HomeMy WebLinkAboutWales Rnd 6 Grant App FINALRenewable Energy Fund Round 6
Grant Application
Wales Wind Feasibility Project
AEA 13-006 Application Page 1 of 25 September 2012
SECTION 1 – APPLICANT INFORMATION
Name (Name of utility, IPP, or government entity submitting proposal)
Alaska Village Electric Cooperative, Inc.
Type of Entity: Not-for-profit corporation Fiscal Year End December 31
Tax ID # 92-0035763 Tax Status: For-profit or X non-profit ( check one)
Mailing Address
4831 Eagle Street
Anchorage, AK 99503
Physical Address
4831 Eagle Street
Anchorage, AK 99503
Telephone
800.478.1818
Fax
800.478.4086
Email
1.1 APPLICANT POINT OF CONTACT / GRANTS MANAGER
Name
Brent Petrie
Title
Manager, Community Development and Key
Accounts
Mailing Address
4831 Eagle Street
Anchorage, AK 99503
Telephone
907.565.5358
Fax
907.561.2388
Email
BPetrie@avec.org
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)
X 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);
Yes
1.2.2 Attached to this application is formal approval and endorsement for its project
by its 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 or No in the box )
Yes
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.
Yes
1.2.4 If awarded the grant, we can comply with all terms and conditions of the
attached grant form. (Any exceptions should be clearly noted and submitted
with the application.)
Yes
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.
Renewable Energy Fund Round 6
Grant Application
Wales Wind Feasibility Project
AEA13-006 Grant Application Page 2 of 25 September 2012
SECTION 2 – PROJECT SUMMARY
This is intended to be no more than a 1-2 page overview of your project.
2.1 Project Title – (Provide a 4 to 5 word title for your project)
Wales Wind Energy Feasibility and Conceptual Design Project
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.
Wales (population 154) is located on Cape Prince of Wales, at the western tip of the Seward
Peninsula, 111 miles northwest of Nome. It lies at approximately 65.609170 North Latitude and
-168.087500 West Longitude. (Sec. 05, T002N, R045W, Kateel River Meridian.)
2.2.2 Community benefiting – Name(s) of the community or communities that will be the
beneficiaries of the project.
This project will benefit the community of Wales, Alaska.
2.3 PROJECT TYPE
Put X in boxes as appropriate
2.3.1 Renewable Resource Type
X Wind Biomass or Biofuels
Hydro, including run of river Transmission of Renewable Energy
Geothermal, including Heat Pumps Small Natural Gas
Heat Recovery from existing sources Hydrokinetic
Solar Storage of Renewable
Other (Describe)
2.3.2 Proposed Grant Funded Phase(s) for this Request (Check all that apply)
Pre-Construction Construction
Reconnaissance Design and Permitting
X Feasibility Construction and Commissioning
X Conceptual Design
Renewable Energy Fund Round 6
Grant Application
Wales Wind Feasibility Project
AEA13-006 Grant Application Page 3 of 25 September 2012
2.4 PROJECT DESCRIPTION
Provide a brief one paragraph description of your proposed project.
AVEC proposes to install two wind meteorological (met) towers and complete geotechnical
work to determine the feasibility of installing wind turbines in Wales in order to get a better
understanding of the good wind regime in Wales. The work will involve obtaining a letter of
non-objection from the landowner for the placement of the met tower s and geotechnical
fieldwork, permitting, transporting and installing met towers at two locations, studying the
wind resource for one year, and conducting a geotechnical investigation to determine the soil
conditions and needed engineering at the sites. A conceptual design at one site will be created
based on the outcome of the met towers’ recordings and geotechnical investigation. Permits
and site control will be obtained for the project.
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, etc.)
The primary financial benefit from this project would be to determine whether the wind
resources are suitable to provide power to the community and , if so, to prepare a conceptual
design of a wind facility. In the past, wind turbines were installed in Wales; however, because
of the strong and very variable winds, turbine issues occurred. AVEC is interested in finding the
best location and turbine design in order to take advantage of the wind resource in an area
where the wind is less variable.
Assuming the installation of a 100 kilowatt (kW) capacity system, it could produce 318,864
kilowatt hours (kWh/year) annually. The possible displacement of diesel fuel used for village
power generation in Wales could be 25,777 gallons per year. Using AVEC’s 2011 average cost
of fuel in Wales ($4.31) this project could save about $111,098 during the first year of
operation, expected to be 2015. Over the life of the project, the estimated savings would be
$2,221,977.
The average annual price for residential electricity was $0.63 per kilowatt hour (kWh) in 2011,
which far exceeds the national benchmark of $0.264/kWh. The residents of Wales would
benefit from this project that would mitigate the rising energy costs found in rural Alaska.
The high cost of electricity is a burden to the residents of Wales who rely upon subsistence
hunting and fishing, trapping and Native arts. Wage earning jobs in Wales are limited to local
infrastructure and a privately managed reindeer herd during harvest time. The scarcity of jobs
contributes to the low median household income of $21,667 and the high unemployment rate
of about 42%. Providing a reliable alternative energy source in the community would help
stabilize energy costs for the residents.
The Wales Local Economic Development Plan for 2011‐ 2016 identified a list of priority needs
for the community. Many of the local buildings and facilities are old and in dire need of repair
Renewable Energy Fund Round 6
Grant Application
Wales Wind Feasibility Project
AEA13-006 Grant Application Page 4 of 25 September 2012
or new construction. The high cost of electricity is a constraint to fulfilling the needs of
maintenance, repair, and development within the community. Stabilizing the rising costs of
energy production would ease the burden felt by the residents and allow for progress in
achieving the community goals.
Sources: Alaska Community Database, Wales Local Economic Development Plan 2011‐ 2016
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.
The total project cost for the proposed project is $200,000. AVEC is requesting $190,000 from
AEA grant funds and will provide $10,000 as a cash match.
2.7 COST AND BENEFIT SUMARY
Include a summary of grant request and your project’s total costs and benefits below.
Grant Costs
(Summary of funds requested)
2.7.1 Grant Funds Requested in this application. $190,000
2.7.2 Cash match to be provided $ 10,000
2.7.3 In-kind match to be provided $
2.7.4 Other grant applications not yet approved $
2.7.5 Total Grant Costs (sum of 2.7.1 through 2.7.3) $200,000
Project Costs & Benefits
(Summary of total project costs including work to date and future cost estimates to get to a fully
operational project)
2.7.6 Total Project Cost (Summary from Cost Worksheet
including estimates through construction)
$1,020,000
2.7.7 Estimated Direct Financial Benefit (Savings) $ 111,098 (first year)
$2,221,977 (lifetime)
2.7.8 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 your application
(Section 5.)
$ to be determined
Renewable Energy Fund Round 6
Grant Application
Wales Wind Feasibility Project
AEA13-006 Grant Application Page 5 of 25 September 2012
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). 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.
AVEC would provide overall project management and oversight. AVEC is the electric utility
serving Wales. To further support the AVEC team in project delivery, wind resource,
engineering and environmental issues, consultants would be selected.
Brent Petrie, Manager Community Development and Key Accounts, would lead the project
management team consisting of AVEC staff, consultants and contractors. He has worked for
AVEC since 1998, where he manages the development of alternatives to diesel generation for
AVEC such as using wind, hydropower, and heat recovery. He also manages relationships with
AVEC’s largest customers and is the project manager for AVEC’s many construction projects as
an energy partner of the federally funded Denali Commission.
Mr. Petrie has worked in the energy and resource field for more than thirty years, having
worked for the federal and state governments as consultant, planner, and project manager. He
has been a utility manager or management consultant since 1993. As General Manager of
Iliamna-Newhalen-Nondalton Electric Cooperative from 1994 to 1998, he reported to a se ven-
member, elected board of directors, and served as project manager on its hydroelectric project
development. He is an elected member of the Board of Directors of the Utility Wind Interest
Group representing rural electric cooperatives and serves on the Power Supply Task force of
the National Rural Electric Cooperative Association. Mr. Petrie has a Master’s Degree in Water
Resource Management and a Bachelor's Degree in Geography. His resume is attached.
Also involved with the project management and grant administration is:
Meera Kohler, the President and CEO of AVEC. Meera Kohler has more than 30 years of
experience in the Alaska electric utility industry. She was appointed Manager of Administration
and Finance at Cordova Electric Cooperative in 1983, General Manager of Naknek Electric
Association in 1990, and General Manager of Municipal Light & Power in Anchorage in 1997.
Since May 2000, Ms. Kohler has been the President and CEO of AVEC and in this position has
the ultimate grant and project responsibilities.
Renewable Energy Fund Round 6
Grant Application
Wales Wind Feasibility Project
AEA13-006 Grant Application Page 6 of 25 September 2012
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.
The key tasks and their completion dates are:
Authorization to Proceed: August 1, 2013
Obtain Site Control/Right of Entry/Permits: September 2013
Ship Met Towers: September 2013
Erect Met Towers: September 2013
Complete Monitor Met Towers Data: October 2013-September 2014
Geotech Field Work: October 2013
Geotech Report: December 2013
Dismantle Met Towers: September 2014
Wind Resource Report: October 2014
Conceptual Design and Cost Estimate: November 2014
The schedule organized by AEA milestones is as follows:
Milestones Tasks Start Date End Date
1. Project scoping and
contractor solicitation
AVEC would select contractor(s) for the
wind feasibility, geotechnical analysis,
conceptual design, and permitting
immediately following AEA’s
authorization to proceed.
August 1,
2013
August 15,
2013
2. Detailed energy resource
analysis
To initiate the Wind Resource Analysis
before winter, AVEC would purchase or
refurbish (as necessary), ship, and erect
the met towers in September 2013.
AVEC would immediately seek approvals
from permitting agencies, starting the
process before the grant is awarded to
ensure that the met towers can be
installed in the late fall. The earlier the
met towers are collecting data, the
earlier AVEC would have the wind
resource data to ascertain the suitability
of use of this renewable resource.
Monitoring of the met towers would
continue until September 2014, when the
met towers would be dismantled. The
wind resource report would be drafted
by the end of October 2014.
September
15, 2013
October
31, 2014
3. Identification and
resolution of land issues
AVEC would work with the Wales Native
Corporation to obtain a letter of non-
objection for the placement of the met
September
1, 2013
June 1,
2014
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Grant Application
Wales Wind Feasibility Project
AEA13-006 Grant Application Page 7 of 25 September 2012
towers and geotechnical work, prior to
the work. AVEC would initiate
negotiations of permanent site control to
place turbines, if feasible.
4. Detailed analysis of
current cost of energy and
future market
AVEC would analyze the existing and
future energy costs and markets in
Wales. The information would be based
on AVEC records and community plans. A
community meeting would be held to
determine future energy markets.
Information regarding energy markets
would be incorporated into the CDR.
February 1,
2014
March 30,
2014
5. Detailed economic and
financial analyses
An economic and financial analysis, which
examines potential final design and
construction costs, operating and
maintenance costs, user rates, and other
funding mechanisms, would be
developed and included in the CDR.
June 1,
2014
August 30,
2014
6. Conceptual business and
operations plan
Draft business and operational plans
would be developed working with the
City of Wales and the Wales Native
Corporation. The conceptual plan would
include draft recovered heat agreements,
if feasible.
June 1,
2014
October
31, 2014
7. Conceptual design and
costs estimate
Various wind turbines would be
examined to determine which would be
best suited to fit the lower energy
demand and single phase electric system
in Wales. A reconnaissance level
geotechnical study would be completed.
A conceptual design and cost estimate
would be prepared using information
gathered from the wind study and
geotechnical fieldwork.
September
1, 2014
November
1, 2014
8. Permitting and
environmental analysis
Research would be completed to
determine needed environmental
permits for the design and construction
phases of the project.
September
15, 2014
December
15, 2014
9. Final report and
recommendations
All of the memoranda and reports
written for the project would be
combined in a final report and submitted
to AEA. The Final CDR would include the
following information:
Wind Resource
Site Control
December
31, 2014
Renewable Energy Fund Round 6
Grant Application
Wales Wind Feasibility Project
AEA13-006 Grant Application Page 8 of 25 September 2012
Existing and Future Energy Costs
and Markets
Economic and Financial Analysis
Conceptual Business and
Operations Plan
Geotechnical Report
Conceptual Design Analysis and
Cost Estimate, including a
turbines analysis
Environmental Permits
3.3 Project Resources
Describe the personnel, contractors, accounting or bookkeeping 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.
AVEC would use a project management approach that has been used to successfully design and
construct wind turbines throughout rural Alaska: a team of AVEC staff and external consultants.
AVEC staff and their role on this project includes:
Meera Kohler, President and Chief Executive Officer, would act as Project Executive and
will maintain ultimate authority programmatically and financially.
Brent Petrie, Manager, Community Development and Key Accounts, would lead the
project management team consisting of AVEC staff, consultants, and contractor s.
Together with his group, Brent would provide coordination of the installation of the met
towers, geotechnical work, conceptual design, and permitting. The group’s resources
include a project coordinator, accountant, project/construction manager (PM/CM), and
a community liaison. Mr. Petrie will be the program manager for the project and will
assign project manager resources to implement the project. He will also be responsible
for reporting directly to AEA on the status of the project.
Bill Stamm, Manager of Engineering, would provide technical assistance and
information on the existing power system and possible issues and project study needs.
Debbie Bullock, Manager of Administrative Services, would provide support in
accounting, payables, financial reporting, and capitalization of assets in accordance with
AEA guidelines.
Anna Sattler, Community Liaison, communicate directly with Wales’ residents to ensure
that the community is informed.
An AVEC project manager would lead this project. It is likely that one of AVEC’s in-house
contractors would lead the work. The project manager would be responsible for:
Obtaining site control/access and permits for the installation of the met towers and
geotechnical work
Renewable Energy Fund Round 6
Grant Application
Wales Wind Feasibility Project
AEA13-006 Grant Application Page 9 of 25 September 2012
Selecting, coordinating, and managing the wind resource, geotechnical, engineering,
and permitting consultants and ensuring that their deliverables are on time and within
budget
Working with AVEC’s Community Liaison to develop the Existing and Future Energy
Costs and Markets Memorandum and the Conceptual Business and Operating Plan
Working to develop the Economic and Financial Analysis
Contractors for this project would include:
Wind Resource Consultant. AVEC currently has an on-call contract with V3 Energy, LLC
for wind resource studies and reports. It is likely that V3 would work on this project.
Doug Vaught’s (V3’s owner) resume is attached. V3 will:
Consult on the installation, operation, and maintenance of the towers
Draft the wind resource report
Geotechnical consultant. AVEC would select and employ an experienced geotechnical
consultant who would:
Conduct a reconnaissance level geotechnical and natural hazards field study and
report of the project area
Engineering consultant. AVEC would select and employ an engineering consultant who
would:
Provide conceptual design and engineering specifications for the wind turbines
Environmental Consultant. AVEC currently has an on-call contract with Solstice Alaska
Consulting, Inc. for environmental permitting. It is likely that Solstice would work on this
project. Robin Reich’s (Solstice’s president) resume is attached. Solstice would:
Consult with agencies
Develop and submit permit applications for the met towers
Document permit needs for future wind project
Selection Process for Contractors: The geotechnical and engineering consultant selection
would be based upon technical competencies, past performance, written proposal quality, cost,
and general consensus from an internal AVEC technical steering committee. The selection of
the consultant would occur in strict conformity with AVEC’s procurement policies, and
conformance with OMB circulars.
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.
AVEC would require that monthly written progress reports be provided with each invoice
submitted from contractors. The progress reports would include a summary of tasks completed,
issues or problems experienced, upcoming tasks, and contractor’s needs from AVEC. Project
progress reports would be collected, combined, and supplemented as necessary and forwarded
as one report to the AEA project manager each quarter.
Semi-annual face-to-face meetings would occur between AVEC and AEA to discuss the status of
Renewable Energy Fund Round 6
Grant Application
Wales Wind Feasibility Project
AEA13-006 Grant Application Page 10 of 25 September 2012
all wind projects funded through the AEA Renewable Energy Grants program. Individual project
meetings would be held, as required or requested by AEA.
Meera Kohler, AVEC’s President and CEO, may be contacted as an alternative ma nager.
3.5 Project Risk
Discuss potential problems and how you would address them.
Site Control/Access. Sometimes site control for the placement of met towers or turbines is
difficult; however, because the community supports the project (letters of support have been
received from all community entities), it is not expected that gaining site control would be
difficult.
Weather. Weather could delay geotechnical fieldwork and/or the erection of the met towers;
however, experienced consultant and contractors, familiar with Alaskan weather conditions,
would be selected. It is unlikely that a delay in the total project schedule would occur if the
fieldwork or erection of the met towers is delayed. It is possible to erect the met towers during
winter months. The met towers would be installed to handle Wales’ winter weather conditions.
The met towers would be monitored by local AVEC personnel to ensure the met towers are up
and functioning properly throughout the year.
Construction Funding. By having the project designed and permitted, AVEC would be prepared
to capitalize on many funding opportunities.
Permitting. Permits for the met towers would be acquired, including approvals for the Federal
Aviation Administration and the U.S. Fish and Wildlife Service. AVEC would hire an
environmental consultant familiar with permitting wind projects in Alaska. Early consultation
with agencies would occur in order to flesh out location, natural and social environment,
specific species, and mitigation issues. The consultant would work openly with the agencies
and conduct studies as appropriate.
Renewable Energy Fund Round 6
Grant Application
Wales Wind Feasibility Project
AEA13-006 Grant Application Page 11 of 25 September 2012
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.
For this project, a Class 7 wind regime is assumed. However, the appropriate total rating would
be determined by this feasibility study.
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 generation system in Wales consists of 3 diesel engine generators: a 168
kilowatt (kW) Cummins installed in 2006, a 236kW Detroit Diesel, and a 168kW Cummins, both
installed in 1992. Individual generator efficiency is not tracked, but the aggregate diesel
generator efficiency in 2011 was 12.37 kilowatt hours per gallon (kWh/gallon).
In 1998, a pilot project to demonstrate high penetration wind-diesel project and the ability to
operate with the diesels off was constructed in Wales. The project was originally planned to be
located in another village but land issues and other items made that location impractical. The
project was relocated to Wales after a quick review of wind potential and acceptance by local
landowners and the servicing utility, AVEC. The original project sponsor was Kotzebue Electric
Association with assistance from the Alaska Science and Technology Foundation, USDOE and
AEA. The project successfully demonstrated that a village power system could be run for several
days at a time with diesels off and had the potential to save fuel. At the time of construction the
project features consisted of two AOC 15/50 tur bines, a battery storage system, a synchronous
condenser, dispatchable heater loads to absorb excess wind energy and customized controls.
The system demonstrated its original function, but long term operation proved complex and
some components were difficult to maintain. Some components have weathered and are not
readily replaceable. Prior to placement of these turbines, wind studies were not completed at
the same level of detail as are done today. The system has not operated for three years and its
repair in its original pilot project configuration is not desirable for long term maintenance and
sustainability. AVEC believes by completing the modern wind feasibility studies that consider
parameters such as turbulence and cold air density and adoption of a lower maintenance low to
Renewable Energy Fund Round 6
Grant Application
Wales Wind Feasibility Project
AEA13-006 Grant Application Page 12 of 25 September 2012
medium penetration configuration with smaller machines will mitigate complications. Funds are
requested to perform wind resource assessments at two locations in the Wales area and to
determine alternate machines that may be installed.
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.
Existing energy infrastructure in Wales is primarily diesel fuel for electrical power generation,
heating oil for boiler (thermal) and home heating, and diesel and gasoline fuel for transportation
needs. Between January 2011 and December 2011, 49,662 gallons of diesel fuel were consumed
to generate 613,640kWh at the AVEC facilities.
The anticipated effects are less usage of diesel fuel for electrical power generation. Also, the
diesel generator use in Wales would be decreased, thereby decreasing generator operations and
maintenance costs, enabling generators to last longer and need fewer overhauls.
4.2.3 Existing Energy Market
Discuss existing energy use and its market. Discuss impacts your project may have on energy
customers.
The electricity consumption (sold) in Wales between January and December 2011 was
535,407kWh, at an average Effective Residential Rate of 21.13 cents/kWh. The highest use is
during the late fall and winter months, after the Bering Strait freezes, as there is a change to a
cold continental climate. If the findings of this study support the use of wind energy, the amount
of diesel fuel used would be reduced.
Wales is accessed by air and sea only; however, frequent fog, wind, and blizzards limit access to
the state-owned gravel airstrip. Reliable electric service is necessary to maintaining the
navigational 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.
The school, clinic, and city building are served by piped water. There are two septic systems --
one for the school and a second for teacher's housing, the clinic, and city building. Electricity is
required for this system to function properly and prevent freezing during the cold winter
months.
The residents of Wales would experience long-term socio-economic benefits to stabilized energy
costs. The 2006-2010 American Community Survey (ACS) estimated about twenty-eight percent
of the residents live below the poverty line, with the median househol d income at $21,667. The
community relies on whales, walrus, polar bear, moose, salmon, and other fish for their
livelihood. Providing sustainable electricity to maintain refrigeration is essential for extended
storage of perishable food stuffs and for proper freezer storage of food. The construction of the
proposed project would augment and improve the existing power generation system by
Renewable Energy Fund Round 6
Grant Application
Wales Wind Feasibility Project
AEA13-006 Grant Application Page 13 of 25 September 2012
incorporating a locally available renewable resource.
According to the Wales Local Economic Development Plan, the community is greatly interested
in repairing or replacing the wind turbines that are no longer functional.
Sources: Alaska Community Database, Wales Local Economic Development Plan 2011‐ 2016
4.3 Proposed System
Include information necessary to 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. AVEC plans to conduct a feasibility analysis, resources
assessment, conceptual design, and permitting to assess the possibility of using wind power in
Wales. If the wind resource proves suitable and funding is obtained, wind turbines would be
installed to serve the community. This study will assist in determining the wind energy
generation system that would be best suited for the system, area and load.
Optimum installed capacity/Anticipated capacity factor/Anticipated annual generation. The
purpose of this work is to gather background information to plan a future alternative energy
facility. Anticipated capacity and generation would be examined for a number of turbine types
to determine the best option for the community.
Anticipated barriers. The potential barriers to the success of this project include weather,
permitting, site control, and construction funding. Weather is a minor ba rrier and does not pose
a threat to the completion of this project. Permitting, based on an initial investigation, does not
appear to be a significant hurdle to completing this phase of the project. Construction funding
would be easier to obtain with design and permits in hand. Site control should not be difficult to
obtain, since the City, Tribe, and Wales Native Corporation support the project (See Section 8
and Tab B).
Basic integration concept/Delivery methods. The wind turbines would need to interconnect
with the existing diesel power plant. Secondary load control would dispatch boilers as required
to use excess wind energy while allowing the diesel generators to continue running at efficient
levels. Conceptual design, to be completed as a part of this project, would detail how power
from a wind turbine would be integrated and delivered into the existing system in Wales.
Renewable Energy Fund Round 6
Grant Application
Wales Wind Feasibility Project
AEA13-006 Grant Application Page 14 of 25 September 2012
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.
AVEC has not obtained site control for the placement of the met tower s or conducting
geotechnical fieldwork. A letter of non-objection would be sought from the corporation or city,
depending on location, after project funding is assured. Starting with a community meeting to
announce that the project has been funded, AVEC’s community liaison would lead the effort to
gain site control. Since the major landholders support the project (See Section 8 an d Tab B), site
control is not expected to be an obstacle to the placement of the met towers and conducting
geotechnical fieldwork.
Further investigation to determine the best location for the met towers and possible future
turbines would be completed prior to grant award.
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 discussion of potential barriers
FAA Air Navigation Hazard Permitting. The met towers’ placement would be selected based on
airspace availability and limitations to meet the Federal Aviation Administration’s Notice
Criteria. If the project proves feasible, and after the turbine location and type have been
selected, AVEC would seek a no-hazard determination from FAA for the potential turbines. AVEC
would do this early in the process to ensure that adequate time and resources are allocated to
this effort. It is expected to take about three months to obtain the FAA determination for the
turbines.
Endangered Species Act/Migratory Bird Treaty Act Consultation . Consultation with the U.S.
Fish and Wildlife Service (USFWS) in compliance with the Endangered Species Act and Migratory
Bird Treaty Act would be required to install the met towers. A finding letter stating that the
project would not be expected to impact threatened or endangered species or birds would be
drafted and submitted to the USFWS once AVEC is assured this project is fu nded. It is expected
that AVEC would receive concurrence from the Service within one month. The authorization
would be issued prior to initiating met tower work in September 2013.
Clean Water Act (Section 401) Permit. If the met towers are erected within designated
wetlands, a U.S. Army Corps of Engineers authorization would be required. Because of the
limited footprint of the met towers and geotechnical work, a “Nationwide Permit” would be
sought. The application/preconstruction notice would be submitted to the Corps once funding is
assured, and the permit would be issued prior to initiating met tower work in September 2013.
Renewable Energy Fund Round 6
Grant Application
Wales Wind Feasibility Project
AEA13-006 Grant Application Page 15 of 25 September 2012
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
Threatened or endangered species. The U.S. Fish and Wildlife Service would be consulted to
ensure that installation of the met towers would have no effect on threatened or endangered
species. If clearing is required for the installation of the met towers, it would be timed to avoid
impacts to migratory birds in compliance with the Migratory Bird Treaty Act.
Habitat issues. During permitting, the project team would work with agencies to ensure that the
project would not impact any State refuges, sanctuaries or critical habitat areas, federal refuges
or wilderness areas, or national parks.
Wetlands and other protected areas. If the met towers are placed in designated wetlands, a
U.S. Army Corps of Engineers’ wetlands permit wou ld be needed.
Archaeological and historical resources. Wales has a rich history that includes a burial mound
from the “Birnirk” culture, dating 500 A.D. to 900 A.D., that is now a national landmark.
Compliance with the National Historic Preservation Act and consultation with the State Historic
Preservation Officer would be conducted prior to construction of the wind turbines.
Land development constraints. No land development constraints are currently identified;
however, if any should arise, AVEC will work with the appropriate agencies to ensure the project
is in compliance.
Telecommunications interference. The met tower locations will be selected as to not interfere
with telecommunication services.
Aviation. Met tower placement would be selected based on airspace availability and limitations
to meet the FAA’s Notice Criteria, and a no-hazard determination would be sought from the FAA
as soon as the met tower location has been finalized.
Visual, aesthetics impacts. If final data supports placement of wind turbines, AVEC will conduct
community meetings to discuss visual impacts and how they could be mitigated.
Renewable Energy Fund Round 6
Grant Application
Wales Wind Feasibility Project
AEA13-006 Grant Application Page 16 of 25 September 2012
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
Total anticipated project cost, and cost for this phase/requested grant funding/matching
funds. AVEC plans to conduct a Feasibility Analysis, Resources Assessment, and Conceptual
Design to assess the possibility of using wind power in Wales. This work would cost $200,000.
AVEC requests $190,000 from AEA. AVEC would provide $10,000 as a matching cash
contribution.
Identification of other funding sources. Once the turbine type is determined, the next phase of
this project would be final design and construction. Although it is difficult to determine without
an assessment of the resource and what type, size, and number of turbines would be needed,
AVEC expects that final design and construction would cost $1,020,000. It is possible that the
funding for this work could come from AEA’s Renewable Energy Fund program, USDA Rural
Utility Service program, or another grant program.
Projected capital cost of proposed renewable energy system/projected development cost of
proposed renewable energy system. The final phase of this project would be Design and
Construction and Commissioning (Phase IV). AVEC estimates that this phase could cost
$1,020,000. AVEC would provide a 10% cash match for the construction project.
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.)
The met towers would require monthly monitoring and data management. It is expected that
this would cost $700 total for the year that the met tower s is erected. The cost would be funded
by this grant. However, if wind turbines prove feasible, the operating and maintenance costs will
be provided by AVEC general operating costs.
Renewable Energy Fund Round 6
Grant Application
Wales Wind Feasibility Project
AEA13-006 Grant Application Page 17 of 25 September 2012
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
Identification of potential power buyer(s)/customer(s). AVEC, the existing electric utility
serving Wales, is a member-owned cooperative electric utility and typically owns and maintains
the generation, fuel storage, and distribution facilities in the villages it serves.
Wales has 43 households and a health clinic, city office, school, and water treatment
plant/washeteria, which purchase power from AVEC. At this point in project development, the
potential power price and rate of return on the project is unknown.
Potential power purchase/sales price/ Proposed rate of return from grant -funded project. At
this point in project development, the potential power price and rate of return on the project is
unknown. Work done under this grant would determine this.
Renewable Energy Fund Round 6
Grant Application
Wales Wind Feasibility Project
AEA13-006 Grant Application Page 18 of 25 September 2012
4.4.4 Project Cost Worksheet
Complete the cost worksheet form which provides summary information that will be considered
in evaluating the project.
Renewable Energy Source
The Applicant should demonstrate that the renewable energy resource is available on a
sustainable basis.
Annual average resource availability. Class 7 wind assumed
Unit depends on project type (e.g. windspeed, hydropower output, biomasss 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 3
ii. Rated capacity of generators/boilers/other CMS=168kw; DD=236kW; CMS=168kW
Total=572kW
iii. Generator/boilers/other type Diesel engine generators
iv. Age of generators/boilers/other 6 years; 20 years; 20 years
v. Efficiency of generators/boilers/other
b) Annual O&M cost (if system is part of the Railbelt grid, leave this section blank)
i. Annual O&M cost for labor $140,000/year (labor and non-labor combined)
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] 613,640 kWh (2011 actual)
ii. Fuel usage
Diesel [gal] 49,662 gal (2011 actual)
Other
iii. Peak Load 135 kW (2011 actual)
iv. Average Load 70 kW (2011 actual)
v. Minimum Load
vi. Efficiency 12.37 kWh/gallon (2011 actual)
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 6
Grant Application
Wales Wind Feasibility Project
AEA13-006 Grant Application Page 19 of 25 September 2012
vii. Future trends
d) Annual heating fuel usage (fill in as applicable)
i. Diesel [gal or MMBtu]
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
(W ind, Hydro, Biomass, other)
[kW or MMBtu/hr]
Wind 100 kW capacity proposed
b) Proposed annual electricity or heat production (fill in as applicable)
i. Electricity [kWh] 318,864 kWh/yr
ii. Heat [MMBtu]
c) Proposed annual fuel usage (fill in as applicable)
i. Propane [gal or MMBtu]
ii. Coal [tons or MMBtu]
iii. Wood [cords, green tons, dry tons]
iv. Other
Project Cost
a) Total capital cost of new system $1,020,000
b) Development cost
c) Annual O&M cost of new system $14,954 (based on $0.0469/kWh for wind energy)
d) Annual fuel cost
Project Benefits
a) Amount of fuel displaced for
i. Electricity 25,777 gal/yr
ii. Heat
iii. Transportation
b) Current price of displaced fuel $4.31/gal
c) Other economic benefits
Renewable Energy Fund Round 6
Grant Application
Wales Wind Feasibility Project
AEA13-006 Grant Application Page 20 of 25 September 2012
d) Alaska public benefits
Power Purchase/Sales Price
a) Price for power purchase/sale
Project Analysis
a) Basic Economic Analysis
Project benefit/cost ratio 1.63
Payback (years) 9.3
4.4.5 Proposed Biomass System Information
Please address the following items, if know. (For Biomass Projects Only)
N/A
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
Potential annual fuel displacement. The anticipated annual fuel displacement for the
completed project would be 25,777 gallons per year and 515,540 gallons over the anticipated
20-year lifetime of the installation. Based on ISER’s 2015 estimated fuel costs for Wales, this
project could save approximately $109,552 during its first full year of operation. (2015
projected fuel cost number was derived from ISER’s 2015 medium fuel cost projection for t he
community plus the mid-price of social cost of carbon per gallon in 2011 dollars).
Renewable Energy Fund Round 6
Grant Application
Wales Wind Feasibility Project
AEA13-006 Grant Application Page 21 of 25 September 2012
Anticipated annual revenue/Potential additional annual incentives/Potential additional
annual revenue streams. Because this project is in the concept design stage, revenue and
incentives are unknown.
Non-economic public benefits. Providing a reliable renewable resource would benefit all of
Alaskans as it mitigates potential hazardous environmental incidents that could threaten water
and land resources. There would be a reduced potential for fuel spills or contamination,
improved air quality, and the decreased reliance on fossil fuels.
Data from this project will provide important information regarding wind resources in rural
Alaska to be applied in future projects.
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
As a local utility that has been in operation since 1968, AVEC is completely able to finance,
operate, and maintain this project for the design life. AVEC has capacity and experience to
operate this project. AVEC has operating wind projects throughout the state and is very familiar
with planning, constructing, operating, and maintaining wind systems.
Business Plan Structures and Concepts which may be considered: The wind turbine(s) would be
incorporated into AVEC’s power plant operation. Local plant operators provide daily servicing.
AVEC technicians provide periodic preventative or corrective maintenance and are supported by
AVEC headquarters staff, purchasing, and warehousing.
How O&M will be financed for the life of the project: The costs of operations and maintenance
would be funded through ongoing energy sales.
Operational issues which could arise: There are no known met tower operational issues.
Operational issues of the proposed turbines would be determined.
Operating costs: Different turbines have different operating costs; however using AEA defaults
for wind energy, the estimated O&M would be $14,954 (based on $0.0469/kWh for wind
energy).
Commitment to reporting the savings and benefits: AVEC is fully committed to sharing the
savings and benefits information accrued from this project with its member owners and with
AEA.
Renewable Energy Fund Round 6
Grant Application
Wales Wind Feasibility Project
AEA13-006 Grant Application Page 22 of 25 September 2012
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.
Once funding is known to be secured, AVEC would seek a non -objection letter from the Wales
Native Corporation and begin the FAA and USFWS permitting process for the met towers. AVEC
would seek contractors to install the met towers and complete the geotechnical work once the
grant agreement is in place.
Met tower installation and geotech nical work would occur before winter. Work that can be
completed before the wind study is completed would occur over the winter, including analysis
of current cost of energy and future market, and the economic and financial analyses. Once the
wind study is completed, the conceptual design and permitting would occur.
SECTION 8– LOCAL SUPORT
Discuss what local support or possible opposition there may be regarding your project. Include
letters of support from the community that would benefit from this project.
The community is very committed to moving this project forward and fully supports this project.
Letters of support for this project have been received from the Wales Native Corporation and
the Tribal Council of Wales. Please see Tab B.
SECTION 9 – GRANT BUDGET
Tell us how much you want 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.
AVEC plans to conduct a feasibility analysis, resources assessment, conceptual design, and
permitting to assess the possibility of using wind power in Wales. This work is estimated to cost
$200,000. AVEC requests $190,000 from AEA. AVEC will provide $10,000 as a cash
contribution. A detail of the grant budget follows below.
To date, no funds have been obtained for this project.
If the wind resource proves to be suitable, AVEC would seek funding to construct turbines in
Wales. AVEC would provide a 10% cash match to any obtained funding.
Renewable Energy Fund Round 6
Grant Application
Wales Wind Feasibility Project
AEA13-006 Grant Application Page 23 of 25 September 2012
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
1. Project scoping and
contractor solicitation Aug 2013 $1,900 $100 Cash $2,000
2. Detailed energy resource
analysis Oct 2014 $38,000 $2,000 Cash $40,000
3. Identification of land and
regulatory issues Jun 2014 $4,750 $250 Cash $5,000
4. Permitting and
environmental analysis
Dec 2014 $6,650 $350 Cash $7,000
5. Detailed analysis of
existing and future energy
costs and markets
March 2014 $4,750 $250 Cash $5,000
6. Assessment of
alternatives Nov 2014 $9,500 $500 Cash $10,000
7. Conceptual Business &
Operations Plan Oct 2014 $1,900 $100 Cash $2,000
8. Concept Design and Costs
Estimate Nov 2014
Geotech $23,000 $1,200 Cash $25,000
Concept Design $55,100 $2,900 Cash $58,000
9. Detailed economic and
financial analysis Dec 2014 $9,500 $500 Cash $10,000
10. Conceptual business and
operations plans Dec 2014 $7,600 $400 Cash $8,000
11. Final report and
recommendations
Dec 2014 $26,600 $1,400 Cash $28,000
TOTALS $190,000 $10,000 $200,000
Budget Categories:
Direct Labor & Benefits $9,500 $500 Cash $10,000
Travel & Per Diem $9,500 $500 Cash $10,000
Equipment $9,500 $500 Cash $10,000
Materials & Supplies $0 $0 $0
Contractual Services $161,500 $8,500 Cash $170,000
Construction Services $0 $0 $0
Other $0 $0 $0
TOTALS $190,000 $10,000 $200,000
Tab A
Resumes
V3 Energy, LLC Douglas Vaught, P.E. 19211 Babrof Drive Eagle River, AK 99577 USA tel 907.350.5047 email dvaught@mtaonline.net Consulting Services : • Wind resource analysis and assessment, including IEC 61400-1 3 rd ed. protocols • Wind turbine siting, FAA permitting, and power generation prediction • Wind-diesel power plant modeling and configuration design • Cold climate and rime icing environment analysis of wind turbine operations • Met tower/sensor/logger installation and removal (tubular towers 10 to 60 meters in height) Partial List of Clients: • Alaska Village Electric Cooperative • NANA Pacific, LLC • enXco Development Corp. • Bristol Bay Native Corp. • Naknek Electric Association • Kodiak Electric Association • Barrick Gold • Alaska Energy Authority • North Slope Borough • Manokotak Natives Ltd. Representative Projects: • Alaska Village Electric Cooperative. Site selection, FAA permitting, met tower installation, data analysis/wind resource assessment, turbine energy recovery analysis, rime icing/turbine effects analysis, powerplant system modeling. Contact information: Brent Petrie, Key Accounts Mgr, 907-565-5358 • Kodiak Electric Association. Met tower installation, data analysis and modeling for Alaska’s first utility scale turbines (GE 1.5sle) on -line July 2009. Contact information: Darron Scott, CEO, 907 -486-7690. • NANA Pacific, LLC. Site reconnaissance and selection, permitting, met tower installation, wind resource assessment and preliminary power system modeling for Northwest Arctic Borough villages and Red Dog Mine. Contact information: Jay Hermanson, Program Manager, 907-339-6514 • enXco Development Corp. Met tower installation documentation, site reconnaissance , analysis equipment management for utility-sca le wind projects, including Fire Island near Anchorage. Contact information: Steve Gilbert, Alaska Projects Manager, 907-333-0810. • Naknek Electric Association. Long -term wind resource assessment at two sites (sequentially), including site selection, met tower installation, data analysis, turbine research, performance modeling, and project economic analysis. Contact information: Donna Vukich, General Manager, 907-246-4261 • North Slope Borough (with Powercorp Alaska, LLC). Power system modeling, site reconnaissance and selection, FAA permitting, wind turbine cold climate and icing effects white paper. Contact information: Kent Grinage, Public Works Dept., 907-852-0285 Recent Presentations: • Wind Power Icing Challenges in Alaska: a Case Study of the Native Village of Saint Mary’s, presented at Winterwind 2008, Norrköping, Sweden, Dec. 8, 2008.
Tab B
Letters of Support
Tab D
Governing Body Resolution
Tab E
Certification
Tab F
Additional Materials