HomeMy WebLinkAboutORPC Round 5 AEA Application Final
Renewable Energy Fund Round 5
Grant Application
AEA 12-001 Application Page 1 of 33 7/1/2011
Application Forms and Instructions
The following forms and instructions are provided to assist you in preparing your application for
a Renewable Energy Fund Grant. An electronic version of the Request for Applications (RFA)
and the forms are available online at: http://www.akenergyauthority.org
Grant Application
Form
GrantApp5.doc Application form in MS Word that includes an outline of
information required to submit a complete application.
Applicants should use the form to assure all information is
provided and attach additional information as required.
Application Cost
Worksheet
Costworksheet
5.doc
Summary of Cost information that should be addressed by
applicants in preparing their application.
Grant Budget
Form
GrantBudget5.
doc
A detailed grant budget that includes a breakdown of costs by
milestone and a summary of funds available and requested to
complete the work for which funds are being requested.
Grant Budget
Form Instructions
GrantBudgetIn
structions5.doc
Instructions for completing the above grant budget form.
Authorized
Signers Form
Authorized
signers
form5.doc
Form indicating who is authorized to sign the grant, finance
reports and progress reports and provides grantee information.
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 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 demonstr ate 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.
Renewable Energy Fund
Grant Application Round 5
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SECTION 1 – APPLICANT INFORMATION
Name (Name of utility, IPP, or government entity submitting proposal)
ORPC Alaska, LLC
Type of Entity: Independent Power Producer Fiscal Year End: December 21, 2011
Tax ID # 90-0506267 Tax Status: X For-profit or non-profit ( check one)
Mailing Address
ORPC Alaska
725 Christensen Dr., Suite 6
Anchorage, AK 99501
Physical Address
Same
Telephone
907-339-7939
Fax
207-772-7708
Email
mworthington@orpc.co
1.1 APPLICANT POINT OF CONTACT / GRANTS MANAGER
Name
Monty Worthington
Title
Director of Project Development
Mailing Address
Same as above
Telephone
Same as above
Fax
Same as above
Email
Same as above
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
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.
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Grant Application Round 5
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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)
TidGen™ Array 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.
The TidGen™ Array Project, part of a larger commercial project at East Foreland, near Nikiski, Alaska, is
a pilot project to test the effectiveness of Ocean Renewable Power Company’s TidGen™ Power System
in Cook Inlet. The energy produced will be delivered to the Railbelt Grid via interconnect to the Homer
Electric Association (HEA) distribution system in the early stages of the project, and ultimately via a
dedicated transmission line to the Bernice Lake Substation. From there, it can be delivered to any of the
Railbelt utilities and associated communities.
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
Heat Recovery from existing sources X Hydrokinetic
Solar Storage of Renewable
Other (Describe)
2.3.2 Proposed Grant Funded Phase(s) for this Request (Check all that apply)
Reconnaissance Design and Permitting
Feasibility X Construction and Commissioning
Conceptual Design
2.4 PROJECT DESCRIPTION
Provide a brief one paragraph description of your proposed project.
ORPC Alaska, LLC, a wholly owned subsidiary of Ocean Renewable Power Company, LLC
(collectively, ORPC), develops technology and projects generating emission-free electricity from water
currents. Its technology includes the proprietary TidGen™ Power System, which includes one or more
TidGen™ devices connected to an on-shore station with power and data cables. In ORPC’s Cook Inlet
TidGen™ Project, ORPC will install a four-device TidGen™ Power System with a rated generating
capacity of 600 kW in a 6-knot current. AEA Round 4 funding to ORPC will help fund a single-device
TidGen™ Power System. This Round 5 project, called the TidGen™ Array Project, will expand the
system to a four-device TidGen™ Power System, by adding an array of three TidGen™ devices.
2.5 PROJECT BENEFIT
Briefly discuss the financial and public benefits that will result from this project, (such as reduced fuel
costs, lower energy costs, etc.)
The TidGen™ Array Project to be funded by Round 5 will allow ORPC to advance the commercialization
of the TidGen™ Power System by increasing the number of TidGen™ devices in the system from one to
four. In subsequent stages of a much larger project at East Foreland called the Cook Inlet Tidal Energy
Project (not in the scope of this application), ORPC plans to deploy its proprietary OCGen™ Power
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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)
$ 8,696,494
2.7.5 Estimated Direct Financial Benefit (Savings) -$1,087,080
2.7.6 Other Public Benefit (If you can calculate the benefit in
terms of dollars please provide that number here and
+$14,805,000
System to achieve a rated capacity of 1.2 MW by the end of 2015 and of 5 MW by the end of 2016. By
the end of 2022, ORPC will gradually increase its rated capacity to up to 100 MW under an operating
license from the Federal Energy Regulatory Commission (FERC).
Once in operation, the 600 kW TidGen™ Array Project will displace approximately 17.9 million cubic
feet of natural gas, corresponding to $120,431 in cost savings and 948 tons of avoided CO2 emissions for
the state of Alaska. Once the subsequent stages of the Cook Inlet Tidal Energy Project have been
completed, the 100 MW project will successfully displace approximately 4.2 billion cubic feet of natural
gas each year, saving the state $30.2 million in fuel costs and avoiding 221,205 tons of CO2 emissions
annually. On a present value basis (at a 3% discount rate), the fuel costs savings for the 600 kW
TidGen™ Array Project would be $1,593,876 and for the expanded 100 MW project would be
$302,593,118, before considering the social costs of carbon inherent in natural gas-based generation.
Anticipating a power purchase agreement that takes the externalities of avoided fossil fuels as well as
future avoided costs into account, ORPC projects that by the end of 2015, the 600 kW TidGen™ Array
Project will generate annual revenues of approximately $496,999 from electricity sales and potentially
more from carbon offset sales, and other tax credits. From 2015 to 2022 and beyond, ORPC anticipates
that its various projects in Alaska will generate revenues in the tens of millions of dollars, which will in
turn create significant tax revenues for the state. The TidGen™ Array Project will also create a significant
number of high quality jobs in Alaska. ORPC will support between 25 and 30 new and existing jobs in
the state during the TidGen™ Array Project’s 18-month peak construction period, and support four to five
long-term jobs during the operating period. Between 2015 and 2022, as the 100 MW Cook Inlet Tidal
Energy Project grows to full generating capacity, ORPC anticipates supporting up to 680 green economy
jobs during peak construction and up to 155 green economy and maritime industry jobs over the long
term in Alaska.
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.
ORPC has just begun project development at East Foreland, and is funding all pre-deployment
development work, which will amount $1,412,716 through 2012. Completion of the TidGen™ Array
Project will require a total of $8,696,494, to be funded as follows: (1) $4,696,494 by ORPC; (2) $2
million from the AEA’s REF Round 4 award; and (3) $2 million from an AEA Round 5 award. For the
TidGen™ Array Project, the Round 5 funding request will cover 23% of project costs; AEA Round 4
funding will cover 23% and ORPC funding will provide the remaining 54%. ORPC’s funding
commitment will count as cost share toward AEA funding.
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. $ 2,000,000
2.7.2 Other Funds to be provided (Project match) $ 6,696,494 ($2,000,000
AEA Round 4 Funded)
2.7.3 Total Grant Costs (sum of 2.7.1 and 2.7.2) $ 8,696,494
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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.
Monty Worthington, ORPC Alaska, LLC, 725 Christensen Dr., Suite 6, Anchorage, AK 99501
Telephone: (907) 339-7939 Email: mworthington@orpc.co
Resume and references attached.
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.)
Round 5 Funds: TidGen™ Power System Build-out
January 2014 – Technical and environmental feasibility analysis for TidGen™ Array Project
completed, submitted to AEA
January 2014 – Components for three additional TidGen™ devices will be released for manufacture.
If need be (ORPC hopes to retain contractors from initial work), bid packages will be developed and
new contractors selected on a competitive basis.
April 2014 – TidGen™ bottom support frame construction begins in Alaska
May 2014 - TidGen™ TGU components arrive in Alaska
June 2014 - TidGen™ device assembly complete
June 2014 – TidGen™ power and data cables (P&D cables) installed
July - September 2014 – Three additional TidGen™ devices deployed in phases to bring the
TidGen™ Power System up to a 600 kW capacity
December 2014 – First quarterly report (performance and environmental effects) from the four-device
TidGen™ Power System will be collected, analyzed and shared
June - September 2015 – Annual maintenance completed on the TidGen™ Power System
November 2015 – Annual report on one year of operation completed, submitted to AEA
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.)
Using Round 5 funds, ORPC will complete the following:
1. Complete feasibility report on TidGen™ Array Project - January 2014
a. Confirm that all milestones under Round 4 funding are complete (see Appendix A for
Round 4 schedule and milestones)
b. Hold meeting with AEA to evaluate performance of single-device TidGen™ Power
System and finalize design of the four-device TidGen™ Power System before release of
components for manufacture and procurement
2. Bids received for components for the three new TidGen™ devices; components released for
manufacture - February 2014
3. Components for three TidGen™ devices procured, prepared for shipment to laydown site - May
2014
a. Three bottom support frames fabricated in Alaska
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b. Three TGUs and power electronics manufactured and prepared for shipment to Alaska
4. Three TidGen™ devices assembled at East Foreland laydown site - June 2014
a. Device components arrive at East Foreland laydown site
b. Three TidGen™ devices assembled
5. Three TidGen™ devices added to existing single-device TidGen™ Power System; four-device
TidGen™ Power System commissioned - July 2014
a. Three bottom support frames installed
b. Power transmission system installed and connected for the three new devices
c. Three TidGen™ TGUs installed
d. 4-device TidGen™ Power System interconnected to grid and commissioned
6. First quarterly report on TidGen™ Power System operation and performance completed -
December 2014
a. Collect sufficient data to report on TidGen™ Power System operation
b. Finalize reports on operation of TidGen™ Power System and disseminate to agencies,
AEA, and stakeholders. Evaluate economics of project for deployment of OCGen™
Power System
7. Annual inspections and maintenance of TidGen™ Power System performed - June–September
2015
a. TidGen™ device raised and inspected; annual maintenance performed
8. Annual report on TidGen™ Power System operation and performance completed - November
2015
a. Collect sufficient data to report on operation of TidGen™ Power System
b. Finalize reports on operation of TidGen™ Power System and disseminate to agencies,
AEA and stakeholders
c. Evaluate economics of project for future installation of OCGen™ Power System
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 a hydrokinetic industry pioneer, ORPC has gained unmatched multi-seasonal marine operations
experience over the past several years in deploying, testing and monitoring two first-of-a-kind tidal in-
stream energy conversion devices in the Bay of Fundy’s adverse marine and weather environments. The
key to ORPC’s success has been the collective experience, technical expertise, dedication, commitment,
and leadership of the company’s professional team. ORPC’s management team, Technical Advisory
Board, Management Committee, and partner, Caithness Development, include professionals with
extensive experience and proven track records in developing, permitting, financing, constructing,
operating and managing cogeneration, independent power and renewable energy facilities, as well as
forming, funding and managing startup and technology development companies. The extended ORPC
team includes highly respected firms and individuals with extensive experience in turbines, generators,
submersible vessels, composite manufacturing, power electronics, control systems, power plant licensing,
environmental permitting, community outreach, project management, construction and operations, and
legal services.
ORPC is committed to recruiting and retaining contractors and partners for the TidGen™ Array Project
from within Alaska whenever possible, encouraging businesses to establish a presence in the state and
advancing the industry through executed contracts with technical and project support resources. ORPC
has sought to employ local companies and contractors whenever the required work capacity is available
or can be developed within a local organization. ORPC has contracts with Alaskan private companies and
public institutions, including TerraSond, LGL, HDR, Marsh Creek, Aquacoustics, PND Engineering,
Stephen Braund and Associates, the University of Alaska Anchorage, and the Alaska Center for Energy
and Power to build the capacity to support tidal energy project development in Alaska (please see various
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letters of support attached in Appendix B).
In the East Foreland area, ORPC began working with Homer Electric Association (HEA) early in project
development. ORPC has since signed a letter of intent (Appendix C) with HEA in a step towards a
Memorandum of Understanding and a Power Sales Agreement. ORPC has also begun working with local
marine service companies such as OSK Dock, offering opportunities for local contractors to become
involved in the project design and implementation. When local companies and research institutions are
not able to fill certain project roles, ORPC recruits experts from outside the state, primarily focusing on
companies with previous experience in Alaska.
For major equipment purchases and contracts, ORPC makes every attempt to competitively quote all
subcontractor needs. The company also seeks input from contractors about technology designs to ensure
ease of manufacturability. When selecting contractors, ORPC does a cost/benefit analysis based on price,
available assets, manpower, timing and quality of work on previous projects. The lowest cost does not
always ensure a contract. As ORPC continues to grow, so does the company’s contract base, whose
performance is continually evaluated.
ORPC Alaska Key Personnel (detailed resumes in Appendix D)
Doug Johnson – Director of Projects, Alaska
Mr. Johnson has over 30 years of project development experience in Alaska, having worked as an
investor, a business owner, an entrepreneur, a professional manager and a business consultant. He has
developed projects ranging from the launch of Alaska’s first biotech company to the planning and
execution of a $2 billion hospital in Abu Dhabi.
Monty Worthington – Director of Project Development, Alaska
Mr. Worthington has over 10 years of experience designing and implementing renewable energy
systems in Alaska, the Pacific Northwest and Asia. He has managed renewable energy projects for
both private companies and nonprofit organizations and also has extensive experience in the design,
installation and maintenance of marine electrical systems.
ORPC Management Team (detailed resumes in Appendix D)
Christopher R. Sauer – President and CEO
Mr. Sauer provides overall management and leadership in all of ORPC’s technical and commercial
activities. Mr. Sauer is a professional engineer, energy entrepreneur and strategic development
consultant with more than 30 years of experience in executive management, engineering,
construction, project development, marketing, financing and startup company formation in the
electricity, cogeneration, renewable energy and energy efficiency industries.
John R. Cooper – Senior Vice President and CFO
Mr. Cooper manages all financial matters for ORPC, including raising capital. He has more than 30
years of experience as a senior finance executive in the energy industry, where he has been involved
in project finance and development, corporate finance, transaction structuring, capital raising,
executive management, consulting and representation on the boards of directors of several renewable
energy start-ups.
Jarlath McEntee, M.S., P.E., Vice President of Engineering & Chief Technology Officer Mr.
McEntee is responsible for all of the technology development and engineering efforts of ORPC,
directly managing engineering teams and processes and directing technology strategy. As ORPC
technology leader, Mr. McEntee will direct the design, engineering and specification development for
the TidGen™ Array Project. Mr. McEntee has specialties in engineering management, complex
systems design, dynamics, fluid mechanics and thermodynamics as well as 20 years of experience in
the testing, design and manufacture of alternative energy systems.
John Ferland, Vice President – Project Development
Mr. Ferland is responsible for ORPC’s international project development and environmental
permitting activities, and for fostering collaborative relationships with project communities and other
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stakeholders. He is a former president of the Maine Center for Enterprise Development and has
extensive experience in the environmental industry and startup company management.
Robert A. Lewis – Director of Operations Planning and Chief Safety Officer
Mr. Lewis supervises all operational aspects of ORPC’s tidal energy projects and is the company’s
safety officer. He has over 15 years of experience in industrial facilities, including quality control,
environmental compliance and product development.
Advisors to ORPC (detailed resumes in Appendix D)
Dr. Brandon Southall
Dr. Southall completed graduate studies in 2002 on hearing and the effects of noise on seals and sea
lions. He continues fieldwork on northern elephant seal acoustic communication. Recently, he was a
fisheries research biologist and director of NOAA's Ocean Acoustics Program. He was involved in
the development of acoustic exposure criteria for marine mammals, organized symposia on shipping
noise and marine mammals and was centrally involved in the formation of correspondence group on
the shipping noise issue within the International Maritime Organization. He provides technical advice
on regulatory policies and mitigation strategies for minimizing noise impacts.
Millard S. Firebaugh, Sc.D, Rear Admiral, U.S. Navy (retired)
Dr. Firebaugh, a retired rear admiral in the U.S. Navy, a former chief engineer of Electric Boat Corp.,
and a former CEO of SatCon Technologies, is a recognized leader in the engineering and production
of advanced technology, including R&D, ship design, shipbuilding, power systems and electronics,
and executive management. Dr. Firebaugh is a member of the ORPC Technical Advisory Board and
Management Committee.
Ernest K. Hauser
Mr. Hauser advises ORPC on development, licensing and permitting, project engineering and
management. He is ORPC’s former Senior Vice President of Projects, and has more than 35 years of
experience in business and project development, management, operations, finance and construction in
the energy and petrochemical industries.
Sahba S. Vaziri
Ms. Vaziri contributes to ORPC’s applications for federal and state funding, including proposals to
the U.S. Department of Energy, the Alaska Energy Authority, the Maine Technology Institute and the
Denali Commission. She also participates in strategic and financial planning of ORPC. She brings
over 20 years of experience in finance to ORPC.
Patrick J. McGinnis, P.E.
Mr. McGinnis has more than 20 years of experience with major engineering firms including GE,
Lockheed Martin, Ford Aerospace and the Naval Surface Warfare Center managing R&D projects in
advanced machinery.
Peter R. Betzer, Ph.D.
Dr. Betzer, a former dean of the School of Marine Science at the University of South Florida and a
world-renowned authority in his field of geochemistry, provides ORPC with input and direction in
oceanography and marine engineering.
Jason Moore, P.E., Project Engineer, Caithness Corporation
Mr. Moore is a project engineer for Caithness Development Corporation, whose wholly owned
subsidiary is one of the member-owners of ORPC. He manages Caithness’s energy project
installations and startups and provides advisory support to ORPC.
Consultants and Contractors (detailed resumes in Appendix D)
HDR|DTA
HDR|DTA is made of up engineers, scientists, and regulatory specialists serving clients in the
hydropower industry. ORPC works with Mary McCann, Senior Aquatic Scientist and Manager of
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Environmental Services, who has over 20 years of experience in fisheries and aquatic habitat studies,
fish passage studies, aquatic resources and RTE surveys, water quality studies, general environmental
impact analysis and assessments, and federal and state licensing and permitting activities.
TerraSond LTD
Recent work with TerraSond has focused on the development of in-stream hydrokinetic and tidal
renewable energy feasibility programs. Geophysicist David Oliver, head of TerraSond, has over 18
years of technical experience in the geotechnical and geophysical industry, including resource
assessment, site selection, and hazard assessment. Mr. Oliver is an expert at program design and field
data collection, as well as the precise management and spatial analysis of remotely sensed data.
Department of Civil Engineering, University of Alaska, Anchorage (UAA)
ORPC partners with high-quality university programs and researchers whenever possible. Associate
Professor Tom Ravens, Ph.D., has over 15 years of experience in hydrodynamic (wave and current)
and sediment transport modeling and analysis, and has published widely in this field. Dr. Ravens is
currently developing flow, wave, and sediment transport models for Cook Inlet and the Beaufort Sea.
LGL Alaska Research Associates Inc.
The current project manager and principal investigator for LGL studies of Cook Inlet beluga whales is
Tamara McGuire, Ph.D. Dr. McGuire, also lead scientist at LGL, has 19 years of experience as a
wildlife biologist and a marine mammal scientist and has conducted land- and boat-based research on
Cook Inlet beluga whales. She has logged over 500 hours monitoring and theodolite tracking whales
and vessels around the Port of Anchorage in Upper Cook Inlet.
PND Engineers, Inc.
PND has many years of experience providing innovative solutions to clients in the remote and arctic
regions of Alaska. Jim Campbell, the principal/senior engineer for ORPC projects, has more than 20
years of experience in geotechnical and civil engineering, surface and subsurface hydrology,
hydrogeology and environmental investigations. He has performed extensive geotechnical
investigation and design work, both on and offshore, for assessment and design of roadway, building,
tank farm and marine structure foundations.
3.5 Project Communications
Discuss how you plan to monitor the project and keep the Authority informed of the status.
ORPC will develop a communication plan for the TidGen™ Array Project that best matches the
information needs of AEA. From its permanent office in Anchorage, ORPC will report to AEA on the
TidGen™ Array Project’s timeline and performance. ORPC’s project management practices are geared
towards carefully monitoring scope, schedule and budget to ensure the project is tracking as planned.
Any significant changes to any of these aspects of the project will be promptly reported to AEA. To
ensure that the project management team is thoroughly informed on the Project’s progress, ORPC will
establish monthly meetings to provide updates with the project manager, contractors, and key ORPC
personnel as they have for their other grant funded projects. ORPC will submit regular quarterly progress
reports via to AEA, and will schedule meetings as necessary or as requested to update AEA staff on the
project.
3.6 Project Risk
Discuss potential problems and how you would address them.
As a developer of leading edge technology and projects ORPC as a company is attuned to the inherent
risks in these endeavors, and is committed to proactively managing these risks and planning projects such
that risk is continually reduced as project implementation approaches, and through the deployment and
operation of pilot projects, such as the TidGen™ Array Project. While many of the risks encountered in
the first Alaskan projects are well understood from the experience gained through implementation of first -
of-a-kind projects in Maine, some are unique to Alaskan projects and must be adapted and managed
accordingly. ORPC intends to mitigate the following key risk area through the project development
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process in Cook Inlet:
Financial: For the TidGen ™ Array Project to be successful, ORPC must continue to secure funding
beyond its current cash reserves for the various phases of the Project. To this end, ORPC is pursuing
funding from diversified sources including state and federal grants, and private capital sources. Over the
past four years, ORPC has successfully raised more than $39 million in private and public financing,
including $20.75 million in private equity and equity bridge financing and more than $19 million in state
and federal government awards to develop its proprietary technology and permitting. Financial risks to
the project include the following:
Delivered Cost of Energy – The delivered cost of energy from a tidal generation project is the
solution to a formula the variables of which include capital costs to construct and install the
project, its operations, management, long-term maintenance and environmental monitoring costs,
and its useful life, the amount of energy available in the tidal stream (min/max current speeds),
and the efficiency of the energy devices in extracting the mechanical energy from the tidal
stream, converting it to electrical energy and transmitting it to the on-shore transmission grid.
Risks arise from estimating each of these variables, and assuming changes over time from
inflation, improvements in technology, reduced or increased costs of materials and services,
output degradation, etc. Based on ORPC’s experience to date in building and testing the Beta
TGU (turbine generator unit, see details in Section 4.3 below and in Appendices E and F),
engineering for the TidGen™ Power System in Maine, product specifications and cost estimates,
and evaluation of the Cook Inlet tidal resources, etc., ORPC has developed the financial
projections for the project, as well as sensitivities to variations in these project parameters.
Revenue Assumptions – Revenues to be earned from sale of electrical energy, capacity and
various renewable energy attributes and tax policy must be estimated far into the future based on
current market conditions and expectations on how these will change. There is an inherent risk
that these assumptions about future prices may be different from what is expected as a result of
changes in supply and demand, as well as political and other economic factors.
Permitting and Environmental Risks: Agencies and stakeholders are generally enthusiastic about helping
tidal energy projects succeed. However, since these projects involve new technology and a new energy
source, the limitations of existing regulations can cause permitting delays. At the federal level, tidal
energy projects fall under the jurisdiction of FERC and are treated as traditional hydropower projects.
However, FERC has implemented an expedited pilot license process that allows short-term projects to be
installed and tested before full long-term operating licenses are issued. Over the last several years, ORPC
has gained unparalleled experience in the FERC pilot licensing process through its development of pilot
projects in Maine and Alaska. ORPC has also catalyzed a collaborative relationship between FERC and
other federal and state agency personnel that will help ensure the development of a licensing process that
is reasonable in scope while remaining protective of the environment. Potential environmental risks for
the project include:
Marine life – ORPC is aware of project risks associated with potential negative interactions
between the TidGen™ Power System and marine life. However, environmental monitoring
efforts to date show that these risks are low, and ORPC will continue to work with relevant
agencies and researchers to ensure the power systems do not pose a significant risk to marine life.
Of particular focus for ORPC in the Cook Inlet area is the local population of beluga whales,
which are now protected under the Endangered Species Act (ESA). It is vital that the TidGen™
Power System does no harm to this whale population, and that it fully complies with all ESA
restrictions. Consultations with the National Marine Fisheries Service (NMFS) will continue to
ensure that all ORPC monitoring efforts address any agency concerns and that the TidGen™
Array Project does not negatively affect the beluga whales. In this regard, NMFS has expressed
support for ORPC’s relocation of the TidGen™ Array Project to the East Foreland site (see
Appendix G).
ORPC has been in consultation with NMFS as well as the US Fish and Wildlife Service
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(USFWS) to ensure that fish populations are likewise considered during project development.
Environmental monitoring and fish studies performed during ORPC’s Beta TidGen™ Project
(Appendix F), in conjunction with the University of Maine’s School of Marine Sciences,
provided ORPC with an understanding of the power system’s interaction with the marine
environment. Thus far, these studies have shown that fish have either avoided the power system,
or have swum through it unharmed. Please contact ORPC for a copy of these extensive studies.
ORPC has also conducted pre-deployment fish studies at Fire Island and reported on them in
consultation with USFWS and NMFS. Based on this experience and through further consultation,
ORPC will scope both pre deployment studies and post deployment monitoring to satisfy the
concerns of agency personnel and stakeholders.
Sediment Transport – There are two potential risks associated with sediment transport. The first
is the possibility that due to the slowing of natural currents by the TidGen™ Power System,
sediment will be deposited and will create shoals in shipping channels. The second is the
possibility that natural sediment transport will adversely affect the bottom support frames and/or
buried transmission lines. ORPC has developed a plan with the University of Alaska to model
sediment transport prior to installation, and will use the TidGen™ Array Project to monitor and
predict the future effects of the TidGen™ Power System on sediment patterns. Furthermore, the
recent decision by AEA to partner with the National Oceanic and Atmospheric Administration on
circulation modeling of Cook Inlet with a focus on tidal energy extraction will offer another
modeling tool to address sediment transport impacts. ORPC will use the data generated from
these modeling efforts to plan installations that are not likely to create undesirable changes to
sediment transport processes in Cook Inlet.
Ice – There are concerns over the potential effects of surface ice, beach ice (large agglomerated
blocks of ice and sediment), and frazil ice on the TidGen™ Power System. Initial conversations
with University of Alaska experts indicate that surface and beach ice are unlikely to penetrate to a
depth where it will interact with the power system, which will be installed 40' below the surface.
Frazil ice is also unlikely to penetrate this deeply. There is, however, the possibility of ice
agglomerated with rock or sediment being suspended in the water column in the area of the
TidGen™ Power System. ORPC will conduct studies utilizing a Shallow Water Ice Profiler to
determine the extent, if any, of this ice at the planned deployment depths, and implement any
necessary modifications to the design to accommodate ice in this portion of the water column.
The main concern with ice in Cook Inlet will be the effect of surface ice on maintenance
activities. ORPC can avoid this potential constraint by adjusting project maintenance schedules
accordingly.
Technical Feasibility Risks: ORPC acknowledges there may be project risks associated with the technical
feasibility of its power systems. But the probability of this is low, considering ORPC’s successful
demonstration of technical viability through two demonstration projects – the prototype TGU
Demonstration Project in 2008 and the Beta Pre-Commercial TidGen™ Power System Project in 2010
(please see Appendix F for details).
Lessons learned through ORPC’s first commercial deployment and operation of the TidGen™ Power
System in Maine beginning in 2012 will also help mitigate technical risks to the TidGen™ Array Project.
At the same time, the unique water environment of Cook Inlet will present new technical challenges not
encountered in the Maine projects. These challenges include:
Foundation/mooring system design - ORPC will consider the difficulty of mooring in the
challenging environment of Cook Inlet. Local engineering firm PND Engineers, Inc. (PND) has
already begun devising conceptual designs for ORPC’s mooring systems and continues to assist
with the design of the bottom support and mooring systems. PND has extensive experience in oil
and gas industry mooring systems in Cook Inlet and is a primary contractor on the Port of
Anchorage expansion. As part of an ORPC grant from the Department of Energy (DOE),
TerraSond will collect data on the sub bottom characteristics of ORPC’s Cook Inlet sites to
provide the necessary information to complete the design of TidGen™ Power System’s bottom
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support frames and the OCGen™ Power System’s mooring system.
Silt Abrasion - Due to the influence of several large glacially fed rivers, Upper Cook Inlet has
extremely high concentrations (typically 2gm/L) of suspended sediment. The abrasive qualities of
this sediment have already proven to be a challenge for machinery and vessels in the offshore oil
and gas and marine service industries that operate in this environment. In assessing the
vulnerability of the components of ORPC’s technology to sediment-induced abrasion, one of the
greatest concerns is the effect of the sediment on the bearings and seals, since failures of these
components could lead to loss of efficiency, increased maintenance and, potentially, component
failures. In the TidGen™ TGU, fluid power is transferred from the turbines to the underwater
sealed permanent magnet generator via a rotating shaft that passes through a seal, excluding water
from the generator. Seal failure could lead to water intrusion and generator failure. Bearing wear
could lead to excess energy loss and could transfer excessive load to the seals, causing their
premature failure or increasing the frequency of costly maintenance operations. To address this
issue, ORPC and the University of Alaska Anchorage (UAA) have partnered on a DOE-awarded
grant to test combinations of bearings and seals being considered for use in the TidGen™ TGU.
These tests are being conducted in a flume designed to circulate samples of Cook Inlet water.
This laboratory testing will be completed prior to the selection of components for the TidGen™
TGU so they can be chosen based on their resistance to abrasion from Cook Inlet sediments and
their necessary maintenance cycles can be quantified.
Power Transmission - The power transmission system must be safe and reliable. Local
contractors with relevant experience in this area and outside companies with extensive knowledge
in this field will be engaged to design and deploy the system to ensure its safety and
effectiveness. The relocation of the TidGen™ Array Project to the East Foreland site has greatly
reduced technical risk in the power transmission system. As HEA has industrial scale power
distribution and transmission capacity in the East Foreland area to service the natural gas facilities
there, there is ample opportunity to interconnect the power from the project to HEA’s existing
infrastructure. For the TidGen™ Array Project, this may include connection to distribution
systems or a direct line to the Bernice Lake Substation, which has an open breaker.
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.
For a discussion of the potential energy resource, please see p.16, Section 4.3.1.
HEA is currently under contract to purchase its power from Chugach Electric through 2013. After this,
HEA plans to transition to generating its own power for distribution to its customers. HEA is investing in
upgrades to its generation infrastructure, primarily focused on increasing the number of natural gas
turbines; in the meantime, the power purchased from Chugach Electric is produced from natural gas
turbines. Currently all of the natural gas used in the Railbelt area is supplied from the Cook Inlet natural
gas fields. Recent estimates from the United States Geological Service suggest that large yet-untapped
supplies of Cook Inlet gas that may be available; exploration for these reserves is planned in coming years.
However, forecasts predict that currently tapped resources will be depleted as soon as 2020. Thus, as soon
as 2014, new gas supplies or other electrical generation capacity will be required to meet peak Railbelt
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energy demands. Other alternatives include a proposed in-state gas line from the North Slope, wind
projects at Fire Island and Eva Creek, and the Susitna-Watana Hydroelectric Project.
One of the distinct advantages of tidal energy is that it is predictable and thus easily and economically
integrated with the generation and transmission infrastructure of HEA and the greater Railbelt grid. Tidal
power will thus prove to be a valuable and diversified asset to the Railbelt regardless of future energy
infrastructure decisions. The TidGen™ Array Project will offer an emission-free source of power that will
serve to extend existing gas reserves in Cook Inlet, extend the viability of any new discoveries, and offer a
long- term flat priced power source that will be easily integrated with natural gas, hydropower, or other
renewable or non-renewable energy resources. Since the TidGen™ Array Project will produce no
greenhouse gases, it will also be protected from the future carbon taxes that will likely be applied to
electricity produced by natural gas; this will further improve the project’s economic benefits to the local
energy market. Below are some examples of future energy resources under consideration.
Traditional hydropower plants already exist on the Railbelt grid, and others, such as the proposed 600 MW
Susitna Watana Project or the 330 MW Lake Chakachamna Project, are being investigated for possible
development. While these traditional projects offer reliable power that is also economical, upfront costs
are quite high. These projects tend to couple well with renewable projects whose output varies
periodically, since modern hydro turbine controls allow them to ramp up and down with the availability of
other resources, thereby conserving and effectively utilizing reservoir capacity. When contractual
arrangements allow for hydropower plants to operate as resource following generation assets, these plants
already balance wind resources well in this manner, and the predictable nature of tidal energy will make
this kind of integration easier and even more efficient. Environmentally, hydropower has created
longstanding concerns about its impact on fish habitat, since its turbines are potentially harmful to fish that
pass through them, and since the intakes often funnel or ―suck‖ fish into them. Where anadromous fish
like salmon spawn, hydropower plants often encounter resistance from environmental and community
interest groups. With tidal power, however, there is no ducting and no ―sucking‖ pressure funneling fish
into the turbines; moreover, the slow speed (40 rpm) of the turbine foils poses minimal risk to the fish.
Subsequent ORPC project monitoring will verify these fundamentals.
Within the HEA service area, another proposed hydro project is the Grant Lake Project, a small (3 MW)
project. This project would couple perfectly with the TidGen™ Array Project, as it would provide an
opportunity to integrate a traditional hydro power facility with tidal energy much like a larger tidal energy
project would be integrated with a future large hydro facility on the Railbelt.
Cook Inlet Region Incorporated’s Fire Island Wind Project, originally a 54 MW-capacity project
scheduled for installation in 2012, has now been downsized to 17.6 MW and is scheduled for installation
in 2013. The implementation of this project would offer welcome diversification to the Railbelt generation
assets, while serving as a trailblazing project that integrates commercial scale variable output renewable
energy resources into the Railbelt grid. This project will make an excellent complement to ORPC’s
potential Cook Inlet projects, since the transmission line from Fire Island to Point Woronzof will have
additional capacity to accommodate both the wind and a tidal power project. ORPC has already spent over
$1 million developing a tidal energy project at Fire Island that would complement the TidGen™ Array
Project, as the staggered phase of the tides in Cook Inlet would allow for power to be continually between
the East Foreland site and Fire Island. The power generated by ORPC’s TidGen™ Array Project will be
more predictable and reliable than wind power, and will be able to be dispatched more easily, thus curbing
the oscillations in power output inevitably produced by wind energy. Right now, since wind technology is
much more developed than tidal technology, it is more economical. However, because tidal energy has the
added advantage of predictability, it promises to be a comparably more reliable and cost-effective resource
once the industry reaches its commercialization phase.
There is potential for future geothermal development in Alaska, particularly at Mount Spurr near the
Beluga Power Plant infrastructure. Geothermal energy promises to be a clean, stable, renewable energy
source, although there are technical challenges in implementing it in seismically active and glacially
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dynamic areas such as Mount Spurr. Any geothermal project installed there would also integrate well with
tidal power (as with hydropower) by acting as a system balance.
Another alternative being investigated by local Railbelt utilities is coal-fired power plants. Tidal energy
has significant environmental advantages over coal-fired power, as well as the potential to be more
economically competitive, as economies of scale drive costs down and the fully embedded cost of coal
continues to rise. Coal-fired power produces not only CO2, which adds to the effects of global warming,
but also mercury, a toxic contaminant that accumulates in the food chain and has become a recent concern
in wild Alaskan salmon. Tidal power has none of these disadvantages, as it is a totally clean, renewable
energy resource.
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.
This is a Railbelt Energy Project – N/A.
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 Railbelt grid, including the HEA service area, is largely dependent on natural gas for energy
production. In the short term, the TidGen™ Array Project will displace modest amounts of natural gas
usage, thus extending the resource’s viability. In the long term, as ORPC’s projects in Cook Inlet expand,
benefits will accrue from the introduction of a renewable energy source that integrates well with natural
gas powered plants, existing hydro plants such as Eklutna and Bradley lakes, and future development of
other energy resources such as the Fire Island Wind Project, Railbelt Large Hydro projects or the Mount
Spurr geothermal project. Tidal energy is appealing to HEA and other Railbelt utilities that must negotiate
annual bulk natural gas contracts largely because of its predictability. As these utilities attempt to forecast
their gas needs, having a resource that is predictable will allow them to more accurately estimate their
power supply and avoid costly over- or under-estimation of these bulk contracts. The predictability and
gradual nature of the tidal energy as it ramps up and down will also make the integration of the power
technically manageable, and will ultimately lead to economical integration costs regardless of the future
energy portfolio of the purchasing utility.
4.2.3 Existing Energy Market
Discuss existing energy use and its market. Discuss impacts your project may have on energy
customers.
The energy market on the Railbelt grid will require significant alternative power production as natural gas
supplies decline. While initially producing modest amounts of power that will not significantly affect the
cost of electricity to ratepayers, the TidGen™ Array Project will provide predictable, economical power.
In addition, commercializing ORPC’s proprietary technology in Cook Inlet will allow it to expand into the
rural energy market in Alaska, where it will offer customers relief from the high cost of power associated
with diesel generation facilities. In the HEA service area, where the TidGen™ Array Project will be
interconnected, the majority of the power is currently purchased from Chugach Electric Association under
a contract that will expire in 2013. The power produced by the TidGen™ Array Project will come on line
after this contract has expired, at which time HEA will be generating its own power, primarily through
natural gas fueled facilities, but also through hydro power from Bradley Lake. As described in 4.2.2 above,
the power generated from the TidGen™ Array Project will be easily integrated into the HEA system
without significantly affecting operations or incurring large integration costs. The data collected through
this project will be essential to understanding the predictability and schedule of the tidal energy produced
by later phases of the project, and will thus be essential to understanding the economic and technical
feasibility of future project build-outs in Cook Inlet. This will in turn inform future energy infrastructure
choices by HEA and other utilities, allowing them to understand the positive or negative effects to
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ratepayers’ cost of energy before undertaking larger tidal energy projects.
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
ORPC Technology Overview
The core technology component and ―engine‖ for all of ORPC’s hydrokinetic power systems is the proprietary
turbine generator unit (TGU). The TGU uses proprietary advanced design cross flow turbines to power an
underwater permanent magnet generator mounted at its center on a single driveshaft. It is constructed primarily
of composite materials that will not corrode, and has a gearless, direct-drive design that requires no lubricants
and so leaks nothing into the surrounding water. The TGU produces zero emissions, including greenhouse
gases.
ORPC is developing three distinct hydrokinetic power systems based on the proprietary TGU, each designed
for commercial deployment in specific applications and water depths: The TidGen™ Power System, the
OCGen™ Power System and the RivGen™ Power System (see Appendix E). ORPC has filed several U.S. PCT
and individual country patent applications for its advanced design cross flow turbine, its underwater permanent
magnet generator, and its TGU.
System Design
The Cook Inlet TidGen™ Project will begin with the installation of a single-device TidGen™ Power System in
2013. The power from this single-device system will be transmitted to shore as MVDC power, and conditioned
at the on-shore station to grid-compatible 3-phase power at the specified voltage of the interconnect location.
The performance of the single-device TidGen™ Power System will be monitored through the winter. Provided
sound performance and environmental compatibility, the TidGen™ Array Project will then be implemented to
install three additional TidGen™ devices in the summer of 2014, to create a four-device TidGen™ Power
System. Prior to the deployment of the additional three devices, a decision will be made with HEA power
engineers as to whether a dedicated power feed to the Bernice Lake Substation is required or if the full
TidGen™ Power System can be interconnected through the distribution system. The appropriate terrestrial
power transmission system and switch gear will be installed.
In 2015, ORPC will continue to gradually expand the Cook Inlet Tidal Energy Project to 5 MW, which it will
operate through its expected eight-year FERC pilot project license term. According to the project site’s
characteristics (depth, bottom composition and existing navigational uses), this expansion will be accomplished
by installing an OCGen™ Power System and perhaps additional TidGen™ devices. Each module in the
OCGen™ Power System will consist of two to four 150 kW TGUs, giving the module a rated capacity of 300 -
600 kW (345- 690 kW peak). This will increase the site’s rated generating capacity to 1.2 MW by the end of
2015, 5.05 MW by the end of 2016, and eventually to commercial scale (100 MW) by 2022. Peak generating
capacity will be approximately 115% of rated generating capacity and will be reached when current flow
exceeds 5.4 knots. OCGen™ modules (consisting of stacked, buoyant TGUs) will be deployed in moored,
underwater arrays on the same site. The inherent flexibility of this type of stacked, arrayed deployment allows
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ORPC to adapt its technology to a wide variety of sites, eliminating the need to develop site-specific devices
and to rapidly and economically build out a site once the lengthy licensing/permitting process is completed.
The ultimate generating potential of tidal energy in the entire Cook Inlet has not yet been determined, but will
likely be in the hundreds of megawatts. Based on the relatively small footprint of the 3 MW project planned at
Fire Island, it is apparent that ORPC’s East Foreland site may have the potential for 100 to 200 MW of
generating capacity. In the tidal currents at the East Foreland site it is estimated that ORPC technology will
produce at least 2,798 MWh per 1 MW of installed nameplate capacity in the early years, and 3,439 MWh per 1
MW of installed nameplate capacity once the technology is fully commercial (in 2016 and beyond). For the 600
kW TidGen™ Array Project, ORPC anticipates at least 1,679 MWh electricity production per year. This
corresponds to a capacity factor of 32%.
The electricity produced by this installation will be transmitted to ORPC’s on-shore station at the East Foreland
come-ashore location via a submarine cable. Initial reconnaissance has identified potential come- ashore sites
both north and south of East Foreland. There, the electricity will be power-conditioned in the on-shore station
to grid-compatible three-phase power, and will be connected to the HEA power distribution or transmission
infrastructure, ultimately tying into the Bernice Lake Substation.
The Cook Inlet environment presents challenges that must be overcome, including ensuring that ice,
particularly frazil ice, does not interfere with the TidGen™ Array Project. Initial investigations, however,
suggest that the project’s deployment will be well below the range of either frazil ice or conglomerated surface
ice. Another site-specific challenge is the heavy silt content of the Cook Inlet waters. It will be essential to
ensure that this does not affect the design life of the TGUs, but since the TGU has very few moving parts, this
should not be a major concern. UAA will complete materials testing of various technology components to
identify and appropriately modify any materials showing vulnerability to silt erosion. ORPC, in partnership
with UAA, was recently awarded a $240,000 U.S. Department of Energy award to fund this study. Mooring and
foundations in the Cook Inlet environment will be another technical challenge. Alaskan companies such as
PND Engineers, Inc., who have extensive experience in dealing with mooring issues in Cook Inlet oil and gas
developments, will help overcome this challenge. See section 3.6 for further discussion of potential project risks
and barriers.
4.3.2 Land Ownership
Identify potential land ownership issues, including whether site owners have agreed to the project or
how you intend to approach land ownership and access issues.
The subsurface lands that will be used for mooring and power transmission systems are state property, and will
thus be subject to appropriate Alaska Department of Natural Resources (DNR) land use permitting
requirements. ORPC recently received its first submerged land use permit (valid until March 2014) from DNR
for the deployment of scientific monitoring equipment at the East Foreland site. ORPC has already begun
researching potential Right of Ways (ROWs) for the terrestrial portion of the power transmission system and
has identified routes using either existing utility corridors or willing private landowners to transmit the power
from the come-ashore location to the HEA distribution system or directly to the Bernice Lake Substation.
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
Permits will be required for installation of the single-device TidGen™ Power System (funded through Round
4), and ORPC will reapply as needed to begin the TidGen™ Array Project. At the date of Round 5 application
submittal, ORPC has already secured the following permits for the East Foreland site:
DNR Submerged Land Use Permit: Required for deployment of scientific monitoring equipment;
obtained in June 2011.
FERC preliminary permit: Secures site for ORPC Alaska; applied for in July 2010 and officially
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noticed by FERC on March 11, 2011.
The following additional permits will be applied for and received following submittal of this application, as
they are necessary for work included in Round 4 funding:
FERC pilot project license: Allows for initial testing of hydrokinetic device in preliminary site area; the
draft application will be filed by December 2012; the final pilot license application will be filed by
March 31, 2013.
Fish Habitat Permit (Alaska Department of Fish & Game): This permit requires a 50-day review period
that includes a public notice and comment period coinciding with the Coastal Zone Management
review. This permit will be applied for by February 2013 and procured by June 2013.
Army Corps of Engineers (ACOE) Title 10 permit: Requires 60-90 days for approval and Coastal Zone
consistency for final authorization; permit will be applied for by January 2013 and procured by June
2013.
Alaska Department of Natural Resources (DNR) Water Rights: Waived; only necessary for freshwater.
U.S. Coast Guard Notification: The U.S. Coast Guard will conduct a waterways assessment in
conjunction with the ACOE permitting process and will recommend approval/disapproval.
4.3.4 Environmental
Address whether the following environmental and land use issues apply, and if so how they will be
addressed:
Threatened or Endangered species
Habitat issues
Wetlands and other protected areas
Archaeological and historical resources
Land development constraints
Telecommunications interference
Aviation considerations
Visual, aesthetics impacts
Identify and discuss other potential barriers
Threatened or Endangered Species and Habitat
Of prime importance to the success of the TidGen™ Array Project is ensuring that it has no adverse impact on
the Cook Inlet beluga whale population, which has recently been added to the endangered species list. To
address the beluga issue, ORPC will continue to consult with National Marine Fisheries Service (NMFS) to
guarantee that the TidGen™ Array Project does not further compromise the recovery chances of the beluga
population and to ensure that the project complies with the Endangered Species Act. ORPC initially located its
pilot project, largely due to consultation with NMFS, to an area off of Fire Island known for its low beluga
usage. NMFS was further encouraged by the relocation of the project to the East Foreland Area, and has
continually suggested that an initial Cook Inlet pilot project would be more appropriate in this area (see
Appendix G).
ORPC has been proactively working to develop monitoring technology to ensure that any interactions between
the beluga whales and the project are observed. In pursuing funding for this necessary technology development,
in 2010 ORPC secured a $600,000 grant from the U.S. DOE to monitor beluga whale activity pre- and post-
deployment with advanced passive acoustic monitoring (PAM) technology. Deployment and testing of these
PAM devices in conjunction with continued visual monitoring at the Fire Island site began in August 2010.
Over the winter of 2010-2011, the DOE-funded PAM devices and an additional PAM array deployed by the
ADF&G led Team Cook Inlet Beluga Acoustics (Team CIBA) were deployed at the Fire Island site. Data
analysis from this effort is ongoing and will involve comparing the efficacy of visual monitoring and the
different PAM devices to determine the optimal beluga monitoring practice for Cook Inlet, that will then be
implemented at the East Foreland site to collect information on pre-deployment beluga usage of the site.
Concurrently, as part of ORPC’s testing in Maine, ORPC and Scientific Solutions, Inc are experimenting with
state-of-the-art Active Acoustic Monitoring (AAM) technology that promises to offer real-time project
monitoring to document interactions between marine mammals such as the Cook Inlet beluga whales and the
TidGen™ Array Project. Through the combination of these PAM and AAM devices, ORPC intends to
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positively monitor the project to provide both agency personnel and the general public with data on the
interactions, if any, of beluga whales with the power system, a crucial step to ensuring the project is
environmentally compatible with the Cook Inlet environment.
Habitat
Critical beluga habitat and salmon habitat are also of concern. Studies on these habitats will be conducted as
required through consultation with NMFS and the USFWS. These will be included in a biological Assessment
(BA) on the project that will be submitted prior to receipt of a license for the project.
Archaeological and Historical Resources
ORPC will be in consultation with the State Historic Preservation Office (SHPO) to determine whether there
are any archaeological or historical sites that will be impacted by the TidGen™ Array Project and will perform
any necessary surveys.
Wetlands
There is no expected impact on or use of wetlands, since ORPC devices will be mounted underwater in the
deepest Cook Inlet channels. All of the come ashore points as well as terrestrial power transmission system
options currently under consideration avoid wetlands as well.
Land Development Constraints
The main land development constraints will involve the use of state subsurface lands, which will be addressed
through the Alaska Department of Natural Resources land use permit, and the use of surface land to transmit
power once it is delivered to shore. ORPC has already begun researching potential Right of Way (ROW) issues
and has identified several possible overland routes that will utilize existing utility ROW corridors and willing
private landowners for the terrestrial power transmission infrastructure that will tie the TidGen™ Array Project
into the HEA grid.
Telecommunications Interference
There is no anticipated telecommunications interference as ORPC will design the project to have no impact on
the Kenai Kodiak Cable Company’s fiber optic cable or any terrestrial transmission lines
Aviation Considerations
The only concerns with aviation would be with species that dive in Cook Inlet. ORPC will determine if any
species of concern might use the project area at the depths of the TidGen™ devices, and perform any studies as
required.
Visual and Aesthetic Impacts
Because ORPC power systems are fully submerged underwater, they are completely invisible from the surface,
and have no effect on natural water landscapes.
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
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Identification of other funding sources
Projected capital cost of proposed renewable energy system
Projected development cost of proposed renewable energy system
The complete Cook Inlet TidGen™ Project through construction and the first year of operation is anticipated to
cost $8,696,494. Of this, $4,673,404 is attributed to the addition of an array of three TidGen™ devices and one
year operation of the TidGen™ Power System. ORPC is requesting $2 million from AEA to complete the
TidGen™ Array Project and has already been awarded $2 million from AEA Round 4 to complete the
installation and operation of the single-device TidGen™ Power System. ORPC’s matching funds will amount
to a total of $4,696,494 towards the entire project. The projected capital cost of the TidGen™ Array Project is
anticipated to be $7,283,777. ORPC anticipates spending $1,412,717 on the project development costs.
4.4.2 Project Operating and Maintenance Costs
Include anticipated O&M costs for new facilities constructed and how these would be funded by the
applicant.
(Note: Operational costs are not eligible for grant funds however grantees are required to meet
ongoing reporting requirements for the purpose of reporting impacts of projects on the communities
they serve.)
The annual maintenance will require raising each TidGen™ device in the power system to the surface for
cleaning and inspection. Major maintenance will involve towing the devices to shore to do a generator
overhaul, general tune up, and bearing and seal replacement. ORPC also anticipates incurring significant
environmental monitoring expenses, especially in the early years of the project. Based on recent experience
with the Beta TidGen™ Power System (details in Appendix F) and the commercial TidGen™ Power System
being installed in Maine, ORPC has carefully projected O&M costs for the TidGen™ Array Project. The initial
annual O&M budget, with environmental monitoring costs levelized, is $320,000 for the 600 kW TidGen™
Array Project (in 2011), approximately 16 cents per KWh, with virtually all of these expenses incurred in
Alaska for parts, supplies, labor, and service contracts to local marine service companies. Once the project is
expanded to 5 MW, annual O&M costs are projected to be $1.4 million per year (in 2011$), approximately 10
cents per KWh. At 100 MW, these costs will increase in absolute terms to $13.5 million (in 2011$), decreasing
on a per KWh basis to approximately 6.5 cents per KWh. ORPC is not anticipating applying for grant funding
for this portion of the project but rather plans to support these costs through internal funding sources.
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 potential buyers for the electricity generated by the TidGen™ Array Project and the larger Cook Inlet Tidal
Energy Project include all the local Railbelt utilities. At this point, however, Homer Electric Association is the
primary utility being considered, as they own the nearby electrical infrastructure. A power purchase agreement
(PPA) will be negotiated in the feasibility phase of the TidGen™ Array Project. Currently avoided costs, the
benchmarks for PPA’s in Alaska, for Railbelt utilities range from $0.04 per kWh to $0.135 per kWh. For the
Project to be economically attractive to potential investors, the electricity generated needs to be sold at rates
above the current avoided cost of fossil fuel based generation in Alaska. The cost competitiveness of ORPC’s
tidal energy generation relies initially on federal and state subsidies, tax rebates, waivers, and incentives
available to ORPC or to the utilities distributing ORPC’s renewable energy. Currently, the cost of electricity
generated from ORPC’s systems exceeds the wholesale price of electricity in most markets in the U.S.,
especially those heavily dependent on fossil fuels, such as Alaska; therefore, without incentives, ORPC’s power
systems may not produce electricity at rates that make economic sense to utilities that purchase or distribute the
electricity.
Since the Cook Inlet Tidal Energy Project will be built out in stages over a multi-year period, different phases
of the project will attract varying returns as certain common costs can be amortized over a larger base, and high
power prices and sales of renewable energy attributes will likely become available for later project stages,
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enhancing project returns. Based on a cash flow analysis of the 5 MW Cook Inlet Tidal Energy Project, ORPC
has determined an internal rate of return on pre-tax cash flow of 12.5% to be a reasonable goal to attract private
investment capital to fund the capital requirements of the expanded project. As a result the power sales rate
would need to be set at an initial price of $0.271 per kWh in 2011 dollars. With further up front grant funding
this power sales rate would be reduced: for instance if the Round 5 funding is secured the rate would fall to
$0.257 per kWh.
4.4.4 Project Cost Worksheet
Complete the cost worksheet form which provides summary information that will be considered in evaluating
the project.
Download the form, complete it, and submit it as an attachment. Document any conditions or sources
your numbers are based on here.
Attached after Page 33 of application.
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
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ORPC's Cook Inlet Tidal Energy Project promises to bring long term, diversified benefits to the state of
Alaska and its people. Through the TidGen™ Array Project, ORPC will develop and install a power system
that produces clean, reliable, schedulable and reasonably priced electrical energy from locally available
hydrokinetic resources, replacing environmentally unsound, volatile priced fossil fuels. Significant, far-
reaching benefits include: (1) developing Alaska’s world-class tidal energy resources using the most
environmentally benign form of electricity generation utilizing U.S. technology—and by doing so, attracting
hundreds of millions of dollars of new investment to the state; (2) creating new high-paying technical jobs;
(3) bringing in significant new tax revenues; and (4) creating numerous non-economic public benefits for
Alaskans.
Table 1 below summarizes the numerous quantifiable benefits of the 600 kW TidGen™ Array Project and
subsequent expansion of the Cook Inlet Tidal Energy Project. As an initial stage of a much larger project, the
TidGen™ Array Project should be viewed as a pilot project. On a dollars-per-MW basis, the pilot will be
extremely expensive compared to the local utility’s existing generation options, primarily due to the high
costs of permitting and licensing (which must be amortized over a very small project), environmental
monitoring, and other economies of scale, which will come with future project installations. In addition, at
fuel prices published in AEA’s Renewable Energy Fund Round 5 Model, in the foreseeable future, no
hydrokinetic project would be able to compete with Alaska’s existing natural gas based generation options.
However, when the external environmental cost of fossil fuels, avoidance of carbon offset payments, job
creation, ORPC’s investment, and the Alaskan content of the project’s O&M expenditures are taken into
account, even the 600 kW TidGen™ Array Project becomes economically attractive. Moreover, as Table 1
illustrates, once ORPC expands the generating capacity of the Cook Inlet Tidal Energy Project to 100 MW,
the project’s advantages are more than considerable.
Generation costs avoided by Alaskan utilities calculated in Table 1 are the product of electricity generated by
the proposed project (in kWh) and natural gas costs, social costs of carbon, and O&M costs on a per - kWh
basis found in AEA’s Renewable Energy Fund Round 5 Model (Railbelt south of Alaska Range). These
values are calculated annually for a 15-year project life for the pilot (600 kW and 5 MW) phases of the
Project and for a 25-year project life for the commercial phases. A net present value calculation at a 3%
discount rate is then performed. For a 600 kW facility, the NPV of the generation costs for Alaskan utilities
is calculated to be $2,066,302. The generation costs of the proposed TidGenTM Array Project are restricted to
O&M costs, as ORPC’s hydrokinetic projects use no fossil fuels. For a project of this size (600 kW) and for
the stage of commercialization of this project, O&M costs are quite high, at $0.016 per kWh. The NPV of
these costs over a 15-year project life at 3% is $3,153,383. The net benefit of the proposed project is thus -
$1,087,080 (Section 2.7.5). As Table 1 illustrates, ―Generation Benefits‖ gradually increase to
+$270,741,427 as the Cook Inlet Tidal Energy Project expands to 100 MW.
ORPC conducted its own internal economic impact analysis to assess the effect of the project on the Alaska
economy. It then verified its analysis using the Marine and Hydrokinetic (―MHK‖) Jobs and Economic
Development Impact Model (―JEDI‖), designed in 2010 by Marshall Goldberg of MRG & Associates under
contract to the National Renewable Energy Laboratory (―NREL‖).
Using NREL’s MHK JEDI model, ORPC has quantified the number of jobs that each stage of the project
would generate. The TidGen™ Array Project is expected to generate 28 construction period jobs. Based on
its recent hiring experience, ORPC forecasts that jobs in this sector will pay an average of $60,000 per year,
resulting in an aggregate payroll of approximately $2.52 million during the 18-month construction,
fabrication and installation. During operation, the project would generate four permanent jobs, resulting in
$3,780,000 of direct earnings over a 15 year period. The recipients of these direct earnings will in turn spend
money, creating multiplier effects that will bring even more economic benefits and induced output to the
region, leading to additional new jobs, increased wages, and more personal disposable income. The Institute
of Social and Economic Research (ISER), part of UAA, states that for Anchorage, this multiplier effect is
between 1.3 and 1.6 but would be lower for smaller population areas. Hence 1.35 was used (please see
http://www.iser.uaa.alaska.edu/publications/client/afnjobs/ecmulti.pdf). Table 1 assumes a multiplier of 1.35,
resulting in construction period induced output of $3.4 million and operating period induced output of $5.1
million over a 15 year period. In total, the Alaska Jobs Induced Benefits for the 600 kW project are
$14,805,000. Generation Benefits (-$1,087,080) and Alaska Jobs Induced Benefits (+$14,805,000) result in
$13,717,920 total benefits for the project. Compared to total project costs of $8,696,494, the benefits to
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costs ratio of the project is 1.58. As the project expands, the number of jobs created and sustained grows
accordingly. By the time it approaches 20 MW, the project will have created hundreds of jobs and hundreds
of millions of dollars of jobs related benefits for Alaska. Table 1 shows the number of jobs created in each
phase of the project as it expands to 100 MW and the corresponding benefits.
Table 1.
Cook Inlet Tidal Energy Project Benefits and Costs
Project Size 600 KW 5.05 MW 20.45 MW 100.15 MW
Project Life Assumed 15 15 25 25
Project Benefits
Generation Benefits (NPV @ 3%)
Generation Cost Avoided by Alaskan Utilities $2,066,302 $14,833,394 $102,484,692 $407,704,316
Less: Generation Costs of Proposed Project $3,153,383 $12,137,682 $45,495,275 $136,962,889
Generation Benefits -$1,087,080 $2,695,712 $56,989,417 $270,741,427
Alaska Jobs Induced Benefits
Construction Period Jobs Created 28 95 135 677
Earnings During Construction 2,520,000 14,265,000 24,210,000 121,851,000
Output Induced by Construction Period Jobs 3,402,000 19,257,750 32,683,500 164,498,850
Operating Period Jobs Created/Sustained per Year 4 16 33 155
NPV of Annual Earnings During Operation 3,780,000 14,310,000 49,000,000 233,033,333
NPV of Annual Output Induced by Operating Period Jobs 5,103,000 19,318,500 66,150,000 314,595,000
Alaska Jobs Induced Benefits $14,805,000 $67,151,250 $172,043,500 $833,978,183
TOTAL PROJECT BENEFITS $13,717,920 $69,846,962 $229,032,917 $1,104,719,610
Project Costs
Capital Cost $7,283,777 $38,197,329 $138,104,760 $592,316,388
Development Costs $1,412,716 $2,239,927 $3,550,247 $4,948,964
TOTAL PROJECT COSTS $8,696,494 $40,437,256 $141,655,007 $597,265,352
Benefit to Cost Ratios
Generation Benefits / Cost Ratio -0.13 0.07 0.40 0.45
All Benefits/Cost Ratio 1.58 1.73 1.62 1.85
The capital and development costs for each stage of the ORPC project include all expenditures that occurred
for the prior stage of the project.
Utility Generation is calculated using Railbelt South of Alaska Range prices supplied by AEA, which include
fuel costs, social cost of carbon and local O&M costs. Cost of ORPC generation consists of ORPC's O&M Costs
which start at 16 cents per KWh for the 600 KW project, declining to 6.5 cts/KWh (2011$) for the 100.15 MW and larger projects.
The numbers for construction and operating period jobs for the 600 KW case and the 5.05 MW case were calculated using the
Marine and Hydrokinetic Jobs and Economic Development Impact Model designed in 2010 by Marshall Goldberg of MRG &
Associates under contract to the National Renewable Energy Laboratory. For the 20.45 MW and 100.15 MW cases the jobs
numbers are ORPC estimates. Earnings are assumed to be $60,000 on average per employee, which is ORPC's recent
experience. Output induced by the jobs is calculated using a 1.35 multiplier (source: ISER, referenced on p. 21),
Fossil Fuel Displacement
ORPC’s proprietary technology can contribute significantly to reducing the use of fossil fuels and their
associated polluting greenhouse gas and other emissions (NOx, SOx). Table 2 below illustrates the annual
amounts and costs of natural gas displaced and the amount of CO2 emissions avoided over the next ten years
as the first and subsequent stages of the Cook Inlet Tidal Energy Project progress.
By the end of 2015, as Table 2 illustrates, the TidGen™ Array Project will displace almost 18 million cubic
feet of natural gas, corresponding to $120,431 of cost savings and 948 tons of avoided CO2 emissions for the
state. By 2023, the subsequent stages of the Cook Inlet Tidal Energy Project will successfully displace
approximately 4.2 billion cubic feet of natural gas each year, saving the state $30.2 million in fuel costs and
avoiding 221,205 tons of CO2 emissions annually. This analysis uses Alaska Energy Authority’s projections
for natural gas costs (2009 CEA/CP Gas Contract using PACI), but because natural gas costs have been
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historically volatile, the cost savings over time may be substantially greater, since ORPC’s proprietary
technology uses absolutely no fossil fuels.
The relatively rapid increase in capacity shown in Table 2 is possible because ORPC’s proprietary
technology is scaled up through replication, rather than by building increasingly larger or distinctly different
units. The core of the technology is always the TGU. Once ORPC installs the first successful TidGen™
Array Project and obtains its FERC operating licenses for full development of the site, expanding beyond 5
MW will incur limited additional development costs or permitting delays.
Table 2.
Fossil Fuel Displacement, Fuel Cost Savings, CO₂ Emissions Avoided, and Carbon Costs Avoided
as a Result of ORPC's
Cook Inlet Tidal Energy Project
Year 2014 2015 2017 2020 2023
Megawatts of Installed Capacity in Operation 0.15 0.60 5.05 20.45 100.15
Kilowatt-hours Generated by ORPC 337,768 1,678,988 17,364,984 82,837,225 391,819,299
Natural Gas Use Avoided by AK Utility (Using AEA's
10,640 Btu/Kwh) (Mcf) 3,594 17,864 184,763 881,388 4,168,957
2009 cea/cp Gas Contract using PACI (Source:
AEA REF Rd 5 Model) ($/Mcf) $6.64 $6.74 $6.91 $7.10 $7.24
Natural Gas Cost Avoided $23,873 $120,431 $1,276,755 $6,259,815 $30,178,484
20 Yr NPV of Natural Gas Cost Avoided @ 3%
Not
Calculated $1,593,876 $18,222,741 $76,626,874 $302,593,118
Avoided Metric Tons of CO₂ Emissions 191 948 9,804 46,766 221,205
Carbon Price (Source: AEA REF Rd 5 Model)
($/Mcf) 1.32 1.36 1.44 1.57 1.72
Carbon Costs Avoided $4,740 $24,268 $266,283 $1,388,055 $7,174,286
20 Yr NPV of Carbon Costs Avoided @ 3%
Not
Calculated $367,071 $4,837,565 $20,906,915 $85,665,488
Job Creation and Capital Investment
The TidGen™ Array Project is an essential part of the commercialization of ORPC’s proprietary technology
at the most robust tidal sites in the United States. From 2013 through 2022, ORPC anticipates installing 100
MW of capacity through the various stages of the Cook Inlet Tidal Energy Project, which at a cost of
approximately $30,000 for the first kilowatt to $6,000 for the 100,000th kilowatt will correspond to
approximately $597 million of capital investment in Alaska (Table 1). ORPC’s investment in Alaska will
also result in substantial job creation and support.
The success of the ORPC’s project development subsidiaries has depended heavily on its ongoing dialogue
with the local communities at all of its project sites. ORPC first proved its positive economic impact on local
communities in Maine through its 2008 prototype TGU project, which at its height employed 37 direct hire
and local subcontractors. Next, the fabrication, assembly, installation and testing of the Beta TidGen™
Project supported 40 to 60 jobs, and has introduced several million dollars into the local Maine economy
(Summary Report in Appendix F). Data from ORPC’s commercial TidGen™ Power System installation in
Maine will further inform economic benefits from the TidGen™ Array Project.
Using the Marine and Hydrokinetic Jobs and Economic Development Impact Model designed in 2010 by
Marshall Goldberg of MRG & Associates under contract to the National Renewable Energy Laboratory,
ORPC estimates that in Alaska within 18 months, at the peak of fabrication and installation, the TidGen™
Array Project will support 25 to 30 new and existing jobs across a variety of skill levels --
scientific/engineering R&D, manufacturing and assembly, and marine services sectors -- driven by R&D; the
procurement of components; the assembly, and deployment and ongoing monitoring of equipment. Over the
long-term operating period, the TidGenTM Array Project should result in four to five new jobs. Based on its
recent hiring experience, ORPC forecasts that jobs in this sector will pay an average of $60,000 per year,
resulting in an aggregate payroll of approximately $2.25 to $2.70 million during the 18-month construction,
fabrication, and installation period, and $240,000 annually during long-term operation. The recipients of this
income will in turn spend money, creating multiplier effects that will bring even more economic benefits to
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the region, leading to additional new jobs, increased wages, and more personal disposable income. By 2023,
ORPC will have invested hundreds of million dollars of capital in Alaska, resulting in 670 jobs at the peak of
project construction and 155 jobs over the long term.
ORPC currently has a staffed office in Anchorage and has already begun expanding staff with the
development of the first Alaskan projects (Cook Inlet and Nenana), which are currently being permitted and
have retained local contractors for much of this activity. ORPC intends to hire local fabricators, assembly
and deployment contractors, a full time project manager, and technical personnel. In addition, local marine
service companies will be contracted for deployment and maintenance; local scientific companies will be
used for site analysis and environmental impact assessments; local engineering firms will be contracted for
design of mooring and power transmission systems, and the local ports will be contracted for TidGen™
Array Project support. Final assembly of TidGen™ and OCGen™ Power Systems for Cook Inlet and
subsequent projects will be done at the Port of Anchorage and Port MacKenzie with Alaskan labor. Local
ports and marine service industries will secure significant long term contracts in the installation, operation,
and maintenance of the TidGen™ and OCGen™ systems, and local scientific companies will be utilized to
continually monitor and refine the installations. ORPC has partnered with many Alaskan companies and
institutions, such as Terrasond LTD, LGL Alaska Research Associates, Inc., Aquacoustics, PND Engineers,
Inc., March Creek, local marine service companies, and local ports (various letters of support are in
Appendix B). In addition, the University of Alaska, Anchorage and the Alaska Center for Energy and Power
are engaged as partners in the Cook Inlet TidGen™ Project, creating opportunities for educators, researchers
and students alike by bringing a tidal energy focus to the university system.
Operation and Maintenance: ORPC has carefully projected O&M costs for the TidGenTM Array Project. The
initial annual O&M budget will be $320,000 for the TidGenTM Array Project, (approximately 16 cents per
KWh), increasing to approximately $1.4 million once the Cook Inlet Tidal Energy Project expands to 5 MW
(approximately 10 cents per KWh ) and $13.5 million (2011 dollars) for the 100 MW project (approximately
6.5 cents per KWh). Essentially all of the O&M budget for the Cook Inlet Tidal Energy Project will be spent
locally in Alaska.
Revenues
The TidGen™ Array Project will be interconnected to the Railbelt Grid through HEA, and the electricity
generated will be delivered to their customers. As the Cook Inlet Tidal Energy Project expands, electricity
could be delivered to other Railbelt utilities as well. For the Project to be economically attractive to potential
investors, ORPC will need revenue support above the current ―avoided cost‖ by the State of Alaska and
Alaska’s local utilities to establish a power purchase/sales price that takes the externalities of fossil fuels and
utilization of a local renewable source into account. Assuming a power purchase agreement for the 5 MW
Project, the Project will need to sell its power at an initial price of at least $0.271 per kWh (in 2011 dollars)
to provide the minimum rates of return and cash flows to attract private investment capital and debt to fund
the project’s capital requirements. If the Round 5 grant funds are awarded this power purchase rate would be
reduced to $0.257 per kWh. This tariff level does not include additional premia, prevalent in other parts of
the country, for the renewable, emission free attributes of the energy sold and may be below what would be
needed if additional renewable energy attributes do not become available. If Alaska or the nation adopts a
Renewable Portfolio Standard, then the additional revenue from the sale of renewable energy credits could
enhance the revenue stream to ORPC and economic appeal of the TidGenTM Array Project. Table 3 below
shows ORPC’s forecast for revenues from electricity sales as the Cook Inlet Tidal Energy Project progresses,
growing from $496,999 in 2015 to $138 million in 2023 and beyond.
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Table 3.
Revenues from the Multi-Stage Cook Inlet Tidal Energy Project
Year of Operation 2014 2015 2017 2020 2023
Megawatts of Installed Capacity in Operation (1 yr after
Installation) 0.15 0.60 5.05 20.45 100.15
Kilowatt-hours Generated by ORPC 337,768 1,678,988 17,364,984 82,837,225 391,819,299
Power Price to be Negotiated ($/MWh) Esc 2.2% 289.64 296.01 309.18 330.04 352.30
Electricity Sales Revenues $97,831 $496,999 $5,368,882 $27,339,319 $138,038,637
Production Tax Credit ($/KWh) 0.011 0.011 0.011 0.011 0.011
PTC Revenues $3,715 $18,469 $191,015 $911,209 $4,310,012
TOTAL REVENUES $101,546 $515,468 $5,559,897 $28,250,528 $142,348,649
Potential Additional Annual Incentives (i.e. tax credits)
Marine and hydrokinetic energy production with a minimum capacity of 150 kW is eligible for federal
renewable electricity production tax credits (PTC) of $0.01 per kWh. Table 3 above shows the PTC
contributing an additional annual incentive of $18,469 in 2015, growing to about $4.3 million by 2023.
ORPC anticipates that future tax credits will increase to match the $0.02 per kWh currently offered for wind
and biomass projects, leading to higher all-in sales revenues to ORPC and shorter payback periods.
Potential Additional Annual Revenue Streams (i.e. green tag sales or other renewable energy subsidies or
programs that might be available)
Carbon Offset Payments: As shown in Table 2, the 600 kW TidGenTM Array Project results in the
avoidance of fossil fuel based generation of 1,678,988 KWh of electricity by Alaskan utilities.
Accordingly, using AEA’s Renewable Energy Fund Round 5 Model, ORPC calculates the social cost of
carbon avoided by these utilities to be $24,268, increasing to $7,174,286 for the expanded 100 MW
project. On a present value basis (at a 3% discount rate), these savings correspond to $367,071 for the
TidGenTM Array Project and to $85,665,488 for the expanded 100 MW project.
Investment Tax Credits: On February 17, 2009, President Obama signed the American Recovery and
Reinvestment Act of 2009. Section 1603 of the Act’s tax title appropriates payments to qualified
applicants in an amount generally equal to 10% or 30% (depending on property type) of a property’s
basis. To qualify, an energy property must be placed in service during 2009 or 2010 (or after 2010 if
construction was begun on the property during 2009 or 2010). On July 20, 2011, twenty-four state
governors, members of the bipartisan Governors’ Wind Energy Coalition, asked the Obama
Administration to extend the investment tax credits and production tax credits for renewable energy for
seven years. It is likely therefore that these deadlines will be extended, as they have been for other
renewable energy technologies in the past. ORPC expects to take advantage of this benefit, reducing the
capital investment required in the project and enhancing the economic returns to project investors.
Renewable Energy Credits: Along with carbon offsets and other incentive programs, Renewable Energy
Credits (REC) are part of a growing movement. Also called Green Tags or Tradable Renewable
Certificates, RECs are certificates issued by a government agency to a power company (such as ORPC)
that utilizes environmentally friendly methods of generating electricity. Potential RECs on the order of
$0.04 per kWh would add $67,160 of annual revenues for the TidGenTM Array Project and $15.7 million
annually for the 100 MW expanded project. Since ORPC has already taken PTCs (in lieu of investment
tax credits) of $0.011 per kWh into account, to be conservative, no RECs are shown in Table 1.
Payback Period
Total payback period corresponds to the amount of time required for annual operating income to accrue
sufficiently to cover the cumulative installed project costs of adding capacity to the system. Calculating with
investment tax credits (ITC) rather than with PTC effectively reduces the capital cost by about 30%. Although
the ITC is scheduled to expire in several years, it has been extended for eight years for the solar industry, and
ORPC assumes that it will be similarly extended for the tidal energy industry. Assuming 30% ITC, the project
payback period is 11.15 years (Table 4).
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Table 4.
Cook Inlet Tidal Energy Project Payback Calculation
($000)
End of Year: 2014 2016 2018 2020 2022 2024 2026
Operating Year Number: 1 2 & 3 4 & 5 6 & 7 8 & 9 10 & 11 12 & 13
Assumptions:
MW Added 0.15 1.05 6.65 12.6 46.4 33.3 0
Total MW in Operation 0.15 1.20 7.85 20.45 66.85 100.15 100.15
Cost of New MW $4,023 $10,709 $43,640 $83,283 $271,099 $184,511 $0
Investment Tax Credit Assumed 30%
MWH Produced 338 5,620 45,302 134,469 415,799 783,639 783,639
Sales Price per KWH esc at CPI per AEA Rd 5 Model $289.64 $302.52 $315.98 $330.04 $344.72 $360.05 $376.07
Operating Income Calculations ($000):
Revenues from Electricity Sales 98 1,689 14,196 44,013 142,237 279,114 291,530
O&M, Environmental Monitoring, Insurance and
Mgmt Costs 457 1,766 4,554 8,752 22,788 42,444 44,305
Operating Income (Excludes PTC) -359 -77 9,642 35,261 119,449 236,671 247,226
Payback Calculations ($000):
Beginning Project Costs 0 3,176 10,749 31,654 54,691 125,011 17,498
Plus: Incremental Project Costs 4,023 10,709 43,640 83,283 271,099 184,511 0
Less: Investment Tax Credit 1,207 3,213 13,092 24,985 81,330 55,353 0
Less: Operating Income -359 -77 9,642 35,261 119,449 236,671 247,226
Ending Project Costs 3,176 10,749 31,654 54,691 125,011 17,498 0
Payback Years NA for the 600 KW TidGen Project
Payback Years 11.15 for the Expanded 100.15 MW Cook Inlet Tidal Energy Project
Non-Economic Public Benefits to Alaskans (over the lifetime of the project)
Tidal energy represents one of the most environmentally benign and potentially cost effective methods for
generating electricity, and Alaska’s world-class tidal energy resources are as robust as any in the United
States. Because these resources’ power density is so high, developing them is both technically and
environmentally appealing. Working in collaboration with ORPC, the University of Alaska, already widely
recognized for excellence in the fields of environmental science and power generation, will gain even more
technical experience through its connection to a world class, first of its kind green power resource like the
TidGen™ Array Project.
In the long run, with the mass production of ORPC’s proprietary technology, many areas of rural Alaska
with high energy costs will become new markets for this technology, at prices that will be attractive
compared to those of existing power technologies. Numerous sites in the Gulf of Alaska, the Aleutian Islands
and Southeast Alaska have already demonstrated exceptional tidal energy potential. As ORPC develops this
industry and capacity within the state of Alaska, it will also expand and contribute its knowledge and skills
toward the development of new projects around the world. In this way, the TidGen™ Array Project will help
to make Alaska the center of tidal energy generation expertise. Alaska, which is located along major
shipping and future circumpolar routes, and which possesses the second highest tidal range in the world
(Cook Inlet) as well as an estimated 95% of the nation’s total tidal power potential (estimated at an
astounding 109 TWh per year) is perfectly situated to become a central figure in the world's tidal energy
industry.
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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
Business Structure
ORPC’s business plan includes the goal of developing tidal and hydrokinetic technology and projects to serve
the Railbelt and rural Alaskan needs. To accomplish this, ORPC is pursuing a two pronged approach: 1)
develop utility-scale technology that delivers emission-free, predictable, reliable electricity to the Railbelt
energy grid at a price that is competitive with existing and future power generation options; and 2) concurrently
develop a rural micro-gird scale technology that will be portable, easy to deploy and maintain with rural
Alaskan infrastructure, and that will be price-competitive with existing diesel electrical generation systems as
well as future energy options. The rural micro-grid technology is the RivGen™ Power System, which will be
deployed at ORPC’s Nenana site. The utility-scale development will take place in Cook Inlet beginning with
the TidGen™ Array Project. ORPC through business discussions with HEA is currently exploring options for
the business structure that will be best suited to the Cook Inlet Tidal Energy Projects. This will likely either be
an IPP structure or a private industry/utility partnership, yet to be finalized as the two entities learn how best to
collaborate on the project.
In the early phases of the Cook Inlet projects, ORPC has focused on the preparation needed to develop the
world-class tidal energy that exists there. During this period, company staffing consisted of two Alaskans. The
Alaska Projects Director, Doug Johnson, continues to lead strategic development, developing and managing the
relationships with communities, partners and agencies that are needed for successful business growth through
new projects. The Alaska Director of Project Development, Monty Worthington, manages the day-to-day
activities that ensure project success. Mr. Worthington has coordinated the work of many local firms under
contract to assist with site assessment and permitting for the TidGen™ Array Project. ORPC has since hired
two additional employees in Alaska to provide overall administrative support and supervise RivGen™ projects.
A project manager for the Cook Inlet projects will be hired by 2013.
Upon completion of the early phases of ORPC’s projects in Cook Inlet, a new organizational structure will be
developed with a detailed staffing plan to support the assembly, deployment and operation of the TidGen™
Power System. TidGen™ Array Project testing will take place over a full year; upon its completion, ORPC will
develop the pilot project at the East Foreland in stages to 5 MW, operate this for several years to collect the data
necessary to inform a commercial project, and then develop the site to its full potential through a commercial
project (100 MW or more). Several Alaska-based companies have contributed to the feasibility and
reconnaissance work on the project, and will be contracted for deployment and maintenance of the system once
it is in place. Power sales agreements with HEA and other local utilities will be developed and executed to
assure the economic sustainability of ORPC’s projects in Cook Inlet. ORPC has entered into early
conversations with HEA and other utilities and continues to provide them with periodic updates.
Subsequent expansion of OCGen™ Power Systems within the Cook Inlet site will take place as funding is
secured and production is ramped up. During this period, the business structure will change from a development
company model to an operating company model. As Cook Inlet settles into a power production mode, ORPC
will develop other tidal and river sites throughout the state and systematically bring them into production.
Funding of Maintenance and Operation
ORPC will fund TidGen™ Project maintenance by reinvesting revenue generated by the project back into its
Renewable Energy Fund
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O&M. Revenue will be diverted to support this function before being utilized in any other aspect of ORPC’s
business in Alaska. If needed, ORPC can also utilize funds from its parent company to subsidize any lack of
internal revenue during the TidGen™ Array Project’s development.
Operational Issues
ORPC has developed the following table to address these potential issues, similar to operational issues in the
marine industry, and the contingency plan associated with each:
Contingency Probability Impact Mitigation Response
TidGen™ TGU
complete breakaway
from bottom support
frame
Improbable TGU floats to the
surface and
becomes a
navigation hazard
High safety factor on
attachment of TidGen™
TGU to bottom support
frame and a pressure
activated GPS beacon to
notify control center and
track position
Recover TGU and
repair
TidGen™ TGU
partial breakaway
from bottom support
frame
Low Reduced TGU
output and efficiency
High safety factor on
attachment to bottom
support frame
Recover TGU and
repair
Foreign object
strikes TGU
Low No impact on TGU -
No loss of output
Structural damage
to TGU - No loss of
output
Structural failure of
TGU- loss of TGU
output
Device operates at depths
below floating objects and
above the ocean floor
Device is designed to
operate at partial output
None
Recover and
effect repairs
Recover and
replace while
repairs are
effected
Flotsam and jetsam
entangles TGU
Low Loss of TGU output
- reduced device
output
Device is designed to
operate at partial output;
notice to mariners of device
deployment area
Clear debris
Loss of electrical
power connection
Low Loss of output
power
Connectors are protected by
structural members from
strikes by foreign objects
Retrieve device
and repair
Loss of electrical
data connection
Low Loss of
instrumentation data
Connectors are protected by
structural members from
strikes by foreign objects
Retrieve device
and repair
TGU generator
failure
Low Reduced output
power
Generator is sealed against
water intrusion and
designed to operate at the
depths and temperatures
contemplated
Retrieve device
and repair
TGU mechanical
failure-couplings,
shaft, bearings, foils
Low Reduced output
power
Materials and bearings will
be lab tested in water with
high silt content to ensure
they can withstand Cook
Inlet environmental
conditions.
Schedule
maintenance at
appropriate
intervals indicated
by materials
testing
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Excessive vibration Low Increased wear Rigid design with high
strength.
Evaluate and
repair if excessive
Emergency shut
down
Moderate Loss of output
power
Power electronics will
unload the generators and
short all generator windings
to electrically halt the TGUs
Determine cause;
restart when
prudent or repair if
necessary
Operational costs
Operational costs will include the ongoing annual maintenance described earlier, as well as continual TidGen™
Array Project monitoring to ensure it is operating within expected parameters with no operational issues. The
bulk of this monitoring will be done automatically, but periodical manual checks of these parameters will also
be performed. It is expected that this ongoing operation, combined with maintenance for the TidGen™ Array
Project will cost $180,400 annually. Since the TidGen™ Array Project will utilize the Railbelt Grid for power
distribution; there are no expected ongoing costs for back up.
Reporting
ORPC will collect data on the performance and ongoing costs of the TidGen™ Array Project throughout the
duration of the FERC pilot license for the project. As this information will be critical in assessing the
economics of a the larger commercial-scale build out in Cook Inlet, it will be essential to ORPC that it is
accurate and rigorously analyzed. ORPC will commit to share this data on energy produced, associated
operating costs, and project benefits and savings with the Alaska Energy Authority and the public.
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.
Readiness for Proposed Grant
ORPC established the technical viability of its proprietary turbine generator unit (TGU) in 2008 during the
TGU Demonstration Project, a yearlong testing program carried out at ORPC’s tidal energy sites in
Western Passage and Cobscook Bay, Maine. The TGU Demonstration Project, which was the first to
generate electricity from Bay of Fundy tidal currents without the use of dams or impoundments, included
the engineering, fabrication, assembly, deployment, and testing of a prototype TGU about one third the
size of the TidGen™ TGU. The project validated the TGU’s basic design as well as its ability to generate
electricity, to operate unattended, and to self-start in reversing tidal flows.
In 2010 ORPC successfully completed its second tidal energy demonstration project, the Beta Pre-
Commercial TidGen™ Power System Project (Beta TidGen™ Project, summarized in Appendix F). The
Beta TidGen™ Project included deployment of the largest hydrokinetic device ever deployed in U.S.
waters (Figure 1). The Beta TidGen™ System is the technological precursor to the grid-connected
TidGen™ Power System that ORPC plans to install in Cobscook Bay in spring 2012. It was comprised of
four primary components: 1) ORPC’s beta pre-commercial turbine generator unit (Beta TGU) and
associated power electronics which has a maximum design capacity of 60 kW; 2) ORPC’s Energy Tide 2
research and testing vessel, from which the Beta TidGen™ System was deployed; 3) the mooring system
for the Energy Tide 2; and 4) the performance data acquisition and environmental monitoring systems.
Performance test results show that the TGU’s electrical output meets or exceeds expectations for the full
range of current velocities encountered.
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Figure 1. The Beta TidGen™ System on the way to its test site mooring.
While monitoring the Beta TidGen™ Project, ORPC worked in conjunction with the U.S. Coast Guard
(USCG) Research and Development Center and successfully demonstrated that the Beta TidGen™ System
could provide usable power to the USCG station in Eastport, Maine and potentially to other USCG
facilities that are adjacent to high tidal or river current areas. To accomplish this, tidal power harnessed in
Cobscook Bay by ORPC’s Beta TidGen™ System was used to charge battery banks that were periodically
delivered to the USCG pier to be discharged into the USCG’s 41-foot Utility Boat, mainly to heat the
engines. The Beta TidGen™ System operated without mechanical failures over the course of the
demonstration period, charging the battery banks 19 times to deliver a total of 191 kilowatt-hours of
energy to the shore tie connection. This project constituted the first practical application of tidal energy by
a U.S. federal agency.
Figure x. US Coast Guard Launch with Battery Bank
In 2012, as part of the Maine Tidal Energy Project, ORPC will build and install its first grid-connected
tidal energy power system, the TidGen™ Power System, in Cobscook Bay, immediately adjacent to the
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Bay of Fundy. Over the next four years, ORPC will expand the capacity of this TidGen™ Power System
in Cobscook Bay, and add OCGen™ Power Systems at Kendall Head and Western Passage to reach the
pilot project limit of 5 MW.
Readiness for the proposed Project will be facilitated by the $2 million AEA Round 4 funding awarded in
2011. Once Round 4 funding is received, ORPC is poised to use it immediately to install and operate the
initial TidGen™ Power System and collect data necessary to inform the TidGen™ Array Project. ORPC
has already begun project development at the East Foreland site in earnest with company funds. This has
included contracts with UAA to perform circulation modeling, the deployment of an array of Acoustic
Doppler Current Profilers to locate the optimal pilot project location, and will continue with the collection
of geophysical data in 2011 and environmental and geotechnical data in 2012.
ORPC has begun staffing for the TidGen™ Project in advance of deployment, and now has a team of
nearly 30 engineers and staff distributed among its three offices in Anchorage, and Portland, and Eastport,
Maine. ORPC has also entered into strategic partnerships with contractors, landowners, municipalities,
utilities, and nonprofit organizations that will streamline the implementation of the Project as it progresses.
Other Grants/Awards
To date, ORPC has received commitments of more than $39 million in private and public financing,
including $20.75 million in private equity and equity bridge financing and more than $19 million in state
and federal government awards (please see Appendix H for table detailing these awards).
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.
ORPC’s efforts in Alaska have received enthusiastic support from the public, private industry, and
government organizations. From stakeholder meetings and personal visits, it is clear that Alaskan
organizations and communities see the potential tidal energy has to help diversify the sources of our
electricity. Letters of support from some of our partners, including Homer Electric Association, the utility
for the East Foreland area, are included as appendices.
ORPC is working carefully with scientists, fishers, and the National Marine Fisheries Service to ensure
that adequate means are in place to both understand beluga whales and fishes’ use of the project area and
monitor their interactions with any deployed devices. ORPC continues to consult with stakeholders,
agencies, and the public through regular project update mailings and meetings, addressing any concerns in
a collaborative, proactive manner. In these ways, ORPC maintains ongoing community involvement and
public support of the 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
The budget for the TidGen™ Array Project including the project development and single-device
TidGen™ Power System installation and operation amounts to $8,696,494. Of this $2,000,000 will be
provided by ORPC’s AEA Round 4 funding and $2,000,000 by this Round 5 funding request, with the
remaining $4,696,494 provided through ORPC cost share. ORPC’s funding request of $2,000,000 from
the AEA REF Round 5 thus corresponds to 23% of the entire Cook Inlet TidGen™ Project’s funding
requirements, with AEA Round 4 funds providing 23% and ORPC providing 54%.
The Grant Budget Form (below following the Cost Worksheet) summarizes the Cook Inlet TidGen™
Renewable Energy Fund
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Project funding plans between August 2012 and November 2015 (the AEA Funding Period). ORPC has
already begun investing significant resources into developing and permitting the Cook Inlet TidGen™
Project, which encompasses the TidGen™ Array Project. These efforts have been funded entirely by
ORPC, and will total $1,412,716 by the end of 2014, and have included work on obtaining and complying
with FERC permitting; site characterization work; environmental data collection; meetings with
communities, agencies, stakeholders, contractors, public officials and others involved or affected by the
project; and participation in organizations, conferences and industry meetings.
Renewable Energy Fund Round 5
Project Cost/Benefit Worksheet
RFA AEA12-001 Application Cost Worksheet Page 1 7-1-11
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
The Applicant should demonstrate that the renewable energy resource is available on a
sustainable basis.
Annual average resource availability. 95% Annual Average Availability (Long-Term)
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
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]
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 7-1-11
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]
600 KW (Scope to expand to 5 MW by end of 2016, to 20 MW
by end of 2019 and 100 MW by 2022)
b) Proposed annual electricity or heat production (fill in as applicable)
i. Electricity [kWh]
ii. Heat [MMBtu]
c) Proposed annual fuel usage (fill in as applicable)
i. Propane [gal or MMBtu]
ii. Coal [tons or MMBtu]
iii. Wood [cords, green tons, dry tons]
iv. Other
4. Project Cost
a) Total capital cost of new system $7,283,777
b) Development cost $1,412,716
c) Annual O&M cost of new system $320,000
d) Annual fuel cost 0
5. Project Benefits
a) Amount of fuel displaced for
i. Electricity 17,864 Mcf Natural Gas per Year for the 600 KW Project (growing to 4.2 million
Mcf at 100 MW stage of the expanded project)
ii. Heat
iii. Transportation
b) Current price of displaced fuel $120,431 in 2015 or $1,593,876 on an NPV basis (Based on
6.74 per Mcf – 2015 value of 2009 CEA/CP Gas Contract using
PACI) (NPV Calculations are performed using a life of 15 years and
a discount rate of 3%)
c) Other economic benefits (1) Social Cost of Carbon Avoided: $24,268 in 2015 or
$367,071 on an NPV basis (948 metric tons of CO2 avoided
Divided by 0.05306 metric tons of CO2 per Mcf of Natural Gas
Multiplied by 1.36 $/Mcf, which is the 2015 carbon price supplied in
the AEA REF Round 5 Fuel Pricing Model) (NPV Calculations are
performed using a life of 15 years and a discount rate of 3%)
(2) O&M Component of Alaska Utility’s Generation Cost:
$8,395 in 2015 or $105,355 on an NPV basis (Based on
0.005 $ per kWh – 2015 value of 2009 CEA/CP Gas Contract using
PACI) (NPV Calculations are performed using a life of 15 years and
a discount rate of 3%)
d) Alaska public benefits $14.805 million. The project will result in 28 construction
period jobs to be created and sustained during the 18-
month construction period. This results in $2.5 2 million of
Renewable Energy Fund Round 5
Project Cost/Benefit Worksheet
RFA AEA12-001 Application Cost Worksheet Page 3 7-1-11
direct earnings and $3.402 million of induced output. The
project will also result in 4 operating period jobs to be
created and sustained for the life of the Project. This results
in $3.78 million of direct earnings and $5.103 million of
induced output over an assumed 15-year project life. (The job
numbers were derived using Marine and Hydrokinetic Jobs and
Economic Development Impact Model, designed in 2010 by
Marshall Goldberg of MRG & Associates under contract to the
National Renewable Energy Laboratory. Direct earnings were
calculated using an annual average salary level of $60,000, which
is ORPC’s recent experience, and the induced output was derived
using a 1.35 multiplier, the midpoint of a range. (ORPC obtained
from the Institute of Social and Economic Research, University of
Alaska, Anchorage.)
6. Power Purchase/Sales Price
a) Price for power purchase/sale $0.271 per KWh in 2011 dollars (Calculated on a 5 MW Project
Basis) (Should Round V funds be awarded to the project, the
power purchase rate would be reduced to $0.257 per KWh)
7. Project Analysis
a) Basic Economic Analysis
Project benefit/cost ratio Ratio of Generation Benefits to Project Costs: -0.13
Ratio of Generation Benefits Plus Alaska Jobs Induced Benefits: +1.58
Payback (years) 17 Years for 600 KW Pilot Project (11.15 Years as the project expands to
100 MW by 2022 as ORPC anticipates)
Renewable Energy Fund Grant Round V Grant Budget Form 7-1-11
Milestone or Task Anticipated
Completion Date
RE- Fund
Grant Funds
Grantee Matching
Funds
Source of Matching
Funds:
Cash/In-kind/Federal
Grants/Other State
Grants/Other
TOTALS
Initial 1 – device TidGen Power System
installation and operation complete
$ 2,000,000
(Round IV funds) $ 2,023,089 $ 4,023,089
Feasibility of TidGen Buildout complete
including analysis of initial TidGen performance
$ $ 50,000 Cash $ 50,000
Bids received for three additional TidGen™
device components; components released for
manufacture Jan-13 $ 200,000 $ 269,141 Cash $ 469,141
Three Additional TidGen™ device components
procured and prepared for shipment May-13 $ 1,150,000 $ 1,450,000 Cash $ 2,600,000
Three additional TidGen™ device components
arrive at Port of Anchorage; three additional
bottom support frames complete; report on
continued operation of initial TidGen™ Power
System with first TidGen™ device complete,
project development work for permitting
complete May-13 $ 150,000 $ 252,845 Cash $ 402,845
Deployment of three additional TidGen™
devices complete; full 600 kW TidGen™ Power
System brought online. Jul-13 $ 500,000 $ 423,964 Cash $ 923,964
600kW TidGen Power System operated for one
year, quarterly reports produced, annual
inspection performed July-14 $ 0 $ 177,455 Cash $ 177,455
Report on operation and performance of
complete 600 kW TidGen™ Power System October-14 $ 0 $ 50,000 Cash $ 50,000
$ $ $
$
$
TOTALS $ 4,000,000 $ 4,696,494 $ 8,696,494
Renewable Energy Fund Grant Round V Grant Budget Form 7-1-11
Budget Categories:
Direct Labor & Benefits $ 0 $ 371,400 $ 371,400
Travel & Per Diem $ 0 $ 41,300 $ 41,300
Equipment $ 3,350,000 $ 1,698,128 $ 5,048,128
Materials & Supplies $ 0 $ 84,000 $ 84,000
Contractual Services $ 0 $ 1,196,017 $ 1,196,017
Construction Services $ 650,000 $ 1,305,649 $ 1,955,649
Other $ 0 $ $
TOTALS $ 4,000,000 $ 4,696,494 $ 8,696,494
Applications should include a separate worksheet for each project phase (Reconnaissance, Feasibility, Design and Permitting, and Construction)-
Add additional pages as needed
Appendix A: Schedule and Milestones from Round 4 Funding
Round 4 Funds: Initial Construction and Commissioning
SCHEDULE
January 2013 – initial TidGen™ device components will be released for manufacture; bid packages
will be developed for system components; contractors will be selected for manufacture and assembly
on a competitive basis.
May 2013 – initial TidGen™ device components will be delivered, stored, assembled and shop-tested
at the East Foreland laydown site (TBD), location of installation and assembly facilities.
June 2013 – Site preparation and deployment of bottom support frame and transmission cables will be
followed by mounting of the TidGen™ TGU onto the bottom support frame. Shore station site at the
East Foreland interconnect location (TBD) will be prepared and the modular on-shore station and
switchgear will be delivered and installed.
July 2013 – the first TidGen™ device will be installed. The single-device TidGen™ Power System
will then be operated and monitored (or technical performance and environmental compatibility)
through the winter to collect data and plan for the subsequent installation of three more TidGen™
devices.
December 2013 – Data from the single-device TidGen™ Power System will be collected and
reported. ORPC will issue and review quarterly reports on operation and environmental monitoring,
which will supply much-needed information for further site development under the FERC pilot
project license. Federal and state agencies will review the reports to assess potential environmental
impacts.
MILESTONES
1. Confirmation that all design and feasibility requirements are complete, December 2012
a. Evaluate final design before release of components for manufacture and procurement
2. Bids received for TidGen™ Power System and components, January 2013
a. Bids received for all TidGen™ Power System components
b. TidGen™ Power System and initial TidGen™ device long lead time components
released for manufacture
3. Deployment and operations contractors selected, contracts signed, March 2013
a. Deployment and maintenance plans and contractor roles complete
b. Receive and evaluate contractor bids for project deployment and operations
c. Execution of bid documents with contractors complete (Port of Anchorage, marine
service contractor, cable deployment contractor, electrical contractor)
4. Single-device TidGen™ Power System components procured, prepared for shipment, May 2013
4. Single-device TidGen™ Power System components arrive at East Foreland laydown site, May
2013
a. Components from Maine arrive
b. Bottom support frame components procured
c. Ancillary system components arrive
5. Bottom support frame fabrication and TidGen™ TGU assembly complete at East Foreland
laydown site, June 2013
6. Bottom support frame, shore station deployed, terrestrial power transmission installed, July 2013
a. Prep the site for the shore station on East Foreland interconnect location
b. Complete deployment area site preparation and install bottom support frame
c. Deliver modular shore station, switchgear, and power transmission system to East
Foreland interconnect location
d. Terrestrial power transmission system installation complete
7. Initial TidGen™ device and power transmission system deployed, July 2013
a. Submarine power cable deployed from bottom support frame to Shore station
b. Power transmission system interconnected
c. Initial TidGen™ device deployed and interconnected to rest of power system
d. TidGen™ Power System interconnected to grid with data acquisition systems
8. Performance of single-device TidGen™ Power System reported to agencies and stakeholders for
review, December 2013
Appendix B:
Community and Partner/Consultant
Letters of Support
Alaska Center for Energy and Power • University of Alaska Fairbanks • 814 Alumni Drive
P.O. Box 755910 • Fairbanks, Alaska 99775 -5910 • Tel: (907) 474 -5402 • Fax: (907) 474 -5475
August 17th, 2011
To: Renewable Energy Fund Review Committee
From : Gwen Holdmann, Director, Alaska Center for Energy and Power
Re: Ocean Renewable Power Co. (ORPC) Renewable Energy Fund Round IV Proposal
Dear Review Committee;
I am writing this letter in support of the proposal submitted by ORPC entitled ‘ORPC Cook Inlet TidGen™ Array
Project’. As you know, we are very excited about the opportunities for hydrokinetic devices in Alaska. Cook Inlet
is one of the premier sites in the world for tidal energy, and we support the leadership role ORPC is playing in
developing the technology to harness this resource.
We also hope that ORPC’s project, which includes the University of Alaska Anchorage, will serve as an
opportunity to foster greater collaboration between University of Alaska researchers based in Anchorage and
Fairbanks. We appreciate the proactive approach ORPC has taken in involving researchers and students from both
UAA and UAF in their projects, which is helping to build research capacity in Alaska as well as developing a
workforce with hands‐on experience in this technology area.
Sincerely,
Gwen Holdmann, Director
Alaska Center for Energy and Power
University of Alaska Fairbanks
Gwen.Holdmann@alaska.edu
(907) 590-4577
Department of Civil Engineering
3211 Providence Dr.,
Anchorage, Alaska 99508
Tel 907-786-1951 * Fax 907-786-1079
www.engr.uaa.alask.edu/
August 26, 2011
To whom it may concern,
Ocean Renewable Power Corporation (ORPC), specifically ORPC Alaska, is applying for RE
Fund Round 5 funding for their Cook Inlet TidGen™ Array Project, the build out stage of the
larger Cook Inlet Tidal Energy Project. This letter is being written in support of ORPC’s
application for the Array Project.
The University of Alaska, Anchorage (UAA) School of Engineering (PI Tom Ravens) has been
working collaboratively with ORPC to design studies and to pursue funding to understand the
environmental effects of the tidal installation and to ensure that ORPC’s hydrokinetic devices
will be able to withstand the high suspended sediment concentrations. ORPC and UAA received
a DOE award to conduct “Abrasion Testing of Critical Components of Hydrokinetic Devices”.
These tests have begun and will ensure that ORPC uses the best possible materials to withstand
the highly sedimented Cook Inlet waters.
I have found the ORPC staff very conscientious in their efforts to develop renewable energy in
Cook Inlet in an environmentally sound manner.
Sincerely,
Tom Ravens, Ph.D.
Professor, Dept. of Civil Engineering
University of Alaska, Anchorage
(907) 786-1943
TomRavens@uaa.alaska.edu
August 2
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August 20, 2011
To Whom it May Concern:
This is a letter of support for ORPC’s Alaska Renewable Energy Fund application to the Alaska Energy
Authority to proceed with their Cook Inlet TidGen™ Array Project.
The National Renewable Energy Laboratory (NREL) is the nation’s primary laboratory focused on energy
efficiency and renewable energy. NREL is a government-owned-contractor-operated facility managed
and operated by the Alliance for Sustainable Energy, LLC (“Alliance”) under U.S. Department of Energy
(DOE) Contract No. DEAC36- 08GO28308.
As a project partner in which we are devoting some of our own resources, NREL will be working closely
with ORPC in developing Cook Inlet’s substantial tidal energy potential. As well, NREL and ORPC are
currently developing a Cooperative Research and Development Agreement (CRADA) to facilitate
NREL’s further involvement in ORPC’s turbine development program. NREL will bring our expertise in
computer modeling and technology development to accelerate ORPC’s improvements in turbine
efficiency over the next several iterations of ORPC’s technology. This is a typical role we play with
technology developers, most notably with the wind industry as they have successfully advanced their
technology maturity and reliability. We aim to apply this well documented and tested approach to the
emerging tidal and in-stream hydrokinetic industry, and Alaska holds tremendous promise to be a leader
in this field.
Through the US Department of Energy, NREL has recently located staff directly in Alaska in recognition
of the energy challenges and opportunities throughout the state. NREL is well aware of Alaska’s ocean
energy potential, including over 90% of the entire nation’s tidal energy. Harnessing this energy is both an
exciting and important initiative that could catapult Alaska and the nation into the forefront of clean
energy production.
We believe this is an important project that can contribute to the Railbelt and ideally the nation’s energy
security. Please contact me if you have any questions or would like additional information. Best of luck
on your application.
Sincerely,
Brian Hirsch, Ph.D.
Senior Project Leader – Alaska
Brian.Hirsch@nrel.gov
Alaska office:
420 L Street, # 305
Anchorage, AK 99501
907-271-3633
Established in 1971
ALASKA • CALIFORNIA • LOUISIANA • TEXAS • WASHINGTON • BRITISH COLUMBIA • NEWFOUNDLAND • ONTARIO • RUSSIA
LGL Alaska Research Associates, Inc.
2000 West International Airport Road, Suite C-1
Anchorage, Alaska 99502 USA
Tel: (907) 562-3339 Fax: (907) 562-7223
e-mail: alaska@lgl.com web: www.lgl.com
Alaska Energy Authority
813 West Northern Lights Blvd.
Anchorage, AK 99503
August 17, 2011
Subject: Support to ORPC’s grant application to the Alaska Energy Authority Renewable
Energy Fund (Round 5) for the Cook Inlet TidGen Array Project.
To whom it may concern:
The purpose of this letter is to express the support of LGL Alaska Research Associates, Inc.
(LGL) for ORPC Alaska, LLC (ORPC) in their activities related to the pursuit of a tidal energy
project in Cook Inlet at the East Foreland. Specifically, we support ORPC’s application for
funding of their Cook Inlet TidGen™ Array Project with the Alaska Energy Authority’s
Renewable Energy Fund Round 5.
LGL is an international environmental research and consulting firm with offices around the
world, including Anchorage, Alaska. LGL performed beluga whale observations of the ORPC
Tidal Project site in Upper Cook Inlet near Fire Island. The beluga whale study was funded
entirely by ORPC. Currently, LGL continues its partnership with ORPC, HDR/DTA, the
University of Alaska, the Alaska Department of Fish and Game, and Greeneridge Sciences to
conduct a Department of Energy-funded project to develop, implement, and compare acoustic
and visual methods to monitor for beluga whales in and around the ORPC project sites.
Our experience with ORPC as a client has been excellent; representatives we have worked with
are technically competent and fiscally rigorous in all of their dealings.
Sincerely,
Michael R. Link
President, LGL group of companies
cc Monty Worthington, ORPC
Alaska Electric and Energy Cooperative, Inc.
3977 Lake Street Homer, Alaska 99603 (907) 235-8551
April 21, 2011
Christopher R. Sauer
President & CEO
Ocean Renewable Power Company
120 Exchange Street, Suite 508
Portland, ME 04101
RE: Letter of Intent for East Foreland Tidal Energy Project
Dear Chris,
I am following up on the March 22nd work session facilitated by your Ocean Renewable Power
Company (ORPC) team that included our Board of Directors, Management Staff and the public.
The East Foreland Tidal Energy Project (Project) brings both organizations together with the
common goal of proving the potential for affordable renewable energy from an East Foreland
tidal energy facility while creating economic opportunities on the Kenai Peninsula.
The purpose of this Letter of Intent (LOI) is to document our intentions to proceed in a
collaborative, good faith basis to technically and economically evaluate, structure and implement
the Project. As currently envisioned, the Project would consist of a tidal energy production
facility at the East Foreland site utilizing one or more of ORPC’s proprietary power systems with
a rated total capacity of up to 5 megawatts interconnected to the Homer Electric Association, Inc.
(HEA) grid and licensed under a Federal Energy Regulatory Commission (FERC) pilot project
license.
As discussed in prior meetings, due to existing contracts, HEA is not able to take power from
any source other than Chugach Electric Association, Inc. until January 1, 2014 without their
approval. Any agreement with them to do so will likely involve regulation costs, and these costs
may economically prohibit HEA from accepting any Project energy prior to that date. The
Project draft milestones below are subject to this limitation:
2011 Feasibility Phase
a. Perform initial site characterization.
b. Preliminary interconnection evaluation and cost estimates.
c. Preliminary estimation of project power output profile and grid integration evaluation
costs.
d. Scheduling of power system installation (phases).
e. Structure of relationship; common talking points, scenario development, and economic
evaluation resulting in Memorandum of Understanding (MOU).
Christopher R. Sauer April 21, 2011
Ocean Renewable Power Company Page 2
f. Begin proactive public input/outreach (including a project website).
g. Develop a regulatory/licensing strategy.
h. Investigate potential funding strategies.
i. Identify potential supply chain partners, including fabrication, assembly, installation and
maintenance (marine support).
2012 Project Development (pre-deployment) Phase
a. Finalize candidates for key supply chain partners.
b. Perform detailed site assessment survey and studies.
c. Complete a detailed site design.
d. Conduct consultations with federal and state agencies, communities, Cook Inlet Keeper
and other stakeholders.
e. Develop and submit a FERC Final Pilot License Application.
f. Explore viable funding sources and finalize a funding plan.
g. Develop, negotiate and execute key project agreements, including power purchase
agreement (end of year).
2013 Initial Deployment Phase
a. Secure funding for the Project.
b. Obtain the FERC Pilot Project License.
c. Install one to three ORPC power system devices, connect to the HEA grid and commence
operations and power delivery subject to existing HEA power purchase contract
limitations.
2014-2015 Project Build Out
a. Complete the Project build out to the pilot project limit of up to five (5) megawatts over a
two to three (3) year period.
It is mutually understood that this LOI is not a legally binding document and therefore does not
encumber the parties with any financial obligations nor compel them to commit resources of any
kind. It is anticipated that it will be superseded by a MOU that will more clearly define the
expectations, roles and obligations of each, and further refine the next steps for the Project.
Specific roles, timelines and financial commitments will be more definitively established during
the 2011 Feasibility Phase.
We look forward to working with ORPC to make the Project an economic success for our
members.
Sincerely,
Bradley P. Janorschke
General Manager
•
Appendix A – ORPC Technology
ORPC technology consists of a family of modular power systems. The core technology
component and “engine” for all of ORPC’s power systems is the Turbine Generator Unit
(TGU). The TGU uses proprietary advanced design cross flow turbines to power an
underwater permanent magnet generator mounted at its center on a single driveshaft. It is
constructed primarily of composite materials that will not corrode, and has a gearless,
direct-drive design that requires no lubricants and so does not contaminate the
surrounding water. The TGU produces zero emissions, including greenhouse gases.
ORPC is developing three distinct power systems
based on the TGU, each designed for commercial
deployment in specific applications and water
depths:
The TidGen™ Power System, consisting of one or
more TidGen™ devices (Figure 1) (TGUs, each
with a rated capacity of 150 to 175 kW, mounted
on bottom support frames) connected to an on-
shore substation using underwater power and
control cables. This system is designed for tidal
energy applications in water depths from 60 to
150 feet.
The RivGen™ Power System, consisting of one or
more RivGen™ devices (Figure 2) (TGUs, each
with a rated capacity of 50 kW, mounted on
bottom support frames) connected to an on-
shore substation using underwater power and
control cables. This system is designed for
smaller river applications, including those in
remote, off-grid communities, in water depths of
25 feet or more.
The OCGen™ Power System, consisting of one or
more OCGen™ modules (Figure 3) (two to four
TGUs, each with a rated capacity of 150 to 175
kW, “stacked” to create a larger generating
platform that is positively buoyant, provides
dynamic lift and is held at a specific water depth
using a deep sea mooring system) connected to
an on-shore substation using underwater power
and control cables. This system is designed for
deep tidal energy and offshore ocean currents.
Figure 1: TidGen™ device
including TGU and bottom support frame
Figure 2 : RivGen™ device
including TGU and bottom support frame
Figure 3: Moored OCGen™ module
made up of four TGUs
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Appendix H: Table Detailing Grants Awarded to ORPC
Ocean Renewable Power Company, LLC
State and Federal Government Awards
Governmental Agency Purpose Date Awarded Amount
Massachusetts Technology
Collaborative Seed Loan for OCGen™ TGU Demo Project July 2007 $240,000
Maine Technology Institute DA1614 Development Award for OCGen™
TGU Demo Project June 2007 $300,000
Maine Technology Institute DA1903 Development Award for OCGen™
TGU Demo Project January 2008 $211,200
Maine Technology Institute Asset Commercialization Fund Award for
OCGen™ TGU Commercialization Project December 2008 $150,000
Maine Technology Asset Fund MTAF 2030 for Beta OCGen™ TGU Project January 2009 $806,138
Maine Technology Institute MTI 2513 OCGen™ Mooring System February 2010 $285,000
Maine Technology Asset Fund MTAF 3020 for TidGen™ Power System
Commercialization Project January 2011 $1,260,000
U.S. Coast Guard Demonstration of Use of Tidal Energy for CG
Station Eastport, ME Pier August 2009 $100,000
U.S. Department of Energy STTR Phase I and II, Refi ement of Cross
Flow Hydrofoils February 2010 900,000
U.S. Department Of Energy OCGen™ Module Mooring Project June 2010 $1,034,534
U.S. Department Of Energy
Acoustic Monitoring of Beluga Whale
Interactions with ORPC’s Cook Inlet Tidal
Energy Projec February 2010 $600,000
U.S. Department of Energy Sub-recipient, University of Maine, Maine
Tidal P wer Initiative July 2010 75,000
U.S. Department of Energy TidGen™ Power System Commercialization September 2010 $10,000,000
U.S. Department of Energy brasion Testing of Critical Compo ents of
Hydrokinetic Devices September 2010 $240,000
Alaska Denali Commission RivGen™ Power System August 2010 $830,325
Alaska Energy Authority Renewable Energy Fund for Cook Inlet
TidGen™ Project June 2011 $2,000,000
Total $19,032,197