................. 10�

Figure 3-3: Radio Station Arilje 93,0 MHz ...................................................................................... 10�

Figure 3-4: Building 4 ..................................................................................................................... 11�

Figure 3-5: Coal boiler at the hospital ............................................................................................ 11�

Figure 3-6: Building 5 ..................................................................................................................... 11�

Figure 3-7: Elementary School ....................................................................................................... 12�

Figure 3-8: New boiler system for the school kitchen .................................................................... 12�

Figure 3-9: School Kitchen ............................................................................................................. 12�

Figure 3-11: Court (Justice) ............................................................................................................ 13�

Figure 3-12: Municipality ................................................................................................................ 13�

Figure 3-13: Service Center ........................................................................................................... 13�

Figure 3-14: Electro Service ........................................................................................................... 14�

Figure 3-15: Bank ........................................................................................................................... 14�

Figure 3-16: Kindergarten .............................................................................................................. 14�

Figure 4-1: Heating demand by usage and fuel types ................................................................... 16�

Figure 5-1: Boiler for mazut in the Elementary school .................................................................. 19�

Figure 5-2: Heat distribution in the health center .......................................................................... 19�

Figure 6-1: Wood chip storage with boiler ..................................................................................... 21�

Figure 6-2: Wood chip boiler with storage ...................................................................................... 22�

Figure 6-3: Biomass boiler 1MW built in in container, deliverable in two trucks ........................... 23�

Figure 6-4: Cross section heating pipe ......................................................................................... 23�

Figure 6-5: Laying of a heating pipe .............................................................................................. 23�

Figure 6-6: Delivered pipe roll ........................................................................................................ 24�

Figure 6-7: inter pipe connection ................................................................................................... 24�

Figure 7-1: Yearly Load Curve of the project ................................................................................. 26�

Figure 7-2: Daily Load Curve of the project ................................................................................... 27�

Figure 7-3: Drawing of heating grid ................................................................................................ 28�

Figure 7-4: Generall Investment Costs for Biomass boiler systems .............................................. 30�

Figure 7-4: Diagram of heating costs ............................................................................................. 39�

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Index of Tables

Table 3-1: Heating demand by type of usage .................................................................................. 9�

Table 3-2: Heating demand of the analyzed buildings ................................. 15�

Table 4-1: Specific Heat Cost in Serbia ........................................................... 16�

Table 4-2: Mass of carbon dioxide emitted per quantity of energy ................................................ 18�

Table 5-1: Invest in single boiler system ........................................................................................ 19�

Table 5-2: Operational cost for the given heating system .............................................................. 20�

Table 7-1: Energy demand ............................................................................................................. 26�

Table 7-2: Investment of Biomass Plant and Heating Grid ............................................................ 29�

Table 7-3: Grid dimensions and costs ............................................................................................ 32�

Table 7-4: Heat losses ................................................................................................................... 34�

Table 7-5: Cost estimation substations ......................................................................................... 35�

Table 7-6: Yearly operating cost for the proposed project ............................................................. 36�

Table 7-7: Biomass cost ................................................................................................................. 37�

Table 7-8: Static Balance of the proposed project ......................................................................... 38�

Table 7-9: Comparison of heating prices current and biomass heating system ............................ 39�

Table 7-10: Cash Flow of the proposed project ............................................................................. 42�

Table 7-11: Sensitivity of Investment Costs ................................................................................... 43�

Table 7-12: Sensitivity of biomass fuel costs ................................................................................. 44�

Table 7-13: Sensitivity of current heating costs as future savings ................................................. 44�

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1 Introduction

The Deutsche Gesellschaft für Internationale Zusammenarbeit GmbH (referred to hereinafter as GIZ) has commissioned the 8.2 Consulting AG (referred to hereinafter as 8.2AG) to perform a Bankable Feasibility Study for a woodchip-based heating system in the Serbian town Arilje, 180 km

south of Belgrad.

The heating supply for these public buildings in Arilje has been generated so far from fossil fuels and shall be generated from biomass combustion in the future.

The Bankable Feasibility Study includes a detailed analysis of the current energetic situation in Arilje, a review of the technical concept of the heating system and a financial evaluation of the

business plan. Corporate law and property law issues were not subject of the audit.

2 Arilje

2.1 Location and Topography

Arilje is a town and municipality in western Serbia, in the Zlatibor District. It is a hilly and mountain-

ous area at an altitude of 330 to 1,382 meters. Arilje has a population of 6,763 inhabitants while the municipality has 18,792 inhabitants. The town's coordinates are 43.75°N and 20.10°E.

Arilje is surrounded by many forest areas which are presently mainly used for industrial applications and furthermore by many residents to obtain fuel for their households.

2.2 Project Description

The municipality of Arilje is planning to supply the municipal buildings with energy from biomass in the future. In the course of other municipal modernization measures, it is planned to coordinate civil engineering projects to take advantage of synergies between the constructional measures.

The data with respect to the individual buildings was assessed and provided by the municipality. This data was examined for plausibility by 8.2AG and missing data was supplemented with plausi-

ble assumptions.

On the basis of this data a calculation of the connection cable and the quantity of heat for a local heating grid was performed.

Based on the data an economical operation has been estimated. The calculated investments were compared to the modernization of existing individual boiler systems. It was taken into consideration

that 2 of the 17 heating systems had been modernized recently. Thus, the investment for the indi-vidual boilers comprises only 15 boilers. The direct saving of future heating costs from a biomass heating plant including a grid to connect the building compared to the current situation has been evaluated in a detailed Cash-Flow-Overview.

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3 Description of Buildings

The municipal institutions are all located in the central urban area of Arilje. The existing stock of buildings is mainly old and not equipped with special insulation measures.

The data for the fuel requirement was collected and reported by the Municipality itself. The fuel

consumption data is based on the year 2013. This data was examined for plausibility by 8.2AG and missing data was supplemented with plausible assumptions.

This data is the basis for the further consideration.

The use of the buildings was reviewed during the on-site visit. It turned out that there are 3 types of use:

1. School

• Start of school: 8:00

• End of school approx.: 15:00

• Partial use of rooms and gymnasium until 22:00

• School holidays: 01st -15th January

• No use on weekends

2. Offices

• Start of office hours: 8:00

• End approx.:18:00

• No use on weekends

3. Hospital

• Heating 24h/day

• Also on weekends

3.1 Heating Demand and Usage Patterns

To perform the calculation of the heating demand the present heating demand is used. Three types of buildings with different modes of operation are defined.

Table 3-1: Heating demand by type of usage

Day period Night period

Heating pe-riod

Time Temp

. Time

Temp.

1 Hospi-tal

06:00 - 22:00

20°C 22.00 - 06:00

15°C 30.09. - 01.05. around the clock, 7days a week

2 School 08:00 - 22:00

20°C 22.00 - 06:00

15°C 30.09. - 01.05.;

Holidays: 01. - 15.01.

Monday to Friday, only during the day

3 Office 08:00 - 18:00

20°C 18:00- 08:00 15°C 30.09. - 01.05. Monday to Friday, only during the day

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3.2 Municipal Facilities

3.2.1 Building #1 Workshop

The workshop is laid down as a backup in the plans. It shall therefore not be further consid-

ered herein. The workshop has no heating sys-tem.

Type of usage: Office

The building is used on workdays between 8:00h and 18:00h. The building contains train-

ing workshops and storerooms. The hall is non- insulated.

It is taken into consideration to use part of the Workshop for the biomass heating system.

3.2.2 Building #2 High School

The annual heating demand for the school is about 361.975 kWhth for an area of 2.192m². The currently used fuels are electricity and LPG. The building is equipped with a new heat-ing system with LPG and boilers.

Type of usage: School

It is used on workdays between 8:00h and 22:00h.

3.2.3 Building # 3 Radio Station

The annual heating demand of the radio station is about 85.000 kWhth for an area of 360m². The fuel used is electricity.


The building is used on workdays between

08:00h and 18:00h.

There is no data regarding the exact equipment age available. It is assumed that it needs to be replaced due to its estimated age.

Figure 3-1: Workshop

Figure 3-2: High School

Figure 3-3: Radio Station Arilje 93,0 MHz

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3.2.4 Building # 4 & 5 Hospital

The annual heating demand for the hospital is about 814.150 kWhth for an area of 2.090m². The fuels used are mazut and coal.

Type of usage: Hospital

These buildings are in use from 0:00h until 24:00h, seven days a week.

The heating is carried out with coal, which is manually fed into the boiler.

The boiler system is old and has to be replaced.

The heating system is also used for water heat-ing. For medical and hygienic applications the domestic hot water is also needed during the summer.

Figure 3-4: Building 4

Figure 3-5: Coal boiler at the hospital Figure 3-6: Building 5

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3.2.5 Building # 6 & 7 Elementary School & School Kitchen

The annual heating demand for the elementary school and the school kitchen is about 618.052 kWhth for an area of 6.370 m². The fuels used

are mazut, electricity and LPG.


These buildings are used on workdays from 08:00h to 22:00h.

The School (Figure 3-7: Elementary School)

has an old boiler system.

The boiler system consists in a unit for mazut and another unit for electric heating. Due to the age of the boiler systems it needs to be re-placed.

The school kitchen (Figure 3-9: School Kitchen) is equipped with a new boiler system (Figure 3-8: New boiler system for the school kitchen). The fuel used is LPG.

Figure 3-8: New boiler system for the school kitchen Figure 3-9: School Kitchen

Figure 3-7: Elementary School

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3.2.6 Building # 8 Administration of Justice

The annual heating demand for the administra-tion of justice building is about 30.875 kWhth for an area of 750m². The fuel used is electricity.


This building is used on workdays from 08:00h to 18:00h.

The electric heat generators located in the basement of the building are old and need to

be replaced.

3.2.7 Building # 9 Municipality

The annual heating demand of the municipality

building is about 99.372 kWhth for an area of 740m². The fuel used is electricity.



3.2.8 Building # 10 Service Center

The annual heating demand of the service cen-ter is about 128.115 kWhth for an area of 579 m². The fuel used is electricity.


This building is used on workdays from 08:00h

to 18:00h.

Figure 3-10: Court (Justice)

Figure 3-11: Municipality

Figure 3-12: Service Center

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3.2.9 Building # 11 Electro Service

The annual heating demand of the electro ser-vice is about 25.650 kWhth for an area of 280 m². The fuel used is electricity.



The heating of the rooms is done by electric space heaters. For the connection of the build-

ing to a heating network it is necessary to install a hot water heating system (not included in the investment).

3.2.10 Building # 12 Bank

The annual heating demand of the bank build-ing is about 87.500 kWhth for an area of 350m². The fuel used is electricity.


This building is used on work days from 08:00h

to 18:00h.

The electric heat generation is old and needs to be replaced.

3.2.11 Building # 13 & 13.1 Kindergar-

ten

The annual heating demand for the kindergar-ten is about 325.191 kWhth for an area of 2.960

m². The fuels used are electricity and mazut.


The building is used on workdays between 08:00h and 16:00h.

It is equipped with a mazut-fired boiler system

and an additional electric heating system.

The heating systems are old and need to be re-placed.

Figure 3-13: Electro Service

Figure 3-14: Bank

Figure 3-15: Kindergarten

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3.3 Overview of the Heating Demand and the Given Cost

The current situation of the heat demand is described and summarized in the table below:

No. Name

Heating

Fuels

Cost

area [m²]

Heat de-

mand

[kWhth] *

Heat de-

mand

[kWhth] **

€/kWh th total

1 Workshop reserve / backup

2 High School �� 361.975 394,560 E & LPG 0,047 16.956 €

3 Radio �� 85.500 64,800 E 0,300 25.635 €

4 & 5 Hospital �� 814.150 627,300 M & C 0,080 64.734 €

6 & 7 Elementary School & Kitchen �� 618.052 1,146,600 M, E & LPG 0,036 22.144 €

8 Justice � 30.875 135,000 E 0,095 2.918 €

9 Municipality �� 99.372 133,200 E 0,052 5.149 €

10 Service Cen-ter � 128.115 104,220 E 0,101 12.976 €

11 Electro Ser-vice �� 25.650 50,400 E 0,053 1.371 €

12 Bank �� 87.500 63,000 E 0,051 4.443 €

13 &13.1

Kindergarten �� 325.191 532,800 M & E 0,079 25.635 €

Total 16.672 2.576.380 3,251,880 181.966€

Table 3-2: Heating demand of the analyzed buildings Fuels: Mazut [M]; Coal [C]; Electricity [E]; Liquid Petroleum Gas [LPG] * estimation through fuel consumption amounts without electricity, ** estimation through heated area with 180 kWh/m² (250 kWh/m² for Hospital)

Most buildings are additionally equipped with electric air conditioners or room ventilation. Data re-garding the electricity consumption required for these systems could not be obtained. Nevertheless the estimation of heat consumption, taking into consideration a general consumption of 180 kWh/m²

heated area (� for room heating office and schools, Hospital use would be normally around 250-300 kWh/m²) shows with 3.251.880 kWh per year, a higher value than the current consumption calculated through bills of heating fuels for the mentioned buildings.

This table shows furthermore the current energy costs for each of the above mentioned buildings.

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4 Heating Cost in Serbia

Table 4-1: Specific Heat Cost in Serbia Quelle: GIZ, Specification for the calculations

The table shows the typical cost of fuels and heating in Serbia.

This data was provided by the GIZ and is used for the calculations if no other project-related data was available.

4.1 Fuels

Figure 4-1: Heating demand by usage and fuel types

4.1.1 Mazut (Heavy Fuel Oil)

With a share of 31% mazut is the most used fuel. Mazut is obtained in crude oil processing. This petroleum residue (mazut) forms a thick, viscous black liquid. Its average composition can be as-sumed to be of 88% carbon and 12% hydrogen. It is hard to ignite and burns under ordinary cir-cumstances with an extremely smoky flame. Due to its poor environmental properties mazut is no

longer permitted as fuel for space heating in Serbia.

In view of the national energy strategy and in order to fulfil the environmental directives of the EU, heavy oil like mazut cannot be considered as a potential fuel for room-heating in the future in Serbia.

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17

As a result of this mazut is expected to not be used anymore in the foreseeable future as a fuel for the project related facilities. It is assumed that mazut will be replaced by light oil. In this case a corresponding cost increase is expected.

The price of mazut is about 70 € / MWh. The price of light oil EL is 110 € / MWh.

If mazut is replaced by the light oil EL, the cost will increase by 40 € / MWh. This is an increase of nearly 57%.

4.1.2 Lignite (Brown Coal)

Lignite, often referred to as brown coal, is a soft brown combustible sedimentary rock that is formed from naturally compressed peat. It is considered the lowest rank of coal due to its relatively low

heat content. It is mined in China, Bulgaria, Greece, Germany, Poland, Serbia, Russia, Turkey, the United States, Canada, India, Australia and many other parts of Europe and it is used almost ex-clusively as a fuel for steam-electric power generation.

Brown coal as a fuel for heating is not an environmental friendly energy conversion. In conjunction with the existing boiler and its poor environmental characteristics the fuel lignite is not acceptable

for a low-emission heat generation in the buildings. It is not to be expected that lignite can still be used without additional measures for emission control after a boiler replacement.

4.1.3 Electrical Energy for Heating

The electrical energy (electricity) is produced in heating plants that are associated with large energy losses. The system efficiency of power plants is very low. For example, if the power plant uses

lignite, the efficiency of electricity production is about 35%, and in addition a few percent in the current distribution are lost. In total the losses are that high that only about 30% of the primary energy is used by the consumers. Such values can be easily exceeded by good boilers for biomass with a utilization rate of 85%, also taking into account the energy required for the transport of the fuel.

4.1.4 LPG and light oil

LPG and light oil are fuels that are attributable to petroleum fraction. They have the great advantage that they can be transported by truck to the consumers and that they are storable in a tank. By the preceding conversion processes for the preparation and purification of fuels partially polluting prop-erties can be reduced.

However, this does not reduce the CO2 emissions of fuels.

Furthermore, the good properties of these fuels are paid for with a high price.

4.1.5 Biomass / Wood

Wood is an ancient and advanced fuel. There are simple reasons: wood stores solar energy and with the help of modern heating technologies wood is an environmentally friendly source of heat.

Another benefit for the environment is that wood is usually locally available and does not need to be transported over long distances to the consumers like oil or gas.

18

From the region for the region

During the combustion of wood CO2 is also produced. But wood is a renewable resource that stands out for its closed CO2 cycle. During combustion only the amount of CO2 is released which was taken from the atmosphere during the growth of the trees, unlike coal, oil and gas. The same

amount would also be caused by rotting of the wood. In sustainable forest management the same amount of CO2 will be stored in the plant with the help of sunlight.

This closed loop leads to a very positive CO2 balance.

4.1.6 Carbon Dioxide Emission

The environmental performance is a factor that should be considered when purchasing a boiler or

a heat grid. The CO2 balance for renewable raw materials is significantly better than that of fossil fuels. Not only the CO2 emissions of the boiler are considered, but the production of the raw material until the disposal of waste. Short supply routes for wood from the region reduce the CO2 emissions, for example.

To evaluate the environmental performance the CO2 figures for the fuels used in the portfolio are

compared with the CO2 figure for biomass. The figures were taken from the website of the Bavarian State Office for Environment (http://www.izu.bayern.de/praxis/detail_praxis.php). With the excep-tion of the figures for mazut.

Fuel Energy demand Specific CO2 emission CO2 per anno

Fuel oil (Mazut) [M] 911.200 kWh th 288 g/kwh 262 t CO2

Coal [C] 781.800 kWh th 403 g/kwh 315 t CO2

Electricity [E] 897.277 kWh th 580 g/kwh 520 t CO2

LPG 399.094 kWh th 1.820 g/kwh 726 t CO2

Total CO2 in given system 1824 t CO2

Biomass 3.266.329 kWh th 140 g/kwh 457 t CO2

Delta 1367 t CO2

Reduction of CO2 emissions 75%

Table 4-2: Mass of carbon dioxide emitted per quantity of energy

The comparison of the CO2 emissions shows that the CO2 balance is improved by 75 % if the fuel for heating is changed to biomass.

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5 Existing Heating Systems

5.1 Existing Boiler System

Except of two buildings, all buildings are equipped with very old boiler systems and it is clear that they cannot be operated for long anymore. The boilers which are fired by mazut should be replaced

due to poor environmental record of mazut.

Measures for energy efficiency such as controlled heating pumps and control techniques for con-trolling the temperature are not being used.

Figure 5-1: Boiler for mazut in the Elementary school

Figure 5-2: Heat distribution in the health center

5.2 Cost Estimation for the Replacement of Boilers

The table below presents the costs for the construction of a new boiler system (replacement of old existing boiler systems) for all buildings. The recently installed new boilers at the high school (chap-ter 0) and the elementary school kitchen (chapter 3.2.5) were not taken into account. Thus, the investment comprises only 15 out of the 17 single boilers.

The cost estimation includes boilers, burners, pipes and hoses, fittings, the chimneys, the fuel sup-

ply and the electrical systems. It is assumed that no changes to the existing heating systems are required.

Pieces Unit Power Single price Total price

5 Condensation boiler system turnkey and ready to use 50kW 12.500 € 62.500 €





Total 300.000 €

Invest per annum, Interest of 4,5%, with maturities of 15 years

27.934 €

Table 5-1: Invest in single boiler

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5.3 Operational Cost for the Existing Heating System

Cost Cost per annum Comments

Staff 7.600,00 € assumption

Maintenance cost 15.000,00 € assumption

Substitution Fuel costs 181.966,17 € see Table 3-2

Power cost and auxiliary cost 4.058,75 € assumption

Total 208.624,92 €

Table 5-2: Operational cost for the given heating system

The table shows the operating costs of the given system. There are no details on the costs for

personnel and maintenance available. The costs of these positions have been estimated. The cost of fuel procurement is based on information provided by the community (see Chapter 3.3). The cost of electrical equipment and associated costs were also estimated.

The above determined costs are used for further calculations. For the final cash-flow-analysis, the

substitution of the current fuel costs is assumed as an income for the project, since this will lead to direct savings within the municipal budget.

21

6 Boiler and Fuel Storage

The complete system consists of the components boiler plant, fuel storage, the heating grid and the substations. These components are described in the following.

6.1 Wood Chip Boiler

The combustion of wood chips as an alternative to fossil fuels takes place in automated grate boil-ers. Wood chip boiler systems are from a medium power range (from 30 kW) to large systems used by more than 1.000 kW available.

The wood chips are transported from a storage bunker to the combustion chamber in which the combustion/oxidation takes place. In order to keep the emissions as low as possible, the combus-

tion should run optimally. This is ensured by an automatic supply of air. By the supply air regulationthe power of the boiler can also be regulated.

The characteristics of a good wood chip boiler are:

• Automatic ash removal

• Automatic, periodically cleaning of the heat exchanger

• Burn back protection free of extinguishing water

• Continuous Emissions monitoring by a lambda probe

• Control technology with remote monitoring of the entire system

• Modulating heat output of approximately 30% to 100% buffer not mandatory

• Easy adjustment of the control to fuel modification (e.g. pellets)

The boiler can be placed in a building or a container. A container has the advantage that the boiler

can be easily replaced at a scale up of the network by a larger boiler, allowing more flexibility.

Normally, a biomass boiler only covers the base load, so a peak load boiler is needed to ensure that there is enough heat available at any time.

If any other residential buildings are connected a full supply is the usual way.

A biomass boiler plant consists not only of the two basic components (burner and heat ex-changer), like it is the case with a conventional

gas burner (the gas line substitutes a fuel stor-age), but there are two other parts of the sys-tem that have an important role. These are the fuel storage and a heat buffer.

Figure 6-1: Wood chip storage with boiler

22

6.1.1 Storage of the Wood Chips

The wood chips are usually stored close to the boiler plant. They are delivered by tractor or truck. Since the usable storage space amounts to 80% of the total area, the size of the silo should be accordingly at least 90m3 to ensure a safe delivery and loading of the silo. There are several pos-

sibilities for the storage of the wood chips:

• Aboveground silo (metal, fiberglass, plastic, concrete)

• Underground bunker

An underground bunker requires relatively little space and can be well integrated into the environ-ment. Furthermore, it is easy to load an underground silo.

For an above-ground silo the construction cost is much lower, since no pit must be dug. The

feed is, however, more complicated since the chips need to be conveyed in the silo.

Furthermore, the fire protection regulations must be followed:

• Walls and ceilings F90

• Electrical equipment product safety rules

• No other use of space

Self-closing doors and fire retardant

The chips are transported automatically by pneumatic conveyors or by conveyor belts from the silo to the boiler.

Figure 6-2: Wood chip boiler with storage (energie+konzept 2013)

23

Figure 6-3: Biomass boiler 1MW built in in container, deliverable in two trucks (energie+konzept 2013)

6.2 Heating Grid

The heat from the heating plant is transported by a local heating pipe to the consumer. Depending on the intended application the lines can be made from PEX (cross-linked polyethylene high pres-sure) or steel. A common feature of all heat pipes is their insulation which allows that no heat is lost

on the way to the consumer.

The PEX pipes have already proven to be successful in many district heating grids. They are char-acterized by low investment. The laying of the pipes requires no expensive welding or bonding techniques.

Figure 6-4: Cross section heating pipe (REHAU 2014)

Figure 6-5: Laying of a heating pipe (REHAU 2014)

PEX pipes are coated with an oxygen barrier layer to prevent oxygen from entering the heating

water and to prevent related corrosion in the pipe, which extends the life time of the pipes. In addi-tion, the pressure loss is low because they have a low roughness.

24

Figure 6-6: Delivered pipe roll (REHAU 2014) Figure 6-7: inter pipe connection (REHAU 2014)

The heating pipes can be laid in open trench. In comparison to steel pipes, the PEX pipes have the advantage that they can be laid flexibly and thus less work for the manufacturing of bends is re-quired. Due to their flexibility the making of elbows is almost not necessary. Expansion bends or compensators are not required.

6.3 Connection to the Biomass Boiler System

The connection to the biomass heating system is made via a distributor to the boiler. Boiler pumps and valves are intended to be installed for the control of the return flow temperature. For the oper-ation of the heating grid a grid pump is needed to transport the hot water through the grid. Further-more it has to compensate the thermal expansion of the heating water and ensure that the static pressure in the heating grid is maintained by pressure regulation. For safe and optimal operation

of the heating grid an electrical control is required.

6.4 Connection to the Buildings

The connection of the buildings to the heating system is achieved by introducing the pipes directly into the buildings. The heat transfer is made by means of a heat exchanger. The hydraulic circuit in the heating grid is disjoint from the hydraulic circuit in the building. In case of additional supply

the heat exchanger runs in series with the boiler. At full supply the boiler is substituted by the substation. The interface between the grid and the consumer is the output side of the substation without circulation pump and fittings.

Furthermore the measurement of the delivered heat quantity is performed at the substation.

6.5 Biomass as a Fuel

The delivery of biomass is carried out by local players. With respect to this, the GIZ and the com-munity have already had talks with potential suppliers. Furthermore the local biomass potential was investigated in a study.

For the production of wood chips, wood which is not suitable for industrial applications is chipped. This can be, for example, logging residues, small timber or waste wood.

25

The quality of the chips is usually stipulated by ÖNORM. Two important characteristics of wood chips are on the one hand their size and on the other hand their water content. E.g. G50 means that at least 60% of the wood chips do not exceed 50 mm. W 50, for example, means that their water content is up to a maximum of 50% of their total mass.

The calorific value and the bulk volume depend on both, the size and water content, as well as the type of wood used. The calculations are based on the assumption of G50 and W50 wood chips with a calorific value of 750 kWh/srm. (srm = m³ bulk density)

The required investment for wood chip boilers is relatively high, however fuel prices are low. Hence, small plants are usually not profitable and it therefore makes sense that small customers cluster

around one local district heating system.

26

7 Grid and Boiler Design

7.1 Energetic Balance and Load Curve

To evaluate the existing heat demand of the buildings within the future heating grid a software simulation was carried out with the current heat consumption (see Table 3-2), typical temperature

gradients and typical heating characteristics for the three different types of usage: hospital, school and office.

With regard to the heat supply throughout a heating grid in comparison to the supply throughout individual plants a simultaneity factor has to be considered, which depends on the number of cus-

tomers. The heat demand of the customers never occurs exactly at the same time; therefore, the required generating capacity for the, in this case 14 customers, is reduced to 63% (based on the TRGI 86/96).

Power Load

Hot water 0 kW 0 MWh

Losses in pipes 40 kW 203 MWh

Installed capacity of the substations

2.950 kW2.576 MWh

Sum 2.990 kW 2.779 MWh

Table 7-1: Energy demand

Figure 7-1: Yearly Load Curve of the project

The curve shows that a biomass boiler would be sufficient for about 95% of the yearly heat demand. To cover the peak heat demand on the coldest winter day and in particular to demonstrate sufficient redundancy for heat supply, two biomass boilers were selected, each 950 kW. Due to the relatively high price of light oil EL and LPG a peak load boiler with fossil fuels was not selected.

27

Figure 7-2: Daily Load Curve of the project

The picture shows the simulated daily load profile for a very cold winter day (-15°C). The morning peak is characteristic due to the heating demand of the school building and the offices. The evening peak is mainly caused by the partial use of the classrooms and the gym.

Assuming a heat capacity demand of 130 W/m² for older, inefficient buildings (standard 80 W/m”), the total amount of the connected heating area with 16.672 m² would result in a heating capacity demand of 2.168 kW. Since the buildings have different uses and different peak demand periods, a simultaneity-factor of 0.8 is used to define final heat demand in the buildings. Assuming losses of 40 kW in the grid, the new overall boiler capacity should be also within this methodology 1.774

kW. So, two 950 kW Biomass boilers will be enough to cover the current heat demand of the con-nected buildings. Nevertheless, current boiler systems can be maintain connected to the new grid to cover potential peak demands which will be max. 150 kW.

7.2 Heating Grid

Characteristics:

• Flow temperature: 90 ° C

• Return temperature: 65 ° C

• Pipe material: PE-Xa pipe

• Flow temperature / outdoor temperature

• 90 ° C only on cold days

• RPM regulated pump / return flow

The design of the heating grid does not take into account the simultaneity factor. Specifically the distribution lines to the individual customers must be able to transport the full power. Therefore the main feeder pipelines keep a capacity reserve for future grid expansion.

For the individual sections the nominal diameter was designed and the flow rate and pressure drop for each route section were calculated by taking into account an optimum pressure of 150 Pa based on the maximum transportable power for this section.The following figure shows a drawing of the heating grid. It only serves to provide a rough overview. A drawing in higher solution can be found

in Appendix 2

8 5��$��$(��%��$��$��(�($

28

Figure 7-3: Drawing of heating grid

7.3 Invest Biomass Plant

The costs are allocated between three areas:

1. Biomass boiler system 2. Heating Grid 3. Substation

It follows an initial overview of the total cost. The three areas are broken down in detail in the following section.

29

The investment costs were determined based on experience values depending depending on the specific developed project design.

The Serbian branch of German Company Viessmann from Serbia has provided an offer for the boiler plant (Appendix 1).

In addition to the main boiler, a second boiler for biomass was intended to be used as a back-up and peak load boiler.

For the operation of the plant piping fittings, an electrical control and a chimney are required. In addition, a heating grid needs to be built and the individual boilers in the buildings must be replaced by substations. Furthermore, a building for the technical equipment and a detailed technical plan-

ning for the heating grid are required.

The overall investment costs for the project based on the current level of information, is

estimated at € 1,048,335. This results in around 275 €/kW without grid and substations. The

Figure 7-4 provides an overview about general investment costs for biomass boiler inclusive stor-age, feeding system, boiler house and without heating grid and substations in €/kW.

Table 7-2: Investment of Biomass Plant and Heating Grid

Investment Cost

950kW biomass boiler and bunker 254.000 €

950kW biomass boiler reserve 117.000 €

Pumps, Pipes and Instruments 50.000 €

Electrical equipment 20.000 €

Chimney 24.000 €

Heating Grid 291.335 €

Substations 155.000 €

Civil works 80.000 €

Planning and Engineering 17.000 €

Miscellaneous 40.000 €

Total 1.048.335 €

30

Figure 7-4: Generall Investment Costs for Biomass boiler systems (FNR 2014)

31

7.4 Cost Estimation for Heating Grid

For the pipeline construction the following cost approach was chosen:

The cost of materials (pipe costs) corresponds to the material costs in Germany. The costs for installation and earth works were provided by the contracting authority as a cost for Serbia. Cost

reductions (specified by the municipality) due to the synergies within the planned earth works for new sewer lines were taken into account with respect to the routing of lines.

Sec-tion no.

Nominal pipe size

Section length

Cost €/m € per Section

Cost sav-ing for

combined piping

Weighting in %

Actual cost

1. 75 x 6,8 (DN 65) 79 m 147,00 €/m 23.276 € 100% 23.276 €

2. 90 x 8,2 (DN 80) 245 m 147,00 €/m 72.130 € 35,00 €/m 76% 54.956 €

3. 40 x 3,7 (DN 32) 9 m 93,00 €/m 1.696 € 100% 1.696 €

4. 40 x 3,7 (DN 32) 12 m 93,00 €/m 2.175 € 100% 2.175 €

5. 50 x 4,6 (DN 40) 38 m 93,00 €/m 7.048 € 35,00 €/m 62% 4.396 €

6. 50 x 4,6 (DN 40) 6 m 93,00 €/m 1.043 € 100% 1.043 €

7. 50 x 4,6 (DN 40) 13 m 93,00 €/m 2.342 € 35,00 €/m 62% 1.461 €

8. 75 x 6,8 (DN 65) 55 m 147,00 €/m 16.141 € 35,00 €/m 76% 12.298 €

9. 110 x 10,0 (DN

100) 43 m 147,00 €/m 12.652 € 35,00 €/m 76% 9.640 €

10. 50 x 4,6 (DN 40) 53 m 93,00 €/m 9.924 € 100% 9.924 €

11. 110 x 10,0 (DN

100) 34 m 147,00 €/m 10.088 € 35,00 €/m 76% 7.686 €

12. 63 x 5,7 (DN 50) 66 m 111,00 €/m 14.617 € 100% 14.617 €

13. 110 x 10,0 (DN

100) 51 m 147,00 €/m 14.978 € 100% 14.978 €

14. 140 x 12,7 (DN

140) 177 m 219,00 €/m 77.438 € 35,00 €/m 84% 65.062 €

15. 75 x 6,8 (DN 65) 29 m 147,00 €/m 8.511 € 100% 8.511 €

16. 63 x 5,7 (DN 50) 3 m 111,00 €/m 626 € 100% 626 €

17. 90 x 8,2 (DN 80) 23 m 147,00 €/m 6.827 € 100% 6.827 €

18. 160 x 14,6 (DN

160) 10 m 147,00 €/m 2.827 € 100% 2.827 €

19. 63 x 5,7 (DN 50) 32 m 111,00 €/m 7.137 € 100% 7.137 €

20. 40 x 3,7 (DN 32) 7 m 93,00 €/m 1.315 € 100% 1.315 €

21. 75 x 6,8 (DN 65) 24 m 147,00 €/m 7.120 € 100% 7.120 €

22. 160 x 14,6 (DN

160) 89 m 147,00 €/m 26.139 € 100% 26.139 €

32

23. 40 x 3,7 (DN 32) 34 m 93,00 €/m 6.245 € 0% 0 €

24. 160 x 14,6 (DN

160) 26 m 147,00 €/m 7.626 € 100% 7.626 €

Total 1158 m 293,54 €/m 339.921 € 251,58 € 86% 291.335,00 €

Table 7-3: Grid dimensions and costs

33

Q = ��

7.5 Design of the Grid Pump and Calculation of the Power Requirement

The required pump power of the grid pump is calculated using the following formula taking into account the total pressure loss and the section with the highest flow rate:

Efficiency pump ( �� 0,6

Volume flow (�� 100 m³/h

Total pressure drop (�� 540.000 Pa

Pump power (Q) 25.000 W

Full load hours (1.10. till 1.05.)

5.088 h

Power consumption 127.200 kWh

7.6 Calculation of Heat Loss

For the calculation of the heat loss the specific U-value (in W / mK) for a given nominal size, is being multiplied with the difference between soil temperature and average operating temperature.

Q in W/m = U * (�B – �E)

The following table calculates the heat losses for supply and return for each section, which are summed up. In total the losses arise to 40 kW. Since the heating grid should not be operated

throughout the year, but only 5,088 hours annual heat losses of about 200 MWh can be expected.

34

No. Section length

Pipe dimensions Heat losses per

section in W

m mm U-Value VL RL

1. 79 DN 65 (75 x 6,8) 0,192 1216 836

2. 245 DN 80 (90 x 8,2) 0,249 4887 3360

3. 9 DN 32 (40 x 3,7) 0,179 131 90

4. 12 DN 32 (40 x 3,7) 0,179 167 115

5. 38 DN 50 (63 x 5,7) 0,212 643 442

6. 6 DN 50 (63 x 5,7) 0,212 95 65

7. 13 DN 50 (63 x 5,7) 0,212 214 147

8. 55 DN 65 (75 x 6,8) 0,192 843 580

9. 43 DN 100 (110 x 10,0) 0,361 1243 854

10. 53 DN 50 (63 x 5,7) 0,212 905 622

11. 34 DN 100 (110 x 10,0) 0,361 991 681

12. 66 DN 50 (63 x 5,7) 0,212 1117 768

13. 51 DN 100 (110 x 10,0) 0,361 1471 1012

14. 177 DN 160 (160 x 14,6) 0,319 4512 3102

15. 29 DN 65 (75 x 6,8) 0,192 445 306

16. 3 DN 50 (63 x 5,7) 0,212 48 33

17. 23 DN 80 (90 x 8,2) 0,249 463 318

18. 10 DN 160 (160 x 14,6) 0,319 245 169

19. 32 DN 50 (63 x 5,7) 0,212 545 375

20. 7 DN 32 (40 x 3,7) 0,179 101 70

21. 24 DN 65 (75 x 6,8) 0,192 372 256

22. 89 DN 160 (160 x 14,6) 0,319 2269 1560

23. 34 DN 32 (40 x 3,7) 0,179 481 331

24. 26 DN 160 (160 x 14,6) 0,319 662 455

Sum 1.157 24.065 16.545

Line length 2.314 Sum of heat losses 40.610

Table 7-4: Heat losses

Heat losses (Q) 40 kW

Full load hours (1.10 to 1.05) 5.088 h

Heat losses p.a. 207 MWh

7.7 Cost Estimation

7.7.1 Cost Estimation Substations

Substations will be provided at all connection points for the district heating grid. The substations contain essentially a heat exchanger for indirect heat transfer between the heating grid and the heating system in the building. Further fittings on the grid side are include which will regulate the return temperature and allow shutting off the substation from the grid. Of course, each substation

includes a calorimeter. On the side of the buildings, terminals are provided to connect to the build-ing.

35

The costs for the connection to the building’s individual heating grids, as well as the costs for ad-justments or changes to the heating grid are not considered.

No Name Substation Dimen-

sion (kW) Cost

1 Workshop (optional) 50 0 €

2 High school 250 10.500 €

3 Radio 50 5.500 €

4 Hospital coal boiler 400 14.000 €

5 Hospital with Sanitary water 200 10.500 €

6 Elementary School 900 45.000 €

7 Elementary School Kitchen 150 11.000 €

8 Justice 100 7.000 €

9 Municipal 100 7.000 €

10 Service Center 100 7.000 €

10 Service Center 50 5.500 €

11 Electro Service 50 5.500 €

12 Bank 50 5.500 €

13 Kindergarten 100 7.000 €

13.1 Kindergarten 400 14.000 €

Total 2,950 kW 155.000 €

Table 7-5: Cost estimation substations

7.7.2 Cost Estimation for the Comparative Measure

As a comparative measure the cost of delivery and installation of 15 boiler plants with a capacity of 50 kW to 1.000 kW each, were estimated. This summed up to € 300.000 net (Chapter 5.2).

36

7.7.3 Operational Cost of a Biomass Heating Grid

Type of cost Annual Cost (based on year 1)

Employment cost (Supervision): 230 days x 1 hour x 10 €/h 2.300,00 €

Maintenance cost: 0,5 % of overall Invest 5.241,67 €

Fuel cost (Biomass cost): 1,089 t Woodchips á 50 €/t 54.450,00 €

Power demand: 25 kW, 4,000 h/a á 0,05 €/kWh 5.000,00 €

Ash disposal: 2 % of Input, 10 €/t 217.80 €

Insurance: 0,25 % of Invest per year 2.620,84 €

Total 69.830,32 €

Table 7-6: Yearly operating cost for the proposed project

Operating costs include personnel costs of the facility to run the plant. In particular, the following points have been considered:

• The delivery of fuels

• The technical management

• The daily inspection

• The commercial management

• The entire materials management

The maintenance cost especially includes the cost of repairs and maintenance and disposal costs of the ash.

The extra expenses consist primarily of costs of electricity for the operation. Further costs result from the analysis of fuels and heating water.

The costs for the biomass are explained explicitly in Table 7-7: Biomass cost. They are based on

a semi-annual operational delivery. The costs are free to store.

To determine the cost of fuel, the heat demand is assumed. In addition, the losses of the heating network and the losses of the boiler systems are taken into account.

The calorific value of the biomass fuel is mainly determined by the damp in the wood (WU) and by the type of wood. For the biomass from the region the following information has been provided to

us:

W 40 %

Hu = 3,0 kWh/kg (mean value)

Bulk density: 325 kg/m

Price: 50 €/t

Two runs per week with a truck can be expected for the delivery of the biomass. If the delivery is

done with smaller trucks than 60m³, the number of vehicles per week will increase.

37

Cost of Biomass

Heating demand 2.576.380 kWh/a

Losses grid 200.000 kWh/a

Losses boiler 15%

Fuel demand 3.266.329 kWh/a

WU of biomass 40%

Cost per ton 50 €/t

Weight 1.089 t

Truck 60 m³

Operation time 30 weeks

Runs per week 2

Table 7-7: Biomass cost

38

7.7.4 Balancing Expenditure and Income

In the following the expenditure and income are accounted. For the existing heat supply and the new heat supply full costs were determined. If the balance is positive, then the measure is to be regarded as essentially economic.

Annual Static Balance for the project

Overall Investment (Table 7-2) 1.048.335,00 €

Revenues (Substitution of current fuel costs) + 181.966€

Operational cost (Table 7-6) - 69.830,32 €

Capital costs 4,5% /15a - 97.614,46 €

Annual Balance Profit + 14.521,22 €

Table 7-8: Static Balance of the proposed project

The balancing takes into account the total costs that are necessary for an investment in the heating grid. The investment is accounted for on the service life of fifteen years.

This sum will be compared to the avoided costs for the operation of the existing system.

Fuel costs would be even much higher if mazut is substituted by light oil (see chapter 4.1 Fuels). This point is not taken into account in the previous accounting.

Additional revenue arises as there is no need to invest in new boilers for the existing system.

The accounting is based on a full cost calculation. With an annual balance sheet surplus of

14.521,22 € per year, it can be assumed that the investment is viable.

7.7.5 Comparison of the Heat Rates

For comparison of the heat rates the heat price of the existing heat supply is put in relationship to

the heat supply from biomass.

The annual costs of the existing system are compared to the new potential biomass system. The calculation for the existing heat supply is done by summing up the annual cost of the operation of the existing boiler plant (Chapter 5.3) and the annual cost of the avoided investment for new boiler plants (Chapter 5.2). This sum is divided by the heat requirement (Chapter 3.3) and gives the spe-

cific heat price.

The calculation for heat supply by biomass is based on the annual operation cost (Chapter 7.7.3) and the annual investments (Chapter 7.3) divided by the heat requirement (Chapter 3.3).

39

Issue Heat demand Cost Spec heat rates

( kWh/a)

Given

(€/a)

Biomass

(€/a)

Given

(€/kWh)

Biomass

(€/kWh)

Fuel and Operation 2.576.380 208.624,96 69.830,32 0,081 € 0,027 €

Invest 2.576.380 27.934,14 97.614,46 0,011 € 0,038 €

Sum 0,092 € 0,065 €

Table 7-9: Comparison of heating prices current and biomass heating system

The specific heat price for the existing heating supply and for the planned biomass based heating supply is shown in €/kWh.

For the existing system the operating costs according to Chapter 5.3 are applied.

The investment costs result from the replacement of the existing boilers according to Chapter 5.2.

For the biomass heating system the operating costs according to Chapter 7.7.3 are applied.

The investment costs for the biomass heating system according to Chapter 7.3 and 7.7.4 are ap-plied.

The costs are put in relation to the heating demand according to Chapter 3.3.

Figure 7-5: Diagram of heating costs

� �

��

��

��

��

��

��

��

��

��

��

9:;��

"5��$��:

4�;�: � ��& )��&$��

40

The diagram (Figure 7-5: Diagram of heating cost) shows the full costs for the provision of heat. Here, the existing system is being compared with the new district heating grid and biomass power plant. Even if the investment is significantly lower in new boilers for the existing system the com-parison shows that the lower operational cost of the biomass system is more economical in the

overall consideration.

7.8 Cash Forecasting

The cash forecast presents the costs and expenses over a period of 15 years.

For all costs and revenues a price increase is assumed. For fossil fuel there is assumed a price increasing of 3 % per year, all other costs are assumed to increase by 2 % per year.

This cash forecast includes the same elements as the calculation of the operational cost of a bio-mass heating grid. Please refer to chapter 7.7.3 Operational Cost of a Biomass Heating Grid.

Additional costs for the replacement of mazut by light oil were not recognized. This approach would improve the revenues by approx. 31.920 €/a.

The outcoming net present value (NPV) of the following Cash-Flow-Overview is about

114,784.33 € after 10 years and 571.022,95 € after 15 years, based on a market interest rate

of 4,5 % per year. Since after 10 years the heating plant and the grid will be totally paid, no

further capital costs will occur between the 11th and the 15th year, which strongly improves

the viability of the project in this period.

41

��

��

�� !��" ��#��$ %& ��

'�(�� )*+,�-��

��

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5�0 ��

6��*��!�"4��"( ��

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��#�$��% �� &��

42

Table 7-10: Cash Flow of the proposed project

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��

�� !��" ��#��$ %& ��

'�(�� )*+,�-��

��

.��-"��#/��(�0�1�& ��

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43

7.8.1 Investment / Credit

The investments are expected to be financed with a credit line within KfW-MEGLIP Financing under the following conditions:

Loan period: 10 years

Equity: 0 % (100 % Loan is seen as income in year 0)

Eradication grant: 15% after implementation to be used as payback for loan

Rate of interest: 4.5% per year

The annual capital costs are given by the regular repayments and from the interest on the invest-ment.

7.9 Sensitivity

The sensitivity considers possible changes in the project constellation.

For this purpose, the main cost blocks will be changed and their impact will be considered.

7.9.1 Sensitivity of Investment Costs

The investment costs are modified. It is assumed that the investment costs increase between 10%

and 50%. No negative values arise.

For the evaluation the income, see table 7-10 Cash Flow, Column ‘Total 15 years’ is used.

Base Value Sensitivity Calculation Total 15 years

Invest Increase of In-

vest New Invest Accum. Cash Flow

1.048.335,00 € 0% 1.048.335,00 € 1.008.645,14

1.048.335,00 € 20% 1.258.002,00 € 750.308,26€

1.048.335,00 € 78% 1.866.954,46 € 0,00 €

Table 7-11: Sensitivity of Investment Costs

If the investment costs are increased by more than 78 % the accumulated cash flow after 15 years will become negative.

7.9.2 Sensitivity of current and future fuel Costs

The future biomass fuel costs are modified in the following calculation. The fuel costs are increased from 50€/m3 to 70€/m3. It is also considered at which biomass price, the income after 15 years

becomes zero.

For the evaluation the income after 15 years, see table 7-10 Cash Flow, Column ‘Total 15 years’ is used.

44


Cost of Biomass Increase of Bio-

mass Cost

New Biomass

Cost

Accum. Cash

Flow

50,00 €/t 0% 50,00 €/t 1.008.645,14 €

50,00 €/t 40% 70,00 €/t 631.994,46 €

50,00 €/t 107,2% 103.60 €/t 0 €

Table 7-12: Sensitivity of biomass fuel costs

If the biomass fuel costs are increased by more than 107% the accumulated cash flow after 15 years will become negative.

To evaluate the sensitivity on the income, the savings of current heating costs, financial indicators are analysed by decreasing assumed specific heating price. The following table presents the results of this evaluation:

Table 7-13: Sensitivity of current heating costs as future savings


“Current” Heat-

ing price

Decrease of “cur-

rent” Heating

price

New “Current

Heating” price

Accum. Cash

Flow

70,63 €/MWh 0 % 1.008.645,14 € 1.008.645,14 €

70,63 €/MWh 20 % 56,50 €/MWh 338.401,79 €

70,63 €/MWh 30 % 49,37 €/MWh 0 €

Table 7-13 shows that even the project will provide budget savings by using biomass even if the

current fuel prices for light fuel oil would decrease up to 30 %.

45

List of References for Figures

[Figure 6-1] KOHRT, Joachim; Wärmeversorgung Eichenkamp Sothenbergschule; energie + konzept; 2013

[Figure 6-2] KOHRT, Joachim; Wärmeversorgung Eichenkamp Sothenbergschule; energie + konzept; 2013

[Figure 6-3] KOHRT, Joachim; 8.2 Consulting AG

[Figure 6-4] REHAU; Technische Information, Rehau Systeme für die Wärmeversorgung, Rauvitherm und Rauthermex, gültig ab Mai 2014

[Figure 6-5] REHAU; Rauthermex – mit Sicherheit mehr Wärme; Technische Informationen

817600, gültig ab 2009



[Figure 6-8] KÖB HOLZHEIZSYSTEME GMBH; Holzheizsysteme von 100 bis 1700 kW; 09/2013

Appendix 2: Drawing of the grid

implementation of a woodchip-based heating system for ... · arilje, a review of the technical...

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