Rob Mallinson Managing Director, Wood Energy Australia Pty Ltd

Beaufort Hospital and beyond – Wood Fuel Case Studies, and Opportunities for Tasmania

Wednesday 13th August 2014

WoodEnergy Australia

1. Introduction

2. Why Wood energy ?

3. Wood energy – who suits it ?

4. Wood energy – a Politicians dream

5. Wood energy – a quick intro

6. Case Studies – including Beaufort Hospital

7. Summary

8. How Tasmania can realise the potential

Topics

1. Wood / Living Energy

11 years old. Installed over 40,000kW of wood boiler capacity (28 boilers)

Partnered with Hargassner and Binder (Austrian) as well as Visdamax (Malaysian)

Installed wood boilers ranging from 30kW to 22.5MW

Wood Energy specialists : focus is on the area that is economic : HEAT !!

2. Why Wood Energy ?

Well-proven, reliable technology : Good old combustion

Under-utilised for various reasons (short term-ism, policies, mis-information)

Amongst the best pay-back of all carbon abatement opportunities

Bio-mass fuel is abundant, so supply is hardly ever an issue, and it compares well on costs :

• Natural Gas prices are forecast to increase due to LNG commitments ex Queensland

Angela MacDonald-Smith, Financial Review, May 2013 :

“…..but the fear is that much worse is to come as $60 billion in liquefied natural gas (LNG) projects start production in 2014-15 and customers in

eastern Australia have to compete for supply with export markets in Asia.”

• Supply vs Demand must be balanced

• Prices forecast to go up by around $6-8/GJ

2. Why Wood Energy (cont)

• Medium/large Heat Users

• Especially users of expensive fuels

• And ‘coal exiters’

• Ideally with good year-round heat loads

• Schools, Uni’s, Hospitals and Pools are at the heart of the community, so are good exemplar sites

• Abattoir’s, Dairy & Cheese factories, Food, etc etc

3. Who suits Wood Energy ?

4. Wood Energy : A Politician’s Dream ?

1. It’s proven and practical, and economic now

2. Wood energy reduces costs for heat users, improving competitive advantage

3. It’s Sustainable

4. It provides a beneficial use for by-products (“waste to energy”)

5. Local demand can normally be matched with local resource

6. It creates local jobs, supporting rural communities

7. It helps improve air quality and water quality and soil quality (salinity)

8. It reduces reliance on finite fossil fuels, thereby building energy resilience

9. It’s part of a sensible shift towards renewable, sustainable energy sources

ADD IN CO2 ABATEMENT – WHAT ELSE CAN POLITICIANS WANT ?!

Boilers are highly developed products

Automated ignition

Automated fuel feed

Automated boiler tube cleaning

As convenient as fossil fuels….?

SEE VIDEO……

5. A quick intro to “Wood Energy”

Wood Chip – Fuel Storage

15

6. Case Studies - Summary

Site Old Fuel Boiler Size Approx Capital Payback

Hospital LPG 300kW $500k less grant 2-3 years

Sewage Plant Diesel 500kW $1,000k less grant 3-4 years

University Coal 1100kW $900k less grant 4-5 yrs vs LPG

Polytechnic Coal 2 x 650kW $900k 3-4 yrs vs LPG

Aquatic Centre Brown coal 850kW $500k Other benefits

Hospital LPG 1500kW $900k 4-5 years

Olympic Pool (South Australia) Sawdust 500kW $400k 8-10 years

Beaufort Hospital LPG 100kW $400k 8-10 years

Little Sisters of the Poor H&H, Dunedin, NZ

Case Study 1 : Hospital / Rest Home

Prior Now

Heat Source LPG Wood Chip

Boiler Size 900kW 300kW

Annual Heating Bill $250,000 $75,000

Driver for change : Cost of LPG (300% of wood)

Capital Cost $500k, less $200k Govn’mt grant

Payback : Approx 2-3 years

Kapiti Coast Waste Water Treatment Plant (NZ)

Case Study 2 : Sewage Plant

Prior Now

Heat Source Diesel Wood Pellets (or chip)

Annual Bill $450-600k $200k

Driver for change : Cost of Diesel, CO2 reductions

Capital Cost $1000k, less $200k grant, and Govn’mt Loan

Payback : Approx 2.5 to 4 years

Competition : Natural Gas, for about $1m less

Features : Walking Floor in fuel store, pellets in a full step grate boiler, combustion of ‘odour air’ at minimum of 630oC. Particulate emissions of

20mg/Nm3 after cyclone.

ase Study 3 : Otago University

Case Study 3 : Otago University

Prior Now

Heat Source Coal – via the Polytech Wood chip

Annual Bill ? c.$150,000

Driver for change : Energy Independence, Sustainability, CO2 reductions

Capital Cost $900k, less $100k Govn’mt Grant

Payback : Attractive versus LPG

Competition : LPG, for about $0.7m less

Features : 1100kW boiler with 13,000 litre buffer tank. Australasia’s first ceramic filters, giving <25mg/Nm3

Case Study 4 : Otago Polytechnic

Prior Now

Heat Source Coal Wood chip

Annual Bill c.$140k c.$175k

Driver for change : Sustainability, CO2 reductions, Air quality

Capital Cost $900k

Payback : Approx 3-4 years versus LPG

Competition : LPG, for about 20% of the capital

Features : Twin 650kW units, with ceramic filters. 15,000 litre buffer tank.

Case Study 5 : Aquatic Centre

Splash Palace – Invercargill, NZ

Case Study 5 : Aquatic Centre

Prior Now

Heat Source Brown coal Wood Chip

Annual Bill $90,000 $140,000 BUT…..

Driver for change : Sustainability, CO2 reductions, Leadership

Capital Cost $500km, less $100k Gov’mt Grant

Payback : Other benefits were valued (staff time, staff health, local leadership)

Competition : Brown coal

Features : 850kW chip boiler, with 600kW diesel back-up. Small fuel store.

Hillmorton Hospital – Christchurch, NZ

Case Study 6 : Hospital

Prior Now

Heat Source LPG Wood Chip

Annual Bill c.$450,000 $175,000

Driver for change : Costs

Capital Cost $900k, less $100k Govn’mt grant

Payback : Approx 4 years

Competition : Stay on LPG – competition for capital

Features : 1500kW wood boiler. New fuel store, fed by drag chain. 330mm dia feed augers. Emissions of <50mg/Nm3 using an electrostatic precipitator.

Case Study 7 : Mt Gambier Aquatic Centre

Mount Gambier, South Australia

Case Study 7 : Aquatic Centre

Prior Now

Heat Source LPG Wood Chip

Annual Bill $15,000 $20,000 est

Driver for replacement : Old age, sustainability, keeping costs low

Capital Cost $400k

Payback : Not great (c. 9-10 years v Natural Gas – though price changing)

Competition : Change to natural gas

Features : 500-600kW, walking floor in fuel store, replaced old wood boiler.

Anga & Varme AB

Beaufort, Victoria

Case Study 8 : Beaufort Hospital

Prior Now

Heat Source LPG Wood Chip

Annual Bill $75,000 c. $25,000

Driver for replacement : Sustainability, Leadership

Capital Cost c. $0.4m

Payback : c. 8-10 years

Competition : Stay on LPG

Features : 100kW, containerised, 2 x chip agitators, 2 x 2000li buffer tanks.

Case Study 8 : Beaufort Hospital

Hargassner Features

Beaufort, Victoria

Case Study 8 : Beaufort Hospital

Prior Now

Heat Source LPG Wood Chip

Annual Bill $75,000 c. $25,000

Driver for replacement : Sustainability, Leadership

Capital Cost c. $0.4m

Payback : c. 8-10 years

Competition : Stay on LPG

Features : 100kW, containerised, 2 x chip agitators, 2 x 2000li buffer tanks.

6. Case Studies - Summary

Site Old Fuel Boiler Size Approx Capital Payback

Hospital LPG 300kW $500k less grant 2-3 years

Sewage Plant Diesel 500kW $1,000k less grant 3-4 years

University Coal 1100kW $900k less grant 4-5 yrs vs LPG

Polytechnic Coal 2 x 650kW $900k 3-4 yrs vs LPG

Aquatic Centre Brown coal 850kW $500k Other benefits

Hospital LPG 1500kW $900k 4-5 years

Olympic Pool (South Australia) Sawdust 500kW $400k 8-10 years

Beaufort Hospital LPG 100kW $400k 8-10 years

7. Summary : Wood Energy is not just a Politician’s Dream

1. It’s proven and practical, and economic now, especially when all factors ‘costed’

2. Wood energy reduces costs for large heat users, improving competitive advantage

3. It’s Sustainable

4. It provides a beneficial use for by-products (waste to energy)

5. There’s localised demand, matching localised resource

6. It creates local jobs, and supports rural communities

7. It helps improve air quality and water quality and soil quality (salinity)

8. It reduces reliance on finite fossil fuels, thereby building energy resilience

9. It’s part of a sensible shift towards renewable, sustainable energy sources

10. It’s a cost effective way to reduce CO2 emissions

When selecting new or replacement plant, should Government Procurement Policies include these broader factors in the selection criteria ?

8. How to realise Tasmania’s potential ? Create a Vision..... 1. Develop the clean, green brand – aim for 90% renewable ?

2. Be pragmatic, aim for early wins : a) Recognise the ‘Heat’ Market – not just electricity

b) Implement ‘no-brainer’ Government Procurement Policies to get example sites

c) Don’t be distracted by blue sky technologies – focus on what is right in front of you

3. Look at overseas learnings : a) Examine learnings from NZ’s Wood Energy Grant Scheme

b) Consider the UK’s Renewable Heat Incentive (RHI) and others

4. Work with Treasury. Put a value on : a) Job creation : A double-up of benefit

b) Supporting rural communities

c) Sustainability

d) Energy resilience (reduced reliance on finite fossil fuels)

5. Level the playing field. e.g. Vic grants for ‘clean coal’ ?

6. Factor in all costs : e.g. water and ground contamination from coal ash

7. Create an Association, to promote these benefits, and a pathway