HomeMy WebLinkAboutOIT, Application 9-24-12_VersionRenewable Energy Fund Round 6
Grant Application
AEA 13-006 Application Page 1 of 27 7/3/2011
Application Forms and Instructions
This instruction page and the following grant application constitutes the Grant Application Form
for Round 6 of the Renewable Energy Fund. An electronic version of the Request for
Applications (RFA) and this form are available online at:
http://www.akenergyauthority.org/RE_Fund-6.html
· If you need technical assistance filling out this application, please contact Shawn Calfa,
the Alaska Energy Authority Grant Administrator at (907) 771-3031 or at
scalfa@aidea.org.
· If you are applying for grants for more than one project, provide separate application
forms for each project.
· Multiple phases for the same project may be submitted as one application.
· If you are applying for grant funding for more than one phase of a project, provide
milestones and grant budget for each phase of the project.
· In order to ensure that grants provide sufficient benefit to the public, AEA may limit
recommendations for grants to preliminary development phases in accordance with 3
ACC 107.605(1).
· If some work has already been completed on your project and you are requesting
funding for an advanced phase, submit information sufficient to demonstrate that the
preceding phases are satisfied and funding for an advanced phase is warranted.
· If you have additional information or reports you would like the Authority to consider in
reviewing your application, either provide an electronic version of the document with
your submission or reference a web link where it can be downloaded or reviewed.
REMINDER:
· Alaska Energy Authority is subject to the Public Records Act AS 40.25, and materials
submitted to the Authority may be subject to disclosure requirements under the act if no
statutory exemptions apply.
· All applications received will be posted on the Authority web site after final
recommendations are made to the legislature.
· In accordance with 3 AAC 107.630 (b) Applicants may request trade secrets or
proprietary company data be kept confidential subject to review and approval by the
Authority. If you want information is to be kept confidential the applicant must:
o Request the information be kept confidential.
o Clearly identify the information that is the trade secret or proprietary in their
application.
o Receive concurrence from the Authority that the information will be kept
confidential. If the Authority determines it is not confidential it will be treated as a
public record in accordance with AS 40.25 or returned to the applicant upon
request.
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SECTION 1 – APPLICANT INFORMATION
Name (Name of utility, IPP, or government entity submitting proposal)
OIT Inc.
Type of Entity: Small Business Fiscal Year End 2011
Tax ID # 92-0135109 Tax Status: X For-profit or non-profit ( check one)
Mailing Address
P.O. Box 55878
North Pole, AK 99705
Physical Address
2355 Richardson Highway
North Pole, AK 99705
Telephone
907-488-4899
Fax
907-488-4823
Email
northlandfuelsrc@aol.com
1.1 APPLICANT POINT OF CONTACT / GRANTS MANAGER
Name
Rod R. Chiupka
Title
General Manager/Project Manager
Mailing Address
P.O. Box 55878
North Pole, AK 99705
Telephone
907-488-4899
Fax
907-488-4823
Email
northlandfuelsrc@aol.com
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
X 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
or
No
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
or
No
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.
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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)
OIT Inc Waste Heat Turbine 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.
The OIT Inc Waste Heat Turbine Project is located in Moose Creek, Alaska 20 miles from
Fairbanks, AK. The project will create electrical power through use of a steam turbine driven by
waste heat generated during operations at OIT’s remediation facility. The turbine project will
create 335KWH providing enough electrical power to operate OIT’s facility while adding
157KWH to the GVEA grid in cogenerated surplus electrical power. The 157KWH in
supplementary power would benefit the general Moose Creek, AK population consisting mainly
of small business, churches and homes.
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.
OIT Moose Creek, Alaska facility location:
64 42’ 50” North 147 08’ 17” West
2.2.2 Community benefiting – Name(s) of the community or communities that will be the
beneficiaries of the project.
As mentioned in section 2.2 electrical power generated from this project would benefit the
general Moose Creek, Alaska population, the community consists of small business, churches
and homes. In addition the general GVEA grid will realize a supplementary source of
cogenerated power supporting GVEA’s pursuit for alternative power sources.
2.3 PROJECT TYPE
Put X in boxes as appropriate
2.3.1 Renewable Resource Type
Wind Biomass or Biofuels
Hydro, including run of river Transmission of Renewable Energy
Geothermal, including Heat Pumps Small Natural Gas
X 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
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Reconnaissance X Design and Permitting
Feasibility X Construction and Commissioning
Conceptual Design
Below is a schematic view of OIT Inc remediation plant and waste heat boiler location.
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2.4 PROJECT DESCRIPTION
Provide a brief one paragraph description of your proposed project.
Organic Incineration Technology (OIT) incinerates non-hazardous petroleum contaminated
soils, absorbent pads and sludges generated by Alaskan industries in a regulated,
environmentally safe facility in Moose Creek, AK. The waste treatment process generates a
substantial amount of energy which is currently exhausted and therefore wasted. Through the
installation of a heat recovery steam generator (HRSG), a steam turbine generator system and
condenser, OIT intends to capture the waste heat from the existing incineration process and
turn that energy into electricity to be used on-site and placed onto the grid for use by the
surrounding community. Through the implementation of this system, OIT would be utilizing an
existing energy resource to reduce the community’s dependence on traditional utility power
sources fueled by the burning of fuel oil.
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.)
As noted above, OIT has the potential to generate power not only for use on-site but also for
use by the surrounding community through the purchase of and implementation of some
additional equipment (noted within) into their existing process.
In addition to the obvious benefit of electric power generation, there is an environmental benefit
to the implementation of this technology as well. The on-site generation of approximately
2,814,000 kWh of power (per incinerator) would displace that amount of power generation by
the utility. Based on the EPA’s standard equivalent measures for utility power generation in the
state of Alaska, this displacement would result in significant impact to emissions.
NOx Emissions Reduction of 9,595,740 lb/yr
SO2 Emissions Reduction of 3,039,401 lb/yr
CO2 Emissions Reduction of 3.067 x 109 lb/yr
By process of incineration OIT Inc will take a waste exhaust stream and turn it into a usable
cogenerated power source usable by GVEA as an alternative power resource decrease the
amount of expensive diesel fuel required to produce electricity. Our estimations show a fuel
saving for the utility of 61,781 gallons of diesel fuel on an annual basis. This quantity translates
to $247,124 per year in cost savings for the utility. In addition and of importance to the
surrounding community a number of jobs will be extended and new jobs created. OIT would
extend the operational season from 6 to 12 months extending current operations employee
base of 12 from half year to year round and adding an additional 4 – 6 operation and support
positions.
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 is approximately $3,258,000. It is assumed one-half of the total project
funding will come from Alaska Energy Authority and one-half the total project will be the
responsibility of OIT Inc. AEA would provide $1,629,000 and OIT Inc would provide $1,629,000.
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OIT Inc intends to combine a balance of cash, generated revenue and bank loans in order to
pay for its portion of the project calculated at $1,629,000. Pre approval in support of the project
has been established with our banks.
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. $1,629,223
2.7.2 Cash match to be provided $
2.7.3 In-kind match to be provided $1,629,223
2.7.4 Other grant applications not yet approved $
2.7.5 Total Grant Costs (sum of 2.7.1 through 2.7.3) $3,258,447
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)
$3,258,447
2.7.7 Estimated Direct Financial Benefit (Savings) $
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.)
$
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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.
OIT Inc’s Project Manager:
Rod R. Chiupka
Resume:
Contact Information: Mailing Address
P.O. Box 55878 North Pole, AK 97705
Phone:
Office 907-488-5563 / Cell # 435-478-9012
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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
Reconnaissance Many hours were spend indentifying
potential benefits of cogeneration
system, project cost,
potential returns and impacts on current
operations.
OIT Inc has contracted Turbo Steam
LLC to develop the process pending
AEA approval. 2004 4/2012
Feasibility OIT Inc investigated the potential of
installing a cogeneration system in 2004-
05. At that time it was decided that due
to KW buyback rates of $.041 the project
was impractical.
This year it has been determined at a
current buyback rate of $.13 Per KW the
project is feasible. 4/2012 6/2012
Conceptual Design OIT commissioned Turbo Steam LLC to
conduct a full scale proposal outlining
equipment cost, installation cost,
operational cost, maintenance cost and
rate of return expectations. A complete
document has been received, reviewed
and approved by OIT Inc. 6/2012 9/2012
Design and Permitting Turbo Steam LLC has completed the
final proposal and the document has
been approved by OIT Inc.
Permitting is a matter of formality and will
be completed upon approval of grant. 7/2012 9/2012
Construction The construction phase of this potential
project would commence upon approval
of AEA funding. As documented within
this document systems components and
equipment will require manufacture time
of up to 46 weeks. These components
would be order upon approval of AEA
grant funding. TBD TBD
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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.
Personnel:
Project Manager - Rod R. Chiupka – Northland Fuels and Energy
On-Site Forman – Mike Hamilton – OIT Inc.
Consultant – Kirsten Kowal, Senior Application Engineer - Turbo Steam LLC
Condenser Design – Ranga Nadig, Ph.D. - Maarky Thermal Designs
Boiler Design – Turbo Steam LLC
Electrical Engineer – TBD*
General Contractor – TBD*
Electrical Contractor – TBD*
Mechanical Contractor – TBD*
Accounting/Bookkeeping – Sally Soffstall – OIT Inc
* Designates these components will be but out for bid, 100% designated for local contractors
only.
OIT Inc entertained two proposals and chose Turbo Steam LLC as their proposal of choice. Our
choice was based on overall project cost, expertise with this type of project and overall company
experience in this field.
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.
This project will be closely monitored by our project manager and profession team composed of
experienced construction management, knowledgeable construction employees and capable
accounting department. The project progression will require daily, weekly and monthly progress
reports all corresponding to a project completion schedule.
Additional contact concerning this project can be directed to Mark Sanford, President OIT Inc.
He can be reached at 970-488-4899 on email at mark.sanford@oitinc.net.
3.5 Project Risk
Discuss potential problems and how you would address them.
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We do not anticipate any problems. Any unforeseen problems that could arise would be dealt
with in a professional manner. As with most projects some “as built” revisions are expected
during construction and connection of this project. All problems will be resolved under the
guidance of the project manager using standard and proven construction practices.
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.
The heat in the exhaust gases produced by the existing waste incineration process would be the
primary fuel for this operation. The design of the system would be such that whenever the
incinerators are producing exhaust gases, the generator would be producing electricity so the
availability of electricity would be tied to the operations of the plant; meaning that the ultimate
availability of electricity would be dependent on the availability of the petroleum contaminated
waste products for incineration.
By incorporating the turbine electrical generation cogeneration system OIT would open an in
state more affordable treatment option for our states oily waste producers. It would allow these
petroleum businesses i.e. transportation (Alyeska) refineries (Flint Hills) and producers (BP) and
alike a more affordable incentive based in state disposal option. There are expensive
transportation costs associated with packaging and shipping these waste products outside to
Spokane, Washington. Not to mention the lost revenue, jobs and energy that could stay in
Alaska.
Currently these oily waste generators in order to realize tax and energy credits send most of their
oily waste outside to a cogeneration (similar system as proposed herein) facility located in
Spokane, Washington. All indications confirm; if Alaska had a cogeneration oily waste reduction
facility such as is being proposed herein. These Alaska oily waste generators would much prefer
the instate disposal option providing a more affordable incentive based instate option.
Cogeneration is significant to their concerns, turning oily waste into a usable/marketable power
source via the HRSG proposed project at OIT Inc’s Moose Creek facility will qualify as an option
providing incentives needed by the generators.
There is a current back log of contaminated soils on our Moose Creek facility site and tens of
thousands of additional tons of material under long term contract. OIT Inc maintains long-term
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contracts with Alyeska, Ft. Wainwright, Eielson AF and many others.
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.
At this time OIT Inc does not possess an existing energy system. Our facility relies
100% on GVEA for electrical power to operate plant and associated facilities. During
operable months OIT’s average monthly electrical bill is $20,000.
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.
OIT’s soil remediation process consumes approximately 2000 gallons of fuel oil and/or
used oil mixes each day in the course of processing contaminated soils. When
processing oily waste i.e. filters rags, booms and sludges fuel consumption is greatly
reduced due to the energy contained within those waste streams. The “OIT Inc Waste
Heat Turbine Project” would allow for production of electricity through cogeneration
resulting in a process by which current gases created during processing would no longer
be a total waste stream but in effect serve a dual purpose to include power generation.
Each gallon of fuel consumed would not only be used to remediate a contaminated
product but also produce a marketable energy product contributing to the need for
affordable electricity and assisting with local energy needs.
As mentioned in section 4.1 OIT’s energy resource (petroleum contaminated soils and
oily waste) are abundant. Currently onsite are approximately 35,000 tons of
contaminated soils and oily waste. With 2013 material expectations to be within the
annual average range of 25,000 – 35,000 tons. During a typical operational season May
– November OIT will process approximately 25,000 ton with a potential of creating
1,200,00KWH’s of electricity. This is a typical 6(+) month per year operating scenario.
Our operational period is typically curtailed due to seasonal weather challenges. In
particular when temperatures reach -15F soils become so difficult to handle we can no
longer process at a returnable rate. This is where the oily waste stream; filters, rags,
booms and sludges become favorable. If and when the turbine electrical generation
option becomes a reality OIT Inc would have the financial motivation while processing
the ability to process this waste stream. This scenario would allow OIT Inc to produce an
additional 1,200,00KWH’s of electricity during the winter months of November through
April providing additional energy back to the GVEA grid when temperatures are their
coldest and energy is at peak demand.
4.2.3 Existing Energy Market
Discuss existing energy use and its market. Discuss impacts your project may have on energy
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customers.
This project would have a very positive impact on the local electrical utility market. On the
open market it takes 8.8 gallons of diesel fuel to product 335kw of electricity an amount
equivalent to the OIT Inc proposed turbine system.
OIT Inc’s Moose Creek remediation facility will be able to cogenerate electricity in the
course of during regular business. The cogenerated electricity would save the local utility
thousands of gallons of virgin fuel each year. By incorporating the proposed turbine
generator system into the existing remediation plant OIT Inc’s Moose Creek facility will
produce enough electricity to satisfy both; OIT’s Moose Creek facility demands of 178kwh
and at the same time produced an additional/surplus of 157kwh of marketable electricity
saving the local utility 61,250 gallons of virgin fuel per year translating to $247,124 in
annual dollar savings at $4.00 per gallon.
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
The proposed system would require the addition of a HRSG boiler, steam turbine generator
system, condenser and all associated piping and electrical conduit. The available energy from
the exhaust stream of a single incinerator is capable of converting approximately 11,000 pounds
per hour of water into 300 psig superheated steam. This steam would then be fed to a steam
turbine generator that would convert the energy available in the steam into mechanical energy by
spinning the turbine. The mechanical energy would be transmitted to a synchronous generator
via its shaft and turned into approximately 335 kW of useable electricity. If we were to consider
an estimated 7000 hours of operation in a given calendar year (an availability factor of 80%), we
would estimate that the typical incineration operations would generate approximately 2,400,000
kWh of power generation per year. General overview of OIT’s remediation process is located
below.
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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.
There are no land ownership issues as OIT Inc is the sole owner of the immediate and
surrounding property. The Moose Creek facility is semi-remote with gravel pits and forest
surrounding the facility. Access is in existence. Below is a google-earth view for reference
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
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· Anticipated permitting timeline
· Identify and discussion of potential barriers
OIT Inc. is fully permitted petroleum contaminated soil and materials storage and processing
facility permitted under ADEC permit # 325TVP01.
No additional permit time lines are anticipated. There are no potential barriers for installation of
the Turbine System.
OIT has a verbal agreement with GVEA to move forward with written approvals certain upon
completion of design and project funding. Final paperwork will be available to GVEA upon AEA
funding.
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
This project will not create any issues as it consists only of an addition to a fully permitted
existing system. The upgrade and installation of the heat recovery steam generator system
consist of removing a section of ducting, inserting a heat exchanger/boiler and piping connecting
the boiler to the turbine/generator housed in a newly constructed build all of which fit within
current and existing boundaries.
There are no challenges as it pertains to the above listed issues or to any other environmental
issues.
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
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· 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
OIT Inc will match AEA funds. OIT Inc funding will use a combination of cash and pre-approved
bank loans. OIT Inc has received pre approval for bank loans associated with this project.
Project itemization by phase as shown below.
OIT Inc Turbine/Generator Proposal Phase Funding Approval Phase Equipment Order Phase Construction Phase Total Cost
Total anticipated project cost, and cost for this phase
$10,000 $25,000 $1,820,370 $1,402,630 $3,258,000
Requested grant funding
$1,629,000
Applicant matching funds – loans, capital contributions, in-
kind $1,629,000
Identification of other funding sources
N/A
Projected capital cost of proposed renewable energy
system $1,589,000
Projected development cost of proposed renewable
energy system
$40,000
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.)
O&M costs are outline below, all years are fully sustainable through revenue generation and
accounted for with proforma documents. Note, every five years there is a required complete
disassembly and inspection.
OIT Inc Project Operation Maintenance and Operational Costing
year 1 year 2 year 3 year 4 year 5 year 6 year 7 year 8 year 9
HRSG Maint Est. (Typical) $62,500 $37,500 $37,500 $37,500 $125,000 $37,500 $37,500 $37,500 $37,500
Condenser Maint Est.
(Typical) $1,000 $1,070 $1,145 $1,225 $6,311 $1,403 $1,501 $1,606 $1,606
Steam Turbine Maint.
(Typical) $5,000 $5,350 $5,725 $6,125 $36,544 $7,504 $8,026 $8,591 $39,192
TOTAL ANNUAL EXPENSES $68,500 $43,920 $44,370 $44,850 $167,855 $46,407 $47,027 $47,697 $78,298
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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
OIT Inc has a verbal agreement with GVEA to sell excess electrical power back to the grid.
Electricity produced by the cogeneration HRSG will first be used to power the Moose Creek
facility, remaining power will be sold back to the utility gird at a current rate between $.13 and
$.15 per kw. The excess power would be an affordable supplement to existing GVEA energy
requirements.
OIT Inc has calculated a return on investment / payoff of approximately 4 - 6 years. This
assumption is most dependent on operational hours per calendar years. The average
operational hours per calendar year are estimated at approximately 7000 hours which is about
80% annual up time. This percentage takes into calculation; normal maintenance shutdowns
needed for parts replacements, normal wear and tear and preventive maintenance requirements.
Rate of return calculations include cost savings on electricity normally used in running the OIT
Inc Moose Creek facility. The estimated annual operational savings would be approximately
$161,980.
In addition revenue would be produced exporting excess power back to the GVEA grid,
calculated here at a rate of $.15 per kw, we approximate annual revenue of $164,850.
Calculations outlined below.
On-Site Power Usage Electric Rate, $/kWh 0.13 5 year Return on Investment
System Operating Hours 7000
Site Electricity Demand 0
GVA Feed-In Tariff (Avoided Cost of Fuel), $/kW 0.15
REVENUES Year 1 Year 2 Year 3 Year 4 Year 5
Electric Savings (On-Site Usage) @ 7000hrs 178 kW $ 161,980 $161,980 $161,980 $161,980 $161,980
Income from Exported Power @ 7000hrs 157 kW $ 164,850 $164,850 $164,850 $164,850 $164,850
State AEA Grant Funding (50:50) $3,258,000 $326,830 $326,830 $326,830 $326,830 $326,830
TOTAL/ACCUMILTIVE REVENUES $326,830 $653,660 $980,490 $1,307,320 $1,634,150
Renewable Energy Fund Round 6
Grant Application
AEA13-006 Grant Application Page 18 of 27 7/3//2012
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.
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 System is part of Railbelt grid.
ii. Rated capacity of generators/boilers/other
iii. Generator/boilers/other type
iv. Age of generators/boilers/other
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
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]
ii. Fuel usage
Diesel [gal]
Other
iii. Peak Load
iv. Average Load
v. Minimum Load
vi. Efficiency
vii. Future trends
d) Annual heating fuel usage (fill in as applicable)
i. Diesel [gal or MMBtu] N/A
ii. Electricity [kWh] N/A
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
AEA13-006 Grant Application Page 19 of 27 7/3//2012
iii. Propane [gal or MMBtu] N/A
iv. Coal [tons or MMBtu] N/A
v. Wood [cords, green tons, dry tons] N/A
vi. Other N/A
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]
335 kWe
b) Proposed annual electricity or heat production (fill in as applicable)
i. Electricity [kWh] 2,400,000 kWh
ii. Heat [MMBtu] N/A
c) Proposed annual fuel usage (fill in as applicable)
i. Propane [gal or MMBtu] N/A
ii. Coal [tons or MMBtu] N/A
iii. Wood [cords, green tons, dry tons] N/A
iv. Other N/A
Project Cost
a) Total capital cost of new system $1,890,370.00
b) Development cost $ 71,316.00
c) Annual O&M cost of new system $ 57,545.00 (7 year average includes 5th year
disassemble and inspection est. cost of $125,000.00)
d) Annual fuel cost Fuel cost is minimal and indirect, (electrical power is
a by-product of proposed cogeneration system
benefiting from existing remediation process)
Project Benefits
a) Amount of fuel displaced for
i. Electricity Annually: GVEA would save 61,781 gallons of fuel as result of OIT Inc
cogeneration process.
ii. Heat
iii. Transportation
b) Current price of displaced fuel (61,781 gallons) @ $4.00/gallon = $247,124 annual
dollars saving.
c) Other economic benefits Economical price for cogenerated electricity,
additional GVEA power source, fuel savings
d) Alaska public benefits Local jobs, current waste stream converted to energy
source, oily waste industry in-state disposal option,
currently exported revenues would stay in state
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Grant Application
AEA13-006 Grant Application Page 20 of 27 7/3//2012
providing a local economic benefit.
Power Purchase/Sales Price
a) Price for power purchase/sale GVEA would purchase excess electricity sent back to
the grid at a current rate of $.13 - $.15 per KW. Saving
(on average) $247,000 on avoided cost of fuel.
Project Analysis
a) Basic Economic Analysis
Project benefit/cost ratio 1.0 / 1.0 Ration calculated over a 4.2 year period
OIT Inc cost @ $1,629,223.
Benefits: Economic benefits of fuel savings @ $247,500
annually and increased employment and wage benefits @ (10
new or extended jobs) annual average value @ $500,750.
Payback (years) Benefit/cost ratio payback is 4.2 years.
Direct revenue based payback OIT Inc investment of
$1,629,223 period is 4.9 years.
4.4.5 Proposed Biomass System Information
Please address the following items, if know. (For Biomass Projects Only)
· What woody biomass technology will be installed (cord wood, pellets, chips, briquettes,
pucks).
· Efficiency of the biomass technology.
· Thermal or electric application.
· Boiler efficiency.
· Displaced fuel type and amount.
· Estimated tons of wood pellets or chips (specify) to be used per year, and average moisture
percentage.
· Estimated cords of wood to be used per year, specify whether dry or green and the moisture
percentage.
· Ownership/Accessibility. Who owns the land and are their limitations and restrictions to
accessing the biomass resource?
· Inventory data. How much biomass is available on an annual basis and what types (species)
are there, if known?
Renewable Energy Fund Round 6
Grant Application
AEA13-006 Grant Application Page 21 of 27 7/3//2012
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
The OIT Inc cogeneration project is expected to save 61,781 gallons of diesel fuel each year
translating to $247,124.00 in annual savings for the utility. Calculated out over a ten year period
totals would be 617,818 gallons and $2,471,240.00 in cost savings over that period.
OIT Inc will have a Power Purchase Agreement in place with GVEA prior to start up. At this
time the base rate is estimated to be between $.13 and $.15 per kw. At this time there are not
any know tax incentives available.
OIT Inc does not anticipate any additional green tag or renewable energy subsidies.
One of the biggest beneficiaries will be local employment. It is assumed that with the ability to
operate an additional 6 months per year above and beyond our current 6 month operating
season OIT Inc will keep employed and newly employ an additional 8 – 10 operational
personnel, an additional maintenance person and an additional office/bookkeeper position. A
total of 10 -12 direct local jobs. These are all good paying positions and would earn between
$35,000 and $55,000 per year.
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
OIT inc is an ongoing concern having been in business for 20 years. The Moose Creek facility
has processed over 375,000 tons of contaminated soils and materials. The business foundation
and structure are in place, addition of a Turbine Generator system would allow OIT Inc. to take an
exhaust waste heat stream and convert it into a renewable energy source usable and aiding the
surrounding community.
Renewable Energy Fund Round 6
Grant Application
AEA13-006 Grant Application Page 22 of 27 7/3//2012
Incorporating a Turbine Generation system will be financially self sufficient as is demonstrated
below. Incorporating on site electrical savings with exported power revenue to the GVEA grid
demonstrates the ability to financially sustain, maintain and operate this project. Of note although
not taken into account within this scenario is the broadening of contaminated materials that would
be eligible for processing. By providing an incentive based in state option for oily waste
generators OIT Inc can add an additional revenue opportunity.
On-Site Power Usage Electric Rate, $/kWh 0.13 5 year Return on Investment
System Operating Hours 7000
Site Electricity Demand 0
GVA Feed-In Tariff (Avoided Cost of Fuel), $/kW 0.15
REVENUES Year 1 Year 2 Year 3 Year 4 Year 5
Electric Savings (On-Site Usage) @ 7000hrs 178 kW $ 161,980 $161,980 $161,980 $161,980 $161,980
Income from Exported Power @ 7000hrs 157 kW $ 164,850 $164,850 $164,850 $164,850 $164,850
State AEA Grant Funding (50:50) $3,258,000 $326,830 $326,830 $326,830 $326,830 $326,830
TOTAL/ACCUMILTIVE REVENUES $326,830 $653,660 $980,490 $1,307,320 $1,634,150
OIT Inc is fully committed to reporting savings and benefits at any time in any way.
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.
OIT Inc has spent many years assessing, calculating and planning for this opportunity. We have
worked with the Federal Combined Heat and Power Partnership (CHP), UAF Petroleum
Engineering Department and Turbo Steam LLC in preparing these scenarios. We have
conducted studies and run proformas in advance.
No other grants have been used in this process.
Renewable Energy Fund Round 6
Grant Application
AEA13-006 Grant Application Page 23 of 27 7/3//2012
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.
To the best of our knowledge there is no opposition to incorporating a Turbine Electrical
Generator to our existing remediation system.
From all conversations we have experienced there is broad support for our endeavor. Job
creation and job security are most important to the local population. Considering the continual
concern for raising cost of electricity in the Fairbanks area turning an existing recoverable heat
source currently being wasted into a potential electrical power source has enormous local
support.
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.
Upon AEA approval OIT Inc will allocate sufficient capital to their portion of the cogeneration
project. We have had preliminary discussions with are banking contacts explaining the plan,
providing proformas and discussing the potential benefits and have received genuine support of
the funding process. OIT Inc will assume responsibility for one-half ($1,629,223) the total
$3,258,447 funds needed for this project.
Milestones and tasks listed below conform to a realistic completion process. Upon grant
approval OIT Inc will proceed without delay in ordering and compensating suppliers as
scheduled below. Upon approval the process is expected to take approximately one calendar
year. OIT Inc will initiate site preparations. The site preparation is nominal in comparison to
final contrition phase as the remediation system is in place and will only require moderate
retrofitting. Turbine building would be able to be completed and readied in advance of receiving
components.
Renewable Energy Fund Round 6
Grant Application
AEA13-006 Grant Application Page 24 of 27 7/3//2012
RE- Fund Grantee Matching
Source of Matching
Funds:
Grant Funds Funds
Cash/In-kind/Federal
Grants/Other State
Grants/Other
(List milestones based on phase and
type of project. See Milestone list
below. )
(Below List) Completion
scheduled in weeks upon approval
of Grant
Steam Turbine Generator Set
requires 25% T-G Set At Order $48,976.00 $48,976.00 Cash / Loans $97,952.00
10% HRSG
At Order
10% HRSG
at Order
Condenser Drawings Available 10-12 weeks ARO $25,000.00 $25,000.00 Cash / Loans $50,000.00
HRSG Drawing Av 14 weeks ARO $187,500.00 $187,500.00 Cash / Loans $375,000.00
Steam Turbine Generator Drawings 16 weeks ARO $68,314.50 $68,314.50 Cash / Loans $136,629.00
Receipt of Condenser Tube-
Sheets/Tubing 20 weeks ARO $0.00 $0.00 $0.00
Condenser Shipment 24 Weeks after receipt of
Approved Drawing $22,409.50 $22,409.50 Cash / Loans $44,819.00
Completion of HRSG Hydro-Test 30 Weeks - ARO $213,750.00 $213,750.00 Cash / Loans $427,500.00
Receipt of Turbine at Turboseatm
Factory 32-34 weeks ARO $39,037.00 $39,037.00 Cash / Loans $78,074.00
HRSG Shipment 36 weeks ARO $156,250.00 $156,250.00 Cash / Loans $312,500.00
Shipment Of Steam Turbine Generator
Skid 42-44 weeks ARO $39,037.00 $39,037.00 Cash / Loans 78,074
$
TOTALS $862,774.00 $862,774.00 $1,725,548.00
Direct Labor & Benefits $76,644.85 $76,644.85 Cash / Loans $153,290
Travel & Per Diem $38,322.43 $38,322.43 Cash / Loans $76,645
Equipment $61,315.88 $61,315.88 Cash / Loans $122,632
Materials & Supplies $206,941.10 $206,941.10 Cash / Loans $413,882
Contractual Services $107,302.79 $107,302.79 Cash / Loans $214,606
Construction Services $245,263.50 $245,263.50 Cash / Loans $490,527
Other $30,657.94 $30,657.94 Cash / Loans $61,316
TOTALS $766,448.48 $766,448.48 $1,532,897
Condenser Requires $0.00 $0.00 Cash / Loans
$0.00
Budget Categories:Below amounts to be paid out during construction phase
Milestone or Task Anticipated Completion Date
TOTALS
HRSG Requires $62,500.00 $62,500.00 Cash / Loans
$125,000.00
Renewable Energy Fund Round 6
Grant Application
AEA13-006 Grant Application Page 25 of 27 7/3//2012
Project Milestones that should be addressed in Budget Proposal
Reconnaissance Feasibility Design and
Permitting Construction
1. Project scoping and
contractor solicitation.
2. Resource
identification and
analysis
3. Land use, permitting,
and environmental
analysis
4. Preliminary design
analysis and cost
5. Cost of energy and
market analysis
6. Simple economic
analysis
7. Final report and
recommendations
1. Project scoping
and contractor
solicitation.
2. Detailed energy
resource analysis
3. Identification of
land and regulatory
issues,
4. Permitting and
environmental
analysis
5. Detailed analysis of
existing and future
energy costs and
markets
6. Assessment of
alternatives
7. Conceptual design
analysis and cost
estimate
8. Detailed economic
and financial
analysis
9, Conceptual
business and
operations plans
10. Final report and
recommendations
1. Project scoping
and contractor
solicitation for
planning and
design
2. Permit
applications (as
needed)
3. Final
environmental
assessment and
mitigation plans
(as needed)
4. Resolution of
land use, right of
way issues
5. Permit approvals
6. Final system
design
7. Engineers cost
estimate
8. Updated
economic and
financial analysis
9. Negotiated
power sales
agreements with
approved rates
10. Final business
and operational
plan
1. Confirmation that all
design and feasibility
requirements are
complete.
2. Completion of bid
documents
3. Contractor/vendor
selection and award
4. Construction Phases
–
Each project will have
unique construction
phases, limitations,
and schedule
constraints which
should be identified
by the grantee
5. Integration and
testing
6. Decommissioning old
systems
7. Final Acceptance,
Commissioning and
Start-up
8. Operations Reporting