HomeMy WebLinkAboutAPPLICATION - 20221205 REF Round 15 AKR ApplicationRenewable Energy Fund Round 15
Grant Application – Alaska Renewables LLC
AEA 23046 Page 1 of 34 10/04/2022
December 5, 2022
Grants Coordinator Email: grants@akenergyauthority.org
Alaska Energy Authority (AEA)
813 West Northern Lights Blvd.
Anchorage, AK 99503
Dear AEA staff, consultants, and members of the Advisory Committee,
Alaska Renewables (“AKR”) is a small renewable energy development company based in
Fairbanks, Alaska. Founded in early 2021, we are part of the Alaskan community and are
passionate about understanding and responding to its vision and needs. Community is the
foundation upon which successful renewable energy projects are built, and we pride
ourselves on taking a collaborative approach that addresses community concerns while
bringing environmentally responsible and locally sensible projects to fruition. We take the
time to share what a renewable energy project can mean for our community and learn how
it can best align with the community’s diverse values, stakeholders, and needs. We
acknowledge and honor the Alaska Native peoples upon whose ancestral lands we live
and work.
Alaska Renewables aims to deliver clean, competitive renewable projects that create jobs,
increase grid resiliency, and provide a sustainable and secure energy supply for Alaska
that will reduce energy costs while protecting the environment. Therefore, AKR is applying
for a grant from the Renewable Energy Fund to support the further maturity of large -scale
wind projects for off-take to the Railbelt Electric Cooperatives.
One of our projects has been awarded a contract from Chugach Electric Association for
the largest wind generation facility in this state’s history. This application further
incorporates other project sites that are at various stages of development and under
evaluation by all the Railbelt Electric Cooperatives. The cost of developing even a single
site far exceeds the $2M cap of the program. AEA has asked AKR to submit a single
application, which will focus on the top two sites under consideration, and depending on
the amount awarded (if any), AKR would select a portion of those sites identified to best
leverage those REF grant monies. AKR would be flexible in partnership with AEA towards
prioritizing the best use of any awarded funds in consultation with AKR and our existing
and possible future off-takers. This application is highly complementary to Phase I/II
reconnaissance efforts which several of the Railbelt Electric Cooperatives have previously
secured and are again seeking. Rather than duplicating efforts, the use of funds would be
highly focused on “Phase III” efforts to urgently bring low-cost options to reality on behalf of
the Railbelt.
In accordance with 3 AAC 107.630 (b), we request trade secrets and proprietary company
data be kept confidential. We recognize that a significant portion of the application is
currently labeled as confidential. Large-scale power plant development is a highly-
competitive business, and much of the attached information is protected by Non -
Disclosure Agreements with partners including Railbelt Electric Cooperatives. We have
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Grant Application – Alaska Renewables LLC
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labeled such information in red throughout the application for easy redaction. All attached
files are considered confidential unless otherwise agreed. AKR will work with AEA to make
information public as necessary and as allowable by our obligations unto other parties.
AKR is committed to providing matching resources at the match amounts indicated in the
grant application. As CEO, I hereby commit AKR to the obligations under the grant; and
certify AKR is in compliance with applicable federal, state and local laws including existing
credit and federal tax obligations.
The AKR team has completed gigawatts of projects from cold climates such as Canada to
islanded grids such as Japan. We are honored to have the welcom e and engagement from
many stakeholders who are working to advance Alaska’s energy transition, some of whom
have provided letters of recommendation attached. We appreciate the opportunity from
Alaska Energy Authority to apply for this grant and look forward to your response.
Sincerely,
Matt Perkins
CEO
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Grant Application – Alaska Renewables LLC
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Application Forms and Instructions
This instruction page and the following grant application constitutes the Grant Application Form for
Round 15 of the Renewable Energy Fund (REF). A separate application form is available for
projects with a primary purpose of producing heat (see Request for Applications (RFA) Section
1.5). This is the standard form for all other projects, including projects that will produce heat and
electricity. An electronic version of the RFA and both application forms is available online at:
https://www.akenergyauthority.org/What-We-Do/Grants-Loans/Renewable-Energy-Fund/2022-
REF-Application.
What follows are some basic information and instructions for this application:
● If you are applying for grants for more than one project, provide separate application forms for
each project.
● Multiple phases (e.g. final design, construction) for the same project may be submitted as one
application.
● If you are applying for grant funding for more than one phase of a project, provide milestones
and grant budget for each phase of the project (see Sections 3.1 and 3.2.2).
● In order to ensure that grants provide sufficient benefit to the public, AEA may limit
recommendations for grants to preliminary development phases in accordance with 3 Alaska
Administrative Code (ACC) 107.605(1).
● If some work has already been completed on your project and you are requesting funding for
an advanced phase, submit information sufficient to demonstrate that the preceding phases are
completed and funding for an advanced phase is warranted. Supporting documentation may
include, but is not limited to, reports, conceptual or final designs, models, photos, maps, proof
of site control, utility agreements, business and operation plans, power sale agreements,
relevant data sets, and other materials. Please provide a list of supporting documents in
Section 11 of this application and attach the documents to your application.
● If you have additional information or reports you would like the Authority to consider in
reviewing your application, either provide an electronic version of the document with your
submission or reference a web link where it can be downloaded or reviewed. Please provide a
list of additional information; including any web links, in Section 12 of this application and attach
the documents to your application. For guidance on application best practices please refer to
the resource-specific Best Practices Checklists; links to the checklists can be found in the
appendices list at the end of the accompanying REF Round 15 RFA.
● In the Sections below, please enter responses in the spaces provided. You may add additional
rows or space to the form to provide sufficient space for the information, or attach additional
sheets if needed.
● If you need assistance with your application, please contact AEA’s Grants Coordinator by email
at grants@akenergyauthority.org or by phone at (907) 771-3081.
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Grant Application – Alaska Renewables LLC
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REMINDER:
● AEA is subject to the Public Records Act AS 40.25, and materials submitted to AEA may be
subject to disclosure requirements under the act if no statutory exemptions apply.
● All applications received will be posted on the Authority web site after final recommendations
are made to the legislature. Please submit resumes as separate PDFs if the applicant would
like those excluded from the web posting of this application.
● In accordance with 3 AAC 107.630 (b) Applicants may request trade secrets or proprietary
company data be kept confidential subject to review and approval by AEA. If you want
information to be kept confidential the applicant must:
o Request the information be kept confidential.
o Clearly identify the information that is the trade secret or proprietary in their application.
o Receive concurrence from the Authority that the information will be kept confidential. If
the Authority determines it is not confidential, it will be treated as a public record in
accordance with AS 40.25 or returned to the applicant upon request.
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Grant Application – Alaska Renewables LLC
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SECTION 1 – APPLICANT INFORMATION
Please specify the legal grantee that will own, operate, and maintain the project upon completion.
Name (Name of utility, IPP, local government, or other government entity)
Alaska Renewables LLC
Tax ID # 87-1705711
Date of last financial statement audit: N/A
Mailing Address: Physical Address:
2595 Allen Adale Rd 2595 Allen Adale Rd
Fairbanks, AK 99709 Fairbanks, AK 99709
Telephone: Fax: Email:
518-424-4432 N/A matt@alaskarenewables.com
1.1 Applicant Point of Contact / Grants Coordinator
Name: Title:
Matt Perkins CEO
Mailing Address:
2595 Allen Adale Rd
Fairbanks, AK 99709
Telephone: Fax: Email:
518-424-4432 N/A matt@alaskarenewables.com
1.1.1 Applicant Signatory Authority Contact Information
Name: Title:
Matt Perkins CEO
Mailing Address:
2595 Allen Adale Rd
Fairbanks, AK 99709
Telephone: Fax: Email:
518-424-4432 N/A matt@alaskarenewables.com
1.1.2 Applicant Alternate Points of Contact
Name Telephone: Fax: Email:
Andrew McDonnell 907-987-2951 N/A andrew@alaskarenewables.com
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Grant Application – Alaska Renewables LLC
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1.2 Applicant Minimum Requirements
Please check as appropriate. If applicants do not meet the minimum requirements, the application
will be rejected.
1.2.1 Applicant Type
☐ An electric utility holding a certificate of public convenience and necessity under AS 42.05
CPCN #______, or
☒ An independent power producer in accordance with 3 AAC 107.695 (a) (1)
CPCN #_N/A___, or
☐ A local government, or
☐ A governmental entity (which includes tribal councils and housing authorities)
Additional minimum requirements
☒ 1.2.2 Attached to this application is formal approval and endorsement for the project by the
applicant’s board of directors, executive management, or other governing authority. If the
applicant is a collaborative grouping, a formal approval from each participant’s governing
authority is necessary. (Indicate yes by checking the box)
☒ 1.2.3 As an applicant, we have administrative and financial management systems and follow
procurement standards that comply with the standards set forth in the grant agreement
(Section 3 of the RFA). (Indicate yes by checking the box)
☒ 1.2.4 If awarded the grant, we can comply with all terms and conditions of the award as
identified in the Standard Grant Agreement template at
https://www.akenergyauthority.org/What-We-Do/Grants-Loans/Renewable-Energy-
Fund/2022-REF-Application (Any exceptions should be clearly noted and submitted with the
application.) (Indicate yes by checking the box)
☒ 1.2.5 We intend to own and operate any project that may be constructed with grant funds for
the benefit of the general public. The projects will benefit the general public via the power
purchasers, each one or more Member-Owned Electric Cooperatives. While we intend to own
and operate, there is significant interest in longer-term ownership by larger infrastructure
owner/operators, such as an Alaska Native Corporation, a global energy major, or another
independent power producer. The facilities may also eventually transfer ownership and
optionally operation to one or more of the off-taking Member-Owned Electric Cooperatives.
Such change in ownership would not change the public benefit nature of the projects nor the
commercial obligations by the project unto the Member-Owned Electric Cooperative power
purchasers. (Indicate yes by checking the box)
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Grant Application – Alaska Renewables LLC
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SECTION 2 – PROJECT SUMMARY
2.1 Project Title
Provide a 4 to 7 word title for your project. Type in the space below.
Utility-Scale Railbelt Wind – Alaska Renewables
2.2 Project Location
2.2.1 Location of Project – Latitude and longitude (preferred), street address, or
community name.
Latitude and longitude coordinates may be obtained from Google Maps by finding you project’s
location on the map and then right clicking with the mouse and selecting “What is here? The
coordinates will be displayed in the Google search window above the map in a format as follows:
61.195676.-149.898663. If you would like assistance obtaining this information, please contact
AEA’s Grants Coordinator by email at grants@akenergyauthority.org or by phone at (907) 771-
3081.
Latitude 64.8840 Longitude -148.6050
Latitude 61.4337 Longitude -151.0019
[Other description of location]
2.2.2 Community benefiting – Name(s) of the community or communities that will be the
beneficiaries of the project.
Members of CEA, GVEA, HEA, and MEA
2.3 Project Type
Please check as appropriate.
2.3.1 Renewable Resource Type
☒ Wind ☐ Biomass or Biofuels (excluding heat-only)
☐ Hydro, Including Run of River ☐ Hydrokinetic
☐ Geothermal, Excluding Heat Pumps ☒ Transmission of Renewable Energy
☐ Solar Photovoltaic ☒ Storage of Renewable
☐ Other (Describe) ☐ Small Natural Gas
2.3.2 Proposed Grant Funded Phase(s) for this Request (Check all that apply)
Pre-Construction Construction
☐ Reconnaissance ☒ Final Design and Permitting
☐ Feasibility and Conceptual Design ☐ Construction
2.4 Project Description
Provide a brief, one-paragraph description of the proposed project.
Following years of reconnaissance, field assessments, and commercial dialogue with all the
Railbelt Electric Cooperatives, AKR now has several wind development assets which have the
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potential to dramatically displace expensive fossil fuel consumption for electricity generation in
Alaska. Little Mt Susitna (LMS) has been awarded the win from Chugach Electric’s recent
Renewables RFP. Shovel Creek and other sites entered into GVEA’s 2021 RFI and are sites of
potential interest for GVEA’s strategic generation plan. Both LMS and Shovel Creek now have
meteorological campaigns up and running (the latter thanks to REF 14). Now, AKR is advancing
into the core work of site environmental data collection, engineering, grid integration and
interconnection study, and the many other workstreams required to bring the projects through to
construction.
2.5 Scope of Work
Provide a short narrative for the scope of work detailing the tasks to be performed under this
funding request. This should include work paid for by grant funds and matching funds or performed
as in-kind match.
The stage of development for the two leading sites (Shovel Creek and Little Mt Susitna) appears to
best fit “Phase III”, and funds could be used for any of the following workstreams: advancement of
wind resource via erection of further met towers and/or LIDAR units, engineering design for the
final project layouts, payment of portions of interconnection study, independent engineering study
for project finance, permit preparation, environmental studies, and legal support for each of PPA
contracting, EPC contracting, turbine procurement, financial close, and final lease negotiation.
Additionally, in consultation with AEA, some funding may go for tasks on additional sites that AKR
has under development.
2.6 Previous REF Applications for the Project
See Section 1.15 of the RFA for the maximum per project cumulative grant award amount
Round
Submitted
Title of application Application
#, if known
Did you
receive a
grant? Y/N
Amount of REF
grant awarded
($)
14 Interior Alaska Wind Energy
Resource Assessment
14029 GVEA 855,000
Note: Should AKR be awarded an REF 15 grant, and should AKR allocate funding thereunder to a
project site being validated by GVEA under the funding above, AKR will coordinate with AEA to
ensure that the maximum grant allocation per project is not exceeded. Further, should GVEA be
awarded further funding for the work above, AKR will coordinate with AEA and GVEA to ensure
that the maximum grant allocation per project is not exceeded.
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Grant Application – Alaska Renewables LLC
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SECTION 3 – Project Management, Development, and Operation
3.1 Schedule and Milestones
Please fill out the schedule below (or attach a similar sheet) for the work covered by this funding
request. Be sure to identify key tasks and decision points, including go/no go decisions, in your
project along with estimated start and end dates for each of the milestones and tasks. Please
clearly identify the beginning and ending of all phases (I. Reconnaissance, II. Feasibility and
Conceptual Design, III. Final Design and Permitting, and IV. Construction) of your proposed
project. See the RFA, Sections 2.3-2.6 for the recommended milestones for each phase. Add
additional rows as needed.
Task
# Milestones Tasks
Start
Date
End
Date Deliverables
1 Detailed resource
assessment
Use the underway
meteorological
campaign data and
other site-specific
wind datasets to
define additional
campaign goals,
perform ongoing
met tower
maintenance,
procure and install
additional towers
and/or LIDAR, and
hire independent
engineer to conduct
a detailed resource
assessment, finalize
optimal turbine
layout, and write
bankability reports
Mar
2023
Oct
2024
Final turbine layout,
Independent Engineer
report
2 Project scoping
and contractor
solicitation
Negotiate EPC
contracts Jan
2023
June
2023
Executed contracts
3 Permit
applications
Additional Land Use
Permit Applications,
Section 404
Wetland Permits,
Section 401 Water
Quality Certificate,
Cultural Resource
Investigation Permit,
etc.
Sept
2023
May
2024
Awarded permits
4 Final
environmental
assessment and
mitigation plans
Wetland Field
Delineations, FAA
Obstruction
Evaluation, Phase I
Environmental
Report, Raptor
July
2023
Jan
2024
Reports and agency
recommendations
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Surveys, Bird
Migration Surveys,
Breeding Bird
Surveys
5 Resolution of land
use, right of way
issues
Negotiate final land
leases Mar
2021
Aug
2023
Lease and easement
agreements
6 System final
engineering
Geotech / Soil
Resistivity
Civil Design
Foundation Design
Collection System
Design
Project Substation
Design
SCADA &
Communication
Design
Arc Flash Studies
Jul
2023
Oct
2024
Construction drawings, final
permit materials, etc.
7 System
interconnection
and integration
studies
Develop transient
stability models,
short circuit model,
1-line and 3-line
drawings, etc.
Conduct integration
study to determine
the integration
impacts and costs
and benefits to the
Utility’s system and
Power Pool resulting
from the proposed
Resources
Sep
2022
Dec
2023
Interconnection plan and
agreement
Verification of plan to
comply with Railbelt
Reliability Council’s
reliability standards
Verification of plan to
comply with Power Pool’s
reliability requirements
Metering plan and
agreement
Dispatch, SCADA, and
telecommunications plan
and agreement
Voltage, reactive power,
and power factor control
plan
Facility synchronization
plan
Reliability guarantee
Operational issue plan
Abnormal frequency plan
Abnormal voltage plan
Inspection requirements
agreement
Commissioning plan
Energization plan
Witness agreements
Communications plan and
procedure for normal and
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Grant Application – Alaska Renewables LLC
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emergency operating
conditions
Curtailment procedure
agreement
8 Final cost estimate
and financing plan
Negotiate turbine
purchase agreement
and financial
structure
Nov
2023
May
2024
Financier-agreed pro forma,
and investor, legal, and
diligence
contracts/documents
9 Power or heat sale
agreements in
place
Negotiate final PPA
contract(s) Mar
2023
Oct
2023
PPA and/or other off-taker
commercial contract(s)
10 Regulatory
approval
Support off-takers
through RCA
process
Jun
2023
Feb
2024
RCA approval
11 Final business and
operational plan
Negotiate O&M
agreements,
hire/assign
operational team,
finalize
commissioning and
energization plan,
implement
integration plan with
off-takers
Jan
2024
Oct
2024
Operating manuals, asset
management team and
organizational structure in-
place, milestone punch
lists, etc.
3.2 Budget
3.2.1 Funding Sources
Indicate the funding sources for the phase(s) of the project applied for in this funding request.
Grant funds requested in this application $2,000,000
Cash match to be provideda $2,946,500
In-kind match to be provideda $600,000
Energy efficiency match providedb $
Total costs for project phase(s) covered in application (sum of above) $5,546,500
Describe your financial commitment to the project and the source(s) of the match. Indicate
whether these matching funds are secured or pending future approvals. Describe the impact, if
any, that the timing of additional funds would have on the ability to proceed with the grant.
Over the past two years, AKR has already raised >$1M in cash from private investors based in
Alaska and the L48, and invested approximately half of this in developing these projects, and
further invested significantly in in-kind contributions (labor, equipment). At the time of application,
AKR has a portion of the cash match above in-hand, is actively raising the next round of capital,
and is committed to allocate it to the projects proposed herein.
a Attach documentation for proof (see Section 1.18 of the Request for Applications)
b See Section 8.2 of this application and Section 1.18 of the RFA for requirements for Energy Efficiency
Match.
3.2.2 Cost Overruns
Describe the plan to cover potential cost increases or shortfalls in funding.
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Unanticipated/unbudgeted costs and shortfalls in funding will be addressed through minimizing the
number of sites in the scope and/or covering the remaining development costs with private capital.
3.2.3 Total Project Costs
Indicate the anticipated total cost by phase of the project (including all funding sources). Use actual
costs for completed phases. Indicate if the costs were actual or estimated.
Reconnaissance Actual $449,487
Feasibility and Conceptual Design Actual $1,167,846
Final Design and Permitting Estimated $5,546,500
Construction Estimated $589,844,079
Total Project Costs (sum of above) Estimated $597,007,912
Metering/Tracking Equipment [not included in project
cost]
Estimated $525,000
3.2.4 Funding Subsequent Phases
If subsequent phases are required beyond the phases being applied for in this application,
describe the anticipated sources of funding and the likelihood of receipt of those funds.
● State and/or federal grants
● Loans, bonds, or other financing options
● Additional incentives (i.e. tax credits)
● Additional revenue streams (i.e. green tag sales or other renewable energy subsidies or
programs that might be available)
AKR is initiating the next round of private financing to bring these projects through to construction.
The timing of these funds has no restriction on the ability to proceed with the grant. There is
significant interest from large investment groups, but the best negotiation position for AKR – and
the Railbelt Electric Cooperatives – will be if the next round of financing can happen on the
Railbelt’s timeline, not investors’. Therefore while the grant funds represent only a portion of the
total cost of developing these wind farms, a full REF award would give AKR better negotiation
position with the capital markets and therefore a lower cost of capital, and thus meaningfully
reduce the cost of electricity to the Railbelt and benefit the public. Therefore for such large projects
as these, a $2M grant fund has a massive benefit ratio.
Specific funding sources that are of relevance are the Production/Investment Tax Credit and
MACRS Depreciation, both of which are long-standing programs over the history of the wind
industry, and which were recently further expanded under the 2022 Inflation Reduction Act.
3.2.3 Budget Forms
Applications MUST include a separate worksheet for each project phase that was identified in
Section 2.3.2 of this application — I. Reconnaissance, II. Feasibility and Conceptual Design, III.
Final Design and Permitting, and IV. Construction. Please use the tables provided below to detail
your proposed project’s total budget. Be sure to use one table for each phase of your project, and
delete any unnecessary tables. The milestones and tasks should match those listed in 3.1 above.
If you have any question regarding how to prepare these tables or if you need assistance preparing
the application please feel free to contact AEA’s Grants Coordinator by email at
grants@akenergyauthority.org or by phone at (907) 771-3081.
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Phase 3 — Final Design and Permitting
Milestone or Task
Anticipated
Completion
Date
RE- Fund
Grant Funds
Grantee
Matching
Funds
Source of
Matching
Funds:
Cash/In-
kind/Federal
Grants/Other
State
Grants/Other
TOTALS
Use first met tower dataset
and other site-specific wind
datasets to define additional
campaign goals
31-Mar 2023 $2,500 $5,000 In-kind $7,500
Met tower maintenance Oct 2024 $10,000 $8,000 In-kind $18,000
Procure and install additional
towers and/or LIDAR June 2023 $600,000 $48,000 In-kind $648,000
Independent engineer to write
bankability reports Oct 2024 $100,000 $0 $100,000
Negotiate EPC contracts Jun 2023 $ $40,000 Cash & In-
kind $40,000
Additional Land Use Permit
Applications, Section 404
Wetland Permits, Section 401
Water Quality Certificate,
Cultural Resource
Investigation Permit, etc.
May 2024 $245,000 $0 $225,000
Wetland Field Delineations,
FAA Obstruction Evaluation,
Phase I Environmental Report,
Raptor Surveys, Bird Migration
Surveys, Breeding Bird
Surveys, etc.
Jan 2024 $717,500 $400,500 Cash $1,138,000
Negotiate final land leases Aug 2023 $ $40,000 Cash & In-
kind $40,000
Negotiate turbine purchase
agreement and financial
structure
May 2024 $ $575,000 Cash & In-
kind $575,000
Negotiate final PPA contract(s) Oct 2023 $ $225,000 Cash & In-
kind $225,000
Support off-takers through
RCA process Feb 2024 $ $30,000 Cash & In-
kind $30,000
System final engineering Oct 2024 $ $1,600,000 $1,600,000
Negotiate O&M agreements,
hire/assign operational team,
finalize commissioning and
energization plan, implement
integration plan with off-takers
Oct 2024 $0 $200,000 Cash & In-
kind $200,000
System interconnection and
integration studies Oct 2023 $325,000 $375,000 Cash & In-
kind $700,000
TOTALS $2,000,000 $3,546,500 $5,546,500
Budget Categories:
Direct Labor & Benefits $ $600,000 In-kind $
Travel & Per Diem $ $ $
Equipment $ $ $
Materials & Supplies $ $ $
Contractual Services $2,000,000 $2,946,500 Cash $
Construction Services $ $ $
Other $ $ $
TOTALS $2,000,000 $3,546,500 $5,546,500
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Grant Application – Alaska Renewables LLC
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3.2.4 Cost Justification
Indicate the source(s) of the cost estimates used for the project budget, including costs for future
phases not included in this application.
AKR’s prior experience developing and building wind projects, installing meteorological towers in
Alaska, contractor quotes for all phases of development and construction, and actual costs
incurred to date all form the cost justification.
3.3 Project Communications
3.3.1 Project Progress Reporting
Describe how you plan to monitor the progress of the project and keep AEA informed of the status.
Who will be responsible for tracking the progress? What tools and methods will be used to track
progress?
Using standard project management software and methods, project progress will be measured,
documented, forecasted and reported on a monthly basis by both AKR and contracted partners.
Each month, AKR will provide AEA a summary report describing the progress, updating the Gantt
chart, identifying issues or upcoming risks, costs versus budget and forecast / look ahead of
upcoming payments.
In addition to AKR’s management team who performs these functions today, AKR is actively hiring
several roles, including a Project Manager who would be assigned as the key POC for AEA. This
role will directly report to AKR’s CEO. As there are many contractors already involved, AKR has
already established reporting rhythms such as biweekly meetings, written progress reports, etc.
with these important extended team members. The Zoho platform offers timesheets to log billable
and non-billable hours, Gantt charts to manage the project plan and keep track of critical tasks, etc.
3.3.2 Financial Reporting
Describe the controls that will be utilized to ensure that only costs that are reasonable, ordinary
and necessary will be allocated to this project. Also discuss the controls in place that will ensure
that no expenses for overhead, or any other unallowable costs will be requested for reimbursement
from the REF Grant Program.
With a successful track record of self-financing the business, AKR has an intuitive discipline and
existential need for careful cost-management. The business employs competitive bidding for all
procurement >$5,000 to secure the right vendors/partners, and upfront negotiation to ensure clear
agreement on scope, timeline, cost, and liability.
However, intuition is only the foundation. The business is managed with Quickbooks, offering
immediate accountability into cost tracking. All costs are tracked therein. Moreover, AKR must
quarterly report financial statements to its board and investors. AKR accounting will assign a
project ID number for AEA funds that will be used to track, aggregate, analyze and report on all
projects financial activities and transactions directly related to this effort. All purchase orders and
internal labor charges will be reported under this project number. All costs will be itemized and
summarized in a monthly project cost summary report linked to each individual transaction. The
report will show budget versus actual dollars spent and estimate upcoming expenses / payments
based on updated task completion dates.
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SECTION 4 – QUALIFICATIONS AND EXPERIENCE
4.1 Project Team
Include resumes for known key personnel and contractors, including all functions below, as an
attachment to your application. In the electronic submittal, please submit resumes as separate
PDFs if the applicant would like those excluded from the web posting of this application.
4.1.1 Project Manager
Indicate who will be managing the project for the Grantee and include contact information. If the
applicant does not have a project manager indicate how you intend to solicit project management
support. If the applicant expects project management assistance from AEA or another government
entity, state that in this section.
As above, AKR is actively hiring several roles, including a Project Manager who will be assigned as
the key POC for AEA. This role will directly report to AKR’s CEO. In the meantime, the CEO is
managing the project – contact info as provided on p5.
4.1.2 Project Accountant
Indicate who will be performing the accounting of this project for the grantee. If the applicant does
not have a project accountant indicate how you intend to solicit financial accounting support.
AKR’s Accounting team is Anchorage-based Thomas Head & Greisen. Additional bookkeeping will
provided by AKR’s bookkeeper.
4.1.3 Expertise and Resources
Describe the project team including the applicant, partners, and contractors.
For each member of the project team, indicate:
● the milestones/tasks in 3.1 they will be responsible for;
● the knowledge, skills, and experience that will be used to successfully deliver the tasks;
● how time and other resource conflicts will be managed to successfully complete the task.
If contractors have not been selected to complete the work, provide reviewers with sufficient detail
to understand the applicant’s capacity to successfully select contractors and manage complex
contracts.
To complete this work, AKR will substantially rely on the expertise and resources of industry-
leading subject-matter experts at key contractor / consulting firms. Such contractors/firms have and
will be competitively solicited. AKR and those partners have deep experience in all aspects of wind
energy assessment and project feasibility analysis, including licensed professional electrical, civil
and environmental engineers and specialists in land acquisition, procurement, contracting, legal
reviews, surveying, permitting, mapping and CAD. The AKR team has a long and reputable history
developing and engineering over 5 GW of solar, wind, battery, gas turbine and coal power plants.
Andrew McDonnell – Milestones #1, 3, 4, 5
Former tenured professor of ocean, earth and environmental science
Full-time employee at AKR
Hands-on experience successfully leading the site selection, engineering, logistics, installation, and
commissioning of meteorological towers in Alaska.
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Deep experience with resource assessment, mapping, data science, remote monitoring,
environmental science, and technical writing
AKR has already contracted and/or collaborated with all of the following. Due to the competitive
nature of development, the network of project resources below is confidential.
Lou Bowers – Milestone #1
20-yr industry leading veteran of wind industry meteorology, >800MW assets operating
Successfully supported AKR on part-time basis for >1 yr
KB Energy and/or Baseline Renewables – Milestone #1
Longstanding industry-leading meteorological installation and commissioning partners
In-Alaska met campaign experience, 100s of met towers installed
Successfully supported AKR’s wind portfolio by each installing one of the two leading project sites
https://baselinerenewables.com/projects/
DNV or UL – Milestone #1
Global independent engineers with in-Alaska experience
DNV has successfully supported GVEA with the met campaign
https://www.dnv.com/power-renewables/generation/wind-energy.html
https://www.ul.com/industries/energy-and-utilities/renewables
Boreal Environmental Services – Milestone #1
Alaska-based expert in remote sensing equipment
Successfully supported AKR with power upgrades at LMS
https://borealenvironmental.com/
Davis, Wright & Tremaine – Milestones #2, 9, 10, 11
Broad legal firm with Anchorage-based team and extensive experience in energy issues nationally,
in addition to a key, recent track record with energy issues in front of the Regulatory Commission of
Alaska
Successfully supported AKR with regulatory counsel
https://www.dwt.com/
Stantec and ABR – Milestones #3, 4
Alaska-based teams with deep bench and track record – Stantec has GWs of wind experience and
ABR has worked on every utility-scale Alaska-based wind farm
Contracted to AKR for the projects
Kitchen Legal – Milestone #5
Well-regarded Anchorage-based attorney specializing in land and environmental legal matters
Contracted with AKR for nearly two years
http://www.kitchenlegal.com/
For Milestone #6, a contractor has not yet been selected to complete the work. AKR very recently
received proposals from several Engineering, Procurement and Construction firms including
Alaska-based teams. Those proposals provide sufficient detail to understand each engineering
firm’s capacity to successfully design and execute the projects. AKR has retained a leading EPC
project management expert, who built one of Alaska’s largest wind farms, to assist in selecting this
contractor.
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EPS, Inc. – Milestone #7
EPS is the grid engineering expert for the Alaska Railbelt and moreover has industry-leading
experience with integrating large renewables into “islanded” grids such as Maui
https://epsinc.com/
Matt Perkins – Milestones #8, 9, 11
Former employee of GE Renewables with experience specifying, pricing, negotiating, and
contracting power generation equipment including wind turbines; and experience negotiating
energy service agreements (e.g. PPAs); and experience building businesses from scratch
including hiring and setting up corporate operations.
4.2 Local Workforce
Describe how the project will use local labor or train a local labor workforce.
Workforce development is critical to the success of Alaska-based projects. More than half of the
team listed above is Alaska-based. AKR has an “Alaska-first” partner policy – for every major
scope of work to date, AKR has sought Alaska-based resources and in some cases provided
training to those personnel to enhance their skills. Moreover, AKR has sought only to bring in out-
of-state resources in partnership with local team-members, to collaborate and bring the best of
both the global experience and the Alaska-specific reality. This humility on both sides and
willingness to learn and exchange has proved to be key for AKR’s success to date, and will
continue to be critical.
A key imperative for 2023 is for AKR to work with the state’s Workforce Development team to
develop a broader training plan to ensure that the large workforce required to install and operate
these projects is available and competitive. As long-life assets, wind turbines provide the
opportunity for career-long operations & maintenance employment.
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SECTION 5 – TECHNICAL FEASIBILITY
5.1 Resource Availability
5.1.1 Assessment of Proposed Energy Resource
Describe the potential extent/amount of the energy resource that is available, including average
resource availability on an annual basis. For pre-construction applications, describe the resource to
the extent known. For design and permitting or construction projects, please provide feasibility
documents, design documents, and permitting documents (if applicable) as attachments to this
application (See Section 11). Likelihood of the resource being available over the life of the project.
See the “Resource Assessment” section of the appropriate Best Practice Checklist for additional
guidance.
Attached are confidential wind resource assessment summaries of the two sites.
Shovel Creek Wind Resource Assessment Summary and Project Layout.docx
Little Mount Susitna Wind Resource Assessment Summary and Project Layout.docx
Modeled energy production for each site (confidential):
Shovel_Creek_standard_energy_capture_report.xlsx
Little_Mount_Susitna standard_energy_capture_report.xlsx
A historical meteorological data report from the Shovel Creek (Murphy Dome) site (confidential) is
available in:
Murphy Dome Vbar Data Report to GVEA 5-09.xlsx
Attached are confidential feasibility assessments from GE, Stantec, and RESPEC covering
environmental/permitting, turbine suitability, road layouts, and construction. Further documents
regarding the projects can be provided upon AEA request.
5.1.2 Alternatives to Proposed Energy Resource
Describe the pros and cons of your proposed energy resource vs. other alternatives that may be
available for the market to be served by your project.
AKR is a technology-agnostic and site-agnostic developer – in considering how to be of service to
the Railbelt, we continuously look at all commercially viable technologies and resources. To
support that acumen, we rely on our team’s broad technology track record, which includes
anaerobic digestion, fuel cells, wind turbines, photovoltaics, inverters/drives/VFDs, gas turbines,
CCGT & CHP, heat energy storage, and HVAC. We seek to solve for Cost (including
volatility/stability), Grid Reliability, and Environmental Impact (including CO2).
Competitive bidding processes run by CEA and GVEA have indicated to us that at this time, these
assets are the lowest-cost, near-term options available to the Railbelt. Over the years to come, we
look forward to being part of developing other resources to continue to be of service.
5.1.3 Permits
Provide the following information as it may relate to permitting and how you intend to address
outstanding permit issues. See the “Environmental and Permitting Risks” section of the appropriate
Best Practice Checklist for additional guidance.
● List of applicable permits
● Anticipated permitting timeline
● Identify and describe potential barriers including potential permit timing issues, public
opposition that may result in difficulty obtaining permits, and other permitting barriers
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See attached confidential permitting feasibility documents from Stantec and ABR.
5.2 Project Site
Describe the availability of the site and its suitability for the proposed energy system. Identify
potential land ownership issues, including whether site owners have agreed to the project or how
you intend to approach land ownership and access issues. See the “Site control” section of the
appropriate Best Practice Checklist for additional guidance.
The LMS and Shovel Creek sites are well into the land lease application process between AKR
and DNR.
https://aws.state.ak.us/OnlinePublicNotices/Notices/View.aspx?id=206903
https://aws.state.ak.us/OnlinePublicNotices/Notices/View.aspx?id=204364
The DNR teams have engaged agencies and other reviewers for feedback and are expected to
issue preliminary decisions this winter, during the grant review period. DNR typically expects the
entire land leasing process to take 9-12 months.
5.3 Project Technical & Environmental Risk
5.3.1 Technical Risk
Describe potential technical risks and how you would address them.
● Which tasks are expected to be most challenging?
● How will the project team reduce the risk of these tasks?
● What internal controls will be put in place to limit and deal with technical risks?
See the “Common Planning Risks” section of the appropriate Best Practice Checklist for additional
guidance.
Due to the relatively remote locations and harsh climate, building wind power assets in Alaska
requires experienced personnel and careful preparation. Challenging tasks include: limited in-state
expertise with moving and installing large wind turbines, short build seasons, environmental
nuisances/hazards (e.g. high-wind days delaying turbine erection), integrating large intermittent
resources like wind energy into the lightly loaded long transmission system of the Railbelt (both for
load balancing/resource adequacy as well as transient stability), and others.
Keenly aware of these issues, the project team has mitigated these risks through a variety of
mechanisms: forming EPC teams with a mix of team members representing in-state expertise and
global wind-specific experience, selecting wind turbine products and options that are appropriate
for the Alaska climate, planning on an atypically long construction schedule, engaging grid
integration experts outside of the Electric Cooperatives who have experience on other “high-
penetration” grids such as Ireland, South Australia, the Faroe Islands, Hawaii, etc., and
commissioning collaboratives studies with the Electric Cooperatives to engineer the projects
appropriately.
Ultimately, it is not just internal controls but more so external forces that will ensure these technical
risks are quantified, limited, and mitigated. The investment community, legal teams, and Electric
Cooperatives all require that these risks are minimal enough in order to proceed with the projects.
Therefore the AKR team has been proactive in identifying and embracing the risks, rather than
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avoiding. As part of AKR’s successful prior fundraising and bidding, a clear and accurate
assessment of the risks to the best abilities of the team, has been required and will continue to be
required at each future milestone step of major partnership.
5.3.2 Environmental Risk
Explain whether the following environmental and land use issues apply, and if so which project
team members will be involved and how the issues will be addressed. See the “Environmental and
Permitting Risks” section of the appropriate Best Practice Checklist for additional guidance.
● Threatened or endangered species
● Habitat issues
● Wetlands and other protected areas
● Archaeological and historical resources
● Land development constraints
● Telecommunications interference
● Aviation considerations
● Visual, aesthetics impacts
● Identify and describe other potential barriers
See attached confidential environmental and permitting feasibility documents from Stantec and
ABR. Since these were developed, significant progress has been made delving into these issues
with those two firms and others.
5.4 Technical Feasibility of Proposed Energy System
In this section you will describe and give details of the existing and proposed systems. The
information for existing system will be used as the baseline the proposal is compared to and also
used to make sure that proposed system can be integrated.
Only complete sections applicable to your proposal. If your proposal only generates electricity, you
can remove the sections for thermal (heat) generation.
5.4.1 Basic Operation of Existing Energy System
Describe the basic operation of the existing energy system including: description of control system;
spinning reserve needs and variability in generation (any high loads brought on quickly); and
current voltage, frequency, and outage issues across system. See the “Understanding the Existing
System” section of the appropriate Best Practice Checklist for additional guidance.
The existing Railbelt transmission and generation network consists of four vertically integrated
electric cooperatives and a small number of independent power producers. The four utilities
serve as balancing authorities for their respective service areas. Using short term load
forecasting and unit commitment software tools, the four utilities mutually agree each day to
an hourly generation dispatch and transmission schedule for the following day. Unplanned
deviations from the schedule are implemented as needed to maintain Railbelt and
balancing area reliability.
Each utility is required to have online spinning reserve to contribute during a system disturbance
that results in a loss of supply. The total combined reserves are enough to recover from the
loss of the largest single contingency – e.g., generator trip offline.
Each utility uses Automatic Generation Control (AGC) software and SCADA systems to automate
real time control of voltage, frequency and energy exchanges between balancing area
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connection points. The control center software is industry-standard and already includes features
to manage integration of new intermittent resources; however, training will certainly be required to
enable staff to comfortably manage new resources.
AKR has built an in-depth Economic Dispatch Model / Merit Order Model for GVEA and CEA and is
currently expanding that model to the entire Railbelt, enabling us to assess how much wind can be
integrated and where. This analysis takes into account heat rates, emissions factors, spinning
reserves, fuel availability, maintenance factors, power flow, RA requirements, etc. The datasets
have been provided by staff and/or are publicly available data. We have reviewed these results
substantially with several Railbelt Electric Cooperatives at the staff, leadership, and board levels.
5.4.2 Existing Energy Generation Infrastructure and Production
In the following tables, only fill in areas below applicable to your project. You can remove extra
tables. If you have the data below in other formats, you can attach them to the application (see
Section 11).
5.4.2.1 Existing Power Generation Units
For the purposes of existing energy generation infrastructure/production and economic benefits,
this proposal has considered the impact of a proposed installation on Chugach Electric-operated
assets to demonstrate potential value. Separately, AKR has a parallel analysis for GVEA’s
operating fleet that can be reviewed with reviewers as necessary.
Unit 1: Southcentral Power Plant, Natural Gas Fired 3x1 LM6000 PF Combined Cycle, 200.2 MW
capacity, commissioned 2013
Unit 2: George M. Sullivan Combined Cycle (Units 9-11), Natural Gas Fired 2x1 LM6000 PF
Combined Cycle, 126.7 MW capacity, commissioned 2016
Unit 3: George M. Sullivan Simple Cycle (Units 7-8), Natural Gas Fired GE Frame 7, 166.8 MW
total capacity, commissioned 1979 and 1984
Unit 4: Hank Nikkels Power Plant, Natural Gas + Dual Fuel GE LM2500+ and Westinghouse W -
251-B, 66.5 MW total capacity, commissioned 2007 and 1972.
Unit 5: Beluga Power Plant, Natural gas Fired GE Frame 5, GE Frame 7, and Brown Boveri
Turbodyne 11D4, 332 MW total capacity, commissioned 1968-1978
Unit 6: Cooper Lake Power Plant, Hydroelectric facility, 19.2 MW capacity (100% CEA),
commissioned 1960
Unit 7: Eklutna Power Plant, Hydroelectric facility, 47 MW capacity (64.3% CEA), commissioned
1955
Unit 8: Bradley Lake Power Plant, Hydroelectric facility, 123 MW capacity (56.3% CEA),
commissioned 1997
Unit 9: Fire Island, Wind Generation, 11x GE XLE Turbines (1.6 MW rating), 17.6 MW capacity,
commissioned 2012.
5.4.2.2 Existing Transmission System
Describe the basic elements of the transmission system. Include the capacity of the step-up
transformer at the powerhouse, the transmission voltage(s) across the community, any
transmission voltages, and other elements that will be affected by the proposed project.
For LMS, grid injection is enabled by significant transmission availability via the Beluga system,
which comprises 2x 230kV lines and 1x 138kV line. Anticipated interconnection equipment will be a
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230kV Substation, New Transmission, Subtransmission Cable (34.5kV), Subtrans HDPE, Subtrans
Installation, Communication Microwave and Communication Fiber.
For the Shovel Creek project, AKR is proposing a 138 kV line to eliminate the step-up transformers
for the interconnecting station. The interconnection will be at 138 kV. Equipment ratings can be found
in the attached one-lined diagrams.
5.4.2.3 O&M and replacement costs for
existing units
Power Generation
i. Annual O&M cost for labor $4,125,371
ii. Annual O&M cost for non-labor $8,790,694
iii. Replacement schedule and cost for
existing units
$635,000,000 (in
2022 dollars)
O&M and replacement costs of existing units are not expected to change significantly with the
completion of the proposed project and, thus, are not considered a major driver of project value or
viability. Moreover, it is difficult to estimate these numbers for the Railbelt. The estimates above
reflect Southcentral Power Project generation as a proxy to answer the question. Our integration
studies for one of the proposed projects, which are underway right now, will calculate an hourly
modeled project impact over the 25 year project life to determine the financial impact to the electric
system (per MWh) of adding the project, which includes fuel cost savings, changes to variable O&M
costs, and many other factors. The results will assist in refining the provided O&M estimates.
5.4.2.4 Annual Electricity Production and Fuel Consumption (Existing System)
Use most recent year. Replace the section (Type 1), (Type 2), and (Type 3) with generation
sources
*We expect the planned Railbelt Battery Energy Storage systems to be considered, but since
CEA/MEA and GVEA have not yet finalized the design and study of the impact of these studies, we
omit at this time.
5.4.3 Future Trends
Describe the anticipated energy demand in the community, or whatever will be affected by the
project, over the life of the project. Explain how the forecast was developed and provide year by
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year forecasts. As appropriate, include expected changes to energy demand, peak load, seasonal
variations, etc. that will affect the project.
Near-term load growth is relatively flat across the Railbelt, but beneficial electrification poses major
threats/opportunities for higher MWh loads in the years to come, including EVs, heat, and new major
industrial projects. Some of these scenarios pose opportunities for yet more cost effective integration
of wind, such as large-scale demand side management, but the projects do not require this load
growth and are sized for the project.
The most significant future trend is the well-reported and challenging resource and commercial
issues with Cook Inlet natural gas supply. AEA is well aware of the benefit that an alternate source
of energy could provide as the fuel supply contracts expire in the coming years.
5.4.4 Proposed System Design
Provide the following information for the proposed renewable energy system:
● A description of renewable energy technology specific to project location
● The total proposed capacity and a description of how the capacity was determined
● Integration plan, including upgrades needed to existing system(s) to integrate renewable
energy system: Include a description of the controls, storage, secondary loads, distribution
upgrades that will be included in the project
● Civil infrastructure that will be completed as part of the project—buildings, roads, etc.
● Include what backup and/or supplemental system will be in place
See the “Proposed System Design” section of the appropriate Best Practice Checklist for additional
guidance.
AKR is considering multiple wind turbine OEMs for supply, but the basis of design is GE’s 3.4-140-
60Hz wind turbine generator system (3.4MW, 98m hub height, 140m rotor diameter), outfitted with
GE’s Cold Weather Extreme option to ensure reliable and sustained operations in Alaska’s cold
climate. Ultimate capacity for the projects is subject to final agreement with the Electric Cooperatives
but is targeted at 110MW for Shovel Creek and between 120MW and 200MW for LMS.
The integration plan is a major scope of ongoing work with Chugach Electric at the moment – see
Sections 3.1, 5.4.2.3, and the related attachments.
For LMS, site access would require a new road to the existing oil and gas roads to the south, which
in turn would be accessed by barge from Cook Inlet or by air. The site access road would be 26 feet
wide with widening as needed on the curves to accommodate hauling the turbine blades. The turbine
access road within the project area would be 36 feet wide to accommodate the erection crane
traveling between turbine pads, with minor widening anticipated on the curves. The goal is to design
a route with grades and a horizontal alignment that can safely accommodate access for wind farm
construction and operation. Starting about 13 miles from the Beluga barge landing on Cook Inlet at
the eastern end of the existing road to the old drilling sites, the proposed east ridge route is about
12 miles long and provides fairly flat grades for the access road across good terrain. It minimizes the
potential drainage issues by avoiding the major drainages in the area and doesn’t cross major gullies
as it mostly crosses the upper end of the smaller side-hill drainages. The preliminary geotechnical
evaluation indicates good foundation soils for the road and readily available materials suitable for
the road construction. The first 2.25 miles of new road crosses the flats to reach the bottom of the
hillside. The next three miles is a fairly easy 3 mile sidehill climb at an average of about 5% grade,
which is really quite flat for an access road. A 2-5% downgrade over the next two miles brings us to
a flat basin. After a bit more than a mile across the basin the access road would climb up at about 9-
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10% for about 2 miles where it would join up with the one of the turbine access roads. Preliminary
engineering work indicates this route and several alternatives that approach the site from the south
appear to be very feasible and capable of providing reliable access to support construction and
operations.
For Shovel Creek, site access is much simpler – the existing Murphy Dome Road Extension directly
reaches the site and requires minor improvement. Small portions of Murphy Dome Road Extension
crosses sidehill terrain and has profile grades consistently near or a bit above 10%. It will likely
require slight widening, some profile improvements, and some embankment improvements to
facilitate mobilization of the tower components. The turbine access roads follow along the top of a
broad ridge. All but about ¼ mile is between 2% and 6% profile grade.
Each project will have a typical maintenance and storage building.
5.4.4.1 Proposed Power Generation Units
Unit # Resource/
Fuel type
Design
capacity
(kW)
Make Model Expected
capacity
factor
Expected
life
(years)
Expected
Availability
92 Wind 3400 GE Sierra 37% 35 98%
5.4.5 Basic Operation of Proposed Energy System
● To the best extent possible, describe how the proposed energy system will operate: When will
the system operate, how will the system integrate with the existing system, how will the
control systems be used, etc.
● When and how will the backup system(s) be expected to be used
See the “Proposed System Design” section of the appropriate Best Practice Checklist for additional
guidance.
As above, much of this question will be answered by the integration study ongoing with Chugach
Electric and 3rd-party consultants. In general, the system will be right-sized for the most cost-effective
integration into the Railbelt to yield the greatest reduction in Railbelt electricity prices. Excess wind
generation may be “dumped” at a lower cost into interruptible loads, thermal/electrical energy
storage, and/or heat generation.
For the purposes of this proposal, integration of a representative new wind generation installation is
shown as an offset of gas-fired generation within Chugach Electric’s managed assets.
5.4.3.1 Expected Capacity Factor 35.7%-38.1%
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5.4.5.2 Annual Electricity Production and Fuel Consumption (Proposed System)
5.4.6 Proposed System Operating and Maintenance (O&M) Costs
O&M costs can be estimated in two ways for the standard application. Most proposed renewable
energy projects will fall under Option 1 because the new resource will not allow for diesel
generation to be turned off. Some projects may allow for diesel generat ion to be turned off for
periods of time; these projects should choose Option 2 for estimating O&M.
Option 1: Diesel generation ON
For projects that do not result in shutting down
diesel generation there is assumed to be no
impact on the base case O&M. Please indicate
the estimated annual O&M cost associated with
the proposed renewable project.
$26,000/MW/yr
Source: OEM proposal for Full Service
Agreement plus contingency factor.
Option 2: Diesel generation OFF
For projects that will result in shutting down
diesel generation please estimate:
1. Annual non-fuel savings of shutting off
diesel generation
2. Estimated hours that diesel generation
will be off per year.
3. Annual O&M costs associated with the
proposed renewable project.
1. $
2. Hours diesel OFF/year:
3. $
SECTION 6 – ECONOMIC FEASIBILITY AND BENEFITS
6.1 Economic Feasibility
6.1.1 Economic Benefit
Annual (2025) Lifetime (2025-2045)
Anticipated Natural Gas Displaced for
Power Generation (MMBTU)
2,966,110 62,583,125
Anticipated Natural Gas Displaced for
Power Generation ($MM, Eval Model)
$24.49 $601.70
Anticipated Power Generation O&M Cost
Savings
- -
Total Other costs savings (taxes,
insurance, etc.)
- -
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Total Fuel, O&M, and Other Cost Savings
($MM, Eval Model Avoided Cost)
$24.49 $601.70
6.1.2 Economic Benefit
Explain the economic benefits of your project. Include direct cost savings and other economic
benefits, and how the people of Alaska will benefit from the project. Note that additional revenue
sources (such as tax credits or green tags) to pay for operations and/or financing, will not be
included as economic benefits of the project.
Where appropriate, describe the anticipated energy cost in the community, or whatever will be
affected by the project, over the life of the project. Explain how the forecast was developed and
provide year-by-year forecasts
The economic model used by AEA is available at https://www.akenergyauthority.org/What-We-
Do/Grants-Loans/Renewable-Energy-Fund/2022-REF-Application. This economic model may be
used by applicants but is not required. The final benefit/cost ratio used will be derived from the
AEA model to ensure a level playing field for all applicants. If used, please submit the model with
the application.
This project provides electricity generation to Railbelt utilities at costs lower than those anticipated
for offset generation sources over the duration of a 20-year project life. To illustrate the potential of
the proposed generation, a representative economic model has been assembled for this application.
In this example, a single site 36-turbine 122.4 MW nameplate capacity wind installation offsets
between 380 and 460 GWh of natural gas electricity generation for Chugach Electric, representing
over $600MM in displaced costs between 2025 and 2045. With an assumed $50 per MWh + 2.5%
escalation take-or-pay power purchase agreement, this project is anticipated to result in over $50MM
in NPV net benefit to CEA and, subsequently, ratepayers while reducing CO2 emissions by more
than 3.3 million tones over 20 years.
This application’s representative model strives to capture as many major project impacts as possible,
including year-to-year variation in wind generation through multi-year meteorological simulations. An
annual wind curtailment of 6.6% is included to avoid overestimation of avoided electricity costs. This
value is the result of a preliminary asset dispatch model assembled by AKR to understand how CEA’s
existing asset operation would need to change to accommodate large-scale wind generation. In
circumstances where the model determined CEA’s demand and generating assets were unable to
accommodate all wind production, curtailment was employed.
AKR recognizes that AEA’s economic value model presents a simplified view of project benefit; there
are significant power system and dispatch implications for a project of this magnitude, which ongoing
studies and analyses intend to identify. Additionally, AKR recommends further evaluation of long-
term utility avoided costs. Real avoided costs within AEA’s model plateau after 2030, which creates
dissonance against likely market realities. The value of this project will grow further if real costs of
avoided power increase against even a modest price index past 2030.
6.1.3 Economic Risks
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Discuss potential issues that could make the project uneconomic to operate and how the project
team will address the issues. Factors may include:
● Low prices for diesel and/or heating oil
● Other projects developed in community
● Reductions in expected energy demand: Is there a risk of an insufficient market for energy
produced over the life of the project.
● Deferred and/or inadequate facility maintenance
● Other factors
These projects will not become uneconomic unless other technologies overtake the potential of wind
generation to produce low-carbon energy at competitive prices. Technologies that have this
potential, such as fusion generation, tidal generation, hydroelectric generation, and small modular
nuclear generation are unlikely to displace wind generation in the next few years. Large natural gas
opportunities such as LNG or AGDC will help in the integration of wind, by offering a complementary
fuel source, but will be exposed to global energy prices and geopolitics and thus are expected to be
volatile and likely expensive. Wind energy is likely to be an important part of the Railbelt’s generation
for the foreseeable future.
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6.2 Other Public Benefit
Describe the non-economic public benefits to Alaskans over the lifetime of the project. For the
purpose of evaluating this criterion, public benefits are those benefits that would be considered
unique to a given project and not generic to any renewable resource. For example, decreased
greenhouse gas emission, stable pricing of fuel source, won’t be considered under this category.
Some examples of other public benefits include:
● The project will result in developing infrastructure (roads, trails, pipes, power lines, etc.) that can
be used for other purposes
● The project will result in a direct long-term increase in jobs (operating, supplying fuel, etc.)
● The project will solve other problems for the community (waste disposal, food security, etc.)
● The project will generate useful information that could be used by the public in other parts of the
state
● The project will promote or sustain long-term commercial economic development for the
community
These projects will accelerate the development of sustainable long-term economic development in
the form of utility-scale wind generation projects, which offer long-term increases in quality jobs
due not only to the wind projects, but also in industries that depend on electric power. These
industries include large-scale gold mines like those currently in the Fairbanks area, industrial loads
across the Railbelt, and indoor agriculture. Successful wind generation projects may also increase
the economic development associated with beneficial electrification (e.g. heat pumps & electric
vehicles) that would help reduce the emissions that cause recurring air pollution across the
Railbelt, currently violating air quality standards.
Moreover, the increase in generating facilities will increase the grid resiliency of the Railbelt. By
placing a major wind generation facility north of the intertie, intertie outages will have less of an
outage and economic impact on the GVEA service territory. Similarly, a large facility in
Southcentral will provide additional electricity resiliency for the Anchorage area. On an electrical
basis, keeping the Beluga lines energized provides grid stability to the entire CEA grid. This project
helps justify the maintenance associated with that spur of the network.
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SECTION 7 – SUSTAINABILITY
Describe your plan for operating the completed project so that it will be sustainable throughout its
economic life.
At a minimum for construction projects, a business and operations plan should be attached and the
applicant should describe how it will be implemented. See Section 11.
7.1.1 Operation and Maintenance
Demonstrate the capacity to provide for the long-term operation and maintenance of the proposed
project for its expected life
● Provide examples of success with similar or related long-term operations
● Describe the key personnel that will be available for operating and maintaining the
infrastructure.
● Describe the training plan for existing and future employees to become proficient at operating
and maintaining the proposed system.
● Describe the systems that will be used to track necessary supplies
● Describe the system will be used to ensure that scheduled maintenance is performed
AKR intends to contract for O&M with a mix of the OEM team and the EPC team. The OEM
proposal is a “Full Service Agreement” wherein the OEM has contractual obligation to maintain a
high level of availability. The wind turbine OEMs each have >25,000 wind turbines under service
contract globally. The OEM’s modern software products empower it to continuously stream data
from the wind farm through analytics that deliver sophisticated insights to help teams in the field
troubleshoot or remotely maintain equipment. These partners have dedicated Energy Learning
Centers where training is offered on a variety of entry-level to detailed topics. The project will
support attendance for key personnel. EPCs would be additionally contracted for road,
transmission and other key O&M.
Through the commercial guarantees of a PPA, AKR and any future owner/operator will have
aligned incentives to ensure that scheduled maintenance is performed. Asset Performance
Management software platforms support tracking, proactive maintenance, root cause investigation,
etc. to ensure the highest uptime and energy yield. Similar Inventory Management software
platforms are also commonplace for spare parts management, to ensure the right part is in the
right place at the right time supported by the right technician.
7.1.2 Financial Sustainability
● Describe the process used (or propose to use) to account for operational and capital costs.
● Describe how rates are determined (or will be determined). What process is required to set
rates?
● Describe how you ensure that revenue is collected.
● If you will not be selling energy, explain how you will ensure that the completed project will be
financially sustainable for its useful life.
Capital costs are based on direct quotes from multiple wind turbine OEM and EPC contractors who
have closely examined the sites and assessed the engineering and construction required.
Anticipated operational cost sourcing is described above. All capex and opex costs have and/or will
go through competitive bidding processes. As part of a conventional power plant structured
finance, the O&M cost will be baked into the total investment. The infrastructure owner/operator will
leverage a standard Asset Management software platform to ensure that costs are on target.
Energy rates are negotiated with the off-taker based upon the Electric Cooperatives assessment of
avoided cost, fuel volatility, risk management, sustainability goals, grid resiliency, and other factors.
These rates are then structured into an industry-standard long-term PPA. The rates may proceed
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through the Regulatory Commission of Alaska for approval. Revenue collection is dictated by the
terms of the PPA with protective clauses for both parties to ensure reasonable and accountable
financial performance.
7.1.2.1 Revenue Sources
Briefly explain what if any effect your project will have on electrical rates in the proposed benefit
area over the life of the project. If there is expected to be multiple rates for electricity, such as a
separate rate for intermittent heat, explain what the rates will be and how they will be determined
Collect sufficient revenue to cover operational and capital costs
● What is the expected cost-based rate (as consistent with RFA requirements)
● If you expect to have multiple rate classes, such as excess electricity for heat, explain what
those rates are expected to be and how those rates account for the costs of delivering the
energy (see AEA’s white paper on excess electricity for heat).
● Annual customer revenue sufficient to cover costs
● Additional incentives (i.e. tax credits)
● Additional revenue streams (i.e. green tag sales or other renewable energy subsidies or
programs that might be available)
As discussed above, specific funding sources that are of relevance are the Production Tax Credit
and MACRS Depreciation, both of which are long-standing programs over the history of the wind
industry, and which were recently further expanded under the 2022 Inflation Reduction Act.
7.1.2.2 Power Purchase/Sale
The power purchase/sale information should include the following:
● Identification of potential power buyer(s)/customer(s)
● Potential power purchase/sales price - at a minimum indicate a price range (consistent with the
Section 3.16 of the RFA)
Identify the potential power buyer(s)/customer(s) and anticipated power purchase/sales price
range. Indicate the proposed rate of return from the grant-funded project. Include letters of support
or power purchase agreement from identified customers.
CEA, GVEA, HEA, and MEA
Price ranges from $50/MWh to $90/MWh depending on project size, timing, and final configuration.
SECTION 8 – PROJECT READINESS
8.1 Project Preparation
Describe what you have done to prepare for this award and how quickly you intend to proceed with
work once your grant is approved.
Specifically address your progress towards or readiness to begin, at a minimum, the following:
● The phase(s) that must be completed prior to beginning the phase(s) proposed in this application
● The phase(s) proposed in this application
● Obtaining all necessary permits
● Securing land access and use for the project
● Procuring all necessary equipment and materials
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Refer to the RFA and/or the pre-requisite checklists for the required activities and deliverables for
each project phase. Please describe below and attach any required documentation.
The workstreams listed within Section 3 are all already in-progress or in staging phase, according
to priority and timing. Therefore, these grant funds would be put to immediate use.
SECTION 9 – LOCAL SUPPORT AND OPPOSITION
Describe local support and opposition, known or anticipated, for the project. Include letters,
resolutions, or other documentation of local support from the community that would benefit from
this project. Provide letters of support, memorandum of understandings, cooperative agreements
between the applicant, the utility, local government and project partners. The documentation of
support must be dated within one year of the RFA date of October 4, 2022. Please note that letters
of support from legislators will not count toward this criterion.
Please see letters attached.
SECTION 10 – COMPLIANCE WITH OTHER AWARDS
Identify other grants that may have been previously awarded to the Applicant by AEA for this or
any other project. Describe the degree you have been able to meet the requirements of previous
grants including project deadlines, reporting, and information requests.
N/A
SECTION 11 – LIST OF SUPPORTING DOCUMENTATION FOR PRIOR PHASES
In the space below, please provide a list of additional documents attached to support completion of
prior phases.
Site-specific assessment of available energy resource following industry standards usually based
on field measurements, discussions with resource owners, and other onsite activities
Collection and analysis of meteorological tower data at proposed wind turbine locations
Load growth projections – N/A
Transmission system layout and capacity
Assessment of project site
Geotechnical characteristics
Annual energy production profile
Conceptual system layout
Conceptual level cost estimates for final design and construction
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SECTION 12 – LIST OF ADDITIONAL DOCUMENTATION SUBMITTED FOR CONSIDERATION
In the space below, please provide a list of additional information submitted for consideration.
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SECTION 13 – AUTHORIZED SIGNERS FORM
Community/Grantee Name: Alaska Renewables LLC
Regular Election is held: N/A
Date: December 5, 2022
Authorized Grant Signer(s):
Printed Name Title Term Signature
Andrew McDonnell VP N/A
I authorize the above person(s) to sign Grant Documents:
(Must be authorized by the highest ranking organization/community/municipal official)
Printed Name Title Term Signature
Matthew Perkins CEO N/A
Grantee Contact Information:
Mailing Address: 2595 Allen Adale Rd, Fairbanks, AK 99709
Phone Number: 518-424-4432
Fax Number: N/A
Email Address: matt@alaskarenewables.com
Federal Tax ID #: 87-1705711
Please submit an updated form whenever there is a change to the above information.
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SECTION 14 – ADDITIONAL DOCUMENTATION AND CERTIFICATION
SUBMIT THE FOLLOWING DOCUMENTS WITH YOUR APPLICATION:
A. Contact information and resumes of Applicant’s Project Manager, Project Accountant(s),
key staff, partners, consultants, and suppliers per application form Section 3.1, 3.4 and
3.6.
Applicants are asked to provide resumes submitted with applications in separate electronic
documents if the individuals do not want their resumes posted to the project web site.
B. Letters or resolutions demonstrating local support per application form Section 9.
C. For projects involving heat: Most recent invoice demonstrating the cost of heating fuel
for the building(s) impacted by the project.
D. Governing Body Resolution or other formal action taken by the applicant’s governing
body or management per RFA Section 1.4 that:
● Commits the organization to provide the matching resources for project at the match
amounts indicated in the application.
● Authorizes the individual who signs the application has the authority to commit the
organization to the obligations under the grant.
● Provides as point of contact to represent the applicant for purposes of this
application.
● Certifies the applicant is in compliance with applicable federal, state, and local, laws
including existing credit and federal tax obligations.
E. An electronic version of the entire application on CD or other electronic media, per RFA
Section 1.7.
F. CERTIFICATION
The undersigned certifies that this application for a renewable energy grant is truthful and
correct, and that the applicant is in compliance with, and will continue to comply with, all
federal and state laws including existing credit and federal tax obligations and that they
can indeed commit the entity to these obligations.
Print Name Matthew Perkins
Signature
Title CEO
Date December 5, 2022
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