[Gasification] : Borealis / Spanner RE2 CHP

Mon Sep 22 02:16:01 CDT 2014

Peter,

As always, your experience is invaluable to the likes of myself. I have just
been to northern Mozambique to visit a gasifier we supplied a year ago. I am
very pleased to say that the equipment was still running as supplied having
only incurred a starter motor burnout in the time in between. Unfortunately,
the running hours were abysmal. The gasifier was bought by an NGO who have
not bothered to even visit the site and see what they paid for.
Unbelievable! In the intervening 12 months, three sets of operators were
trained to run the machine starting from political candidates down to
finally, three young men most likely to stick with the machine. We went
there to give the machine a once over and to have a formal hand over to the
community. Sadly, the community failed to pitch up for the formal handover!
Talk about apathy! In fairness, it is electioneering time and this just
featured low on their priorities. The local sponsor of the project took away
the battery and the LPG cylinder (they use gas to start the motor to get the
gasifier up to speed) and have vowed to give the machine to a more deserving
community. While very sad, it does provide the opportunity to do this
properly on the second round. This time, we (supplier and patron) are
insisting that the NGO go to the community and engage with them regarding
the "business plan" associated with the machine. The gasifier runs a 15kW,
3ph, 380V generator primarily to run a 7.5kW maize (corn) mill. Excess power
was to go to a clinic and school at the location. The business plan
envisages charging about 10% of the maize to be milled as a milling fee. The
intent is to put a portion of this into a maintenance budget with the
balance going to the operators as an income. Maintenance will include
monthly oil changes, replacement screens on the mill, LPG for start up, etc.
The project will be a failure if this business model is not followed as the
machine will stand after breaks for the first time and there is no money to
fix it. 

Getting a successful project to work in this environment is very difficult
if the operator does not have some "skin" in the game. One of the strategies
we looked at was to supply power to the small businesses in the village. I
have no doubt that a tavern serving cold beer would have a very vested
interest in keeping the machine going. So, the tavern keeper may actually be
the best person to recruit as the "minder" responsible for the machine. Sad
that we have to think of alcohol as a way of keeping a gasifier system
alive!

On a second note, there is a lot to be said for DC systems in rural areas so
that solar and wind can also be incorporated into the system. Our 15kW
system for example only really needs to operate about 4 hours per day to
meet the milling requirement. During that time it could quite easily charge
batteries to provide LED lighting at night. It can also charge the clinic
batteries that will keep the drug refrigerator going 24/7. The tavern keeper
can install an ice maker to keep beverages cold once the machine has
stopped. I believe that the secret to keeping a rural system working is for
the power recipients to have an incentive to keep the machine going. We
shall simply have to see...

Rex Zietsman

From: Peter Davies [mailto:idgasifier at gmail.com] 
Sent: 21 September 2014 04:30 AM
To: gasification at lists.bioenergylists.org
Subject: Re: [Gasification] : Borealis / Spanner RE2 CHP

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

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-- 
Peter Davies
Director
ID Gasifiers Pty Ltd
Delegate River, Victoria
Australia
Ph: 0402 845 295

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