PART THREE

12. Power and Heat Plants in General
13. Heat Plant A
14. Heat Plant B
15. Power Plant C
16. Power Plant D
17. Summary on Power and Heat Plants
18. Operation Economics by Different Prices of Fuel
19. Summary and Conclusions

12. Power and Heat Plants in General

In this chapter four power and heat plants will be presented. They have been designed to supply power and (or) heat for the purposes of those eleven industry mills, that were presented in chapter 3. All four power and heat plants operate on industrial wood wastes and, in case there is not enough of these to satisfy the demand, on hogged fuel wood.

The plants are non-existent and have been designed for the purpose of this study.

The prices of the various plant equipment have been obtained either as quotations by the manufacturens or from the cost files for similar installed equipment. The energy cost calculations are based on assumptions concerning wages, fuel prices, price of electricity etc., listed in chapter 2. These assumptions refer to the cost level of the fourth quarter of 1979 in the Philippines in South-East Asia.

The sensitivity analysis at the end of the chapter indicates to what extent the results of the cost calculations are affected by changes in the initial cost assumptions.

In the cases of Heat Plants A and B as well as Power Plant °C the energy costs have been calculated for various size alternatives. For instance, Power Plant C was initially designed for a power output of 250 kW and to support Sawmill No. 4 (100 m³ sawnwood per day). In this chapter calculations have also been made for an identical power plant, but with an output reduced to 125 kW. This plant supports Sawmill No. 3 (50 m³ sawnwood per day).

The investment costs of these heat and power plants with alternated output capacities have been estimated rather roughly. For this reason the capital cost figures and the energy cost figures of these plants cannot be regarded as reliable as those calculated on basis of the actual investment costs.

The energy cost tables in this chapter indicate the annual costs caused by power and heat generation by a given power or heat plant in connection with a given industry mill. In fact, they are the operation costs of the power and heat plants and they must not be confused with the operation costs of the actual manufacturing process of the industry mills.

It must finally be pointed out that neither the solutions of technical plant design nor the stated investment costs of this chapter represent the only feasible alternative. On the contrary, there is a multitude of possible solutions in designing a wood fired power and heat plant and the investment cost of such a plant may vary considerably according to plant design and for a number of other reasons as well.

13. Heat Plant A

13.1 Description

Heat Plant A is designed to operate at small sawmills with low requirements on thermal energy and heat temperature. The plant fires sawmill waste to produce warm water, which is pumped to the drying kiln of the sawmill. At the sawmill the drying of sawnwood stands for the major part of the heat demand, in many cases for all of it.

The wood waste from the saw is conveyed to a pile. Sawdust and small-size chips are conveyed there directly but bigger wastes such as slabs and edgings are first hogged in a chipper to meet boiler requirements.

From the pile the chips are transferred to the dumping silo next to the boiler house. This is done either by a front-end loader or by men with the aid of carts and spades.

The volume of the dumping silo is 10 m³. The silo serves both as a dumping retort and as an intermediate fuel storage.

Three screws at the bottom of the silo remove the chips onto a feeding screw, which takes the chips to the feed hopper and into the boiler. The fuel combustion takes place on an inclined grate. The flue gases are passed through a cyclon where the dust is separated and onto the 20 m stack and the open air.

The water is heated to 115...120 °C before passed over to the dryer. The temperature drop during the cycle is 20... 30 °C. To prevent the water from boiling the water-side pressure is kept at 10 bar. The boiler has a thermal output of 1 MW, which is enough to support a sawmill with an output capacity of 50 m³/d.

Fuel oil is used as pilot fuel and also to support combustion at high chips moisture or rapid load changes. The oil is stored in a 10 m³ tank next to the boiler house.

The operating personnel consists of one boilerman per shift and one cleaner per day. Depending on arrangements the fuel handling personnel varies between one man per day or two men per shift.

Heat Plant A could be supplied as a turn-key delivery. The delivery time is 6 months plus approximately 3 months for freight. Assembly and trial run counts for 2 months which totals 11 months between contract signing and commissioning.

The total transport weight of Heat Plant A is 15...20 t, including fuel handling equipment but not including a front-end loader.

13.2 Investment Costs

		USD
A. Equipment Costs (F.O.B.)
1. Boiler plant		127 000
	1 MW warm water boiler
	10 bar, 120 °C
	Fuel feeding and combustion equipment
	Water treatment equipment
	Pumps, pipings and tanks
	Measuring and control equipment
	Electrification
	I.D. fan, dust separator and stack
2. Fuel handling equipment		87 000
	Chips handling, incl. dumping silo and feeder screws
	Chipper 10 m3/h
	10 m3 oil tank
A. Total		214 000
B. Construction costs
3. 220 m3 boiler house, foundations		65 000
B. Total		65 000
C. Miscellaneous costs
4. Freight and insurance (7 % A)		15 000
5. Clearing and transport to site (2.5 % A)		5 000
6. Assembly (20 % A)		43 000
7. Planning and supervision (6 % A+ B)		14 000
8. Interest during construction (8 % A+ B)		18 000
C. Total		95 000
Total investment costs (A+ B+ C)		320 000

13.3 Energy Costs

			Unit	Sawmill No. 3 13 500 m3/a	Sawmill No. 4 27 000 m3/a
1. Wages and salaries
	operating personnel			3 x 3 + 1 x 1 = 10
	unit cost		USD/a	490
Total			USD/a	4 900	4 900
2. Maintenance, repair and insurance
	3 % of equipment costs
Total			USD/a	6 400	7 200
3. Fuel
	average boiler efficiency		%	72
	fuel oil	- share	%	5
		- price	USD/MWh	25
	sawmill waste	- share	%	95
		- price	USD/MWh	-
	unit cost		USD/MWh	1.7
	consumption of thermal energy		MWh/a	5 625	11 250
Total			USD/a	9 600	19 100
4. Auxiliary power, lubricants etc.
	auxiliary power demand		kWh/MWh	25
	price of electricity		USD/kWh	0.048
	total		USD/MWh	1.2
	lubricants etc.		USD/MWh	0.2
	ash removal		USD/MWh	0.2
	total unit costs		USD/MWh	1.6
	consumption of thermal energy		MWh/a	5 625	11 250
Total			USD/a	9 000	18 000
5. Capital costs
	investment costs		USD	320 000	363 000
	annuity factor (10 %, 10 a)		%	16.27
Total			USD/a	52 000	59 000
6. Electrical energy
	consumption		MWh/a	540	1 080
	unit price		USD/MWh	48
Total			USD/a	25 900	51 800
Total energy costs			USD/a	108 000	160 000
Unit energy cost			USD/m3	8.00	5.90

13.4 Fuel Oil Comparison

An oil fired heat plant of the same capacity as Heat Plant A would cost 85 000 USD which is 235 000 USD less than the price of Heat Plant A. On the other hand, the energy generation based on fuel oil would cost an additional 86 000 USD per year at present oil prices and 140 000 USD more if the oil price would rise by 50 %, other prices remaining the same.

The additional investment caused by choosing the wood fired Heat Plant A instead of the cheaper oil fired plant pays itself back in 3, 3 years at present prices and in 1.9 years in the plus 50 % case.

	Unit	Heat Plant A	Oil fired plant
			Oil price
			present	present + 50 %
Investment cost	USD	320 000	85 000	85 000
Annual energy cost at Sawmill no. 3 (excl. capital costs)	USD/a	56 000	142 000	196 000
Annual savings by Heat Plant A operation	USD/a		86 000	140 000
Pay-back time of investment in Heat Plant A	a		3.3	1.9

14. Heat Plant B

14.1 Description

While the drying kiln of a sawmill operates with a water temperature of 120 °C, the driers and the hot presses in panel manufacturing require at least 150 °C but often 200 °C. At these temperatures it is preferable to supply the thermal energy in the form of steam rather than warm water. Heat Plant B is designed for this purpose. Its main application is to supply the heat needed at various types of panel plants, but it could also support an integrated plant of bigger size, which has no power generation of its own. As fuel Heat Plant B uses the wood wastes of the manufacturing process and hogged wood.

The wood handling equipment is of the same type as at Heat Plant A. For particle and fibreboard manufacturing a chipper is needed at the mill. This can be used for fuel wood hogging as well. For this reason no separate chipper is included in the heat plant delivery.

The wood waste yield of plywood manufacturing covers 90...100 %, of the fuel demand. In the case of particle and fibreboard manufacturing the figure is 5...10 %. The remaining part of the fuel wood is made up of small-size roundwood or logging residues. These are either chipped at the site of logging or transported to the plant and chipped there.

At full load the fuel consumption is approximately 1.5 m³ chips per hour. The volume of the dumping silo is 20 m³.

For steam generation a three-pass flame - fire tube boiler is applied. A furnace is connected to the boiler, in which the chips are combusted on a sloping grate. The hot flue gases leave the furnace and pass through the boiler, warming and evaporating the water, and leave through the dust separator and the 20 m stack.

The boiler has a capacity of 1.1 kg saturated 15 bar steam per second. The temperature of the output steam is about 200 °C, which is enough to meet the panel manufacturing requirements. The thermal output is approximately 2.5 MW.

Fuel oil is used as pilot and supporting fuel.

The steam is used for drying and heating in the manufacturing process. While giving off heat the steam condensates and the condensate flows back to the boiler house into the condensate tank. From there it is pumped through the deaerator into the feed water tank, from where a new cycle begins.

To compensate losses in mass flow, filtered, softened and deaerated make-up water is pumped into the water-steam cycle at regular intervals.

The operating personnel consists of two boilermen and two fuel handling men per shift. In addition there are three persons - a plant engineer, a water treatment technician and a cleaner-working in the day shift only. The work at the heat plant occupies the day shift personnel only part of the time and they can have parallel duties on the industry side as well.

Heat Plant B could be delivered by turn-key arrangement. The delivery time is 10 months of which some 3 months stand for freight. An additional 2 months is to be counted for assembly and trial run.

Total transport weight is about 40 t.

14.2 Investment Costs

		USD
A. Equipment costs (F.O.B.)
1. Boiler plant		297 000
	Three pass flame-fire tube steam boiler, 1.1 kg/s, 15 bar, 200 °C Fuel feeding and combustion equipment Water treatment equipment Pumps, pipings and tanks Measuring and control equipment Electrification I.D. fan, dust separator and stack
2. Fuel handling equipment		61 000
	Chips handling, incl. dumping silo and feeder screws 20 m3 oil tank
A. Total		358 000
B. Construction costs
3. 1300 m3 boiler house, foundations		65 000
B. Total		65 000
C. Miscellaneous costs
4. Freight and insurance (7 %a)		25 000
5. Clearing and transport to site (2.5 % A)		9 000
6. Assembly (20 % A)		72 000
7. Planning and supervision (6 % A+ B)		25 000
8. Interest during construction (8 % A+ B)		34 000
C. Total		165 000
Total investment costs (A+ B+ C)		588 000

14.3 Energy Costs

			Unit	Panel Plant
				No. 1	No. 2	No. 3	No. 4
			m3/a t/a	8 100	5 400	6 750	13 500
1. Wages and Salaries
	operating personnel				4 x 3 + 3 x 1 = 15
	unit cost		USD/a		490
Total			USD/a	7 400	7 400	7 400	7 400
2. Maintenance, Repair and Insurance
	2, 5 % of equipment costs
Total			USD/a	9 000	9 000	9 000	9 000
3. Fuel costs
	average boiler efficiency		%	72
	fuel oil	- share	%	5
		- price	USD/MWh	25
	wood waste	- share	%	95	8
		- price	USD/MWh	-	-
	hogged wood	- share	%	0	87
		- price	USD/MWh	-	3.6
	unit cost		USD/MWh	1.7	6.1
	consumption of thermal energy		MWh/a	10 350	15 150	6 750	13 500
Total			USD/a	17 600	92 400	41 200	82 400
4. Auxiliary Power, Lubricants etc.
	auxiliary power demand		kWh/MWh	25
	price of electricity		USD/kWh	0.048
	subtotal		USD/MWh	1.2
	lubricants etc.		USD/MWh	0.2
	ash removal		USD/MWh	0.2
	total unit costs		USD/MWh	1.6
	consumption of thermal energy		MWh/a	10 350	15 150	6 750	13 500
Total			USD/a	16 600	24 200	10 800	21 600
5. Capital costs
	investment costs		USD		588 000
	annuity factor (10 %, 15 a)		%		13.15
Total			USD/a	77 300	77 300	77 300	77 300
6. Electrical Energy
	consumption		MWh/a	1 940	3 240	2 835	3 375
	unit price		USD/MWh			48
Total			USD/a	93 100	155 500	136 100	162 000
Total energy costs			USD/a	221 000	365 700	281 800	359 700
			USD/m3	27.30		41.80	26.60
			USD/t		67.70

14.4 Investment and Energy Costs; Integrated Plants

A heat plant of the same type as Heat Plant B could be connected to an integrated plant with a production mix of sawnwood, various types of panels and further refined products derived from these.

The heat demand of an integrated plant is generally bigger than of a separate panel plant, which leads to a bigger heat generating capacity and, hence, to a more expensive heat plant than Heat Plant B.

The investment and energy costs of such a plant are estimated as follows:

		Unit	Integrated Plant
			No. 1	No. 2	No. 3
Consumption of thermal energy		MWh/a	35 100	40 645	27 450
Heat plant investment cost		USD x 103	1 000	1 060	1 000
Total energy costs		USD/a	630 000	717 000	603 000
Unit energy costs
	- sawnwood	USD/m3	5.80	5.80
	- plywood	USD/m3	23.00	23.00	27.30
	- veneer	USD/m3			22.10
	- particle board	USD/m3	21.30	21.30

14.5 Fuel Oil Comparison

The economics of investing in Heat Plant B instead of in an oil fired heat plant are calculated in the table below. As operation costs are used the average costs of Panel Plants No 1...4.

	Unit	Heat Plant B	Oil fired plant
			Oil price
			resent	present 50 %
Investment cost	USD	588 000	128 000	128 000
Annual energy cost (excl. capital costs)	USD/a	235 000	366 000	470 000
Annual savings by Heat Plant B operation	USD/a		137 000	241 000
Pay-back time of investment in Heat Plant B	a		4.3	2.2

15. Power Plant C

15.1 Description

Power Plant C is designed to supply both heat and power for mechanical forest mills, using the residues of the mill. The power is generated by a steam engine generator set and the heat is recovered from the back-pressure steam of the engine by running it through a heat exchanger.

Because of the low temperature of the back-pressure steam, the best applications of Power Plant C are in connection with sawmills. At a production of 100 m³ sawnwood per day the daily waste yield is about 85 m³, while the fuel demand is some 50 m³ per day.

The fuel handling equipment is of the same type as at Heat Plant B. A chipper is included in the equipment list of Power Plant D because there is no such at the sawmill and bigger size wood waste must be hogged before it is used as fuel.

The steam is generated by a two-drum water tube boiler. At the bottom of the boiler there is a sloping grate on which the chips are combusted. The boiler output is 1.1 kg of 16 bar and 350 °C superheated steam per second. This corresponds a thermal output of 2.8 MW.

Ash is removed from bottom of the grate and from the dust separator by a screw, which conveys it to a cart or a container. These have to be exchanged, and emptied at regular intervals. At full load operation the ash yield is roughly 5 m³ per week.

The output of the steam engine generator is 250 kW which-is about 75 percent of the average demand of a 100 m³/d sawmill. The rest of the electrical energy must be generated by a diesel generator set or be purchased from public utilities.

As a continuous steam flow is required for sawnwood drying and the steam engine thus also could run continuously, but the sawmill only operates in one shift, there is a surplus in power generation at off-operation time of the sawmill. The selling of this surplus would improve operation economics.

The operating personnel of Power Plant °C consists of two boilermen, one engine operator and two fuel handling men per shift. In the day shift there is further a plant engineer, a water treatment technician and a cleaner working at the power plant only or alternatively at the power plant and the sawmill at the same time. The delivery time of the boiler is 7 months plus approximately 3 months for freight. Assembly and trial run takes an additional 2 months totalling 12 months between contract signing and commissioning. The corresponding time for the steam engine is 9...10 months.

The transport weights are 40 t for the boiler and Its equipment and 5...10 t for the engine set.

15.2 Investment Costs

		USD
A. Equipment costs (F.O.B.)
1. Boiler plant		340 000
	Two-drum water tube steam boiler
	1.1 kg/s, 16 bar, 350 °C
	Boiler feed pumps
	I.D. fan, dust separator and stack
2. Steam engine plant		175 000
	Two-cylinder 250 kW back-pressure steam engine set with condensate oil removing device
	Steam-water heat exchanger
3. Water treatment		132 000
	Filtering, softening and deaerating equipment
	Chemical feeders
	Feed water tank
4. Fuel handling equipment		89 000
	20 m3 dumping silo and screw feeder
	10 m2/h chipper
	20 m3 oil tank
5. Auxiliary equipment		13 000
6. Piping and insulation		43 000
7. Instrumentation		105 000
8. Electrical equipment		39 000
9. HVAC		3 000
A. Total		939 000
B. Construction costs
10. 900 m3 plant building, foundations		45 000
B. Total		45 000
C. Miscellaneous costs
11. Freight and insurance (7 % A)		66 000
12. Clearing and transport to site (2.5 % A)		23 000
13. Assembly		241 000
14. Planning and supervision (6 % A + B)		59 000
15. Interest during construction (8 % A + B)		79 000
C. Total		468 000
Total investment costs (A + B + C)		1 452 000

15.3 Energy Costs

			Unit	Sawmill No. 3 13 500 m3/a	Sawmill No. 4 27 000 m3/a
1. Wages and salaries
	Operating personnel			5 x 3+ 3 x 1 = 18
	unit cost		USD/a	490
Total			USD/a	8 800	8 800
2. Maintenance, repair and insurance
	2.5 % of equipment costs
Total			USD/a	16 400	23 500
3. Fuel
	ratio between boiler fuel input and output of industrial heat		%	51
	fuel oil	- share	%	5
		- price	USD/MWh	25
	sawmill waste	- share	%	95
		- price	USD/MWh	-
	unit cost		USD/MWh	2.5
	consumption of industrial thermal energy		MWh/a	5 625	11 250
Total			USD/a	14 100	28 100
4. Auxiliary power, lubricants etc.
	auxiliary power demand		kWh/MWh	36
	price of electricity		USD/kWh	0.048
	subtotal		USD/MWh	1.7
	lubricants etc.		USD/MWh	0.3
	ash removal		USD/MWh	0.3
	total unit costs		USD/MWh	2.3
	consumption of industrial thermal energy		MWh/a	5 625	11 250
Total			USD/a	12 900	25 900
5. Capital costs
	investment costs		USD	1 016 000	1 452 000
	annuity factor (15 a, 10 %)		%	13.15
Total			USD/a	133 700	190 900
6. Electrical energy
	consumption		MWh/a	540	1, 080
	generation		MWh/a	470	940
	purchased power		MWh/a	70	140
	price of electricity		USD/MWh	48
Total			USD/a	3 400	6 700
Total energy costs			USD/a	173 500	283 900
Unit energy costs			USD/m3	12.90	10.50
In case the potential power generation surplus of			MWh/a	745	1 490
was sold at			USD/MWh	34
annual savings of			USD/a	25 300	50 700
would be reached. This would give the unit energy cost			USD/m3	11.00	8.50

15.4 Fuel Oil Comparison

The table below shows the pay-back time of the Power Plant C investment compared with an alternative, where heat is generated by fuel oil and electrical energy is purchased from public utilities. Operation costs refer to the sawmill No. 4 case.

	Unit	Power Plant C	Oil fired plant
			Oil price
			present	present + 50 %
Investment costs	USD	1 452 000	502 000	502 000
Annual energy costs (excl. capital costs)	USD/a	93 000	275 000	380 000
Annual savings by Power Plant C operation	USD/a		182 000	287 000
Pay-back time of investment in Power Plant C	a		7.7	4.2

16. Power Plant D

16.1 Description

Power Plant D generates power and industrial heat. Power is generated by a 1 MW back-pressure steam turbine generator set and the heat is supplied in the form of medium-and low-pressure steam. With a thermal output of about 8 MW and an electrical output of 1 MW the main application of this plant is in connection with integrated units of small-size mechanical forest industry mills.

At an integrated plant one unit often uses the residues of another as raw material in its manufacturing process. For this reason, the yield of combustible wood wastes at an integrated plant generally covers only part of the fuel demand.

Power Plant D uses an amount of wood wastes corresponding to 25 to 60 percent of its total fuel consumption, the rest being hogged wood and small amounts of fuel oil.

The fuel chips are stored in a pile. The wood wastes from the different units of the integrated plant are conveyed to the pile as well as the hogged fuel wood. The hogging of the fuel wood and of bigger-size wastes is done either by the chipper of the particle board plant or by a separate one.

At the bottom of the pile there is a screw discharger, which feeds the chips onto a belt conveyor. The conveyor transports the chips into a hopper at the boiler house, from where the fuel is fed into the boiler.

The steam boiler is of the same water tube design as at Power Plant C but with a bigger capacity. Its output is 3, 9 kg of 40 bar and 360 °C superheated steam per second.

To meet the different temperature requirements of the integrated plant steam is supplied both from a turbine extraction at 10 bar and 200 °C as well as from after the turbine outlet at 3 bar and 150 °C.

The generating capacity of the power plant covers approximately two thirds of the industrial power demand. The remaining part must be generated by other means or be purchased. The power output could be raised by changing the plant design. This would, however, lead to increased initial cost and a more sophisticated technology, which might not fit the conditions of developing countries.

The operating personnel is listed in the table below:

Chief technical engineer	1 x 1
Power plant engineer	1 x 1
Boilermen	3 x 3
Turbine operator	1 x 3
Fuel handling personnel	4 x 3
Maintenance technicians	2 x 1
Water treatment technician	1 x 1
Cleaners	2 x 1

(1 x 1= one person, day shift only; 3 x 3= three persons per shift.)

The delivery time of both the boiler and the turbine is 15 months including 3 months of freight time. An additional 3 months is to be counted for assembly.

The transport weight of the equipment of the boiler plant is about 200 t while the turbine set weighs some 10 t.

16.2 Investment Costs

		USD
A. Equipment costs (F.O.B.)
1. Boiler plant		688 000
	Water tube steam boiler 3.9 kg/s
	40 bar, 360 °C
	Boiler feed pumps
	I.D. fan, dust separator and stack
2. Steam turbine plant		130 000
	1 MW back-pressure turbine generator set
	Steam-water heat exchanger
3. Water treatment		184 000
	Filtering, softening and deaerating equipment
	Chemical feeders
	Feed water tank
4. Fuel handling equipment		149 000
	Pile discharger and belt conveyors 100 m3 oil tank
5. Auxiliary equipment		56 000
	Steam conditioning valves
	Crane
6. Piping and insulation		86 000
7. Instrumentation		132 000
8. Electrical equipment		79 000
9. HVAC		8 000
A. Total		1 512 000
B. Construction costs
10. 4 500 m3 plant building, foundations		225 000
B. Total		225 000
C. Miscellaneous costs
11. Freight and insurance (7 % A)		106 000
12. Clearing and transport to site (2.5 % A)		38 000
13. Assembly		387 000
14. Planning and supervision (6 % A+ B)		104 000
15. Interest during construction (8 % A+ B)		139 000
C. Total		774 000
Total investment costs (A+ B+ C)		2 511 000

16.3 Energy Costs

			Unit	Integrated Plant
				No. 1	No. 2	No. 3
1. Wages and salaries
	operating personnel			8 x 3+ 7 x 1 = 31
	unit cost		USD/a	490
Total			USD/a	15 200	15 200	15 200
2. Maintenance, repair and insurance
	2.5 % of equipment costs
Total			USD/a	37 800	37 800	37 800
3. Fuel
	ratio between boiler fuel input and output of industrial heat		%	59
	fuel oil	- share	%	5
		- price	USD/MWh	25
	wood waste	- share	%	59	51	25
		- price	USD/MWh	-	-	-
	hogged wood	- share	%	36	44	71
		- price	USD/MWh	3.6
	unit cost		USD/MWh	4.30	4.80	6.50
	consumption of industrial thermal energy		MWh/a	35 100	40 645	23 450
Total			USD/a	150 900	195 100	178 400
4. Auxiliary power, lubricants etc.
	auxiliary power demand		kWh/MWh	30
	price of electricity		USD/kWh	0.048
	subtotal		USD/MWh	1.4
	lubricants etc.		USD/MWh	0.2
	ash removal		USD/MWh	0.2
	total unit costs		USD/MWh	1.8
	consumption of industrial thermal energy		MWh/a	35 100	40 645	27 450
Total			USD/a	63 200	73 200	49 400
5. Capital costs
	investments cots		USD	2 511 000
	annuity factor (15 a, 10%)		%	13.15
Total			USD/a	330 200	330 200	330 200
6. Electrical energy
	consumption		MWh/a	6 395	7 135	5 495
	generation		MWh/a	4 515	5 040	3 095
	purchased power		MWh/a	1 880	2 095	2 400
	price of electricity		USD/MWh		48
Total			USD/a	90 200	100 600	115 200
Total energy costs			USD/a	687 500	752 100	726 200
Unit energy costs
	- sawnwood		USD/m3	7.00	7.00
	- plywood		USD/m3	24.90	23.60	33.30
	- veneer		USD/m3			29.20
	- particle board		USD/m3	22.10	20.70	32.60

16.4 Fuel Oil Comparison

The following table shows a pay-back calculation on the economics of a Power Plant D investment.

	Unit	Power Plant D	Oil fired plant
			Oil price
			present	present + 50 %
Investment costs	USD	2 511 000	749 000	749 000
Annual energy cost, Integrated Plant No. 2 (excl. capital costs)	USD/a	422 000	1 137 000	1 508 000
Annual savings by Power Plant D operation	USD/a		715 000	1 086 000
Pay-back time of investment in Power Plant D	a		2.7	1.7

17. Summary on Power and Heat Plants

Some of the technical and economical features of Heat Plants A and B as well as Power Plants C and D are listed in the following table.

		Heat Plant		Power Plant
		A	B	C	D
Output	- thermal	1 MW	2.5 MW	2 MW	8 MW
	- power	-	-	250 kW	1 MW
Form of energy		hot water	medium pressure steam	low pressure power	low and medium pressure steam power
Fuel		hogged sawmill waste	hogged wood waste and fuel wood	hogged sawmill waste	hogged wood waste and fuel wood
		fuel oil	fuel oil	fuel oil	fuel oil
Boiler design		warm water	flame-fire tube, three-pass	two-drum water tube	one - drum, water tube
Prime mover		-	-	steam engine	steam turbine
Boiler output conditions		10 bar, 120°C	1.1 kg/s 15 bar, sat., (200°C)	1.1 kg/s, 16 bar, 350 °C	3.9 kg/s, 40 bar, 360 °C
Fuel consumption (chips) at full load		0.7 3/h	1.5 m3/h	2.0 m3/h	6.3 m3/h
Plant building volume		220 m3	1 300 m3	900 m3	4 500 m3
Time of delivery and assembly		11 months	12 months	12 months	18 months
Approximate transport weight		20 t	40 t	50 t	210 t
Total investment cost		320 000 USD	588 000 USD	1 452 000 USD	2 511 000 USD
Pay-back time of investment compared with oil fired equipment		3.3 years	4.3 years,	7.7 years	2.7 years

The calculation of the investment costs in the above tables is based on a number of assumptions concerning the equipment list. Some items are considered belonging to the industry mill and hence omitted in this connection. If, however, this would not be the case the revised total investment cost is obtained by adding the price of the item in question to the original investment cost. Some of these prices are listed in the following table.

Item	F.O.B. price
10 m3/d chipper	(Plant B)	28 000 USD
40 m3/d chipper	(Plant D)	46 000 USD
Front-end loader with 4 m3 bucket		106 000 USD
Compressed air system, incl. compressor		18 000 USD
Diesel generator sets for on-site power generation or for stand-by power
100 kW		31 500 USD
300 kW		60 000 USD

In the following table a comparison is made on the unit energy costs of some mechanical forest industry products. The unit costs are listed both for different energy supply alternatives - including fuel oil heat generation - and for different production units.

Production Unit	Energy Supply	Sawnwood USD/m3	Plywood USD/m3	Veneer USD/m3	Fibreboard USD/t	Particle Board USD/m3
Sawmill No. 1	Public grid	1.00
Sawmill No. 2	Public grid	1.00
Sawmill No. 3	Heat Plant A	8.00
	Power Plant C	12.90
	Power Plant C 1)	11.00
	Oil I 2)	11.60
	Oil II 2)	15.60
Sawmill No. 4	Heat Plant A	5.90
	Power Plant C	10.50
	Power Plant C 1)	18.50
	Oil I	10.80
	Oil II	14.70
Panel Plants No. 1, 2, 4	Heat Plant B		27.30		67.70	26.60
	Oil I		45.40		96.50	36.70
	Oil II		57.00		122.00	45.90
Panel Plant No. 3	Heat Plant B					41.80
	Oil I					50.80
	Oil II					59.90
Integrated Plant No. 1	Heat Plant B	5.80	23.00			21.30
	Power Plant D	7.00	24.90			22.10
	Oil I	11.30	39.60			34.80
	Oil II	15.10	51.10			44.10
Integrated Plant No. 2	Heat Plant B	5.80	23.00			21.30
	Power Plant D	7.00	23.60			20.70
	Oil I	11.20	39.00			34.70
	Oil II	15.00	50.40			44.00
Integrated Plant No. 3	Heat Plant B		27.30	22.10		30.10
	Power Plant D		33.30	29.20		32.60
	Oil I		41.60	36.40		40.90
	Oil II		53.40	48.10		49.80

¹⁾ Power generation surplus sold at 34 USD/MWh.
²⁾ Oil I = heat generation by fuel oil, power purchased from public utilities. Present oil price
Oil II = like oil I. Oil price 50 % above present oil price.

18. Operation Economics by Different Prices of Fuel

The impact of a change in the price of fuel oil on the payback time of the power and heat plants was examined in connection with the plant presentation. As it is obvions that not only the price of oil, but also the price of fuel wood and wood wastes strongly affect operation economics this question will be examined here.

The operation economics - measured by the pay-back time - will be calculated for three different cases:

- the price of wood wastes rises from zero to the price level of fuel wood, i.e. 8.5 USD/t,

- the price of wood wastes as well as the price of fuel wood rise by 50 % from the previous level to 13 USD/t,

- the price of fuel wood is 13 USD/t while the price of wood wastes are zero.

In addition, the pay-back time figures for present and plus 50? % oil prices are presented for the sake of comparison.

	Initial price assumptions	Oil price + 50 %	Wood waste + fuel wood 8, 5 USD/t	Wood waste + fuel wood 13 USD/t	Fuel wood 3 USD/t
	(1)	(2)	(3)	(4)	(5)
Heat Plant A	3.3	1.9	6.3	8.2	3.3
Heat Plant B	4.3	2.2	6.1	19	9.5
Power Plant C	7.7	4.2	23	investment not paid back	7.7
Power Plant D	2.7	1.7	3.3	4.4	2.9

Table 18.1 Heat and power plant pay-back times (years) by different fuel prices.

By comparing the columns (3) and (4) with column (1) of the table above, it is clearly shown that the economics of wood based energy generation heavily depends on the prices of wood wastes and fuel wood. This means that if there is an alternative way of using wood wastes instead of power and heat generation, the economical advantage of combusting the waste is not as obvious as before. Only in the case of co-generation of power and heat (Power Plant D) the pay-back figures are not crucially worsened by the higher price of wood based fuel.

Column (5) indicates that panel manufacturing (Plant B) will suffer economically from a rise of the fuel wood price (wood waste cost remaining zero). This is because of the low waste yield especially at particle board and fibreboard manufacturing, leading to a high dependence on purchased fuel wood.

The conclusion to be drawn is that economical wood based energy generation is possible only if there is no alternative use for the fuel (or there is enough of it for all applications) or that the wood could be applied to generate both industrial power and heat.

On the other hand, column (2) indicates clearly, that rising oil prices improve economics rapidly, making wood based energy generation economically feasible even at higher wood prices than those initially assumed.

19. Summary and Conclusions

The aim of this study was to investigate the potential rate of self-sufficiency in energy of small scale mechanical forest industry mills in developing countries. The study was performed as a case study, in which eleven (non-existent) industrial mills were examined.

Based on the data from these mills concerning energy consumption and yield of combustible process wastes, four wood fired power and heat plants were designed. In cases where the waste yield did not cover the entire fuel demand it was assumed that hogged fuel wood, e.g. logging residues, were combusted.

In designing the power and heat plants attention was paid to chose systems, which represent proven technology and which are suited for operation in tropical conditions. To reduce investment costs as well as the need for highly educated maintenance personnel the plants were equipped with a low level of automation.

The operation costs of wood based heat and power generation were calculated both as annual costs and as cost per unit of manufactured end-product. The costs were compared with the costs of fuel oil based heat generation and power supply from public utilities.

19.1 Technology

At the present stage of technology there is no obstacle to converting manufacturing wastes into power and heat for the use of mechanical forest industries in the developing countries. The technologies of fuel wood handling and combustion, warm water and steam generation as well as steam based power generation have all reached a proven stage a long time ago.

The flue gases from wood combustion could in some cases be used directly for heating and drying purposes instead of warm water or steam generation. It is also possible to connect a prime mover directly to some mechanical device instead of using a power generator. The suitability of these alternatives must be examined case by case. Due to their rather limited number of applications they were not dealt with in the study.

Generation of combustible gases out of wood wastes looks a very interesting solution to power and heat generation.

This is particularly the case in such remote areas, where industrial operation is 100 %, dependent on on-site power generation.

Although the development in the gasification field has been rapid during the last years, the technology of gas application is not yet at a proven stage. Therefore, a producer gas engine set cannot be recommended as a supplier - at least not as the only supplier - of power for the purposes of mechanical forest industries in the developing countries.

19.2 Economics

In general, considerable savings could be gained by using wood waste instead of oil as fuel. At present oil prices the extra cost of an investment in wood based heat generation facilities is paid back by annual savings in operation costs in 3...4.5 years.

By generating not only the heat, but also the power by fuel wood, the annual savings are still increased. The pay-back time of the 1 MW wood fired power plant examined in this study was 2.7 years.

A rising oil price causes shorter pay-back times, while rising prices of wood wastes and fuel wood - indicating a lack of these or the existence of some other profitable application - leads to longer pay-back times.

Another way of evaluating the economics of wood based power and heat generation is to study the energy unit costs. These indicate how much the energy costs, that is needed to produce one unit of some end-product.

The energy unit cost of sawnwood is 11 USD/m³ when fuel oil is used but only 6...7 USD/m³ by wood-based heat or heat and power generation. At a production of 100 m³ sawnwood per day this totals an annual sawing of about 130 000 USD.

In panel manufacturing the difference between oil based and wood based energy costs are as significant as in the sawnwood case. By using wood based heat and power from the public grid a plywood plant manufacturing 30 m³ per day approximately the same amount could be saved annually.

The economics of wood based energy generation is naturally depending on the price of fuel oil. The higher the oil price gets the bigger are the savings by wood combustion and the shorter are the pay-back times of investments in wood firing power and heat plants.

There was one exception from the rule of cheap wood based energy in this study. The heat and power generated by Power Plant C - a wood fired steam boiler connected to a steam engine set - was only slightly cheaper than the oil alternative, and in one case oil was even more economical.

This was due to the considerably high investment cost caused by the steam engine, which in turn led to high annual capital costs. Regardless of the savings in fuel cost, the pay-back time of the investment was 7.7 years. This seems to be a high figure, considering the scarcity of capital in many developing countries.

To summarize, wood based heat and power generation is economically feasible at today's oil prices.

In the case of the mechanical forest industry of developing countries the main problem is to generate the funds needed for the initial investment in wood combusting equipment. Once the investment is made and the plant is in operation, the savings in fuel costs will pay back the spent money in 2...4 years, or in an even shorter time if the oil price continues to rise.

19.3 Self-sufficiency in Energy

When the yield of combustible wood wastes is regarded the sawmills and the plywood plant are the only industrial mills of those examined in this study, that are self-sufficient in fuel. To fill the fuel gap of the other mills fuel wood must be purchased. As the price of logging residues and small-size roundwood, due to the lack of alternative applications, generally is much below the fuel oil price, the use of hogged fuel wood does not affect operation economics to any significant extent.

As long as there is fuel available the heat needed in the manufacturing process can be generated at the site for instance by a warm water or steam boiler. Thus, all the industry mills of this study could be regarded as self-sufficient in heat.

Self-sufficiency in electrical energy is, however, more difficult to reach. This is because of the fact that there is a given ratio between the power output and the output of industrial heat generated by an industrial back-pressure power plant. At the plant sizes and steam pressures coming in question in this study this ratio is 0.10... 0.15. (A power plant generating 1 MW of industrial heat has a maximum power output of 150 kW.)

The ratio between power demand and heat demand at the investigated industry mills is bigger than that, normally 0.18... 0.25.

In this case there seem to be two principal solutions of reaching self-sufficiency in power generation. One is to design a power plant which by means of a more sophisticated technology would have a generation ratio between power and heat, that corresponds to the consumption ratio.

Such a plant is expensive and needs a highly skilled operating personnel, which makes it poorly suited for operation in developing countries.

The other solution could, in spite of its slightly higher cost of operation, prove quite satisfactory in the operating conditions of developing countries. It is consisting of a power plant of simple design, which covers a certain part, say two thirds, of the power demand. The rest would be generated by a diesel set. This would lead to rather low initial costs and still to reduced energy costs as only part of the power is generated by fuel oil and the rest, plus all the heat, is generated by wood.

The diesel power could of course be replaced by power purchased from the public grid in those cases public power would be available.