Loading...
HomeMy WebLinkAbout1 - Kipnuk GrantApplication4 Renewable Energy Fund Round IV Grant Application AEA 11-005 Application Page 1 of 27 7/21/2010 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/RE_Fund-IV.html Grant Application Form GrantApp4.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 Costworksheet4.doc Summary of Cost information that should be addressed by applicants in preparing their application. Grant Budget Form GrantBudget4.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 GrantBudgetInstructions4.pdf Instructions for completing the above grant budget form. • 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 IV AEA11-005 Grant Application Page 2 of 27 7/21/2010 SECTION 1 – APPLICANT INFORMATION Name (Name of utility, IPP, or government entity submitting proposal) Kipnuk Light Plant Type of Entity: Electric Utility Mailing Address P.O. Box 071 Kipnuk, Alaska 99614 Physical Address Kipnuk, AK Telephone 907-896-5427 Fax 907-896-5022 Email scarlklp@yahoo.com 1.1 APPLICANT POINT OF CONTACT / GRANTS MANAGER Name Sam Carl Title Utility Manager Mailing Address Kipnuk Light Plant P.O. Box 071 Kipnuk, Alaska 99614 Telephone 907-896-5427 Fax 907-896-5022 Email scarlklp@yahoo.com 1.2 APPLICANT MINIMUM REQUIREMENTS Please check as appropriate. If you do not to meet the minimum applicant requirements, your application will be rejected. 1.2.1 As an Applicant, we are: (put an X in the appropriate box) X An electric utility holding a certificate of public convenience and necessity under AS 42.05, or An independent power producer in accordance with 3 AAC 107.695 (a) (1), or A local government, or A governmental entity (which includes tribal councils and housing authorities); Yes 1.2.2. Attached to this application is formal approval and endorsement for its project by its board of directors, executive management, or other governing authority. If the applicant is a collaborative grouping, a formal approval from each participant’s governing authority is necessary. (Indicate Yes or No in the box ) Yes 1.2.3. As an applicant, we have administrative and financial management systems and follow procurement standards that comply with the standards set forth in the grant agreement. Yes 1.2.4. If awarded the grant, we can comply with all terms and conditions of the attached grant form. (Any exceptions should be clearly noted and submitted with the application.) Yes 1.2.5 We intend to own and operate any project that may be constructed with grant funds for the benefit of the general public. Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 3 of 27 7/21/2010 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) High Penetration Wind Diesel Power and Heat 2.2 Project Location – Include the physical location of your project and name(s) of the community or communities that will benefit from your project. Kipnuk, Alaska 2.3 PROJECT TYPE Put X in boxes as appropriate 2.3.1 Renewable Resource Type X Wind Biomass or Biofuels Hydro, including run of river Transmission of Renewable Energy Geothermal, including Heat Pumps Small Natural Gas Heat Recovery from existing sources Hydrokinetic Solar Storage of Renewable Other (Describe) 2.3.2 Proposed Grant Funded Phase(s) for this Request (Check all that apply) 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. The proposed project is a medium to high penetration for the community of Kipnuk, Alaska. The project will be owned and operated by the Kipnuk Light Plant and the community of Kipnuk, and consists of three Northwind 100 wind turbines, a modular hybrid wind diesel power conditioning control module, a 200 kW frequency controlled heat recovery boiler, 20 residential electric thermal storage devices. This hybrid power system is designed to fit with the existing diesel powerplant, and wrap into any new plant proposed for the future. The wind turbines are well proven in Alaska, the power conditioning and controls module is able to be located next to the existing or new powerplant. The power control and conditioning module will contain new wind diesel controls and switchgear, grid regulating inverter and energy storage unit for grid stabilization. The 20 electric thermal storage devices will capture any excess available wind energy and store it as heat for residential heating. The wind turbines and hybrid controls and power conditioning module will be mounted on pile foundations, on property provided by the community. This wind diesel system architecture is scalable through the addition of wind turbines, new diesel Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 4 of 27 7/21/2010 gensets, addition of more real energy storage in the form of batteries, flywheel or capacitors. The system is also capable of accomodating addition of residential electric thermal storage devices when additional wind energy capacity becomes available. 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 benefits of the this project include: The wind energy will displace 42,890 gallons of fuel used to generate electricity and 12,300 gallons of heating fuel. The annually savings to the utility that can be passed onto the customers total $275,950 annually based on a $5.00/gallon (AEA conceptual design report) average price for fuel over the life of the project. The electric thermal storage devices have the potential to reduce residential heating costs in the 20 homes by 50%. This represents a displacement of residential heating fuel equivalent to $52000 annually. Additional turbines and off peak stoves can increase the benefit in the future. The annual heating costs based on $8.00/gallon home heating fuel price. The savings will be realized through the sale of an equivalent amount of excess electricity at 50% of the displaced fuel cost. This shares the savings equally between the customer and the utility, which will charge $.15 to $.20/KWhr for surplus wind energy. Beyond a reduction in fuel use, cheaper power and lower heating costs, additional benefits of the project include: - Increased local employment and training - Reduced reliance on the volatility of fuel prices - Reduced risk of fuel spills - Reduced local air pollution and contribution to climate change - Increased revenue to the utility company - Reduced PCE payments - Use of the smart grid to improve management of utility and improve efficiency of the utility 2.6 PROJECT BUDGET OVERVIEW Briefly discuss the amount of funds needed, the anticipated sources of funds, and the nature and source of other contributions to the project. The total project cost is $4,624,041. The Kipnuk Light Plant will contribute $1,200,000 in matching funds. Total request from the renewable energy fund is $3,424,041. 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. $3,424,041 2.7.2 Other Funds to be provided (Project match) $1,200,000 2.7.3 Total Grant Costs (sum of 2.7.1 and 2.7.2) $4,624,041 Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 5 of 27 7/21/2010 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) $4,624,041 2.7.5 Estimated Direct Financial Benefit (Savings) $701,360 annually 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.) See cost worksheet 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. Project Management Plan Project supervision: Chaninik Wind Group board of directors, and Kipnuk Light and Power Utility Board, Dennis Meiners and Ben May of Intelligent Energy Systems, will manage this project with a construction STG Inc. will provide project management assistance. The project management board will consist of the Kipnuk local utility board and the Board of Directors of the Chaninik Wind Group. The chief electrical engineer is: Albert Sakata, P.E. The project engineers are Albert Sakata, P.E. and Dale Letourneau On site supervisor: Ben May, IES Metering project manager: Martin Leonard metering, monitoring and web based support tools, systems engineer System components, control and integration; power system stability: The wind turbines and hybrid power system have advanced remote diagnostics capability. These components can be monitored and controlled via phone modem or Ethernet connection without the need for special software, through the use of visualization software. Full product warranties for controls, power conditioning, battery systems, wind turbines, metering systems and electric thermal storage devices are available from the suppliers, as well as application support, training, installation, commissioning and emergency assistance. Construction; STG Inc. - Jim St. George 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.) Funding available summer 2011 Complete final designs and construction agreements Summer 2011 Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 6 of 27 7/21/2010 Procurement of Turbines and long lead time items September 2011 Spring Barge shipments Summer 2011, overwinter crane Construction of control and integration module, delivery winter 2012 Installation of Thermal storage, August 2011 Commissioning Summer, 2012 Project support January-December 2012 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.) Key milestones: Final design and Permitting: A conceptual project design has been completed and is based on similar types of project. All permitting agencies have been contacted and applied for. Site control and heat and metering sales agreements. Grant Award Procurement and Mobilization Construction Commissioning Support Closeout 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. Project Management Plan Project supervision: Chaninik Wind Group board of directors, and Kipnuk Light and Power Utility Board, Dennis Meiners and Ben May of Intelligent Energy Systems, will manage this project with a construction STG Inc. will provide project management assistance. The project management board will consist of the Kipnuk local utility board and the Board of Directors of the Chaninik Wind Group. The chief electrical engineer is: Albert Sakata, P.E. The project engineers are Albert Sakata, P.E. and Dale Letourneau On site supervisor: Ben May, IES Metering project manager: Martin Leonard metering, monitoring and web based support tools, systems engineer System components, control and integration; power system stability: The wind turbines and hybrid power system have advanced remote diagnostics capability. These components can be monitored and controlled via phone modem or Ethernet connection without the need for special software, through the use of visualization software. Full product warranties for controls, power conditioning, battery systems, wind turbines, metering systems and electric thermal storage Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 7 of 27 7/21/2010 devices are available from the suppliers, as well as application support, training, installation, commissioning and emergency assistance. Construction; STG Inc. Jim St. George 3.5 Project Communications Discuss how you plan to monitor the project and keep the Authority informed of the status. A full-time, qualified project manager will be monitoring this project. The project point of contact and the project manager will jointly submit periodic status reports. Additionally, weekly and monthly project coordination meetings will be held with the project team to track progress and address issues as they arise 3.6 Project Risk Discuss potential problems and how you would address them. There are inherent risks in any project involving construction, logistics, and unpredictable weather. One primary advantage this project has is that Kipnuk is a member of the ChaninikWind Group, which has created a strong and supportive assistance network in the region. This includes expanded access to tools, equipment training, spare parts, and transportation and service options. The team of Intelligent Energy Systems and STG has experience managing the logistics of this project. Many questions involved in the installation of wind turbine in villages have been answered, and problems solved. The primary is increasing the cost effectiveness of the projects, and simplifying operations and reducing maintenance. This project has elected to use the Northwind 100. This is one of the most expensive wind systems available, however the performance of the turbines is well understood. The project integration is built around a fully tested, power control and conditioning module, which include switchgear, hybrid system controls, a power conditioning inverter and 250 kWhrs of lithium ion battery energy storage. Similar power conditioning and energy storage modules are being installed in utility applications in the U.S. and Europe. There are two primary reasons for this, cost and performance. Several different types of power conditioning modules are available in the market place, from large and very reputable supplies such as ABB, GE, S&C Electric, American Superconductor and others. These offering are the result of major advances in power electronics manufacturing, which has resulted in 50% cost reduction over the last 3 years. These systems are being manufactured in serial production for widespread application. It is anticipated that smaller footprint STATcom/DVR devices will become increasing common through all electrical grids. The manufacture and supply of lithium ion batteries are following the same trend, of packaged modules, with higher performance and lower costs. This is largely due to the recent expansion of manufacturing capacity to meet the plug in and hybrid vehicle markets. It has been projected that the cost of high performance lithium ion battery banks will decrease by a factor of 5 to 10 over the next 5 to 7 years, as automobile orders increase. These large industrial electrical equipment suppliers are beginning to produce these types of grid connected storage solutions, in modular and custom sizes, and are backing their installation will full warranties, and testing programs which provide unprecedented levels of performance. SECTION 4 – PROJECT DESCRIPTION AND TASKS Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 8 of 27 7/21/2010 • 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. Regional wind monitoring was placed in Kongiganak by the Alaska Energy Authority to collect data representative for the region. Kipnuk is 30 miles away, and not a tree or hill in sight.) This data was correlated with long term airport data by meteorologist, Ed McCarthy of WECTEC, and J.P Pinard, P.E, PhD of Jp Pinard engineering to confirm the suitability of the resource. The results of the wind resource evaluation indicate an outstanding wind resource with an average wind speed of 7.78 m/s, and with the power distribution well suited for the capture of wind energy. The data was analyzed in the HOMER and Windographer software models to and compared with the power curves of various candidate wind turbines. Only direct drive permanent magnet generator wind turbines were evaluated, because of their record of long life and low maintenance. The two primary wind turbines which are available in Alaska the Northwind 100 B model, the EWT 900, 54 meter wind turbine. The HOMER modeling optimized the installation to 3, Northwind 100. HOWEVER, the EWT has the ability to provide sufficient additional excess wind capacity to displace 54000 gallons of home heating fuel and 66,000 gallons of diesel fuel used for power generation, the cost of installation of the EWT with module and 100 electric thermal storage devices to heat almost all of the homes in the community,, this would require a budget of $6,000,000 which is beyond the limits of this program. 4.2 Existing Energy System 4.2.1 Basic configuration of Existing Energy System Briefly discuss the basic configuration of the existing energy system. Include information about the number, size, age, efficiency, and type of generation. The existing power plant has a potential power generation capacity of 635 kW from three-diesel generator with individual capacities of 250 kW, 250 kW, and 135 kW. The average community load is 220 kW and peak load is 370 kW. The existing power generation facility has a heat recovery system providing heat to the Kugkaktlik Limited, Traditional Council and Power Plant Offices. The community has had to frequently ration power, and numerous times has had to purchase fuel locally in small amounts at retail prices of up to $8.00 per gallon to continue to generate power until the barge shipments arrive. The new power plant and bulk fuel storage facility is proposed for construction in 2008-9, is uncertain. The Wind Heat project could be constructed in conjunction with this project and fully integrated into the system. The new power plant will have a generation capacity of 1,200 kW of Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 9 of 27 7/21/2010 diesel generation. The generators will be sized to meet the current power needs of the community as projected for the next 10 years. Four generators with the following capacities of 370, 370, 230 and 230 kW are planned for installation in 2013. The generators will be integrated with an automated control system, which can optimize the selection of gensets. Investments were made in the installation of a new Cummins 350 kW genset was installed, and the AEA is in the process of installing a new Cat 3456, electronically fuel injected generator rated 457 kW. Population data for Kipnuk show a constant population growth since 1990. The current population is 680. Data for the last 5 years showed a growth of 7% that has slowed to 1.5% annually. New facilities and new loads include: AVCP 25 single family dwellings, in next 10 years. ADOT, new airport facilities, 120 kW ANTHC, clinic, 50 kW Coastal Villages Regions Fund (CVRS) Fisheries Support Center potential fish plant. A new school, is planned, 2013, 75 kW Water and Sewer System, 2013, 75 kW It has been estimated that the Electric Load will grow from its 2008, 1,657,658 kWhrs, to 2,381,000 kWhrs in by 2015. In the early years any excess wind energy will be captured and stored to heat community buildings and residences. Kipnuk has needed a new diesel powerplant for 10 years, and the Alaska Energy Authority has proposed funding a new powerplant in Kipnuk for the last 7 years. It is unlikely that a new diesel plant will receive funding for this project for several years. In the meantime the wind project, which includes the power conditioning and control module, is intended to interface directly with the old and newly proposed powerplant. Once installed the power conditioning and control module will interface with the existing power plant and provide many benefits immediately. These include: voltage and frequency regulation for improved powerquality, automation of diesel powerplant operation, sufficient energy storage to ride through fault and peak lopping events of up to 250 kW for 15 minutes. And of course, full integration of the wind in such a manner that the diesels can be turned off approximately 1200 to 2000 hours per year. This will reduce diesel- operating costs and result in immediate and long term savings to the utility. 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. Fuel is delivered to Kipnuk via barge twice a year, once in the Spring and again in the Fall. Due to limited bulk fuel storage capacity, Kipnuk Light Plant has nearly run out of fuel for the past two years. The viability of various sources of energy was assessed in the Kipnuk, Alaska Rural Power System Upgrade Conceptual Design Report 2007. “The report on page 11 states: It is assumed that upgrades to the community electrical power system incorporating supplemental wind energy, Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 10 of 27 7/21/2010 is a priority and will be conducted within the next ten years.” This report was conducted when fuel prices were below $2.00 per gallon delivered in bulk to the utility. Last year bulk fuel wholesale purchases were $4.26 per gallon. This translated to home heating fuel costs of $8.00 per gallon. Annual electrical load growth and step increases in demand were projected through 2017. Demand grows from a peak of 339 kW now to a projected 709 kW. The alternatives were narrowed to three; Increased diesel efficiency: The current fuel efficiency of the diesel generation plant can be increased from 10 kw/hr per gallon to 14 kWhrs per gallon. This would result in annual fuel savings of 50,000 gallons per year. Switching from #1 to #2 diesel fuel could save as much as 7,400 gallons per year. 4.2.3 Existing Energy Market Discuss existing energy use and its market. Discuss impacts your project may have on energy customers. Kipnuk is located on the west bank of the Kugkaktlik River in the Yukon-Kuskokwim Delta, 85 air miles southwest of Bethel. It lies four miles inland from the Bering Sea coast. The community is located in a marine climate. Precipitation averages 22 inches, with 43 inches of snowfall annually. Summer temperatures range from 41 to 57, winter temperatures are 6 to 24. Kipnuk is accessible only by air or by snow machine in winter, and boat in summer, for delivery of supplies. In a recent RUBA report, it was indicated that Kipnuk meets all Essential indicators, and almost all Sustainability indicators. Kipnuk relies on electricity to maintain home lighting, street lighting, telephone service, school service, clinic hours, and freezers to maintain a subsistence lifestyle. Reliable electricity is crucial to the residents of Kipnuk. Heat: A survey was conducted of heating fuel usage of each residence. These results are being correlated with other records. This information indicates that on average, a typical residence in Kipnuk uses 766 gallons of heating fuel annually, leaving an estimated 136,000 gallons of heating fuel available for displacement with wind. Heating fuel represents the single greatest cost of maintaining a residence. Typical costs last year exceeded $ 6,000 per household. The availability of wind correlates well with heating Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 11 of 27 7/21/2010 needs. The ability to store this wind energy at night and when the loads are low, sell this wind energy for half the cost of heating fuel, store the wind energy for use when needed, can reduce average residential fuel costs by $3,000 annually per household. 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 High Penetration Wind Diesel Smart Grid It has been demonstrated that low penetration systems, ones in which the proportion of wind to diesel rarely exceed 30%, are not economical and construction costs are disproportionably high. More importantly, the high cost of home heating is easily 3 to 5 times the cost of electricity in rural Alaska, and soaring fuel costs are crippling communities. A primary object of this program is to reduce dependency on diesel fuel and to reducing all energy costs in order to stabilize the local economies. The proposed system fulfils these objectives, more cost effective energy, by installation of a Phase 1, High Penetration Wind Diesel Smart Grid with Energy Storage, which will reduce fuel used to generate electricity by 40%, while reducing residential heating costs in 20 homes by 50%. This project will use wind to displace 57,190 gallons of heating fuel. Additionally these benefits are returned to the utility in increased revenues and increased local employment. Additional benefits are returned to the state in lower PCE contributions. This proposed system provides an integrated village heat and power system which uses a smart grid and thermal energy storage devices in each home to capture and store at a significantly reduced cost, excess wind energy. The wind diesel system is stabilized through the use of power conditioning module with 250 kW hours of energy storage in the form of standardized lithium ion battery modules which are manufactured for the power generation industry and automobile manufactures. The energy storage and power conditioning system will be used to balance fluctuations in the load or wind turbine output. This wind diesel architecture is designed to incorporate more wind, while reducing diesel generation. The use of battery energy storage enables 2000 hours of diesel off operation and the ability to accommodate other types of renewable generation including residential wind systems. The power system is designed for expansion through the addition of increased numbers of wind turbines, increased thermal storage devices and increased powerconditioning and energy storage capacity. The metering and energy storage systems are a necessary component of the village energy system management system and is responsible for the capture and beneficial use of the Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 12 of 27 7/21/2010 wind. The system includes: Three Northwind 100 wind turbines on 37 meter tubular towers. These turbines are being used successfully across the state. The turbines towers will installed on pile foundations, A containerized switchgear, control and integration module, containing switchgear, controls and a lithium ion battery module. Heat recovery will be through 200 kW of distributed thermal storage heaters will be placed in the community building, head start preschool, the clinic, the homes of 20 village elders, and through the installation of a 200 kW frequency controlled boiler in the power conditioning module located in the community building. A smart metering system will enable the stoves on and off as excess wind becomes available. The three wind turbines with a rated output of 300 kilowatts. Grid stability, as defined by voltage and frequency stability will be provide through the power conditioning module and the action of fast acting load controllers on the heat recovery boiler and residential electric thermal storage devices. The boiler and ETS units are configured to operate in a complementary manner to the availability of excess wind. The power conditioning module with battery storage regulates the voltage of the power system automatically decreasing diesel generation and wind energy penetration is increased, to the point where the supervisory control system signals the diesels to go off line. Primary responsibility for responding to frequency changes occur at the boiler and ETS units. The supervisory control system would monitor the electrical load demand and configures various system operating modes. As the wind comes up, which occurs frequently at night most of the winter, excess wind energy would be made available to customers at a reduced rate. . The supervisory control system would determine the amount of available wind energy, while optimizing power production and component output. The supervisory controller would signal the metering system to enable various devices for separate green energy sales and separately account for wind only and diesel only power sales. Thermal Storage Devices in each home would be enabled to capture excess wind energy when available and store it for heating use throughout the day or for several days. The ability of the storage devices to store wind generated electricity Below is a diagram of the proposed system. This diagram, contains three future elements, the addition of more wind turbines, solar panels, and distributed residential energy storage. These three components are shown only to indicate the extent of the system potential. The diagram indicates the future implementation of plug in vehicles for local transportation. Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 13 of 27 7/21/2010 The project design offers a very simple and reliable wind diesel architecture, which can be expanded to achieve 50% fuel saving at the electric utility, and 50% of the fuel requirements of the community. Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 14 of 27 7/21/2010 The control and communications relationships of the power system components. The design enables high wind penetration at all times, with the existing power system stabilized at low loads with the flywheel to support any changes in power requirements or loss of wind output, while decreasing diesel fuel usage. The remote heat recovery boiler will be placed at the school, to absorb a limited amount of excess wind energy, and the smart meter enabled thermal energy storage units in each of 20 residences will capture the remaining wind. In low winds, the diesel power system will operate in a high penetration mode, with the smallest genset on line or possibly turned off, and the available wind captured to displace fuel used to generate electricity. As wind speeds increase greater proportions of wind energy are captured as heat. Diesel Retrofit The main features of modular control and integration unit, is that it s designed to be connected to an existing power plant. In this instance the switchgear is integrated into the design to reduce future costs, and maximizing the use of the existing facility. New gensets can then be added into the old of new powerhouse as required, with a minimum of new cabling and modification. This design anticipates the installation of new generators sets, which can operate efficiently over a range of load conditions in parallel operation with the wind turbines. The control system and power electronics design would select the most efficient generator to always be on line. Wind Turbines Cost estimates for turbine installation were developed after geotechnical investigations and load analysis. Installation costs estimates were developed for several types of turbines. Gross annual estimated energy production for each turbine was arrived at through comparison of power curves and wind resource information using HOMER. The results are summarized in Table 4. A 20-year investment horizon and a 5% nominal interest rate were used for economic analysis. These are the same investment guidelines as proposed in the Alaska Rural Energy Plan, April 2004. Table 3 – Wind Turbine Assumptions Per-Turbine Costs Fuel Saving gallons Turbine Model Rated Power (kW) Hub Height (m) Lifetime (yr) Capital Replacement O&M Generation* equivalent gallons NW 100 100 37 20 $900,000 3,500,000 275,000 $ 450,000 $12,000 288,476 18,367 3, NW 100 300 37 20 $2, 500,000 $ 1200000 $28,000 865,431 57,190 1 EWT 900 900 60 20 $ 4,200,000 $ 2,000,000 $ 32,000 2,601,763 120,380 These turbines will be placed approximately 250 feet apart and located 1000 feet from the existing 12.47 kV transmission line. Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 15 of 27 7/21/2010 Wind Diesel Integration and Balance of System: The existing plant control system senses the load an automatically dispatches the most efficient generator set or combination of sets to meet the load. Additions to the power system will need to be made to accommodate high wind penetrations. Basic Stabilization and Functionality The Control and Power conditioning module consists of an large inverter which can provide instantenous response to changes in system voltage. When couple to the lithium ion battery bank the unit can provide up to 250 kWhrs of real energy and 250 kVar of reactive power correction. This system is electrically coupled to the power grid, and maintains power quality during fluctuations in wind output, major changes in load, or through power system faults such as the loss of all turbines, or the primary diesel generator. The battery energy storage and power electronics interface combination by itself is capable of basic stabilization of both the voltage and frequency of the power system without any additional information from external sources. The power conditioning system achieves stabilization through sensing of the grid and step-less absorption and exportation of real power for frequency variation and reactive power for voltage support. The energy stored in the batteries reduces cyclic loading and smoothes out short-term fluctuations as the electric load and wind turbine outputs no matter how rapidly they change. This level of stabilization translates into large savings due to the ability to operate smaller more fuel efficient generator sets, lower diesel set points, reduced spinning reserve and diesel maintenance. It is estimated that sufficient wind is available to allow the diesel gensets to be turned off for 2000 hours annually. High Penetration Wind Systems The sub second response of the power conditioning module is supplemented by the multisecond response of the diesel generators. Other system changes can occur on the minute time frames, in which diesel generators, and wind turbines can be reconfigured and loads in the community can be turned on and off. The integration of the power system increases the value of the available wind. Properly integrated advanced control capability decreases the contribution of the diesel generators and provides more opportunity to use the powerconditioning system to ride through fluctuations of the wind, and thus increase penetration. The integrated control system increases the value of all the components in the system. To enable the advanced features of grid stabilization for high wind penetration systems, and maximum utilization of wind energy, the power conditioning and electric thermal storage units must operate in a coordinated manner with the other major system components distributed throughout the grid. This is done through a network of distributed integrated controllers. These controllers on the ETS units are designed to respond to changes in system frequency, and thus absorb and reject wind as required. Each ETS device is driven by advanced software applications, which allows each component in the system to recognize and coordinate its activities with the other controllers on the system. The addition of an intelligent distributed network of component controllers which are linked by high speed communications is a key feature in achieving optimising wind energy capture, Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 16 of 27 7/21/2010 improving efficiency, and getting the full benefit of every component in the system. The controllers can be built into the automation controls of the power plant or can be provided as an overlay, that works with and existing system. Diesel Generator Monitors Monitoring modules are interfaced to the existing generator controllers. These modules send information back to the Power conditioning and control module about the current state of the generator (running, stopped, on-line or off-line) as well as how much power the generator is delivering if it is on-line. Using a power transducer tapping in to existing current transformers (CT’s) and potential transformers (PT’s) the monitoring device informs the system supervisory controller of how much power is being generated, as well as how much spinning reserve is available on-line. Wind Turbines The wind turbines are provided with a customer interface to the wind turbine controller (WTC). Monitoring modules are added in order to communicate with the wind turbines. These modules send information and receive information such as the state of the machine (running, stopped, on- line and off-line, power generated, alarms, nacelle position, etc.) back and forth between to the system supervisory controller and the other individual controllers. Typically instruction include, starting machines, stopping machines, reducing the power output of the machine through pitch regulation or power set point control. The WTC would communicate via fiber optic cable. High Renewable Penetration Operation Modes High Renewable Penetration operation occurs under the following three distinct modes: 1. Diesel + Power Conditioning module 2. Diesel + PowerConditioning + Maximum Wind Turbine 3. Diesel + PowerConditioning + Limited Wind Turbine Heat Recovery and Demand managed devices This system is designed so that output of the wind farm typically exceeds the electric requirements of the community. Under these conditions wind turbine output can be curtailed, and loads can be managed to capture or control this energy. Two methods are available in this configuration, heat recovery and demand control. At the school, an electric boiler and a frequency response controller, would be installed. The boiler grid interface uses the electric boiler elements, and a variable load controller system to provide very fast frequency, voltage and power factor correction and capture of excess wind energy. This boiler power demand would be controlled and used to respond to balance the power system during times of collapsing wind power generation. In this instance the boiler captures up to the first 200 kW of wind energy and follows the load very closely, balancing the energy generation. To the demand through direct frequency control. The boiler is assist the powerconditioning and battery system, by rapidly absorbing longer bursts of energy, on a much smaller scale. The electric heat recovery boiler would be plumbed into the existing heating system, and regulated as part of the heating system, using the same thermostatic controls. Excess wind energy when available would be captured in this boiler and the heat used to offset fuel costs of running the community buildings. Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 17 of 27 7/21/2010 The school represents a large interruptible energy storage system. The heat recovery load at the high school will require separate metering and service panel, including cables, breakers, and breakers. The system would use the existing temperature controls and act as demand managed devices controlled through the master control overlay. The method of communication proposed is Ethernet. Major community buildings with large heating requirements, such as the school, city offices, clinic, city shop, and water and sewer treatment facilities represent potential customers with large heat demand could also benefit from excess energy produced by an expanded wind plant. Electric Thermal Storage An average home in Kipnuk uses over 760 gallons of heating fuel annually. During a windy week in the winter a single home can consume and entire 55 gallon drum of heating fuel. This project proposes to capture the wind and use it to heat homes, throughout the year using Electric Thermal Storage (ETS). ETS is the method of capturing excess wind generated electricity as heat and storing it for use at a later time. An ETS unit, is an insulated metal box, about the same size as a Toyo Stove, which contains electric heating elements which lie within special, high-density ceramic bricks. These bricks are capable of storing vast amounts of heat for extended periods of time. During periods of excess wind energy, a signal from the power plant supervisory controller is sent to the metering system. The meters then enable the relays which turn on elements which heat the bricks. Operation of the system is completely automatic. A sensor monitors the outdoor temperature to regulate the amount of heat the systems stores in the bricks. A thermostat regulates the delivery of the heat to the room. Each unit has a built in microprocessor that allows the owner to configure the operation for their needs. There are over 100,000 of these units in operation in the mid-west states and off-peak heating is common in Europe. The system provides a lower cost low maintenance method of home heating. The village would likely be on an 8-hour charge schedule, with supplement charging in periods of high wind. An individual room-heating unit can both produce and store up enough energy on an 8 plus 2 charge schedule to output 20,000 Btu/ per hour per unit, 24 hours per day. This is similar in size and energy output of a Toyo Stove. The dimensions are 58 inches in length, 24.5 inches in height, and 10.5 inches in depth, and when filled with heat charge bricks each unit weighs 690 lbs. The room units (shown above) are non-ducted and are designed to heat the room or area into which they are placed. These heaters can be used in new construction applications or as a retrofit or supplement to an existing heating system, and only require an electrical connection to operate. Stored heat is circulated evenly and quietly by a fan inside the unit as the room thermostat calls for heat. Individual units are easy to operate and requires very little maintenance. The amount of heat stored in the brick core of the heater is regulated (either manually or automatically) according to seasonal weather conditions using an outdoor temperature sensor and an onboard microprocessor. The Smart metering system enables the ETS to charge, and allocates the costs differently between off-peak wind and diesel only generation. The metering system working with control signals from the diesel plant insures that customers are only charged for the reduced rates excess wind rate for heating. . Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 18 of 27 7/21/2010 This project proposes to install 180 residential room heaters. Because of the poor condition of many electrical service entrances, upgrading of approximately 100 service entrances are required. The budget includes the replacement of 100 service entrances and meter bases in order to receive the Metering system Wind/thermal storage requires a method of notifying the stoves of the availability of low cost wind energy, and a way to account for the difference in cost of wind versus diesel generated electricity. This is done through new meters, which will be placed on each home. The proposed metering platform creates a wireless communications link, which provides fully automated, intelligent two-way communications between the power plant and each meter. The advanced meters offer many additional features that will allow the utility to be managed more effectively, and optimize diesel station operation. The metering system will consist of 3 collector meters, one at the school, one at the washeteria/water plant, and the last at the powerhouse. Each residential customer will have a single-phase meter at their home. These meters will communicate with the data collecting 3 phase meters to create a mesh network. The meters are designed for plug and go capability, which eliminates programming and simplifies installation. This same metering system has been selected for use as it has proven to be a best practice management tool for the Alaska Village Electric Cooperative. Three of the most important features are: 1. Demand control capability that allows the utility to control thermal storage devices remotely. Thermal stoves will be enabled for green energy pricing only when a signal from the utility indicates that an excess of wind energy is available. The meter can switch devices the stoves on and off according the amount of excess wind energy available. The meters can also control other electrical devices such as water heaters and/or controlling lighting or thermostats. 2. User interface. The meters come with an in-home display device that can be used to inform the customer about their cost and energy usage. In the future they can be enabled to enter credit card information to pay bills directly. 3.Pre payment option; the proposed meters can be configured with a prepay option, which requires consumers to pay in advance of use. This feature is requested by small utilities, because it mitigates the financial risks associated with power sales and reduces embarrassing utility disconnects, billing disputes and damage to local relationships. When coupled with the associated user display in each home, the system improves financial management for both the utility and the customer. The in-home display allows utility customers to self manage energy use through real- time, informed decisions about consumption. When combined with the user interface, most customers are typically very satisfied. The need for low cost residential heating represents the largest potential load for the Utility. The mine will operate motors, pumps, heaters, crushers, auxiliary generators and each individual component by itself can be responsible for very large loads. Control modules can be added to these load centers integrate the operation of the mine with the wind diesel system. To obtain the full benefit and for safety, a demand signal/control is introduced to prevent loads from coming on when the power system has insufficient generation on line and to keep engines from running inefficiently and especially for loss of load protection. Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 19 of 27 7/21/2010 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 land needed for the project has been given to the utility by the village corporation. 4.3.3 Permits Provide the following information as it may relate to permitting and how you intend to address outstanding permit issues. • List of applicable permits • Anticipated permitting timeline • Identify and discussion of potential barriers The construction of the wind and power project will require some of the following review and/or permitting, no potential barriers have been identified. 1. Coastal Project Questionnaire Since Kipnuk is located in a coastal zone, the project requires submittal of a Coastal Project Questionnaire to the State of Alaska, Department of Natural Resources (DNR). The DNR coordinates review of the questionnaire by various state agencies and assists in identifying required permits pertinent to the project. The standard review spans about a 30-day period. 2. Fire Marshall Plan Review The construction of the new power generating facilities will require submittal of a complete set of construction documents to the State of Alaska, Department of Public Safety, Division of Fire Protection (Fire Marshal) for plan review and approval. The State Fire Marshal then issues a Plan Review Certificate to verify compliance with adopted Building, Fire, and Life Safety codes. Final stamped drawings must be submitted along with the application fee for project review. Anticipate a minimum of one month before comments may be received from Fire Marshal. 3. Alaska Department of Transportation If the construction of a tie-in to the existing electrical distribution system fails within an existing Department of Transportation (DOT) right-of-way, a utility permit from the DOT will be required. 4. Alaska Department of Environmental Conservation Review The Alaska Department of Environmental Conservation (ADEC) regulates the operation of diesel power generation facilities by a consistency review process. The Application for the Pre-Approved Limit Diesel Generation Facility must be submitted prior to the facility startup, provided that the nitrogen dioxide emissions do not exceed 100 tons/year. The review is set up to accommodate future growth of Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 20 of 27 7/21/2010 a power plant, provided that the growth is requested during the initial application, and it does not exceed the 100 ton/year on nitrogen oxide emissions. Power plants which fall into the sizes necessary for Alaska villages will not exceed the 100 ton/year level. The addition of the Wind System will significantly reduce the emissions of harmful air pollutants. 5. Regulatory Commission of Alaska Certification The Regulatory Commission of Alaska (RCA) regulates public utilities by certifying qualified providers of public utility and pipeline services and facilities at just and reasonable rates, terms, and conditions. This keeps rates as low as possible while allowing the utility to earn a fair return. The commission also determines the eligibility and the per kilowatt-hour support for electric utilities under the Power Cost Equalization program. 6. State Historic Preservation Office The State Historic Preservation Office (SHPO) is required, under Section 106 of the National Historic Preservation Act, to review any state of federally funded project for potential of disturbing cultural resources. 7. Federal Requirements • U.S. Fish and Wildlife Service The U.S. Department of the Interior Fish and Wildlife Service will require that any construction project be reviewed for impact to endangered species. The Fish and Wildlife Service has been consulted with respect to this project, and has requested further review due to the known presence of listed species and/or designated critical habitat in the action area, or to the suspected presence of listed species in the vicinity of the action area. Because of the absence of federal funds no formal consultation is required. • U.S. Army Wetlands Permit Projects that disturb or place fill material on existing soil requires a request for a wetlands determination from the U.S. Army Corps of Engineers and, if found to be wetlands, application for a Department of the Army Permit must be submitted for, and granted, before construction begins. • Federal Aviation Administration Review Projects located less than 5 miles from a runway or airport, such as this Wind System, should complete Form 7460-1, “Notice of Proposed Construction or Alteration,” and submit all necessary elevation and height of structure information to the Federal Aviation Administration (FAA), Alaska Region, prior to construction. The FAA reviews the plans and determines whether the construction of project will present a hazard to air traffic in the vicinity. The FAA is very responsive and typically provided project determinations within one week of the completed form submittal. Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 21 of 27 7/21/2010 • Bureau of Indian Affairs If the construction of a tie-in to the existing electrical distribution system falls within an existing right-of-way through Native allotment(s), a permit from the Bureau of Indian Affairs (BIA) will likely be required. • Federal Regulatory Commission If the construction of a tie-in to the existing electrical distribution system falls within an existing right-of-way through federal lands, a utility permit from the Federal Energy Regulatory Commission (FERC) may be required. 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 Since the land for the project has been selected by the local village corporation, and there no Federal money involved, no significant filling of wetlands is to take place there are no endangered species present, there are no anticipated conflicts or threats to migratory birds, the sites selected are do not represent hazards to flight operations, and are not located in archeological sensitive areas. After contacting the USFWS, the FAA and the Corp of Engineers, it is determined that no permits to construct this project are needed. In each location, the power lines to the wind turbines will extend underground from nearby 3-phase power. No power poles will be installed and no aerial transmission lines, that could present a hazard to migrating birds, are being constructed. The Corp of Engineers will place the wind turbines on pile foundations, which will not require any filling of wetlands, and do not require a Section 404 permit. It is not anticipated that any of the Chaninik projects will interfere with or result in the mortalities of any endangered species or migratory birds. The USFWS, Corp of Engineers, FAA and State permitting agencies have been contacted. USFWS concerns have requested that power lines be buried if possible, and to refrain from using guyed towers, to maintain lattice towers by keeping them free of raven nests. Preliminary locations were presented to the FAA, and they have requested a final review of the selected sites, and that the wind turbines be surveyed in, within one month of installation. We will be providing the USFWS, the Corp of Engineers, the FAA and the Alaska State Division of Governmental Coordination. Andrew Grossman has been hired as an environmental consultant for the Chaninik Wind Group projects. He is retired USFWS and NMFS biologist experienced in permitting of construction projects in Alaska. 4.4 Proposed New System Costs and Projected Revenues Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 22 of 27 7/21/2010 (Total Estimated Costs and Projected Revenues) The level of cost information provided will vary according to the phase of funding requested and any previous work the applicant may have done on the project. Applicants must reference the source of their cost data. For example: Applicants Records or Analysis, Industry Standards, Consultant or Manufacturer’s estimates. 4.4.1 Project Development Cost Provide detailed project cost information based on your current knowledge and understanding of the project. Cost information should include the following: • Total anticipated project cost, and cost for this phase • Requested grant funding • Applicant matching funds – loans, capital contributions, in-kind • Identification of other funding sources • Projected capital cost of proposed renewable energy system • Projected development cost of proposed renewable energy system The total project cost is $4,624,041. The Kipnuk Light Plant will contribute $1,200,000 in matching funds. Total request from the renewable energy fund is $3,424,041. 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.) Operations and Maintenance Summary: Annual Control and Integration Support Service Contract $ 12,000 Wind Turbines Service Contract $ 18,000 Repair/Replace/Insure Estimate $ 21,000 Total Estimated O&M Costs Increase $ 51,000 Explanation Control System: The control system and flywheel come with a two year maintenance contract and an extended warranty is available for a fee of $1000 per month. The local operators will be trained to use the control and integration system. Typically automated operation reduces the local labor burden. Wind Turbines: The wind system is estimated to operate 350 days or 50 weeks per year with 2 weeks of scheduled maintenance. Service and maintenance agreements as well as loss or damage insurance is available from the manufacturer, and the cost of the turbine includes a 24 month service agreement. The terms of these agreements are negotiated at the time of purchase, and include Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 23 of 27 7/21/2010 many options, which range from complete coverage and performance guarantees. A budget of $1000 per month per turbine, or $.02/kWhr per year is set aside. The cost of the turbine includes one week of factory training for two local operators, and one week on site training. The turbines have advanced diagnostic package with remote diagnostics which enable full time monitoring, remote programming and remote technical assistance. Turbine Maintenance: Maintenance can be divided into three categories, routine, unscheduled and scheduled. Routine maintenance is required to maximize performance, maintain safety, and ensure a full operating life of each turbine. An estimate of the cost of annual and 10 year maintenance is provided below. This installation cost estimates include a cost for specialists to be brought in for the first year to perform these functions, and provide additional on-site specialized training to local personnel. This estimate includes setting aside an amount annually for extended and unscheduled maintenance. Excluding major component inspections and replacements, the following maintenance schedules generally apply to each turbine type. Weekly and Monthly Inspections: Bi-Annual Inspections and Service: 10 year inspections: Every 10 years the wind turbines should be thoroughly inspected. Particular attention should be paid to the blades. Most manufacturers recommend that the blades be removed and deflection tested for integrity and strength. This exercise can be conducted using a tower attached jib crane. Each blade would be removed and lowered to the ground, where the blades would be placed in a jig and tested for deflection. At this time the blades would be replaced, resurfaced, and repaired as needed. Repair and replacement fund for failure of major components. An annual replacement account will be set aside to replace major components on the turbine. This set aside account would be based on an annual production estimate of $.02/kWhr. This amount could be readjusted based on rising costs and the comparable cost of fuel. 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 Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 24 of 27 7/21/2010 Energy Purchases: Kipnuk Light Plant provides electricity to the community and holds the certificate of public convenience. A household survey was conducted and the results indicate that residential customers are desperate for lower cost heating options, as heating fuel is becoming unaffordable at $ 8.00 per gallon. Electric Thermal Storage is a method by which excess wind generated electricity can be stored as heat so that it can be used 24 hours per day. The excess wind energy will be offered to customers at between $ .08 to $.15/kWr, which is equivalent to heating oil equivalent of $ 2.60 to $ 5.00 per gallon assuming that # 2 heating fuel with 138,000 btu/gallon and with a highly efficient furnace with 95% conversion efficiency. Since there is no local wood, or peat or coal, wind heat in this application will be the lowest cost heating source, and highly desirable. 4.4.4 Project Cost Worksheet Complete the cost worksheet form which provides summary information that will be considered in evaluating the project. See attached cost worksheet. 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 Diesel fuel used to generate electricity in Kipnuk is expected to grow from the present level of 150,582 gallons, to 198,000 gallons annually by 2015. This project is estimated to generate 2,048,682 kWhrs of electricity with wind. This will be used in conjunction with the flywheel to displace 90,900 gallons of fuel used to generate electricity and another 24,000 gallons of fuel used for heating. (90,900 x $5.00 = $454,950, plus 24,000 gallons x $6,00/gal for heating fuel = $144,000. The flywheel reduces the diesel run time of the most expensive Caterpillar engine by 4000 hours, which results in doubling its replacement interval, this saving is estimated to be $154,43. 4000 hours x 12.50 per hour, plus ½ of $200,000 replacement costs. In the early years of the project, this energy will be used to displace heating fuel, but as the load grows more fuel used for power generation will be displaced. The estimated project benefit is $753,389 less the additional incurred maintenance costs that are estimated at $48,000 per year. The total financial benefit is $705,389: Large wind with thermal storage, provides three benefits, decreased dependency on fossil fuels means more dollars stay in the community. Wind heat has the potential to increase revenues to the Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 25 of 27 7/21/2010 local utility while at the same time reducing home heating costs. 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 The Chaninik Wind Group is working to develop a regional wind system business plan, based on a cooperative business model. The primary elements of this plan include utilizing combined funding from the savings of displaced diesel fuel to pay for system maintenance, and overall administration. The greater the number of wind turbines, the more fuel displaced, the more viable the will be the financial strength of the group. One of the principles of successful operation will be to create a well-paid job in each community to support the wind system operation, and to create a network of trained operators, one in each village who can support each other. A proposed source of funding would be to allocate $.05 per kilowatt hour for wind production to the operation and support. Each wind turbine will conservatively produce 150,000 kWhrs annually. This would be $30,000/turbine x 3 turbine = $37500 in additional wages to utility personnel. Another $.03 / kWhr would be dedicated to a replacement fund. However, a production bonus would be paid to the utility personnel for any kilowatt hours produced above 200,000 kWhrs per year. This production bonus would be $.10/kWhrs. This could be as much as $10000 per turbine or $10,000. The increased cost of turbine operations would be partially paid for through the turbine bonus, increased non-fuel operating costs provided in the PCE program, and through fuel savings. The customer would still see a significant decrease in electrical rates, as the current value of kilowatt of displaced fuel is in the range of $.30/kWhr. The Chaninik Wind Group would administer the overall business plan with the assistance of the automated meter reading and information technology systems. In each village the system would be administered through the use of prepaid meters. The business plan in developed will provide a detailed management and financial plan, and outline utility performance standards. 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. Other grants awarded for the wind system in Kipnuk consist of a designated legislative grant for $1,200,000. Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 26 of 27 7/21/2010 SECTION 8– LOCAL SUPORT Discuss what local support or possible opposition there may be regarding you r project. Include letters of support from the community that would benefit from this project. The Council and residents of Kipnuk have been entirely supportive of this project and the anticipated savings it will bring to their community along with the reduced carbon footprint. 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 – GrantBudget3.doc See attached grant budget sheet Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 27 of 27 7/21/2010 SECTION 9 – 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. 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 1.6. 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. Print Name Sam Carl Signature Title Utility Manager, Kipnuk Light Plant Date 9/15/10