[Gasification] : Borealis / Spanner RE2 CHP

Peter Davies idgasifier at gmail.com
Sat Sep 20 21:29:49 CDT 2014


Tom,

Interesting financial assessment, we have found during our own 
development that most of your assumptions though to be way too 
optimistic, at least in the Australian business environment. As an 
example we had a Poultry client needing 100kWe, their commercial power 
rate was 23c/kWhr and they used a little over 160mWhr/yr. They had 
limited heat needs but were sourcing green sawdust and wood chip which 
could be dried using the surplus heat from the gasifier, as well as a 
unique bio-security opportunity that the presence of the gasifier 
provided in disposal of dead birds, along with superior odor control and 
improved shed environment through use of the biochar co-produced (none 
of this valued in the proposal). The clients consultants determined we 
could supply the complete turnkey system for <12c/kWhr (including buying 
in fuel and labor).  One of the electricity retailers then offered a 
grid supply agreement fixed for 3 years at an average of 5.5ckWhr 
including peak & shoulder rates, no capital outlay required. The result 
being implementation of the gasifier solution was deferred. This type of 
example has been repeated a number of times over the last 2 yrs.

At least we are good for competitive influence in the electricity 
market... It has also taught us about the importance of the total value 
proposition (VP), rather than simply focus on individual aspects like 
electricity. http://en.wikipedia.org/wiki/Value_proposition

We cannot yet claim longevity in operational hours in commercial 
environments with our own systems, it is coming but not independently 
verifiable yet, notwithstanding even our original successful development 
unit is still operable today 6 years on. From the outset though we have 
striven to develop systems based on our own needs in small business. 
That is simplicity, reliability, consistency whilst using real world 
fuels being the key design drivers. We have done so on a broken shoe 
string basis, so development designs when implemented were often sub 
optimal from a long term operational view point because of budget 
constraints, useful in testing core design elements but caution called 
for in terms of a commercial implementation without beefing up a range 
of components. Need 6mm steel sides? 2mm  gets used because it was in 
the seconds bin at the steel supplier for peanuts. Minimum refractory 
thickness recommended would get shaved and shaved again. Need a purpose 
designed fan? A cheap Chinese made "off the shelf" would be what we 
would end up with (though we have have become adept at changing bearings 
to quality C3 or C4 heat tolerant types). Build looks complex, or need 
specialist fitters? Back to the drawings, tweak this, reshape that, 
simple folds, easier seam welds etc etc.

It was at one level frustrating, but in hindsight now we realize what a 
unique approach we ended up with, intense pressure to innovate solutions 
and then innovate again. So much in design & fabrication gets over 
engineered or becomes unnecessarily complex with add on "solutions" 
treating the outputs of poor core designs, instead of fixing the core in 
the first place. What we have done over the last seven years is work out 
the real lower material limits and design parameters, not estimate them. 
Along the way the designs have matured into ones suited for mass 
fabrication.

If our drivers and work method was the plan then lean, mean and 
functional has been the outcome.

This year and into early 2015 we have several systems going into 
commercial settings under real world economic arrangements. That is non 
subsidized in a tough economic and policy environment and at a discount 
rate on Business as Usual (BaU). The VP being built around superior 
waste re-purposing, integration with existing site management and work 
force, avoided power & heating costs and external energy market 
volatility resilience, finally new product opportunities that the 
presence of a reliable gasifier generates. Most importantly matched with 
a financial model based on "seamless" acquisition in requiring minimal 
capital injection with the system being paid predominantly out of 
existing operational budgets through lease arrangements (adding a little 
more in the VP through leveraging tax policy), ultimately making the 
decision for the client similar to comparing savings from changing 
electricity supplier for example... In short not just maturing the 
product designs but maturing our own business. Indeed the latter is I 
think Spanners great strength.

These gasifier systems range from 15kWe to 500kWe capable modules, the 
latter for 2MWe plants. All of these have survived the manipulations of 
dodgy industry scam artists seeking to piggy back off our success 
(claiming to have the design) or steal our IP, quite apart from 
extensive technical & financial due diligence and in the case of the 
industrial scale plant conducted at a much higher level than what what 
might be the case for other options like combustion boiler systems, and 
with regulatory authorities perched close to the shoulder. Indeed in one 
case the large client company involved informed us (after exchanging 
contracts locking us in as their suppliers) that two of the senior 
managers sent to view the development plant were in fact under 
instructions to report negatively, unless it was extraordinarily to a 
level above and beyond what would be reasonable to ignore, in practice 
backing such a decision against their future careers.

What other industry has such a tough sell?

Amongst all this is one 250kWe system which we have tentative agreement 
with the client to use as a reference system for others to view, study 
the performance of and publicly report. Will advise when this is fully 
commissioned and available.

It would be nice after all the years to answer your original question 
with more definition, it is the one criticism that we have suffered over 
here that only more time will address since the commercial iterations 
are only just now going out. We are nonetheless actively working towards 
it, we know where we have come from, what we have been through and where 
we are going, and the numbers presented on this list in terms of 
alternative system cost and performance give us great hope for a place 
in the future.

Kind regards,
Peter





On 21/09/2014 4:49 AM, Tom Miles wrote:
>
> Larry,
>
> Thanks for the information about the Borealis/Spanner. The general 
> question is, what are the economic circumstances that make small scale 
> gasification worthwhile?
>
> If I understand the German farm market correctly there is, as you 
> indicate,  a financial incentive to generate heat. Also I understand 
> that If you are on the grid and generate power in Germany you must 
> sell to the grid but you receive favorable rates.
>
> Assume 6500 hrs/year
>
> Spanner requires that you run the gasifier system at a minimum of 80% 
> capacity (i.e. no load following) to run reliably with no tars, etc.
>
> 80% x 6500 = 5,200 at full capacity equivalent.
>
> 5200 hours/8760hrs/yr = 59% capacity factor (% of potential full 
> load/year).
>
> 5200 hours x 100 kWhth = 520,000 kWhth/yr
>
> 5200 hrs x 45 kWe = 234,000 kWhe/yr
>
> Assume that a customer is heating with oil or propane in New Hampshire 
> At $25-$34/MMBtu. Assume 80% efficiency or $31/MMBtu for oil and 
> $43/MMBtu for propane.
>
> http://www.nh.gov/oep/energy/energy-nh/fuel-prices/index.htm
>
> $31/MMBtu / 293 kW/MMBtu = $0.10/kWhth x 520,000 = $55,017/year 
> displaced oil
>
> $43/MMBtu / 293 kW/MMBtu = $0.10/kWhth x 520,000 = $76,314/year 
> displaced propane
>
> Electricity in NH is reported at $0.1531/kWh
>
> $0.1531/kWh x 234,000 kWh/yr = $35,825/yr
>
> Total potential heat and power offset $112,139/yr for propane and 
> $90,842/yr for oil.
>
> The system could consume about 234,000 kg wood at 0.95 kg/kWhe (23% 
> efficiency), 222 tonnes or 244 short tons. Assume a delivered fuel 
> cost of $60/ton, or $15,000/year. So the gross benefit of the 
> gasifier-genset (with net metering) for a farm or nursery in New 
> Hamphsire would be about $97,000/year for propane and $76,000 for oil. 
> Assume about $8,000 for labor (10 hours/week x 40 weeks) and 
> $12,000/year for repairs (3% x $400,000). Total fuel, labor and 
> repairs $35,000. So that gives us a margin for ownership of 
> $77,000/year for propane and $56,000/yr for oil. So 6-8 years payback, 
> except that these small systems always cost a lot more than you think.
>
> If we apply German conditions at EUR 1.40/litre for a diesel, USD 
> $1.79/l (1.28 USD/EUR), 10 kWh/l (36.4 MJ), 80% efficiency, heating 
> with diesel would cost about $0.224/kWh.
>
> Electricity at EUR $0.20/kWh would cost USD $0.26/kWh (1.28 UD/EURO).
>
> Gross benefits for substituting oil would be:
>
> Thermal - $0.224/kWh th x 520,000kWh = USD $116,480
>
> Electric - $0.26/kWh e x 234,000 = $60,840
>
> Total $177,320
>
> If you can use all the heat and sell all the power then benefits in 
> Germany are almost twice those in the US ($177,320/$90,842). If my 
> assumptions are reasonable the net payback would be about 3 years in 
> Germany compared with diesel.
>
> I have heard that Spanner’s customer service is excellent. They 
> reportedly meet with owners (250+) once every three months. That is 
> unheard of in small scale gasification. It means that they can attend 
> to Thomas Koch’s “baby” when it cries. (Thomas told us that you must 
> be no more than 1 km away from your “baby” gasifier for every hour 
> that you can leave it without crying.)
>
> These factors combine to make well supported small scale gasification 
> feasible in Germany. The US would seem to be a greater challenge. At 
> the industrial scale low cost oil and gas from fracking has killed a 
> lot of biomass projects. Will this be true of small scale systems? Or 
> will previous projections of increased prices for diesel and heating 
> oil favor biomass gasification?
>
> Tom
>
> *From:*Gasification 
> [mailto:gasification-bounces at lists.bioenergylists.org] *On Behalf Of 
> *Larry Gooder
> *Sent:* Thursday, September 18, 2014 11:49 AM
> *To:* gasification at lists.bioenergylists.org
> *Subject:* SPAM: [Gasification] Borealis / Spanner RE2 CHP
>
> Tom
>
> Borealis Wood Power is the North American distributor of the Spanner 
> Holz-Kraft CHP that delivers 45kWe and 110 kWt
>
> As to make a decent ROI we need to have the end user to have a need 
> for 6,500 hours or more of the demand.
>
> Spanner RE2 is over the 250 unit mark in the European Union market and 
> the large majority of these are 7,000 plus hours/year customers.
>
> And as noted some of the countries have a premium feed in tariff and 
> that helps on the electrical side, but the thermal has to be 
> considered first.
>
> I get regular e-mails and phone inquiries from people who want to 
> explore generating electrical power using their wood chips, but when 
> asked what they are going to use the thermal for, they draw a blank, 
> as they were only considering the electrical side. Competing with more 
> expensive and highly fluctuating cost fuels as propane or oil there is 
> a good ROI and electrical generated heat comes in as well.
>
> The overall efficiency of the plant, using wood chips with moisture 
> content of 13%, thermal efficiency: 56.1% and electrical efficiency of 
> 23.3%.
>
> Our full scale demonstration plant is running at our facility in 
> Burlington Ontario Canada (40 minutes from Toronto International 
> Airport) and welcome you to come and have some hands on experience.
>
> Larry Gooder
>
> Enthusiastically,
>
> Larry Gooder
>
> O: +1 905 319 0404 x 2
>
> C: +1 519 671 6153
>
> LOGO_final
>
>
>
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-- 
Peter Davies
Director
ID Gasifiers Pty Ltd
Delegate River, Victoria
Australia
Ph: 0402 845 295

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