| Abstract: | This research models a wood pellet heating system at the Tlingit-Haida Regional Housing Authority in Juneau, Alaska, used to provide thermal energy to a 929-M2 warehouse, as an alternative to a heating system that burns more costly fossil fuels. Research objectives were to evaluate project economics of the pellet system and to conduct cost:benefit analysis on key variables (initial capital cost, fuel oil cost, and wood pellet cost). Economic results of interest included net present value, payback, internal rate of return, and cost:benefit ratio. Monte Carlo simulations were conducted using RETScreen software with the parameters of heating oil cost, wood pellet cost, fuel price escalation, and heating load. Cost:benefit analysis was conducted for capital cost versus wood fuel cost and also versus alternative fuel cost. This research found that economic performance was favorable over a wide range of normal operation conditions, even when paying a relatively high price for wood fuel. A pellet production facility in southeast Alaska could lead to lower wood fuel costs and even more favorable regional economics. |
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