Sealaska Plaza Wood Pellet Boiler Benefit-Cost and Sensitivity Analysis

Executives at Sealaska Corporation's headquarters, Sealaska Plaza, in Juneau decided to replace existing oil fired boilers with a wood pellet boiler for heating as a part of the Corporation's green initiative.1 By introducing green energy, the Corporation hopes to reduce its carbon footprint, encourage other business entities in Southeast Alaska to use green energy, help to establish a local wood pellet industry in Southeast Alaska, increase local employment, and reduce the impacts of oil price volatility. Currently there is no wood pellet industry in southeast Alaska and Sealaska Corporation is assuming the leading role to develop the demand for wood pellets by promoting this renewable technology and using the Corporation's building as a demonstration location. The wood pellet boiler that the Sealaska Plaza building is using to heat the building is a Viessmann PYROT boiler that is powered by KÖB biomass technology. The publicly visible silo in front of the Corporation’s headquarters in downtown Juneau is an indication that this is a signature project to increase the public awareness about biomass technology. This paper provides a technical summary of benefit-cost ratios and sensitivity analyses of the biomass project given different fuel price projections and estimates of the social costs of carbon. The costs driving the benefit-cost ratios of this 20-year project are calculated by using the data provided by the Sealaska Corporation. In order to conduct these analyses, some economic assumptions were made and are presented below.Emerging Energy Technology Grant. The Denali CommissionIntroduction / Economic Assumptions / Benefit-Cost Analysis and Sensitivity Analysis / Payback Period / Conclusion / Reference

Alaska Fuel Price Projections 2012-2035

This and previous Alaska fuel price projections were developed for the Alaska Energy Authority (AEA) for the purpose of estimating the potential benefits and costs of renewable energy projects. Project developers submit applications to AEA for grants awarded under the Alaska Renewable Energy Fund program process. The fuel price projections are not price forecasts but a statistical estimation of potential future utility avoided fuel costs based on the relationships between historic utility fuel prices and crude oil and refinery prices reported by the U.S. Department of Energy, Energy Information Administration (EIA). These statistically estimated relationships are used to project potential future fuel prices based on EIA’s published Annual Energy Outlook crude oil and natural gas price forecasts. In addition to developing these low, medium and high fuel price projections, estimates of the social cost of carbon (previously included as estimates of potential carbon taxes), and a price differential for home heating fuel are provided and are incorporated into the Renewable Energy Fund benefit-cost model for evaluating potential projects. Previously, a five cents premium for low sulfur fuels was added to the projections in anticipation of implementation of low sulfur fuel air quality requirements. However, the low sulfur fuel requirement was implemented in 2010; hence recent prices reflect the effects of the rule and a premium is no longer necessary. The fuel price projections are limited in their applicability to the modeling of project benefits and costs and should not be considered fuel price forecasts.Alaska Energy AuthorityIntroduction / Methods and Assumptions / Natural Gas / Fuel Oil / Reference

Snapshot: The Home Energy Rebate Program

Alaska’s state government has spent an estimated $110 million since 2008 for better insulation, new furnaces, and other retrofits for roughly 16,500 homeowners—10% of all homeowners statewide.1 That spending was under the Home Energy Rebate Program, which rebates homeowners part of what they spend to make their houses more energy-efficient and less expensive to heat.2 The state legislature established the current program in 2008, as energy prices were spiking. The Alaska Housing Finance Corporation (AHFC) administers it, and the Institute of Social and Economic Research and the Cold Climate Housing Research Center did this analysis for AHFC, assessing the broad program effects from April 2008 through September 2011. Changes in fuel use and heating costs reported here are estimates from AHFC’s energy-rating software; figures based on actual household heating bills aren’t currently available. The software uses house characteristics and location-specific information on weather and other factors to produce the estimates—but remember they are estimates.3Cold Climate Housing Research Cente

Alaska Fuel Price Projections 2011-2035

This and previous Alaska fuel price projections were developed for the Alaska Energy Authority (AEA) for the purpose of estimating the potential benefits and costs of developing renewable energy projects applied for through the Alaska Renewable Energy Fund program process. The projections are not price forecasts but a statistical estimation of potential future utility avoided fuel costs based on the relationships between historic utility fuel prices and crude oil and refinery prices reported by the Energy Information Administration (EIA). These statistically estimated relationships are used to project potential future fuel prices based on EIA’s Energy Outlook oil price forecasts. In addition to developing these low, medium and high fuel price projections, estimates of the social cost of carbon (previously included as estimates of potential carbon taxes), a premium for low sulfur fuels, and a price differential for home heating fuel are provided and are incorporated into the Renewable Energy Fund benefit-cost model for evaluating potential projects. The settings of these parameters are public policy considerations selected for project reviews by the AEA. The fuel price projections are limited in their applicability to the modeling of project benefits and costs and should not be considered fuel price forecasts.Alaska Energy Authority.Introduction / General methods and assumptions / Natural Gas / Fuel Oil / Reference

Cordova Psychrophiles Bio-Digester Benefit-Cost and Sensitivity Analysis

Cordova is located in southcentral part of Alaska, 150 miles southeast of Anchorage, and can be accessed only by boat or plane. The average winter temperature1 varies from 17⁰ F to 28⁰ F (-8⁰ C to -2⁰ C) and the average summer temperature varies from 49⁰ F to 63⁰ F (9⁰ C to 17⁰ C).2 To support Cordova’s ongoing energy independence efforts , the Denali Commission approved a science project for the Science Club students at Cordova High School using Emerging Energy Technology Funds to develop a bio-digester that uses psychrophiles, a cold climate bacteria, that can reproduce in very cold temperatures, as low as 19⁰ F (-7.5⁰ C).3 Use of psychrophiles in a bio-digester in Cordova is a new technology that aims to produce low cost biogas for Alaskans who live in extreme cold temperatures. The production of biogas varies significantly depending on ambient temperatures. The cold climate application of this technology is in its research and development (R&D) phase, which makes in-depth economic analysis challenging as there is little cost information and many parts for the application of the technology have to be custom build. This paper describes a preliminary economic analysis of the Cordova project. In order to provide a study at this early stage in technology development, the analysis was prepared using a combined benefit-cost and sensitivity analysis to show the impacts of variations in methane output, and diesel fuel and propane prices. For this preliminary analysis we compared the bio-digester technology against diesel and propane fuel alternatives.The Denali Commission. Alaska Center for Energy and Power.Table of Contents / List of Tables / Suggested Citation / Introduction / Economic Assumptions / Benefit-Cost Analysis and Sensitivity Analysis / Factors Driving the Benefit Cost Ratio / Conclusion / References / Appendix a. Estimated Present Values for the Psychrophiles Bio-digester / Appendix B. Fuel Price Projection / Appendix C. Anchorage CPI / Appendix D. Conversion Factors / Appendix E. Goal Seek for B-C ratio of 1 with Different Capital Costs / Appendix F. Goal Seek for B-C ratio of 1 with Different Labor and O&M Costs / Appendix G. Seek for B-C ratio of 1 with Different Total Cost

Alaska Fuel Price Projections 2013-2035

The Alaska Fuel Price Projections are developed for the Alaska Energy Authority (AEA) for the purpose of estimating the potential benefits and costs of renewable energy projects. Project developers submit applications to AEA for grants awarded under the Alaska Renewable Energy Fund (REF) program process. These fuel price projections are used to evaluate the economic feasibility of project applications; economic feasibility is only one of many factors of the project evaluation process. In this report we present the methodology for the seventh fuel prices projection. In addition to their use for the REF review, the Institute of Social and Economic Research (ISER), University of Alaska Anchorage (UAA) uses the projections for other economic research and energy project evaluations. Economists at ISER have completed six previous Alaska Fuel Price Projections since 2008 (all available at: http://www.iser.uaa.alaska.edu/). The fuel price projections fulfill an important need for price information and are used by many stakeholders in addition to AEA. As a result of their broad use among the public, we expanded what used to be cursory notes on methodology. Our intent is to provide more detailed information to the report’s readers and users of the fuel price projections.Alaska Energy AuthorityIntroduction / Methods and Assumptions / Natural Gas / Fuel Oil / References / Appendix A. Projection Methodolog

Using Cluster Analysis to Assess the Adoption of Energy Star Ratings by the Commercial Buildings in the United States

As of December 2013, approximately 5,200 building managers and owners in the commercial building sector in the United States have decided to retrofit their buildings and seek qualification for the Energy Star rating administered by the U.S. Environmental Protection Agency. I have sampled the buildings that have scored high enough, at least 75 on a scale of 100, and sent out surveys asking various questions regarding the decision factors to retrofit their buildings. I then used principal components analysis to factor out the primary reasons why building managers/owners implement various clean energy projects and what factors contribute to making that decision. After that I used cluster analysis to explain how homogeneous and heterogeneous the decision-making processes are. Finally, I used regression analysis to find the relationships between the principal components and size variables such as the size of the buildings and the total number of full-time employees. The results show that, in general, the majority (56%) of the managers/owners in the commercial building sector are not concerned about the energy efficiency of their buildings, 27% of them are low or moderately concerned and only 17% of them are highly concerned about energy efficiency and energy conservation. The results also show that when the building size or the total number of employees goes up then the concern for energy efficiency, insulation upgrade, and resource conservation go down. In addition, the result shows an interaction effect of the building size and total number of employment. It shows that when these variables are multiplied together then the resultant value is positively related to concern for energy efficiency, insulation upgrade, and resource conservation

(Draft Final Report)

The Senate Finance Committee, through its Senate Energy Working Group, has asked a series of important questions about energy prices, energy costs, and energy use. The Committee also asks the “overarching” question of what can be done to reduce gasoline and heating fuel prices in Alaska? Which of these strategies has the greatest likelihood of success for the least cost to state government? This report contains our responses to both the overarching and specific questions posed. Our answers and recommendations are based on reviews of the most current, publicly available data regarding fuel prices and fuel use. We interviewed numerous agency officials, businesspeople, and residents participating in a range of energy related programs supported by the State of Alaska

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prepared for