Craig Sawmill Waste Fired Boiler System

Project Outline and Objectives

In 2004 the city of Craig began investigating ways to reduce the cost of heating their community swimming pool and pool-house, as well as their elementary school and middle school. The three buildings are adjacent to one another on city property in the middle of town. One study suggested converting the propane-heated pool to oil (14,000 gallons/year). Further studies showed that a woodchip-burning boiler could substitute for both the propane used for the pool and the oil in the schools (~ 24,000 gallons of oil per year). The chipped wood would come from a local sawmill. The project looked feasible with oil at $2.50/gallon, so a detailed engineering design was developed and the boiler was commissioned in the spring of 2008.


Wet chips are delivered to the 24-ton storage bin which has a 10-day capacity at 2.2 tons of chips per day. Hot water from the boiler heats air used to dry the wet chips to the desired moisture content. The wood is burned in a Chiptec boiler which utilizes a staged combustion system. The chips are first gasified in the chamber then the producer gas is burned in the boiler. Hot water from the boiler is pumped on demand to heat exchangers at the pool and schools. If the wood boiler failed, the existing propane and oil boilers would continue to supply heat to the facilities. For three months the system required about 8 - 10 hours per week of maintenance time, which included a weekly cleaning. The boiler has excess capacity and may supply additional buildings in the future.

In 2009, the City of Craig released a report describing the development of the project. It will probably take another two years to obtain more detailed operating characteristics and costs for the project. Experience in similar Lower 48 installations has shown that it takes time to adapt to the inherent variability of local fuel and heating loads. For example, in 2009 the City planned substituting less expensive hog fuel, a mixture of sawdust and bark, for the more uniformly sized and drier chips currently supplied by the sawmill.

Data and Analysis

Assumptions and preliminary economics:

  • 85% displacement of 22,300 gal/yr of #2 heating oil and 39,000 gal/yr of propane used by the pool and school buildings
  • $4.10/gal for heating oil and $2.50/gal propane
  • O&M costs of approximately $24,000/yr (1/3rd labor and 2/3rd power and consumables)
  • 753 tons/yr of 50% moisture content chips at $20/ton
  • 65% efficiency for wood combustion versus 70% efficiency of the previous system

Annual savings are approximately $122,000 per year. Simple payback on the initial system cost is $1,510,000/$122,000, approximately 12.4 years. Given the spare capacity, system economics will improve if the project serves additional facilities. Given an estimated useful project life of 20 years, the economics of the current project are acceptable under the above assumptions.

Lessons learned at this installation can be used to save time and reduce cost in other communities.
  • System: 4MMBtu/hr gasifier, hot water boiler
  • Manufacturer: Chiptec (Vermont)
  • Design Engineer: R&M (Ketchikan), CTA (Missoula)
  • Fuel: woodchips from Viking Sawmill, Klawock, displace equivalent of 24,000 gal diesel/year
  • Schedule: Commissioned April 2008
  • Installed cost: $1.51 million

Funding Sources

Engineering and Design

Engineering and design total costs were $100,000, these costs were paid through various funding sources, including the City of Craig at $40,000, United States Department of Agriculture (USDA) Forest Service at $30,000, and the Alaska Energy Authority at $30,000. The construction costs of the biomass unit were 1.5 million dollars. This cost was covered through a series of grants and loans.


Construction Cost $1,500,000 shared by:
USDA Forest Service $117,000
AK Energy Authority grant $300,000 (Renewable Energy Grant Fund)
AK Energy Authority loan $500,000
NRCS grant $45,000 (National Resource Conservation Service)
Bank Loan for City of Craig $500,0001

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