Renewable Energy Feasibility Study Final Report: Prepared For: Gila River Indian Community
Renewable Energy Feasibility Study Final Report: Prepared For: Gila River Indian Community
Renewable Energy Feasibility Study Final Report: Prepared For: Gila River Indian Community
i
TABLE OF CONTENTS
EXECUTIVE SUMMARY .......................................................................................................................1
1 INTRODUCTION...........................................................................................................................8
1.1 PROJECT BACKGROUND AND OBJECTIVES ................................................................................................ 8
1.2 OVERVIEW OF WORK PERFORMED ......................................................................................................... 9
2 SOLAR PROJECT SITE SELECTION ................................................................................................10
3 SOLAR PROJECT TECHNICAL ANALYSIS .......................................................................................13
3.1 TRIBAL GOVERNANCE CENTER ............................................................................................................. 15
3.1.1 Overview................................................................................................................................15
3.1.2 Solar Models..........................................................................................................................17
3.1.3 Performance Analysis Results................................................................................................18
3.1.4 Electrical Interconnection...................................................................................................... 21
3.2 WILD HORSE PASS HOTEL AND CASINO ................................................................................................22
3.2.1 Overview................................................................................................................................22
3.2.2 Solar Models..........................................................................................................................26
3.2.3 Performance Analysis Results................................................................................................27
3.2.4 Electrical Interconnection...................................................................................................... 30
3.3 SAN TAN INDUSTRIAL PARK ................................................................................................................31
3.3.1 Overview................................................................................................................................31
3.3.2 Solar Models..........................................................................................................................32
3.3.3 Performance Analysis Results................................................................................................34
3.3.4 Electrical Interconnection...................................................................................................... 36
3.4 LONE BUTTE SUBSTATION...................................................................................................................37
3.4.1 Overview................................................................................................................................37
3.4.2 Solar Models..........................................................................................................................38
3.4.3 Performance Analysis Results................................................................................................39
3.4.4 Electrical Interconnection...................................................................................................... 42
3.5 PV SYSTEM EQUIPMENT CONSIDERATIONS............................................................................................42
4 EVALUATE PROJECT CONCEPTS..................................................................................................44
4.1 POWER MARKET ASSESSMENT ............................................................................................................ 44
Introduction
The Gila River Indian Community (GRIC or the Community) contracted the ANTARES Group, Inc.
(“ANTARES”) to assess the feasibility of solar photovoltaic (PV) installations. A solar energy project could
provide a number of benefits to the Community in terms of potential future energy savings, increased
employment, environmental benefits from renewable energy generation and usage, and increased
energy self-sufficiency.
The study addresses a number of facets of a solar project’s overall feasibility, including:
Technical appropriateness
Solar resource characteristics and expected system performance
Levelized cost of electricity (LCOE) economic assessment
ANTARES previously provided GRIC with a technical characterization report which provided information
about a range of solar technology options. Commercially available solar technologies were screened to
identify the ones that could be economically viable for GRIC in the near term. This report builds on the
knowledge in the technical characterization report, by taking the technical solutions deemed to have
potential and applying them to specific project locations identified through site visits and discussions
with the GRIC representatives.
Technical Feasibility Analysis
Although there are a number of possible locations at GRIC that meet all or most of the selection criteria
for a solar PV project, only four of the best sites are included in the detailed feasibility analysis, two roof
areas and two ground areas. The buildings considered for roof mounted projects include the Wild Horse
Pass Hotel and Casino and the Tribal Governance Center. The ground areas include the San Tan
Brownfield and the area near the Lone Butte Substation. All of these selected sites are on Community
owned facilities and lands. This can help ensure that any renewable energy project would benefit the
Community and provide a long term stable energy supply. Furthermore, both of the selected buildings
have flat roof area available, and the roofs are relatively new and in good condition. The selected
ground areas are level and do not have significant obstructions that would hinder development. They
are also fairly close to grid interconnection points. It is also worth noting that the analysis results for the
arrays at the selected sites will be representative of other potential projects at GRIC, in terms of system
performance (electricity generated per unit capacity) and expected capital costs. Although the
economics may change somewhat for a particular site, such as if additional site work was needed for
project development or the electrical interconnection required additional equipment or costs, it is
expected that the results from the selected projects will help to gauge overall project viability. This is
also why a range of project configurations was explored in this study.
Project Concepts
One of the key considerations for development of a solar energy project is electricity distribution and
sales agreements, to determine the end user or purchaser of the electricity generated by the system.
Electricity generated from a PV system on Community land or buildings could be used to directly serve
the GRICUA customers and offset existing grid electricity purchases from other utilities. There are a
number of other utilities that serve some areas of the Community, but interconnection with the GRICUA
distribution system is the primary power off-take arrangement considered in this analysis because the
1The current LCOE includes the rate of inflation, while the constant LCOE does not.
2The long term general inflation rate is based on financial parameter guidance for the federal government, based on the
Annual Supplement to NIST Handbook 135 (U.S. Department of Commerce, NIST, 2012). The weighted average cost of capital is
based on the average rate used for the U.S. Energy Information Administration’s Annual Energy Outlook 2013.
0.12
LCOE ($/kWh, Constant)
0.10
0.08
0.06
0.04
0.02
0.00
-60 -40 -20 0 20 40 60
Relative Change (%)
3Installed prices for residential and commercial PV systems have been shown to decrease by about 40% in the U.S. from 2008-
2012, and the downward trend continues. While much of the recent decline can be attributed to reduced PV module prices,
future decreases are expected to focus on reducing balance of system (non-module) costs.
The project purpose is to provide sufficient information on solar and biomass energy technologies to
allow the Community to make informed decisions about investment in energy generation resources. The
GRIC manages its own electric distribution system and delivers electricity to residential,
commercial/institutional and industrial customers through the Gila River Indian Community Utility
Authority (GRICUA).
GRICUA does not currently own any generation resources. GRICUA has a long-term purchase agreement
that ensures it will have access to the power capacity that the Community needs to satisfy future
growth. However, the price of power is tied to the price of natural gas, so the possibility of increasing
energy self-sufficiency through the use of renewable energy resources, the costs of which are
independent of natural gas, could prove attractive to the Community. There are other significant
environmental and economic benefits associated with renewable energy use. Any solar or biomass
energy project option has to provide sufficient benefits to the Community in terms of energy savings,
increased employment, environmental benefits and/or energy self-sufficiency that are compelling and
are comparable to or greater than other energy, infrastructure or public works projects that the GRIC is
considering.
While GRICUA serves most of the electric customers in the GRIC, development of any power project on
the GRIC would have to take into account the potential technical and financial implications that could
affect other power providers that service utility customers. Arizona Public Service (APS), Salt River
Project (SRP), and the San Carlos Irrigation Project (SCIP) provide electric service to a small number of
customers in the GRIC, some of which are industrial end users.
Early in the study, ANTARES provided GRIC with a technical characterization report which provided
information about a range of biomass and solar technologies. The technologies were screened to
identify the ones that could be economically viable for GRIC in the near term.
This report addresses the detailed analysis of the potential for solar energy projects in the GRIC. It builds
on the knowledge in the technical characterization report. It takes the technical solutions deemed to
have potential and applies them to specific projects identified for the GRIC energy assessment. A
companion report addresses biomass project technical and economic feasibility.
4Results of this effort are contained in a technology characterization report that complements the detailed project-specific
analysis documented in this report.
The Renewable Energy Technology Characterization report submitted previously identified power
production using solar photovoltaics (PV) at a variety of scales and locations (ground-mounted and roof-
mounted) as the best potential technology for the GRIC. There are a number of considerations for
selection of a preferred site for a solar photovoltaics (PV) array. The major initial selection criteria for
PV array siting include:
Large available flat or south-facing area in order to facilitate array design
No shading from nearby trees or structures
Close proximity to electrical load centers or substations so that PV array can be tied into existing
electrical system
Available area is does not have extraordinary security concerns or restricted access
For building mounted systems:
o Minimal mechanical equipment located on selected rooftop areas
o The roof on the building is in good condition or has been recently installed.
o Array design would be compatible with the existing architecture and facility design
o Area is not planned for demolition or major renovations within the lifetime of the
system
In addition to general siting considerations, there are also a number of factors that impact PV array
development and selection of appropriate technology type, size, and overall project configuration. In
most cases, economics will be a primary concern for project development. The site specific
considerations for a roof mounted PV project will include the roof age, condition, roofing material,
loading capacity (evaluated by a structural analysis), aspect (orientation of roof area relative to the solar
path), pitch, obstructions, shading, power end user (before or after meter), and other possible uses for
the roof area including solar thermal applications. A ground mounted system will have other important
consideration for project development and configuration, such as access to distribution lines and
distance to interconnection points, ground slope, alternative land uses, land ownership, and
environmental and cultural impacts. For both ground mounted and roof mounted systems, the
aesthetic impacts of the PV array can be a key consideration as well.
A screening analysis was performed as part of the previous report, which included a high level cost of
electricity calculation to determine the economic benefits of solar energy projects of different
configurations and sizes. The evaluated options included PV systems ranging from 50 kilowatts (kW) to
20 megawatts (MW) in scale, considering monocrystalline silicon (m-Si) modules, polycrystalline silicon
(p-Si) modules, thin film cadmium-telluride (CdTe) modules, and various mounting options (roof and
ground mounted fixed tilt arrays at different tilt angles, as well as a single axis tracking ground mount
system). The results of the analysis showed that in general the larger systems have lower year 1 cost of
electricity, mostly due to the economies of scale benefits that decreases the per-unit installation costs
as system capacity increase. Furthermore, the analysis also showed that thin film arrays generate more
5 DC refers to direct current. Unless otherwise noted, system capacity is given in terms of direct current in this report.
The different solar energy systems evaluated in the analysis are discussed in detail below, organized by
location and project type. Each project discussion includes a summary of the selected candidate
locations and project considerations, including orientation, space constraints, and shading concerns.
Exhibit 4 summarizes the selected project locations and various module types and mounting
arrangements considered at the sites. All of the roof mounted systems considered are on flat roofs, so
ballasted systems are the preferred mounting option for minimizing roof penetrations. The fixed tilt
ground mount systems use racking systems oriented at a higher tilt angle in order to optimize annual
electricity generation. A single-axis (1-X) tracking system that follows the sun from the East to the West
(E-W) throughout the day to optimize system output is also considered for the Lone Butte Substation
ground mount option.
Exhibit 4. Mounting Configurations for Selected Sites
Module Mounting Tilt Angle Orientation*
Option Location / Description
Type Configuration (degrees) (degrees)
A Tribal Governance Center, p-Si Ballasted racking 10 180
1
B roof mount CdTe Ballasted racking 5 180
A Wild Horse Pass Hotel & p-Si Ballasted racking 10 162
2
B Casino, roof mount CdTe Ballasted racking 5 162
A San Tan Brownfield, ground CdTe Fixed Tilt Racks 25 180
3
B mount CdTe Fixed Tilt Racks 25 180
A Lone Butte Substation, ground CdTe Fixed Tilt Racks 25 180
4
B mount CdTe 1-X tracking (E-W) - -
* An orientation angle of 180° corresponds to due south, while a 270° orientation points directly west and
a 90° orientation points directly east.
In addition to siting details, the subsections below also present system sizing and performance modeling
results for each options, as well as a discussion of electrical interconnection considerations. The
following methodology was used to determine the potential system capacities and performance.
1. Evaluate the approximate area available for each selected location using satellite imagery,
photos, as well as site map and roof plans when available.
2. Select commercially available PV modules and appropriate inverters for each
configuration/system size.6
3. Estimate the physical configuration of potential arrays for each site based on module sizes,
spacing requirements, available (unshaded) area, and inverter matching.
6Modules were paired with the appropriate inverters for each potential location using the number of modules that could fit in
the available physical space for each building and industry standard string sizing parameters.
Each array requires an inverter to convert the DC electricity produced by the modules into alternating
current (AC) electricity that can be used to meet building loads or fed back to the grid. Power-One and
Advanced Energy inverters were selected for all arrays in this analysis. Each inverter was selected to best
fit its associated array’s capacity and electrical characteristics while maximizing inverter efficiency and
economy. Additional information about the selected inverters is provided in Appendix A. The properties
of the selected inverters are used to estimate the appropriate number of modules in each array string,
as well as to determine expected system performance. However, it is important to note that while these
selections are important for modeling purposes, they are not critical to overall analysis results. There is a
wide range of alternative modules and inverters that could be selected for installation at the facility
without significantly impacting the performance or costs.
Potential shading from the structures and equipment on the roof are evaluated with a shading model, so
that the system can be designed to maximize system capacity while avoiding shading that can severely
impact system performance.
The Solmetric SunEye is an industry standard instrument that uses a specialized camera and associated
software to estimate the site-specific power output from a PV system throughout the year while taking
A fixed tilt racking system was selected as an ideal solar application for this building. In particular, a
ballasted PV system is used as it will significantly limit the number of required roof penetrations.
Exhibit 10. Model of Potential CdTe System on Tribal Governance Center Roof (Option 1B)
Exhibit 12. Model Results for Tribal Governance Center p-Si Array (491 kWDC)
400
100,000
Monthly Electric Output (kWh)
350
80,000 300
Peak Output (kW)
250
60,000
200
40,000 150
100
20,000
50
0 0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Month
Figure shows total monthly electric output and peak output values in terms of AC kW.
400
100,000
350
Monthly Electric Output (kWh)
80,000 300
40,000 150
100
20,000
50
0 0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Month
Figure shows total monthly electric output and peak output values in terms of AC kW.
Potential shading from these structures and equipment on the roof were evaluated with a shading
model, so that the PV arrays can be designed to maximize system capacity while avoiding shading that
can severely impact system performance. SunEye shading measurements were taken at select areas
during the site visit to help determine what areas will be shaded throughout the year. An example
SunEye measurement taken for the center open area of the hotel wing roof (southwest portion of the
building) is shown in Exhibit 17. The yellow areas in the figure indicate times during the year in which
the area of interest will receive no shading, while the green areas indicate times during the year that the
area will be shaded. In this case, there is some shading due to adjacent structures, however it mostly
only occurs in the early morning and late afternoon hours when the solar resource is less intense; there
are no losses in the optimal solar window of 9 AM – 3 PM. Nevertheless, areas such as this with possible
shading concerns are avoided in system design to the extent possible.
Exhibit 18 shows a SunEye measurement taken at one of the lower sections just north of the hotel wing.
Since the shading in this area is very significant, no solar modules will be placed in this section of the
roof.
A fixed tilt racking system was selected as an ideal solar application for this building. A ballasted PV
system will significantly limit the number of required roof penetrations. Furthermore, this arrangement
is low profile and will have little visibility from the ground. The analysis assumes that the modules would
be mounted to the ballasted racking structure at either 10o or 5o, for polycrystalline and thin-film
configurations, respectively. These tilt angles will help to optimize annual energy production year round
while balancing the need to minimize system payback periods. Note that a detailed engineering report
outside the scope of this study must be performed to assess the weight capacity of the roof prior to
system installation.
Exhibit 20. Model of Potential p-Si System on Wild Horse Pass Hotel and Casino Roof (Option 2A)
As noted previously, while all kWh of electricity generated by the PV system and used to serve on-site
loads will directly reduce the grid electricity purchases (and associated electric commodity costs), the
reduction in peak electric demand (and associated costs) is not as straightforward. The PV system will
only reduce peak demand to the extent that it generates electricity that offsets consumption during the
peak usage period for each month. The estimated peak shaving associated with the system is shown in
the last column of Exhibit 22 for reference. The considered PV array is only expected to result in minor
peak shaving, since this facility is a casino which has high energy demand during the night when the PV
array is not producing any electricity. This helps to illustrate the importance of evaluating the overall the
energy cost benefit from the system based on customer electric usage and applicable rate schedule
prior to system implementation.
Exhibit 23. Model Results for Wild Horse Pass Hotel and Casino p-Si Array (437 kWDC)
80,000 350
70,000
Peak Output (kW)
300
60,000
250
50,000
200
40,000
150
30,000
20,000 100
10,000 50
0 0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Month
Figure shows total monthly electric output and peak output values in terms of AC kW.
Option 2B: Wild Horse Pass Hotel and Casino Roof Mounted CdTe Array
The energy produced by the Option 2B array could be fed into the same interconnection point, two of
the building’s switchgears rated at 3600A and 1600A at 277/480V. The net expected monthly output for
Exhibit 24. Expected Performance for Wild Horse Pass Hotel and Casino CdTe Array (450 kWDC)
PV System Generation
Facility Electricity Facility Peak
Month Net Monthly % of Facility Peak Output*
Consumption (kWh) Demand (kW)
Output (kWh) Consumption (kW)
January 1,341,931 2,379 44,075 3.28% 314
February 1,270,766 2,230 51,761 4.07% 351
March 1,384,040 2,388 70,111 5.07% 390
April 1,416,335 2,558 86,106 6.08% 399
May 1,580,765 2,578 97,227 6.15% 400
June 1,637,258 2,776 94,215 5.75% 398
July 1,773,569 2,910 93,092 5.25% 398
August 1,796,566 2,848 86,841 4.83% 392
September 1,638,602 2,794 75,677 4.62% 388
October 1,531,158 2,745 64,632 4.22% 350
November 1,405,252 2,480 47,354 3.37% 313
December 1,413,713 2,304 39,799 2.82% 279
Annual Total 18,189,953 - 850,889 4.68% -
* The peak output from the PV system is the highest generation value for the array for any given month, and is not
necessarily coincident with the facility’s peak load.
Exhibit 25. Model Results for Wild Horse Pass Hotel and Casino CdTe Array (450 kWDC)
400
100,000
Monthly Electric Output (kWh)
350
80,000 300
Peak Output (kW)
250
60,000
200
40,000 150
100
20,000
50
0 0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Month
Figure shows total monthly electric output and peak output values in terms of AC kW.
Note: The tannery structures shown in the red outlined area in the right of the image have been removed.
Exhibit 30. Model of Potential 5 MWAC array at San Tan Brownfield Area (Option 3B)
PV System Generation
Month
Net Monthly Output (kWh) Peak Output (kW)
January 145,893 970
February 159,582 1,000
March 193,989 1,000
April 217,953 1,000
May 229,984 1,000
June 215,370 966
July 217,365 963
August 212,081 977
September 200,528 1,000
October 191,131 957
November 153,764 929
December 138,678 899
Annual Total 2,276,318 -
Exhibit 32. Model Results for San Tan Brownfield Option 3A Array (1 MWAC)
1,000
200,000
Monthly Electric Output (kWh)
980
960
Peak Output (kW)
150,000
940
920
100,000
900
50,000 880
860
0 840
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Month
Figure shows total monthly electric output and peak output values in terms of AC kW.
PV System Generation
Month
Net Monthly Output (kWh) Peak Output (kW)
January 729,466 4,852
February 797,912 4,999
March 969,945 4,999
April 1,089,765 4,999
May 1,149,920 4,999
June 1,076,851 4,831
July 1,086,825 4,816
August 1,060,404 4,887
September 1,002,640 4,999
October 955,654 4,783
November 768,822 4,643
December 693,388 4,497
Annual Total 11,381,592 -
Exhibit 34. Model Results for San Tan Brownfield Option 3B Array (5 MWAC)
PV System Output Peak PV Output
1,400,000 5,100
5,000
1,200,000
4,900
Monthly Electric Output (kWh)
1,000,000
4,800
Peak Output (kW)
800,000 4,700
600,000 4,600
4,500
400,000
4,400
200,000
4,300
0 4,200
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Month
Figure shows total monthly electric output and peak output values in terms of AC kW.
An existing radial 12 kV line runs from the local San Tan Substation, eventually terminating along
Ironwood Road north of Route 87. This represents the most viable location of interconnection to the San
Tan project site at a distance of roughly 0.5 miles. High-voltage infrastructure will be required at the
project site, including step-up transformers and medium voltage switchgear. Further information
regarding the existing high-voltage lines will be required in order to specify specific interconnection
design. Final interconnection design is subject to NEC requirements up to the current-transformer (CT)
cabinet; design past this point is subject to NESC requirements.
Exhibit 40. Model of Potential 5 MWAC 1-X Tracking Array at Lone Butte Substation (Option 4B)
PV System Generation
Month
Net Monthly Output (kWh) Peak Output (kW)
January 729,466 4,852
February 797,912 4,999
March 969,945 4,999
April 1,089,765 4,999
May 1,149,920 4,999
June 1,076,851 4,831
July 1,086,825 4,816
August 1,060,404 4,887
September 1,002,640 4,999
October 955,654 4,783
November 768,822 4,643
December 693,388 4,497
Annual Total 11,381,592 -
Exhibit 42. Model Results for Lone Butte Substation Fixed Tilt Array (5 MWAC)
5,000
1,200,000
4,900
Monthly Electric Output (kWh)
1,000,000
4,800
600,000 4,600
4,500
400,000
4,400
200,000
4,300
0 4,200
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Month
Figure shows total monthly electric output and peak output values in terms of AC kW.
PV System Generation
Month Net Monthly Output
Peak Output (kW)
(kWh)
January 735,364 4,156
February 907,372 4,524
March 1,208,333 4,821
April 1,491,286 4,999
May 1,666,542 4,999
June 1,603,046 4,953
July 1,510,511 4,893
August 1,442,967 4,757
September 1,304,076 4,773
October 1,144,141 4,468
November 823,213 4,037
December 696,221 3,749
Annual Total 14,533,073 -
Exhibit 44. Model Results for Lone Butte Substation 1-X Tracking Array (5 MWAC)
1,600,000
5,000
1,400,000
Monthly Electric Output (kWh)
1,200,000 4,000
Peak Output (kW)
1,000,000
3,000
800,000
600,000 2,000
400,000
1,000
200,000
0 0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Month
Figure shows total monthly electric output and peak output values in terms of AC kW.
The adjacent Lone Butte substation operates at 69 kV and 12 kV at distribution level. This represents the
most viable location of interconnection to the Lone Butte project site at a distance of roughly 500 feet.
Medium-voltage infrastructure will be required at the project site, including step-up transformers and
medium voltage switchgear. Further information regarding the existing high-voltage lines and existing
substation will be required in order to specify specific interconnection design, however, it is anticipated
that a step-up transformer at the existing substation will be the tie point to the grid. Final
interconnection design is subject to NEC requirements up to the current-transformer (CT) cabinet;
design past this point is subject to NESC requirements.
This chapter provides an overview of some key considerations for solar project development. This
includes a summary of electric interconnection and potential off-takers in the GRIC area, available
incentives, and potential ownership structures. These factors will all ultimately impact project
economics and selection of preferred system size and arrangement selected for development.
4.1.1 I NTERCONNECTION
The project would interconnect to the GRICUA distribution system. Interconnection of the ground
mount arrays must consider the potential impacts of the system not only to the GRICUA system, but also
to the utilities from which GRICUA purchases electricity.
GRICUA receives power at the Lone Butte Substation, the new Wild Horse Substation, and via a 12 kV
service delivery point with SRP. GRICUA has an entitlement to power from the Salt Lake City Area
Integrated Project (SLCA/IP) from WAPA, SRP, and uses other providers as necessary.
7Several industrial end users in the Lone Butte Industrial Park buy power directly from SCIP, such as Kaiser, which has two large
aluminum extrusion plants located at the Chandler site.
8 The Vee Quiva Casino and several other end users in the northeast portion of the Community are served by SRP.
The SRP is not regulated by the ACC on utility matters ( (Arizona Corporation Commission, n.d.). SRP
independently developed interconnection guidelines for distributed generation project and an
interconnection agreement, based on draft rules and a report released by the ACC in 1999 and 2000,
respectively. SRP's rules include technical protection requirements, a flow chart of interconnection
9The draft interconnection guidelines for distributed generation facilities can be found here:
http://images.edocket.azcc.gov/docketpdf/0000074361.pdf
Tucson Electric Power (TEP) and Arizona Public Service (APS) -- the other two major electric utilities in
Arizona -- have similarly established their own interconnection procedures for DG systems. It is likely
that Arizona's regulated utilities will adopt the ACC's interconnection standards when the final rules are
adopted.
If GRICUA did not use the power to satisfy a portion of its own internal needs, the most likely third party
off-takers for electricity or RECs generated by a solar project at GRIC include APS, SRP, and the San
Carlos Irrigation Project. These three entities are discussed in more detail below. The project developer
must begin working with other utilities early in the development process to gauge interest in the project
and to prevent potential difficulties with interconnection. The base assumption for this project is that
the power off-taker will be GRICUA because interconnection with the transmission system will translate
into higher interconnection costs, transmission costs and may not offer any additional revenue. The
general practice for other utilities in the region to meet renewable energy requirements is to build very
large ground-mount solar systems (e.g., SRP’s Copper Crossing 20 MW plant in Florence, AZ and APS’s
multiple large solar projects in Gila Bend, Arizona). APS has announced plans to partner with Abengoa
Solar to construct a 280MW concentrating solar project in Gila Bend at a cost of $2 billion which would
be the largest of its kind in the world.
Arizona Public Service (APS)
APS is the primary subsidiary of Pinnacle West Capital Corporation, an energy holding company that is
based in Phoenix. As Arizona’s largest electric company, APS serves 1.1 million customers,11 with a reach
extending to most areas of the state. APS expects that renewable energy will supply 12% of electricity by
2015. In the 2012 Corporate Responsibility Report, APS detailed a portfolio that included 348 MW of
installed solar capacity, with another 423 MW under development (Pinnacle West Corporation, 2012).
APS also owns several small scale solar projects and purchases solar power from other projects under
long term PPA. The 2012 Integrated Resource Plan evaluated four portfolio simulations for the year
2027, with renewables contributing between 1,141 and 1,427 MW; these scenarios include a Base Case
and a Coal Retirement case, as well as an “Enhanced Renewables” case where 30% of the utility’s energy
needs were met by renewable (Arizona Public Service Company, 2012).
10SRP’s technical requirements for interconnecting distributed generation facilities are available here:
http://www.srpnet.com/electric/pdfx/interconnect_guidelines.pdf
11 http://www.aps.com/en/ourcompany/aboutus/companyprofile/Pages/home.aspx
20 year PPA with PSEG14 Solar Source for electricity generated by the 19 MW Queen Creek Solar
project, located in Pinal County.
25 year PPA with Iberdrola Renewables for electricity generated by the 20 MW Copper Crossing
Solar Ranch in Pinal County.
1,012 kW of solar PV installed on SRP facilities
324 kW of solar PV installed on partnering facilities
Planned 1 MW project in partnership with Arizona State University and SunPower Corp., to be
constructed at ASU’s Polytechnic campus in Mesa, Arizona.
SRP’s Sustainable Portfolio Resolution has a target of supplying 20% of retail energy sold in the year
2020 with sustainable resources, and also reducing emissions intensity by 15% relative to 2006 values by
2020.15 Purchased RECs cannot account for more than 25% of the total sustainable portfolio. Although
SRP has exceeded its FY 2012 target of 9% renewable energy, the Integrated Resource Plan for FY 2013
states that an additional 273 MW of sustainable energy will likely be needed by 2020 from sources such
as wind, geothermal, solar, and distributed generation projects.16
San Carlos Irrigation Project (SCIP)
In the San Carlos Irrigation Project (SCIP) 5-year Integrated Resource Plan dated Jan 26th 2012, the utility
acknowledges that there has been an increased interest among its customers to integrate distributed
renewable energy generation (San Carlos Irrigation Project, State of Arizona, 2012). SCIP at this time is in
preliminary discussions with the Bureau of Indian Affairs to support working directly with its customers
on PV installations, and they are working towards developing incentives and/or support mechanisms to
ease the process. SCIP has limited experience with this but the report also noted that in 2010 SCIP
worked with the National Park Service to install a solar array to serve the needs of the Casa Grande
Ruins National Monument. The National Park Service and SCIP went into a bill crediting agreement as
part of this effort.
12 http://www.srpnet.com/menu/About/generalinformation.aspx
13 p20-21 (Salt River Project, Town of Gilbert, Ft. McDowell Yavapati Nation, Salt River Pima-Maricopa Indian Community, 2012)
14 PSEG stands for Public Service Enterprise Group Inc.
15 P24, (Salt River Project, 2012)
16 p34, (Salt River Project, Town of Gilbert, Ft. McDowell Yavapati Nation, Salt River Pima-Maricopa Indian Community, 2012)
17 The test of the pass-through ruling can be found at: http://www.irs.gov/pub/irs-wd/1310001.pdf. Additional background on
tax credit pass-through is available from: http://www.renewableenergyworld.com/rea/news/article/2013/05/solar-tax-credit-
opportunity-for-indian-tribes
http://apps1.eere.energy.gov/tribalenergy/financial_opportunities.cfm
21 http://www.azcommerce.com/qecb/, http://www.azcommerce.com/assets/qecballocation.pdf
22 A listing of REC marketers can be found here: http://apps3.eere.energy.gov/greenpower/markets/certificates.shtml?page=2
23 http://ww2.wapa.gov/sites/Western/renewables/pmtags/Pages/pmtagspurchase.aspx.
24 Applicable incentive level as of May 1, 2013.
GRIC has full control of the As a non-taxable entity, GRIC is not able to
GRIC owns and operates 100% of
project. GRIC receives all take advantage of the federal incentives
the project (entities could
revenue generated or cost available for solar projects.
include GRICUA, Gila River
savings. The project stays within
Gaming or Tribal Government)
the tribe.
GRIC owns the project and GRIC does not operate the project, the
GRIC owns the project and leases collects lease payments from the lessee does. The tax benefits and value from
it to a 3rd party (assuming a 3rd party. GRIC is also able to the power are likely shared with the 3rd
private letter ruling is obtained take advantage of tax benefits party.
from IRS) by passing them through to the
lessee.
GRIC own and operates the Ownership is shared with a partner. Project
GRIC owns the project with a project. GRIC is able to take revenues and tax benefits are shared as
partner (assuming a private advantage of tax benefits by well. GRIC loses some control.
letter ruling is obtained from IRS) passing them through to a
partner.
There is little risk for GRIC. The ESCO owns the project and receives the
An ESPC arrangement is entered Energy savings are guaranteed. tax benefits. Additional energy savings may
into between GRIC and an ESCO The upfront capital is paid for by go to the ESCO. Additional contracting and
the ESCO. negotiations necessary to initiate project.
San Carlos Apache Tribe in Arizona is planning to build a 1.1 MW PV system on tribal land that is
leased to the tribal casino. They have received assistance from DOE Strategic Technical
Assistance Response Team (START) program, and as of May 2013 were in the process of
reviewing financing options for the project.
Pinoleville Pomo Nation in Ukiah, California plans to install a 3 MW solar project to provide
electricity for tribal administrative buildings and a subdivision.
Southern Ute Indian Tribe of Ignacio, Colorado is planning a PV array project with single axis
tracking, which will provide power for tribal facilities and residences.
Jemez Pueblo tribe in New Mexico has been planning a 4 MW PV array since 2010. This ground
mount PV system is expected to cost $22 million, and will cover 30 acres. The most recent DOE
grant funding will be used to complete project development activities, including acquiring a
power purchase agreement, completing site-related requirements such as surveys, and finalizing
financing.
To’Hajiilee, New Mexico, which is part of the non-contiguous part of the Navajo Nation, is in the
process of developing a 33 MW solar project. The Shandiin Solar Farm will be one of the largest
utility-scale PV arrays on tribal land in the US. The project is expected to cost $124 million to
build, and has received a $300,000 DOE grant to secure funding. SunPower Corp. is helping the
To’Hajiilee’s economic development team develop the project and negotiate with utilities for
the power purchase agreement.
It is likely that GRIC will need to secure a financing partner in order to develop a large scale solar project.
In addition to banks and standard investment companies, there are a vast array of financers and
investors who specialize in solar and other renewable energy projects. Some integrated PV companies
may also offer financing was well as turnkey EPC services for large scale solar systems.
The following list includes a number financing companies that have been involved with solar project
development in Arizona in recent years, based on currently available data from the Solarbuzz US Deal
Tracker (Solarbuzz, 2013). Note that this list is not comprehensive, and the companies have not been
reviewed or vetted by ANTARES at this time. However, this may be useful as a starting point for GRIC if
a solar PV project is pursued.
SolarCity, PPA Financing or solar lease (http://www.solarcity.com/)
Blue Renewable Energy (http://laffertyelectrictechnologies.com/companies/blue-renewable-energy/)
Clean Energy Capital (http://cleanenergycapitalllc.com/clean-energy-capital-overview/)
Seminole Financial Services, LLC (http://www.seminolefinancialservices.com/)
MP2 Capital (http://www.mp2capital.com/)
Tioga Energy (http://www.tiogaenergy.com/)
27 Sources: (DOE Office of Indian Energy Policy and Programs, 2013) (Meehan, 2013) (Barber, 2012)
The Renewable Energy Finance & Investment Network (REFIN) is a directory of sources of finance for
renewable energy and energy efficiency in the US. Although the most recent version is from 2004, it may
also be a useful reference. The directory is available for download at http://community-
wealth.org/sites/clone.community-wealth.org/files/downloads/tool-acore-directory.pdf
29Solar America Board for Codes and Standards, Wind Load Calculations for PV Arrays Report,
http://www.solarabcs.org/about/publications/reports/wind-load/index.html
Case 1 Case 2
(no incentives) (with incentives)
General inflation (per year) 2.0% 2.0%
Federal Tax Rate N/A 35%
State Tax Rate N/A 5.05%
Combined State and Federal Tax Rate N/A 38.25%
Economic Life (years) 25 25
Weighted Average Cost of Capital 6.6% 6.6%
REC Price $2/MWh $2/MWh
Investment Tax Credit N/A 30% of capital costs
Arizona Wind and Solar Tax Credit N/A $25,000
Depreciation N/A 5-year MACRS
Taxes: Taxes are not included in the case without incentives because GRIC does not have a tax burden.
Combined Federal and State taxes for the case with incentives are 38.25% which is typical for a
corporation which may act as a project partner.
Weighted Average Cost of Capital (WACC): The WACC is the average of the debt and equity financing
costs. The WACC is commonly used as the discount rate for investment opportunities, and was used in
this manner for the analysis. Also called the hurdle rate, it is a measure of the anticipated present value
of future cash flows. It serves as a benchmark for a project’s profitability, and is usually set based on an
investor’s anticipated return on other projects available for investment. The interest rate earned by a
university endowment, for example, is often the university’s discount rate when it is presented with
alternative projects for investment. If the project will earn more than adding the same amount of
money to the endowment, then it is considered profitable.
30The US Deal Tracker includes key project metrics including installed system costs for a rolling database of planned, installed,
and decommissioned PV projects in the United States.
The base capital cost represents the all-in cost of installation of each system and includes the following:
Application Engineering Services – standard engineering services required to install on a typical
rooftop, jurisdictional permitting, inverter-direct monitoring system, and interconnection and
upkeep documents.
Solar Equipment and Materials – commercial grade silicon crystalline modules, inverters and
control system, standard aluminum racking and associated structural fastening system, tracking
system as applicable, and wiring, conduit, and associated required electrical infrastructure.
Installation Services – federal labor wages including all subcontracting labor costs
Several inverter manufacturers offer the extended warranties, which guarantee continued operations
for up to 20 years without requiring an inverter replacement. As such, the cost of purchasing an
extended, 20 year inverter warranty is included in the economic analysis. The life cycle cost analysis also
assumes inverter replacement at year 21 for all systems.
They key inputs for economic analysis are shown in Exhibit 50 and Exhibit 51 for the roof mount and
ground mount configurations, respectively. It is important to note that only first year costs for O&M and
RECs are shown in the table (since they do not include inflation or escalation). In addition, only the first
year electricity generation values are shown; output for subsequent years is reduced according to the
average degradation rates noted in the tables. The value of the incentives for the Case 2 analysis for all
options was shown previously in Exhibit 48.
Exhibit 50. Summary of Inputs for Roof Mount PV Systems
0.18
0.16
LCOE ($/kWh, Constant)
0.14
0.12
0.10
0.08
0.06
0.04
0.02
0.00
-60 -40 -20 0 20 40 60
Relative Change (%)
0.12
LCOE ($/kWh, Constant)
0.10
0.08
0.06
0.04
0.02
0.00
-60 -40 -20 0 20 40 60
Relative Change (%)
31Similar data for non-residential systems from the same source showed a decrease of 24% in installed prices during that
period.
The project identified multiple potential solar PV applications for the Gila River Indian Community. Four
of the best sites were included in the detailed feasibility analysis, two roof areas and two ground areas.
The buildings considered for roof mounted projects include the Wild Horse Pass Hotel and Casino and
the Tribal Governance Center, while the considered ground areas include the San Tan Brownfield and
the area near the Lone Butte Substation. All of these selected sites are on tribally owned facilities and
lands, which is expected to be beneficial for meeting GRIC goals. Both of the selected buildings have flat
roof area available, and the roofs are relatively new and in good condition. The selected ground areas
are level and do not have significant obstructions that would hinder development. They are also fairly
close to grid interconnection points.
Exhibit 58 summarizes the key technical and economic results for each PV system analyzed in detail, for
the assessment with system degradation is included. All considered roof mounted arrays used ballasted
fixed tilt racking systems, with both polycrystalline silicon (p-Si) and thin film Cadmium Telluride (CdTe)
modules in different configuration options. The ground mount arrays all used CdTe modules which are
less sensitive to high temperatures and reduced output due to panel soiling from dust. These systems
differed in other ways, by varying system sizes and racking configurations. Although most arrays used
fixed tilt racking, one of the ground mount systems has a single axis (1-X) tracking system to increase
system output.
The roof mounted systems all had very similar LCOE results, ranging from $0.13-$0.16/kWh without
incentives, and $0.10-$0.13/kWh with incentives (when system degradation impacts are included). The
ground mounted systems all have lower LCOEs than the roof mounted systems, mostly due to the
economies of scale benefits of these larger systems that lead to lower per unit installed costs. The LCOE
for the ground mounted projects range from $0.09-$0.10/kWh without incentives, and $0.07-$0.09 with
incentives (when system degradation impacts are included). The Lone Butte Substation array with single
axis tracking (Option 4B) was found to be the best performing project overall. Although it has the
highest per-unit capital costs of the ground mount systems, the performance benefits from the tracking
system more than make up for the added costs. In general, the system degradation results in around a
5% reduction in system output over the lifetime of the system, and increases the LCOE values by about
$0.01/kWh relative to the assessment that does not include degradation. Sensitivity analyses showed
that the project LCOE results are closely tied to the capital costs and weighted average cost of capital, so
reductions in either parameter would have a significant impact on the overall economics. The projects
are also fairly sensitive to solar radiation, and only somewhat sensitive to O&M costs.
Arizona Commerce Authority. (2013). Commercial/Industrial Solar Incentives. Retrieved 5 8, 2013, from
http://www.azcommerce.com/commercialindustrial-solar/
Arizona Corporation Commission. (n.d.). Who Regulates Salt River Project. Retrieved from
https://www.azcc.gov/divisions/utilities/electric/srp.asp
Arizona Public Service Company. (2012, March). 2012 Integrated Resource Plan. Retrieved August 9,
2013, from http://www.aps.com/library/resource%20alt/2012ResourcePlan.pdf
Arizona Public Service Company. (2013). Renewable Energy Incentive Options. Retrieved September 5,
2013, from
http://www.aps.com/en/business/renewableenergy/renewableenergyincentives/Pages/incentiv
es.aspx
Barber, D. A. (2012, October 16). Off-Grid Solar on US Tribal Land the Next Boom. Retrieved from
EnergyTrend: http://pv.energytrend.com/knowledge/Grid_Solar_%2020121016.html
CAL FIRE. (2008). Solar Photovoltaic Installation Guideline. California Department of Forestry and Fire
Protection, Office of the State Fire Marshal.
DOE Office of Indian Energy Policy and Programs. (2013). START Program. Retrieved from
http://energy.gov/indianenergy/resources/start-program
DSIRE. (2010). Retrieved October 18, 2010, from Database of State Incentives for Renewables &
Efficiency: http://dsireusa.org/incentives/index.cfm?re=1&ee=1&spv=0&st=0&srp=1&state=AZ
Gila River Indian Community Utility Authority. (2009, January 15). Integrated Resource Plan. Retrieved
August 12, 2013, from
http://ww2.wapa.gov/sites/western/es/irp/Documents/GilaRiverTribe2009.pdf
Greentech Media. (2012). Global PV Module Manufacturers 2013: Competitive Positioning,
Consolidation and the China Factor.
Greentech Media. (2013). Global PV Inverter Report 2013: Addendum Regarding Recent Acquisitions by
ABB and Advanced Energy.
Greentech Media. (2013). The Global PV Inverter Landscape 2013: Technologies and Strategies in a
Shifting Market.
Jordan, D. C., & Kurtz, S. R. (2012). Photovoltaic Degradation Rates - An Analytical Review. Progress in
Photovoltaics: Research and Applications.
Lawrence Berkeley National Laboratory. (2013). Tracking the Sun VI, An Historical Summary of the
Installed Price of Photovoltaics in the Unites States from 1998 to 2012.
2.2.1 Feasibility of Expansion of Separation of Clean Wood From C&D and MSW Streams.........................................9
2.3 SALTCEDAR (TAMARIX SPP.) .............................................................................................................................................10
ii October 2013
5.3 LEVELIZED COST OF ELECTRICITY (LCOE) ANALYSIS RESULTS ...................................................................................................35
8 REFERENCES............................................................................................................................................................... 45
Exhibit 3. Area of Interest of Interest for Saltcedar Harvest and Riparian Restoration.............................................................11
Exhibit 7. Saltcedar growth in the area where samples were collected ....................................................................................16
Exhibit 10. Additional Saltcedar Analysis for Each Sample Location .........................................................................................18
Exhibit 15. Biomass Power Project Heat and Mass Balance Model...........................................................................................28
Exhibit 24. Annual Fuel Usage and Emissions Levels for 1000 HP Biomass Boiler.....................................................................40
iv October 2013
ACRONYM LIST
ACC Arizona Corporation Commission
AD Anaerobic Digestion
ANTARES ANTARES Group Inc.
AQMP Air Quality Management Plan
ASU Arizona State University
BACT Best Available Control Technology
BIA Bureau of Indian Affairs
BTU British thermal unit
C&D Construction and demolition
CFR Code of Federal Regulations
CHP Combined Heat and Power
DEQ Department of Environmental Quality
DOE Department of Energy
EPA Environmental Protection Agency
ESCO Energy Savings Company
ESP Electrostatic Precipitator
ESPC Energy Savings Performance Contract
FEMP Federal Energy Management Program
GHG Greenhouse Gas
GIS Geographic Information Systems
GRIC Gila River Indian Community
GRICUA Gila River Indian Community Utility Authority
HAP Hazardous Air Pollutant
HHV Higher Heating Value
HR Hour
IB MACT Industrial Boiler Maximum Available Control Technology
IRC Internal Revenue Code
IRS Internal Revenue Service
ITC Investment Tax Credit
KPPH Thousand Pounds per Hour
kW Kilowatt
kWh Kilowatt-hour
LCOE Levelized Cost of Electricity
LHV Lower Heating Value
MACRS Modified Accelerated Cost Recovery System
MGD million gallons per day
MMBtu million Btu (British thermal unit)
MSW Municipal Solid Waste
MW Megawatt
MWh Megawatt-hours
v October 2013
NOX nitrogen oxides
NPDES National Pollutant Discharge Elimination System
ORC Organic Rankine cycle
OSB Oriented strand board
PM Particulate Mater
PSD Prevention of Significant Deterioration
psia Pounds per Square Inch Absolute
psig Pounds per Square Inch Gauge
PTE potential to emit
REC Renewable Energy Certificate
RES Renewable Energy Standard
RPS Renewable Portfolio Standard
SCIP San Carlos Irrigation Project
USC United States Code
USGS U.S. Geological Survey
VOC Volatile Organic Compound
WACC Weighted Average Cost of Capital
WWT Waste Water Treatment
WWTP Waste Water Treatment Plant
YR Year
vi October 2013
1 E XECUTIVE S UMMARY
Introduction
The Gila River Indian Community (GRIC or the Community) contracted the ANTARES Group, Inc. (“ANTARES”) to
prepare a biomass resource assessment study and evaluate the feasibility of a bioenergy project on Community land.
A biomass project could provide a number of benefits to the Community in terms of increased employment,
environmental benefits from renewable energy generation and usage, and increased energy self-sufficiency.
The study addresses a number of facets of a biomass project’s overall feasibility, including:
ANTARES previously provided GRIC with a technical characterization report which provided information about a
range of biomass technology and configuration options. Commercially available biomass technologies were screened
to identify the ones that could be economically viable for GRIC in the near term. This report builds on the knowledge
in the technical characterization report, by taking the technical solutions deemed to have potential and applying
them to specific project locations identified through site visits and discussions with the GRIC representatives.
ANTARES also completed a complementary Solar Energy Feasibility Study, which considered the feasibility of solar
energy projects on GRIC lands and facilities and was submitted concurrently with this report.
There are three key components of the biomass supply available to a potential end user in the Community:
Clean, untreated urban wood waste from the larger Phoenix metropolitan area
Byproducts from the processing of guayule into natural rubber
Saltcedar from expansion of riparian area restoration
Each of these potential resources were evaluated in this study. The urban resource assessment identified a number
of potential future suppliers of biomass fuels, including several aggregators that recover wood from urban activities.
However, only one of these aggregators, No-Waste Grindings, expressed interest in being a potential supplier. They
are estimated to have the capacity to supply up to 20,000 tons of wood chips per year. It is important to note that
special permission would be needed to bring this material on tribal land, since there is a tribal ordinance that
restricts waste products from being brought into the Community.
Another potential fuel stream is guayule bagasse from Yulex, which is the residual by-product of a natural rubber
production process. The Yulex production facility is located on GRIC land within the Lone Butte Industrial Park. It was
estimated that approximately 5,000 tons of guayule material could be available for a bioenergy project annually.
The study also evaluated the quantity of biomass materials that could be generated as part of a riparian restoration
program to remove saltcedar (e.g. Tamarix), an invasive species that has infested some areas of the Community,
particularly around the Gila River in the northwestern area of the GRIC land. A GIS analysis was used to determine
the acreage and associated estimate of the quantity of saltcedar that could potentially be recovered and used for a
bioenergy project. This assessment identified about 17,500 acres of infested area in District 6 and 7, about a third of
which is densely infested. The amount of saltcedar that could be collected annually depends on the treatment
A number of different potential bioenergy projects and configurations were considered for GRIC, but only one
project configuration was selected for detailed analysis – a biomass power plant. Although cogeneration or
combined heat and power (CHP) systems tend to be more economical for small bioenergy project, no suitable
thermal end users were identified that could take advantage of the useful heat energy generated by a CHP system.
There are several facilities that appear to have large and consistent process thermal energy loads in the Lone Butte
Industrial Park, including cement brick and vermiculite manufacturers, but these processes have very high
temperature requirements (1000-1500 °F), which exceed the capabilities of a typical biomass boiler project that
would usually rely on steam to provide process heat. While such loads could be met with a gasification project or
hybrid system, there are a number of technical and economic challenges that would be difficult to overcome. A
biomass heating and cooling project was also considered for the Cultural Resource Center, which is one of the larger
tribally owned buildings. However, a high level analysis of such a project (provided in Section 3.2.2 of the report)
showed that would not likely be any net energy cost savings for the project. As such, this type of project was not
deemed feasible at this time.
Instead, the detailed technical analysis considered a biomass power plant at the Lone Butte Industrial Park, sized to
utilize all of the likely available biomass fuel supply. A biomass power project would help to meet some of the GRIC
project goals to develop renewable energy project that benefits the Community and provides a long term stable
energy supply. It is assumed that the facility would be located at or near the Yulex facility, as they would provide a
portion of the biomass feedstock from guayule residues. The rest of the feedstock would come from wood chips
from recovered urban wood waste.
The selected power plant configuration uses a high pressure boiler to generate steam that will be expanded in a
condensing steam turbine. Based on the available biomass feedstock supply, a 1,000 horse-power (hp) boiler was
selected, which will operate at 425 pounds per square inch gauge (psig), and the condenser will operate at 2 pounds
per square inch absolute (psia). This system was modeled using Thermoflex, a commercially available heat and mass
balance software package, in order to evaluate expected performance. The key results from this analysis are
provided in Exhibit 1. The overall system efficiency is fairly low (14.4%), which is typical for a power-only, small-scale
biomass power project. Because of resource limitations, this project is much smaller than most stand-alone biomass
power plants, which typically start at 25 MW and may consume 300,000 tons of fuel per year or more. Bigger plants
with larger generating capacities are generally more economic, as they obtain economies of scale that help to reduce
the per-unit installation and operating costs.
Electricity generated from the considered biomass project on Community land could be connected directly to the
GRICUA distribution lines and used to serve the GRICUA customers. This is the primary arrangement considered in
this analysis, it is expected that a direct connection to the GRICUA would be most beneficial to the Community. If the
biomass system was located at the Lone Butte Industrial park, it could supply a number of the park tenants.
Project ownership and potential partnerships are another important consideration for project development.
Although a renewable energy project at GRIC could have a number of different partner and ownership structures,
GRIC has stated that they would prefer to have a tribal entity own the project. However, a partnership scenario could
bring some benefits in terms of up front project funding and availability of federal tax incentives. There are a few
potential alternatives that may present a way for GRIC to maintain ownership and control of the project while
benefiting from the tax incentives. One of these options is a “pass through lease,” in which a tax equity investor (such
as a financial institution) would be the lessee, and would make rent payments to the tribe in exchange for benefiting
from the investment tax credit. Another possible option would be to have a tax equity investor that is a partner
rather than a lessee. In this case GRIC would both own and operate the project while taking advantage of the tax
benefits through the participation of a passive investor.
A levelized cost of electricity (LCOE) analysis was performed for the biomass power plant in order to evaluate the
cost-effectiveness of the project. The LCOE provides the average cost of power over the lifetime of the project, and is
useful in gauging the cost of producing electricity and comparing it to the electric production costs for other
technologies and utility supplied power. Inputs to the LCOE calculation include system output (kWh generated),
capital costs, O&M and fuel costs, financing assumptions, and any applicable incentives.
Both current and constant LCOE figures are calculated in the analysis. 1 Key financial input variables include a 25 year
project lifetime, a long term general inflation of 2%, and a weighted average cost of capital of 6.6%. 2 The LCOE
analysis was performed in two ways; the base analysis (Case 1) does not include any incentives, and an alternate
analysis (Case 2) includes all potentially available incentives that could apply to a biomass power project developed
with a partner. The evaluation with incentives assumes there is a project partner with a tax burden that can take
1The current LCOE includes the rate of inflation, while the constant LCOE does not.
2The long term general inflation rate is based on current target set by the Federal Reserve. The weighted average cost of
capital is based on the average rate used for the U.S. Energy Information Administration’s Annual Energy Outlook 2013.
Exhibit 2 summarizes the key inputs and results of the economic analysis. It is important to note that only first year
costs for O&M and RECs are shown in the table (since they do not include inflation or escalation). The value of the
incentives for the Case 2 analysis is also shown in this table. The incentives provide a roughly $0.02/kWh overall
benefit for the systems. However, the results show that the electricity provided by a biomass power project would be
much more expensive than the current electric commodity costs, which is around $0.05/kWh, regardless of whether
incentives are included.
Case 1 Case 2
No Incentives With Incentives
Key Economic Inputs
System Capacity, gross (kW) 2,010 2,010
Net Electricity Generation (MWh/yr) 14,056 14,056
Base Capital Cost ($) $14,967,000 $14,967,000
ITC Value ($) - $4,490,000
Net Installed Cost ($) $14,967,000 $10,476,900
Annual Non-Fuel O&M Costs ($/yr) $1,213,746 $1,213,746
Annual Biomass Feedstock Cost ($/yr) $1,105,000 $1,105,000
Annual REC Value ($/yr) - $28,112
LCOE Results
Current LCOE ($/kWh) $0.284 $0.264
Constant LCOE ($/kWh) $0.235 $0.216
Sensitivity analyses were performed to address uncertainties in specified cost parameters and evaluate the affect that
varying these values will have on the overall project economics. The results of this analysis showed that the LCOE is
most sensitive to capital costs and biomass fuel cost, such that a 5% change in of these factors results in a 2% change
in the LCOE. The economics are somewhat less sensitive to the WACC, as a 5% change in this value results in 1%
change in the LCOE. Nevertheless, even with a 50% reduction in fuel costs or capital costs, the constant LCOE is still
around $0.20/kWh for Case 1.
There are a number of factors that lead to the poor economic results for the biomass power project. The first is that a
power-only project has a fairly low fuel to electricity conversion efficiency. Although the overall energy conversion
efficiency could be greatly improved with a cogeneration project that is able to recover and use heat that would
otherwise be rejected, no good opportunities to utilize recovered thermal energy were identified in this study.
Another reason for the high LCOE is the relatively small size of the system. Larger biomass systems benefit from
3Note that the ITC benefit for biomass power projects is set to expire on December 31, 2013. However, it was included in this
alternative analysis anyway, in order to evaluate the benefit it could have on a project in case the incentive is extended or
renewed in the future.
The resource analysis identified a limited supply of low cost biomass fuel in the GRIC area. The most likely sources of fuel
are clean wood chips from urban wood waste recovery activities, and guayule bagasse residues. Combined, these
resources are estimated to be able to provide up to about 25,000 tons of biomass per year, at a relatively high delivered
cost of around $45/ton. Due to the high cost and low yield from saltcedar remediation activities, riparian area restoration
would not be feasible as a source for biomass fuel. However, removal of saltcedar from the infested areas could certainly
benefit the local environment if riparian restoration funding could be secured from an alternative source. This activity
would also provide community jobs and wildlife habitat benefits.
The technical analysis considered a biomass boiler system with a 2 MW steam turbine to generate electricity. It was
assumed that the facility would be located in the Lone Butte Industrial Park, near the Yulex facility where the guayule is
processed. The considered system would generate around 14,056 MWh of electricity per year, with a fairly low overall
system efficiency (14.4%), as is typical for a power-only project. A number of technical and economic challenges were
identified for the project. Guayule was found to be a potentially problematic boiler fuel in terms of alkali and ash content,
although using only a portion of this fuel mixed with clean wood chips could mitigate the negative effects somewhat.
However, mixing these different fuel streams may require separate feedstock processing and handling systems which
would add further expense to the installation costs that were not included in this assessment. Furthermore, air emissions
for a facility of this size may trigger Title V permitting requirements unless a fluidized bed boiler is used which would add
more expense.
The economic analysis showed that at current prices, biomass power project will not be cost effective as the LCOE is much
higher than current (or projected future) energy costs, even without the potential added capital costs that may be
necessary as noted above. The LCOE results were also much higher than for the solar PV projects considered in the
complimentary Solar Energy Feasibility Study report submitted separately to GRIC. Furthermore, a biomass project is a lot
more complicated and has a lot more risk than a solar PV project in terms of operations, fuel supply availability and cost,
and other potential unforeseen costs. Although a biomass project would provide more new jobs that would benefit the
Community, if a renewable energy project is pursued on-site a solar PV project seems to be a better choice overall.
4 Energy Information Administration Natural Gas price data from (EIA 2013).
Clean, untreated urban wood waste from the larger metropolitan area
Byproducts from the processing of guayule into natural rubber
Saltcedar from expansion of riparian area restoration
A high level characterization and assessment of these resources was provided previously in the Renewable Energy Technical
Characterization report. This report chapter provides details regarding the planning and logistics associated with providing a
reliable biomass fuel supply from one or a combination of these three sources. In particular, this chapter discusses how
saltcedar removed from riparian areas could make up a higher cost component of a biomass fuel supply and partially
subsidize riparian area restoration efforts. Separate chapter subsections discuss fuel quality considerations and issues with
fuel procurement including contracting, receiving and storage and quality control.
YULEX
Yulex Corporation processes locally grown guayule into biomaterials such as rubber and resin at its facility in the Lone Butte
Industrial Park in Chandler, Arizona. Guayule is a flowering shrub in the aster family, native to the Southwest, which is
grown as a perennial crop along the Gila River and at other locations within a 50 mile radius of the manufacturing plant. The
rubber produced is non-allergenic, as opposed to latex, and has many end uses.
There are three potential biomass feedstock streams from guayule: the entire shrub 5, bagasse, and leaves and stems. Of
these, guayule bagasse (a finely ground material that remains after the rubber material is extracted) is the most attractive
for bioenergy usage, as it is already cleaned and processed. It would not be economical to utilize the entire shrub as a
biomass feedstock, as Yulex grows these plants specifically for producing rubber. Furthermore, the leaves and stems would
require additional processing to make them suitable for a fuel stream, and would have a higher ash content that makes it
challenging to use as a fuel source.
The manufacturing facility currently operates one shift per day, five days per week (Monday through Friday). They are
planning to increase production by 2015, by operating two shifts per day. Since very little weight is lost during the
extraction process, the amount of bagasse generated is essentially equivalent to the quantity of material processed. The
facility currently generates about 15-25 tons of guayule bagasse per day, for a single shift operation. Therefore, the total
The bagasse has a fairly high moisture content of about 50% (by weight) after the processing step. However, it also has a
fairly high heating value of about 8,500-10,000 Btu/lb on a dry basis (HHV). There is no issue with ash content of the
bagasse; most of the ash from analyzed samples is a result of dirt that is mixed in with the guayule during harvest. During
the site visit, ANTARES took samples of the bagasse and sent to Hazen for analysis (results are provided in Section 2.4).
Currently, most of the bagasse material is used as a composted soil amendment and weed inhibitor, which is applied to the
Yulex guayule plots in the nearby area. Leaves, branches, and other residual materials from the plant are combined with the
bagasse waste stream to generate this compost. Yulex places a value of $100/ton on the bagasse as a soil amendment,
calculated as avoided cost for purchasing equivalent amendments and herbicides or mulch. Yulex has also experimented
with making a particle board type of material with the bagasse, and has found it is capable of producing a termite resistant,
high-value product.
Since a bioenergy project could not compete with these prices for higher-value products, this assessment only considers
utilizing the additional bagasse material that will be available when Yulex increases production by changing to a 2-shift
operation in 2014. It is assumed that doubling operational time will also double the amount of material process and the
associated bagasse, thereby resulting in 5,000 tons per year of material available for a bioenergy project. The price
associated with this fuel stream is estimated to be similar to other urban fuel materials. Potential biomass projects to be
developed in partnership with Yulex are discussed in more detail in Section 3.2.
NO-WASTE GRINDINGS
No-Waste Grindings is one of the key potential suppliers for clean wood waste generated from urban-sources such as
recycled pallets, clean construction and demolition, and other wood scrap materials. ANTARES staff visited the No Waste
Grinding southern facility and met with Lee Craig during the site visit in July 2013. The facility currently collects biomass
material from a number of small companies throughout the Phoenix area.
The company currently produces about 75,000-80,000 cubic yards of wood chip material per year (equivalent to about
17,500-20,000 tons per year). The wood is very dry, typically around 10% moisture content or less (by weight). Much of this
material is used as horse bedding, which has very strict requirements to be clean and free of debris. Some of the wood chip
material also used for playground material and mulch. The company also sells chips sporadically to Garrick, which supplies
material to the biomass facility at the Frito Lay plant located in Casa Grande, Arizona.6 Mr. Craig stated that the company
would prefer to sell to one large customer with requirements that are not as strict, and they were definitely interesting in
being considered as a potential supplier. No Waste Grindings produces wood chips that are 3” and 2” minus, although
different sizes could potentially be generated as needed. A magnet is used to remove metals, and material can also be
screened if needed.
A cost estimate for the wood chips is about $9-$11/cubic yard, which is equivalent to about $36 to $44/ton, for material
picked up at the facility. For delivered materials, loading and unloading and transporting the wood materials would add
additional cost. Total transportation charges are generally done by the hour.7 The total transportation cost to the Lone
6The Frito Lay plant has a biomass plant that is used to generate energy for the production facility. The plant has a fairly high biomass consumption rate,
using approximately 60,000 lb/hr of wood.
7 For example, trucking costs are estimated to be around $125/hour. A standard tractor trailer can holds around 20-25 tons of wood chips.
No-Waste Grindings is willing to sign a long term contract, and does not have any specific contract requirements. They
currently use container trailers for transport, but would be willing to get a walking floor trailer if it would have lots of use
for new customer with large demand.
The City of Phoenix states that one million tons of solid waste goes to the city’s landfill located on SR85 each year, with 50%
from residences. This amount is equivalent to approximately one ton of garbage per resident per year, although it does not
include refuse taken to private landfills or other cities within the Phoenix metropolitan area (City of Phoenix 2013). A 2003
waste characterization study of single-family residential waste quantified the composition of the city’s refuse in great detail
(Cascadia Consulting Group, Inc. 2003). The study concluded that 28.1% was compostable yard waste, such as leaves and
prunings, while 7.3% was construction and demolition wastes (1.8% of which is dimensional lumber, crates and boxes,
pallets, or other untreated wood). Compostable yard waste is estimated to be 122,258 tons annually, while construction
and demolition (C&D) waste is estimated to be 31,614 tons annually, of which 7,835 tons is untreated wood, (including
dimensional lumber, crates and boxes, pallets, or other untreated wood), 1,787 tons is treated wood, and 2,570 tons is
contaminated wood.
Currently, green waste from the city of Phoenix is managed by Gro-Well /Green Organics Recycling, which operates a
mulching processing plant on 20 acres of city-owned land. Gro-Well also contracts with the Salt River Pima Maricopa Indian
Landfill, which collects approximately 40,000 tons a year of green waste. Rich Allen at the Salt River Landfill stated that to
his knowledge, Gro-Well is always looking for new off-takers of processed biomass, especially since the Snowflake biomass
power plant closed in March 2013 (Worth 2013). The 24 MW Snowflake plant opened in 2008 and is located 180 miles
northeast of Phoenix; it previously supplied power to the now-closed Catalyst Paper Mill.
There are a large number of municipal and private landfills in the Phoenix area managed by Waste Management; the
company collects green waste from the company’s landfills and transfer stations. In partnership with Garrick LLC, 8 this
waste is processed into at the Maricopa Organics Recycling Facility, located at the Sierra Estrella Landfill. The processed
biomass material is primarily sold to Frito-Lay to run its Casa Grande facility, although mulch and compost is also produced
for local use (Garick 2012).
Many of the smaller municipalities are not currently segregating wood waste and green organics materials, although they
have done so in the past. Some, such as Glendale, stopped collecting this material due to budget issues. Ernie Reese, the
acting Superintendent of the Glendale Landfill, stated that the city would likely be interested if a future opportunity arose
for the city to generate revenue from wood waste while also keeping the waste out of the landfill. Tucson’s Los Reales
landfill also ceased segregation of green wood waste, which was used by the city for mulch; this waste is now incorporated
into the landfill, which they find to be beneficial for the landfill.
No-Waste Grindings, the major potential supplier, can likely guarantee that its existing supply is suitable for use as a fuel. It
also can expand production by increasing recovery efforts. However, an additional waste characterization will be required
to verify that the sources of wood waste do not contain excessive quantities of treated wood, plastics or other inorganic
materials. The U.S. EPA released new guidance for the use of C&D wood that suggests that C&D wood fuels meet the
criteria for exemption from more strict emissions requirements under revised Boiler MACT regulations (Environmental
Protection Agency 2012, 312). However, the same guidance specifies that C&D wood fuel must be produced using best
practices as part of a comprehensive collection system. This leaves room for local interpretation of what the acceptable
quantity of contaminants in a fuel wood supply is. Some of the common concerns regarding air emissions associated with
combustion of C&D wood waste include emissions of non-metal hydrocarbons and metals. Often, best practices dictate 1
percent or less contamination of fuel supplies with inorganic materials, treated wood, or other post-consumer wastes to
reduce some of these concerns but that value differs from application to application.
The project may also need to meet other requirements depending on the level of contaminants present in the fuels, if the
project is seeking to meet state renewable energy requirements and/or obtain financial incentives from the sale of RECs.
Wood fuel processing, quality and testing requirements are often developed on a case-by-case basis with regulators and
third-party bodies that certify power from renewable energy projects as eligible for RECs. GRIC has its own legal definition
of hazardous waste that should be used to ensure any biomass material used for fuel is not characterized as a hazardous
substance. If the project intends to sell any RECs into the Arizona state market, the requirements under Arizona’s
Renewable Energy Standard (RES) must be met.9
Therefore, while the perception that production of biomass fuel may result in relaxed fuel quality standards compared to
production of animal bedding and playground ground cover, the reality is that the supply chain management and testing
requirements for producing a fuel quality chip and meeting requirements set by GRIC (as well as Arizona’s RES and/or third-
party certification companies if RECs will be sold into the state or voluntary markets) that may result in increased fuel
supply costs.
Outreach and education is required to provide Community leaders and citizens with the information they need to
understand what types of fuels will be used and how fuel quality will be maintained to guard against negative
environmental consequences of waste wood combustion. This outreach effort can only be done effectively after significant
effort has been made to develop fuel quality specification and protocols for the separation of clean, untreated wood waste
and monitoring have already been made. This outreach effort could result in opposition to the project that could require
significant additional changes to the fuel supply strategy (and project scale) if concerns cannot be met.
9 For example, for biomass projects the Arizona RES permits the use of non-hazardous plant matter waste material that is segregated
from other waste. This may not preclude the presence of some contaminants in the fuel stream, but would limit the use of painted,
treated, or pressurized wood, wood contaminated with plastics or metals, tires, or recyclable postconsumer waste paper in fuel streams
in biomass generators eligible for compliance with RES standards. (Arizona Corporation Commission 2006)
Establishing a riparian area restoration program is a multi-year process that requires significant stakeholder outreach and
education, consensus building, fundraising, vegetation inventory and analysis, adaptive management (i.e., trial and error)
and a long-term commitment to site monitoring. The outcome can include the restoration of degraded sites to conditions
that function and look like the ecosystems that were displaced long ago. Restored sites can have reduced wildfire risks,
support a greater diversity of native plant and animal species and can result in improved water quality.
The GIS analysis utilized data from the U.S. Geological Survey, which was downloaded from the Nation Map Seamless
Server. This data dates to 2010, and is considered to be the “best available” orthoimagery (geometrically corrected aerial
images with uniform scale that can therefore be used for accurate distance measurements) from the USGS. The Spatial
Analyst extension of ArcGIS was used to identify the areas within GRIC that are highly infested with saltcedar. The area
identified in this analysis is indicated in Exhibit 3 and Exhibit 4. Additional details on the analysis methodology are provided
in Appendix A.
Using the assessment above, the total acreage of saltcedar infestation was estimated to be 17,461 acres, located in District
6 and 7 of the GRIC. About one third of that acreage is very densely infested. The geographic focus of resource inventory
and treatment should emphasize highly dense saltcedar infestations with a high probability of treatment success, high-
value wildlife habitat and high potential for recreational use. An annual inventory program that evaluates and recommends
high-priority treatment would evaluate approximately two quarter sections 10, or 320 acres per year. The quarter-quarter11
section data can be provided to GRIC separately in spreadsheet format as desired. The total annual treatment acreage
would need to be determined based on program treatment and budget priorities. This is discussed in light of riparian area
treatment costs in the next subsection. Treatment could proceed in conjunction with development of environmental
education and recreation opportunities.
The potential for biomass from saltcedar treatment varies extensively from site to site. The range of reported biomass yield
values ranges from 4 tons per acre (Sandia National Laboratory 2011) to as high as 15 tons per acre (Nackley Lloyd et al
2012). However, in densely invested riparian areas, saltcedar removal typically provides between 5 and 10 tons of biomass
per acre (Duncan 2013).
The first step is to obtain approval to evaluate the feasibility of program development via the appropriate committees
within the Community government. This would most likely require development and approval of a resolution or other
The program champion should have the decision-making clout to represent the program at the relevant committees and
ability to direct staff resources and volunteer resource in subsequent steps of program development.
The initial program formation steps would likely have to be done with a limited outlay of Community financial and staff
resources and require a significant amount of volunteer effort. An alternative would be to hire a part-time program
coordinator with natural resource management and grant-writing experience.
The program champion should convene a steering committee with the objective of establishing high-level program goals
and objectives. Exhibit 5 provides a preliminary list of contacts for the program steering committee. Once program goals
and objectives are determined, treatment priorities and funding needs can be established and grants and other funding
resources can be explored. The overall restoration goals for the Gila River riparian area are likely to require multiple
treatment methods; the steering committee should remain open to use of multiple approaches and will need to develop a
level of comfort with competing priorities and opinions among steering committee members.
Foster the adoption of innovative conservation approaches to invasive riparian plant management to improve
riparian system health and function and enhance natural resources
Use bioenergy technologies to promote utilization of invasive plant biomass
Transfer project findings, products and technologies to a broad range of regional stakeholders and promote
exchange of information between stakeholders
Based on the costs or riparian restoration and the inherent challenges associated with revegetation in arid climates, it is
advisable to conduct an inventory of the most densely infested saltcedar areas and prioritize a subset of parcels that have
several key characteristics:
There are existing models to guide the development of program goals and objectives, vegetation inventories, site selection
protocols and overall saltcedar management plans. Some program resources and templates can be accessed through the
resources provided below.
Recommendations:
Take advantage of relatively low-cost networking and training resources available through organizations such as
the Tamarisk Coalition. Start by attending the February 2014 Tamarisk Coalition Conference in Grand Junction,
Colorado: http://www.tamariskcoalition.org/announcements/save-date-2014-tamarisk-coalition-conference
Review other models for sustainably funding long-term riparian management programs such as that prepared for
the Colorado River Basin:
http://www.tamariskcoalition.org/sites/default/files/files/Sustainable_Funding_Options_for_a_Comprehensive_Ri
parian_Restoration_Initiative_in_the_Colorado%20River%20Basin_2011.pdf
Review funding and other resources available through the Riparian Restoration Connection website:
http://www.riparianrestorationconnection.com/
Saltcedar Extraction
depends on density
& Grinding n/a $ 1,775.00
Tallpot tree planting
Est. 60% success rate
(30 ft centers) $ 20.00 $ 980.00
Up front capital equipment costs are not a major factor for the Community as major pieces of equipment (excavators,
specialized shears, horizontal grinders) are likely to be owned by contractors. Based on the annual treatment acreage
expected for the GRIC (even at a high end of 100 acres per year based on funding received by other similar programs
through the Natural Resources Conservation Service and other sources), the project cannot financially justify purchasing
these pieces of equipment. The above costs are for custom restoration contractors for saltcedar extraction and grinding.
The potential revenues available through the sale of biomass for fuel or other sources (at saltcedar biomass removal rates
of 5 to 10 tons per acre, at an artificially high rate of $100 per ton designed to offset treatment costs) would range from
$500 to $1,000 per acre, a small amount compared to likely treatment costs. Therefore, sale of biomass for fuel, firewood
or other end products should be viewed as a minor factor in considering the scope of riparian area restoration.
In addition, samples of the guayule biomass material were collected from the Yulex manufacturing facility. Two samples
were taken from a single bagasse pile, which were also placed into plastic bags and sent to the lab for testing.
In reviewing the test results there are several areas of concern for the use of either of these feedstocks as boiler fuel.
Focusing first on the saltcedar, the chlorine and sulfur are above the recommended limits for a biomass boiler. The
presence of either one of these components even in small quantities (0.25%-0.5%) can lead to deterioration of the boiler
and combustion chamber materials. The chlorine would cause condensing on the boiler surfaces and corrode the boiler
tubes. The sulfur would cause corrosion problems and create large SOx emissions.
The major issue for the guayule is the alkali content. While not specifically tested for in this analysis, Yulex provided
ANTARES with previous test results which included analysis of the alkali, showing levels ranging from 0.44-2.96 lb/MMBTU.
This would exceed the threshold where it becomes problematic in a boiler, 0.4 lbs/MMBTU.
In addition, the ash content is high for both the guayule and the saltcedar. A typical ash content for boiler fuel is 1-2%. The
guayule has a high of 2.91% and the saltcedar has a high of 7.31% (both in terms of the as received material). This is higher
than desired and would require a combustion chamber with automatic ash extraction in order to handle the volume of ash
if these fuels were fired on their own.
Due to its chlorine, sulfur, and ash content, saltcedar would not make an ideal boiler fuel if used on its own. It could
potentially be used if mixed as a small percentage with another fuel, such as clean woods chips, however the boiler
equipment should be closely monitored for damage. The saltcedar was not considered as a fuel for detailed technical and
economic analysis presented in this report.
The guayule was included as a fuel in the detailed analysis, and was estimated to make up 20% of the total annual fuel input
by weight. The balance of the fuel stream for the considered project is clean wood chips. Utilizing only a portion of guayule
as a boiler fuel should help to negate some of the effects of the high ash and alkali content, although the fuel could still
cause problems. The effect of using a fuel with undesirable properties is that it raises the cost of operations and causes
interruptions in generation. There may be capital upgrades available, such as use of a different energy conversion
technology, which could alleviate the problems stemming from guayule. This would add significantly to the capital costs and
there are no guarantees that the fuel would not cause issues. More testing is recommended before proceeding with the
saltcedar or guayule as a fuel to ensure that it is compatible with a biomass boiler system or other biomass energy
conversion system.
Site selection for a biomass energy plant is complex and highly site specific since the conversion of biomass fuels to heat,
power or both requires a variety of support infrastructure that is simply not required with other renewable energy
technologies. Solid fuel systems typically include extensive support infrastructure including fuel receiving and handling
systems, fuel storage, energy conversion systems, ash handling and thermal/electric delivery systems. The key selection
criteria selected for solid fuel systems is provided below:
Available Space – Space is a critical requirement for any solid fuel project. Space is required for fuel unloading,
processing/screening (for quality), conveyance and storage. Generally, the less space available, the more reliable,
regular and higher quality fuel deliveries must be to ensure the project is available to provide energy as needed. In
combination, this may mean that facilities that are very short on space may have to rely on expensive and/or
energy dense fuels like wood pellets to be practical.
Current Fuel Used (Combined heat and power/Heat only) – While some biomass fuels may be relatively
inexpensive as compared to most fossil fuels (wood chips versus fuel oil for example), the added costs (capital and
operating) to receive and handle the fuels can be significant. Additionally, because of the relatively high moisture
content of some biomass fuels, conversion efficiencies will generally be lower for biomass fuels than for fossil
fuels. For these reasons, biomass plants that displace fossil fuels in heat only or combined heat and power (CHP)12
applications tend to be easier to justify economically if they are displacing high priced fuels such as propane and
fuel oil. These fuels can be more than 5 times as expensive as biomass fuels on an energy basis.
Electricity Costs (CHP) – For bioenergy projects that produce power, the existing cost or value of electricity is an
important factor in economic viability. The higher the cost of procuring electricity through the grid or other means,
the more likely that biomass energy project can generate power competitively. For plants that only produce
electricity, the wholesale price of power generally needs to be above $80/MWh (even when considering
incentives) to offer an opportunity for return on investment. For cogeneration projects, the avoided cost of power
can be lower depending on values assigned for the plant’s thermal output.
Current Steam/Hot Water Demand (not for domestic hot water loads) – As noted above, the cost of building and
operating a solid-fuel biomass energy plant is higher than those for an equivalently sized liquid or gaseous-fired
fossil energy plant. Therefore, it is critical that the investment be utilized to its fullest capacity to generate an
economic return. This usually includes finding a valuable end-use for as much of the plant’s thermal output for as
many hours per year as possible. Special care and precaution should be exercised during the feasibility stage in
situations that propose building a bioenergy plant if the plant’s full capacity is not usable year round.
Existing Boilers (Redundant Systems) – Redundancy is an important consideration in building any new energy
plant, particularly when thermal energy is a critical output such as for process loads. While the electric grid may
12CHP and cogeneration are terms that are used interchangeably in this report and refer to the simultaneous production of useful heat
and electrical energy.
13The study determined that a 1 to 2 MW system would generate more electricity than needed; an evaluation of potentially exporting
excess electricity to the grid did not progress beyond the initial discussions with GRICUA.
As described in detail in the Renewable Energy Technology Characterization Report, biomass cogeneration projects
designed to serve a steady heat load tend to be economically preferable over other types of bioenergy systems, as they are
able to offset a higher cost energy load. However, the only process heating load at the Yulex facility consists of the electric
ovens are used for drying the rubber products. This is a fairly small and intermittent load, which is met using a diesel-fired
generator that produces electricity.16 This load is not a good match for a biomass cogeneration project, as there would be
very limited value in serving that load. As such, alternative thermal end uses would need to be found in order to consider a
cogeneration project. Potential options include:
Although the industrial facilities noted above have large thermal energy demands, using a biomass cogeneration system to
serve these loads would be very challenging. Both cement and vermiculite manufacturing processes require very high
temperatures, typically around 1,000-1,500°F. One potential method to serve a portion of these loads with biomass
feedstocks would be to preheat raw materials and combustion air utilizing a stand-alone biomass boiler. It may also be
possible to fire biomass directly in a kiln, although the equipment would need to be modified to use solid fuels, and the
biomass would need to be pre-cleaned and processed into a uniform fuel (pulverized, crushed, or pressed into briquettes or
pellets).17 Another way to meet some of the process heat load would be to use a biomass gasifier to generate syngas, which
could then be fired directly in the kiln along with natural gas. However, any of these methods would require significant
changes to the current facility operations, and would be very costly to implement.
14There is one acre of land just north of the current Yulex processing facility that could be used for a biomass plant (including
biogeneration unit, and fuel handling, processing, and storage).
15In other words, if it there was some benefit to Yulex for providing guayule residues to a larger bioenergy project, such reduction in
electricity costs, or an additional revenue stream for materials that are not otherwise used or needed. Another possible benefit would be
helping to meet corporate sustainability goals from additional renewable energy production.
16ANTARES estimates that the oven’s energy demand is about 1 MMBtu/hr, and is only operated for about 625 hours per year based on
the current 1-shift operation schedule.
17 Solid fuel firing also presents a challenge in terms of ash content, which is expensive to scrub out at these temperatures.
Since no good options for a thermal host have been identified in this area, which would be necessary to consider a
cogeneration biomass project, ANTARES opted to evaluate a biomass power generation facility in the detailed assessment
as presented in the following chapter. Such a project could be located near the existing Yulex facility (where some of the
feedstock is expected to come from), or elsewhere in the park. The electricity generated from the project could be used to
serve Yulex or other industrial park tenants, or some or all of the electricity could be connected to the grid and used to
serve other GRICUA customers.
A high level analysis was performed in order to determine if this project warranted a more in-depth evaluation in the
detailed assessment. This first step in the analysis was to estimate the building’s monthly heating and cooling loads. This
was accomplished using temperature profile data for Phoenix, AZ, to determine how many hours the currently installed
system would run, and at what capacities. The heating and cooling loads were determined using a bin analysis, in which the
average hourly temperature for every hour of each month is aggregated into numerical bins. Each bin spans two degree
temperature increments, such as 100-102°F, 98-100°F, etc. The bins are a numerical construct used to simplify the loads, by
counting how many hours in each month the average temperature falls within the given range for each bin.
The hottest hour of the year was assumed to be when the installed unit operated at peak load for cooling. The operating
capacity of the existing heat pump units was then scaled linearly between the hottest temperature bin and the 60°F to 62°F
degree bin, beyond which no cooling is needed. A similar process was performed for the heating loads. These bins were
then used to determine an estimated total monthly ton-hours of space conditioning needed. This resulted in a total annual
chiller load of around 240,000 ton-hours (equivalent to 2875 MMBtu), and a total annual heating load of 425 MMBtu.
The estimated heating and cooling loads were then used to estimate the associated cost savings to utilize biomass heating
and absorption chillers instead of a heat pump system. The chiller calculation was based on the performance specifications
for a commercial 100 ton absorption chiller, assuming a 10 degree change in water temperature from inlet to outlet. The
heat pump efficiency was estimated to be 0.85 kW/ton, based on commercial units in this size. Other key assumptions used
in the analysis include:
18ANTARES considered a number of other tribally owned buildings and complexes in the Sacaton area, including the Executive Ke, Council
Ke, Gila River Wellness Center, and the District 3 Service Center.
A number of project challenges were identified that precluded this location from being considered in the detailed analysis.
ANTARES contacted the Chandler Waste Water Treatment Superintendent, John Pinkston, about the Chandler waste water
treatment facility in Lone Butte, who informed ANTARES that the Chandler facility uses two facultative lagoons, with the
capacity to process 10 MGD although actual operations are typically between 4-7 MGD. Facultative ponds (a type of
stabilization pond used to treat wastewater) are typically designed to encourage oxygen transfer near the surface, to avoid
anaerobic conditions. There is no anaerobic digestion taking place at this location. This facility configuration would require
an additional anaerobic lagoon or other higher cost treatment system in order to implement an AD project.
GRIC has a water treatment plant to the east of the facility, but it does not treat waste water and the configuration is not
compatible with AD. GRIC also operates a lagoon to the southwest of the Chandler facility which uses the effluent from the
Chandler process, however it is only a storage lagoon. No actual treatment takes place there and the water is distributed to
farms in the area.
Since the size of the Chandler facility (4-7 MGD) is on the lowest end of the threshold to consider AD, and is significantly
lower than the typical size needed for an economically beneficial project (30 MGD), an AD system is not expected to be
This chapter presents the technical analysis results for a biomass power generation project located in the Lone Butte
Industrial Park. It is assumed that the facility would be located at or near the Yulex facility, as they would provide a portion
of the biomass feedstock from guayule residues.
As discussed in Section 2.2, the guayule bagasse is what remains after Yulex processes the guayule and extracts the material
for making natural rubber. The bagasse is a finely ground material with a fairly high moisture content, giving it a consistency
somewhat like wet sawdust. Very little mass is removed during processing, so each operational load results in a large
fraction of residues. It is assumed that 5,000 tons per year of bagasse material could be available for a bioenergy project,
based on the additional supply expected when Yulex doubles production in 2014.
The estimated quantity of wood chips from urban resources is based on the information provided by No-Waste Grindings,
who was the only potential supplier that provided data for the analysis. Although they were willing to expand their
operations as needed to meet the facility demand, 20,000 tons per year is approximately how much they currently sell. As
such, a portion of this supply may come from their existing sources, with the rest representing expansion of their business
to meet demand. The material largely consists of very dry wood from recycled pallets, clean C&D wastes, and other residual
waste wood streams. It is expected that additional material could be sourced for a bioenergy project, but it would have to
either be diverted from existing high-value end uses such as mulch and horse bedding, or would come from much further
distances. In either case, the delivered cost of the feedstock would increase significantly.
It is important to note that this analysis assumes that the wood chip and guayule bagasse fuels can be mixed at the boiler.
However, these materials are very different and may require separate or specially designed conveyors, processing
equipment, and boiler metering screws. These technical challenges would need to be addressed prior to pursuing such a
project, and could add additional upfront costs to project design and installation that are not accounted for in this study.
The facility configuration includes a biomass preparation yard which is used to receive, process, and store the incoming
biomass fuel. It is assumed that the wood fuel will be delivered in walking floor trailers which are self-unloading, in order to
avoid the high expense of a truck tipper.19 There would likely be around 3-4 truckloads delivered per day on average,
assuming each truck has a 22-ton payload and deliveries are only made on weekdays. The fuel prep yard equipment would
typically include conveyors, stackers, reclaimers, screens and metal separators, covered storage area, and fuel metering
bins.
Based on the available biomass feedstock supply, a 1,000 horse-power (hp) boiler was selected, which will operate at 425
psig, and the condenser will operate at 2 psia. An air cooled condenser is used in this analysis, which is appropriate for
facilities in the southwest where water is a precious and limited resource. The steam turbine will on-average generate
approximately 2.0 MW of electricity for sale for the 8,000 annual hours of operation (91% availability).
19Although No-Waste Grindings does not currently have walking floor trailers, they were willing to consider purchasing such equipment,
depending on the level of supply and a long term contract.
The overall system efficiency is fairly low (14.4%), which is typical for a power-only project. It is also worth noting that this
project is much smaller than most stand-alone biomass power plants, which typically start at 25 MW. Bigger plants with
larger generating capacities are generally more economic, as they obtain economies of scale that help to reduce the per-
unit installation and operating costs. The system economics will be evaluated in detail in the next chapter.
Exhibit 16 summarizes the monthly annual electric consumption and peak demand for Yulex, based on the 2012 usage data
provided by GRICUA. This information is considered in the context of having all or part of the electric loads met by an on-
site biomass facility, which is one potential option for using the electricity. The facility’s total annual consumption is about
796 MWh, with 57% of the usage attributed to the office and the rest from the processing facility (“Plant”). The peak
demand for the office varied from a low of 86 kW in May and August, to a high of 159 kW in September. The Plant has
lower overall electric (kWh) consumption, but higher peak demands, due to the variable nature of their operations. The
Plant peak demand ranged from a low of 51 kW in February to a high of 389 kW in January.
Based on these values, on a monthly basis Yulex would only consume around 5-10% of total biomass facility output, based
on current operations. If there is a higher level of activity in future due to increased production as planned, Yulex could
utilize a larger percentage of the generated electricity. It is estimated that the all-in average annual electric cost that Yulex
currently pays GRICUA is around $0.11/kWh. Additional discussion about potential off-takers and uses for the electricity is
provided in the following chapter.
Economizer
Boiler
Stack Red lines indicate gas or air flow
Orange lines indicate fuel flow
Blue lines indicate water or steam flow
Steam
Turbine
Intake air
(combustion)
Air Cooled
Condenser
DA Tank
400
100,000
350
Electricity Consumption (kWh)
80,000 300
60,000
200
40,000 150
100
20,000
50
- -
Jan Feb March April May June July Aug Sept Oct Nov Dec
A biomass system located at the Lone Butte Industrial park could supply a number of the park tenants. If the project were
located at Yulex, power could be fed into Yulex’s meters to supply them with power. However, the project would generate
more power than needed to serve the Yulex electricity demand so an interconnection will be needed with the GRICUA
distribution system. Although there are other electric utilities in the area (for example, several industrial end users in the
Lone Butte Industrial Park buy power directly from SCIP), it is expected that a direct connection to the GRICUA would be
most beneficial to the Community and the most expeditious to achieve
GRICUA does not currently have an agreement in place for interconnection of distributed generation projects, but has
stated that they would develop the agreements prior to detailed system design, once the proposed systems are better
defined. Regardless of the project scope, any process or procedure will involve GRICUA working with SCIP to ensure that
system reliability and integrity is maintained.
This chapter provides information on the detailed economic analysis that was performed for the biomass power project
configuration described previously. A discussion of the potential ownership structures is presented first in order to give
context on the possible partnership scenarios as they impact the financial situation for a biomass project. The methodology
and key inputs to the economic analysis are then presented, followed by the levelized cost of electricity (LCOE) analysis
results.
The most likely tribal entity to own and operate a biomass power project is GRICUA. It is also possible that a project sited at
Lone Butte Industrial Park could be owned by Lone Butte Industrial Development Corporation or a non-tribal third party
who would lease property at the industrial park and sell the power to GRICUA.
The federal Investment Tax Credit (ITC) and MACRS (modified accelerated cost recovery system) accelerated depreciation
are key incentives that help make renewable energy projects in the United States financially viable (see Section 5.2.2 for
details). However, they require a taxable entity to take advantage of them. Federal income tax is not imposed on businesses
operated by American Indian tribes, therefore GRIC would normally not be able to take advantage of the tax incentives on
their own. That said, there are several partnership models that exist to help renewable energy projects on tribal land
benefit from federal tax incentives. These opportunities were described in detail in the Solar Energy Feasibility Study report,
and are summarized below.
Lease tribal land to private developers who are eligible for tax incentives to develop renewable energy projects.
The developer is responsible for the capital outlay for the project, and retains full ownership and benefits. The
tribe collects a lease payment for the use of their land, but does not obtain any direct benefits for the project.
Partner with a third party entity to develop the project, and obtain private letter ruling from the IRS to establish
eligibility for incentives. This could take the form of a “pass through lease” arrangement, in which a tax equity
investor (such as a financial institution) would be the lessee, and would make rent payments to the tribe in
exchange for benefiting from the investment tax credit. Another potential arrangement would be to obtain a tax
equity investor that is a partner rather than a lessee. The partner could be a financial institution, venture capital
firm, or any qualified corporation (ideally with a high tax burden).
Pursue an Energy Savings Performance Contract (ESPC), an arrangement where a taxable Energy Savings Company
(ESCO) project partner provides the upfront capital cost and is paid back over time from the energy savings. ESPCs
are a commonly used contracting vehicle for federal agencies to implement renewable energy, energy savings, or
water savings projects. In this scenario, the risk for the tribe would be lowered because the ESCO pays all initial
costs and guarantees energy savings. However, the ESCO would require a reasonable return on investment for any
project outlay.
Note that although it is anticipated that Yulex will be involved in the project, it is not expected that they would be
interested in having full control and responsibility of owning and operating a power plant. However, they could be
It is worth pointing out that even for third party ownership, a biomass energy project could benefit the Community by
providing jobs for plant operation, as well as fuel supply infrastructure (such as biomass feedstock trucking). In this way,
some of the money for energy costs that currently goes outside entities that generate power would be kept within the
Community.
Both current and constant LCOE figures are calculated in the analysis. The current LCOE is also known as the nominal LCOE
because it includes the rate of inflation. The constant LCOE removes the effects of inflation and shows the LCOE in real
dollars. Where the rate of inflation is greater than zero (as it is in this analysis), the constant LCOE will be lower than the
current LCOE.
Although the base case LCOE analysis does not include any incentives, there are a number of incentives that could be
included in the partner scenarios. A partner scenario could take many forms with complex arrangements for sharing the
value of a project. Possible business models for partner projects could include revenue sharing or lease structures.
Additionally, a partner with a tax burden may be able to take advantage of a projects’ depreciation benefits. However, such
complex evaluation scenarios may make it difficult to compare the cases due to different inputs. As such, in an effort to
make it simpler to judge the viability of each project, ANTARES modeled the incentives cases so that the value of the
incentives is rolled into the LCOE figure. For example, the larger the depreciation, the lower the LCOE. This assumes that the
benefit of the incentives will generally be fully passed on to the project itself. This may not perfectly replicate the LCOE in a
real-world partnership scenario (where the partner may claim a higher portion of the benefits), but it does allow for
reasonable comparisons and a reasonable starting point for analysis.
The key analysis tools used in the LCOE analysis included an in-house excel spreadsheet tool used to aggregate economic
input data and calculate levelized costs and metrics. Key assumptions used as inputs to the model include:
A 25-year project lifespan and economic life. This time frame is based on the expected useful life of the biomass
system and associated equipment. The 25-year period would begin in 2014 and end at the close of 2039. (The
project start date does not have a large impact on the economic results though, so a delay in project initiation for a
year or two wouldn’t make much difference in the overall results.)
All costs are adjusted to the appropriate time frame. Future costs are escalated by adjusting for inflation and
equipment cost escalation. The total future cost of the project is adjusted to its present value using the discount
rate (including inflation).
As noted above, two scenarios were developed and evaluated for each option; the base case (Case 1) assumes no
incentives will be obtained by the project; and Case 2, which assumes that the project will be able to obtain a variety of
potentially available incentives. A sensitivity analysis is also performed on key variables (capital costs, biomass fuel costs,
and weighted average cost of capital) to provide a more thorough understanding of the impact that these values could have
on the project’s economics.
The following subsections describe the methods and assumptions used in the base case and alternative financing analyses.
Case 1 Case 2
(no incentives) (with incentives)
General inflation (per year) 2% 2%
Federal Tax Rate N/A 35%
State Tax Rate N/A 5.05%
Combined State and Federal Tax Rate N/A 38.25%
Economic Life (years) 25 25
Weighted Average Cost of Capital 6.6% 6.6%
REC Price N/A $2/MWh
Investment Tax Credit N/A 30% of capital costs
Depreciation N/A 5-year MACRS
Inflation: A 2% long term inflation rate is used in this analysis, based on the current target set by the Federal Reserve (Why
does the Federal Reserve aim for 2 percent inflation over time? 2013).
Taxes: Taxes are not included in the case without incentives because GRIC does not have a tax burden. Combined Federal
and State taxes for the case with incentives are 38.25% which is typical for a corporation which may act as a project
partner.
Weighted Average Cost of Capital (WACC): The WACC is the average of the debt and equity financing costs. The WACC is
commonly used as the discount rate for investment opportunities, and was used in this manner for the analysis. Also called
the hurdle rate, it is a measure of the anticipated present value of future cash flows. It serves as a benchmark for a project’s
profitability, and is usually set based on an investor’s anticipated return on other projects available for investment. The
interest rate earned by a university endowment, for example, is often the university’s discount rate when it is presented
with alternative projects for investment. If the project will earn more than adding the same amount of money to the
endowment, then it is considered profitable.
As no specific WACC was requested by GRIC, ANTARES assigned a value of 6.6%. This is the rate used in the U.S. Energy
Information Administration’s Annual Energy Outlook 2013 publication for levelized costs across various generation
technologies. It is important to note that in a partner scenario, the partner may evaluate the project with their own WACC.
Taking this into consideration, and the fact that the chosen WACC has a large effect on the LCOE, sensitivity charts are
presented to show the LCOE across a range of WACC assumptions.
Financing: The base case scenario assumes that the projects would be 100% debt financed at an interest rate of 6.6%.
Tribes and businesses organized as arms of government aren’t subject to federal income tax, therefore GRIC would not be
able to take advantage of tax deductions for interest paid on debt. This is also why the interest rate is the same as the
WACC. The WACC factors in tax rates, but there are no taxes in a scenario with 100% tribal ownership.
The interest rate used for the incentives case is 10.7%. After factoring in taxes, this results in a WACC of 6.6%. The actual
interest rate for a project partner will likely be different than what was assumed, but the resulting 6.6% WACC allows for an
even comparison between the scenarios with and without incentives.
In order to determine the overall impact that the potential incentives could have on project economics, they are all
included in Case 2 only. No incentives were included in the base case analysis (Case 1).
Federal Incentive: Section 48 ITC: Section 48 of Title 26 of the Internal Revenue Code allows owners of qualified renewable
energy equipment, to take a percentage of the system’s total capital cost as an Investment Tax Credit (ITC) against federal
income tax during the first year of operation liability. The tax credit for biomass technologies is currently equivalent to 30%
of the total capital cost, with no system size restrictions or maximum credit. However, this credit for biomass projects is
currently set to expire at the end of 2013; in order to claim the credit a project must have initiated construction by
December 31, 2013. Although this is not likely for the considered GRIC project, this incentive is still considered in the
analysis in case the deadline is extended or the credit is reinstated at a future date. There is a precedent suggesting such
actions are possible, since this has happened several times in the past.
There are several key provisions that must be met for a biomass project to qualify for the ITC:
1. The power must be "sold by the taxpayer to an unrelated person during the taxable year" (IRC Sec 45 (a)(2)(B)). Since
GRIC is not a taxpayer, this incentive would only has value under alternative financing strategies, whereby a
taxpaying third-party partner has ownership, or if a pass through lease (described above) can be arranged and
approved by the IRS.
2. It has to be a new project, or add a new increment of power to an existing facility.
3. The project cannot use any fossil fuels beyond those required for startup and stabilization.
4. Only property that is an “integral part” of the biomass facility is eligible. For example, roadways and paved areas of
the facility can be eligible for the incentive if they are used for transport of material and equipment, but not if it is
solely for employee/visitor parking. Property used for unloading, transfer, storage, or preparation is eligible.
5. ITC is subject to recapture if the original taxpayer disposes of the property w/in 5 years of placed in service date.
6. The recipient (the third-party taxpaying partner) of the ITC must decrease its depreciation base of the investment
for tax purposes. Specifically, the taxpayer must decrease the depreciation base of the investment by 50% of the
credit amount.
Federal Incentive: MACRS Accelerated Depreciation: Under 26 USC § 168, the federal government offers a 5-year
accelerated depreciation option (MACRS) for certain renewable energy equipment, including bioenergy systems (UNITED
STATES CODE TITLE 26. INTERNAL REVENUE CODE n.d.). This accelerated depreciation allows the owner to deduct larger
amounts of the asset cost earlier on in the project’s life. Accelerated depreciation can only be claimed by a taxable entity;
public utility property is not eligible (Publication 946 (2012), How To Depreciate Property n.d.). Before calculating
depreciation, the adjusted basis of the project must be reduced by one-half of the amount of any federal energy credits
(such as the Section 48 ITC) for which the project qualifies.
Renewable Energy Credits: Another way the tribal government can gain value from a renewable energy project is through
the sale of Renewable Energy Certificates (RECs). RECs are a tradable commodity that represent the non-energy of the
generation of 1 MWh of renewable electricity. There are both voluntary markets for RECs and compliance markets,
compliance market RECs are used to meet state Renewable Portfolio Standard (RPS) policies (Renewable resources for
Federal agencies n.d.). The value of RECs vary by technology and market, but a price between $1-$5/MWh is typical for the
Fuel preparation yard (automated biomass receiving and handling system, and storage yard)
Steam boiler system and emissions control (ESP)
Steam turbine-generator
Building and site work (boiler house, site improvements)
Process controls
Construction and commissioning services
The estimated capital cost was developed based on in-house resources and vendor quotes for projects with similar
configurations and sizes collected from previous studies. This resulted in a total capital cost estimate for the project of
$14,967,000. The relatively high per-unit cost of $4,446 per kW capacity is due to the technology type and small size of the
project; a larger project would have lower per unit costs due to economies of scale benefits. A breakout of the expected
major installation cost items is provided in the table below. The prime mover cost includes the cost for an air cooled
condenser, which is significantly more expensive than a water cooled condenser.
Equipment
Cost Component Unit Cost Labor and Materials Total
Boiler, Pollution Control and Fuel Handling $2,211,000 $5,396,237 $7,607,000
Prime Mover $467,000 $2,023,989 $2,491,000
Building and Structures $233,000 $330,000 $563,000
Electrical Interconnect $6,000 $23,000 $29,000
Engineering Fees 10% $1,069,000
Environmental Fees 5% $535,000
Legal and Financial 5% $535,000
Contingencies 20% $2,138,000
Total $14,967,000
The labor portion of fixed O&M is based on the number of employees needed to operate and maintain the plant. The labor
requirements for a 2 MW stand-alone steam turbine biomass power plant is estimated to include a total of 11 staff,
Fuel costs
The total delivered cost for the wood chips are estimated to be $44/ton (as-received), which is equivalent to about
$3.06/MMBtu. This is based on the gate price provided by the potential feedstock suppliers and an estimated delivery cost.
The guayule residues are valued at $45/ton ($4.74/MMBtu). Although this material does not have any associated delivery
costs, the estimated cost is still relatively high due to the other potential high value uses for the feedstock. Yulex will want
fair compensation for their feedstock, so it was assumed to be approximately equivalent to the wood chip cost.
20Although it may be possible to get by with fewer boiler attendants, additional staff are needed to ensure that there is at least 2 people
on site at all times in order to meet standard practices for plant safety.
Case 1 Case 2
No Incentives With Incentives
System Capacity, gross (kW) 2,010 2,010
Net Electricity Generation (MWh/yr) 14,056 14,056
Base Capital Cost ($) $14,967,000 $14,967,000
ITC Value ($) - $4,490,000
Net Installed Cost ($) $14,967,000 $10,476,900
Annual Non-Fuel O&M Costs ($/yr) $1,213,746 $1,213,746
Annual Biomass Feedstock Cost ($/yr) $1,105,000 $1,105,000
Annual REC Value ($/yr) - $28,112
Case 1 Case 2
No Incentives With Incentives
Stand Alone Biomass Power
Current LCOE ($/kWh) $0.284 $0.264
Constant LCOE ($/kWh) $0.235 $0.216
The incentives provide a roughly $0.02/kWh overall benefit for the systems.
Results of the sensitivity analysis for the Case 1 assessment (no incentives) are shown in Exhibit 22. Constant LCOE values
are displayed on the y-axis. The sensitivity chart shows that the project is most sensitive to changes in the capital costs and
fuel costs, and somewhat less sensitive to changes in the WACC. The sensitivity of the capital costs and fuel costs are nearly
identical. It was determined that a 5% change in these figures results in a 2% change in the LCOE. Similarly, a 5% change in
the WACC results in 1% change in the LCOE. This analysis suggests that changes in the capital costs and fuel costs will have
the greatest impact on the projects’ success.
0.25
LCOE ($/kWh, Constant)
0.20
0.15
0.10
0.05
0.00
-60 -40 -20 0 20 40 60
Relative Change (%)
Capital Cost WACC Fuel Costs
21The electric commodity cost of $0.05/kWh is the current rate that GRICUA pays for energy purchased from the wholesale market and
existing contracts.
This chapter provides a summary of the regulatory requirements and potential environmental issues that must be
considered for development of a biomass energy project. Air emissions restrictions and permitting requirements are the
main source of regulations that must be considered for a biomass boiler such as the power-only project evaluated in the
detailed analysis. Since this project used an air cooled condenser system (instead of water-cooled), a storm water or
National Pollutant Discharge Elimination System (NPDES) permit is unlikely to be needed. The air emissions considerations
are summarized in the following subsection. Other considerations for project development are presented afterward.
Because GRIC is not regulated by the state, it is not subject to the requirements set by the ACC or Arizona DEQ. As such,
project developers will generally need to defer ensure that they are following tribal requirements and processes.
22Some of the Federal regulations that need to be considered include: Federal Prevention of Significant Deterioration (PSD)
Requirements; Federal Maximum Available Control Technology (MACT) and Best Available Control Technology (BACT); and New Source
Performance Standards (NSPS).
Exhibit 24. Annual Fuel Usage and Emissions Levels for 1000 HP Biomass Boiler
A biomass project on GRIC land must comply with the air quality standards listed in the GRIC Air Quality Management Plan
(AQMP). There are two different types of permits that are issued: A Title V Permit and a Non-Title V Permit. A Title V Permit
is required for any major source prior to construction. To trigger the need for a Title V permit, a source must emit 100 tons
per year or more of any regulated air pollutant. Regulated air pollutants are define by the Clean Air Act and include NOx,
PM, SO2, CO, Ozone, and VOCs.
A Non-Title V Permit is required for smaller sources that do not need a Title V Permit. There are three categories for Non-
Title V Permits: Individual Permit, Synthetic Minor Individual Permit, and General Permit. For individual permits, the
following limits determine whether a Non-Title V Permit is required:
75 tons per year but less than 100 tons per year for any single pollutant;
Three tons per year of any single hazardous air pollutant (HAP);
Five tons per year of any combination of HAPs; or
300 pounds per year of any single or any combination of ultra-hazardous air pollutants.
Synthetic Minor permits are for sources that wish to avoid a Title V permit. The owner may voluntarily agree to cut back
hours or accept other operating limitations in order to avoid Title V classification. General permits are intended for smaller
sources that have many similar facilities. These sources may be able to register with the DEQ and comply with general
As reported in Exhibit 24, as currently proposed the GRIC biomass project would emit just over 100 tons per year (tpy) as a
stoker system. This would require the project to obtain a Title V Permit as it is over the limit for regulated air pollutants.
They could potentially apply for a synthetic minor permit by reducing operations slightly. An alternative scenario is to use a
different boiler technology, since a fluidized bed system would produce significantly less emissions. Under this scenario, the
carbon monoxide emissions would be roughly 30 tpy, well below the threshold for triggering a Title V Permit. The drawback
is that a fluidized bed system is more expensive than a stoker system.
In December 2012 the EPA finalized the Industrial Boiler Maximum Available Control Technology MACT standards (IB MACT)
rule which will reduce emissions of toxic air pollutants from existing and new industrial, commercial, and institutional
boilers located at area source facilities. Biomass boiler units are subject to these requirements. The required actions and
emission limits for a facility depend on whether it is characterized as a major source or an area source facility.
The biomass boiler considered for GRIC would be categorized as an area source facility (as listed in 40 CFR Part 63 Subpart
JJJJJJ), which emits or has the potential to emit less than 10 tons per year (tpy) of any single air toxic or less than 25 tpy of
any combination of air toxics. A new area source biomass boiler with a nameplate capacity greater than or equal to 10
MMBtu/hr (such as the unit considered for GRIC) must keep PM emissions at 0.03 lb/MMBtu or less (which can be
accomplished by utilizing an electrostatic precipitator). The facility is also expected to employ best management practices,
and must complete biannual tune-up and reporting. Depending on what type of emissions control device is used, the
facility must either meet an opacity limit (<10% via COMS), or install and operate a detection system (such as bag leak
detection for a fabric filter). It is expected that particulate emission control through an electrostatic precipitator (ESP) likely
will be required.
The preservation of historic and cultural resources is required by federal, state and local legislation. Any activities that have
the potential to affect properties designated as historic in the National Register of Historic Places or equivalent state
historic lists must consult with the appropriate state and local officials in their decision making process. This process would
typically take place between a state historic preservation officer and the project developer during the environmental
assessment. Impact on cultural activates or places should also be considered through GRIC staff. Although there does not
appear to be any historic or cultural properties in the Lone Butte Industrial Park, it will be important to ensure that no other
designated areas of significance will be affected.
Another important consideration is fire suppression requirements. Sufficient fire suppression equipment must be included
in all areas, including in the fuel storage area for the biomass feedstocks. This equipment would need to be inspected upon
installation.
In addition, proper guards will need to be in place around all conveying equipment including augers, conveyors and walking
floors. Operations personnel can be easily trained in the operation, routine maintenance, and safety procedures involved
with a new biomass plant. This training is available as part of the boiler install and startup service. The biomass option will
also present a modest increase in truck traffic to the site. A conceptual design must consider traffic routing, among other
factors, into account to minimize safety and operational impacts. For safety reasons the deliveries should only occur during
daylight hours and operations staff should coordinate and oversee deliveries as necessary to maintain a safe working
environment. Furthermore, following standard safety protocols will require at least two people to be on-site at all times, in
order to provide assistance in the case of an emergency.
This study included a biomass resource assessment study and evaluation of the feasibility of a bioenergy project located on
Community land. The resource analysis identified a limited supply of low cost biomass fuel in the GRIC area. The most likely
sources of fuel are clean wood chips from urban wood waste recovery activities, and guayule bagasse residues. Combined,
these resources are estimated to be able to include up to about 25,000 tons of biomass per year, at a relatively high
delivered cost of around $45/ton.
The study also evaluated the quantity of biomass fuel that could be generated as part of a riparian restoration program to
remove saltcedar (e.g. Tamarix) from GRIC land. A GIS analysis showed that there are approximately 17,500 acres of
saltcedar infested area in District 6 and 7, about a third of which is densely infested. The saltcedar removal and subsequent
land restoration process is a time intensive, multi-year effort which would be quite costly, estimated at around $15,000 to
$20,000 per acre, and would only provide a relatively small amount of biomass fuel on the order of 5 to 10 tons per acre
from densely infested areas. Due to the high cost and low yield, such an effort would not be feasible as a source for biomass
fuel. In addition, laboratory compositional analysis testing of the saltcedar showed that this material would be problematic
to use as a biomass boiler fuel. However, removal of saltcedar from the infested areas could certainly benefit the local
environment if riparian restoration funding could be secured from an alternative source. This activity would also provide
Community jobs and wildlife habitat benefits.
A number of different potential bioenergy projects and configurations for GRIC were considered in the technical analysis.
However, although cogeneration systems tend to be more economical for small bioenergy project, no suitable thermal end
users were identified that could take advantage of the useful heat energy generated by the system. As such, the detailed
analysis focused on a power-only biomass project, sized to use the potentially available resource supply from wood chips
and guayule bagasse. Biomass heating and cooling for the tribal buildings was considered, but ultimately ruled out in a high
level screening assessment as being too expensive.
The technical analysis considered a biomass boiler system with a 2 MW steam turbine to generate electricity. It was
assumed that the facility would be located in the Lone Butte Industrial Park, near the Yulex facility where the guayule is
processed and the bagasse is generated. The considered system would generate around 14,056 MWh of electricity per year,
with a fairly low overall system efficiency (14.4%), as is typical for a power-only project.
The considered project has a number of technical and economic challenges. The guayule bagasse was found to be a
potentially problematic boiler fuel in terms of alkali and ash content. Although the considered configuration would only
utilize a portion of guayule as a boiler fuel which should help to reduce some of the negative effects, the fuel could still
cause problems. The mixing of different fuel streams may also be a complication in terms of feedstock handling and input
to the boiler. In addition, air emissions for a facility of this size may trigger Title V permitting requirements unless a fluidized
bed boiler is used which would add additional expense. Furthermore, bringing the wood chip on GRIC lands would require
special permission from the tribe, as there is an ordinance that restricts bringing any type of waste material on-site.
The economic analysis showed that at current prices, biomass power project will not be cost effective as the LCOE is much
higher than current (or projected future) energy costs. This could be improved if a lower cost feedstock material was
available, a larger project was possible (i.e. increased low-cost fuel supply), or a thermal energy end user was found that
could support development of a cogeneration project which would result in higher efficiencies.
Nevertheless, even if the biomass energy project economics improved, it does not seem likely that they would be able to
compete with current energy costs. The LCOE results were also much higher than for the solar PV projects considered in the
complimentary Solar Energy Feasibility Study report submitted separately to GRIC. Furthermore, a biomass project is a lot
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The GIS analysis utilized 4-band, 1 meter resolution National Agriculture Imagery Program (NAIP) data
from the U.S. Geological Survey, which was downloaded from the Nation Map Seamless Server. This
data dates to 2010, and is considered to be the “best available” orthoimagery from the USGS. Using the
Spatial Analyst extension of ArcGIS, the imagery was converted into distinct vector zones so that the
areas of saltcedar infestation could be extracted. First, an unsupervised maximum likelihood
classification was performed on the imagery to identify land cover classes within the image. To minimize
processing, the raster imagery was resampled to 2 meters, and then processed through a majority filter
to further generalize the resulting output image. The areas of the resulting raster that corresponded
with tamarix coverage were exported and converted to a polygon shapefile. This process is depicted in
Exhibit 1.
Exhibit 1. Progression from 4-band NAIP Raster Image to Polygon of Saltcedar Coverage
To facilitate the creation of a riparian area management plan, the generated polygon was merged with
shapefiles that correspond to the township, range, section, and quarter-quarter sections of the Public
Land Survey System. Finally, acreage was calculated for the resulting saltcedar polygons, and the data
was exported to an Excel spreadsheet. The entire area of saltcedar within the previously identified
corridor, as calculated from the orthoimagery, is depicted in Exhibit 2.
A-1
Exhibit 2. Areas of Saltcedar Infestation
A-2
Appendix B
Fuel Testing Analysis Results
B-1