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HomeMy WebLinkAbout2011 AVEC R5 App; Shaktoolik Surplus Wind Recovery August 26, 2011 Alaska Energy Authority 813 West Northern Lights Boulevard Anchorage, AK 99503-2495 Attn: Renewable Energy Fund Grant Program Round V: Shaktoolik Surplus Wind Energy Recovery for Shaktoolik Water System Heat Dear Review Panel: Alaska Village Electric Cooperative, Inc (AVEC), along with its project partner Alaska Native Tribal Health Consortium (ANTHC) respectfully submits the enclosed application for grant funds available through the Renewable Energy Fund Grant Program. The project would involve design and construction of a secondary load system to capture excess energy from the existing wind turbines to power space heating at the water treatment plant in Shaktoolik. AVEC is seeking $240,260 from AEA under this proposal. ANTHC would provide $12,645 as an in-kind match, which would be provided by labor on the project. The total project cost for design and construction is $252,905. It is expected that the project would decrease the water utility system costs by about $14,700 annually. Please don’t hesitate to contact Mr. Petrie of my staff if you have any questions. Sincerely, Meera Kohler President and CEO cc: Brent Petrie, AVEC; Carl Remley, ANTHC Enclosures Alaska Village Electric Cooperative, Inc. Shaktoolik Surplus Wind Energy Recovery For Shaktoolik Water System Heat Renewable Energy Fund-Round V Grant Application Submitted by: Alaska Village Electric Cooperative, Inc 4831 Eagle Street Anchorage, Alaska 99503 Submitted to: Alaska Energy Authority 813 West Northern Lights Blvd. Anchorage, AK 99503 August 26, 2011 Renewable Energy Fund Round 5 Grant Application AEA 12-001 Grant Application Page 1 of 14 8/26/2011 Surplus Wind Energy Recovery for Shaktoolik Water System Heat SECTION 1 – APPLICANT INFORMATION Name Alaska Village Electric Cooperative 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 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. Alaska Village Electric Cooperative, Inc. Shaktoolik Water System Surplus Wind Energy Recovery Renewable Energy Fund Grant Application Round 5 AEA 12-001 Grant Application Page 2 of 13 8/26/2011 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) Surplus Wind Energy Recovery For Shaktoolik Water System Heat 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. Shaktoolik (pop. 251) is located on the east shore of Norton Sound. It lies 125 miles east of Nome and 33 miles north of Unalakleet. The community lies at approximately 64.333890° North Latitude and -161.153890° West Longitude. (Sec. 23, T013S, R013W, Kateel River Meridian.) The wind energy recovery for water system heat would include upgrades to the AVEC power plant and the City of Shaktoolik’s water plant are located within Shaktoolik city limits. 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 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) Reconnaissance X Design and Permitting Feasibility X Construction and Commissioning Conceptual Design 2.4 PROJECT DESCRIPTION Provide a brief one paragraph description of your proposed project. AVEC’s two wind turbines (Northern Power Systems 100 B models) in Shaktoolik when started up later this year will generate in excess of community requirements when there is moderate to heavy wind and when the community load is light. Much of this excess will not be used, since there is no economic way to store the energy. AVEC, together with Alaska Native Tribal Health Consortium with input from the City of Shaktoolik, are planning to design and construct a secondary load installation to capture the excess energy to power water treatment plant space heating, drinking water storage tank heating, and circulation loop heating. Design of the proposed equipment would be based on AVEC’s other secondary load installations and adapted to installation into the water treatment plant. Alaska Village Electric Cooperative, Inc. Shaktoolik Water System Surplus Wind Energy Recovery Renewable Energy Fund Grant Application Round 5 AEA 12-001 Grant Application Page 3 of 13 8/26/2011 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.) Water systems and wastewater systems are the single largest energy consumer in arctic and subarctic villages, often using up to 30% of all the energy, i.e., electricity and fuel oil, used in a village. A significant portion of this in Shaktoolik is for heating water in both the water storage tank and operating the washers and dryers in the washeteria. Use of excess wind energy which will be converted to heat in the water plant by displacing essentially all of the fuel oil used for freeze protection and a significant percentage of that used in the washeteria. Using the excess wind energy to displace the use of fuel oil in the water plant will result in a reduction in fuel usage of approximately 10,171 gallons at a cost of approximately $34,785. The approximate utility-billed cost of the excess wind energy used to replace the fuel oil will be approximately $14,751. This will result in a net savings to the community of approximately $20,034 per year. The benefits to the community of this project are a reduction in the amount of fuel required by the community, a much more efficient use of the renewable wind energy generated in the community, and a direct benefit to each community member due to the lower cost for both water delivery and washeteria operation. 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. This project involves design and construction. The estimated cost of design phase is $53,820. The design cost includes an in-kind cost match of $2,691 provided by ANTHC. The nature of the design cost match would be a contribution of project labor time by ANTHC. The estimated cost of the construction phase of this project is $199,085. The construction cost includes an in-kind match of $9,954 provided by ANTHC through project labor time. 2.7 COST AND BENEFIT SUMARY Include a summary of grant request and your project’s total costs and benefits below. Grant Costs (Summary of funds requested) 2.7.1 Grant Funds Requested in this application.$ 240,260 2.7.2 Other Funds to be provided (Project match)$ 12,645 2.7.3 Total Grant Costs (sum of 2.7.1 and 2.7.2)$ 252,905 Project Costs & Benefits (Summary of total project costs including work to date and future cost estimates to get to a fully operational project) 2.7.4 Total Project Cost (Summary from Cost Worksheet including estimates through construction) $ 252,905 2.7.5 Estimated Direct Financial Benefit (Savings)$ 34,785 in fuel oil annually Alaska Village Electric Cooperative, Inc. Shaktoolik Water System Surplus Wind Energy Recovery Renewable Energy Fund Grant Application Round 5 AEA 12-001 Grant Application Page 4 of 13 8/26/2011 2.7.6 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.) $ 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. Two organizations would be participating in the implementation of this grant. They are the Alaska Village Electric Cooperative (AVEC) and the Alaska Native Tribal Health Consortium (ANTHC). Both members of this team have extensive experience designing, building, and operating both electrical generation facilities (including wind) and water treatment plants in rural Alaska. This project would have co-project managers. They would be Brent Petrie of AVEC and Carl Remley of ANTHC. Mr. Petrie has worked for AVEC since 1998 where he manages the development of alternatives to diesel generation for AVEC such as hydro, wind, and heat recovery. He also manages relationships with AVEC’s many construction projects as an energy partner of the federally funded Denali Commission. Mr. Petrie has been employed in the energy and resource field for more than 30 years, having worked for the federal and state governments as consultant, planner, and project manager. 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 Masters Degree in Water Resource Management and a Bachelors degree in Geography. Mr. Remley is Energy Projects Manager for ANTHC and has been an ANTHC employee since 2002. In that role, Mr. Remley is responsible for both energy conservation and renewable energy projects. At present, this includes performing energy audits in public buildings in forty rural Alaska villages, installing energy conservation displays in all homes in twelve villages, evaluating heat recovery opportunities in ten villages, implementing heat recovery in several villages, and acting as the energy coordinator for the Indian Health Service in the state of Alaska. Prior to that, Mr. Remley owned and operated an energy conservation consulting company for twenty two years and was a design engineer in the aerospace industry for ten years. Mr. Remley has a Bachelors Degree in Mechanical Engineering and a Masters Degree in Business Administration. He is also both a Certified Energy Auditor and a Certified Energy Manager. Resumes are found in Tab A Alaska Village Electric Cooperative, Inc. Shaktoolik Water System Surplus Wind Energy Recovery Renewable Energy Fund Grant Application Round 5 AEA 12-001 Grant Application Page 5 of 13 8/26/2011 3.2 Project Schedule Include a schedule for the proposed work that will be funded by this grant. (You may include a chart or table attachment with a summary of dates below.) The design effort for this project would start as soon as funding was available. Based on data available, this should be early September of 2012. Based on the work involved, it is anticipated that the design phase would continue through April of 2013. The construction phase would start in late April of 2013 and be completed by the end of September of 2013. A detailed schedule is attached in Tab G. 3.3 Project Milestones Define key tasks and decision points in your project and a schedule for achieving them. The Milestones must also be included on your budget worksheet to demonstrate how you propose to manage the project cash flow. (See Section 2 of the RFA or the Budget Form.) During the design phase, the key task will be to assure that the results of the HOMER analysis are properly utilized to assure adequate thermal storage capacity is available to maximize the use of the low cost excess wind energy. The other challenge will be to assure the power plant controls and the water plant controls are set up to maximize the use of the excess wind energy. During the construction phase, the challenge will be to implement the modifications necessary while minimizing the interruptions to operation of the water treatment plant. Since implementation of the plumbing changes will be similar to the modifications to implement more conventional heat recovery, no significant issues are anticipated. A combination of the attached schedule (in Tab G) and the budget work sheets (in Tab C) will be used to both assure we are on budget and on schedule and as a warning if we fall either behind schedule or are over budget. 3.4 Project Resources Describe the personnel, contractors, 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. As mentioned earlier, the co-project managers will be Brent Petrie of AVEC and Carl Remley of ANTHC. They will be supported during the design phase by Will Fraser, Mechanical Engineering Manager for ANTHC, Dave Reed, Electrical Engineering Manager for ANTHC, and Mark Teitzel Vice President/Engineering Manager of AVEC. During the construction phase, the project managers will be supported by Mark Bryan, Operations Manager for AVEC, Bill Thomson, Technology and Training Superintendent for AVEC and an appropriate Construction Manager from ANTHC. To the extent possible, local labor from Shaktoolik will be used during construction. Resumes of all key personnel are attached in Tab A. 3.5 Project Communications Discuss how you plan to monitor the project and keep the Authority informed of the status. Written project progress reports will be provided to the AEA project manager each quarter. Semi-annual face-to-face meetings would occur between AVEC, ANTHC, and AEA to discuss the Alaska Village Electric Cooperative, Inc. Shaktoolik Water System Surplus Wind Energy Recovery Renewable Energy Fund Grant Application Round 5 AEA 12-001 Grant Application Page 6 of 13 8/26/2011 status of all wind energy recovery projects funded through the AEA Renewable Energy Grants program. Individual project meetings would be held, as required or requested by AEA. 3.6 Project Risk Discuss potential problems and how you would address them. In general, there are no technology risks involved with the plan to utilize excess renewable wind energy to provide both space and process heat to the water treatment plant and washeteria. AVEC has used the technology successfully directing excess wind energy to produce heat within the power plants. Utilizing the technology within the water treatment plant has not been done in Alaska before. However, implementation of this technology will be similar to implementing heat recovery from the power plant to the water plant and that has been done many times before and it being done in several plants now. The challenge of this project will be to demonstrate that the electric boiler technology and controls can be successfully used to provide heat to the various use points at the water treatment plant on an interruptible basis. The availability of the water tank for thermal storage greatly reduces any risks. SECTION 4 – PROJECT DESCRIPTION AND TASKS Tell us what the project is and how you will meet the requirements outlined in Section 2 of the RFA. The level of information will vary according to phase(s) of the project you propose to undertake with grant funds. If you are applying for grant funding for more than one phase of a project provide a plan and grant budget form for completion of each phase. 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. A feasibility study has been conducted on this project and is attached for review. The renewable energy resource that is available for this project is excess wind. The two Shaktoolik wind turbines (Northern Power Systems 100 B models) will generate in excess of community requirements when there is moderate to heavy wind and when the community load is light. Currently, this excess will not be used, since there is currently no economic way to store the energy. The HOMER analysis completed as part of the Feasibility study predicts that the equivalent of 12,127 gallons of #1 fuel oil is available from the excess wind each year. The analysis also shows that more excess wind is available during the colder months than the warmer months. The water treatment plant load also peaks during the colder months. Alaska Village Electric Cooperative, Inc. Shaktoolik Water System Surplus Wind Energy Recovery Renewable Energy Fund Grant Application Round 5 AEA 12-001 Grant Application Page 7 of 13 8/26/2011 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. On the power generation side, the AVEC power plant uses a combination of diesel and wind to generate all electricity used in Shaktoolik. The excess wind will be produced by two Northern Power Systems 100 B model wind turbines currently under construction. Per the HOMER analysis, the excess wind generated by these two turbines is the equivalent of 12,127 gallons of oil. The water treatment plant currently uses two oil fired hot water boilers to provide space heat, water storage tank heat, and water circulation heat. The overall efficiency of the boilers is approximately 75%. A total of 12,750 gallons of fuel is used at the water treatment plant. 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. The community of Shaktoolik uses renewable wind and diesel fuel for electrical power generation, heating oil for boiler (thermal) and home heating, and diesel and gasoline fuel for transportation needs. Heat for the water treatment plant is generated by fuel oil which is barged into the community. The cost per gallon in 2010, for the water treatment plant fuel was approximately $3.42. This project would reduce the amount of fuel barged to the community for the water treatment plant by approximately 10,171 gallons per year. This project would significantly increase the amount of renewable wind generated electricity utilized by the community. 4.2.3 Existing Energy Market Discuss existing energy use and its market. Discuss impacts your project may have on energy customers. Once the wind turbines are installed in late 2011, two sources of energy will be used to generate electricity in the community, fuel oil and renewable wind. Heat (including for the water treatment plant) is mostly generated by fuel oil. This project would reduce the amount of fuel oil used in the community by approximately 10,171 gallons and increase the amount of renewable wind energy utilized without adding wind generation capacity. There would be no negative impact on the community energy prices due to this project. Alaska Village Electric Cooperative, Inc. Shaktoolik Water System Surplus Wind Energy Recovery Renewable Energy Fund Grant Application Round 5 AEA 12-001 Grant Application Page 8 of 13 8/26/2011 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 renewable energy technology utilized for this project is electricity produced by two soon to be installed Northern Power Systems 100 B units. The specific application of that technology for this project is to utilize most of the excess wind generated by the existing equipment to offset heating loads in the water treatment plant during moderate to high wind and low electrical demand periods. The optimum installed capacity is that necessary to displace all 12,750 gallons of fuel oil presently used to provide heat to the water treatment plant, the water storage tank and the circulated water loops. It is anticipated that a 120 kilowatt heater will be utilized. It is anticipated that a combination of the excess wind available and the storage capacity for the heat available in the water tank and a 120 kW electric heating system in the water treatment plant will allow for the elimination of 10,171 gallons of the present 12,750 gallons of fuel oil use. Based on the HOMER analysis, the equivalent of 12,127 gallons of fuel oil are available in excess wind. It is anticipated that all 10,171 gallons of that will be utilized in the water treatment plant. 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. No new land is necessary for this project and both the current land owners, AVEC and the City of Shaktoolik support the project. 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 The project will involve work to the existing power plant and water plant. A State Fire Marshall Permits may be required. If so, the permit process will be started during the design phase and completed prior to construction. Alaska Village Electric Cooperative, Inc. Shaktoolik Water System Surplus Wind Energy Recovery Renewable Energy Fund Grant Application Round 5 AEA 12-001 Grant Application Page 9 of 13 8/26/2011 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 The project will involve work to the existing power plant and water treatment plant/washeteria. Because of the limited scope of this project, it is unlikely that any environmental or land use issues will arise. 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 The feasibility phase of this project, funded by AVEC is complete and the report is attached. This application is for design and construction phases. The total anticipated project cost for the design and construction phases of the project is $252,905, including $53,820 for design and $199,085 for construction. ANTHC is contributing a match of $12,645 in the form of in-kind labor hours for labor. Therefore, the requested grant funding is $240,260. There will be no loans on this project and no other funding sources are anticipated. The projected capital cost is the entire project cost of the project less the match or $240,260. Alaska Village Electric Cooperative, Inc. Shaktoolik Water System Surplus Wind Energy Recovery Renewable Energy Fund Grant Application Round 5 AEA 12-001 Grant Application Page 10 of 13 8/26/2011 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.) There is minimal additional equipment required at the AVEC power plant and only an electric boiler and associated controls at the water treatment plant. The operation of the excess wind interruptible power system for the water treatment plant will be automated at both the AVEC power plant and the Shaktoolik water treatment plant. Therefore operational costs will be very low, they are expected to be in the range of a few hundred dollars per year to replace controls or heaters as necessary. AVEC’s costs of operations and maintenance would be funded through ongoing energy sales to the villages that AVEC serves including those fees paid by the City of Shaktoolik as outlined in the Interruptible Electricity Sales Agreement. 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 The buyer of the excess wind energy will be the City of Shaktoolik (Shaktoolik water treatment plant). The price as offered by AVEC is $0.05 per kilowatt-hour based on an interruptible rate. 4.4.4 Project Cost Worksheet Complete the cost worksheet form which provides summary information that will be considered in evaluating the project. The project cost worksheet has been completed and is attached in Tab B. 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 (gal and $) 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 potential annual fuel displacement by this project is 10,171 gallons of #1 fuel. At today’s cost of $ 3.42 per gallon, that would represent a reduction of $34,785 in fuel oil usage. Assuming a twenty year life, the life time savings in today’s fuel cost would be $ 695,700. Alaska Village Electric Cooperative, Inc. Shaktoolik Water System Surplus Wind Energy Recovery Renewable Energy Fund Grant Application Round 5 AEA 12-001 Grant Application Page 11 of 13 8/26/2011 Assuming an overall efficiency of the oil fired heating system of 75%, the fuel usage would convert to an annual kilowatt-hour consumption of 295,028 kilowatt-hours. AVEC has agreed to sell the excess wind energy at an interruptible rate of $0.05 per kilowatt-hour. This would result in additional annual revenue to AVEC of $14,751. The lifetime revenue in today’s dollars would be $295,020. No additional revenue streams are known at this time. The annual savings of $20,034 ($34,785 - $14,751) will result directly in that amount of lower operating costs at the water plant. These savings should be passed on to both the commercial users and residential customers of the water treatment plant in Shaktoolik for the life of the project. In addition to the direct financial benefit to the community, Shaktoolik will need 10,171gallons less of #1 fuel oil each year and will much more efficiently utilize its wind renewable energy source. 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 An Interruptible Electricity Sales Agreement will be generated and signed that defines all necessary parameters. The sales price of a flat $0.05 per kilowatt-hour has been agreed to by AVEC. This will be a new rate structure that gives AVEC the ability to shut off the service when excess wind is not available. The thermal storage at the water treatment plant will minimize the fluctuations in the availability of interruptible power. It should be noted that this interruptible power will be in addition to the existing electric service to the building and will be separately metered. The maintenance and operations of the equipment installed as part of this project will be maintained by a combination of AVEC and the City of Shaktoolik. AVEC will maintain the equipment and controls in its facility as well as the power lines that feed the water treatment plant. Funds for any required maintenance will come from the new revenue stream. The City of Shaktoolik will see decreased boiler maintenance and operating costs as a result of this project. The funds presently utilized to maintain the fuel oil fired boilers can be diverted to fund any maintenance needs of the new electric equipment. AVEC has implemented electric boilers in several of its power plants around rural Alaska with no significant issues. This project will locate the same or a similar boiler in the Shaktoolik water treatment plant. No operational issues are anticipated. Alaska Village Electric Cooperative, Inc. Shaktoolik Water System Surplus Wind Energy Recovery Renewable Energy Fund Grant Application Round 5 AEA 12-001 Grant Application Page 12 of 13 8/26/2011 Any additional operational costs for AVEC will be minimal since the wind turbines are operational now. The only additional equipment in the AVEC power plant will be some minimal controls. AVEC is fully capable of providing any on-going support for these controls. Operational costs in the water treatment plant will be minimal as well. This new equipment has a life of approximately twenty years. Any maintenance needs can be funded out of the reduced maintenance needs of the oil fired boilers. The oil fired boilers will be maintained as a back-up heat source. However, maintenance costs on those should be minimal due to greatly reduced usage. AVEC’s costs of operations and maintenance would be funded through ongoing energy sales to the villages that AVEC serves. The City of Shaktoolik operations and maintenance would be funding through local utility fees. ANTHC, teamed with AVEC is committing to reporting the savings and benefits to the Alaska Energy Authority for the term required by the grant. SECTION 7 – READINESS & COMPLIANCE WITH OTHER GRANTS Discuss what you have done to prepare for this award and how quickly you intend to proceed with work once your grant is approved. Tell us what you may have already accomplished on the project to date and identify other grants that may have been previously awarded for this project and the degree you have been able to meet the requirements of previous grants. The wind renewable energy source is operational in Shaktoolik. At present, no benefit will be derived from the excess wind energy that can be utilized to provide space and process heating at the water treatment plant. ANTHC and AVEC have worked together on this concept and evaluated existing systems around the state where AVEC has implemented electric boilers to better control the wind energy generated. All of these efforts have been successful. Both members of this team are confident that the thermal storage available in the water treatment plant/washeteria provides a perfect use for the excess wind generation during times of moderate to high winds and low electric usage. This project will reduce the fuel oil that needs to be imported to the village, provide a revenue stream to AVEC for the excess energy, reduce the operating costs of the water treatment plant/washeteria, and therefore reduce the cost of water to both commercial and residential customers. The intent of both partners in this project is to move forward with both design and construction as soon as funding is available. Accomplishments to date include completing a feasibility study that includes a HOMER analysis which clearly shows the viability of this project (Tab G). We have also worked to identify other locations around the state where this approach can be used to maximize the efficiency of wind generation capacity, reduce the use of fuel oil, and reduce the operating costs of both the power plant and the water treatment plant. All commitments made in other AEA grants have been met. Alaska Village Electric Cooperative, Inc. Shaktoolik Water System Surplus Wind Energy Recovery Renewable Energy Fund Grant Application Round 5 AEA 12-001 Grant Application Page 13 of 13 8/26/2011 SECTION 8– LOCAL SUPPORT 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. We have attached a letter of support for this project from the City of Shaktoolik. The City of Shaktoolik owns and operates the water treatment plant. There is no known opposition to this project. 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. Include an estimate of budget costs by milestones using the form – GrantBudget5.doc This application is applying for two phases for this project, Design and Permitting and Construction. The total design cost for this project will be approximately $53,820. $2,691 of that amount will be provided by ANTHC. The nature of the design cost match would be a contribution of project management services. The requested design funds for this project are $51,129 ($53,820- $2,961). The total construction cost for this project will be approximately $199,085. $9,954 of that amount will be provided by ANTHC. The nature of the construction cost match would be a contribution project labor. The requested construction funds for this project are $189,131 ($199,085 - $9,954). The total funds being requested for this project are $240,260. The investments made to date in this project include the costs associated with the attached feasibility study and research into the proposed concept. Tab A Resumes Tab B Cost Worksheet Renewable Energy Fund Round 5 Project Cost/Benefit Worksheet RFA AEA12-001 Application Cost Worksheet Page 1 8-26-11 Please note that some fields might not be applicable for all technologies or all project phases. The level of information detail varies according to phase requirements. 1. Renewable Energy Source – Shaktoolik Excess Wind to Heat The Applicant should demonstrate that the renewable energy resource is available on a sustainable basis. Annual average resource availability.10,171 Gallons Equivalent Diesel Oil of Excess Wind Energy. Unit depends on project type (e.g. windspeed, hydropower output, biomasss fuel) 2. 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 2 North Wind 100 B ii. Rated capacity of generators/boilers/other 100 kW Each by AVEC iii. Generator/boilers/other type Fuel Oil Boilers iv. Age of generators/boilers/other 10 plus years v. Efficiency of generators/boilers/other 75% b) Annual O&M cost (if system is part of the Railbelt grid, leave this section blank) i. Annual O&M cost for labor $ 100 ii. Annual O&M cost for non-labor $ 200 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]10,171 Gallons of Number 1 fuel oil equivalent of Surplus Wind power. 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]10,171 Gallons Number 1 Fuel Oil (Water Plant) ii. Electricity [kWh] iii. Propane [gal or MMBtu] iv. Coal [tons or MMBtu] v. Wood [cords, green tons, dry tons] vi. Other 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 5 Project Cost/Benefit Worksheet RFA AEA12-001 Application Cost Worksheet Page 2 8-26-11 3. 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] Surplus wind recovery b) Proposed annual electricity or heat production (fill in as applicable) i.Electricity [kWh] ii.Heat [MMBtu]10,171 gallons or 1,412 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 4. Project Cost a) Total capital cost of new system $ 252,905 (Design and Construction) b) Development cost c) Annual O&M cost of new system $ 300 d) Annual fuel cost 5. Project Benefits a) Amount of fuel displaced for i. Electricity ii. Heat 10,171 Gallons of Number 1 Fuel Oil Equivalent iii. Transportation b) Current price of displaced fuel $ 3.42 / Gallon c) Other economic benefits New $14,751 annual revenue source for AVEC plant. d) Alaska public benefits Reduced Water Utility Costs of $20,033 Annually 6. Power Purchase/Sales Price a) Price for power purchase/sale $ .05 per KWH for interruptable power 7. Project Analysis a) Basic Economic Analysis Project benefit/cost ratio 2.96 (AEA Round V RE Fund project economic assessment) Payback (years)7.3 Years based on fuel savings. Tab C Budget Form Shaktookik Design Milesone or Task Anticipated Completion Date RE-Funds Grant Funds Grantee Matching FundsSource of Matching Funds: Cash/In-kind/Federal Grants/OtherState Grants/OtherTOTALS Project Work Plan 9/3/20121,710$ 90$ In-Kind by ANTHC 1,800$ Project Scoping 10/1/20127,220$ 380$ In-Kind by ANTHC 7,600$ Preliminary Design 12/7/20124,560$ 240$ In-Kind by ANTHC 4,800$ 65% Design 2/8/201314,060$ 740$ In-Kind by ANTHC 14,800$ Permit Applications 5/1/2013912$ 48$ In-Kind by ANTHC 960$ Negotiated Interruptible Power Sale Agreement 5/1/2013912$ 48$ In-Kind by ANTHC 960$ 95% Design 4/1/20136,270$ 330$ In-Kind by ANTHC 6,600$ Engineers Cost Estimate 4/1/20132,736$ 144$ In-Kind by ANTHC 2,880$ Final System Design 5/1/20136,080$ 320$ In-Kind by ANTHC 6,400$ TOTALS51,129$ 2,691$ 51,129$ Budget Categories:Direct Labor & Benefits44,229$ 2,691$ In-Kind by ANTHC 46,920$ Travel & Per Diem5,980$ -$ In-Kind by ANTHC 5,980$ Equipment-$ -$ In-Kind by ANTHC -$ Materials & Supplies920$ -$ In-Kind by ANTHC 920$ Contractual Services-$ -$ In-Kind by ANTHC -$ Construction Services-$ -$ In-Kind by ANTHC -$ Other-$ -$ In-Kind by ANTHC -$ TOTALS51,129$ 2,691$ In-Kind by ANTHC 53,820$ Add additional pages as neededApplications should include a separate worksheet for each project phase (Reconnaissance, Feasibility, Design and Permitting, and Construction)- Shaktookik Construction Milestone or Task Anticipated Completion Date RE-Funds Grant Funds Grantee Matching FundsSource of Matching Funds: Cash/In-kind/Federal Grants/OtherState Grants/OtherTOTALS Confirmation of Design and Feasibility Requirements5/9/20137,565$ 398$ In-Kind by ANTHC 7,963$ Construction Planning – Long Lead Orders7/11/201337,826$ 1,991$ In-Kind by ANTHC 39,817$ Mobilization and Set Up7/22/201318,913$ 995$ In-Kind by ANTHC 19,909$ AVEC Plant Controls8/5/201337,826$ 1,991$ In-Kind by ANTHC 39,817$ New Service Entrance and Appurtenances7/25/201318,913$ 995$ In-Kind by ANTHC 19,909$ Water Plant Wiring and Controls7/31/20139,457$ 498$ In-Kind by ANTHC 9,954$ Water Plant Plumbing and Mechanical 8/9/201334,044$ 1,792$ In-Kind by ANTHC 35,835$ Integration and Testing8/20/201313,239$ 697$ In-Kind by ANTHC 13,936$ Final Acceptance, Commissioning and Start-up9/2/20136,620$ 348$ In-Kind by ANTHC 6,968$ Operations Reporting9/3/20134,728$ 249$ In-Kind by ANTHC 4,977$ -$ -$ In-Kind by ANTHCTOTALS189,131$ 9,954$ 199,085$ Budget Categories:Direct Labor & Benefits83,058$ 9,954$ In-Kind by ANTHC 93,012$ Travel & Per Diem6,440$ -$ In-Kind by ANTHC 6,440$ Equipment-$ -$ In-Kind by ANTHC -$ Materials & Supplies93,725$ -$ In-Kind by ANTHC 93,725$ Contractual Services5,908$ -$ In-Kind by ANTHC 5,908$ Construction Services-$ -$ In-Kind by ANTHC -$ Other-$ -$ In-Kind by ANTHC -$ TOTALS189,131$ 9,954$ In-Kind by ANTHC 199,085$ Add additional pages as neededApplications should include a separate worksheet for each project phase (Reconnaissance, Feasibility, Design and Permitting, and Construction)- Tab D Letters of Support Tab E Authorized Signers Form Tab F Authority Tab G Additional Materials SHAKTOOLIK, ALASKA ANTHC EXCESS WIND ENERGY USE STUDY PREPARED FOR: ALASKA NATIVE TRIBAL HEALTH CONSORTIUM PREPARED BY: William Thomson PE Alaska Village Electric Cooperative, Inc. 4831 Eagle Street Anchorage, AK 99503 (907) 565 5342 August 20, 2011 ANTHC-Shaktoolik Excess Wind Energy Use Analysis August 20, 2011 Alaska Village Electric Cooperative, Inc. EXECUTIVE SUMMARY The Two Shaktoolik wind turbines (Northern Power Systems 100B models) will generate in excess of community requirements when there is moderate to heavy wind and when the community load is light. Currently much of this excess will not be utilized since there is no economic way to store the energy yet. If electric heating is installed in the Shaktoolik water plant and controlled by the availability of excess energy, 10,171 gallons of fuel per year currently used by the ANTHC water treatment plant could be eliminated. The design of the proposed equipment is based on AVEC’s own secondary load installations but adapted to installation into the water plant. The estimated cost for the heat recovery project is $ 252,905. The simple payback based on a fuel cost of $ 3.42/gallon and fuel saved is 7.3 years. If the cost of interruptible electricity is subtracted from the savings, the simple payback increases to 12.6 years. INTRODUCTION Alaska Village Electric Cooperative (AVEC) and Alaska Native Tribal Health Consortium (ANTHC) have been discussing ways in which operational coordination can achieve increased village efficiency. One clear potential is the use of excess wind energy at the water treatment plant (WTP). The problem with excess wind is its random, unpredictable nature, but the water storage capacity at the water treatment plant provides a method for smoothing out this inconsistency – heating water only when this is possible, and waiting out periods of light wind. Unlike traditional heat recovery from engines, excess wind energy is transmitted via the existing electrical distribution system. The power plant, wind turbines and water treatment plant can be located at a distance from each other anywhere on the village electrical system and do not require interconnecting piping. The components of the required system break down into the following areas: Design, purchase and installation of a 120 kW Water Heater; Design and installation of system control and communications; Installing new electrical service to the WTP. AVEC’s experience since 2003 using electric water heaters for power plant secondary loads can be directly applied to this application and will require no additional research and minimal development. A CCI model VWB-10 boiler can be used as a 120 kW water heater, and can be modified when delivered to Anchorage with a suitable control system. The boiler can be piped directly into the existing boiler system using a recirculation pump. Piping and pumping capacity will be required with a minimum of 50 GPM. AVEC is currently controlling wind turbines in other locations using network radio links and there is a high degree of confidence that a low powered line-of-sight installation over 1/3 mile will provide sufficient coordination between the AVEC powerhouse and the WTP. The AVEC Shaktoolik power plant will have a network dispatcher installed to control the two wind turbines as well as diverting excess energy into water and air heaters at the power plant. The AVEC- designed system dispatcher can be expanded to give the ANTHC WTP load priority access to the surplus. Note that when the WTP cannot absorb the excess wind energy, excess wind, energy dissipation will automatically shift from the WTP back to the AVEC power plant. The 120 kW water heater load will require a new utility service, including a transformer bank and a new 200 amp 480 volt service entrance. A separate revenue meter will be part of this service and will be billed at a nominal rate to split the savings between AVEC and ANTHC. The agreed price for energy sales is $0.05 per kW-hr. An important advantage of this approach over heat recovery is the ease of metering – standard utility metering will keep track of the savings with a high degree of accuracy. Monthly and other readings will be collected and billed using the AVEC automated meter reading (AMR) system. A special system to monitor energy transfers is not required. Shaktoolik has significant potable water storage and most of the fuel currently burned is used to heat the water delivery system. No additional water storage is required. There are no anticipated land use issues with this proposal. There are no anticipated regulatory issues with this proposal. There are no anticipated environmental issues with this proposal. There is no current technology ready for implementation in Alaska Villages that would provide a mechanism for time shifting generated energy from a time of abundant wind to a time of no wind. While such a technology may be obtainable in the future, this proposal should still be deemed economic as it will fully pay back the investment before any future technology could be reasonably implemented. THE BENEFIT ANALYSIS The analysis of available surplus wind energy for use at the Shaktoolik WTP was calculated with Homer software for a typical year. As a requirement for system stability, the diesel engines are not allowed to fall below 50 kW of load. This minimum requirement was included in the Homer analysis. Energy in excess of village needs was estimated on an hourly basis and exported from Homer. Once the hourly data was available from Homer, a spreadsheet was used to determine the effect of changing the size of the water heater. Based on this sensitivity check, a water heater size of 120 kW was determined to be a reasonable compromise. Monthly estimated kW-hrs were converted to gallons of diesel by using 132,000 BTUs / gallon and 75% boiler efficiency. Month Potential Energy available (Gallons) Current Usage at the Shaktoolik WTP Actual Estimated Savings (Gallons) January 984 1500 984 February 1231 1500 1231 March 990 1250 990 April 961 1250 961 May 997 600 600 June 969 600 600 July 1005 600 600 August 1008 600 600 September 977 600 600 October 1011 1250 1011 November 980 1500 980 December 1014 1500 1014 TOTAL 12,127 12,750 10,171 CONCLUSIONS AND RECOMMENDATIONS The estimated project cost for is $ 252,905. Estimated fuel savings are 10,171 gallons. Using an average fuel price of $ 3.42/gallon results in estimated savings of $ 34,784 for a simple payback of 7.3 years on the oil savings to the village. If the $14,751 cost of the interruptible electricity is subtracted, the payback increases to 12.6 years. The village will see an annual savings of $20,033 and AVEC will see an additional $14,751 of revenue for the sale of the surplus power. Shaktoolik Excess Wind Energy Recovery Design ITEM HRS, All UNIT Labor Travel Materials Total Cost Disiplines COST Project Work Plan 15 120 $1,800 $1,800 Project Scoping 30 120 $3,600 $4,000 $7,600 Preliminary Design 40 120 $4,800 $4,800 65% Design 120 120 $14,400 $400 $14,800 Permit Applications 8 120 $960 $960 Negotiated Interruptible Power Sale Agreement 8 120 $960 $960 95% Design 55 120 $6,600 $6,600 Engineers Cost Estimate 24 120 $2,880 $2,880 Final System Design 40 120 $4,800 $1,200 $400 $6,400 Subtotal $46,800 Contingency 15%$7,020 Subtotal Design 340 $40,800 $5,200 $800 $53,820 Shaktoolik Excess Wind Energy Recovery Construction and Total Project MATERIALS AND EXPENSES LABOR FREIGHT TOTAL ITEM QUAN UNIT UNIT MAT Journey LAB Journey LAB General LAB General LAB LABOR TOTAL UNIT FREIGHT TOTAL COST COST HRS RATE HRS RATE COST WT(#)COST COST COST AVEC Power Plant Dispatcher Software Changes 1 ea. $2,000 $2,000 80 $100 $8,000 $10,000 Radio Link Purchase and installation 1 ea. $1,000 $1,000 15 $100 $1,500 20 $1.50 $30 $2,530 WATER PLANT Pipe/Valves/Ftgs/ Gauges/Pump 1 lump $15,000 $15,000 80 $130 80 $50 $14,400 1000 $1.50 $1,500 $30,900 Radio Link Purchase and installation 1 ea. $1,000 $1,000 15 $130 15 $50 $2,700 5 $1.50 $8 $3,708 120 kW Water Heater 1 Ea. $15,000 $15,000 50 $130 50 $50 $9,000 800 $1.50 $1,200 $25,200 Water Heater Modifications 1 ea $1,000 $1,000 20 $130 20 $50 $3,600 $4,600 New 200A 480V Service 1 lump $30,000 $30,000 0 $0 400 $1.50 $600 $30,600 Control Panel 1 lump $8,000 $8,000 16 $130 8 $50 $2,480 50 $1.50 $10,480 Misc Electrical 1 lump $2,000 $2,000 20 $130 20 $50 $3,600 100 $1.50 $150 $5,750 Commission System & Training 40 $120 40 $50 $6,800 0 $6,800 Misc Hardware 1 lump $1,000 $1,000 0 500 $1.50 $750 $1,750 Misc Tools & Safety Gear 1 lump $1,000 $1,000 0 400 $1.50 $600 $1,600 Consumables, Gases, Etc. 1 lump $1,000 $1,000 0 200 $1.50 $300 $1,300 DIVISION 1 EXPENSES Construction Management 120 100 $12,000 $12,000 Construction Admin/Engrg.80 120 $9,600 $9,600 Superintendent Off-Site 40 $130 $5,200 $5,200 Crew Travel Time 20 $100 $2,000 $2,000 Crew Airfares 4 trips $1,000 $4,000 $4,000 Crew Per Diem 20 mn.dy . $80 $1,600 $1,600 Housing Rent 1 mo. $1,500 $1,500 $1,500 Utilities 2 mo. $1,000 $2,000 $2,000 CONST SUBTOTAL $87,100 $80,880 $5,138 $173,118 CONST CONTIN 15%$25,968 DESIGN SUBTOTAL $53,820 TOTAL PROJECT $252,905