Thermal RECs + Biomass = BIG Heating Fuel Savings Jim Van Valkenburgh, VP Sales & Marketing Office & PDC Production Facility: 590 Hancock Road, Peterborough, NH
Biomass Boiler System Installations School Buildings and Campuses Commercial Buildings Industrial Buildings Residential Homes & Multifamily Buildings
What We Do: ➢ Biomass Boiler System Installations ➢ Retrofits with Integration into Existing Heating Systems ➢ New Construction
A Self-Performing Contractor Focused on Biomass ➢ Project Development ➢ We Assist Engineers, Architects, Owners w ith Project Feasibility, Design Mechanical Specifications, Estimating, Value Engineering ➢ Mechanical System Installations ➢ Project Management ➢ Procurement ➢ Construction & Commissioning
What we’ve learned --2016 to 2019: ✓ Projects are Bigger ✓ Reliability is a Priority ✓ Cost Justification Very Important ✓ Thermal-RECs (and PDCs) Make Projects Happen!
Thermal RECs
REC = Renewable Energy Certificate The Official New Hampshire Definition: "the record that identifies and represents each Megawatt-Hour (MWh) generated by an eligible renewable energy generating source under RSA 362-F:6." 1 Megawatt = 1 REC
RECs exist due to state laws called Renewable Portfolio Standards (RPS). • RPS laws require utilities to produce electricity from renewable resources Solar, Wind and Biomass • 29 states and Washington, D.C. have RPS Laws • 8 other states adopted renewable energy Goals
Most Electric Utilities don’t produce any electricity from renewable sources • To meet RPS requirements, they purchase RECs from someone who does… • Or they pay Alternative Compliance Payments (ACP) at a price set by their state • RPS in some states have carve-outs that set percentages for specific renewables • New Hampshire and Massachusetts are the only two states that have RPS percentages for Renewable Thermal energy
1 Megawatt of Energy = 1 REC 1 Megawatt of Heat Energy = 3,412,141 BTU 1 Approximate values: 4 T-RECs per Ton PE PELL LLET ETS 3 T-RECs per Ton PDC PDCs GREEN 2 T-RECs per Ton CHIPS Calculations use HHV energy content of hardwood burned at 84% Efficiency
Solar RECs are most common (S-RECs)
Thermal RECs work the same way Meet t Bob He generates His School bought a 972 Thermal Biomass Boiler that RECs in one burns 249 tons of Wood year. Pellets instead of Oil each year Earning him He sells the T-RECs $15,552 for $16 each Net per year Plus their savings from = = Significa icant t Savings! ngs! their Fuel Switch from Oil to Biomass!
Thermal RECs work the same way Bob ‘s School was burning 30,000 gallons of Their Biomass Boiler burns 249 #2 Fuel Oil at $2.30/gal = tons of wood Pellets at per year $69,00 $6 000 at $240/ton = $59,76 9,760 They sell 972 NH Thermal RECs Their new net annual fuel each year for a profit of cost is $15, 5,55 552 $44,208 4,208 That is an annual fuel cost savings of 35% Bob’s School has cut their Cost Syste $45 $4
Annual al Savin ings gs from: : Therm rmal al REC ECs & Wood Pell llets ts 30,000 Gal allons ons of #2 2 OIL = 24 249 tons of Wo Wood Pellets ts 30,000 gal oil x $2.30/gallon = $ 69,000 249 tons ns Pell llets ets x $240/ 0/to ton n = -$ $ 59,760 ,760 = Oil l at $1.9 1.99/gal /gal Fuel Switch Savings = $ 9,240 (-13.4%) Total T-RECs Generated = 972 Net Income of $16 per T-REC = $15,552 New w ann nnual ual cost st of Pellets lets = $44,2 $44,208 08 = Oil at $1.48/gal Annual al Sa Savings ings = $ $ 24 24,792 2 >> 35% Reduc uction tion
Annual al Savin ings gs from: : Therm rmal al REC ECs & & PDCs (Dry ry Chip ips) s) 30,000 Gal allons ons of #2 2 OIL = 320 20 tons of PDCs 30,000 gal oil x $2.30/gallon = $ 69,000 320 tons ns PDCs Cs x $120 20/t /ton on = -$ $ 38,40 400 0 = Oil il at $1.28/ga .28/gal Fuel Switch Savings = $ 30,600 (-44%) Total T-RECs Generated = 972 Net Income at $16 per T-REC = - $15,552 New w ann nnual ual cost st of PDCs s = $22 22,848 ,848 = Oil at 76.2¢/gal Annual al Sa Savings ings = $4 $46,1 6,152 52 >> 66% Reduc uction tion
Annual al Savin ings gs from: : Therm rmal al REC ECs & & Gre reen n Chip ips 30,000 Gal allons ons of #2 2 OIL = 454 4 tons s of Gre reen n Chip ips s 30,000 gal oil x $2.30/gallon = $ 69,000 454 4 tons ns Chips ips x $60/t 0/ton on = -$ $ 27,240 40 = Oil Oil at 90.8¢/gal 0.8¢/gal Fuel Switch Savings = $ 41,760 (-60%) Total T-RECs Generated = 972 Net Income at $16 per T-REC = - $15,552 New w ann nnual ual cost st of Chips ps = $11, 11,68 688 8 = Oil at 39¢/gal Annual al Sa Savings ings = $5 $57,3 ,312 12 >> 83% Reduc uction tion
Any Biomass Fuel can Generate NH Thermal RECs PE PELL LLET ETS GREEN CHIPS PDC PDCs With these requirements: ❑ Boilers must meet Efficiency and Emissions Regulations ❑ Factory Emissions Data for small and medium sized boilers. ❑ Large boilers (over 1.7 MMBTU/Hr Fuel Input) require on-site tests ❑ BTU collection & recording methods must be approved & verified ❑ An Independent Monitor needed to verify quarterly generation ❑ Boilers must be installed after January 1, 2013 (NH)
Required Monitoring Equipment A Qualified BTU Meter with Data Logger & Output Software • Water Flow Meter • 2 Temperature Sensors • And Data Logger
What are the Requirements? NHPUC REGULATIONS REQUIRE: • Formal Application • NHDES Approval of Boiler • Use of approved BTU Meter Equipment • Installations must be verified by a NH Registered Professional Engineer • An official 3 rd party Independent Monitor must verify REC generation every Quarter • RECs are traded in NEPOOL Exchange by authorized firms
Annual al Costs s to Generat erate e Therm rmal al REC ECs: Initial itial Costs sts: BTU Meter er Data ta Logg gger er BTU Meter er & Data ta Logg gger er Install stallatio ation n Forma matti ting ng of Data ta Logg gger er Outp tput ut Hook k up to Buil ildin ding g Router uter/Se Set t up conne necti tion on Verificat rification on of BTU Meter/Data ter/Data Logg gger er Insta stall llatio ation Typical pical Total tal Initial itial Cost st $12,0 2,000 00 Annual nual Costs: sts: Sales les Commissi mmission on of Therma ermal l RECs Cs = app approx rox. . 10% 0% Quar arterl terly Verificat rificatio ion n of Thermal ermal REC C Gener eratio ation n = $1000 000/yr yrest. BTU Meter er Calib ibrat ratio ion n costs sts $600 00 eve very ry 3 year ars s = $200/ 0/yr yrest. t.
Example Ex ple of Net Annual ual Income e fro rom T-REC ECs 972 Therm rmal al RECs Cs Generate nerated d Agent ent sell lls s them em for $22.75 .75 each h = $22,1 ,113 13 Agent ent Commi miss ssion ion at t 10% % -2,211 211 Net et Incom ome e = $ 19,902 9,902 Quar arterl terly Verificat rificatio ion n of Thermal ermal REC C Gener eratio ation n = $10 1000/ 00/yr yr BTU Meter er Calib ibrat ratio ion n $600 00 eve very ry 3 yea ears rs = $20 200/yr yr Typical pical Total al Initial itial Syste stem m Cost st = $12,0 2,000 0 / 10 yrs rs= = $1,200 1,200 /yr yr Typical pical Annual nual fixed ed costs ts = $2,4 2,400/ 00/yr yr $19,902 - $2,400 = $15,702 Net Profit/yr $15,702 / 972 = $1 $16.21 21 pro rofit t per r T-REC C genera rated ed
Net Cost of Delivered Heat In Oil Equivalent Propane at $2.75/gal = $3.97 Oil Equiv Oil at $3.00/gal Propane at $2.00/gal =$2.88 Oil Equiv Oil at $2.50/gal Propane at $1.50/gal =$2.16 Oil Equiv Oil at $2.00/gal PE PELL LLET ETS …at $240/ton = $1.98/gal Oil Equiv Oil at $1.50/gal Propane at $1.00/gal = $1.44 Oil Equiv PDC PDCs …at $120/ton = $1.28/gal Oil Equiv …at $75/ton = $1.13/gal Oil Equiv GREEN Oil at $1.00/gal CHIPS …at $60/ton = $ .91/gal Oil Equiv Calculations use HHV energy content of Hardwood burned at 84% efficiency, Oil at 80% and Propane at 85% efficiency
Net Cost of Delivered Heat In Oil Equivalent Propane at $2.75/gal = $3.97 Oil Equiv Oil at $3.00/gal Propane at $2.00/gal =$2.88 Oil Equiv Oil at $2.50/gal Propane at $1.50/gal =$2.16 Oil Equiv Oil at $2.00/gal PELL PE LLET ETS …at $240/ton = $1.51/gal Oil Equiv Oil at $1.50/gal Propane at $1.00/gal = $1.44 Oil Equiv Oil at $1.00/gal PDCs PDCs …at $120/ton = $ .80/gal Oil Equiv GREEN …at $75/ton = $ .68/gal Oil Equiv CHIPS …at $60/ton = $ .39/gal Oil Equiv Calculations use HHV energy content of Hardwood burned at 84% efficiency, Oil at 80% and Propane at 85% efficiency
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