Wood-Chip Heating Systems - Biomass Energy Resource Center

Figure 7.3
Existing Gas Cost/ccf
$3.00
$2.75
$2.50
$2.25
$2.00
$1.75
$1.50
$1.25
$1.00
$0.75
$0.50
$0.20
$0.00
Wood Chip System Cost Effectiveness Potential
Likely Cost Effective
Possibly Cost Effective
Unlikely Cost Effective
13,750 27,500 41,250 55,000
Annual ccf Gas Heat Consumption
analysis of the question. The data and assumptions
used to develop these graphs are found in Appendix
E. The cost-effectiveness criteria of these graphs were
based on life-cycle costing.
Figure 7.1 shows the electricity price and level of
annual heating energy consumption at which it might
be cheaper to install a new wood-chip system in a
school, rather than continue with an electric resistance
heating system. It illustrates two important points.
First, the cost-effectiveness of wood-chip heating
systems is very site-specifi c and diffi cult to predict,
particularly for small schools — as evidenced by the
breadth of zone B on the left side of the graph. For
a school consuming about 340,000 kilowatt-hours
(kwh) for heating each year, a wood-chip system is
probably cost-effective at electricity prices greater
than 16.5 cents/kwh, probably not cost-effective at
electricity prices less than 5 cents/kwh, and it may
or may not be cost-effective in between. This is not a
very enlightening conclusion, since few schools in the
Northeast face electricity prices either less than 3.5
cents/kwh or greater than 16.5 cents/kwh.
Second, Figure 7.1 demonstrates that wood-chip
systems are more cost-effective at higher levels of
electricity consumption. For a school consuming in
excess of 1,000,000 kwh/year for heating, a wood-chip
system is likely to be cost-effective at electricity prices
greater than 10 cents/kwh, and may be cost-effective
at prices as low as 4.0 cents/kwh. Most schools in the
Northeast pay more than 7.0 cents/kwh for electricity,
right in the middle of the range in which a wood system
might be cost-effective.
Finally, Figure 7.2 suggests that given current
oil prices in the Northeast, it is less likely to be costeffective
to convert from oil to wood chips than it is to
convert from electric heat to a new wood-chip system.
Figure 7.3 provides a similar analysis for natural
gas. It shows that for schools with a low gas usage for
heat (less than 15,000 ccf/year) and that pay less than
75 cents/ccf, wood-chip systems are highly unlikely
to be cost-effective. There is not a high likelihood of
a cost-effective conversion from natural gas to wood
until the fuel price rises above $1.25/ccf. When gas
consumption for heat is above 50,000 ccf/year and gas
prices are about $1/ccf, there will be some cost-effective
opportunities.
Be careful about drawing defi nitive conclusions
from these graphs; they are products of a number
of simplifying assumptions that may or may not be
applicable to any specifi c situation. For example, the
graphs compare the cost of a new wood-chip system
with the cost of continuing to operate an existing oil,
gas or electric heat system. If you are building a new
facility and are comparing a new wood-chip system
with a new oil, gas or electric system, the woodchip
system will look more cost-effective than these
illustrations indicate.
Despite these limitations, Figures 7.1, 7.2 and
7.3 provide useful insights into the potential costeffectiveness
of wood-chip heating systems. They
confi rm that at prevailing electric, oil and natural gas
prices, wood-chip systems can be cost-effective for
WOOD CHIP HEATING SYSTEMS
68,750
43