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Tom,<br>
<br>
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.<br>
<br>
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.
<a class="moz-txt-link-freetext" href="http://en.wikipedia.org/wiki/Value_proposition">http://en.wikipedia.org/wiki/Value_proposition</a><br>
<br>
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. <br>
<br>
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.<br>
<br>
If our drivers and work method was the plan then lean, mean and
functional has been the outcome. <br>
<br>
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.<br>
<br>
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. <br>
<br>
What other industry has such a tough sell? <br>
<br>
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.<br>
<br>
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. <br>
<br>
Kind regards,<br>
Peter<br>
<br>
<br>
<br>
<br>
<br>
<div class="moz-cite-prefix">On 21/09/2014 4:49 AM, Tom Miles wrote:<br>
</div>
<blockquote cite="mid:019a01cfd503$9dfc4e90$d9f4ebb0$@trmiles.com"
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<p class="MsoNormal"><span style="color:#1F497D">Larry,<o:p></o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D">Thanks for the
information about the Borealis/Spanner. The general question
is, what are the economic circumstances that make small
scale gasification worthwhile?<o:p></o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D">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.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D">Assume 6500
hrs/year<o:p></o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D">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. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D">80% x 6500 =
5,200 at full capacity equivalent. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D">5200
hours/8760hrs/yr = 59% capacity factor (% of potential full
load/year). <o:p></o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D">5200 hours x
100 kWhth = 520,000 kWhth/yr<o:p></o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D">5200 hrs x 45
kWe = 234,000 kWhe/yr<o:p></o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D">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. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D"><a
moz-do-not-send="true"
href="http://www.nh.gov/oep/energy/energy-nh/fuel-prices/index.htm">http://www.nh.gov/oep/energy/energy-nh/fuel-prices/index.htm</a><o:p></o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D">$31/MMBtu / </span>293
kW/MMBtu = $0.10/kWhth x 520,000 = $55,017/year displaced oil<o:p></o:p></p>
<p class="MsoNormal"><span style="color:#1F497D">$43/MMBtu / </span>293
kW/MMBtu = $0.10/kWhth x 520,000 = $76,314/year displaced
propane<o:p></o:p></p>
<p class="MsoNormal"><span style="color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D">Electricity in
NH is reported at $0.1531/kWh<o:p></o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D">$0.1531/kWh x
234,000 kWh/yr = $35,825/yr<o:p></o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D">Total potential
heat and power offset $112,139/yr for propane and $90,842/yr
for oil. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D">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. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D">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.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D">Electricity at
EUR $0.20/kWh would cost USD $0.26/kWh (1.28 UD/EURO).<o:p></o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D">Gross benefits
for substituting oil would be:<o:p></o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D">Thermal -
$0.224/kWh th x 520,000kWh = USD $116,480<o:p></o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D">Electric -
$0.26/kWh e x 234,000 = $60,840<o:p></o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D">Total $177,320<o:p></o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D">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.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D">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.) <o:p></o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D">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?<o:p></o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D">Tom<o:p></o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D"> <o:p></o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D"> <o:p></o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D"> <o:p></o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D"> <o:p></o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><a moz-do-not-send="true"
name="_MailEndCompose"><span style="color:#1F497D"><o:p> </o:p></span></a></p>
<div>
<div style="border:none;border-top:solid #B5C4DF
1.0pt;padding:3.0pt 0in 0in 0in">
<p class="MsoNormal"><b><span
style="font-size:10.0pt;font-family:"Tahoma","sans-serif"">From:</span></b><span
style="font-size:10.0pt;font-family:"Tahoma","sans-serif"">
Gasification
[<a class="moz-txt-link-freetext" href="mailto:gasification-bounces@lists.bioenergylists.org">mailto:gasification-bounces@lists.bioenergylists.org</a>] <b>On
Behalf Of </b>Larry Gooder<br>
<b>Sent:</b> Thursday, September 18, 2014 11:49 AM<br>
<b>To:</b> <a class="moz-txt-link-abbreviated" href="mailto:gasification@lists.bioenergylists.org">gasification@lists.bioenergylists.org</a><br>
<b>Subject:</b> SPAM: [Gasification] Borealis / Spanner
RE2 CHP<o:p></o:p></span></p>
</div>
</div>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal"><span lang="EN-CA">Tom<o:p></o:p></span></p>
<p class="MsoNormal"><span lang="EN-CA">Borealis Wood Power is
the North American distributor of the Spanner Holz-Kraft CHP
that delivers 45kWe and 110 kWt<o:p></o:p></span></p>
<p class="MsoNormal"><span lang="EN-CA">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.<o:p></o:p></span></p>
<p class="MsoNormal"><span lang="EN-CA">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.<o:p></o:p></span></p>
<p class="MsoNormal"><span lang="EN-CA">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.<o:p></o:p></span></p>
<p class="MsoNormal"><span lang="EN-CA">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.<o:p></o:p></span></p>
<p class="MsoNormal"><span lang="EN-CA">The overall efficiency
of the plant, using wood chips with moisture content of 13%,
thermal efficiency: 56.1% and electrical efficiency of
23.3%.<o:p></o:p></span></p>
<p class="MsoNormal"><span lang="EN-CA">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.<o:p></o:p></span></p>
<p class="MsoNormal"><span lang="EN-CA">Larry Gooder<o:p></o:p></span></p>
<p class="MsoNormal"><span lang="EN-CA"><o:p> </o:p></span></p>
<p class="MsoNormal"><span lang="EN-CA"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="mso-fareast-language:EN-CA"
lang="EN-CA">Enthusiastically,<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-fareast-language:EN-CA"
lang="EN-CA">Larry Gooder<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-fareast-language:EN-CA"
lang="EN-CA">O: +1 905 319 0404 x 2<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-fareast-language:EN-CA"
lang="EN-CA">C: +1 519 671 6153<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-fareast-language:EN-CA"
lang="EN-CA"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="mso-fareast-language:EN-CA"
lang="EN-CA"><img id="Picture_x0020_1"
src="cid:part3.01080902.04080803@gmail.com"
alt="LOGO_final" border="0" height="47" width="187"><o:p></o:p></span></p>
<p class="MsoNormal"><span lang="EN-CA"><o:p> </o:p></span></p>
</div>
<br>
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<pre class="moz-signature" cols="72">--
Peter Davies
Director
ID Gasifiers Pty Ltd
Delegate River, Victoria
Australia
Ph: 0402 845 295</pre>
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