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HomeMy WebLinkAboutAEA Renewable Energy Fund Round VIII -Kaktovik Wind - final Renewable Energy Fund Grant Application Kaktovik Wind Diesel Design Round VIII North Slope Borough Project Location: Kaktovik, Alaska Renewable Energy Fund Round VIII Grant Application - Standard Form AEA 15003 Page 2 of 26 7/2/14 SECTION 1 – APPLICANT INFORMATION Name (Name of utility, IPP, or government entity submitting proposal) North Slope Borough Type of Entity: Fiscal Year End: Government and Electric Utility 06/30/2014 Tax ID #92-0042378 Tax Status: ☐ For-profit ☐ Non-profit ☒ Government (check one) Date of last financial statement audit: 06/30/2013 - completed 12/19/2013 Mailing Address: Physical Address: PO Box 69 1274 Agvik Street Barrow, AK 99723 Barrow, AK 99723 Telephone: Fax: Email: (907) 852-0467 (907) 852- 4145 Timothy.rowe@north-slope.org 1.1 APPLICANT POINT OF CONTACT / GRANTS MANAGER Name: Title: Richard San Jose Assistant to Director Timothy Rowe Grants Administrator Mailing Address: PO Box 69 Barrow, AK 99723 Telephone: Fax: Email: (907) 852-0863 (Richard) (907) 852-0467 (Tim) (907) 852-0251 (907) 852-4145 Richard.sanjose@north-slope.org Timothy.rowe@north-slope.org 1.1.1 APPLICANT ALTERNATE POINTS OF CONTACT Name Telephone: Fax: Email: Renewable Energy Fund Round VIII Grant Application - Standard Form AEA 15003 Page 3 of 26 7/2/14 1.2 APPLICANT MINIMUM REQUIREMENTS Please check as appropriate. If you do not to meet the minimum applicant requirements, your application will be rejected. 1.2.1 As an Applicant, we are: (put an X in the appropriate box) ☒ An electric utility holding a certificate of public convenience and necessity under AS 42.05, or ☐ An independent power producer in accordance with 3 AAC 107.695 (a) (1), or ☒ A local government, or ☐ A governmental entity (which includes tribal councils and housing authorities) 1.2 APPLICANT MINIMUM REQUIREMENTS (continued) Please check as appropriate. ☒ 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 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 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 http://www.akenergyauthority.org/REFund8.html. (Any exceptions should be clearly noted and submitted with the application.) (Indicate 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. If no please describe the nature of the project and who will be the primary beneficiaries. (Indicate yes by checking the box) Renewable Energy Fund Round VIII Grant Application - Standard Form AEA 15003 Page 4 of 26 7/2/14 SECTION 2 – PROJECT SUMMARY This section is intended to be no more than a 2-3 page overview of your project. 2.1 Project Title – (Provide a 4 to 7 word title for your project). Type in space below. Kaktovik Wind Diesel Design 2.2 Project Location – Include the physical location of your project and name(s) of the community or communities that will benefit from your project in the subsections below. 2.2.1 Location of Project – Latitude and longitude, 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 at 907-771-3031. The location of this project is Kaktovik, Alaska. Kaktovik will be the community affected by the outcomes of this project. Kaktovik is located at Latitude and Longitude of 70.132607-143.623838 (Google Map). 2.2.2 Community benefiting – Name(s) of the community or communities that will be the beneficiaries of the project. Kaktovik, Alaska will be the beneficiary of this project 2.3 PROJECT TYPE Put X in boxes 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 Renewable Energy Fund Round VIII Grant Application - Standard Form AEA 15003 Page 5 of 26 7/2/14 2.4 PROJECT DESCRIPTION Provide a brief one paragraph description of the proposed project. The North Slope Borough (NSB) envisions a wind energy and area-wide energy management system, consisting of wind diesel integration, end-use energy efficiency, automated building controls, and conservation. This phase of the project is the design and permitting phase of a three phase project which will include a phase for construction and commissioning for three anticipated wind turbines to supplement the existing power generation and distribution system for the community of Kaktovik. The contractor will provide overall project management and system engineering during this phase of the project. During the construction phase, NSB will recruit an engineering and construction contractor for design and installation of all civil works, erection of the wind turbines, and installation of all ancillary electrical systems. 2.5 PROJECT BENEFIT Briefly discuss the financial and public benefits that will result from this project, (such as reduced fuel costs, lower energy costs, local jobs created, etc.) When this project is completely constructed and in operation, the primary financial benefit from the project will be reduced fuel costs to the people of Kaktovik. Findings of wind resource versus load demand result in an estimated gross fuel savings of over 98,000 gallons of diesel fuel per year at the Kaktovik plant, from efficiency improvements due to new automated switchgear, from diesel- powered generation being displaced by wind, and by displacing diesel-fired hot water heating with excess electrical energy from the wind turbines. In addition to the direct fuel reduction are the benefits of: • reduced long-term dependence on outside sources of energy; • reduced exposure to fuel price volatility; • reduced air pollution resulting from reducing fossil fuel combustion; • reduced possibility of spills from fuel transport & storage; and • reduced overall carbon footprint and its contribution to climate change 2.6 PROJECT BUDGET OVERVIEW Briefly discuss the amount of funds needed, the anticipated sources of funds, and the nature and source of other contributions to the project. For the design and permitting phase of the project, the North Slope Borough will cost approximately $440,000 The construction and commissioning phase of the project requires $3,993,000 to complete. Based on published cost estimates of similar wind diesel projects proposed and existing in rural Alaska communities, this rough order of magnitude cost estimate is preliminary. Renewable Energy Fund Round VIII Grant Application - Standard Form AEA 15003 Page 6 of 26 7/2/14 2.7 COST AND BENEFIT SUMMARY Include a summary of grant request and your project’s total costs and benefits below. Costs for the Current Phase Covered by this Grant (Summary of funds requested) 2.7.1 Grant Funds Requested in this application $440,000 2.7.2 Cash match to be provided $ 44,000 2.7.3 In-kind match to be provided $ 0 2.7.4 Other grant funds to be provided $ 0 2.7.5 Total Costs for Requested Phase of Project (sum of 2.7.1 through 2.7.4) $484,000 Other items for consideration 2.7.6 Other grant applications not yet approved $ 0 Project Costs & Benefits (Summary of total project costs including work to date and future cost estimates to get to a fully operational project) 2.7.7 Total Project Cost Summary from Cost Worksheet, Section 4.4.4, including estimates through construction. $4,565,200 2.7.8 Additional Performance Monitoring Equipment not covered by the project but required for the Grant Only applicable to construction phase projects $0 2.7.9 Estimated Direct Financial Benefit (Savings) The economic model used by AEA is available at www.akenergyauthority.org/REFund8.html. This economic model may be used by applicants but is not required. Other economic models developed by the applicant may be used, however the final benefit/cost ratio used will be derived from the AEA model to ensure a level playing field for all applicants. $220,000/year 2.7.10 Other Public Benefit If you can calculate the benefit in terms of dollars please provide that number here and explain how you calculated that number in Section 5 below. $15,000/year Renewable Energy Fund Round VIII Grant Application - Standard Form AEA 15003 Page 7 of 26 7/2/14 SECTION 3 – PROJECT MANAGEMENT PLAN Describe who will be responsible for managing the project and provide a plan for successfully completing the project within the scope, schedule and budget proposed in the application. 3.1 Project Manager Tell us who will be managing the project for the Grantee and include contact information, a resume and references for the manager(s). In the electronic submittal, please submit resumes as separate PDFs if the applicant would like those excluded from the web posting of this application. 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. The North Slope Borough’s project management approach to this project, and to its overall energy upgrade program, is to utilize a team approach consisting of North Slope Borough staff, external consultants and general contractors. Mr. Richard SanJose will be the Program Manager and will be the contact for any technical questions. Mr. Timothy Rowe is the Grants Administrator and will handle grant paperwork, amendments and financial matters. Resumes for Mr. SanJose and Mr. Rowe are attached. The North Slope Borough provides a project team from its operating staff. The Program Manager, Richard SanJose, provides oversight to Project Administrators who interface with the Engineering Consultant and General Contractor. The PM and PA group provides internal focus and coordination of special projects including project development, planning, construction coordination, and reporting. The Engineering Consultant of the North Slope Borough provides technical input on design, feasibility, generation and distribution issues to the team. Additionally, the engineering group provides specifications, design and drawings for North Slope Borough construction of diesel power plants and distribution systems. The Engineering Consultant provides construction administration and commissioning input on behalf of new construction performed by the North Slope Borough contractor. The manager of administrative services, Timothy Rowe provides support in accounting, payables, financial and progress reporting, and capitalization of assets in accordance with NSB guidelines. The project management team’s structure is designed to provide flexibility for the North Slope Borough participants. They have operational responsibilities to the Borough as well as project development responsibilities. This project is being funded and completed in phases. This approach works well with the North Slope Borough’s management style. The functional-interface relationships allow engineering tasks, village government and public relations tasks, procurement functions, and internal construction operations to be dovetailed into the project development process. Cross utilization of talent and resources is an advantage to the project delivery process, providing economies of scale for using project resources. For project delivery, an amalgamated team approach is utilized. To support the North Slope Borough team, design consultants and construction services managers are selected. Both disciplines are derived from a resource bank of professional firms with applicable histories of performance in rural Alaska. The construction services manager works concurrently with the design consultant through design development to provide constructability insight and value engineering to maximize the overall effectiveness of the final construction documents. Renewable Energy Fund Round VIII Grant Application - Standard Form AEA 15003 Page 8 of 26 7/2/14 3.2 Project Schedule and Milestones Please fill out the schedule below. Be sure to identify key tasks and decision points in 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 of your proposed project. Please fill out form provided below. You may add additional rows as needed. Milestones Tasks Start Date End Date Project Scoping and Contractor Solicitation Request and review sealed bid documents for the selection of the contractor. 1/1/15 4/1/15 Environmental Studies Cultural resources surveys, wetlands survey and ESA consultation materials 7/1/15 12/31/15 Permits, right of way, site control complete Obtain Federal, State and local agency permits 7/1/15 4/30/16 Geotech / Survey Reports Survey alignment and prepare report 8/1/15 10/31/15 Resolution of Land use, right of way issues Utilize survey results to identify land use and right of way issues and resolve 11/1/15 4/30/16 Basics of Design Document Engineering survey, alignment definition, preliminary engineering, 8/1/15 1/31/16 Final Design Prepare CDs, material specs, structure layout drawings 11/15/15 8/31/16 Final Cost Estimate Complete final cost estimate 7/1/2016 8/31/16 Update Economic and financial analyses Complete revised economic and financial analysis 7/1/2016 8/31/16 Final business and operational plan completed Prepare business and operational plan 7/1/2016 8/31/16 3.3 Project Resources Describe the personnel, contractors, personnel or firms, equipment, and services you will use to accomplish the project. Include any partnerships or commitments with other entities you have or anticipate will be needed to complete your project. Describe any existing contracts and the selection process you may use for major equipment purchases or contracts. Include brief resumes and references for known, key personnel, contractors, and suppliers as an attachment to your application. The North Slope Borough will ultimately be responsible for successful completion of the project, using partners that have successfully installed similar systems in the recent past. Electrical system engineering will be subcontracted, using current internal procurement practices and selection of engineering service providers from prequalified organizations. The contracted A&E firm will complete the design for the wind turbine foundations. The North Slope Borough will subcontract for the construction of the foundations and the contracted A&E firm will manage that construction In the construction phase, based on the recommendation of the conceptual design report it is foreseen that three Vesta V27 will be placed at the second site that was investigated. The V27 is pitch‐regulated, has a synchronous (induction) generator, active yaw control, a 27 meter diameter rotor, is rated at 225 kW power output, and is available with 30, 40, or 50 meter tubular steel towers. The site identified is Kaktovik Site 2 located at 70°07’30.71” north latitude, 143°39’44.91” west longitude, at an elevation of approximately 50 feet MSL. The site is located closer to the community and water source lake, and is also on KIC lands Renewable Energy Fund Round VIII Grant Application - Standard Form AEA 15003 Page 9 of 26 7/2/14 3.4 Project Communications Discuss how you plan to monitor the project and keep the Authority informed of the status. Please provide an alternative contact person and their contact information. North Slope Borough will assign a project manager to the project. One responsibility of the project manager will be to compile periodic progress reports for use by the Authority. Weekly and monthly project coordination meetings will be held with the project team to track progress and address issues as they arise. = 3.5 Project Risk Discuss potential problems and how you would address them. Logistical and construction activities and weather all contain significant risks. The North Slope Borough routinely purchases Builder’s Risk insurance to mitigate its exposure to these risks. In addition to outside insurance, the experienced team of North Slope Borough and contracted A&E firms with projects much like this one is similar circumstances reduces the risk. The North Slope Borough has extensive experience working in rural Alaska under these conditions. Crucial to successful completion of projects in these environments are advanced planning and flexibility in timing 3.6 Project Accountant(s) Tell us who will be performing the accounting of this Project for the Grantee and include contact information, a resume and references for the project accountant(s). In the electronic submittal, please submit resumes as separate PDFs if the applicant would like those excluded from the web posting of this application. If the applicant does not have a project accountant indicate how you intend to solicit project management support. The Principal Accountant assigned to this project will be Ms. Eva Leavitt. Ms. Leavitt has 8 years’ experience as both a grants administrator and grant accounting specialist within the grants division. Ms. Leavitt’s work is supervised by our Grants Accounting Manager and Governmental Accountant. Ms. Leavitt’s resume is attached for your review 3.7 Financial Accounting System Discuss the accounting system that will be used to account for project costs and whom will be the primary user of the accounting system. The North Slope Borough (NSB) is a municipal corporation governed by an elected mayor and seven-member assembly. The accounting system utilizes the U.S. generally accepted accounting principles (GAAP) established by the Governmental Accounting Standards Board (GASB). The North Slope Borough Administration and Finance Department ensures the financial integrity of the NSB in a manner that meets or exceeds regulatory standards. All documents that initiate an encumbrance or payment are approved through the Director’s office. The NSB utilizes a AS400 based JD Edwards system for its accounting system. The system allows for division of funds which tracks each project to be tracked separately. For grants, a separate document is also maintained to ensure that the expenditures are tracked in the budget categories prescribed in the grant agreement. Both systems are subject to audit review during the single audit process. Renewable Energy Fund Round VIII Grant Application - Standard Form AEA 15003 Page 10 of 26 7/2/14 3.8 Financial Management Controls Discuss 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 Renewable Energy Fund Grant Program. Management has established a "tone from the top" that emphasizes integrity and ethical values, and the importance of compliance with program requirements. The program's organizational structure is conducive to compliance with the program requirements as the Grant Administrator and Grant Accountants work closely together. This small office environment promotes communication and an organizational structure that is conducive to compliance. The Grant Administrator is ultimately responsible for ensuring that the activity is in compliance with the NSB procurement standards, that the activity is allowable within the framework of the grant and that the cost is reasonable, ordinary, and necessary for the project. All contracts including those related to grants are reviewed by the Law Department to ensure compliance with the terms of the grant and the procurement standards of the NSB. NSB has an official written procurement policy that details the procurement process and includes Federal requirements. It is available for review as part of the municipal code on the NSB website. All expenditures are reviewed both at the time of the inception of the contract, purchase order, or purchase order to ensure compliance with the terms of the NSB procurement code and the terms and requirements of the grant agreement. When the item or service is received and a invoice is generated, a detailed review of the invoice occurs. The invoice is reviewed by the Program Manager and the Grants Administrator to ensure compliance with the terms of the grant. All expenditures are reviewed by the Grants Accounting department and Grants Administrator upon preparation of the required financial reports and prior to any request for reimbursement. SECTION 4 – PROJECT DESCRIPTION AND TASKS The level of information will vary according to phase(s) of the project you propose to undertake with grant funds. 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 satisfied and funding for an advanced phase is warranted. 4.1 Proposed Energy Resource Describe the potential extent/amount of the energy resource that is available. Discuss 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. 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. A wind monitoring study was conducted by V3 Energy LLC in Kaktovik from June 26, 2009 to July 19, 2010 (the date of the most recent report provided to the project team). The report utilized two automated weather observing system sources at Barter Island Airport and Barter Island DEW as Renewable Energy Fund Round VIII Grant Application - Standard Form AEA 15003 Page 11 of 26 7/2/14 verification with the installed 30 meter met tower proved difficult due to data loss due to icing and lost data cards. The report indicates a mean winds speed at the 30 meter anemometer of 6.49 m/s utilizing synthesized data. Power density mean at the 30 meter anemometer was calculated at 479 w/m2 also using synthesized data. The wind resource at Kaktovik was noted a class 5 wind resource. The conceptual design report indicates that the wind site investigation and subsequent wind modeling analysis determined that Site 2 has a Class 5 wind resource and is well‐suited for wind power generation. Economic evaluation of the turbine alternatives presented in the report resulted in a preferred turbine configuration of three Vestas V27 turbines installed at Site 2. The economic evaluation projected that this preferred alternative will contribute to approximately 28% of yearly power production and will offset approximately 98,498 gallons of fuel for power generation and 3,314 gallons of heating oil per year. Wind power could provide approximately 2.8% of the energy needed for heat recovery. Integration of the wind power into the diesel power plant will require a large secondary load controller to prevent overloading the grid with excess energy and tripping the generators offline. The village of Kaktovik has abundant winds but finds its fuel supply limited and costly due to its remote location. Solar power from photovoltaic solar arrays is a potential alternative, but suffers from higher capital costs and lower resource availability than wind at this site 4.2 Existing Energy System 4.2.1 Basic configuration of Existing Energy System Briefly discuss the basic configuration of the existing energy system. Include information about the number, size, age, efficiency, and type of generation. The existing power plant at Kaktovik consists of four diesel-powered engine generator sets: two of 430 kW, and two of 950 kW capacity. Individual generator efficiency is not tracked, but the aggregate diesel generator efficiency in 2008 was assumed to equal 12.78 kWh/gallon (based on efficiency data of AVEC and other rural Alaska rural utilities). 4.2.2 Existing Energy Resources Used Briefly discuss your understanding of the existing energy resources. Include a brief discussion of any impact the project may have on existing energy infrastructure and resources. NSB’s existing Kaktovik power plant is located on Fourth Street South on the southern outskirts of Kaktovik. The power plant is owned and maintained by the NSB. The plant, built in 2000, consists of an 82‐foot by 60‐foot insulated pre‐engineered steel structure. The power plant contains generator appurtenances, day tanks, an office, bathroom, storage area, a maintenance area, radiator room and switchgear. The Power Plant does not have boilers; the building utilizes waste heat only. From the power plant two feeders serve the (2) 1000kVA transformers that feed north and south distribution loops for the village The building is founded on a passively refrigerated, insulated slab‐on‐grade type foundation. The power plant contains the following Caterpillar generator sets: (2) Caterpillar 910 kW 3512 diesel generator ‐ (Last Major Overhaul in 2012) (2) Caterpillar 450 kW 3508 diesel generator ‐ (Last Major Overhauled in 2012) 2,720 kW Total Generation Capacity Renewable Energy Fund Round VIII Grant Application - Standard Form AEA 15003 Page 12 of 26 7/2/14 Currently there are four generators installed with space available for two additional generators. An electric boiler could be placed within the space allocated for one of the future generators. This would still allow for one future generator should the village power requirements grow. The existing power plant switchgear is rated 4000A, 277/480V, 3‐Phase, 4‐Wire consisting of six (6) generator sections, a master control section, and two (2) distribution sections. Four (4) of the six (6) generator sections contain generator breakers and controls (Caterpillar EMCP II) and the remaining two (2) generator sections are spared for future use containing only generator breakers without controls. The master section contains the Switchgear PLC, various controls, gauges and alarm indicators as well as a totalizing meter, east and west feeder meters and the station service meter. Distribution Section #1 contains the east and west feeder breakers as well as provisions for a future 1600A frame feeder breaker. Distribution Section #2 contains the Station Service feeder breaker as well as two additional spare feeder breakers. The switchgear was designed and manufactured by Controlled Power Inc. out of Bothell, WA for NC Machinery (generator supplier). The Power Plant is also scheduled for major upgrades and/or replacement, with design beginning as early as 2014. This work would include a new Paralleling Switchgear with a new Allen Bradley PLC and Woodward EasyGen Generator Control system. According to the historic Alaska Energy Authority records (AEA) Power Cost Equalization (PCE) program, the power plant generated a total of 4,806,050 kWh in Fiscal Year 2012 wit h an average efficiency of 13.25 kWh per gallon of diesel consumed. A new wind turbine installation would require the use of one of the existing spare switchgear generator sections. The existing feeder breakers in one of the sections could be utilized to connect the new wind turbines to the switchgear. Only a trip unit would need to be replaced within the existing breaker as the frame size is adequate for the proposed wind turbine capacity, however, it may be desired to replace the existing breaker with a new GE PowerBreak II model per current NSB standards. The section would also need to be equipped with a new controller that would be connected to the existing Switchgear PLC to allow for proper load sharing between the new wind turbines and the existing diesel generators. Appendix A shows the existing Power Plant One‐Line Diagram with the addition of a typical Wind Turbine installation. The proposed location for the new wind turbines will require a new overhead, 2400/4160V, 3‐ Phase, 4‐Wire distribution line as well as two (2) 750kVA pad mounted transformers, one at the wind farm and the other at the power plant, to step the voltage up and back down prior to tying into the existing power plant switchgear Waste heat is captured from all four generators via the engine jacket water. Exhaust stack heat recovery is not being utilized at this time. The engine jacket water rejects heat to a waste heat plate and frame heat exchanger located in the power plant radiator plenum. Waste heat from the engines is distributed to the various NSB buildings via two centrifugal pumps connected to a waste heat pipe manifold. Two waste heat loops are connected to the manifold. The first loop is buried and connects the new power plant to the old power plant with a tee off to the Utilities‐School District Warehouse (USDW) and Public Works Vehicle Maintenance Shop (VMS) buildings. The second loop is an above‐ground loop that supplies the Water Treatment Plant, Health Clinic, and Fire Station. All facilities are operated by the NSB. Both loops are constructed with well‐insulated arctic pipe which results in minimal heat loss to the atmosphere or ground. The engine jacket water heat recovery system on average generates approximately 1.1 million BTUs per hour of useable energy. As presently constructed the village‐wide waste heat recovery system is able to absorb all of this heat for most of the year. Only during a few summer months is more waste heat generated Renewable Energy Fund Round VIII Grant Application - Standard Form AEA 15003 Page 13 of 26 7/2/14 than can be used. During this period the engine radiators are used to cool the engines; the rest of the year the waste heat system acts as the engine radiators. If wind power is generated in the village an electric boiler secondary controller would be used to store the energy that cannot be absorbed instantaneously by the electric power grid. The electric boiler would be located in the power plant or in a nearby module and would connect to the waste heat loop downstream of the jacket water heat exchangers. The new electric boiler will be fed from a feeder breaker from the existing switchgear Distribution Section #2. The existing spare 800A frame breaker should be adequate for the new electric boiler. If a new radiator is installed for excess waste heat rejection, the associated motor can be powered from the existing power plant Panel ‘AA’, similar to the existing radiators. 4.2.3 Existing Energy Market Discuss existing energy use and its market. Discuss impacts your project may have on energy customers. Kaktovik sits on the north coast of Alaska on the Beaufort Sea, roughly 320 m iles east of Barrow. It is subject to severe cold winter temperatures, extended periods of darkness and blowing snow. Reliable electric service is essential to maintaining home heating systems necessary to safeguard the health of the population. Kaktovik is classified as an isolated village, relying on air transportation for delivery of medical goods and transport of sick or injured individuals or mothers nearing childbirth. Reliable electric service is essential to maintaining vital navigation aids for the safe operation of aircraft. Runway lights, automated weather observation stations, VASI lights, DME’s and VOR’s are all powered by electricity. Emergency medical service is provided in Kaktovik by a community health aide. Therefore medical problems and emergencies must be relayed by telephone or by other communication means for outside assistance. Operation of the telephone system requires reliable electric service. The heaviest consumers of power in villages of the North Slope Borough are the water and sewer facilities. Additionally the underground utilities are thawed by electrical heat trace. If heat traces are without power, water and sewer systems will freeze and shut down. Water in Kaktovik comes from a fresh water surface pond which must be processed for use as potable water. Reliable electric service is required for the continuous operation of the water and wastewater systems and to prevent freezing of the systems which causes extensive damage and interruptions in service. Kaktovik is subject to long periods of darkness. Reliable electric service is essential for the operation of home lighting, streetlights and security lighting. Children walk to school and outside lighting helps them find their way and be on the lookout for hazards such as deep snow or in the extreme case, polar bears Residents of Kaktovik rely on a subsistence lifestyle where food is gathered and harvested, then stored for later use. Refrigeration is essential for the extended storage of perishable food. Reliable electric service is essential for proper freezer storage of food during summer months. The North Slope Borough expects the addition of wind turbines to the electric generation system to reduce the amount of diesel fuel used on the island for power generation and for heating. Renewable Energy Fund Round VIII Grant Application - Standard Form AEA 15003 Page 14 of 26 7/2/14 4.3 Proposed System Describe the system you are intending to develop and address potential system design, land ownership, permits, and environmental issues. 4.3.1 System Design Provide the following information for the proposed renewable energy system:  A description of renewable energy technology specific to project location  Optimum installed capacity  Anticipated capacity factor  Anticipated annual generation  Anticipated barriers  Basic integration concept  Delivery methods Renewable energy technology description Wind power is the renewable energy option of choice for Kaktovik. There are no other alternative or renewable energy options that are currently, commercially viable. The community and NSB have the choice of diesel fuel or wind energy. The recommendation for Kaktovik is the installation of three Vestas V27 turbines at Kaktovik Site 2 for a total cumulative generation capacity of 675 kW. This turbine configuration has a 675 kW rated generation capacity, which exceeds the current average electrical load for Kaktovik. The economic evaluation above assumes that the turbine operates at 80% turbine availability without exceeding rated energy output levels. However, for better system performance, the turbines should be pitch controlled to modulate energy output to a level that provides medium penetration to the Kaktovik grid and adequate excess energy to meet recovered heat demands. Optimum installed Capacity The recommended system consists of three Vesta V27 turbines to operate with the existing diesel plant as a wind-diesel hybrid power system. Installed wind power capacity of this configuration would be 675kW. Anticipated Capacity Factor The anticipated capacity factor for the recommended system at 80% availability is 23.5 percent Anticipated Annual Generation The wind farm modeling provided by V3 Energy predicts that this alternative will add 1,390 MWh/year of annual energy production to the Kaktovik power generation system at 80% turbine availability. The construction cost for this alternative is estimated to be $10,552 per installed kW ($7,122,795/675 kW). Anticipated barriers We anticipate some environmental concerns, including avian issues and polar bear habitat. Otherwise, no barriers to successful installation and integration of a wind turbine in Kaktovik are expected. Basic Integration Concept The integration design concept is comprised of three V27 turbines, a secondary load controller boiler to augment an existing diesel generation heat recovery loop, a secondary load controller to manage the dumping of excess electricity (if necessary, a SCADA system to manage the combine operation of the diesel generators and wind turbines, and the SmartView system to enable remote monitoring and control of the wind-diesel hybrid power plant. Renewable Energy Fund Round VIII Grant Application - Standard Form AEA 15003 Page 15 of 26 7/2/14 Delivery Methods The preferred site (Site 2) is northwest of the water supply lagoon. Direct line distance to the powerplant is approximately 1.2 miles; the distribution connection would be direct line and follow this route. Assuming construction of an access road from the north shore road west of the Barter Island DEW station, road distance to the powerplant would be approximately 2.1 miles 4.3.2 Land Ownership 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. The recommended site is owned by the Kaktovik Inupiat Corporation. Negotiations with the Kaktovik Inupiat Corporation will be required for site control. 4.3.3 Permits Provide the following information as it may relate to permitting and how you intend to address outstanding permit issues.  List of applicable permits  Anticipated permitting timeline  Identify and discuss potential barriers Application for permits will be made no sooner than one year prior to construction to be valid for the construction period. The following permits and/or authorizations will be necessary for installation of the wind turbines: • North Slope Borough permitting • USACE Section 404/401 Wetlands permit and Water Quality Assurance • ADNR, OC&OM Coastal Zone Consistency Determination • Title 16 Fish Habitat Permit • SHPO “No Historic Properties Affected” • Storm Water Pollution Prevention Plan • Alaska Pollutant Discharge Elimination System • Vegetation Clearing Not Permitted between May 20 and July 20, except for black scoter habitat where the end of the avoidance period is August 10 • FAA 7460-1 Notice of Proposed Construction or Alteration 4.3.4 Environmental Address whether the following environmental and land use issues apply, and if so how they will be addressed:  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 discuss other potential barriers Kaktovik lies on the north shore of Barter Island, between the Okpilak and Jago Rivers on the Beaufort Sea coast. It is within the 19.6-million-acre Arctic National Wildlife Refuge, an occasional calving ground for the porcupine caribou herd. The area encompasses 0.8 sq. miles of land and Renewable Energy Fund Round VIII Grant Application - Standard Form AEA 15003 Page 16 of 26 7/2/14 0.2 sq. miles of water. The climate of Kaktovik is arctic. Temperatures range from -56 to 78 °F. Precipitation is light, averaging 5 inches, with snowfall averaging 20 inches annually. Kaktovik, Alaska is located on the northern coast of Alaska and is underlain by continuous stable permafrost. There is one known threatened or endangered species, the Polar Bear, in the Kaktovik vicinity. The USFWS has published a voluntary Interim Guidelines to Avoid and Minimize Wildlife Impacts from Wind Turbines document. Consideration of threatened or endangered species and for birds, in general, is critical to wind farm development. Kaktovik is in the North Slope Borough Coastal Resource Service Area and is subject to a Coastal Zone Consistency Determination. Coastal Zone review is conducted through the State of Alaska Department of Natural Resources (ADNR), Office of Coastal and Ocean Management (OC&OM). Coastal Zone review functions as a clearing house for all permits issued by State agencies. Environmental Approach. The engineering contractor will organize a pre-application meeting to be coordinated through the ADNR, OC&OM office for the Kaktovik, Alaska Wind Diesel Project. All agencies, including federal agencies, will be asked to participate. The meeting will identify and discuss appropriate permit issues and provide agency perspective on the proposed development. Discussions should include actions to avoid, minimize and mitigate wetlands impacts. Preliminary concerns for impacts to the National Preserve and possible cultural sites will be identified. Results of this agency pre-application meeting will be a three to five page meeting report summarizing agency concerns, issues and possible mitigation or compensation proposals. This will be as comprehensive as possible but may not identify all permits required for project development given the preliminary nature of the development proposal. 4.4 Proposed New System Costs and Projected Revenues (Total Estimated Costs and Projected Revenues) The level of cost information provided will vary according to the phase of funding requested and any previous work the applicant may have done on the project. Applicants must reference the source of their cost data. For example: Applicants records or analysis, industry standards, consultant or manufacturer’s estimates. 4.4.1 Project Development Cost Provide detailed project cost information based on your current knowledge and understanding of the project. Cost information should include the following:  Total anticipated project cost, and cost for this phase  Requested grant funding  Applicant matching funds – loans, capital contributions, in-kind  Identification of other funding sources  Projected capital cost of proposed renewable energy system  Projected development cost of proposed renewable energy system This application is for the design and permitting phase of this project. We are requesting $440,000 to complete this phase. The North Slope Borough will provide $44,000 as a 10% cash match for this phase of the project. The North Slope Borough also financed the wind study for Kaktovik out of its own operating budget – an estimated outlay of $42,500. We estimate that the completed (constructed) project will cost a total of $4,565,200. We hope to submit a proposal for construction funds in the event there is another AEA funding round in 2015. Renewable Energy Fund Round VIII Grant Application - Standard Form AEA 15003 Page 17 of 26 7/2/14 4.4.2 Project Operating and Maintenance Costs Include anticipated O&M costs for new facilities constructed and how these would be funded by the applicant. (Note: Operational costs are not eligible for grant funds however grantees are required to meet ongoing reporting requirements for the purpose of reporting impacts of projects on the communities they serve.) This phase of the project will be operated by the North Slope Borough working with a contractor to perform the design. Progress reports and financial reporting will be handled by NSB program managers and staff. 4.4.3 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  Proposed rate of return from grant-funded project North Slope Borough is the owner/operator of the utility in this community; therefore, the Power Purchase/Sale is not required Renewable Energy Fund Round VIII Grant Application - Standard Form AEA 15003 Page 18 of 26 7/2/14 4.4.4 Project Cost Worksheet Complete the cost worksheet form which provides summary information that will be considered in evaluating the project. Please fill out the form provided below. Renewable Energy Source The Applicant should demonstrate that the renewable energy resource is available on a sustainable basis. Annual average resource availability. 73% (winds that exceed 4 m/s); CDR assumes 80% wind turbine availability Unit depends on project type (e.g. windspeed, hydropower output, biomass fuel) Existing Energy Generation and Usage a) Basic configuration (if system is part of the Railbelt1 grid, leave this section blank) i. Number of generators/boilers/other 4 ii. Rated capacity of generators/boilers/other 2720 kW (9 X 910 Kw, 2 X 450 kW) iii. Generator/boilers/other type Diesel iv. Age of generators/boilers/other Unknown v. Efficiency of generators/boilers/other 13.25 kWh/gal (2012 PCE report) b) Annual O&M cost (if system is part of the Railbelt grid, leave this section blank) i. Annual O&M cost for labor ii. Annual O&M cost for non-labor c) Annual electricity production and fuel usage (fill in as applicable) (if system is part of the Railbelt grid, leave this section blank) i. Electricity [kWh] 4,806,000 kWh (2012 PCE Report) ii. Fuel usage Diesel [gal] 362,584 (2012 PCE Report) Other iii. Peak Load 769 kW iv. Average Load 547 kW v. Minimum Load ~400 kW vi. Efficiency 13.25 kWh/gal vii. Future trends Average power demand of 813 kW is estimated by 2032 d) Annual heating fuel usage (fill in as applicable) i. Diesel [gal or MMBtu] 32,900 gal (Homer model) 1 The Railbelt grid connects all customers of Chugach Electric Association, Homer Electric Association, Golden Valley Electric Association, the City of Seward Electric Department, Matanuska Electric Association and Anchorage Municipal Light and Power. Renewable Energy Fund Round VIII Grant Application - Standard Form AEA 15003 Page 19 of 26 7/2/14 ii. Electricity [kWh] iii. Propane [gal or MMBtu] iv. Coal [tons or MMBtu] v. Wood [cords, green tons, dry tons] vi. Other Proposed System Design Capacity and Fuel Usage (Include any projections for continued use of non-renewable fuels) a) Proposed renewable capacity (Wind, Hydro, Biomass, other) [kW or MMBtu/hr] Wind - Vestas V27 turbines with a total capacity of 675 kW b) Proposed annual electricity or heat production (fill in as applicable) i. Electricity [kWh] 1,390,849 KWh/year (80% availability) ii. Heat [MMBtu] 129,660 kWh/yr (442 MBtu/yr) c) Proposed annual fuel usage (fill in as applicable) i. Propane [gal or MMBtu] ii. Coal [tons or MMBtu] iii. Wood or pellets [cords, green tons, dry tons] iv. Other Project Cost a) Total capital cost of new system $7,122,795 b) Development cost $484,000 (design) c) Annual O&M cost of new system $68,152 (at $0.049/kWh; 2012 AEA assumption) d) Annual fuel cost No fuel required Project Benefits a) Amount of fuel displaced for i. Electricity 95,184 gal ii. Heat 3,314 gal iii. Transportation b) Current price of displaced fuel $4.28 (2012 PCE Report, $0.40 social cost of carbon not included) c) Other economic benefits d) Alaska public benefits Renewable Energy Fund Round VIII Grant Application - Standard Form AEA 15003 Page 20 of 26 7/2/14 Power Purchase/Sales Price a) Price for power purchase/sale Project Analysis a) Basic Economic Analysis Project benefit/cost ratio 1.03 Payback (years) 14.3 4.4.5 Impact on Rates Briefly explain what if any effect your project will have on electrical rates in the proposed benefit area. If the is for a PCE eligible utility please discuss what the expected impact would be for both pre and post PCE. The North Slope Borough produces, distributes, and sells the electricity for this community. The rates for the sale of the electricity are set by the NSB Assembly and have remained unchanged for a number of years. The cost to consumers is 18 cents per kWH. The North Slope Borough view electricity as a basic need for the residents of the community and has artificially maintained the cost of electricity at this low rate for the benefit of the residents of these communities. The cost of the generation of electricity and other utilities is approximately $.80 per kWh. The difference is paid through general revenue funds that are dedicated to this end. The rate that the consumer directly pays for electricity will remain the same after the project has been completed as it is already kept artificially low. The consumers and residents of the community will however receive a direct benefit of allowing that were previously utilized to maintain these low rate to be utilized for other programs and projects as directed by the NSB Assembly. SECTION 5– PROJECT BENEFIT Explain the economic and public benefits of your project. Include direct cost savings, and how the people of Alaska will benefit from the project. The benefits information should include the following:  Potential annual fuel displacement (gallons and dollars) over the lifetime of the evaluated renewable energy project  Anticipated annual revenue (based on i.e. a Proposed Power Purchase Agreement price, RCA tariff, or cost based rate)  Potential additional annual incentives (i.e. tax credits)  Potential additional annual revenue streams (i.e. green tag sales or other renewable energy subsidies or programs that might be available)  Discuss the non-economic public benefits to Alaskans over the lifetime of the project A wind study analysis has been conducted for this project. The findings in 2010 follow. HOMER – projected annual fuel savings: Renewable Energy Fund Round VIII Grant Application - Standard Form AEA 15003 Page 21 of 26 7/2/14 - 20-year lifetime fuel savings (gallons): 1,970,000 gallons @ $5.27/gal, average fuel price (including SCC) yields a total savings of $10.38 M during the 20 year project life. - Non-economic benefits – CO2 reduction: 3,111 metric tons/yr or 62,200 tons during the 20 year project life. The non-economic benefits to the Alaskan population at large will be from the reduced carbon footprint of the power plant. By reducing the amount of fuel burned at the Kaktovik power plant by over 13%, we will prevent over 3,111 metric tons of carbon dioxide from entering the atmosphere each year. Other significant emissions improvements are a reduction of 6,390 kg/year of carbon monoxide and 57,020 kg/year of nitrogen oxides. 5.1 Public Benefit for Projects with Private Sector Sales Projects that include sales of power to private sector businesses (sawmills, cruise ships, mines, etc.), please provide a brief description of the direct and indirect public benefits derived from the project as well as the private sector benefits and complete the table below. See section 1.6 in the Request for Applications for more information. Renewable energy resource availability (kWh per month) Estimated sales (kWh) Revenue for displacing diesel generation for use at private sector businesses ($) Estimated sales (kWh) Revenue for displacing diesel generation for use by the Alaskan public ($) SECTION 6– SUSTAINABILITY Discuss your plan for operating the completed project so that it will be sustainable. Include at a minimum:  Proposed business structure(s) and concepts that may be considered.  How you propose to finance the maintenance and operations for the life of the project  Identification of operational issues that could arise.  A description of operational costs including on-going support for any back-up or existing systems that may be require to continue operation  Commitment to reporting the savings and benefits Once constructed, the proposed wind diesel system will be fully integrated into the North Slope Borough-owned and operated utility system. Therefore, the proposed business structure will become part of the annual operations and maintenance budget, and any significant capital upgrades will be part of the annual CIP process. The North Slope Borough has the existing infrastructure that will serve this project and is inherently sustainable. This operations and maintenance phase will become part of the annual NSB operations budget. Operational issues that could arise are in integrating between wind and diesel systems and the cost of training the current plant operator on the wind/diesel system. Providing operations and maintenance in an arctic environment can be costly, but will come under the infrastructure O&M program with the North Slope Borough. The remanufactured V27 wind turbines are anticipated to require only one maintenance visit each year. The three turbines for Kaktovik are estimate to Renewable Energy Fund Round VIII Grant Application - Standard Form AEA 15003 Page 22 of 26 7/2/14 require a combined annual maintenance budget of $68,152. This cost will be funded by ongoing energy sales in the village. Power Plant operators will be trained to collect data and will be required to report all cost savings and benefits. SECTION 7 – READINESS & COMPLIANCE WITH OTHER GRANTS Discuss what you have done to prepare for this award and how quickly you intend to proceed with work once your grant is approved. Tell us what you may have already accomplished on the project to date and identify other grants that may have been previously awarded for this project and the degree you have been able to meet the requirements of previous grants. The North Slope Borough has completed the wind study, feasibility analysis, and Conceptual Design Report for this project. This phase of the project was completed within the amended timelines for the grants provided by AEA. SECTION 8 – LOCAL SUPPORT AND OPPOSITION Discuss local support and opposition, known or anticipated, for the project. Include letters of support or other documentation of local support from the community that would benefit from this project. The Documentation of support must be dated within one year of the RFA date of July 2, 2014 North Slope Borough is the provider of local power and energy in the Borough. They own all local utilities. A resolution passed in support of the project was passed in October 2013 in support of the Round VII application. It is attached. A resolution in support of this application will be presented to the assembly in October 2014. SECTION 9 – GRANT BUDGET Tell us how much you are seeking in grant funds. Include any investments to date and funding sources, how much is being requested in grant funds, and additional investments you will make as an applicant. 9.1 Funding sources and Financial Commitment Provide a narrative summary regarding funding source and your financial commitment to the project The North Slope Borough is seeking $440,000 in grant funding to complete the final design and permitting phase of this project. The North Slope Borough will provide project administration as in- kind match in the amount of $33,446 and an additional $10,554 in cash match which will bring the total contribution to 10% of the total award. Renewable Energy Fund Round VIII Grant Application - Standard Form AEA 15003 Page 23 of 26 7/2/14 9.2 Cost Estimate for Metering Equipment Please provide a short narrative, and cost estimate, identifying the metering equipment, and its related use to comply with the operations reporting requirement identified in Section 3.15 of the Request for Applications. This phase of the project is for design and permitting. Metering equipment suitable to fulfill the reporting requirements will be chosen and incorporated into the design. Cost estimates will be available upon completion of this phase. Renewable Energy Fund Round VIII Grant Application - Standard Form AEA 15003 Page 24 of 26 7/2/14 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 and Commissioning). Please use the tables provided below to detail your proposed project’s budget. Be sure to use one table for each phase of your project. 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 at 907-771-3031 or by emailing the Grants Administrator, Shawn Calfa, at scalfa@aidea.org. 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 (List milestones based on phase and type of project. See Milestone list below. ) $ $ $ Project scoping and contractor solicitation completed $10,000 $0 $10,000 Permit applications completed $10,000 $10,000 Cash $20,000 Final environmental assessment and mitigation plans completed $160,000 $0 $160,000 Permitting, rights-or-way, resolution of land use, site control completed $40,000 $24,000 Cash $64,000 Final system design completed $160,000 $0 $160,000 Final cost estimate completed $10,000 $0 $10,000 Updated economic and financial analysis completed $20,000 $0 $20,000 Power of heat sale agreements in place $0 $0 $0 Final business and operational plan completed $10,000 $0 $23,500 Project scoping and contractor solicitation completed $10,000 $0 $10,000 Permit applications completed $10,000 $10,000 Cash $20,000 TOTALS $440,000 $44,000 $484,000 Budget Categories: Direct Labor & Benefits $ $33,446 $ Travel & Per Diem $ $ $ Equipment $ $ $ Materials & Supplies $ $ $ Contractual Services $440,000 $10,554 $ Construction Services $ $ $ Other $ $ $ TOTALS $440,000 $44,000 $484,000 Renewable Energy Fund Round VIII Grant Application - Standard Form AEA 15003 Page 25 of 26 7/2/14 SECTION 10 – AUTHORIZED SIGNERS FORM Community/Grantee Name: North Slope Borough Regular Election is held: Every 3 Years Date: 1st Tuesday in October Authorized Grant Signer(s): Printed Name Title Term Signature Jacob Adams Sr. Chief Administrative Office N/A I authorize the above person(s) to sign Grant Documents: (Highest ranking organization/community/municipal official) Printed Name Title Term Signature Charlotte E. Brower Mayor 2011-2014 Grantee Contact Information: Mailing Address: PO Box 69 Barrow, AK 99723 Phone Number: (907) 852-0467 Fax Number: (907) 852-4145 E-mail Address: Timothy.Rowe@north-slope.org Federal Tax ID #: 92-0042378 Please submit an updated form whenever there is a change to the above information. Renewable Energy Fund Round VIII Grant Application - Standard Form AEA 15003 Page 26 of 26 7/2/14 SECTION 11 – 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 8. 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 Mayor Charlotte E. Brower Signature Title Mayor Date