Loading...
HomeMy WebLinkAboutGalena Reconaissance Survey of Renewable Energy Systems 5-2011Reconnaissance Survey of Renewable Energy Systems for use in Galena, Alaska WHPacific Prepared for: Louden Tribal Council Prepared by: Jeffrey C. Organek, P.E., Civil Engineer/Project Manager Ross Klooster, P.E., Electrical Engineer Brian Yanity, E.1.T., Electrical Engineer Matt Bergan, P.E., Mechanical Engineer William Wall, PhD, Forester May 2011 Reconnaissance Survey of Renewable Energy Systems for use in Galena, Alaska WHPaafic Prepared for: Louden Tribal Council Prepared by: Jeffrey C. Organek, P.E., Civil Engineer/Project Manager Ross Klooster, P.E., Electrical Engineer Brian Yanity, E.1.T., Electrical Engineer Matt Bergan, P.E., Mechanical Engineer William Wall, PhD, Forester May 2011 Contents Reconnaissance Survey of Renewable Energy Systems for use in Galena, Alaska ...........sscsssscsseseeseseeseeeeeeee 1 EX@ CUTIVE SUMIMALY «ose eecesseescescscsseseseseesesecseesesacsecseesssacseesesecsesecsessscseacsasssssseussesassussassecaesscsesaesecoeeassnseateas® 4 Introduction Problem Statement .......ccscsesssesecsecsecssesssecsseecsecsceaceesseesssecseescseesasseeseceeeeeesesasecesssssecessesaseeesssaseeeesseseatees 5 Galena’s Long Term Energy ViSION ........ccccssssssescseseessscscseeeesssescscscsesecscsesecesacsecesseeaesessscsceassssseeeeasaeeasaeee 6 Near Term Energy ViSION..........sccsssesscsssessessssessssscssescssesssssssscsecsesescssessssessssuesscasseesuesecaesessecaeseestenseeeasenss 7 Existing Energy Infrastructure .........sccccssssccscsssessescssscssesessssscsesscscscsceassssecacsssecasaesceassessnseseseneuacassesesecssaeeesaeee 8 Community Layout Electrical... PVV@RU Wa os cock ct akon aio ts ou ats sas cat tacos out ocedvanstt ci ssoesessusdetsatoiasdies satel ausdadeceoatususevesateutsseiesctarsteveesasseesseseeeteo 9 PROPOSEC SVSCCINIS cea rat tac sdovect: scseeaistodeutcnctodschcvctc’odeaedbslahacodnentatotecsqustenssadedeanel eveatartticatocusvsltocieandtesata teases 10 Energy Design Criteria ........cccccssessesesscsseecssesssscssesssscsecscsecsesecsasesseesecsesseeassesseesecaceessaesseesseesenecaeeaseneees 10 PONG irc coma a css wx sre a al nena ena mado ea apenas cu ew nested vas a pst a a veel ec oo 10 Systems Considered for Recommendation.. Biomass Resource Assessment REVICW........cscsccssessesesssseescseessescsecsesseecssessssecsesaceesaessecasseensesesasaeeaeeasaeeneenes 19 SGPT Oge CONN ar ces cr sr a ram ce oa ear ren oa wwe ras crane rots etn oe en eent is seceee 19 Biomass REQUIFE .........esecesesecsssecssscssesessrseeecssssessssccsecscsesessscsesaessssassesseesessesassesaeesesaseessacassasseeaecasaeeaeeneens 20 Harvest Impacts Harvest Systems Resource Recommendations See oa race cc wesw cs cin rs ca wc cn mca nw tes arms sg tes eee 24 SOCIO UEG I SSIS aa ee ces ee ee eee eerie tere oe ei eo 25 OE RCE aie aes eee el ae ele ee ie i sieiees eee een ame 25 Power Cost Equalization(PCE) ...............-.sscsssssssersssssesorevessssasrsosesessneacsonesecssensesasonsorssansasesessseaoosscesenssssare 25 Carbon Credits... Competition for fireWOOd ..........eceesssseseseesecesesesesesceaeseseeaesesescescsesacacseeseaeseeecscsaeacseseessseseneeaeseseseeeeaeeeeate 25 Other Energy Technologies... NASTPOAIT YANO -ictetaceonctctadelatedashacdtatotasctstatedecbsvsactetacuarolshatacvascoscntedesedsteotstsuabststacesdtslecetetenesbedetedstreserae 26 FRE Fa IY a ec wma ec 27 MUGS TS UNAS role rel edie el erectile yee rere eee eid ord dent bere oleate stole alread 27 Appendix A-Figures Appendix B-Thermal/ Electrical Calculations Appendix C-AES system technical/product data Appendix D-Nexterra/Jenbacher product data Executive Summary WHPacific performed a reconnaissance survey of renewable energy systems that could be utilized in Galena Alaska. Biomass fuel was identified as the most promising alternative energy source available. The State of Alaska Department of Commerce has identified goals to implement biomass energy in Galena (reference Appendix B). As a short term goal, wood would be used to offset the use of (fossil) heating fuel in a public building and some residential buildings. A mid-term goal would be to construct a biomass CHP system to supply 50% of the community electrical consumption. The long term goal would be to expand those served by wood heat in both public and residential buildings (an expansion of the short term goal, above). The stretch goal is to expand the biomass CHP system (from the mid-term goal) to supply 100% of the community electrical consumption. As a practical first step towards achieving Galena’s long term energy goals, we recommend that a biomass boiler be installed at the existing air base physical plant that will supply steam to the existing base district heating system. The biomass boiler should be selected so that it may be easily modified in the future to accommodate electrical generation hardware when/if such technology becomes commercially available. In making our recommendations, we relied in part on the “three in three” rule. This informal rule dictates that a particular biomass energy system must have been demonstrated to work in at least three projects with an operational history of three years each before it is considered a viable recommendation. Based on this “three in three” rule, there are currently no commercially available, proven systems that will generate electricity on an isolated electrical grid from biomass fuel. However, there are a number of technological systems explained in this report (reference appendix C and D)that are in the development stages that may mature and become viable alternative energy solutions in the near future (say, within a decade). We recommend a fluidized bed updraft reactor producing steam that will be fed directly into the district heating system, as outlined in Alternative F1 of this report. This will involve installing a Uniconfort Global-G biomass boiler, model 120, which is capable of delivering the 4,500,000 BTU’s Hour required to heat the air base. This system would displace between 150,000 and 200,000 gallons of heating fuel per year. Forest impacts will be between 50 and 150 acres of forest harvested annually, depending on wood moisture content and biomass yield in tons/acre. The boiler and associated hardware will be located in or near the existing Air Base physical plant. The existing warehouse (north of the physical plant) will be used as wood storage. The biomass boiler and associated hardware may fit in the existing physical plant if diesel generators (currently not in use) are removed (reference sheet 2 of Appendix A). Otherwise, a new 2,500 SF building will be constructed (reference sheet 3 of Appendix A) to house the equipment. Both of these arrangements have space to accommodate electrical generating equipment if the system is expanded in the future. If the biomass heating system is upgraded to include electrical generation, the area between the warehouse and the physical plant will have to be converted to a wood storage area. The surrounding forests will me managed to produce cottonwood as the primary biomass fuel. The natural biomass resource consists of cottonwood, spruce, willow, alder, and birch forest. Forest management to harvest cottonwood exclusively will increase the harvest by four times, reducing the total acres impacted by a proportionate amount. The wood will be cut and cold decked in the field for one year. During this time, the wood will dry to a moisture content of approximately 30%. It will be transported to the wood storage facility, chipped, and fed into the biomass plant by a loader onto a fuel conveyor belt and then to a moving grate within the boiler. The system should be planned so that it may expand in the future with relative ease. The selected hardware arrangement should be compatible with electrical generation hardware that can be added on in the future. We also recommend that a commercial grade wood harvesting operation be established to provide a dependable supply of wood. The establishment of this harvest operation shall be conducted concurrently with a campaign to promote the use of wood for residential heating. Residential wood customers will demand spruce and birch fuel, so the forest management plan should consider both cottonwood and spruce/birch management. Introduction The Louden Village Council has hired WHPacific (WHP) to perform a reconnaissance survey of renewable energy systems in Galena Alaska. WHP project manager Jeff Organek traveled to Galena on October 5 and 6, 2010 to observe existing energy infrastructure, gather information, and talk with project stakeholders. Utilizing information gathered during the site visit, a multidisciplinary team consisting of a Civil, Electrical, and Mechanical Engineer, and a Forester, performed research and developed the recommendations presented in this report. The core stakeholders of this project are comprised of the entire community of Galena. Louden Tribal Council is representing the community in an effort to develop new energy sources and systems that are more environmentally friendly and economical than the diesel fueled systems currently in use. Problem Statement Presently, Galena has two diesel power plants, diesel fueled boilers in the physical plant of the airbase, and self-contained diesel boilers in all public buildings. The cost of energy in Galena, as elsewhere in rural Alaska, has escalated due to world market prices and costly transport of petroleum based fuel. It is the general perception of the energy consumers that the trend of increasing fossil fuel costs will continue. It is the goal of this study to research alternative technologies and recommend practical energy systems, utilizing a sustainable, local energy resource that can run parallel with and gradually replace existing electrical generation and facility heating systems. It is important that the selected alternative technology stabilize or preferably lower present energy costs. Galena’s Long Term Energy Vision The following report is a long term vision of the energy infrastructure that could be constructed in Galena in the foreseeable future. Much of this vision relies on technologies that may not be economically feasible at present, however the thought and analysis performed by WHP was substantially directed by a vision that originated with members and affiliates of the Louden Council and community at large. The ultimate goal is to replace all use of fossil fuels with a locally derived, sustainable fuel resource in Galena. By utilizing locally derived fuel in alternative systems, it is believed that the cost of energy will likely trend below energy rates for demand satisfied by conventional systems. In addition to cheaper energy, the community seeks a “value added” energy system (such as biomass), where the dollars spent to harvest and process the fuel resource will be substantially retained within the community. Galena will thereby be largely self-sufficient in their energy needs, and not reliant upon outside economies. Self-sufficiency can free up additional dollars, allowing the community to embrace other conservation measures, and reduce energy use. Conservation measures should include building weatherization, replacement of inefficient lighting, addition of efficient building controls, and replacement of inefficient appliances. The following measures are anticipated in achieving the long term goal of energy self-sufficiency: e ACombined Heat and Power (CHP) plant, utilizing fuel from biomass, will be constructed next to the existing physical plant on the airbase to provide heat and power to the airbase, and transmitted power to both old and new town sites. e Anexisting warehouse building, adjacent to the base physical plant, will be converted to store and air dry the harvested biomass, in the form of wood chips. e Anew biomass boiler will be constructed near the City power plant to supply heat to the City Glycol heating loop. e A pellet mill will be constructed to produce wood pellets to heat privately owned residences. e Along term contract with Gana-a’Yoo, Limited, for land and resource utilization, will ensure a sustainable supply of biomass. During the summer months, when heating demand is decreased, surplus energy and/or waste heat will be diverted to other practical uses. Waste heat that is not demanded by facility heating systems will drive an organic Rankin cycle generator to increase the effective efficiency of electrical generation, or be diverted to greenhouses to extend the growing season. Surplus energy will also be used to manufacture hydrogen. All of the cars and other internal combustion engines will be converted to run off of hydrogen. An in-stream, low head, hydroelectric turbine will generate electricity from the Yukon River. A preferred location for this turbine is 100 yards off shore, adjacent to the sheet piling that protects the east end of the runway. This location is also in close proximity to the 24.9 kV transmission line. Interties will be constructed between Galena and Ruby (50 miles), Koyukuk (30 miles), Nulato (45 miles), and Kaltag (90 miles). This is in line with AVEC’s vision of eliminating half of their power plants in the next decade. Galena energy infrastructure will serve as a model of success for other communities with similar energy goals. Alternative energy technologies, ideas, and experiences will be exported from Galena to other communities throughout Alaska and the global community. Near Term Energy Vision Some of the energy technologies mentioned above are technologically available, but may not be economically feasible. Both the long distance intertie lines and the in-stream hydroelectric turbine are examples of emerging technology that is still largely experimental. Some of these technologies are brand new, cutting edge, and lack a proven history. Consequently, there is some uncertainty in their performance and maintainability, adding a significant level of risk of implementation -A level of risk that the stakeholders may not be comfortable with. WHP proposes the following “near term energy vision” as a practical first step toward achieving Galena’s long term energy vision: e Acommunity wide campaign to adopt energy conservation measures. This will target both public and private energy users, and will have both an educational and a funding component. The conservation measures will involve retrofits of existing buildings to improve thermal efficiency, replacement of energy using appliances with more efficient models, and changing the way people use energy (example: turn off the lights when they are not needed). e A1MW CHP system constructed on the old Air force Base near the site of the existing physical plant. This system will run on biomass fuel, supplying the electrical needs of the entire community. e Awaste heat recovery system to supply steam heat to the base infrastructure distributed through the existing utilidor system. The existing diesel powered boiler at the Base physical plant, and the City diesel fueled CHP system will become dormant, serving strictly as backup power. A new, biomass powered boiler will be installed at the city power plant to supply heat to the existing City glycol loop. Existing Energy Infrastructure Community Layout Sheet 1 of Appendix A shows a plan view of the community. Galena can be viewed as three discrete urban units: 1. Air Base-This region consists of the facilities and infrastructure that once comprised the US Air Force Base and includes the community’s airport. It is protected by a continuous, surrounding dike from periodic flooding of the Yukon River. In general, this region is defined by well constructed and maintained buildings and engineered systems. An underground utilidoor houses steam, water, and wastewater distribution/ collection systems. There is also a 1.4 million gallon fuel tank and fuel distribution system that is in good condition. The plan view of this region forms the shape of a triangle. Much of these facilities are now part of the Galena Interior Learning Academy. This is a vocational/technical school with a student body of approximately 200 students, and is projected to grow to 300 students in the next decade. 2. The Old Town site- This region of the community is located between the airport runway and the Yukon River. The old town is comprised of residential dwellings and some small businesses. 3. Alexander Town site/New Town site- This region is on the Eastern edge of the community. It was developed in 1972 and is predominantly comprised of residential dwellings. The New Town site is also the location of the current power plant, water plant and the City institutional buildings; school, swimming pool, clinic/ City office building, public safety and fire hall. These public buildings are heated with waste heat from the power plant that is distributed by an above ground utilidoor. A 600,000 gallon tank farm, located adjacent to the power plant and water plant, currently provides fuel for electrical generation. The utilidoors at both the Air Base and the New Town Site were designed for use with CHP systems, are modern and in good repair, and are essential to the continued use of the buildings they serve. Electrical A summary of electric usage by month can be found in Appendix B. Based on a report entitled Community Information Summary, winter peak load is 1,750 kW. Based on these figures, it is estimated that the minimum base load is approximately 500 kW. Average generated demand in 2007 was 887 kW, reflecting total annual generated energy of 7,772,042 kWh. Average distributed demand was 789 kW, for a total annual billed energy of 6,908,893 kWh. Annual distribution loss was 863,149 kWh, accounting for 11.1% of generated energy. 574,806 gallons of fuel oil was consumed indicating a generating efficiency of 36.9% with 13.52 kWh energy generated per gallon of fuel consumed. Thermal efficiency of distributed energy was 32.8% with 12.0 kWh of energy billed for each gallon of fuel consumed. The 2009 residential electrical rate was $0.563 per kWh of which $0.3402 per kWh was reimbursed through the State of Alaska, Power Cost Equalization (PCE) program for up to 500 kWh per month. The effective residential energy rate, for the first 500 kWh per month, was $0.2231 per kWh. Electricity for the entire community is generated at the City power plant. There are six diesel generators, all of which are in working order: Generator 1-3512 Caterpillar prime mover, 850 kW alternator Generator 2-S16N Mitsubishi prime mover, 850 kW alternator Generator 3-3512 Caterpillar prime mover, 600 kW alternator Generator 4-3512 Caterpillar prime mover, 1050 kW alternator Generator 5-3512 Caterpillar prime mover, 600 kW alternator Generator 6-3412 Caterpillar prime mover, 500 kW alternator There is no SCADA system in use. There are two transformers located outside of the power plant structure. One is a 4160 V transformer that distributes electricity to both the old town and the new town. The other transformer is supplies a24.9 kV transmission line distributes electricity to the Base. There are also three generators on the Base, but only one, a Cat 750 kW unit, is in service at this time. The base power plant is now essentially dormant. Although the base power plant is connected to the community power plant, via the transmission intertie, it is not capable of supplying power to the community without switchgear upgrades. Thermal A summary of thermal usage by month can be found in Appendix B. There are two discrete heat distribution systems in Galena-one is on Base, and the other is in the City. The City has a hydronic heat distribution system that collects rejected jacket water heat from the generators which is distributed through an above ground, insulated metallic piping system to the water plant, school, swimming pool, clinic/ City office building, and fire hall. There are also hydronic heating loops that supply heat to the diesel fuel tanks located behind the power plant, allowing year around storage and use of #2 diesel fuel. The hydronic system is in satisfactory working order. The base uses a steam heating system. The base physical plant has three, 400 HP, Cleaver Brooks boilers rated at 17,000,000 BTU’s each. Only one of the boilers is used to supply heat to the base buildings by way of an underground utilidor. Heat losses in the steam distribution system have a secondary effect of keeping the water and wastewater utilities (also located in the utilidor) from freezing. The base boiler operator stated that the system presently consumes about 200,000 gallons per year of diesel. The burners burn 117 gallons per hour at full capacity. A retrofit of the system with down-sized burners and modulating controls is currently planned. Proposed Systems Energy Design Criteria Table 1 contains design energy demands for a CHP system that would replace the current diesel energy systems. These figures were derived from the Galena Community Information Summary issued by the Alaska department of Commerce. Reference Appendix B. Table 1. Design Annual Energy Demands Design Thermal Energy 20,000,000,000 Design Electrical Energy (9MWh) 30,800,000,000 Total Energy 50,800,000,000 Design Thermal Power 4,500,000 Design Electric power (2MW) 6,900,000 Total Power 11,400,000 Methodology Louden Tribal Council and other stakeholders in the community have previously conducted informal studies of this problem. Their conclusions have been that a biomass fueled energy system would be an attractive and appropriate energy technology for Galena. WHP has done a more thorough and formal exploration on the economic and technological feasibility of using Biomass energy. We began our research with an understanding that there are two broad options for consideration: 1. Close-coupled gasification -This can be referred to, informally, as a “steam” system. In a close coupled gasification boiler, biomass is burned in a controlled oxygen environment. Gas, consisting primarily of carbon monoxide and hydrogen, commonly referred to as “producer gas” or “syngas”, is produced. The gas is burned in the same boiler, and heat is produced. The heat is used to make steam, and the steam is used for heating, and to run a steam engine or turbine coupled with an electrical generator. The principal advantage of close coupled gasification, over conventional combustion (without gasification), is that higher temperatures are achieved, resulting in higher thermal efficiency. Also, heat required for the gasification process remains within the boiler and supplements the heat of gas combustion. 2. Two-stage gasification -This can be referred to informally as a “gas producing” system. In two stage gasification, biomass is partially oxidized in a reactor in an oxygen deprived environment. Syngas is 10 produced, and sent directly to an internal combustion engine or gas turbine coupled with an electrical generator, or it is directed to a burner in a boiler and used to produce steam. One complexity of two stage gasification is that the gas contains tars and other impurities, and so it is “dirty”. A cleaning filtration process is required between the gasification reactor and the engine/turbine/burner. Both of these systems produce substantial amounts of waste heat and thus can be used as a CHP system for more complete energy utilization and increased system efficiency. WHPacific conducted a multifaceted exploration of this problem in order to determine our recommendations. First, we evaluated the informal studies previously conducted by associates of Louden Council. The WHP team appreciates the effort and depth of thought that has gone into the evolution of the primary concept. A comparative analysis of this concept with the many other solutions for biomass generation will determine whether the initial approach is valid, whether modifications of the primary concept are required, or whether a different approach is recommended. WHP conducted research on the types of technology and equipment that is commercially available to harness biomass energy. This research primarily involved an extensive search of the internet. We found a plethora of websites and available information, the majority of which lacked substance. In our search for appropriate biomass technology and hardware, we sought legitimate companies, suppliers, and processes that have a proven track record. Although the use of biomass energy in rural Alaska can be described as “new”, or “innovative”, we do not think it prudent to approach this as an experiment. Our priority is in assembling a system that we are reasonably confident is reliable, maintainable , economical and efficient. The system needs to be procured from vendors that provide dependable technical support and includes products of manufacturers that will still be in business when replacement parts are needed. Achieving these ideals can prove difficult considering that much of this technology has a very short history. The research process identified many discrete technological components that might serve Galena’s energy needs. For example, there are many types of biomass boilers and prime movers, that could be incorporated into a biomass energy system, however we specifically looked for proven combinations of equipment. We avoided gasifier/ boiler and generator combinations that were not represented in existing applications. Following research of available biomass technologies and equipment, WHP corresponded with professionals in the biomass energy industry. These professionals included vendors, researchers, engineers, and entrepreneurs. We adopted a rule of thumb practiced by the Alaska Energy Authority to determine the legitimacy of an energy system. A biomass energy system is considered to be a valid option if the supplier can show three constructed systems that have been operating for three years each. Informally, we call this the “three and three” rule. 11 In our recommendations, WHP is naming manufacturers and models of specific products that we believe serve as examples of successful biomass energy systems. We add the disclaimer that the recommendations of this report are schematic in nature and do not constitute a specification for a selected solution. It is assumed that a formal feasibility study will be conducted as a follow up to this reconnaissance study, and we highly recommend that the recommendations of this report be re- evaluated to assure that all possible solutions are explored. A thorough approach is required to maximize efficiency and minimize cost of investment, operation and maintenance. 12 Figure 2-Systems Considered for Recomendation SYSTEM 1. Both the boiler and the reciprocating engine |1. relatively low efficiency are old, proven technologies. 2. High impact on forestry resource (1 square 2. The supplier, AEIS/Wichita Boiler appears to |mile harvest annually), will not be socially AESI system, Uniconfort fluidized bed |be a legitimate vendor. sustainable. A | updraft boiler and Benecke reciprocating |3. Remote monitoring capabilities. 3. Despite item 1, pros, this arrangement of steam engine/generator 4. Synchronous power output. hardware does not have a proven operational 5. Uniconfort boiler relatively immune to history. material and moisture variations. 4. Poor/ unknown load following capabilities. 1. The supplier, AEIS/Wichita Boiler appears to |1. The micro turbine and the ORC are bea legitimate vendor. promising, yet young technologies in this 2. Remote monitoring capabilities. arrangement. 3. Higher efficiencies than option A. 2. High impact on forestry resource. B AESI system, Uniconfort fluidized bed | 4. Uniconfort boiler relatively immune to 3. This hardware arrangement has no proven updraft boiler and MST/ORC material and moisture variations. operational history. 4. This is an induction type system and cannot operate alone on an isolated grid. 5. Poor/ unknown load following capabilities. 1. The supplier, AEIS/Wichita Boiler appears to |1. The micro turbine and the ORC are bea legitimate vendor. promising, yet young technologies in this 2. Remote monitoring capabilities. arrangement. AESI system, Uniconfort fluidized bed = |3. Higher efficiencies than option A. 2. High impact on forestry resource. c updraft boiler and MST/ORC, with redox |4. Uniconfort boiler relatively immune to 3. This hardware arrangement has no proven flow battery (battery supplied by another | material and moisture variations. operational history. vendor) 5. Battery will allow system to supply base and |4.Higher capital costs and maintenance on peak loads on an isolated grid. battery. 5. The battery technology is still developing. 1. Nexterra and Jenbacher are legitimate 1. 2 stage system more complex. vendors. 2. Probable higher capital and operating costs. Nexterra/ Jenbacher system, CHP by fixed|2. Higher efficiencies. 3. Hardware arrangement does not have a D bed downdraft gasifyer and Jenbacher |3. One pilot project constructed and several proven operational history. type 6 internal combustion being developed. 4. Gas cleaning phase may produce engine/generator wastewater. 5. Poor/ unknown load following capabilities. 1. Can substantially reduce diesel fuel 1. Requires gas cleaning process. consumption. 2. May not reduce dependence on fossil fuels E TGI Inc. Retrofitted diesel generator, |2.Represents aan incremental step toward to the desired extent. 3. TGI has never offset diesel 60% with wood gas adopting renewable energy systems. operated this system on wood gas. 3. System can follow peak loads. ; ; 1. Proven technology. 1. May not reduce dependence on fossil fuels Develop commercial wood harvesting : 7 . operation, install biomass boiler on base 2. Represents @ an achievable incremental step |to the desired extent. 7 eo aa ___|toward adopting renewable energy systems. 2. Will not supply electricity. to supply steam to existing district heating ; : F . F ___|3. Could serve as a first phase in a broad plan system, encourage residential conversion . to efficient wood stoves as primary heat that would eventually evolve to supply biomass eouce: generated electricity. Systems Considered for Recommendation Table 2 shows the biomass energy systems that were studied and considered for recommendation. Further explanations of the alternatives are provided below. Alternative A-This system consists of a Uniconfort fluidized bed updraft boiler and Benecke reciprocating steam engine and generator as provided by AESI/Wichita Boiler. This concept was originally explored by associates of Louden Tribal Council. Reference Appendix C for vendor supplied data on the system. The Uniconfort Boiler has been produced for 50 years and can handle fuels of varying types and moisture contents. The Benecke reciprocating steam engine is also a mature technology. Unfortunately, the Uniconfort/Benecke arrangement has never been implemented, and there is no proven operational record of performance. Consequently, the efficiency of this system is unknown, but we expect it would have an approximate efficiency of 8% generating electricity (80% boiler efficiency and 10% steam engine efficiency). If the system was set up in a CHP arrangement, the efficiency might achieve 30%. Another uncertainty of this system is its’ ability to follow dynamic loads. Based on our knowledge of these types of systems, we suspect that it would have poor load following capabilities and would be suitable only for supplying base loads. Alternative B- This system consists of a Uniconfort fluidized bed updraft boiler and MST/ORC (Micro Steam Turbine/Organic Rankin Cycle). This system is also supplied by AESI/Wichita Boiler. Similar to alternative A, the reciprocating steam engine is replaced by a MST/ORC arrangement. Although we consider this a promising technological system, AES! has constructed none of these systems, and thus there is no operational history that demonstrates this as a successful alternative. Because we lack operational data on the system, we do not know what the efficiency would be, nor can the vendor provide this information. We do know that the MST/ORC system would have greater efficiency than alternative A. This is a “cascading system” where low quality steam coming off the turbine is used to run the ORC, achieving greater efficiency. For the purposes of this report, we have estimated a CHP efficiency of 40% when conducting biomass harvest projections. As with alternative A, this system will not be able to follow dynamic loads. Furthermore, this is an induction type generation system, and could not run independently on an isolated grid without accompaniment of a modulating power source. Alternative C- Essentially, this alternative is the addition of a redox flow battery to a power generation system. We are considering the AESI supplied Uniconfort fluidized bed updraft boiler and MST/ORC, with redox flow battery supplied by another vendor, although the battery could be used in conjunction with other generation schemes. It should be recognized that a purely gas fired engine, such as Jenbacher, or a steam engine, such as Benecke, is capable of supporting base load conditions only. Due to mechanical constraints of these engines, neither is capable of satisfactorily following Galena’s peak loads. One method of peak 14 generation is to provide a spinning reserve of diesel power. Another method is to convert existing diesel engines to dual, gaseous and diesel fueled units as discussed elsewhere in this report. The disadvantage of either of these methods is continued reliance on diesel fuel. Another solution is to provide a large battery for energy reserve and power delivery to follow system peak loads. An emerging but proven technology is the Flow Battery, of which several technology types are currently produced. The qualifying attributes of these batteries, for use in delivering peak power, are high energy density, high power delivery, system reliability, and sustainability of a large number of discharge cycles without degradation. Unlike a conventional battery, such as lead-acid or cadmium-sulfide, where common components provide both energy storage and energy flow, energy storage and energy flow of flow batteries are provided by separable systems. Also in contrast to lead acid or cadmium sulfide batteries, the plates of flow batteries are not depleted during the charge-discharge cycles, greatly increasing longevity. Flow batteries are similar to fuel cell technology in that a fluid which furnishes chemical energy is stored in tanks and supplied to a reactor that produces electrical energy. The battery can therefore be specifically designed for separate parameters of energy storage and power delivery. Flow batteries have been designed around electrolytes of various metals, with the two of most prolific technologies being zinc- bromine and vanadium-redox. Zinc-bromine batteries can achieve higher power densities but vanadium-redox batteries can withstand significantly more discharge cycles. Of the two types, the vanadium-redox battery seems to be the more mature technology with greater support in the energy industry. The energy medium of the vanadium-redox battery is an electrolyte solution of elemental vanadium and sulfuric acid, stored in two separate tanks. The sulfuric acid is of about the same molar concentration as the sulfuric acid in lead-acid batteries. The stored electrolyte from each tank is pumped to a reactor, where electrolyte from one tank circulates through the anode and electrolyte from the other tank circulates through the cathode. The cathode and anode plates, which are inert carbon felt, imbedded in polymer composite substrates, are sealed and separated by a proton exchange membrane. Increasing tank size and volume of electrolyte, results in larger energy storage capacity (kWh). Increasing the reactor size, by increasing the number and/or surface area of cells, along with increasing the ratings of the circulating pumps, increases power output (kW). Vanadium redox battery technology has grown sufficiently beyond the experimental stage, with practical products produced and sold by a handful of companies, to yield verifiable statistics of reliability and efficiency. At the forefront of design and production have been VRB Technologies of New South Wales and Canada, and Sumitomo Electric Industries (SEI) of Japan. Recently, VRB Technologies acquired SEI and has consolidated a line of products with sizes ranging from a few kWh to ten’s of MWh. To satisfy Galena’s needs for peak loading, a battery of approximately 500 kWh that can instantaneously deliver 150 kW, should suffice. Estimated cost is $350,000 for battery and inverter. 15 Although the redox battery technology is now assessable, we cannot recommend Alternative C until Alternatives B and C mature to the point where they have proven successful. However, the battery will address the peak load following requirements. Alternative D-Energy will be provided by the Nexterra/ Jenbacher CHP system, consisting of a fixed bed downdraft gasifyer and Jenbacher type 6 internal combustion engine/generator. The Nexterra system can be viewed as three discreet processes. First, biomass is burned in a fixed bed, updraft reactor. In this process, biomass fuel will go in, and gas will come out. Second, the gas will go through a cleaning and conditioning process where tar and other impurities are removed. In this process, “dirty” gas goes in, and “clean” gas comes out. In the third stage, gas is burned in GE Jenbacher type 6 internal combustion engine, and electricity is produced. The system set up for CHP. As with the other alternatives considered so far, there is no operational history for this system. However, we expect that this system will mature in the near future. Nexterra currently has one such system installed near Kamloops British Columbia. It has been operated for a short time and is in the “shakedown” phase of operation. There are also two other systems that have been sold, but not yet built. There is also a Nexterra system proposed for construction in Tok Alaska, although funding for this project has not yet been secured. Note that the Kamloops system is connected to a larger power grid, and thus doesn’t face the peak load following challenges that exist on Galena’s isolated power grid. As with the other systems, capital costs and efficiencies are either unknown or uncertain. For the purposes of this study, we have estimated an efficiency of 50% in CHP mode (Vendor supplied data says up to 65%) that was used for biomass harvest projections. We also expect that this system may have difficulties following dynamic loads. There are also unknowns associated with the gas cleaning process. Nexterra uses a proprietary gas cleaning process. The gas cleaning process has the potential to add complexity to the system and increase operating costs. If the cleaning process is flawed, it will fowl the engine and the system will not work. Alternate E- This alternative will implement a TGI Inc. retrofitted diesel generator to offset diesel (up to 60%) with wood gas. A difficulty with most of engines fueled with producer gas is their inability to respond to transient load conditions. This inability is due to the low power density of the fuel. In internal combustion engines, producer gas delivers relatively low combustion pressures and therefore low torque. Engines must be de-rated resulting in a large displacement engine to support a load that would require a much smaller displacement diesel fueled engine. The larger gaseous fueled engines have large revolving mass, hence high inertia, relative to engine shaft power. The high inertia and low torque at synchronous speed makes the engine relatively unresponsive to load changes. The reality is, engines fired on low pressure gas are typically used to support base loads only and therefore are typically used for cogeneration on large, infinite buses. Other types of prime movers are required for peak loading. On very large systems, peak loading can be achieved by high speed turbines, due to the relative stability of these systems. On small systems, such as Galena’s power system, 16 turbines typically lack sufficient dynamic response to relatively high transient loads, so reciprocating diesel engines are an ideal solution. For Galena’s system, it is doubtful that supporting peak load by 100% gaseous fired units is a workable solution and a hybrid system would be required. A large battery that could deliver about 150 kW to 200 kW, such as one of the new flow type batteries, would be one solution to support peak loads, but batteries have a very high capital cost and limited lifespan. Cost per kilowatt-hour delivered by batteries is high in comparison to diesel fueled generators. Another economical solution for such a hybrid system is to convert an existing diesel generator (or generators) to fire simultaneously on fuel oil and producer gas. TGI Incorporated, manufactures an electronic, Gaseous Fuel Delivery (GFD) system that regulates and mixes gaseous fuel with the stream of combustion air. During the intake stroke, a mixture of air and gas enters the cylinder. On compression the air/gas mixture is compressed with subsequent, adiabatic rise in pressure and temperature. Avery small amount of pilot diesel is injected into the cylinder at the top of the compression stroke which initiates combustion of the gaseous fuel mixture. One danger of a dual fueled engine is the real possibility of over-fueling the engine which will result in combustion temperatures that exceed the thermal limit of the engine resulting in top end engine damage. The GFD system regulates gas flow based on engine rpm and exhaust temperatures to prevent over-fueling. The engine manufacturer's stock fuel oil injection system of the engine is not modified. Fuel oil injection is regulated by the electronic governor, based on engine rpm. The proportion of injected diesel fuel is decreased by the electronic governor as gaseous fuel is increased to support the mechanical engine load and maintain engine rpm. In response to transient load, engine rpm is slightly reduced. The electronic governor responds to the reduced rpm by opening the fuel rack, injecting a higher fraction of fuel oil. The governor reacts in a one-to-one correspondence, or isochronously with the change in load and therefore maintains a very high dynamic response. During a typical daily load profile, when the load gradually ramps up to peak load conditions, the initial change in load is met by increasing injected fuel oil. As the load stabilizes at a higher level, the GFD system increases the flow of gaseous fuel and the rate of injected fuel oil is reduced. The gaseous fuel thereby displaces the fuel oil in supporting the higher load. Modifying existing diesels to dual fuel operation using the TGI GFD system, could be provided in combination with other exclusively gaseous fired units, such as a Jenbacher engine. Or dual fueled diesel generators could be used exclusively as an entry level approach into biomass conversion. Savings in fuel oil by installing the GFD on existing diesel generators, will be approximately 60%. Fuel consumption would be cut to less than one-third of consumption with diesel fired units. With much growing interest in use of bio-fuel, it is likely that existing gaseous fueled energy systems will improve and become less costly as new technologies arrive. Presently, these energy conversion systems are largely experimental and unproven. The advantages of an entry level approach of modifying existing generators to the GFD technology, is that much capital cost can be deferred to a later date when existing technologies mature and new technologies arrive with the possibility of providing a more elegant solution at reduced cost. 17 We foresee that this duel fuel technology could be combined with Alternative D. That is, a fixed bed downdraft biomass reactor combined with a gas cleaning process (as supplied by Nexterra) could send wood gas to a diesel generator modified to accept duel fuel. We do not recommend this alternative at this time. We have not identified a proven gas cleaning technology. Also, TGI reports that their duel fuel conversion equipment has never been used with wood gas (although it has been used with numerous other types of gas, including landfill gas). Alternative F-This alternative entails the installation of a biomass boiler at the existing base physical plant. The boiler will provide steam to the existing district heating system. Although this recommendation falls short of Galena’s goals (particularly, electrical generation), we see it as a practicable and achievable first step in a long range alternative energy plan. We advise that this alternative be built with the understanding that it may be modified to accommodate one of Alternatives A through E, above, when and if these technological systems evolve to a point where they have a proven operational history. So, we envision that this alternative may be modified at some time in the future to include electrical generation, from the base physical plant, supplying the electrical demands of the entire community. Either a close coupled or a two staged system may be used to generate the steam. Each system has unique strengths and weaknesses, described elsewhere in this report. The final decision on which type of biomass reactor should be made after a feasibility study is conducted, as this decision relies on which one of Alternatives A through E (if any) are implemented in the future. We offer the following sub- alternatives: Alternative F1- Install a Uniconfort fluidized bed updraft reactor as supplied by AESI. This would supply steam to the existing district heating system on base, and could evolve into alternatives A, B, or C at a future time. Alternative F2- Install a fixed bed downdraft gasification reactor, similar to or as used in the Nexterra system. Wood gas from this reactor can be directed either to a new boiler, or one of the existing boilers can be retrofitted to run off of the gas (note that an existing boiler retrofitted to run off of wood gas would not have the stringent gas cleaning requirements as an internal combustion engine). This installation would allow expansion into alternatives D or E at some point in the future. Make note that we have not recommended installation of a biomass reactor at the City of Galena. The existing City hydronic heating loop draws waste heat from the diesel power plant. Since Alternative F does not call for replacement of electrical generation equipment, we see no advantage to using biomass derived district heating in the City. However, if this alternative is ultimately modified to include electrical generation, we recommend that the equipment be installed at the base physical plant, and, consequently, we would recommend that a biomass boiler be installed at the city power plant to accommodate the heating demands currently provided by waste heat from the diesel generation equipment. 18 Biomass Resource Assessment Review The biomass assessment is based on an interpretation of a biomass report constructed by Will Putman of TCC Forestry. In personal communication with Will Putman, he stated that the report is based on limited field data and should be taken as a first approximation of standing biomass in the area within a 10-mile radius of Galena. However, the information in the report is adequate to be able to understand potential utilization opportunities and issues around Galena. The biomass assessment review is based on four levels of annual BTU requirements supplied by engineers: 169,000 MMBTUs, 127,000 MMBTUs and 101,600 MMBTUs, and 20,000 MMBTUs (reference table 3). At this level of report all estimates should be considered as reasonable approximations with stated assumptions. This should give the reader an understanding of relative amounts of utilization. Table 3. Estimated Efficiencies and Annual Energy Input Requirements ESTIMATED SYSTEM CHP EFFICIENCY REQUIRED FUEL INPUT, MMBTU'S* AESI system, Uniconfort fluidized bed updraft boiler and Benecke reciprocating steam engine/generator 169,000 AESI system, Uniconfort fluidized bed updraft boiler and MST/ORC Torn Nexterra/ Jenbacher system, CHP by fixed bed downdraft gasifyer and Jenbacher type 6 internal combustion 1,001,600 engine/generator Biomass energy system supplying heat to existing Air Base | (heat only) district heating system 80% * based on design energy demands, table 1 Standing Biomass Review report by Will Putnam of TCC Forestry. 19 Biomass Required This discussion is not meant to be a detail treatise on the issue of moisture content of wood, but to create an awareness of how the forest management and wood harvest systems will impact the amount of wood required and efficiencies of the CHP process. The amount of biomass required to fuel a CHP system depends on the total BTU demand of the system and the efficiency of the burning process. Most modern boilers and gasifiers are essentially as efficient as possible for wood at 80-85%. Oil boilers, in comparison, are typically 85% efficient when operating properly. Wood burners of all sorts will specify an ideal range of moisture contents for fuel. Standard gasifying boilers can burn from 10% - 55% moisture content, but typically have an ideal range of 20-40% moisture requirements. Downdraft gasifiers typically require an ideal content of 10-15% moisture content while updraft and fluidized bed gasifiers have a much broader range of materials they can gasify. Actual BTUs in wood is species dependent, but only slightly. Species differ only by about 10% so for this discussion we assume that local species in the Galena area are similar in BTU amounts. However, there are significant differences in recoverable BTUs through the combustion process by the moisture content of the wood going into the combustor. This is simply because the combustor cannot burn water and must “dry” the chips in the burning process. For a descriptive process think of a 40 pound armload of split firewood for a wood stove. At 20% moisture you are adding approximately one gallon of water into our wood stove with the wood. At 40% moisture content you are adding two gallons of water. Green freshly cut wood is typically between 50-60% moisture content, thus if wood is harvested chipped and delivered to the boiler recoverable BTUs will range from 3825-3400 BTUs/Ib, Table 4. Chips do not dry very effectively in a pile. Chip dryers can be installed in the system, however a significant amount of energy is required for drying. So if wood is “seasoned” air-dried to 20% moisture content then chipped and injected into the system the amount of recoverable BTUs in the system essentially doubles to 6800 BTUs/LB. This is very significant point in the development of a Biomass Energy System that is using local resources to power the system. A conservative moisture content on average will be from 25%-35%. Table 4. Effects of Moisture on Deliverable BTUs The Effect of Fuel Moisture on Wood Heat Content Moisture Content 0 15 20 25 30 35 40 45 50 55 60 (MC) wet basis (%) Higher Heating Value 8,500 | 7,275 | 6,800 | 6,375 | 5,950 | 5,525 | 5,100 | 4,575 | 4,250 | 3,825 | 3,400 as fired Btus/Ib 20 Actual annual wood demand can vary significantly depending whether a management strategy is developed to “dry” wood, Table 5. Three levels of annual system demands were modeled in for this discussion: 169,000 MMBTUs, 127,000 MMBTUs, and 101,600 MMBTUs to determine wood utilization and potential harvested acres annually. As described above, moisture content of the wood going into the boiler has a tremendous affect on the number of tons of wood chips required annually to operate the CHP system. In addition the number of acres to secure the required wood varies with tons per acre of wood growing on the site. Table 5 demonstrates the tonnage of wood required annually at the three systems BTU demand levels each of which illustrates the difference in 3 wood moisture levels of 25%, 35%, and 50%. In addition, number of acres required to secure an annual amount of wood is based on three different levels of tons per acre: 15, 25, and 35 tons per acre. Annual wood demand for the largest demand system ranges from 19,929 green tons at 50% moisture down to 13,031 tons per year at 25% moisture. The smallest proposed system will require 11,953 tons at 50% moisture and 7815 tons at 25% moisture. Cost of wood delivered to the boiler has been modeled at different costs depending on types of equipment used, economies of scale and local conditions. Galena like all Interior Rural Villages has few roads and must deal with the local terrain and weather conditions. Though beyond the scope of this document delivered costs in other villages has been modeled as high as $175-$200 per ton. Even at this high cost wood energy systems appear to be financially feasible if well designed. But final feasibility depends on the inherent efficiency of the system installed and the ability to use both the electrical and heat portion of the system effectively. Part of the system required is a well design harvest system and forest management program. Drying of wood to 25% moisture can occur if properly managed and decked for a year in advance of use. Table 5. Comparison of wood required and acres harvested based on BTU requirements of different CHP Systems described in this report. MMBTU Wood Tonper Acres @ Acres @ Acres @ Required Moisture BTU/LB year 15t/A 25t/A 35t/A 169,000 50% 4250 19,929 1328 797 569 169,000 35% 5225 16,133 1075 645 461 169,000 25% 6500 13,031 868 521 372 127,000 50% 4250 14,921 994 596 347 127,000 35% 5225 12,153 810 486 279 127,000 25% 6500 9,796 653 391 341 101,600 50% 4250 11,953 797 478 341 101,600 35% 5225 9,722 648 389 277 101,600 25% 6500 7,815 521 312 223 20,000 50% 4250 2353 156 94 67 20,000 35% 5225 1914 128 77 55 20,000 25% 6500 1538 103 62 44 21 Harvest Impacts The high-end demand system 169,000 MMBTU utilizing 35% moisture wood will require 16,133 tons annually, which is 645,329 tons over a 40 year rotation. At an average of 25 tons per acre the required tonnage equates to 31,880 acres of harvested material over a 40-year rotation. However, the total biomass study area in the TCC report was 22,718 acres with a total estimated green tonnage stocking of 840,237 tons. This discrepancy is well within reasonable amount at this level of estimation based on tons per acre assumptions. If green wood were used in the combustion process 797,160 tons of wood will be required over a 40-year rotation. The smaller of the proposed systems 101,600 MMBTUs will require 9,722 tons at 35% moisture annually or 388,880 tons in a 40-year rotation. At an average of 25 tons to the acre 389 acres will be harvested annually or 15,562 acres in a 40-year rotation. However, a heating only system will use between 1500 and 2500 tons per year depending on moisture content of wood burned. This would equate to between 44 and 156 acres annually depending on tons per acre of harvested stands. Galena will not be limited to only a 10-mile radius around the village but distance does add cost to the production of wood. Also, both the Alaska DNR and BLM are supportive of sustainable biomass utilization from their lands. Forest fires in the interior can easily burns thousands of acres of forest under the correct conditions. Both of the systems discussed will use most of the standing biomass within a 10-mile radius of Galena. This can easily be ecologically sustainable through good forest management targeting Cottonwood as the species to regenerate (discussed below). However, these production levels will require significant harvest levels around the village. When a forest fire burns this much acreage, it is an “Act of God” or a natural part of the disturbance pattern in the ecosystem. This natural disturbance can be more acceptable to society than the “Act of Man” harvesting at large scales. In development of a biomass strategy and scaling of an initial CHP project, the scale of harvest should be a consideration. Harvest Systems Harvest systems need to be properly sized to the terrain and the wood demand. Harvesting will most probably happen both in summer and in winter. Crossing water and ice is a major consideration. Several assumptions have been made to understand what it will take in terms of getting wood into the community. An automated mechanical harvest system will absolutely be required with the level of harvest discussed in this report. We assume 10-ton loads of logs with an average 9” diameter and a 20’ log. A normal bunk will hold approximately 84 logs and will require 1613 round trips into the village if wood is moved at 35% moisture. Total number of these logs is 180,733 annually. At the low end of biomass utilization it will take 844 10-ton loads annually same load and a total of 70,875 logs annually. Chipping would occur ina wood yard in the village into chip storage. Utilizing only logs will reduce yield by 13-20% per acre. There are two additional harvest methodologies for harvesting and utilizing whole tree. The first is to harvest and deck whole trees in the forest, allow to air dry, allow needles and leaves to fall off, chip on site and move chips into the village. The second is to 22 move whole air-dry trees into the village and chip in a wood yard there. Whole tree chipping increases yield per acre, however the single most effective way to increase efficiency of wood utilization is to make sure that wood is air dried as much as possible. Storage and handling are critical to develop as a whole system based on how harvesting and wood moving will occur. The number one failure in many biomass systems is creating a completely integrated system that incorporates a harvesting system with the correct specifications for fuel into the combustion device connected by the correct type of chip handling mechanism. Resource Recommendations The sizes of the proposed systems that are required to supply all of the electrical needs in Galena through a CHP system will utilize quite a significant amount of biomass 10-20,000 tons annually. Electricity generated from biomass rarely if ever is more than 20% efficient at the smaller scales of generation, such as in Galena. That means that 80% of the energy produced from biomass is heat. Effective utilization of heat occurs approximately six months of the year, unless some economic utilization of heat in summer and shoulder months can be developed. Real efficiencies for CHP from biomass only occur when heat can be utilized year round. Otherwise a significant amount of energy is underutilized. All three scales of biomass utilization analyzed in this report can be ecologically sustainable in the Galena area, if a good quality forest management system is developed and implemented. If the utilization occurs only in the natural forest and is limited to the 10-mile radius around the village described in the biomass assessment, then public support may be difficult. Utilization of energy crops in the form of planted cottonwood stands is a way to significantly increase local productivity. Native forest grows about one ton of biomass per acre per year. Planted cottonwood stands can grow up to 4 times that amount annually. Thus reducing the total number of acres utilized in the future. A naturally regenerated cottonwood stand studied in Alaska grew 450,000,000 BTUs per acre in 35 years. This is compared to only 119,000,000 BTUs per acre in a White Spruce stand at the age of 90 years. Thus cottonwood can yield 4 times the BTUs in half the growing time. Start up of a new enterprise at the scale studied may prove to be challenging initially. The scope of the Fort Yukon Biomass project is to utilize heat from the diesel electric generators as 30% of the heat input into a district heating system. Up to 2000 tons of biomass will be utilized to offset the additional 70% heat demand. The system will displace approximately 150,000 gallons of fuel oil for heat initially. This has the advantage that the biomass boiler only runs when needed, thus increasing the efficiency of biomass utilization significantly. One consideration for Galena is to take the development of a biomass energy program as a stepwise integrated process, by developing the most efficient utilization of biomass as heat and then graduate to electricity as forest management and harvesting capacity increases. Another potential way to develop a stepwise approach to CHP is to start with a small system such as a Stirling engine generation system that can be fully loaded year round at about 140 kWH capacity and thus use the total amount of heat generated to increase efficiency. 23 Whatever decisions Galena makes in developing a biomass energy system attention should be paid to full integrating the entire system including forest management, planning, harvest systems, chip storage and delivery systems, combustion system and efficiencies. Sustainability Common perceptions of the definition of “sustainability’ as applied to biomass energy relate three components; economic, ecologic, and social. 1. Economic sustainability-The concept of economic sustainability is easily understood in the context of engineering projects. Generally, a project is considered economically sustainable if the project costs, when spread over the lifespan of the system, are less than the value of the benefits it provides. An energy system would be considered economically sustainable if the costs of electricity and steam paid by consumers were sufficient to pay off the capital and operating costs of the system. Additionally, the energy costs would have to be competitive with (“cheaper”) than competing energy technologies; in this case, fossil fuels. However, there are subtleties to the concept of economic sustainability. For example, a biomass energy system might produce electrical costs to the consumer that are similar with those of fossil fuels, but the money they spend on energy would be retained in the local economy. So, cost is not the only consideration in determining if a project is economically sustainable. Biomass projects of the scale that is being considered in Galena have the potential benefit of creating a new industry with new jobs within the village. However, it is our recommendation that the business be set up ona for-profit bases as a utility and be managed as such. Typically a sustainable economic goal is to stabilize the cost of heat at a reasonable rate of $4-6 per gallon of fuel oil equivalent. Thus a reasonable expectation is not decreasing the cost of heat significantly, but to stabilize the long term costs rather than have local budgets have to deal with constantly increasing costs and especially the significant escalation in price when the oil market jumps up. 2. Ecologic sustainability-For those who subscribe to theories of “global warming” or who promote “green energy”, biomass is considered a carbon neutral fuel source. As such, trees that are cut will grow back over a short period of time, and recapture the carbon that was released by the combustion of their predecessor trees. In this line of thought, biomass energy can be considered to be ecologically sustainable. Amore immediately useful definition of ecologic sustainability would be a harvest situation where the cut trees would grow back in time to be harvested again. An ecologically sustainable system would be one where there was an indefinite supply of wood as fuel. 3. Social sustainability-In order for a biomass project to be socially sustainable, the stakeholders must accept it. That is, the residents must be comfortable with the impacts of biomass harvest on the landscape and the forest environment. Each stakeholder will likely have a unique level of tolerance for 24 the cutting of trees. It is very likely that the average resident would want some sort of naturally vegetated buffer zone surrounding the community. The location and level of wood harvest must be conducted in a way that is acceptable with the average resident, or the project will not be socially sustainable. The project must be economically, ecologically, and socially sustainability, or it will not succeed. Also, realize that these three facets of sustainability effect and conflict with each other. For example, social sustainability may tend to drive the biomass harvest area away from the community, while economic sustainability will tend to drive the harvest area closer to the community. Decisions made must optimize the various facets of sustainability if the project is to succeed. Sociopolitical Issues Boiler Operator While writing this report, the question was asked if a Boiler operator would be required by law to oversee operations of the close coupled gasification system. This could have impact on the operating costs of the system. A phone call to the State Boiler inspector revealed that there are no standards requiring this. Power Cost Equalization(PCE) It should be realized that PCE subsidies may be affected if the electrical generation is made more efficient (cheaper). We have not specifically studied the effect of this project on PCE’s, but wanted to point this out. So, it is possible that the actual costs of electricity could be reduced, while the effective rate paid by the consumer would remain more or less the same. It should be pointed out however, that even if this were to occur, there would be the benefit that most of the fuel costs (for biomass) would be invested in the local economy rather than going to outside vendors. Carbon Credits We have not considered carbon credits in this report, because there is not a realistic carbon market in the United States. If such a planned economic system were to become reality, this project would likely benefit. Biomass energy is considered a “carbon neutral” fuel, and thus this project would generate carbon credits that could be sold at market, offsetting energy costs to the consumer. This is a simplistic and speculative discussion of the subject, but it should be realized that this concept has the future potential to make this project more economically attractive. Competition for firewood The residents of Galena currently harvest firewood for home heating from the same forest resource proposed to fuel the new energy systems. Anecdotal information indicates that residents have impacted the firewood resource to the extent that they have been forced to travel farther from town to harvest 25 satisfactory firewood. It is possible that the new proposed energy systems could compete for wood with the residents, jeopardizing the socially sustainable status that this project requires for success. But, this project may benefit the same people with lower energy costs, wood pellets, and jobs. Also, forestry management practices might create a forest that supplies the needs of both the firewood harvesters and the energy system simultaneously. In any case, this potential conflict should be realized and prevented. Other Energy Technologies In Stream Hydro Low-impact hydroelectric technologies, including in-stream (or hydrokinetic) turbines that do not require dams or diversions of water, are attracting great interest in the Yukon River watershed. There is no good cost estimates on in-stream hydropower, as this technology is still in the experimental stages, and is not yet commercially available. In the summer of 2008, a 5kW hydrokinetic turbine was temporarily installed in the Yukon River village of Ruby, Alaska as part of a demonstration. Other Yukon watershed-based hydrokinetic projects in Alaska include planned installations in the communities of Nenana, Eagle, Tanana, and Whitestone, and at least one project slated for the Canadian side of the watershed. All of these pilot projects are in various stages of planning, permitting, design, and/or installation. Particular challenges that need to be overcome for hydrokinetic turbines to be practical in the Yukon River include: e Diversion of stream debris without obstructing river flow e Cost-effective anchoring of the turbine and support structure in the fastest moving part of the river e Possible impacts to migrating and resident fish populations are another ongoing area of investigation. e River ice freezing in the winter (possibly requiring removal of the turbines) A research project led by Prof. Tom Ravens of the University of Alaska Anchorage, School of Engineering, collected water current speed data in the Yukon River at Galena as part of a statewide hydrokinetic energy resource assessment study. The acoustic Doppler current profiler (ADCP) data was gathered in July 2009. At least one of the transects (lines of measurement collected across the river) were located right in front of the town and the rest were done at different sections through the bend downstream of the town. The mean and max velocity and power figures for the Galena River site are given below, based on the UAA team’s ADCP measurements and USGS streamgauge data between May 1977 and November 2010. Vaverage: 1.04 m/s Vmax: 1.77 m/s Paverage: 0.18 kW/m? Prax? 0.88 kW/m? 26 It is unknown at this time whether the above reported hydrokinetic energy resource would be an economic source of power for Galena. It is recommended that Galena stakeholders further evaluate hydrokinetic turbine options, and closely watch results of the pilot projects going on elsewhere in the Yukon River watershed, or work with a hydrokinetic turbine developer to initiate a pilot project installation at Galena. Galena could also participate in the Alaska Energy Authority‘s “Hydrokinetic Working Group” that includes state and federal permitting and resource agencies, developers, and communities with potential project sites. ORC Technology Organic Rankin Cycle (ORC) turbines are heat engines that can work off a very low temperature differential. As such, they have been used to generate electricity from low grade sources of heat energy. ORC electrical generation devices could complement the biomass energy systems proposed in this report. The waste heat coming off the Jenbacher engine, low quality steam exhausted from the reciprocating steam engine, waste heat from the biomass gas generation processes, or heat taken directly from the biomass boiler might be used to produce additional electricity with an ORC. In this report, we have focused on a rather course view of the design, and thus have not worked out the details of integrating ORC’s into our recommendations. We do think that the feasibility study and design phase of this project should take a closer look at the use of ORC’s within the proposed biomass systems, as we feel they are a viable part of Galena’s long term energy vision. Conclusions We have ruled out the use of either solar or in stream hydro electrical generation at this time. We have identified the use of biomass energy as a useful alternative to fossil fuels. There are several developing technologies and hardware that promise to economically convert biomass fuel to both electricity and heat. At this time however, it is prudent that Galena wait until these technologies mature before purchasing and implementing them. This recommendation is based on the “three and three” rule that dictates a system must have three installed examples that have operated successfully for a minimum of three years each. The community of Galena has several options to begin enacting their long term energy vision. They can purchase one of the systems described as Alternatives A through E in this report. All of these systems are based on sound technologies, but they lack operational histories. If Galena chooses to implement one of these systems, they do so knowing and accepting the risk and uncertainty that accompany that system. WHPacific does not recommend this, but we do recommend that all of these systems and their development elsewhere be watched closely, as they are likely to become viable energy options at some time in the near future. WHPacific recommends that Alternative F1 be examined in a formal feasibility study. This involves installing a Uniconfort boiler, and using it to generate steam for distribution in the existing Air Base 27 district heating system. At this time, we feel there is some advantage in the Uniconfort fluidized bed updraft reactor (over the Nexterra downdraft reactor) in that it will accept a wider variety of fuels and moisture contents. The Uniconfort Global-G model 120 is rated to supply the 4,500,000 BTU/hour heat demand. This heating system has the potential to offset between 150,000 and 200,000 gallons per year of diesel heating fuel and will require the harvest of between 50 and 150 acres of forest annually. Although it is not our primary recommendation, The Nexterra gas system does have promise to supply steam for district heating. However, the smallest biomass heating system that they carry is rated for 8,000,000 BTU’s/hour, as compared to the 4,500,000 BTU/hour heating need on the Air Base. It should also be noted that Nexterra has said that they do not know if their gas system can be used to directly fire a retrofitted diesel boiler as we have suggested is an option elsewhere in this report. The downdraft biomass reactor used in the Nexterra system is more sensitive to varying fuel moisture and consistency than the Uniconfort boiler. This recommendation should be regarded as a first step in achieving Galena’s long term energy goals. The infrastructure should be selected and installed so that electrical generation equipment can be added on with relative ease at a later date. The site should accommodate the space for extra equipment and increased wood storage and handling that will become necessary if electricity is to be generated. We recommend that the boiler is installed in the existing Air Base physical plant (reference sheet 2, Appendix A). The physical plant would probably accommodate both a biomass boiler and a future electrical generation modification, but existing diesel generators (currently not in use) would have to be removed from the building first. Wood would be stored in the existing warehouse north of the physical plant, and transported to the fuel feeding area by loader. An alternative site plan would involve constructing a new 2500 square foot structure to house the equipment (reference sheet 3). It is anticipated that the wood will be dried naturally. Wood will be harvested and cold decked in the field for one year. This will bring the moisture content from about 60% to 30%. After one year of cold decking, the whole logs will be transported to the wood staging area, chipped, and stored in the warehouse or in the designated future wood storage area. We think it would be wise to also evaluate alternative F2, the Nexterra system, during the feasibility study phase. Although our primary recommendation is the Uniconfort system (updraft reactor, close coupled gasification), the two stage gasification system being developed by Nexterra has promise to meet Galena’s long term energy vision also. Other variations should also be considered during the feasibility study phase. We recommend that wood boilers from other manufacturers be considered for use, as this has the potential to reduce capital costs. It was our experience when compiling this report that the vendors who supply the boiler hardware (in our case, AESI and Nexterra) are reluctant to supply either technical information or detailed cost information regarding their systems. This is because all biomass energy projects are unique. Galena, being a remote community, adds a further degree of uniqueness and logistical challenge. It is our understanding that during the feasibility study phase of this project, a vendor or several vendors will 28 have to perform their own study of the project so that they can provide dependable details regarding how their systems will conform to Galena’s unique situation. So, we envision that a formal feasibility study will likely be a joint undertaking by an engineering consultant, vendors, and the project stakeholders. It is also critical to this project that a wood harvesting operation be established. In conjunction with the feasibility study, a business plan should be produced to guide the creation of the wood harvesting operation. This report recommends that the forest is managed to produce cottonwood as fuel. We also recommend that this harvesting operation be considered as a commercial source of wood for home heating. If a reliable source of wood for sale was created, more residents could convert to wood for home heating, which would offset more fossil fuel. However, it is likely that consumers of wood for home heating would demand spruce as a fuel, and not cottonwood. 29 Appendix A-Figures ; ! ae HHH Saynold Strs eda elcties seal eeapece ite bhozers | SLWG LOId a1vos SWVN 371d ONIMVEO UEINNN LOarOud cee canon OroeBveS | 05 151 FYNLONYLSVYANI ADYANA ONILSIXA raaoae TIONNOD WEL NAGNOT |/§ x 3 JUD H M cor | _ Nuvu VASVIV VNA1V9 HOS SWALSAS ADNAN 2 ndemmnemeenmn avd | Ag |'ON w i t- sae _=a||S TEVMAN3Y SO ASAUNS SONVSSIVNNOOSY |? ve oo SESH HKEtan cn Ool°R Sek OQ = 536 an<« au ess & | =S° Bes oO BES ny <P We = ES - n e 25; => ‘we wy = Qa = ; = : > | \ Zz ; o \ = & = = 9 — = <= So Oo ii oO a od 3 Ss < =<|8 <li a = 4 3\5 = Ola z _ a iy Ra Qa a | oe = 2 o= =< un lu tw n Sw > I x Org =< So = Eo z S \ Pow s tu mg? mo 2 8 Gq ib 4 Ee a & o i oe 3 LL a rst a ° co eu =< ae o Lu ~~ A i — ria ; as ia ti Yn ~s = So S S : ——Z- $ if ais Sage ~— as [i :LnoAv7] [6mpsaunotd\Wio\s6umosa\4pmys\se~S00\uepnc7 40 e60IIA SARON\ id “HLVd [a2"puopunys—dHM “FVLS] [ooezyoo\Lew—AU\\ -waLLOTd] [---—- :YOHLNv] [Nd vy 1102/e/s “ALVd ' > _ 1 INCH = 100 FT. i a ; ~ (32,000 SF) Ss . Ra p=. PROPOSED WOOD CHIP STORAGE 7S APPROXIMATE 20,000 SF STORAGE REQUIRED 6 ey ms ee ; ? FUTURE FUEL STORAGE AREA (28,900 SF) | [REQUIRED IF SYSTEM EXPANDED TO \ GENERATE ELECTRICITY EXISTING BASE PHYSICAL PLANT EXISTING DEISEL BOILERS FOR DISTRICT HEATING NEW BIOMASS POWER BOILER 1,750 SF REQUIRED SPACE FUTURE ELECTRICAL GENERATION 750 SF REQUIRED SPACE FUEL FEED AREA NEW ACCESS ROAD FOR FUEL TRANSPORT NOTE: THIS PHOTO FROM 611 CES, DEPARTMENT PROPOSED BIOMASS POWER PLANT SITE BE THE: AIRFORCE, (UTEITY DRAWNG. ALTERNATIVE F-1, USE EXISTING BUILDINGS SCALE: 1"=100' Tn Ree =| wapaaiic 2 0f 3 I oupeN TRIBAL COUNCIL | FIGURES TS twamn WHPaafic PROPOSED ENERGY INFRASTRUCTURE L Por baTE | sanzott 01845 ae i 1 INCH = 100 FT. = SSK ]s_ = EXISTING BUILDING (32,000 SF) PROPOSED WOOD CHIP STORAGE “APPROXIMATE 20,000 SF STORAGE REQUIRED aN Are - FUTURE FUEL STORAGE AREA (28,900 SF) /REQUIRED IF SYSTEM EXPANDED TO GENERATE ELECTRICITY NEW BIOMASS POWER BOILER FACILITY 2,500 SF REQUIRED SPACE INCLUDES ROOM FOR EXPANSION TO ELECTRICAL GENERATION EXISTING BASE PHYSICAL PLANT EXISTING DEISEL BOILERS FOR DISTRICT HEATING START, EXISTING STEAM DISTRIBUTION NOTE: THIS PHOTO FROM 611 CES, DEPARTMENT PROPOSED BIOMASS POWER PLANT SITE OF eae ALTERNATIVE F-1, CONSTRUCT NEW BUILDING SCALE: 1"=100' Te | il 3 of 3 | ouDEN TRIBAL COUNCIL FIGURES |} aan WHPaafic PROPOSED ENERGY INFRASTRUCTURE PLOT DATE | 6/3/2011 = Appendix B-Thermal/ Electrical Calculations Galena Biomass 100% CHP DCRA Community Information Summary ("CIS") Basis of Data: Thermal Electrical CHP Annual Comm Heating Rqmt ("CIS") Design Annual heating Rqmts* Design Thermal Power Month Distribution (Est) mmBtu/month Avg Btu/hr Annual kWh Avg kw Gals Fuel Fuel $/kWh Non-fuel $/kWh Projected Peak kW Design kw Design kWh Month Distribution (Est) kWh/mo Avg kWh/hr (kW) Design Thermal Energy Design Electrical Energy (9MWh) Total Energy Design Thermal Power Design Electric power (2MW) Total Power 16823 mmBtu (million Btu) 20000 mmBtu 4.5 mmBtu/hr (two thermal generation systems) FEB MAR APR MAY JUN JUL AUG SEP OcT NOV DEC 0.16 0.15 0.14 0.08 0.03 0.02 0.02 0.03 0.04 0.08 0.11 0.14 2,692 2,523 2,355 1,346 505 336 336 505 673 1,346 1,851 2,355 3,738,444 | 3,504,792 3,271,139 1,869,222 700,958 467,306 467,306 700,958] _ 934,611 1,869,222 2,570,181 3,271,139 7,772,042.00 887.22 574,806.00 $0.33 $0.14 1753 2000 9,000,000 "CIS" "Cis" "Cis" "Cis" "cis" JAN FEB MAR APR MAY JUN JUL AUG SEP. OCT NOV DEC 0.10 0.10 0.10 0.08 0.07 0.07 0.07 0.07 0.07 0.08 0.09 0.10 777,204 777,204 777,204 621,763 544,043 544,043 544,043 544,043} 544,043 621,763 699,484 777,204 1,079 1,079 1,079 864 756 756 756 756 756 864 972 1,079 20,000,000,000 30,800,000,000 50,800,000,000 Btu Btu Btu 4,500,000 Btu/hr 6,900,000 Btu/hr 11,400,000 Btu/hr Community Information Summary Community: Galena Yukon-Koyukuk Year 2000 Census Area oo Census Population: 580 oat | Census Per Capita Income: $22,143 * old \ Utility Company: City of Galena Regional Corporation: Doyon, Limited uy iA : : . : Zs fe “Sy State House Seat: 12 cand ~ oA State Senate Seat: C Borough: Unorganized Incorporation Type: 1st Class City Latitude: 64d 44mN Longitude: 156d 56m W AEA Comm ID: 68 PCEIDNo: 331990 Location: Climate: Economy: Facilities: Galena is located on the north bank of the Yukon River, 45 miles east of Nulato and 270 air miles west of Fairbanks. It lies northeast of the Innoko National Wildlife Refuge. The area experiences a cold, continental climate with extreme temperature differences. The average daily high temperature during July is in the low 70s; the average daily low temperature during January ranges from 10 to below 0 °F. Sustained temperatures of -40 °F are common during winter. Extreme temperatures have been measured from -64 to 92 °F. Annual precipitation is 12.7 inches, with 60 inches of snowfall annually. The river is ice-free from mid-May through mid-October. Galena serves as the transportation, government, and commercial center for the western Interior. Federal, state, city, school, and village government jobs dominate, but Galena has many other jobs in air transportation and retail businesses. 15 residents hold commercial fishing permits. Other seasonal employment, such as construction work and BLM fire fighting, provide some income. The Illinois Creek gold mine, 50 miles southwest of Galena, closed due to low market prices. Water is derived from wells and is treated. 28 residences and the school are connected to a piped water and sewer system. 110 households use a flush/haul system. 20 households use honeybuckets, and others have individual septic tanks. Refuse collection and a landfill are provided by the city. The city began operating the landfill, located on the former Campion AFS grounds, in 1997. There is a 200,000 gallon reservoir and a community leach field. Transportation: Galena serves as a regional transport center for surrounding villages. The state-owned Edward G. Pitka, Sr., Airport provides the only year-round access. There is a paved, lighted 7,254' long by 150' wide runway and a 2,786' long by 80' wide gravel ski strip adjacent to the main runway. The rivers allow access by cargo barges from mid-May through mid-October. A boat launch was recently completed. Pickups, cars, snowmachines, skiffs, and ATVs are used for local travel. During winter, the frozen rivers are used for travel to Ruby, Koyukuk, Kaltag, and Nulato. A winter trail is available to Huslia. Reference: Division of Community and Regional Affairs (www.commerce.state.ak.us/dca) Galena Wood Current Immediate Short-Term Mid-Term Long-Term Stretch Goal (0-10 Years) (1-3 Years) (2-10 Years) (5-15 Years) (15+ Years) {100% | Diesel || -10% || Conserve || 100% || Diesel || 50% |/ Diesel _—| Efficiency \ || 50% || Wood-CHP | Ui) | $4,881,862 | $0.35 | ja IL | _Wood-CHP || 93% Conserve Wood-CHP | 93% || Wood-CHP Efficiency Wood | 72H $1,200,01 $50.87 $1,200,000 | Current Energy Status Electric Utility (Estimated) Cost of Electricity (Residential) 0.56kWh Annual Community Energy Sales 6,908,893 kWh/Year Average Community Load 789 kW Annual Diesel Electricity Generated 7,772,042 kWh/Year Estimated Peak Load 1,753 kW Wind Turbine Electricity Generated 0 kWh/Year Electrical Intertie? N Hydroelectric Electricity Generated 0 kWh/Year Primary Diesel Power Locations(s): Natural Gas Electricity Generated 0 kWh/Year Hydroelectric Plant Location(s): Annual Electricity Purchased 0 kWh/Year Communities on the Intertie: Source Data Note: 1 yr:FY08 Note: Power plant (station service), transmission, and distribution losses account for the difference between power generation and sales. Diesel Power Generation (Estimated) Annual Diesel Electricity Generated 7,772,042 kWh/year Estimated Local Fuel Cost @ $107.50/bbl $4.41 Annual Diesel Fuel Consumption 574,806 gal/year Fuel Cost $0.33 /kWh Projected Fuel Cost /year $2,534,894 Average Diesel Efficiency 13.52 kWh/gal Non-Fuel Cost $0.14 /kWh Non-Fuel Costs /year $1,066,371 Diesel COE $0.46 /kWh Total Electric $3,600,000 Space Heating (Estimated) 2000 Census Data Fuel Oil 62% Wood 31% Electricity 3% Estimated Heating Fuel Used 129,410 gallons/year $5.41 $48.96 $/mmBTU 16,823 mmBTU Estimated Heating Fuel Cost $/gallon Delivered Heating Fuel Cost Annual Community Heat Requirements Note: Residential data only. Total Heating Oil $700,000 Transportation (Estimated) Estimated Diesel Used 57,654 gallons Estimated cost $5.41 gallon Total Transportation $31 2,000 Total Energy Cost $4,490,000 Page 1 of 4 Galena Wood Demand-Side Electric Efficiency and Conservation Deployment Term Immediate Electricity Saved 1,381,779 kWh Capital Cost $464,000 Technology Electric Usage Fuel Saved 102,194 Gallons Annual Capital Cost $66,063 15% Electricity Reduction from Efficiency Fuel Savings $450,675 5% Electricity Reduction from Conservation Note: Fuel Saving Base on 100% Diesel Yearly Savings $385,000 Demand-Side Heat Efficiency and Conservation Deployment Term Immediate Heat Saved 3,365 mmBTU Capital Cost $1,450,000 Technology Space Heating Fuel Saved 25,882 Gallons Annual Capital Cost $206,447 15% Heat Reduction from Efficiency Fuel Savings $140,022 5% Heat Reduction from Conservation eS Note: Fuel Saving Base on 100% Diesel Yearly Savings ($66,000) Current Power Plant: Upgrade Potential Deployment Term Short Technology Diesel Utility Company City of Galena Technical Assistance or Upgrade Required Generator and Switchgear Capital Cost $800,000 $/kWh Status or Note Annual Capital P/| $87,836 |$0.011 Potential Efficiency 15.00 kWh/Gal New Fuel Cost $2,284,980 | $0.294 New Fuel Used 518,136 Gallons Non-Fuel Cost $947,942 | $0.122 New cost of electricity $0.443 Note: Performance Improvement to Higher Efficiency Yearly Savings $144,000 Deployment Term Short Technology Diesel Engine Heat Recovery Utility Company City of Galena Heat Recovery System Installed? Y Capital Cost $2,484,214 $/mmBTU Heat Recovery System Operational? Y Annual Capital P/I $272,753 $24.33 Buildings Connected and Working: Annual O/M $74,526 $6.65 oe ana aor oT: Total Annual Cost $347,280 | $30.98 Showerhouse, Water Plant Water Jacket 11,209 mmBTU Stack Heat 0 mmBTU Yearly Savings $302,000 Page 2 of 4 Galena Wood Deployment Term Short-Term Percent of Community Electrical Energy Consumption 0% Technology Wood Thermal Energy Produced per Year 5,047 mmBTU Capital Cost $1,340,256 Electric Cost Feat Cost Cords of Wood per Year 222 Annual Capital Cost $126,511 | $0.00 $25.07 Cost of Fuel 250 $/Cord Annual OM Cost $40,208 | $0.000 $7.97 Annual Fuel Cost Fuel Cost: $55,481 | $0.000 $10.99 Note Total Annual Cost $222,200 | $0.000 $44.03 Cost includes: Wood boiler for a public building and a quantity of residential stoves to achieve the percent of community heat Non-Fuel Costs $0.000 energy consumption considered. Alternative COE: $0.000 Annual Electric Savings $0 Annual Heat Savings $210,000 Deployment Term Mid-Term Percent of Community Electrical Energy Consumption 50% Technology Wood-CHP Installed Capacity 464 kw Capital Cost $1,881,853 Ee i eauene Annual Electricity Production 3,454,446 kWh Annual Capital Cost $177,634 $0.051 $11.31 Annual Thermal Energy 15,711. = mmBTU Annual OM Cost $142,869 | $0.021 $4.55 Cords of Wood per Year 4,373 Fuel Cost: $1,093,179 | $0.158 $34.79 Cost of Fuel $260led Total Annual Cost $1,413,681 | $0.230 $50.64 Annual Fuel Cost $1,093,179 Non-Fuel Costs $0.117 Nols Alternative COE: —$0.348 Capital Cost allocation of 50% between electric and heat used. Capital cost shown is 50% of total. A lel ic Savi 0 Scinee Data nnual Electric Savings $400,00 Renewable Power in Rural Alaska: Improved Opportunities for Annual Heat Savings $0 Economic Development. The Arctic Energy Summit: Crimp, Colt, Foster 2007. Deployment Term Mid-Term Percent of Community Electrical Energy Consumption 50% Technology Wood-CHP installed Capacity 464 kw Capital Cost. $1,881,853 | FeciscCost_ Heat Cost Annual Electricity Production 3,454,446 kWh Annual Capital Cost $177,634 $0.051 $11.31 Annual Thermal Energy 15,711 mmBTU Annual OM Cost $142,869 $0.021 $4.55 Cords of Wood per Year 4,373 Fuel Cost: $1,093,179 | $0.158 $34.79 Cost oF Fuel $ 250led Total Annual Cost $1,413,681 | $0.072 $50.64 Annual Fuel Cost $1,093,179 Non-Fuel Costs $0.117 Note . Alternative COE: $0.189 Capital Cost allocation of 50% between electric and heat used. Capital cost shown is 50% of total. EI ic Savi Sous Data Annual Electric Savings $947,000 Renewable Power in Rural Alaska: Improved Opportunities for Annual Heat Savings $0 Economic Development. The Arctic Energy Summit: Crimp, Colt, Foster 2007. Page 3 of 4 Galena Wood Deployment Term Long-Term Percent of Community Electrical Energy Consumption 0% Technology Wood Thermal Energy Produced per Year 3,365 mmBTU Capital Cost $1,200,062 Nn ne Cords of Wood per Year 128 Annual Capital Cost $113,277 | $0.000 $33.67 Cost of Fuel 250 $/Cord Annual OM Cost $36,002 | $0.000 $10.70 Annual Fuel Cost $32,116 Fuel Cost: $32,116 | $0.000 $9.55 Note Total Annual Cost $181,395 | $0.000 $53.91 Cost includes: Wood boiler for a public building and a quantity of residential stoves to achieve the percent of community heat Non-Fuel Costs $0.000 energy consumption considered. Alternative COE: $0.000 Annual Electric Savings $0 Annual Heat Savings $140,000 Deployment Term Stretch Goal Percent of Community Electrical Energy Consumption 100% Technology Wood-CHP Installed Capacity 464 kw Capital Cost $1,881,853 | FMcrecost Heat Cost Annual Electricity Production 3,454,446 kWh Annual Capital Cost $177,634 $0.051 $11.31 Annual Thermal Energy 15,711 = mmBTU Annual OM Cost $142,869 | $0.021 $4.55 Cords of Wood per Year 4,373 Fuel Cost: $4,093,179 | $0.158 $34.79 f Fuel 250/ Cost of Fue s7btled Total Annual Cost $4,413,681 | $0.230 $50.64 Annual Fuel Cost $1,093,179 Non-Fuel Costs $0.117 Note . Alternative COE: $0.348 Capital Cost allocation of 50% between electric and heat used. Capital cost shown is 50% of total. : . Source Data Annual Electric Savings $400,000 Renewable Power in Rural Alaska: Improved Opportunities for Annual Heat Savings $0 Economic Development. The Arctic Energy Summit: Crimp, Colt, Foster 2007. Deployment Term Stretch Goal Percent of Community Electrical Energy Consumption 100% Technology Wood-CHP Installed Capacity 464 kw Capital Cost $1,881,853 | Fegrecost Heat Cost Annual Electricity Production 3,454,446 kWh Annual Capital Cost $177,634 $0.054 $11.31 Annual Thermal Energy 15,711 mmBTU Annual OM Cost $142,869 $0.021 $4.55 Cords of Wood per Year 4,373 Fuel Cost: $4,093,179 | $0.158 $34.79 fF 250/cd Cost ar Vel a Total Annual Cost. $4,413,681 | $0.230 $50.64 Annual Fuel Cost $1,093,179 Non-Fuel Costs $0.117 = Alternative COE: —-$0.348 Capital Cost allocation of 50% between electric and heat used. Capital cost shown is 50% of total. A lel ic Savi Source Data nnual Electric Savings Renewable Power in Rural Alaska: Improved Opportunities for Annual Heat Savings $0 Economic Development. The Arctic Energy Summit: Crimp, Colt, Foster 2007. Page 4 of 4 Appendix C-AES system technical/product data AESI Global Series biomass boiler technical brochure. AESI Project Summary, Kentucky Horse Park Farm- This is a CHP system, but it is not comparable to the situation and needs of Galena. It has been included to give a snapshot of biomass CHP technology available from AESI. Carrier Microsteam Power System, technical brochure-An example of the electrical generating turbine offered by AESI. AESI GLOBAL Series Alternative Energy Solutions International, Inc. offers the premier modular biomass-to-energy system necessary to reliably meet long-term energy needs. Based on a technology developed over 50 years ago by Uniconfort, an ISO 9001 company, and now exclusively fabricated by AESI in the United States, the GLOBAL Series leads the industry in accommodating biomass fuel diversity, composition, and moisture content. Benefit From Modularity AESI's modular design allows for rapid deployment, assembly, scalability, and efficiency to meet expanding energy needs. Modularity enables you to increase your energy output by adding more units. The unit's intelligent engineering, highly automated processes, and small footprint enables seamless integration into existing physical plant or single site operations. Duel-fuel capabilities provide fail safe strategies for managing fuel needs. Hot Water @ 203°F | Saturated Steam up to 300 psig Superheated Water up to 300°F Ele) Mca Klinkering. Water ee Oye Tlot Teale) the compartment control the Bite) Ce Iris EB sitalere | crs imary, Eolas and tertiary air offers eoluraic) Designed For Performance The GLOBAL design is a feat of engineering that is over 50 years in the making. Many generations of product design and improvement have resulted in a highly automated, efficient, and user-friendly system that makes operating a biomass boiler nearly as simple as running a traditionally fueled system. i fa Currently, there are over 4000 Uniconfort i CU. IP systems operating worldwide. Information subject to change alternative energy solutions international, inc. Product Features: Versatile Fuel Handling > Utilizes a wide range of biomass fuels > High moisture fuels up to 120% dry basis > Accepts fuel sized up to 12” x 2” x 2” > High ash content up to 15% > Utilize fossil fuels as a backup fuel Automated Operation > PLC Panel with Remote Support > Automatic fuel feed system > Automatic ash extraction > Automatic soot blower* > Automatic combustion modulation Durable, Quality Components > Stainless steel water cooled moving grates > Plate steel shell > Hand-laid firebrick refractory > Retractable burner assembly * Optional equipment without prior notification 316 S Laura St + Wichita, KS 67211 * 316.201.4143 + info@aesintl.net + www.aesintl.net © 2010AES4 nc Cleaner Combustion Through Gasification By using Vertically Integrated Gasification & Combustion (VIGC) our boilers offer extremely low emissions and high efficiency (80-86%). Unlike outdated solid fuel boilers, AESI’s gasifiers use incline moving grates and a specially designed staged gasification chamber that increases efficiency, reduces particulate emissions, and eliminates klinkering and slagging. Fuel Handling Made Simple The proprietary fuel feeding system is comprised of a container for surge fuel feeding Step 4: Directly Create Heat/Steam fi Step 3: Oxygen Applied to Syngas and an internal feeding device complete with a reduction gear, variable speed motor; controlled by a central PLC panel for complete fuel flow and control. High Efficiency, Low Maintenance, and Flexibility The AESI GLOBAL Series boilers feature a modular 2-pass heat exchanger that is mounted directly above the secondary combustion chamber, sitting atop the packaged unit. The GLOBAL Series heat exchangers are based upon the traditional fire tube design, featuring oversized tubes for enhanced reliability and maximized thermal efficiency under high soot conditions. The firetubes are both rolled and welded to minimize maintenance over the life of the system. The modular design of Step |: Drying | Step 2: Syngas Extracted | the heat exchanger provides unrivaled flexibility, allowing a user to easily change the heat exchanger to provide the desired thermal output. Vertically Integrated Gasification & Combustion AANROCIRNSRERSS rnin |Bces eee What Is Your Opportunity Fuel? AESI GLOBAL SERIES Fuel Consumption Biceuel melting | Steam Delivery | Model] — kcal/hr BTU/hr | BHP | kg/hr | Ibs/hr | kg/hr 30 | 300,000 | 349 | 1,189,700 | 36 | 500 | 1,102| 97 60 | 600,000 | 697 | 2,379,400 | 71 | 1,000 | 2,205 | 194 | 90 | 900,000 1,046 | 3,569,100 | 107 | 1,500 | 3,307 | 291 420 | 1,200,000 1,305 | 4,758,800 | 142 | 2,000 | 4,409 | 389 150 | 1,500,000 1,743 | 5,948,500 | 178 | 2,600 | 5.511 | 486 480 | 1,800,000 | 2,092 | 7,138,200 | 214 | 3,000 | 6614 | 583 | | 240 | 2,400,000 | 2,789 | 9,517,600 | 285 | 4,000 | 8818 | 777 | 300 41,897,000 | 356 | 5,000 | 11,023/ 971 400 15,862,667 | 474 | 6,666 | 14,697 | 1,295 500 | 5,000,000 5,811 _| 19,828,334] 503 | 8,333 | 18,371| 1,619 Wood Sawdust, limbs, bark, trimmings 7 mulch, remnants, debris Agriculture Chaff, hulls, stalks, midds shells, skins, husks, algae B Animal & Municipal Waste m Manure, litter, washdown, municipal solids Industrial & Commercial Throwaway Paper, crates, pallets, pulp fats, oils, sludges, remnants e Turnkey System Integration Alternative Energy Solutions International, Inc. offers turnkey modular systems that are pre-engineered, saving our customers time and money. Our combustion experts bring over 50 years of experience to each project, ensuring that your system is optimized for maximum performance and return on investment. With 24 hour remote system monitoring, our experts remain involved with your operations and provide the insight to keep your system running at its best for the long term. Biomass energy has never been simpler and more accessible. Contact AESI today to learn more. ‘alternative energy solutions international, inc. Rew: 201015 Information subject to change without prior notification. © 2010AES4 Inc 316 S Laura St + Wichita, KS 67211 + 316.201.4143 + info@aesintl.net + www.aesintl.net aesi?_ alternative energy solutions international, inc. CUSTOMER PROFILE The Kentucky Horse Park is owned by the Commonwealth of Kentucky, and is one of many agencies within the state’s Commerce Cabinet. All state employees, there are approximately 80 full-time and 50 seasonal staff that work for the Kentucky Horse Park itself, and there are approximately 250 more people who work in the | various offices of the National Horse Center, or as service providers on the grounds. | PROJECT PROFILE | AESI is supplying a biomass waste to energy system solution for daily use at the Kentucky Horse Farm Park, | in Lexington, Kentucky. Under an Energy Savings Performance Contract, administered by nationally recognized AMERESCO, the Kentucky Horse Park project will aggregate all wastes from horses to a central collection, where it is quickly consumed by a Biomass Gasification & Combustion system, delivering hot water. The waste produced hot water will then be sent to a Pratt & Whitney Power Systems’ PureCycle® Organic Rankine Cycle unit which converts the thermal energy into renewable energy allowing the Horse Park to save money by offsetting electricity cost, eliminate landfilling. “As the first biomass application for our PureCycle® power system, Kentucky Horse Park will be able to dispose of waste while creating its own electric power,” Pratt & Whitney Power Systems Vice President Charles Levey said. “The closed-loop ORC process has the ability and versatility to increase energy efficiency and provide renewable energy to customers across a variety of industries.” IMPROVING THE ENVIRONMENT By using the horse-manure biomass in the AESI provided Vertically Integrated Gasification to Combustion (VIGC) boiler to generate up to 280kW of electric power, materials which would have become methane generating in a landfill are effectively eliminated. The genesis of the VIGC biomass boiler is from world reknown UNICONFORT of Italy, where they have been designing and building biomass boilers for over 50 years. AESI as their North American OEM, is producing and deploying the units on this side of the Ocean. “By taking these aggressive efficiency measures, the Kentucky Horse Park is demonstrating the value of energy conservation and how it has a positive impact on our environment now and in the future,” said Mrs. Beshear. “As founder of Kentucky’s Green Team, | am confident that when guests visit the Horse Park, they will be impressed not only with our world class facility but by our commitment to sustainability.” USING ARRA FUNDS The KHFP, waste to energy project is funded in part through the American Recovery and Reinvestment Act (ARRA) of 2009 in Lexington, Ky. The Kentucky Horse Park received loans through the Clean Water State Revolving Fund for the purchase and installation of a manure bioenergy management facility. “This project is a prime example of how Recovery Act funding is helping local communities,” said Acting EPA Regional Administrator Stan Meiburg. “The construction of the new manure bioenergy management facility will AESI, Inc. 316 S Laura St + Wichita, KS 67211 + 316.201.4143 + www.aesintl.net ar PERRIER esas nse provide an on-site solution for waste disposal, generating renewable electricity and protecting the _ environment.” THE SYSTEM SOLUTION | The provisioned plant consists of three primary pieces of equipment: 1. The VIGC biomass fueled boiler, 2. The ORC electricity generator 3. The forced draft, wash down, cooling tower. The VIGC fire tube boiler is capable of delivering 9.4 mm btu/hour. The units fuel requirements, are competent to accept the KHFP waste horse bedding as fuel, anticipated at humidity of less than 60%, dry basis. Maximum ash content from the fuel will be less than 10%. The VIGC unit is equipped with water cooled moving grate and water cooled ash removal to prevent burnout, auto soot blowers to maintain boiler operation and other relevant accessories. As a standard, AESI installs two, live feed, video cameras which will provide operators with viewpoints on fuel feed handling. These cameras will deliver signal to an independent screen mounted on the primary unit PLC. The Carrier/UTC PureCycle® power system unit converts hot water to electric power through the vaporization and expansion of a working fluid in a closed system. BENEFITS As stated this project delivers multiple and lasting benefits to the Horse Park. Landfill diversion as a general practice is becoming more prevalent and is vital to management of greenhouse gases. As with any commercial disposal program, costs add up. By deploying this system, these costs are completely eliminated which is a benefit equal to about $200,000 per year. Once the materials have been processed through the gasifier and combustor, there will be a residual ash. The ash retains all the soil enhancing benefits of the originating materials. Better than compost, ash volume will 8% of the original mass, making it easier to disperse as a natural soil amendment. Electricity will be generated continuously at sufficient quantities to provide an economic benefit of approximately $125,000 at a unit retail rate of $0.05 per kWh. AESI PROJECT TEAM STAFF Dave Daniels, Josh Holmes, Jared Finlay, Delphine Combaz | TEAM MEMBER PARTICIPANTS Systems such as this one at KHFP are designed and deployed through a coordinated effort of multiple team members. For this project major contributing firms include: UAM - Universal Asset Management (UAM) is an engineering firm expanding its service offering to select vertical markets defined as a comprehensive Asset Protection Program (APP®). The APP is designed to increase the reliability of equipment, automate repair/tracking systems, and provide asset management services reducing and/or stabilizing maintenance costs. | West Coast Industrial Systems — Founded in Sweet Home, Oregon in 1987, WCI is uniquely focused on | material handling systems, fabrication, installation, maintenance service, and custom industrial structures. | Expanded expertise, provides a balanced construction and engineering team which provided material receipt, preparation, transport and management. WCI experience brings innovative design, adapting to | projects such as KHFP. KICE Manufacturing — Kice is a worldwide provider of complete processing systems for more than four generations. Kice offers engineered, pre-assembled, modular systems that makes on-site installation easy and quick. This includes blowers, cyclones, baghouse filters, control systems and panels, pneumatic transport systems, and more. Stairways, ladders, access platforms and any other features needed are designed and built by Kice. i ‘ AESI, Inc. 316 S Laura St + Wichita, KS 67211 + 316.201.4143 + www.aesinil.net Turn to the Experts: Bulldings that have boilers or steam service with pressure reducing valves (PRVs) now have the potential to generat MICROSTEAM = srorewn secre power mtn POWER SYSTEM the innovative technology of the Microsteam power system by Carrier. The operating principle of the Microsteam power system Is simple — pressure energy normally dissipated by reducing steam pressure through a PRV Is instead converted to power by channeling that steam through a patented radial outflow turbine. The Microsteam turbine then generates electricity that can be used in the building reducing the need to buy power. Environmentally Responsible Technology The Microsteam power system represents a significant opportunity to optimize an existing energy resource, increase energy efficiency and take an important step towards creating a sustainable future. Zero-emissions power, officially acknowledged by the California Air Resources Board through DG-017 certification + Helps obtain Leadership in Energy and Environmental Design (LEED®) points for city buildings by reducing up to 275 kW of the electricity demand from the utility company + No pollution or contaminants emitted + Reduced carbon footprint Qualifies for federal stimulus funds and regional efficiency technology subsidies Pioneering Power System The Microsteam power system by Carrier Is a compact, self contained turbine system designed to generate electric power from available steam, Rather than dissipating excess through a PRV, that steam can be channeled through the Microsteam power system, generating electricity to power a facility, run chillers, and more, oftsetting peak electric demand and reducing the risk of demand charges. The key component to the system is based on the patented radial outflow turbine with Its highly efficient design. LLEED® i a rogiotred trademark ofthe US Green Bufing Councit The Microsteam Turbine Offers: + 80 percent energy efficiency for maximum productivity with minimum operating cost Quick return on investment + Remote monitoring capabilities Rugged titanium alloy construction for durability Titanium rotor can process even poor quality steam Is Your Facility Microsteam Turbine Ready? Your facility can profit from a Microsteam power system if you have one or more of the following steam energy sources available: Pressure reduction station of 4" pipe diameter and above Boiler plants over 300 BHP District steam + Cogen exhaust Low pressure absorption cooling over 300 Tons Domestic hot water preset + Electric chiller fuel switch + Turbine cooling replacement Steam Energy Sources Are Typically Found In These Facilities: Chemical industry Colleges and universities + Food processing plants + Hotels Hospitals Petrochemical industry Pulp and paper industry + Pharmaceutical industry < + Manufacturing facilities Commercial and office towers + Biomass : . + Cogeneration ee Solar plants Advantages of the Microsteam power system + High Turbine Efficiency: Levels measured greater than 80 percent in testing at the United Technologies Research Laboratory + Reliable, Resistant to Corrosion and Erosion: Titanium alloy construction designed to clear particulates or contamination found in poor quality steam + Compact Design: 34" wide x 42° long x 78" high allows easy access through standard doors + Simple Installation: All instrumentation wiring and skid ancillary power connections are pre-wired and pre-tested at the factory. Once in position, Installation consists of steam, power and plant utility connections + Simple Operation: Single button startup and shutdown, unattended operation with automatic electrical synchronization and safety controls + Easy to Use Control Panel: Separable from steam equipment with prefabricated quick-connect cables + Carrier Installation and Service: Quality and reliability Ei Steam inlet Ed Steam outlet El Epicyetic gear Ei Generator Eq Lute oil pump PRV PRV Product Features High efficiency radial outflow turbine Erosion resistant alloy construction tolerant of poor quality steam High efficiency epicyclic gearbox High efficiency induction generator Quiet operation Programmable logic controller (PLC) control system with color panel display Pre-wired, factory tested instrumentations and controls Full load power output Full load heat rate Typical inlet pressure Typical exhaust pressure Typical steam flow rate Long life Turn to the Experts” With a turbine efficiency of approximate 80 percent, the Microsteam power system can efficiently generate up to 275 kWe. For installations with a major amount of steam available, multiple units can be installed and the potential can become MWs of energy to be produced. tion chiller (or other summer load) (or other winter load) Specifications 80% at pressure ratio 2.5:1 / 70% at pressure ratio 5:1 Titanium alloy rotor 97% at 300 kW shaft 96% at 275 kWe 85 dBA untreated acoustically Single button startup / automatic synchronization / unattended operation capability / hardwired safety trips Quick connect cables / plug and play operation / minimum installation costs Up to 275 kWe, 480V / 60Hz / 3ph (208V optional) 3,690 BTU/kWh 100 — 250 psig 0-30 psig 4,000 - 20,000 Ibs/hr 15-20 year design 1-800-CARRIER www.carrier.com Carrier Corporation ©2009 A member of the United Technologies Corporation family. Stock symbol UTX. Cat. No. 04-811-50017-25 Manufacturer reserves the right to discontinue, or change at any time, specifications or designs, without notice and without incurring obligations. Appendix D-Nexterra/Jenbacher product data Tok Advanced Power Biomass Gasification Project-Promotional literature on a proposed biomass CHP system for Tok Alaska similar to Alternative D of this report. UNBC Biomass Gasification System, promotional literature-An example of a biomass fueled, steam, district heating constructed by Nexterra. Dockside Green Biomass Gasification System, promotional literature-An example of a biomass fueled, hot water, district heating constructed by Nexterra. First U.S. Demonstration of Biomass Gasification to Internal Combustion Engine Alaska Power & Telephone (AP&1), in collaboration with Nexterra Systems and GE Energy, the community of Tok and the State of Alaska, and with assistance from Dalson Energy, propose to highlight the U.S. Department of Energy's commitment to medium-scale biomass combined heat and power ("CHP") technologies through the deployment of a “state of the technology” 2MWe CHP system in Tok, Alaska, using locally-sourced woody biomass as fuel. The proposed project combines Nexterra’s proprietary gasification technology and syngas conditioning system with GE Energy's expertise in high-efficiency IC (internal combustion) engines. This will be the first biomass gasification to internal combustion engine project deployed in the U.S. AP&T’s customers will be the first in Alaska to add biomass-generated electricity to their renewable power supply. AP&T believes that the system will serve as a viable clean alternative to diesel-fueled generators and will catalyze the replication of renewable community-scale biomass CHP in rural communities, municipalities and institutions throughout Alaska, and across North America. Alaska Power & Telephone has applied for a DOE grant of $10M from the National Energy Technology Laboratory, and will raise another $10M in state and private funding. ~ PROJECT BENEFITS ' SCHEDULE Renewable Energy & Innovation > The DOE Grant award will be announced by December 1, 2009. > A showcase of renewable energy and innovation for Alaska If the grant is awarded, work will start immediately with system start-up projected for Fall 2011. > DOE Grant Submission - ¥ > Site Location - > First biomass-generated electricity project in Alaska > Potential replication of renewable energy throughout Alaska > Establish a biomass fuel distribution network in Alaska Jobs & Investment > Approximately 50 - 100 direct and indirect jobs > Local manufacturing and ongoing employment opportunities > Local fuel procurement and distribution > Cost Assessment/Business Case — ¥ > DOE Grant Award — 04 2009 > Project Permitting — Q1 2010 > Construction Start Date — 02 2010 7 > System Start-up — 03 2011 Low Environmental Impact > Project will offset up to 10,000 tons/year of CO2e emissions > Clean burning fuel will produce air quality emissions comparable to natural gas Lr > Reduce diesel usage in rural communities Wy nexterra > No wastewater discharge " THE TECHNOLOGY Nexterra uses a fixed-bed updraft gasification system which has been commercially proven for converting biomass into synthesis gas or “syngas” which is a clean-buming combustible gas that can be used like natural gas to generate electrical power and heat. The proposed system in Tok, Alaska will combine Nexterra’s commercial gasification technology with its newly developed syngas conditioning system and a GE Jenbacher gas engine. The combination will create a modular biomass combined heat and power ("CHP") plant, enabling the community of Tok to economically self-generate renewable heat and power. ~~ IMPACT ON RENEWABLE POWER INDUSTRY Biomass is a carbon neutral fuel that can be used to produce low-cost renewable heat and power in place of more expensive fossil fuels. Despite significant forest lands and expensive diesel fuel, the biomass energy industry in Alaskais still in its infancy. This proposed project will demonstrate the feasibility of biomass for thermal and electricity generation and its success could lead to replication in other communities and institutions throughout Alaska. This project will use woody biomass from the State of Alaska forest land leased to AP&T for this project through a 25-year, 27,000-acre sustained yield harvest plan. The system will convert approximately 12,500 tons of biomass residuals per year to heat and power — that will use approximately 625 acres/year at 20 tons/acre, or a total of 12,500 acres over 20 years. This amounts to less than half the biomass available from the leased parcel of state forest land. © BIOMASS-TO-POWER SOLUTION Wood Chips Dry Wood Chips Conditioned Syngas GE Energy’s Jenbacher Gas Engines Biomass Dryer Fuel Storage Bin Gasifier | Tar cractorf Precoat Internal Combusion Engine i i c = - Filter ©) FOR MORE INFORMATION Thomas Deerfield Jonathan Wilkinson Dalson Energy Nexterra Systems Corp. 907-277-7900 office 425-533-3900 cell 604-637-2508 office 604-961-1806 cell thomas@dalsonenergy.com jwilkinson@nexterra.ca ) ©> nexterra ¢ Dalson Energy &™~ nexterra 1300 - 650 West Georgia Street Vancouver, BC V6B 4N8 T: 604.637.2501 F: 604.637.2506 www.nexterra.ca UNBC BIOMASS GASIFICATION SYSTEM U BC UNIVERSITY OF NORTHERN BRITISH COLUMBIA All of the core campus buildings are connected to the Power Plant via a utility corridor for the efficient distribution of heat and power. © Project Description © Customer: University of Northern British Columbia ¢ Location: Prince George, B.C. * Application: Biomass gasification plant to provide heat for campus * Nexterra Scope of Work: Turnkey gasification system * Capacity: 15 MMBtu/hr net useable heat (hot water) ¢ Fuel: Locally sourced wood residue ¢ Fuel Moisture Content: Up to 60% * Fuel Source: Local mills and/or clean construction debris © System Highlights © Positions UNBC as a bioenergy leader in the higher education market * Expected to displace 85% of current natural gas consumption 4 ~ hexterra © Expected System Performance Natural Gas Displacement 80,000 GJ/yr Annual Savings . $600,000 - $800,000/yr Avoided CO, Emissions 3,500 tonnes/yr Avoided CO, Emissions (Car Equivalent) 1,000 cars/yr Avoided Carbon Liability ($55/tonne) $192,500/yr Wood Fuel Required 8,000 green tonnes/yr Wood Fuel Trucks Required 280 trucks/yr “We see the bioenergy program as an important component of UNBC’s commitment to reduce greenhouse gas emissions and implement renewable energy technologies on the Prince George campus. It is one way that we're being responsive to a community and region that very much sees bioenergy as part of its future.” - Dr. George Iwama, President, UNBC PROJECT PROFILE Fo | U BC UNIVERSITY OF NORTHERN BRITISH COLUMBIA Site Overview | —y es 25 ci be eticiecs =o wr ; : orcas VJ nexterra CONSTRUCTION PHASE —_ U BC UNIVERSITY OF NORTHERN BRITISH COLUMBIA Anchored by Nexterra’s biomass gasification system, UNBC’s bioenergy program will reduce greenhouse gas emissions and fossil fuel consumption on the Prince George campus. The program will help the University meet its current and future energy needs, reduce or eliminate their greenhouse gas footprint, and reduce energy costs while contributing to R&D, training, student and public education and the development of bioenergy projects and demonstration opportunities for northern communities. NORTHWEST CORNER: . . * SOUTHWEST CORNER NORTHFAST CORNER HCM Architechts. © nexterra rensecornes U BC UNIVERSITY OF NORTHERN BRITISH COLUMBIA Or -£ a) | os. S nexterra FLOOR PLANS 1:200 a SOUTH ELEVATION, NORDEELEVATION WEST ELLYATION TASTELEVATION HEM Architechts @ CP. Concrete @® Wood Cladding @ LEED Educational Panels Galvanized Metal Guardrail @ Metal Cladding/Panel © Storefront Glazing Folded Steel Plate Canopy ® Prefinished Metal Flashing (6) Mechanical Louvre © @) Tempered Glass Canopy Ss nexterra ELEVATIONS 1:200 fr a U BC UNIVERSITY OF NORTHERN BRITISH COLUMBIA UNBC’s Prince George campus is uniquely positioned to become an innovation “hub” for bioenergy. TEACHING RESEARCH CAMPUS LIVING IT UNBC has a diverse range of Locally conducted research is seen to be a vital UNBC’s Prince George campus is a Students, staff, faculty, and alumni environmental degree programs and _ ingredient for making Northern British Columbia showpiece for wood and bioenergy. A are passionate about the environment offers undergraduate and graduate a national leader in a technologically advanced, utility corridor links the main campus and the transition to renewable energy courses covering bioenergy systems, —_ forest-based bioenergy industry. UNBC buildings to a central power plant and sources. For example, UNBC is a biomass characteristics, and the researchers are already engaged with bioenergy provides the distribution system necessary _ founding partner in the International application of material and energy and existing infrastructure includes two research — for UNBC to make the transition to Bioenergy Conference and Exhibition, balances to bioenergy systems. forests and the I.K. Barber Enhanced Forestry renewable energy sources. one of the largest bioenergy Laboratory. conferences in the world. see pees a pe ey we boo ae x ? nexterra UNBC PROFILE U B UNIVERSITY OF NORTHERN BRITISH COLUMBIA About University of Northern British Columbia Prince George, British Columbia The University of Northern British Columbia is one of Canada’s best small universities. With a core campus in Prince George and regional campuses throughout northern BC, UNBC recognizes the importance of quality teaching, personal attention, ground-breaking research, and being relevant to the North. UNBC selected Nexterra to supply and install 15-million BTU fixed-bed biomass gasification system to heat its Prince George campus and anchor its new Northern Bioenergy Innovation Centre. Nexterra’s system is part of a $14.8 million bioenergy program that includes upgraded road and utility infrastructure, a new building and a “living laboratory” for bioenergy research and development. The project, which is jointly funded by the federal and provincial governments, is expected to be completed by late 2010. About Nexterra Systems Corp. Vancouver, British Columbia Nexterra is a leading developer and supplier of advanced biomass gasification solutions that enable customers to self-generate heat and/or power inside-the-fence at institutional and industrial facilities using low cost biomass fuels. Nexterra’s strategic relationships include GE Energy, Johnson Controls and Andritz. Projects include: © Nexterra Product Development Centre (PDC), Kamloops, BC Tolko Industries, Ltd., Heffley Creek Division, Kamloops, BC © University of South Carolina, Columbia, SC © Dockside Green Development, Victoria, BC U.S. Department of Energy (DOE), Oak Ridge National Laboratory, Oak Ridge, TN Partners: Kruger Products Limited, New Westminster, BC © University of Northern British Columbia, For more information: www.unbe.ca 181 mos Prince George, BC Canada Bree COLUMBIA For more information: www.nexterra.ca 1300 - 650 West Georgia Street fr» Vancouver, BC V6B 4N8 i T: 604.637.2501 F: 604.637.2506 ‘www.nexterra.ca UNBC BIOMASS GASIFICATION SYSTEM ees DOCKSIDE r, BC V6B 4N8 1300 - 650 West Georgia Street Vancouver ww nexterra z = =x oO = ms) = oOo T: 604.637.2501 F: 604.637.2506 DOLKSIDE GREEN ™ Project Description ¢ Customer: Dockside Green Energy LLP ¢ Location: Victoria, B.C. on the Upper Harbour ¢ Application: Residential/Commercial heating and hot water ¢ Nexterra Scope of Work: Turnkey gasification system ¢ Capacity: 7 MMBtu/hr ¢ Fuel Source: Locally sourced, clean urban wood residue ¢ Fuel Moisture Content: 20 - 55% © System Highlights ¢ Canada’s first urban gasification facility ¢ Air Emissions: 50% below BC Ministry of Environment's most stringent requirements for particulate matter (PM) ¢ Noise: Meets City of Victoria noise bylaw (55 decibels) © Dockside Green is one of 16 founding projects for Clinton Climate Initiative’s Climate Positive Development Program * Dockside Green biomass plant is owned and operated through a partnership among Vancity Capital, Terasen Energy Services and Corix Utilities (> ww hexterra = Expected System Performance Annual Thermal Capacity (NG Equivalent) 74,000 MMBtu/yr Annual Savings $400,000 - 600,000/yr Avoided CO, Emissions 3,460 tonnes/yr (expected load) Avoided CO, Emissions (Car Equivalent) 850 cars/yr Avoided CO, Tax ($30/tonne) $103,800/yr Wood Fuel Trucks Required 60-100 trucks/yr @ 60% capacity Ash Production (recycled as compost) 220 tonnes/yr @ 60% capacity “We are delighted with the results of Nexterra’s gasification system at Dockside Green and have had overwhelming interest from the general public and media. This is a premier showcase for clean energy technology in a truly sustainable urban development, and we applaud Nexterra on this important achievement.” - Lee Davis, President and CEO of Vancity Capital PROJECT PROFILE ESP Ash Bin. e& nexterra COMPLETED PROJECT Building Fo tindation faites ray & Main Boilers Standh nexterra &~ ww ws na <x = Qo. 2 ° = oO = c = ”n Z| S| oO DOLKSIDE GREEN AFFORDABLE HOUSING [3 STOREY] (BY OTHERS) — | | | TT!???Titliyy]...U” Lod i | | LTTTT 111] ee | [| | 8 | La a | a | ° | BI) MF — Hl = on 4 _| | > Li Ss co = | S | B ~ | Cc 4 % z SMLNIO ALMIGVNIVLSNS | HARBOUR ROAD S nexterra SITE PLAN iS DOLKSIDE GREEN Sams igen Tan &X Wy nexterra GROUND FLOOR PLAN & DOLKSIDE GREEN cc PT tit | nt edna Beate: 1100, Elevation Keyncter 5 aie 14 + Ceomemte Nesamet Comy 7 Wettenl Cavaiheme Mabat Sich 2 Merten Prefled Maral Safing State thee: 4 Mondony Seam Meta Boon 2 Kaew Chaar Motwet or Light Groen tet 4 3800 (8:07) Roti > Guorivol w/ Varsenl Fickete + Lato Shae brvalees Shoot 4 Cohoout towwer (1 Aenuahent lenerkers Weil 11 Mente 1 Motel Saw Saveger Poon Mack 19 Bededing Lighting law energy hgh owns wetivenal trpe Eaters: NOD devaelight an glane 14 Oreste Dose (3 Mae Dooe 14 Convene Parting Seren Pory W's “N nexterra BUILDING ELEVATIONS DOLKSIDE GREEN About Nexterra Systems Corp. Vancouver, British Columbia Nexterra is a leading developer and supplier of advanced biomass gasification solutions that enable customers to self-generate heat and/or power inside-the-fence at institutional and industrial facilities using low cost biomass fuels. Nexterra’s strategic relationships include GE Energy, Johnson Controls and Andritz. About Dockside Green Development Victoria, British Columbia Dockside Green is a 1.3 million-square- foot residential and commercial development in Victoria's Inner Harbour, demonstrating the latest in sustainable design and best practices including green roofs, on-site wastewater treatment, and a biomass gasification district energy system supplying heating and domestic hot water. Projects include: © Nexterra Product Development Centre (PDC), Dockside Green's sustainable features include: ¢ Highest rating LEED® Platinum Kamloops, BC e Renewable heating and hot water ° har tee Ltd., Heffley Creek Division, Kamloops, B © On-site sewage treatment ' © University of South Carolina, Columbia, SC * On-site car sharing and mini-transit system ie mie eee Dockside Green Development, Victoria, BC i ee fixtures and EnergyStar Partners: U.S. Department of Energy (DOE), Oak Ridge : National Laboratory, Oak Ridge, TN © Selected by the Clinton Climate Initiative as one of 16 Kruger Products Limited, New Westminster, B founding members of the “Climate Positive Vancity cori i i 7 nial 7 oa ; my td Development Program” Utilities © University of Northern British Columbia, Prince George, BC ¥-) Terasen iv Natural Resources ia eay Energy Services anada 2 For more information: a lame For more information: www.docksidegreenenergy.com www.nexterra.ca 1300 - 650 West Georgia Street Vv MEXteMa em DOCKSIDE GREEN BIOMASS GASIFICATION SYSTEM www.nexterra.ca GALENA CITY SCHOOL DISTRICT GALENA, ALASKA 99741 PHONE (907) 656-1205 FAX (907) 656-2238 SUPERINTENDENT Chris Reitan ez ; | \ (Heart df the Interior) December 23, 2011 Re: Biomass Meeting Between City of Galena, Galena City School District, and AEA on December 15, 2011 Dear Devany Plentovich; I just wanted to take a moment before the holiday season totally engulfs us and thank you and Sara Fisher- Goad for meeting with us on Thursday, December 15, 2011. The meeting allowed us to get a better perspective of the funding cycles for AEA and how we might continue positioning our biomass project in Galena. We truly appreciate the level of attention that was provided to our biomass proposal and the discussion regarding how we might improve the proposal as we move forward. We believe we have a viable biomass project in Galena that will serve Galena and the surrounding communities well as we move to be more self-sufficient with our energy needs and consumption, and welcome the opportunity to continue working closely with AEA as we move forward with our project. During our meeting you indicated that you would appreciate a copy of the reconnaissance survey that WHpPacific prepared for Louden Tribal Council. Enclosed with this letter is a copy of that survey for your records. If there is additional information we could provide, please don’t hesitate to contact us. Again, thank you for your support of our efforts. Have a joyful holiday season. Ve. Chris Reitan, GCSD Superintendent Email: chris.reitan@galenanet.com Ce: Sara Fisher-Goad, Executive Director Alaska Energy Authority Tom Corrigan, Galena City Manager Kent Dawson, Kent Dawson Company David Lockard SL EE SLO ACL A ACCES AE LE AI EE Oe RE Ct ETE op AN SN From: David Lockard Sent: Monday, January 09, 2012 6:51 PM To: Devany Plentovich Ce: David Lockard Subject: Galena reconnaissance study comments 1. Appears to be well-written and technically competent 2. P.6: discussion of eliminating the need for fossil fuel overlooks the fuel requirements of transportation of workers, chainsaws, heavy equipment, etc. 3. P.6: the dramatic inefficiencies of power generation with ORC technology and of hydrogen production, storage, distribution and use are unlikely to be economically justifiable. 4. P.7: the interties are unlikely to be economic. 5. Is there a local workforce available to run a biomass cultivation, collection, drying, and power generation facility? 6. P.8 indicates there is significant potential for improving generation and distribution efficiencies by as much as 10% and 50% respectively. 7. Galena PCE data appear to be incomplete for FY10 and FY11. If this is a failure to adequately report, it may indicate a lack of local managerial capacity that would bring into question the community’s and the utility’s ability to manage an ambitious renewable energy program. 8. Galena lost approximately 30% of its population between 2000 and 2010, largely as a result of the air force base closure. The reduction in energy needs may not be accurately reflected in historical data. 9. Diesel genset stack heat recovery should be considered as an alternative to these proposals. 10. The challenges of load-following and induction generator operation described in figure 2 have been overcome in recent Alaska projects using synchronous condensers, dispatchable loads, and dump loads. 11. P.14: the redox flow battery is unproven. 12. It would have been interesting to see an estimate of the cost per MMBtu of biomass vs. diesel. MEMORANDUM OF UNDERSTANDING POWERHOUSE/BIOMASS PROJECT This Memorandum of Understanding is executed on the date set forth below, and is made by and between: (i) Gwitchyaa Zhee Corporation (the “Corporation”), a corporation organized under the laws of the State of Alaska pursuant to the Alaska Native Claims Settlement Act (43 U.S.C. 1601 et seq.) (“ANCSA”), whose address is P.O. Box 329, Fort Yukon, AK 99740, and (ii) Gwichyaa Zhee Gwich’in Tribal Government (the “Tribe”), the recognized Tribal Government for the Village of Fort Yukon, Alaska formed on January 2, 1940 under the Indian Reorganization Act of 1934, as amended, whose address is P.O. Box 126, Fort Yukon, AK 99740, and (iii) | The City of Fort Yukon (the “City”), a municipal corporation, whose address is PO. Box 269, Fort Yukon, AK 99740. WHEREAS the Corporation is in the process of building a Powerhouse Facility and a Biomass Facility along with the requisite wood processing and storage facilities (the “facilities”) to support economic development and reduce overall community heating fuel consumption in Fort Yukon; and WHEREAS the new Powerhouse Facility will be owned by the Corporation and operated by GZ Utility Company (“the Utility”); and the Biomass Facility, wood processing, and wood storage facilities will be owned by the Corporation and operated by the newly formed GZ Heat Utility (“the Heat Utility”); WHEREAS the Utility and the Heat Utility are/will be subsidiaries of the Corporation, and the Corporation will enter into long-term use and operation agreements with both the Utility and the Heat Utility; WHEREAS all parties to this agreement recognize that locating the Powerhouse and Biomass facilities in close proximity to one another will allow for beneficial use of diesel generator recovered heat, greatly increasing the efficiency and fuel savings of the district heating system; WHEREAS the Tribe and the Corporation have previously entered into a Land Transfer Agreement (the “Land Transfer Agreement”) recorded on August 22, 1994 at Book 878, Page 307, records of the Fairbanks Recording District, Fourth Judicial District, State of Alaska, through which the Corporation conveyed the title to MEMORANDUM OF UNDERSTANDING Powerhouse/Biomass Project Page 1 of 8 rev. 1/11/12 certain lands which are most preferable for the location of the Powerhouse and Biomass Facilities to the Tribe; WHEREAS the City and the Corporation along with Native Village of Fort Yukon entered into an ANCSA 14(c)(3) settlement agreement on March 7, 1996 which (“Settlement Agreement”) was recorded on April 19, 1999, in the Fairbanks Recording District at Book 1135, Page 402. The agreement was modified by a Modification of Agreement (the “Modification”) on May 11, 2011 which was recorded on May 18, 2011, in the Fairbanks Recording District as document 2011- 008830-0. The Settlement Agreement provided that certain lands, including Lots 1-4 and 8-10 of Block 8, USS 2760 A & B, be conveyed to the City of Fort Yukon by the Corporation, and these lands are most preferable for the location of the Powerhouse and Biomass Facilities; and WHEREAS, as part of the project, the district heating piping system will be located within the City’s road rights-of-way, including but not limited to Hill Street, East Third Avenue, East First Avenue, Spruce Street, and adjacent streets and easements, and will require authorization by the City to construct, operate and maintain the system; WHEREAS the Tribe, the City, and the Corporation now wish to enter into an agreement on the location of the Powerhouse and Biomass Facilities in order to advance the mutually beneficial project, to confirm all necessary land transfers, and ensure that continuous access to the facilities are provided; Based upon the foregoing, the Corporation, the Tribe, and the City mutually agree as follows: 1. The Powerhouse and Biomass Facilities will be located on Tract A of in the Site Selection Document attached hereto and incorporated by reference. Tract A is comprised of the following parcels: a. Lots 1-5 and 8-10, Block 8, US Survey 2760 A & B; and b. Lots 1 and 2, Block 8A, US Survey 2760 A & B; and c. A portion of the unused right of way for East Fifth Avenue between Blocks 8 and 8A; and d. A portion of Lot 5, Section 7, Township 20 North, Range 12 East, Fairbanks Meridian. 2. The Tribe has agreed to transfer to the Corporation all parcels in Tracts B & C as shown on the Site Selection Document attached hereto for use in support of the facilities. Tracts B and C are more particularly described as follows: a. Tract B is a portion of Lot 5, Section 7, Township 20 North, Range 12 East, Fairbanks Meridian. MEMORANDUM OF UNDERSTANDING Powerhouse/Biomass Project Page 2 of 8 rev. 1/11/12 b. Tract C is a portion of Lot 24, US Survey 7161. 3. The location of the facilities upon Tract A has been approved as the most preferable site by the City of Fort Yukon via Resolution 10-13 dated April 13, 2010 and the Corporation via Resolution 10-07 dated April 27, 2010. The location was proposed by the Tribe as the Secondarily Preferred Site through a draft Agreement in Principle on the Site Selection of the GZ Biomass/Powerhouse Project; however, no Resolution has been approved by the Tribe to this effect. All parties agree that Site must have accessing from Airport Road Easement, all heavy equipment access from Airport Road; however, small trucks, parking, etc. can be from Hill Street. Further, the site will be adequately fenced, a buffer zone type of vegetation 30’ wide to screen facility, and reasonable efforts will be made to ensure low decibel levels for minimum noise pollution from the facilities. 4. Through its signature on this Agreement, the Tribe hereby agrees to execute a Resolution approving Tract A as an approved site for the Biomass/Powerhouse Project. 5. The Tribe, City, and Corporation through their signatures below additionally agree to the use of Tracts B and C in support of the facilities. 6. Block 8, U.S. Survey 2760 A & B is currently comprised of 10 lots, Lots 1-4 and 8-10 of which, although currently titled in the name of the Corporation, were included in the ANCSA 14(c)(3) Agreement from 1999 which states that the surface rights of these lots will be transferred to the City of Fort Yukon. As these lots are necessary for locating the Powerhouse and Biomass facility, and the City of Fort Yukon has approved this location for the facilities via Resolution 10-13 dated April 13, 2010, the City hereby agrees to execute all paperwork necessary to transfer the surface rights to these seven (7) lots to the Corporation in accordance with City code so the facilities may be constructed and operated thereon. 7 The ANCSA 14(c)(3) Agreement recorded in 1999 placed a restriction on the use of Block 8, Lots 1-4, and Lots 8-10, U.S. Survey 2760 A & B limiting the use to only residential, recreational, or agricultural purposes. By signing this Memorandum of Understanding, the City, Tribe, and Corporation hereby consent to the removal of these restrictions for these lots and agree to the construction and operation of the facilities thereon. 8. Additionally, Block 8, Lots 1-4 and 8-10 of U.S. Survey 2760 A & B were included in the Land Transfer Agreement between the Corporation and the Tribe which placed limitations on the transferability of these parcels; however, notwithstanding the provisions of the Land Transfer Agreement, the Tribe and the Corporation expressly agree that Lots 1-4 and 8-10 of Block 8, U.S. Survey 2760 A & B, shall be conveyed to the Corporation by special quitclaim deed, which deed will MEMORANDUM OF UNDERSTANDING Powerhouse/Biomass Project Page 3 of 8 rev. 1/11/12 acknowledge that such action is being taken notwithstanding the restrictions on the right of the Tribe to convey any interest in the townships set forth in the Land Transfer Agreement. The purpose of such conveyance is to allow the Corporation to use these lots for the mutually beneficial facilities. Following the conclusion of the operation of the facilities as determined by the Corporation, or the abandonment of this Powerhouse/Biomass Project for more than six (6) consecutive months by the Corporation, or the incurable default of the Corporation in any of its contracts associated with or relating to this Powerhouse/Biomass Project as defined and implemented by the parties to these contracts, title to Lots 1-4 and 8-10 will revert back to the Tribe in accordance with the Land Transfer Agreement. 9. Block 8, Lots 5, 6, and 7, US Survey 2760 A & B are currently vested in the Corporation pursuant to a Yukon Title Company title report dated February 25, 2010, with an encumbrance from a 1983 Deed of Trust from the Corporation to several individuals doing business as Fort Yukon Utilities. This Deed of Trust has been satisfied, and by their signatures below, the City, Corporation, and Tribe agree to the execution and recording of a Satisfaction of Deed of Trust in the Fairbanks Recording District to ensure the Corporation has clear title to Block 8, Lots 5, 6, and 7, US Survey 2760 A&B. 10. Additionally, Block 8A, which is separated from Block 8 by an unused right of way for E. Fifth Street, will also serve as a location for the facilities. In order to secure site control for the project, the Corporation will have Block 8A re-platted to join Block 8, and the City, Corporation, and Tribe agree to execute all documentation necessary to ensure the Corporation has title to Lots 1 and 2, Block 8A and to effectuate a re-plat of Block 8A with Lots 1-5 & 8-10 of Block 8 for purposes of constructing and operating the facilities. Since dedicated rights of way are under the jurisdiction of the City of Fort Yukon as the municipal government, the City agrees to follow applicable ordinances and state law to vacate the unused right of way. 11. The City of Fort Yukon will issue easements, as necessary to provide authorization to construct, operate and maintain the district heating piping system within the City’s rights of way. These easements will be issued in accordance with applicable City land ordinances. 12. The Tribe is presently the owner of record of Lot 5, Section 7, Township 20 North, Range 12 East, Fairbanks Meridian pursuant to a title report from Yukon Title Company dated August 18, 2011. The Corporation is presently the titleholder of record of Lot 24, US Survey 7161. However, both Lot 5 and Lot 24 are subject to the 1994 Land Transfer Agreement between the Tribe and the Corporation which provides for the joint management of the property. Therefore, the Tribe agrees to complete all documentation necessary to effectuate the transfer of both Lot 5, Section 7, and Lot 24, USS 7161 to the Corporation, to the extent the MEMORANDUM OF UNDERSTANDING Powerhouse/Biomass Project Page 4 of 8 rev. 1/11/12 Tribe has an ownership interest therein. This transfer to the Corporation shall be by special quitclaim deed, which deed will acknowledge that such action is being taken notwithstanding the restrictions on the right of the Tribe to convey any interest in the townships set forth in the Land Transfer Agreement. The purpose of such conveyance is to allow the Corporation to use these tracts for the mutually beneficial facilities. Following the conclusion of the operation of the facilities as determined by the Corporation, or the abandonment of this Powerhouse/Biomass Project for more than six (6) consecutive months by the Corporation, or the incurable default of the Corporation in any of its contracts associated with or relating to this Powerhouse/Biomass Project as defined and implemented by the parties to these contracts, title to Tracts B and C will revert back to the Tribe in accordance with the Land Transfer Agreement. 13. | Doyon Limited owns the subsurface rights to Lots 1-4 and 8-10, Block 8, U.S. Survey 2760 A&B, and may choose, via separate instrument, to transfer those subsurface rights to the Corporation during either the construction or operation of the facilities. Such transfer will occur solely between Doyon Limited and the Corporation. 14. The City and Tribe believe that it would be in their collective best interests as well as the best interests of the residents of Fort Yukon if the facilities were constructed and operated by the Corporation, and/or its subsidiaries, and hereby agree to the Corporation’s construction and operation of the facilities. 15. The City and Tribe additionally agree to ensure access to the facilities is always available via public roadways, and to prevent and promptly remove any access obstructions that could impede operations of the facilities. 16. The parties hereto agree that the provisions of this Memorandum cannot be amended, modified, revised, revoked or otherwise changed in any manner except in writing. 7; Each of the persons signing on behalf of a party hereto represents and warrants that she or he has been duly authorized to execute this agreement on behalf of such party and does so with the full consent and approval of said party. 18. General Provisions: a. Modification of Agreement: This Agreement may only be modified by a document in writing executed by all parties to the Agreement. b. Entire Agreement: This Agreement embodies the entire agreement and understanding between parties and supercedes all prior agreements and understandings between all three parties relating to the subject matter thereof. MEMORANDUM OF UNDERSTANDING Powerhouse/Biomass Project Page 5 of 8 rev. 1/11/12 c. Waiver: The failure of any party to this Agreement to insist upon the strict performance of any provision of this Agreement or to exercise any right, power, or remedy consequent upon a breach thereof, shall not constitute a waiver by said party of any such provision, breach, or subsequent breach of the same or any other provision. d. Severability: If any provision in this Agreement or any application thereof shall be invalid or unenforceable, the remainder of this Agreement and any other application of such provision shall not be affected. e. Execution of Documents: The parties agree to execute such other documents as from time to time are necessary to effectuate the purpose of this Agreement. DATED AND EFFECTIVE AS OF THE LAST DATE OF SIGNATURE SET FORTH BELOW. GWITCHYAA ZHEE CORPORATION Laurie Thomas By: Name: 7 | LAD rite__OL Corpovatern Pond Preridad Date: Cpu 27 : LAL STATE OF ALASKA ) ) ss. FOURTH JUDICIAL DISTRICT ) The foregoing instrument was acknowledged before me this 23" day of florsten, , 2012, by Laure Thangs , the of Gwitchyaa Zhee Corporation, an Alaska corporation, on behalf of the corporation. Ge Public in and for Alaska My Commission Expires: LOLb ZT c/ (Seal) State of Alaska NOT. PUBLIC Linda M. Horace My commission expires October 18, 2014 MEMORANDUM OF UNDERSTANDING Powerhouse/Biomass Project Page 6 of 8 rev. 1/11/12 GWICHYAA ZHEE GWICH’IN TRIBAL GOVERNMENT Nancy J Title: Date: STATE OF ALASKA ) ) ss. FOURTH JUDICIAL DISTRICT ) The foregoing instrument was acknowledged before me this [4-day of a Aa 2012, by “int LIN the st Chile of Gwichyaa Zhee Gwich’in Tribal Government, a tribal entity formed under federal law, on behalf of the tribal entity. ! / ~ LINDA FIELDS A role Jul pla (Seal) NOTARY PUBLIC otary Public in and for Alaska State of A eg she My Commission Expires: lr} of- (ea CITY OF FORT YUKON ATTEST Twila Strom Linda Fields By: foe od Ly ott Nae de lel Title: LT Title:_| M Tg C ler bc Date: Akg 4A o_ ZO Date. [~ZO-12 MEMORANDUM OF UNDERSTANDING Powerhouse/Biomass Project Page 7 of 8 rev. 1/11/12 STATE OF ALASKA ) ) ss. FOURTH JUDICIAL DISTRICT ) The foregoing instrument was acknowledged before me this 26rbgay of (Oita uy , 2012, by ASIAN — Vos , the M GAA 5 , of the City of Fort Yukon, an Alaska municipal corporation, on behalf of the municipal corporation. “LINDA | .CLD§ (Seal) NOTARY Notary Sibi in and for Alaska — ‘Sia ot ti My Commission Expires: _W=20>42_ vtezonte Sch Win o Ba ce MEMORANDUM OF UNDERSTANDING Powerhouse/Biomass Project Page 8 of 8 rev. 1/11/12 FORT YUKON CHP SCAP EXHIBIT A TRACT "A" - (6.70 acres)\}