HomeMy WebLinkAboutWave Energy GrantApplication5 Atmocean 082311
Renewable Energy Fund Round 5
Grant Application
AEA 12-001 Application Page 1 of 31 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 demonstrate that the
preceding phases are satisfied and funding for an advanced phase is warranted.
If you have additional information or reports you would like the Authority to consider in
reviewing your application, either provide an electronic version of the document with
your submission or reference a web link where it can be downloaded or reviewed.
REMINDER:
Alaska Energy Authority is subject to the Public Records Act AS 40.25, and materials
submitted to the Authority may be subject to disclosure requirements under the act if no
statutory exemptions apply.
All applications received will be posted on the Authority web site after final
recommendations are made to the legislature.
In accordance with 3 AAC 107.630 (b) Applicants may request trade secrets or
proprietary company data be kept confidential subject to review and approval by the
Authority. If you want information is to be kept confidential the applicant must:
o Request the information be kept confidential.
o Clearly identify the information that is the trade secret or proprietary in their
application.
o Receive concurrence from the Authority that the information will be kept
confidential. If the Authority determines it is not confidential it will be treated as a
public record in accordance with AS 40.25 or returned to the applicant upon
request.
Renewable Energy Fund
Grant Application Round 5
AEA12-001 Grant Application Page 2 of 31 7/1//2011
SECTION 1 – APPLICANT INFORMATION
Name (Name of utility, IPP, or government entity submitting proposal)
Atmocean, Inc.
Type of Entity: IPP Fiscal Year End. Dec 31.
Tax ID # 87-0759120 Tax Status: X For-profit or non-profit ( check one)
Mailing Address
607 Cerrillos Rd
Santa Fe, NM 87505
Physical Address
Same
Telephone
505-310-2294
Fax
None
Email
atmocean.kithil@gmail.com
1.1 APPLICANT POINT OF CONTACT / GRANTS MANAGER
Name
Philip W. Kithil
Title
CEO
Mailing Address
Same as applicant company
Telephone
Same
Fax
Email
Same
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.
Renewable Energy Fund
Grant Application Round 5
AEA12-001 Grant Application Page 3 of 31 7/1//2011
SECTION 2 – PROJECT SUMMARY
This is intended to be no more than a 1-2 page overview of your project.
2.1 Project Title – (Provide a 4 to 5 word title for your project)
Type in your answer here and follow same format for rest of the application.
Wave Energy / Sequestration Technology (acronym “WEST” used hereafter)
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.
Location – latitude and longitude or street address or community / communities served:
Approx 2 miles offshore from Cannon Beach in Yakutat, AK.
Latitude 59°28'21.96"N, Longitude 139°45'28.75"W.
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 X Design and Permitting
Feasibility X Construction and Commissioning
Conceptual Design
2.4 PROJECT DESCRIPTION
Provide a brief one paragraph description of your proposed project.
Atmocean proposes to deploy 600 of our Wave Energy/Sequestration Technology (“WEST”)
devices about 1-2 miles off Cannon Beach near Yakutat, Alaska to generate up to 90% of
Yakutat’s annual kWh, at projected fuel cost savings of 44%. Payback for this project is
estimated at about 4 years. WEST devices convert wave energy into hydraulic pressure which is
transmitted by seafloor hose then onshore pipe or hose (as appropriate) to hydraulic motors
driving existing electrical generators – avoiding the high cost of seafloor electrical cable, and
utilizing existing onshore generation, transmission, and distribution. Using this hybrid system
architecture, WEST provides primary generation and the existing diesel system provides backup
and peak generation.
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.)
RELIABILITY. By incorporating WEST with Yakutat’s existing diesel system, a high level of
reliability is achieved. “Flip the switch and the lights come on.”
Renewable Energy Fund
Grant Application Round 5
AEA12-001 Grant Application Page 4 of 31 7/1//2011
REDUCE DIESEL CONSUMPTION. This hybrid system should reduce Yakutat’s diesel
consumption by up to 90%, since the wave energy is free.
REDUCED COST PER KWH. Under the assumption that diesel average costs will go up 10%
per year, and that Yakutat Electric’s transmission & distribution costs remain level at about
$0.15 per kWh, we estimate cost savings per kWh over 50% by 2019:
LOCAL CONTROL. By substantially severing its susceptibility to oil price increases dictated
largely by the Middle East and world politics, Yakutat will have much greater control over its
own destiny.
DURABILITY. The WEST architecture is designed to survive extreme weather events:
Both ends of each connected array of 50 WEST devices are secured with slack moorings; and
each 10th WEST device has a safety mooring - providing “give” with changing currents and
ocean conditions, while maintaining relative position.
These buoys submerge in waves greater than about 12’ height, providing stress-limiting to
protect against connector or component failure.
SAFETY. The hydraulic pressure lines between WEST devices are 20’-30’ deep (allowing ship
passage); the only surface components are the WEST buoys spaced 100’ apart. Each buoy comes
with USCG lighting and radar reflectors for all-weather visibility.
REDUCED CONSUMER ELECTRIC BILLS. Once the WEST modest upfront costs are
amortized, consumers can expect to see year-to-year reductions in the cost paid per kWh.
LOW OPERATING COSTS. Since the wave energy is free, operations costs are very low.
EASE OF MAINTENANCE. Each WEST device is modular, therefore the system is not
compromised by occasional failure of individual units or components. Because any faulty
components are field-replaceable, costs are kept low.
ECONOMIC GROWTH. Yakutat’s high electric costs have been a key factor in residents
moving away. By stabilizing and reducing electric rates, people can afford to stay in Yakutat,
those who left may return, and the local economy will improve.
0%
10%
20%
30%
40%
50%
60%
2013 2014 2015 2016 2017 2018 2019
Yakutat Projected Savings In Energy Cost/kWh
Renewable Energy Fund
Grant Application Round 5
AEA12-001 Grant Application Page 5 of 31 7/1//2011
PAYBACK PERIOD. Atmocean WEST cost recovery is during the 4th year after deployment –
one of the quickest payback periods of any renewable energy technology.
THE ENERGY SOLUTION FOR ALASKA. For remote coastal communities with year round
ice-free ocean, WEST can be scaled down to as few as 50 devices, to achieve much lower cost of
electricity. This is ideal for remote coastal villages such as found in the Aleutians as well as the
Alaska Peninsula and Southeastern Alaska.
SEASONAL BALANCING. Equally important for many of these communities, since wave
energy is typically much greater in Fall, Winter, and Spring, when reduced daylight and colder
temperatures prevail, WEST is self-tuning to their seasonal energy needs. This is illustrated in
the following seasonal demand reported for St. George Island in the Bering Sea:
Table 2: St. George Island Electrical Demand Summary Summer Winter
Minimum [kW] 70 150
Average [kW] 160 200
Peak [kW] 200 300
From “ Feasibility Study on the connection of a SyncWave Power Resonator™ to St.
George Island” Scott Beatty, MASc Candidate, The University of Victoria
Yakutat, however, is unique as its seasonal kWh demand (2010 data provided by Yakutat
Electric) shows peak occurring in August and September rather than in the low-light winter
months (we assume this is due to the fish processing plant operations):
$-
$5,000,000
$10,000,000
$15,000,000 Year 1Year 2Year 3Year 4Year 5Year 6Year 7Payback Period (Cumulative Diesel Savings
> Cumulative Expenses)
Cum Expenses Cum savings
Renewable Energy Fund
Grant Application Round 5
AEA12-001 Grant Application Page 6 of 31 7/1//2011
LOCAL JOBS. Local jobs are generated at the Atmocean assembly facility to be located in
Yakutat. In addition, local jobs are created during the installation process and for routine
operations & maintenance.
Final assembly onsite is preferred as this economizes on shipping costs (the sub-assemblies
being more compact than fully assembled WEST devices, fewer containers are needed). We
estimate the Atmocean project will generate an initial total payroll (assembly, mooring and pump
deployment) of $450,000. Assuming an average labor rate of $25/hour, this equals 18,000 man-
hours or about 9.2 full time equivalent jobs. Additional jobs and income will come from vessel
charter, and from WEST operations and maintenance during the expected 20 to 30 year life of
the system (estimated at $200,000 per year including supplies, labor, etc.).
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.
Comparing Yakutat’s monthly energy consumption patterns to the offshore wave energy
resource, we estimate 600 WEST devices (two arrays) will supply about 90% of Yakutat’s
annual electricity requirement. The remaining 10% peak and seasonal demand will be provided
by existing diesel generators:
425,000
475,000
525,000
575,000
625,000
675,000
725,000
J F M A M J J A S O N D
Yakutat 2010 Diesel Electricity kWh
-
2,000,000
4,000,000
6,000,000
8,000,000
J F M A M J J A S O N DkWh
Month
Two WEST Arrays kWh Generated vs.
Yakutat 2010 Diesel kWh Generated
2010 Diesel Generation WEST Arrays
Renewable Energy Fund
Grant Application Round 5
AEA12-001 Grant Application Page 7 of 31 7/1//2011
According to our estimates, $4,962,965 is needed to initiate planning, gain permits, produce,
ship, assemble, deploy, and commission these WEST devices (configured in two arrays of 300
devices, deployed within Alaska exclusive territorial waters from 1 to 2 miles off Cannon
Beach). Since Yakutat already operates diesel generators, the WEST hydraulic motor can
directly attach to these generator drive shafts, with a controller cycling between the dominant
wave and secondary diesel energy sources.
The permitting, licensing, and legal portion of the budget represents about 16.1% of the total,
with remaining 83.9% spent on engineering, construction, deployment, and commissioning.
Atmocean CEO Philip Kithil is committing $77,355 in matching funds. Therefore the net grant
request submitted herewith is $4,885,610. His commitment is contingent on receiving the full
amount of requested AEA Round V grant funds. Atmocean’s budget summary follows:
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. $ 4,885,610
2.7.2 Other Funds to be provided (Project match) $ 77,355
2.7.3 Total Grant Costs (sum of 2.7.1 and 2.7.2) $ 4,962,965
Project Milestones
Permitting, License Fees, & Legal Completion Grant Amount Matching Funds Type/Source Total Amount
1. Project scoping and contractor solicitation for planning and design8/5/2012 200,000$ 51,355$ Atmocean investors 251,355$
2. Permit applications (as needed) 8/25/2012 24,000$ -$ Atmocean investors 24,000$
3. Final environmental assessment and mitigation plans (as needed)9/25/2012 148,000$ -$ Atmocean investors 148,000$
4. Resolution of land use, right of way issues 10/25/2012 48,000$ -$ Atmocean investors 48,000$
5. Permit approvals 12/31/2012 4,800$ -$ Atmocean investors 4,800$
6. Final system design 12/31/2012 135,000$ -$ Atmocean investors 135,000$
7. Engineers cost estimate 1/31/2013 16,875$ -$ Atmocean investors 16,875$
8. Updated economic and financial analysis 1/31/2013 6,400$ -$ Atmocean investors 6,400$
9. Negotiated power sales agreements with approved rates 1/31/2013 -$ 10,000$ Atmocean investors 10,000$
10. Final business and operational plan 1/31/2013 157,000$ -$ Atmocean investors 157,000$
Subtotal: Permitting, Licensing, Legal 740,075$ 61,355$ 801,430$
Engineering, Construction, Installation, and Commissioning (ECIC)
1. Confirmation that all design and feasibility requirements are complete.2/8/2013 18,250$ -$ 18,250$
2. Completion of bid documents 2/10/2013 1,600$ -$ 1,600$
3. Contractor/vendor selection and award 2/15/2013 10,250$ -$ 10,250$
4. Construction Phases –
A. Atmocean hardware 7/15/2013 2,857,935$ 6,000$ Atmocean investors 2,863,935$
B. Hydraulic Pressure Line Installation 8/1/2013 545,000$ -$ 545,000$
C. WEST Pump Units Deployment 9/1/2013 150,000$ -$ 150,000$
D. Install Generator Interface, Controller, Etc.9/15/2013 312,500$ -$ 312,500$
5. Integration and testing 10/1/2013 250,000$ -$ Atmocean investors 250,000$
6. Decommissioning old systems not applicable -$ -$ -$
7. Final Acceptance, Commissioning and Start-up 10/15/2013 -$ 10,000$ Atmocean investors 10,000$
8. Operations Reporting ongoing -$ -$ -$
Subtotal: Engineering, Construction, Installation, Commissioning 4,145,535$ 16,000$ 4,161,535$
Grand Total 4,885,610$ 77,355$ 4,962,965$
Renewable Energy Fund
Grant Application Round 5
AEA12-001 Grant Application Page 8 of 31 7/1//2011
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)
$ 4,962,965
2.7.5 Estimated Direct Financial Benefit (Savings) (see section 5
for calculation).
$ 1,760,000
2.7.6 Other Public Benefit (If you can calculate the benefit in
terms of dollars please provide that number here and
explain how you calculated that number in your application
(Section 5.)
$ 847,000
Renewable Energy Fund
Grant Application Round 5
AEA12-001 Grant Application Page 9 of 31 7/1//2011
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.
Atmocean CEO Philip Kithil will provide general oversight of the project. Engineering oversight
will be provided by our Chief Engineer Phil Fullam. Marine operations oversight will come from
Yakutat - one potential candidate is Scott Chadwick who operates a fishing and guiding service,
and has supported Atmocean’s initial survey of the target region off Cannon Beach. Generation
oversight will remain with Scott Newlun who presently serves as Yakutat Electric’s General
Manager.
Legal and permitting matters will be handled by Atmocean’s counsel (located in Anchorage)
Steven J. Shamburek, email shamburek@gci.net.
Atmocean consulting executive Mary Jane Parks will guide the permitting process as well
provide general consulting. Ms. Parks impressive bio follows:
Mary Jane Parks has over 20 years of experience in public utility and private energy
companies in California, Australia and Canada. Ms. Parks has managed renewable energy
projects and business development, working with Finavera Renewables, Inc. and
AquaEnergy Group, Ltd. She was responsible for ocean projects and utility contracts,
including successful negotiation of a power purchase agreement with PG&E for a utility-
scale ocean wave energy facility. Her work included project management and achieving
FERC licensing for the company’s Makah Bay, WA wave energy project.
Contact info and condensed resume’s/bio’s follow:
Kithil
BA, MSBA Economics.
505-310-2294, atmocean.kithil@gmail.com
Home is in Santa Fe, NM (39 years). Previous residence Soldotna AK (1 year), and Denver CO
(3 years). US Army 1LT (1966-68).
Serial entrepreneur with five previous successful startups in: apparel manufacturing/retailing
(1972-86); economic consulting (1986-87); trade association management & public relations
(1988-93); advertising & promotion (1989-92); automotive safety technologies (1994-2010).
Present position: founder and CEO of Atmocean, Inc. (2006-present).
Previous position: founder and President of Advanced Safety Concepts, Inc. Awarded 12 US and
international patents on occupant sensing & “smart” airbags crash sensing.
Fullam
BSME, MBA
505-610-8943, phil@reytek.com
Home is in Rio Rancho, NM. Previously lived in San Antonio TX and Chimayo, NM
Highly capable design engineer with broad experience in product development, manufacturing
engineering, electro-mechanical system design, materials science, prototyping. Currently serves
Renewable Energy Fund
Grant Application Round 5
AEA12-001 Grant Application Page 10 of 31 7/1//2011
as Chief Engineer with Reytek Corporation (www.reytek.com) in Albuquerque, NM where he is
assigned to Atmocean on “as-needed” basis. Among many other accomplishments, on very short
notice he single-handedly designed and produced the Atmocean prototype system now
undergoing sea trials at the California Polytechnic ocean test pier. Fullam holds numerous
patents on diverse inventions.
Shamburek
425 G St. #610
Anchorage, AK 99501
(907) 522-5339
Steven J. Shamburek was graduated from the University of Virginia in 1978 with a major in
economics and a minor in political and social thought and from the University of Virginia School
of Law in 1984.
Judicial Law Clerk for two Judges and a Magistrate Judge of the United States District Court for
the District of Alaska, 1984-1988. Partner in Law Firm, 1989-1999. Solo practice since 2000.
Admitted to practice before all Courts in the State of Alaska (State and Federal), the U.S. Court
of Appeals for the Ninth Circuit, and the U.S. Court of Appeals for the Federal Circuit.
Areas of Practice
Admiralty - all matters involving preferred ship mortgages, wage, necessaries and other maritime
liens, injury claims, collision, salvage, limitations of liability, insurance disputes, crew contracts,
Coast Guard license suspension and revocation hearings and other matters.
Aviation – selected matters involving FAA civil penalty actions; loan documentation in
Oklahoma City and state UCC requirements; selected aviation accidents.
Business and commercial transactions and litigation – all matters related to commercial
transactions and litigation; UCC issues; loan documentation for real estate, personal property and
unusual collateral such as vessels and aircraft; business form and formation including
partnerships, corporations, and LLCs with care for the liability, tax, management and
transferability considerations; all contract matters.
Collection - selected collection matters; lis pendens; pre-judgment attachment; claim and
delivery; FED actions; post-judgment execution; domestication of foreign judgments in state and
federal court.
Construction – all matters related to construction contracts and litigation; readily familiar with
the legal interpretations of standard AGC and AIA construction contracts; Miller Act and Alaska
Little Miller Act surety actions; licensing and bonding requirements.
Creditor bankruptcy – all matters related to creditor representation in bankruptcy. Involved in
some capacity in 150 main cases, adversary proceedings, and preference actions. ECF certified.
Employment – selected matters involving wage and hour issues under the FLSA and the AWHA
and general contract issues; preparation and litigation of non-competition and confidentiality
Renewable Energy Fund
Grant Application Round 5
AEA12-001 Grant Application Page 11 of 31 7/1//2011
agreements. Avoid sexual harassment, wrongful discharge and ADA matters.
Real Estate – all matters related to real estate law; loan documentation and litigation; title
matters; easements; public land issues; condemnation cases; foreclosure actions.
Transportation - Carmack Amendment claims and defense of claims; selected transportation
contracts and BLs.
The firm avoids practice in criminal, family law, debtor bankruptcy, taxation, and workers'
compensation law. However, all of these areas of law intersect and overlap at times with the
primary areas of practice noted above. Thus, a conscious and concerted effort is made to follow
developments in these areas of law including attending meetings of the Family, Creditor/Debtor,
Taxation, Workers' Compensation, and Corporate Counsel Law Sections of the Alaska Bar
Association.
Mary Jane Parks (bio is above).
Local Energy Associates
2229 Calle Alvarado
Santa Fe, NM 87505
626-253-1981
mjp@localenergyassociates.com
Owner, Local Energy Associates November 2009 – Present. Local Energy Consultants' mission
is to promote energy source knowledge and methods for the efficient, sustainable use of
electricity for regional governments. The company works with the private sector on stakeholder
and permitting processes for renewable energy power plants. Expertise is in utility issues,
regional planning, renewable strategies, ocean energy, wind energy, geothermal and solar.
Senior Vice President Principle Power, Inc. June 2008 – September 2010. Development of the
WindFloat, a semi-submersible float and integrated wind turbine for deployment in the deep
ocean.
Senior Vice President Finavera Renewables Inc. 2006 – 2008.
Vice President AquaEnergy Group, Ltd. 2001 – 2006. The Seattle-based ocean energy company
was instrumental in leading the development of the US and European ocean energy sectors. The
company merged with Finavera Renewables, Inc. (TSX-V) in 2006.
Education
Orange Coast College Merchant Marine 1998. Activities and Societies: US Coast Guard
Merchant Mariner, 100 GT.
University of Chicago MA, Organizational Management 1986 – 1987.
Occidental College BA, History, Sociology, French. 1982 – 1986.
Chadwick School 1970 – 1982.
Renewable Energy Fund
Grant Application Round 5
AEA12-001 Grant Application Page 12 of 31 7/1//2011
3.2 Project Schedule
Include a schedule for the proposed work that will be funded by this grant. (You may include a
chart or table attachment with a summary of dates below.)
The following schedule tracks from the project budget milestones provided above.
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.)
We have adopted the RFA milestones as summarized elsewhere in this submittal.
Milestone completion dates are based on current best estimates to complete the project as scheduled. The
over-riding timing issue is to deploy the system during summer of 2013 when ocean conditions are more
favorable to marine operations. While we fully intend to complete this project on-time and according to
budget, safety is the number one concern. Therefore, if delay is encountered in achieving any of the
milestones, and this delay pushes deployment to later in the Fall of 2013 when ocean conditions are
unsafe for deployment, we will have no choice but to defer deployment until Summer of 2014.
Vendor selection (item 3 under ECIC) is probably the most critical timing item as we need to allow 90
days for component production, to insure containerization in time to meet Lynden Transport’s once-a-
month shipping schedule to Yakutat.
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
3Q2012 4Q2012 1Q2013 2Q2013 3Q2013 4Q2013 Permitting, License Fees, & Legal
1 1. Project scoping and contractor solicitation for planning and design
2 2. Permit applications (as needed)
3 3. Final environmental assessment and mitigation plans (as needed)
4 4. Resolution of land use, right of way issues
5 5. Permit approvals
6 6. Final system design
7 7. Engineers cost estimate
8 8. Updated economic and financial analysis
9 9. Negotiated power sales agreements with approved rates
10 10. Final business and operational plan
Engineering, Construction, Installation, and Commissioning (ECIC)
1 1. Confirmation that all design and feasibility requirements are complete.
2 2. Completion of bid documents
3 3. Contractor/vendor selection and award
4. Construction Phases –
4a A. Atmocean hardware
4b B. Hydraulic Pressure Line Installation
4c C. WEST Pump Units Deployment
4d D. Install Generator Interface, Controller, Etc.
5 5. Integration and testing
n/a 6. Decommissioning old systems
7 7. Final Acceptance, Commissioning and Start-up
ongoing 8. Operations Reporting
Renewable Energy Fund
Grant Application Round 5
AEA12-001 Grant Application Page 13 of 31 7/1//2011
for known, key personnel, contractors, and suppliers as an attachment to your application.
Personnel:
Phil Kithil, CEO Atmocean Inc. information provided above.
Phil Fullam, Chief Engineer, Reytek Corporation. Please see website www.reytek.com
Others will be engaged as funding is secured.
Contractors:
Reytek Corporation, Albuquerque, NM
Lynden Transport, Seattle, WA
Local Energy Associates, Santa Fe, NM
Shamburek Law Office, Anchorage, AK
Sandia National Laboratories, Albuquerque, NM
California Polytechnic State Univ., San Luis Obispo, CA
Equipment:
A. WEST subassembly production and/or staging will occur at Reytek manufacturing
facility in Albuquerque, NM. Ample storage yard is available for staging and
containerization. Alternatively, a site may be selected in Seattle area, thereby saving
some shipping cost and expediting the schedule. This will be determined during our 2-
day kickoff meeting in Seattle scheduled for early August, 2013.
B. WEST subassemblies will be containerized for shipment via barge to Yakutat. Each 40’
standard container should hold 20 WEST devices ready-to-assemble. Assuming 600
WEST units, this requires 30 containers. Lynden Transport quote from Albuquerque NM
to Yakutat is $13,381 per container FOB Albuquerque. Estimated enroute time is 11 days
(4 land, 7 ocean), depending on season – however just one trip per month is scheduled.
C. Final assembly facility to be located adjacent the loading dock in Yakutat requires 30’ by
40’ work shed, 110/240v power, workbenches, assembly tooling, and adjacent 1acre
storage yard for staging the fully assembled WEST devices. It is possible portions of
Yakutat’s fish processing plant can be subleased during its assumed downtime (January
thru June 2013), when WEST final assembly will occur.
D. Deployment vessels should have capacity for 10 WEST devices ready-to-deploy (deck
space of roughly 360 square feet, i.e. 12’ x 30’). Assuming the average running time from
dock to Cannon Beach site approx 45 minutes, deployment time approx 30 minutes,
return to dock approx 30 minutes, and reload time 45 minutes, each vessel can make 6
runs in 12 hours, deploying 60 WEST devices. The entire array of 600 thus requires 10
vessel-days.
E. Deploying the main hydraulic line from the array to beach crossing site requires vessel
with capacity for 250 spools of hose and connectors. We estimate each spool volume of 4
cubic feet, and total volume (4’ tall on pallets) of 1,000 cubic feet. Allowing 100%
working room to connect and unspool the 100’ hose segments, the vessel deck space
needed is about 12’ by 30’.
F. Shore crossing requires placement of rigid pipe during low tide, connecting to the
nearshore end of the seafloor hose. This pipe ideally will cross beneath the sand berm at
the land side of the beach, then connect to a (larger) hose leading to the existing diesel
generator facility in Yakutat. Spent seawater will drain back into the harbor area.
G. Placement of slack moorings and the pressure line interconnect between adjacent pumps
will occur in advance, ready for WEST device connection.
H. The system deployment sequence is: A) lay the large hose from beach berm crossing to
Renewable Energy Fund
Grant Application Round 5
AEA12-001 Grant Application Page 14 of 31 7/1//2011
generator plant; B) install moorings with temporary floats, and deploy subsea pressure
line with appropriate tensioning (ready to connect between each WEST unit in step E
below); C) install beach crossing pipe and connect to land hose; D) deploy pressure lines
from beach crossing pipe out to the array mooring, and secure this to temporary floats; E)
deploy WEST devices, sequentially connecting to the pre-positioned subsea hose. Once
the line is fully pressurized and connected to the hydraulic motor, the WEST System is
operational.
Services:
Lynden Transport (turnkey shipping estimated at $13,381 per container FOB Albuquerque NM).
Oversight and management of assembly staff who will assemble the WEST devices at the
workshop facility in Yakutat. We estimate 4 hours per device, so total of 2,400 man-hours
assembly workers plus manager during the assembly process (June-July 2013).
Once WEST arrays are deployed and producing hydraulic pressure at the generator facility,
general oversight is needed of the cycling between primary wave energy and backup diesel
energy, as well as daily inspection of the land hose and beach crossing.
Periodic inspection visit to the WEST arrays off of Cannon Beach will only be necessary if the
hydraulic pressure drops below levels expected for the wave conditions. If a pressure line is cut
or damaged, the problem can be pinpointed: 1) by observing buoy locations to determine if a line
was severed (some buoys will have drifted); or 2) pulling up pumps to measure the local
pressure, which process can pinpoint the location of a damaged line.
Our selection process for major purchases/contracts will include these steps: Publish
requirements, solicit interest, obtain qualifications, get cost quotes, select best qualified (may not
be lowest cost).
Resumes of key personnel, contractors, suppliers. As provided above.
3.5 Project Communications
Discuss how you plan to monitor the project and keep the Authority informed of the status.
This will be according to the contractual terms. We expect to generate daily generation reports of
wave primary energy vs diesel backup energy; exceptions reports; and inspection reports – all of
which will be public information.
3.6 Project Risk
Discuss potential problems and how you would address them.
A major advantage of the WEST architecture is its modularity. While storm-induced loss of a
few WEST devices is possible, the vast majority will “ride out the storm”. With this modular
approach, it is highly unlikely for the entire system to be taken off line.
Risks are ranked from major to minor:
1. Loss of some buoys due to extreme weather events (note – the WEST buoy is the only
above-sea component). We believe the undersea components (25’ to 75’ deep) are
reasonably well-protected even from a 100-year storm and will remain intact and
Renewable Energy Fund
Grant Application Round 5
AEA12-001 Grant Application Page 15 of 31 7/1//2011
functional. If some buoys are lost or damaged and the hydraulic pressure/flow is
temporarily reduced, the system can revert to diesel generation. In this situation, we will
retrieve damaged WEST buoys for repair, and replace as needed. Once deployed, the
system will automatically begin producing hydraulic pressure to generate electricity.
2. If there is damage of an undersea hydraulic pressure line, the system can revert to diesel
generation. To mitigate this condition, we will pull up the damaged hose and replace it
with new hose. Once redeployed, the system will automatically begin producing
hydraulic pressure to generate electricity.
3. If there is damage to the beach crossing pipe, partial or complete loss of hydraulic
pressure is likely. Again, the system will revert to diesel generation until the damaged
pipe section is repaired or replaced. Once repaired, the system will automatically begin
producing hydraulic pressure to generate electricity.
4. Salt water damage to pipe, connectors, the accumulator tank, or Pelton turbine will be
mitigated by periodic inspection, maintenance, repair or replacement as needed.
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.
Wave energy offshore Yakutat’s
Cannon Beach is sufficient to
generate >90% of Yakutat’s
electricity using the Atmocean
WEST system. Even though our
analysis of data compiled by the
National Data Buoy Center
(http://www.ndbc.noaa.gov/)
shows that 20% of all waves are
under 1 meter, and 55% under 2
meters (see adjacent plot), since
the WEST technology relies on
wave steepness as well as height
and period, it provides sufficient
hydraulic pressure even under
these conditions.
With WEST, the smaller wind-waves still generate power, as seen in the detailed power curve
below.
0
5
10
15
20
0
1
2
3
4
5
6
7
8
9
10
0%5%10%15%20%25%30%35%40%45%50%55%60%65%70%75%80%85%90%95%100%Wave Period (s)Wave Height (m)Yakutat Wave Height & Period 2010
Wave Ht Period
Renewable Energy Fund
Grant Application Round 5
AEA12-001 Grant Application Page 16 of 31 7/1//2011
It is important to note, this lookup table
was calculated before our Cal Poly sea
trials began last July. Preliminary input-
output data from these trials suggest our
power output per WEST device will be 2
to 3 times greater than shown here, due to
the much greater thrust forces developed
by our pump design. Therefore, we have
reduced our (April 26 Feasibility Study)
estimate of 1,250 WEST devices needed
to generate >90% of Yakutat annual kWh,
to 600 WEST devices.
In the table below, we compare Atmocean WEST to other wave energy systems that generate
hydraulic pressure to run onshore generators.
We exclude all wave energy systems that put the generator in the ocean, and transmit the
electricity by seafloor cable, as these systems are not cost-effective for smaller-scale wave energy
requirements such as Yakutat. These “offshore-generator/electric transmission” systems also
suffer from an inherent contradiction: to reduce the very high cost of running seafloor electrical
cable, they must be located nearshore – but nearshore locations experience reduced wave energy.
Within the select group of “onshore-generator/hydraulic transmission” wave energy systems,
some are nearshore or in shallow water; require subsurface pipelines; utilize a few massive
devices difficult to ship and install; require fixed seafloor foundations; or use freshwater
transmission (leaks could be detrimental to the local ocean ecosystem). Atmocean WEST
advantages therefore include the following:
Wave capture is farther offshore where waves are bigger.
Transmission line does not require horizontal subsurface drilling.
Individual units are smaller & can be containerized, therefore feasible to ship to remote areas.
Hydraulic line uses seawater, eliminating concern over contamination of the ocean.
System not affected by extreme tides.
Unlike nearshore and beachfront systems, WEST is not “gummed up” by shifting sand.
-
5
10
15
-
0.20
0.40
0.60
0.80
1.00
1.20 0.60.81.01.11.21.31.41.5Wave Period (s)Power (kW)Wave Height (m)
Wave Energy Lookup Table -Low
Waves Detail
kW DPD
Renewable Energy Fund
Grant Application Round 5
AEA12-001 Grant Application Page 17 of 31 7/1//2011
Wave Energy Technologies Using Hydraulic Transmission With Onshore Generation.
Company
Attribute
AquaMarine
“Oyster”
Atmocean
“WEST”
Carnegie
CETO
Dartmouth
SeaRaser
INRI
Seadog
Seawood
Surfpower
Waveberg
Operating Depth 12-16m 25m or deeper >30m required <30m required <20m required <20m required Outside wave
breaking
Ocean regime Nearshore Offshore Near or
Offshore
Nearshore Nearshore Nearshore Nearshore
Power
transmission
Hydraulic Hydraulic Hydraulic Hydraulic Hydraulic Hydraulic Hydraulic
Wave energy
physics
Surge force Wave steepness Surge force Wave heave Wave heave Wave surge Wave heave
Transmission
line type
Pipe under
seafloor
Hose containing
seawater
Pipe under
seafloor
Hose on
seafloor
Hose on
seafloor
Hose on
seafloor
Hose on
seafloor
Transmission
fluid/cycle
Freshwater
closed loop
Seawater open
loop
Fresh or
seawater open
loop
Seawater open
loop
Seawater open
loop (?)
Seawater open
loop
?
Nominal Line
Pressure
1750 psi
(120 bars)
100-200 psi tbd Tbd ~50 psi 200 bar ?
Seafloor
attachment
Individual
fixed
foundation
on seafloor
Standard slack
moorings
Individual
fixed
foundation on
seafloor
Individual
moorings
Individual
moorings
Individual
anchors
Slack moorings
Shoreline
crossing
Directional
drilled
pipeline
Hose (burial not
required)
Directional
drilled pipeline
Directional
drilled pipeline
Tbd Tbd Tbd
Weight 450 t <1 t per device Significant Modest 9 t per device 9t (pontoon
only)
Tbd
System
configuration
1 unit 1 array = 50
devices (typical)
1 unit Multiple units Multiple units
(?)
Multiple units
Shipping size 85’ x 43’ x
43’ (not in
container)
10 per 40’
container
Large Unknown 35 feet height
per unit
Tbd –
significant
Tbd
Onshore
Generator
3 phase
induction
generator
Pelton type
generator
Pelton type
generator
Standard
hydropower
Pelton type
generator
Pelton type
generator
Pelton type
generator
Onshore
Converter
Step up
transformer
to 11/33kV
Standard power
converter
Standard power Standard power Standard power Standard power Standard power
Effective power
output
2,596 MWh
per year
/unit
(Yakutat
wave data)
~2,000
MWh/year/
array (Yakutat
wave data).
Tbd Tbd Tbd Tbd Tbd
Extreme wave
protection
Unknown –
problematic
Buoy submerges
in waves > 3.5
m
Undersea at all
times
Unknown –
problematic
Unknown –
problematic
Unknown –
problematic
Unknown
Seafloor
disturbance
Local
disturbance
of seafloor
from
foundation
placement
Minimal (only
anchor and hose
contact the
seafloor)
Local
disturbance of
seafloor from
foundation
placement
Local
disturbance of
seafloor from
foundation
placement
Local
disturbance of
seafloor from
foundation
placement
Local
disturbance of
seafloor from
foundation
placement
Unknown
Effect on fish,
marine ecology
Minimal
unless fish
or mammals
become
entangled.
Beneficial as
upwelling
replenishes
ocean food web
Minimal unless
fish or
mammals
become
entangled.
Minimal unless
fish or
mammals
become
entangled.
Minimal unless
fish or
mammals
become
entangled.
Minimal unless
fish or
mammals
become
entangled.
Minimal unless
fish or
mammals
become
entangled.
Effects of tides May not
operate
None None None May not
operate
None Tbd
Renewable Energy Fund
Grant Application Round 5
AEA12-001 Grant Application Page 18 of 31 7/1//2011
Among other renewable energy sources, solar panels are obviously severely limited in shorter
daylight, or rainy/cloudy marine climates.
Tidal power is intermittent, and stabilizing these underwater devices has proven challenging.
Tidal rotating devices have potentially negative effects on migrating fish and marine mammals.
Wind power is intermittent and difficult to manage in extreme weather conditions. The turbine
blades could be damaged by Yakutat’s snow and ice.
Geothermal is restricted to relatively few locations and is expensive.
Small scale nuclear is still in development, and is difficult to obtain public acceptance.
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.
Yakutat Electric relies on diesel generation for 100% of its electric generation.
The following is from “Yakutat Conceptual Design, Performance, Cost and
Economic Wave Power Feasibility Study” - Report EPRI - WP- 006-Alaska
Author Mirko Previsic, Coauthor Roger Bedard, Date December 31, 2009
(http://oceanenergy.epri.com/attachments/wave/reports/006_Alaska_Yakutat_Conceptual_Wave_
Power_Feasibility_Study_123109.pdf)
Criteria.
Operating Depth. Under 20m is limited geographically, and problematic due to tides, crashing waves, driftwood, human interference, etc.
Ocean regime. Offshore is preferred as available wave energy is greater than nearshore (where the seafloor absorbs some of the wave energy).
Nearshore systems also could be disabled by natural beach erosion caused by sand migration.
Power transmission. Hydraulic transmission is much less costly than electrical cable.
Wave energy physics. Energy capture needs to be effective in low waves since 20% or more of waves are under 1.5m height.
Transmission line type. Pressure lines must cope with shifting currents, tides, storms, etc.
Transmission fluid/cycle. Seawater eliminates risk to the ocean ecology should rupture occur – but corrosion must be counteracted. Open cycle
(1-way transmission) costs less than closed cycle (round-trip transmission).
Nominal Line Pressure. Lower pressure may reduce pressure drop over longer distance. Higher pressure is optimum for desalination, or dual-
purpose (energy and desalination) systems.
Seafloor attachment. Flexible “slack” moorings may provide greater durability. Fixed foundations or rigid seafloor attachments must cope with
extreme weather conditions.
Shoreline crossing. Directional drilled subsea techniques are more durable but much more expensive and may not be practical in remote
regions. Flexible hose or rigid pipe on the beach surface is easier to maintain and replace if damaged.
Weight. Massive units (e.g. >50 tons) will be expensive to ship and very challenging to deploy.
System architecture & configuration. Wave energy capture should correspond to diffuse, low-grade energy inherent in ocean waves.
Shipping size. Should be containerized for efficient shipping.
Onshore Generator. Off the shelf components.
Onshore Converter. Off the shelf components.
Effective power output & cost per kWh. For most gravity-based systems, wave energy capture is proportional to total system mass (whether
concentrated or distributed). The primary cost drivers are long term system durability and survival under extreme conditions.
Extreme wave protection. The most critical durability issue. Choices are: A) Submerged at all times. B) Duck under big waves. C) Ride over big
waves. Force limiting is best achieved by submerged systems, or by ducking.
Seafloor disturbance. Square meters affected by mooring technique, is critical in regions with extensive coral reefs.
Effect on fish, marine ecology. Best to have zero or slightly positive impact on marine ecology.
Effects of tides. System should not shut down in extreme high or low tides.
Renewable Energy Fund
Grant Application Round 5
AEA12-001 Grant Application Page 19 of 31 7/1//2011
The existing Yakutat Power plant generation equipment consists of four diesel generator sets (gensets)
with a total generation capacity of 4,000 kW. The generation system is a 4160-volt three-phase system. All
generators operate at 1200 RPM.
Genset #1 a new CAT 3516B rated at 1322 kW
Genset #2 is a CAT 3512B rated at 880 kW
Genset #3 is a CAT 3508B rated at 600 kW
Genset #4 is a CAT 3516 rated at 1200 kW
The new 3516B is the primary genset. The 3512B and 3508B gensets operate on an as-needed basis when
the electric load exceeds the 3516B capacity and when the 3516B is down for maintenance. The 3516 is
nearing the end of its useful life and is thus used sparingly. The power plant has two separate cooling
systems, both with heat recovery capability. The 3516B and 3512B are on one common cooling loop, and
the 3508B and the 3516 are on a separate cooling loop. Both cooling loops are 5-inch diameter welded
steel piping with flanged butterfly valves, an AMONT valve, plate heat exchanger and a single radiator.
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.
100% of Yakutat electricity comes from diesel generators.
By integrating Atmocean wave energy as the primary source and using diesel mainly for backup
and peak load generation, the diesel generators life expectancy should increase substantially as
their hours of operation will diminish accordingly. Diesel spare parts and maintenance costs will
also come down.
Among other benefits, by reducing these diesel costs, money can be applied to upgrade and repair
the aging transmission infrastructure, including rotting power poles and aging electric lines (a
critical need per discussion with Scott Newlun).
4.2.3 Existing Energy Market
Discuss existing energy use and its market. Discuss impacts your project may have on energy
customers.
The customer base in Yakutat, as we understand it, consists of individual consumers, tourism-
related small business, government offices, infrastructure and operations provided to the native
community, fishermen, and the fish processing plant. The latter is a major electricity user during
peak operations, and we understand the current high cost of power makes its operation marginal.
There are multiple, interrelated risks to the community from high electric costs. There has been
steady out-migration over the past decade. This means the fixed infrastructure cost is spread over
fewer residents – these higher costs further accelerating the move outside. Excessive power costs
could close the fish processing plant, and its operation transferred to ship processors, or to other
land facilities. This would eliminate a large number of seasonal jobs.
With the Atmocean WEST system up and running, energy bills will come down, and this will
encourage residents to remain in Yakutat rather than move. The fish plant should become
profitable, maintaining operations and seasonal employment.
Many other tangible and intangible benefits will accrue from reducing electricity costs in Yakutat,
by switching to clean renewable wave energy from highly polluting diesel fuel (which is doubly
Renewable Energy Fund
Grant Application Round 5
AEA12-001 Grant Application Page 20 of 31 7/1//2011
polluting since shipping in the fuel also requires diesel or bunker oil).
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
We are attaching our feasibility study “Atmocean Wave Energy Feasibility Study for Yakutat,
AK” updated August 10, 2011 in partial response to these questions. Further information follows
inline each section:
A description of renewable energy technology specific to project location.
See attached.
Optimum installed capacity
We estimate that two arrays of 300 WEST devices will meet 90% of Yakutat kWh demand. Our
current plan, if funded, will deploy these arrays at one time as this is most economical for boat
time, staging, setup and connections, to reach payback within about 4 years.
Renewable Energy Fund
Grant Application Round 5
AEA12-001 Grant Application Page 21 of 31 7/1//2011
In the above Google Earth image, the arrays are shown as smaller lines within the white box
(however could be oriented 90 degrees depending on current measurements). The pink line is
the seafloor transmission line to Cannon Beach, and the aqua line is the land hydraulic hose to
the existing generator station.
Anticipated capacity factor
Since we base our estimates on actual measured waves, capacity factor is already taken into
account.
Anticipated annual generation
We targeted 6.6 million kWh per year for the WEST system. Since some peak loads occur when
waves are lowest (July-August-September), there is still a need for diesel backup.
Anticipated barriers
Lack of funding is the primary barrier. Permitting may slow things down but our discussion with
AK Dept of Natural Resources – Div of Mining, Land, Water (Land Use Permit) and review of
their “Use of Marine Waters-Tide and Submerged Lands” permitting questionnaire, indicates our
system has very little impact and should receive quick approval.
With respect to Federal regulations, according to Stoel, Rives (lawfirm) “The Law of Ocean and
Tidal Energy” (http://www.stoel.com/showarticle.aspx?Show=2523), Federal Energy Regulatory
Commission (FERC) does not have jurisdiction over projects located in 3 mile exclusive state
waters which do not connect to an interstate grid (reference Paragraphs III-A-1, Chapter 3, Page
3).
Basic integration concept
WEST will integrate with the existing generation and transmission/distribution infrastructure of
Yakutat. By connecting the output of our hydraulic motor (Pelton turbine) to the diesel generator
drive shaft, we can implement a hybrid system cost-effectively. A new controller will be needed
to manage the connection for optimum output.
Delivery methods
Delivery of WEST hydraulic pressure will be by hose into the Pelton turbine (or into the
accumulator/storage tank, which then will drive the Pelton turbine connected to the diesel
generator shaft). Existing electrical transmission and distribution will not be affected.
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.
Permits or easements will be needed for the offshore submerged lands (see above comments on
permitting); for the beach crossing; and for running the WEST hydraulic pressure hose from
Cannon Beach to the existing generator building site in town. To accomplish this cost-effectively,
we propose to use existing roadway easements e.g. adjacent drainage channels (however, the
effects of snowplows and snow/ice buildup in these channels, needs to be considered). Roadway
crossings could be via existing culverts or underneath bridges.
We will work closely with the City and Borough, the native community, and with Yakutat
Electric, to solve these land right of way issues.
4.3.3 Permits
Provide the following information as it may relate to permitting and how you intend to address
Renewable Energy Fund
Grant Application Round 5
AEA12-001 Grant Application Page 22 of 31 7/1//2011
outstanding permit issues.
List of applicable permits
Anticipated permitting timeline
Identify and discussion of potential barriers
The “Land Use Permit for Use of Marine Waters”, provided to us by
Christy Colles - Natural Resources Specialist - Alaska Department of Natural Resources Division of
Mining, Land and Water Southcentral Regional Land Office Permitting Unit 550 W. 7th Ave., Suite 900C
Anchorage, AK 99501
is self explanatory and will be filed promptly upon notice of this grant approval. We understand
from Christy that the process is not excessively time consuming – six to nine months – so this
timeline is consistent with the AEA grant timeline as well as our project timeline.
As mentioned above, FERC does not have jurisdiction over energy projects located within the 3
mile exclusive state waters, which do not connect to an interstate grid. As the Yakutat power
system is self-contained, and Atmocean WEST arrays will be inside the 3 mile boundary, no
permit from FERC is needed.
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
We do not anticipate any issues with threatened or endangered species, as our technology has
very low (negligible) impact on the marine or land environment.
Habitat issues
There should be no habitat issues.
Wetlands and other protected areas
While our onshore pressure line will lie in drainage channels (below grade) adjacent roadways,
given the existing effects of traffic and road maintenance, any further impact to these areas will
be nominal.
Archaeological and historical resources
We do not foresee any impact whatsoever on these resources.
Land development constraints
We do not foresee any constraints from land development activity.
Telecommunications interference
There will no impact on telecomm.
Renewable Energy Fund
Grant Application Round 5
AEA12-001 Grant Application Page 23 of 31 7/1//2011
Aviation considerations
Since everything except the buoys are either undersea or lying on the ground, there are no
aviation issues.
Visual, aesthetics impacts
The buoys will be invisible from shore. All other ocean components are subsea. T he beach
crossing pipe probably will get buried naturally (by shifting beach sand) soon after installation,
thus be invisible. The onshore hydraulic hose will lie in culverts or drainage channels next to
roads, with little if any visual impact.
Identify and discuss other potential barriers
None.
4.4 Proposed New System Costs and Projected Revenues
(Total Estimated Costs and Projected Revenues)
The level of cost information provided will vary according to the phase of funding requested and
any previous work the applicant may have done on the project. Applicants must reference the
source of their cost data. For example: Applicants Records or Analysis, Industry Standards,
Consultant or Manufacturer’s estimates.
4.4.1 Project Development Cost
Provide detailed project cost information based on your current knowledge and understanding of
the project. Cost information should include the following:
Total anticipated project cost, and cost for this phase
Requested grant funding
Applicant matching funds – loans, capital contributions, in-kind
Identification of other funding sources
Projected capital cost of proposed renewable energy system
Projected development cost of proposed renewable energy system
Total anticipated project cost, and cost for this phase
Total cost is estimated at $4,962,965 (see budget for details).
Requested grant funding
$4,885,610 (see budget for details).
Applicant matching funds – loans, capital contributions, in-kind
Atmocean CEO Philip Kithil has committed to provide $77,355 in cash as matching funds. These
funds will purchase common stock, and be used as matching funds by Atmocean as authorized
by the Board of Directors (see attached Resolution).
.
Identification of other funding sources
We are scheduled to meet with Russell Dick and Nathan Soboleff from Sealaska Corporation
during the Rural Energy Conference Sept 27-29, 2011 in Juneau to discuss its participation in
this project. As any financial commitment from Sealaska will take several months to gain
approval and agree on terms, we are not able to provide any commitment as part of this
submittal.
Projected capital cost of proposed renewable energy system
$4.9 million (see budget details).
Renewable Energy Fund
Grant Application Round 5
AEA12-001 Grant Application Page 24 of 31 7/1//2011
Projected development cost of proposed renewable energy system
WEST will be fully developed by the time this grant is approved by AEA
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.)
We estimate that O&M costs will run about 15% of the Atmocean WEST upfront costs (about
$200k annually, equal to about 3 cents per kWh) as explained in the Risks section above. Funding
will come from the power purchase agreement to be negotiated between Atmocean and Yakutat
Electric.
4.4.3 Power Purchase/Sale
The power purchase/sale information should include the following:
Identification of potential power buyer(s)/customer(s)
Potential power purchase/sales price - at a minimum indicate a price range
Proposed rate of return from grant-funded project
Identification of potential power buyer(s)/customer(s)
The PPA customer is Yakutat Electric.
Potential power purchase/sales price - at a minimum indicate a price range
We have developed a Draft PPA and submitted this to Yakutat Electric manager Scott Newlun,
and to the City/Borugh Manager Skip Ryman. In this draft, we proposed a cost per kWh the
greater of: either 90% of previous 3 months actual diesel cost per kWh, or $0.25 per kWh. Under
this plan, Yakutat Electric is guaranteed to save money, and bears no risk. It’s primary obligation
is to purchase kWh generated by Atmocean WEST.
In our pricing projections which underlie this project, we assume average annual PPA price/kWh
somewhat different than initially proposed in the above draft PPA. We start at the estimated
current energy cost per kWh of $0.35/kWh, then reduce this by 1% the first year, 2% the 2nd
year, 4% the 3rd year, 8% the 4th year, and 16% the 5th year; then 5% per year until the 20th year
of operation. These assumed prices per kWh are shown below.
2013 2014 2015 2016 2017 2018 2019
$0.350 $0.347 $0.340 $0.326 $0.300 $0.252 $0.239 then reducing 5%/year
Proposed rate of return from grant-funded project
Our projections show an IRR of 30%. We estimate tangible payback in 4 years, and a benefit/cost
ratio of 3.3.
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.
We base wave energy on US Data Buoy Center for #48082. We also considered data from
Renewable Energy Fund
Grant Application Round 5
AEA12-001 Grant Application Page 25 of 31 7/1//2011
#46083 however its 2010 data record was incomplete.
We base Yakutat energy consumption on worksheets provided by Scott Newlun (“Power House
PCD.xlsx”.
We used some information contained in the 2009 EPRI Study “Yakutat Conceptual Design,
Performance, Cost, and Economic Wave Power Feasibility Study” (available online).
We used internal data on WEST performance and expected energy output.
We obtained a cost quote from Lynden Transport, for shipping 40 containers from Albuquerque
NM to Yakutat AK.
Reytek Chief Engineer Phil Fullam reviewed the reasonableness of our component cost estimates.
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
Calculations supporting the values in Section 2.7.5:
90% of 6.6 million kWh = 5.94 million kWh generated from free wave energy. Assuming generation
rate of 15 kWh/gallon of diesel fuel (2010 data from Yakutat Electric), the annual diesel savings are:
5.94 million kWh/15 kWh/gallon x assumed $4 cost per delivered gallon =$1,760,000 direct financial
benefit per year. If we assume diesel cost per gallon increases 10% per year in the future, the total
direct benefit over seven years exceeds $13.6 million.
Calculations supporting the values in Section 2.7.6:
Local labor to assemble & deploy WEST systems: $450,000.
Operations & maintenance: assume 2 full time staff @ $50,000 per year, = $100,000.
CO2 emissions avoided (equivalent to pricing of Renewable Energy Credits) – assume $.05 per
kWh = $297,000.
Potential annual fuel displacement (gal and $) over the lifetime of the evaluated
renewable energy project
By replacing diesel fuel with wave energy over the 20 year assumed life of this project, based on
Yakutat Electric’s stated consumption in 2010 of 440,368 gallons diesel costing $1,469,000, with
15 kWh per gallon generator efficiency, and given our 90% supply assumption, the total (20
years) diesel displaced will be 7.9 million gallons. Assuming a future diesel price averaging about
$5.00/gallon (but could be much higher), the direct cost savings will be $44 million.
Renewable Energy Fund
Grant Application Round 5
AEA12-001 Grant Application Page 26 of 31 7/1//2011
Anticipated annual revenue (based on i.e. a Proposed Power Purchase Agreement price,
RCA tariff, or cost based rate)
Our rate assumptions are shown above. Starting with an energy cost (excluding T&D) of
$0.35/kWh, by year 20 this comes down to $.151/kWh, substantially reducing the cost of
electricity for Yakutat consumers.
Potential additional annual incentives (i.e. tax credits)
We expect there may be significant tax benefits accruing to Atmocean, but do not have specifics
at this time.
Potential additional annual revenue streams (i.e. green tag sales or other renewable
energy subsidies or programs that might be available)
Same answer as above question.
Discuss the non-economic public benefits to Alaskans over the lifetime of the project
Much less pollution from burning diesel fuel.
Favorable public relations, being the first community to employ commercial wave energy. (Don’t
let this opportunity slip by!)
Improvement to ocean ecology from the upwelling generated by each WEST device.
Enhanced natural ocean sequestration of CO2 due to possible phytoplankton blooms each
spring and summer.
Help reverse Yakutat’s decade-long trend of population out-migration.
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
Proposed business structure(s) and concepts that may be considered.
While this proposal assumes Atmocean, Inc. is both the system supplier and the operator
(independent power producer), we are open to an innovative business structure shown below
which embodies local ownership of the project:
Renewable Energy Fund
Grant Application Round 5
AEA12-001 Grant Application Page 27 of 31 7/1//2011
Under this alternative model, Atmocean would co-invest with local entities (individuals, native
org’s, companies, gov’t) to form a local operating company (LLC). This LLC would negotiate the
PPA with the local utility. The LLC would purchase subassembled systems from Atmocean. By
focusing on local control of the operation, the community may be better served; and, Atmocean
would still benefit from its investment in the LLC.
How you propose to finance the maintenance and operations for the life of the project
Since O&M is quite low (expected $200k per year, just 3 cents/kWh, Atmocean (or the operating
entity if the above business model is used) will have ample funds from its PPA contract to cover
these costs.
Identification of operational issues that could arise.
In the Risks section above, we identified some of the worst case events.
A description of operational costs including on-going support for any back-up or existing
systems that may be require to continue operation
The backup system will continue to be diesel, so these technical and cost factors need to be
maintained.
Commitment to reporting the savings and benefits
Atmocean commits to transparency in all dealings with the public, AEA, city and Borough of
Yakutat, etc.
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 t o date and identify other grants
that may have been previously awarded for this project and the degree you have been able to
Business Model
Atmocean,
Inc.
Subassembly
Producer Local LLC
Final Assembly-
Deploy-Operate
Investors
Local Partners
Local Utility Power
Purchase Agmnt.
Solid white= planned funds-in
Dash white = optional funds-in
Solid or dash Gold = payback (ROI)
Renewable Energy Fund
Grant Application Round 5
AEA12-001 Grant Application Page 28 of 31 7/1//2011
meet the requirements of previous grants.
We have conducted the feasibility study (at own expense) and are updating those projections as
new information is obtained.
We have undertaken sea trials at Cal Poly (at own expense), leading to some minor design
improvements, further assurance of durability, and information on bio-fouling.
With these sea trials due for completion September 2011, we hope to gain funding for a moored
array nearby the Cal Poly ocean test pier so we can work out issues with seafloor moorings, array
configuration/spacing, and gain more data on upwelling and durability (this moored unit will stay
out over the winter when Pacific storms churn the region).
We also are in line to get hydraulic modeling support from Sandia National Laboratories, which
will guide our final design of the hydraulic pressure line. This project should kick off in January
2012 and be completed March 2012, in time to integrate the results into the work funded by the
AEA grant commencing August, 2012.
We are 100% privately funded by angel investors. In Kithil’s previous auto safety technology
company, he obtained cooperative research grants from US DOT – NHTSA which were renewed
multiple times between 2000 and 2003, (as evidence of his ability to comply with grant
documentation). In the current as well as past business ventures, he has been awarded several
small business assistance grants from Sandia and Los Alamos National Laboratories, and a
CRADA from Sandia.
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.
We believe our relationships with community leaders (including Skip Ryman, Scott Newlun,
Scott Chadwick, and Ian Fisk) are in good standing.
We are not aware of any opposition to our 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
Provide a narrative summary regarding funding sources and your financial commitment to the
project.
We request $4,885,610 in grant funds, to be supplemented by $77,355 in matching funds from
Atmocean CEO Philip Kithil.
Atmocean, Inc., has pre-approval from its Board of Directors to negotiate the AEA grant.
Atmocean views this project as an enormous win-win for Alaska rural coastal communities as
well as for the Company. We get to showcase our technology in one of the most challenging
Renewable Energy Fund
Grant Application Round 5
AEA12-001 Grant Application Page 29 of 31 7/1//2011
environments found anywhere on Earth. Alaska rural coastal communities get a solution to ever-
increasing diesel electricity costs. The total (tangible and intangible) ROI is very significant.
Renewable Energy Fund
Grant Application Round 5
AEA12-001 Grant Application Page 30 of 31 7/1//2011
SECTION 10 – ADDITIONAL DOCUMENTATION AND CERTIFICATION
SUBMIT THE FOLLOWING DOCUMENTS WITH YOUR APPLICATION:
A. Contact information, resumes of Applicant’s Project Manager, key staff, partners,
consultants, and suppliers per application form Section 3.1 and 3.4. Applicants
are asked to separate resumes submitted with applications, if the individuals do
not want their resumes posted.
B. Cost Worksheet per application form Section 4.4.4.
C. Grant Budget Form per application form Section 9.
D. Letters demonstrating local support per application form Section 8.
E. An electronic version of the entire application on CD per RFA Section 1.7.
F. Authorized Signers Form.
G. Governing Body Resolution or other formal action taken by the applicant’s
governing body or management per RFA Section 1.4 that:
- Commits the organization to provide the matching resources for project at the
match amounts indicated in the application.
- Authorizes the individual who signs the application has the authority to
commit the organization to the obligations under the grant.
- Provides as point of contact to represent the applicant for purposes of this
application.
- Certifies the applicant is in compliance with applicable federal, state, and local,
laws including existing credit and federal tax obligations.
H. CERTIFICATION
The undersigned certifies that this application for a renewable energy grant is truthful
and correct, and that the applicant is in compliance with, and will continue to comply
with, all federal and state laws including existing credit and federal tax obligations and
that they can indeed commit the entity to these obligations.
Print Name
Signature
Title
Date
Renewable Energy Fund
Grant Application Round 5
AEA12-001 Grant Application Page 31 of 31 7/1//2011
Documents incorporated in the application follow:
Selected emails between Atmocean CEO Kithil, Scott Newlun, Manager Yakutat Electric, and
Skip Ryman, City Manager:
Scott Newlun yakpower@ptialaska.net to Philip Kithil <atmocean.kithil@gmail.com>
date Fri, Aug 5, 2011 at 1:31 PMsubject Re: Wave and current measurements
Philip,
I have no problem with you putting in for the grant. I can't speak for everyone but I am glad you are
moving on it. Like I said the AEA is aware of your company and should take a hard look at it.
I will look through your application and see if I notice any problems.
Thank you,
Scott
Skip Ryman
sryman@yakutatak.us
to Philip Kithil <atmocean.kithil@gmail.com>
cc
Scott Newlun <yakpower@ptialaska.net>,
Bill Lucey
<yakutat_salmon_board@yahoo.com>
date Mon, Jun 13, 2011 at 11:46 AM
subject Re: PPA
hide details Jun
13
It sounds intriguing. As long as you understand that this small community is not in a position to
accept any significant financial risk, I am certainly willing to sit down and flesh out details to see
if it is something we can recommend to the Assembly. If Scott agrees we can set a time to begin
discussions.../Skip
Scott Newlun
yakpower@ptialaska.net
to Philip Kithil <atmocean.kithil@gmail.com>,
Skip Ryman <sryman@yakutatak.us>
date Tue, Aug 2, 2011 at 1:27 PM
subject Re: Wave and current measurements
Philip,
We have not given up on wave energy yet, just too many irons in the fire right now. I have been
forwarding information to the Alaska Energy Authority by way of the South East Alaska Integrated
Resource Plan (SEIRP) Work Group Meetings. They are taking a hard look at the project they can help
develop for Yakutat and I will keep you informed of any developments from that front. Please keep us in
the loop with your progress. Thank you,
Scott Newlun
General Manager
Yakutat Power