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HomeMy WebLinkAboutCook Inlet TidGen AEA REF ROUND IV Grant App Renewable Energy Fund Round IV Grant Application AEA 11-005 Application Page 1 of 36 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 36 7/21/2010 SECTION 1 – APPLICANT INFORMATION Name (Name of utility, IPP, or government entity submitting proposal) ORPC Alaska, LLC Type of Entity: Independent Power Producer Mailing Address ORPC Alaska 725 Christensen Dr., Suite 4A Anchorage, AK 99501 Physical Address SAME Telephone 907-339-7939 Fax 207-772-7708 Email mworthington@oceanrenewablepower.com 1.1 APPLICANT POINT OF CONTACT Name: Monty Worthington Director of Project Development Mailing Address ORPC Alaska 725 Christensen Dr., Suite 4A Anchorage, AK 99501 Telephone 907-339-7939 Fax 207-772-7708 Email mworthington@oceanrenewablepower.com 1.2 APPLICANT MINIMUM REQUIREMENTS Please check as appropriate. If you do not to meet the minimum applicant requirements, your application will be rejected. 1.2.1 As an Applicant, we are: (put an X in the appropriate box) An electric utility holding a certificate of public convenience and necessity under AS 42.05, or X An independent power producer in accordance with 3 AAC 107.695 (a) (1), or A local government, or A governmental entity (which includes tribal councils and housing authorities); Yes 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 36 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) Cook Inlet TidGen™ Project 2.2 Project Location – Include the physical location of your project and name(s) of the community or communities that will benefit from your project. The Cook Inlet TidGen™ Project (TidGen™ Project), the first stage of the larger Cook Inlet Tidal Energy Project, will be located 1.25 km north of Race Point, Fire Island in Upper Cook Inlet. The energy produced will be delivered to the Railbelt Grid via the 34.5 kV submarine cable associated with the Cook Inlet Region Incorporated (CIRI) Fire Island Wind Project, tying into the Chugach International substation. From there, it can be delivered to any of the Railbelt utilities and their associated communities. 2.3 PROJECT TYPE: Put X in boxes as appropriate 2.3.1 Renewable Resource Type Wind Biomass or Biofuels Hydro, including run of river Transmission of Renewable Energy Geothermal, including Heat Pumps Small Natural Gas Heat Recovery from existing sources X Hydrokinetic Solar Storage of Renewable Other (Describe) 2.3.2 Proposed Grant Funded Phase(s) for this Request (Check all that apply) Reconnaissance Design and Permitting Feasibility X Construction and Commissioning Conceptual Design 2.4 PROJECT DESCRIPTION Provide a brief one paragraph description of your proposed project. ORPC Alaska, LLC, a wholly owned subsidiary of Ocean Renewable Power Company, LLC (collectively, ORPC), develops technology and projects generating emission-free electricity from tidal, river and ocean currents. ORPC requests Phase IV funding for the TidGen™ Project to complete the first stage of ORPC’s larger Cook Inlet Tidal Energy Project. The TidGen™ Project involves installing a 4- device TidGen™ Power System with a total rated generating capacity of 600 kW in a 6-knot current. ORPC’s TidGen™ Power System consists of one or more TidGen™ devices (which include a turbine generator unit [TGU] mounted on a bottom support frame) connected to an on-shore substation using underwater power and control cables. ORPC expects to receive the pilot project license from the Federal Energy Regulatory Commission (FERC) by December 2011. ORPC will release the initial TidGen™ Project components for manufacture by January 2012 and will ship the components of the first of four TidGen™ devices to Anchorage by May 2012. The TidGen™ Power System will be assembled at the Port of Anchorage and will be installed in phases from June 2012 to July 2013. ORPC will then monitor the system to collect essential site development and environmental data. In subsequent stages of the Cook Inlet Tidal Energy Project, which are not in the scope of this application, ORPC will deploy an OCGen™ Power System to increase the rated capacity to 0.9 MW by the end of 2013 and to 3 MW by the end of 2014. ORPC will ultimately increase the rated capacity to commercial scale − up to 100 MW − by 2020 under a FERC operating license that ORPC will obtain before the end of the pilot project license period. Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 4 of 36 7/21/2010 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.) By the end of 2013, the 600 kW TidGen™ Project will displace over 19 million cubic feet of natural gas, corresponding to $106,254 in cost savings and 1,013 tons of avoided CO2 emissions for the state. By 2020, the subsequent stages of the Cook Inlet Tidal Energy Project will successfully displace over 3.2 billion cubic feet of natural gas each year, saving the state $21.6 million in fuel costs and avoiding 168,811 tons of CO2 emissions annually. Anticipating a power purchase agreement that takes the externalities of avoided fossil fuels as well as future avoided costs into account, ORPC projects that by the end of 2013, the 600 kW TidGen™ Project will generate annual revenues of approximately $324,000 from electricity sales and potentially more from carbon offset sales, and other tax credits. From 2013 to 2020 and beyond, ORPC anticipates that its various projects in Alaska will generate revenues in the tens of millions of dollars, which will in turn create significant tax revenues for the state. The TidGen™ Project will also create a significant number of high quality jobs in Alaska. ORPC will support between 15 and 20 new and existing jobs in the state during the project’s 18-month peak construction period, and support at least five long-term jobs during the operating period. Between 2013 and 2020, as the Cook Inlet Tidal Energy Project grows to full generating capacity, ORPC anticipates supporting between 100 and 200 green economy jobs during peak construction and at least 30 green economy and maritime industry jobs over the long term in Alaska. 2.6 PROJECT BUDGET OVERVIEW Briefly discuss the amount of funds needed, the anticipated sources of funds, and the nature and source of other contributions to the project. As of 2010, ORPC has invested $931,496 in developing and permitting the Cook Inlet Tidal Energy Project, which encompasses the TidGen™ Project. An additional $1,430,834 of ORPC funds and $840,000 from U.S. Department of Energy (DOE) awards ($600,000 for a beluga whale study and $240,000 for a laboratory study of silt abrasion on device components) will be spent on the 3 MW Cook Inlet Tidal Energy Project prior to the commencement of the construction phase. Completion of the TidGen™ Project will require $8,050,538 to be funded as follows: (1) $6,050,538 by ORPC, and (2) $2,000,000 by AEA. ORPC’s funding commitment will count as cost share toward AEA Funding. ORPC’s funding request of $2,000,000 from the AEA thus corresponds to 25% of the TidGen™ Project’s funding requirements during the AEA Funding Period, with ORPC providing 75%. 2.7 COST AND BENEFIT SUMMARY Include a summary of grant request and your project’s total costs and benefits below. Grant Costs (Summary of funds requested) 2.7.1 Grant funds requested in this application. $2,000,000 2.7.2 Other funds to be provided (project match) $6,050,538 2.7.3 Total grant costs (sum of 2.7.1 and 2.7.2) $8,050,538 Project Costs & Benefits (Summary of total project costs including work to date and future cost estimates to get to a fully operational project) 2.7.4 Total Project Cost (Summary from Cost Worksheet including estimates through construction) $8,459,989 2.7.5 Estimated Direct Financial Benefit (Savings) -$1,802,829 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.) $ 4,422,385 Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 5 of 36 7/21/2010 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. Type in your answer here and follow same format for rest of the application. Monty Worthington ORPC Alaska 725 Christensen Dr., Suite 4A, Anchorage, AK 99501 Telephone: (907) 339-7939 mworthington@oceanrenewablepower.com Resume and references attached. 3.2 Project Schedule Include a schedule for the proposed work that will be funded by this grant. (You may include a chart or table attachment with a summary of dates below.) Construction and Commissioning  January 2012 – The TidGen™ Power System and initial TidGen™ device components will be released for manufacture; bid packages will be developed for system components; and contractors will be selected for manufacture and assembly on a competitive basis.  May 2012 – TidGen™ Power System and initial TidGen™ device components will arrive at the Port of Anchorage, where all of the components will be delivered, stored, assembled and shop-tested, and where installation and assembly facilities will be located. (The bottom support frames may be fabricated in Anchorage, depending on final design specifications.)  June 2012 – Deployment of the TidGen™ Power System with the first TidGen™ device will begin in June 2012, first with site preparation and the installation of the bottom support frame and transmission cable, and then with the mounting of the TidGen™ TGU onto the bottom support frame. At the same time, the shore station site on Fire Island will be prepared and the modular on-shore station and switchgear will be delivered and installed. If practical, ORPC intends to install the terrestrial power transmission infrastructure concurrently with the installation of the terrestrial power infrastructure for the Fire Island Wind Project to take advantage of construction capability that will be available on the island.  July 2012 – The TidGen™ Power System with the first TidGen™ device will be installed. The TidGen™ Power System will then be operated and monitored through the winter to collect data and plan for the subsequent installation of three more TidGen™ devices by July 2013. The TidGen™ Power System will be operated and monitored for technical performance and environmental compatibility.  December 2012 – Data from the TidGen™ Power System with the initial TidGen™ device will be collected and reported. Beginning December 2012, ORPC will issue and review quarterly reports on operation and environmental monitoring, which will supply much-needed information for further site development under the FERC pilot project license. Federal and state agencies will review the reports to assess potential environmental impacts.  January 2013 – Three additional TidGen™ device components will be released for manufacture. Contractors utilized for the first TidGen™ device will be reutilized here if their performance was satisfactory on the delivery of the components for the first TidGen™ device, otherwise bid packages will be developed and new contractors selected on a competitive basis.  July 2013 – Three additional TidGen™ devices will be deployed in a phased approach to bring the TidGen™ Power System up to a 600 kW capacity.  December 2013 – Data from the full TidGen™ Power System will be collected, analyzed and reported with attention paid to device performance and environmental effects. See attached project schedule. Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 6 of 36 7/21/2010 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.) Phase IV Construction 1. Confirmation that all design and feasibility requirements are complete, December 2011 a. Review meeting held to evaluate final design before release of components for manufacture and procurement 2. Bids received for TidGen™ Power System and initial TidGen™ device components, components released for manufacture, January 2012 a. TidGen™ Power System and initial TidGen™ device long lead time components released for manufacture 3. Deployment and operations contractors selected, contracts signed, March 2012 a. Deployment and maintenance plans and documents outlining necessary contractor roles complete b. Receive and evaluate contractor bids for project deployment and operations c. Execution of bid documents with contractors complete (Port of Anchorage, marine service contractor, cable deployment contractor, electrical contractor) 4. TidGen™ Power System and initial TidGen™ device components procured, prepared for shipment, May 2012 a. TidGen™ Power System and initial TidGen™ device components procured b. TidGen™ Power System and initial TidGen™ device components prepared and shipped to Port of Anchorage 5. TidGen™ Power System and initial TidGen™ device components arrive at Port of Anchorage, May 2012 a. Components shipped from Maine arrive b. Bottom support frame components procured c. Ancillary system components arrive 6. Bottom support frame fabrication and TidGen™ TGU assembly complete at port of Anchorage, June 2012 a. Bottom support frame construction complete b. TidGen™ TGU assembled 7. Bottom support frame, shore station deployed, terrestrial power transmission installed, July 2012 a. Prep the site for the shore station on Fire Island b. Complete deployment area site preparation and install bottom support frame c. Deliver modular shore station, switchgear, and power transmission system to Fire Island d. Terrestrial power transmission system installation complete 8. Initial TidGen™ device and power transmission system deployed, July 2012 a. Submarine power cable deployed from bottom support frame to Shore station b. Power transmission system interconnected c. Initial TidGen™ device deployed and interconnected to power system d. TidGen™ Power System interconnected to grid with data acquisition systems 9. Reporting on performance of TidGen™ Power System with first TidGen™ device, December 2012 a. Report on TidGen™ Power System with first TidGen™ device performance complete b. Report issued to agencies and stakeholders for review 10. Bids received for three additional TidGen™ device components, device components released for manufacture, January 2013 11. Three Additional TidGen™ device components procured, prepared for shipment, May 2013 a. TidGen™ device components procured b. TidGen™ device components prepared and shipped to Port of Anchorage c. Bottom Support Frame components arrive at Port of Anchorage 12. Three additional TidGen™ device components arrive at Port of Anchorage, three additional Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 7 of 36 7/21/2010 bottom support frames fabricated and three TidGen™ TGUs assembled, June 2013 a. Three additional TidGen™ devices arrive at Port of Anchorage b. Three additional bottom support frames complete c. Ancillary system components arrive d. TidGen™ TGUs assembled e. Initial operation of TidGen™ Power System reported on to agencies, stakeholders and the public 13. Deployment of three additional TidGen™ devices complete, July 2013 a. Three additional bottom support frames deployed b. Power system installed and connected for three additional devices c. Three additional TidGen™ devices deployed d. TidGen™ Power System interconnected to grid 14. Report on device operation and performance completed, December 2013 a. Collect sufficient data to report on operation of TidGen™ Power System b. Finalize reports on operation of TidGen™ Power System and disseminate to agencies and stakeholders c. Evaluate economics of project for future deployment of OCGen™ modules 3.4 Project Resources Describe the personnel, contractors, equipment, and services you will use to accomplish the project. Include any partnerships or commitments with other entities you have or anticipate will be needed to complete your project. Describe any existing contracts and the selection process you may use for major equipment purchases or contracts. Include brief resumes and references for known, key personnel, contractors, and suppliers as an attachment to your application. As a hydrokinetic industry pioneer, ORPC has gained unmatched multi-seasonal marine operations experience over the past two years in deploying, testing and monitoring two first-of-a-kind tidal in-stream energy conversion devices in the Bay of Fundy’s adverse marine and weather environments. The key to ORPC’s success has been the collective experience, expertise, dedication, commitment, and problem- solving prowess of the company’s professional team. ORPC’s management team, Technical Advisory Board, Management Committee, and partner, Caithness Development, include professionals with extensive experience and proven track records in developing, permitting, financing, constructing, operating and managing cogeneration, independent power and renewable energy facilities, as well as forming, funding and managing startup and technology development companies. The extended ORPC team includes highly respected firms and individuals with extensive experience in turbines, generators, submersible vessels, composite manufacturing, power electronics, control systems, power plant licensing, environmental permitting, community outreach, project management, construction and operations, legal services and all other relevant areas of expertise. ORPC Alaska Key Personnel  Doug Johnson – Director of Projects, Alaska Mr. Johnson has over 30 years of project development experience in Alaska, having worked as an investor, a business owner, an entrepreneur, a professional manager and a business consultant. He has developed projects ranging from the launch of Alaska’s first biotech company to the planning and execution of a $2,000,000,000 hospital in Abu Dhabi.  Monty Worthington – Director of Project Development, Alaska Mr. Worthington has over 10 years of experience designing and implementing renewable energy systems in Alaska, the Pacific Northwest and Asia. He has managed renewable energy projects for both private companies and nonprofit organizations and also has extensive experience in the design, installation and maintenance of marine electrical systems. Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 8 of 36 7/21/2010 ORPC Management Team  Christopher R. Sauer – President and CEO Mr. Sauer provides overall management and leadership in all of ORPC’s technical and commercial activities. Mr. Sauer is a professional engineer, energy entrepreneur and strategic development consultant with more than 30 years of experience in executive management, engineering, construction, project development, marketing, financing and startup company formation in the electricity, cogeneration, renewable energy and energy efficiency industries. Mr. Sauer is a founding member of ORPC.  John R. Cooper – Senior Vice President and CFO Mr. Cooper manages all financial matters for ORPC, including raising capital. He has more than 30 years of experience as a senior finance executive in the energy industry, where he has been involved in project finance and development, corporate finance, transaction structuring, capital raising, executive management, consulting and representation on the boards of directors of several renewable energy start-ups. Mr. Cooper is a founding member of ORPC.  Ernest K. Hauser – Senior Vice President, Projects Mr. Hauser has overall management responsibilities for the development and execution of all ORPC projects, including directing and managing environmental permitting, community relations, construction vendor relations and negotiations, commercial contracts and cost estimates. Mr. Hauser has more than 35 years of experience in business development, management, operations, finance and construction in energy and petrochemical industries.  Jarlath McEntee, M.S., P.E., Vice President – Engineering & Chief Technology Officer Mr. McEntee is responsible for all of the technology development and engineering efforts of ORPC, directly managing engineering teams and processes and directing technology strategy. As ORPC technology leader, Mr. McEntee will direct the design, engineering and specification development for the TidGen™ project. Mr. McEntee has specialties in engineering management, complex systems design, dynamics, fluid mechanics and thermodynamics as well as 20 years of experience in the testing, design and manufacture of alternative energy systems.  John Ferland, Vice President – Project Development, ORPC Maine Mr. Ferland develops tidal energy opportunities for ORPC in northern New England and eastern Canada and is responsible for fostering collaborative relationships with project communities and other stakeholders. He is a former president of the Maine Center for Enterprise Development and has extensive experience in the environmental industry and startup company management.  Robert A. Lewis – Director of Operations Mr. Lewis supervises all operational aspects of ORPC’s tidal energy projects and is the company’s safety officer. He is an Eastport, Maine native with over 15 years of experience in industrial facilities, including quality control, environmental compliance and product development. ORPC Consultants and Advisors  Millard S. Firebaugh, Sc.D, Rear Admiral, U.S. Navy (retired) Dr. Firebaugh, a retired rear admiral in the U.S. Navy, a former chief engineer of Electric Boat Corp., and a former COO of SatCon Technologies, is a recognized leader in the engineering and production of advanced technology, including R&D, ship design, shipbuilding, power systems and electronics, and executive management. Dr. Firebaugh is a member of the ORPC Technical Advisory Board and Management Committee.  Sahba S. Vaziri, Director of Business Development Ms. Vaziri manages the preparation and submission of ORPC’s applications for federal and state funding, including proposals to the U.S. Department of Energy, the Alaska Energy Authority, the Maine Technology Institute and the Denali Commission. She also participates in strategic and financial planning of ORPC. She brings over 20 years of experience in finance to ORPC. Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 9 of 36 7/21/2010  Patrick J. McGinnis, P.E., Director of TGU Engineering & Integration Mr. McGinnis has more than 20 years of experience with major engineering firms including GE, Lockheed Martin, Ford Aerospace and the Naval Surface Warfare Center managing R&D projects in advanced machinery.  Peter R. Betzer, Ph.D. Dr. Betzer, a former dean of the School of Marine Science at the University of South Florida and a world-renowned authority in his field of geochemistry, provides ORPC with input and direction in oceanography and marine engineering.  Mary McCann, Senior Aquatic Scientist and Manager of Environmental Services, HDR|DTA Ms. McCann has over 20 years of experience in fisheries and aquatic habitat studies, fish passage studies, aquatic resources and RTE surveys, water quality studies, general environmental impact analysis and assessments, and federal and state licensing and permitting activities.  David Oliver, Geophysicist, TerraSond LTD Mr. Oliver has over 18 years of technical experience in the geotechnical and geophysical industry. Recent work has been focused upon the development of in-stream hydrokinetic and tidal renewable energy feasibility programs. These investigations have initially included resource assessment, site selection, and hazard assessment. He is an expert at program design, field data collection, as well as the precise management and spatial analysis of remotely sensed data.  Tom Ravens Ph.D. – Associate Professor, Dept. of Civil Engineering, University of Alaska, Anchorage Dr. Ravens has over 15 years of experience in hydrodynamic (wave and current) and sediment transport modeling and analysis, and has published widely in this field. Dr. Ravens is currently developing flow, wave, and sediment transport models for Cook Inlet and the Beaufort Sea.  Tamara McGuire Ph.D. – Lead Scientist, LGL Alaska Research Associates Inc. Dr. Tamara McGuire has 19 years experience as wildlife biologist and marine mammal scientist and is the project manager and principal investigator for current LGL studies of Cook Inlet beluga whales. Dr. McGuire has conducted land- and boat-based research on Cook Inlet beluga whales and has logged over 500 hours monitoring and theodolite tracking whales and vessels around the Port of Anchorage in Upper Cook Inlet.  Jim Campbell – Principal/Senior Engineer, PND Engineers, Inc. Mr. Campbell has more than 20 years of experience in geotechnical and civil engineering, surface and subsurface hydrology, hydrogeology and environmental investigations. He has performed extensive geotechnical investigation and design work, both on and offshore, for assessment and design of roadway, building, tank farm and marine structure foundations.  Jason Moore, P.E., Project Engineer, Caithness Corporation Mr. Moore is a project engineer for Caithness Development Corporation, whose wholly owned subsidiary is one of the member-owners of ORPC. He manages Caithness’ energy project installations and startups and provides advisory support to ORPC. ORPC is committed to recruiting and retaining contractors and partners for the TidGen™ Project from within Alaska whenever possible; encouraging businesses it works with to establish a presence in the state; and advancing the industry through executed contracts with technical and project support resources. ORPC has sought to employ local companies and contractors when the required work capacity is available or can be developed within a local organization. ORPC has contracts with Alaskan private companies and public institutions, including TerraSond, LGL, HDR, Aquacoustics, PND Engineering, Stephen Braund and Associates, the University of Alaska Anchorage, and the Alaska Center for Energy and Power to build the capacity to support tidal energy project development in Alaska. When local companies and research institutions were not able to fill these roles, ORPC has brought in expertise from outside the state primarily focusing on companies with previous experience in Alaska. Contracts with Greeneridge Sciences and Cadiente Consulting, among Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 10 of 36 7/21/2010 others, have been developed in this manner. ORPC has funded these contracts with public funding and private investment. Contracts have been executed with these organizations to successfully deliver specific work products to further the engineering, project development and permitting of the Cook Inlet Tidal Energy Project. ORPC has also begun developing relationships with the Port of Anchorage, Port Mackenzie, the Anchorage Economic Development Council, and local utilities to further lay the groundwork for successful implementation of the Cook Inlet Tidal Energy Project. For major equipment purchases and contracts ORPC makes every attempt to competitively quote all of our subcontractor and vendor needs. Also, we engage all of our contractors for input in our designs when it comes to ease of manufacturability. When selecting contractors we look at price, available assets, manpower, timing and quality of work on previous projects. The lowest cost does not always get the job. As ORPC continues to grow so does our contract base and we will constantly evaluate that base for the best performance. 3.5 Project Communications Discuss how you plan to monitor the project and keep the Authority informed of the status. ORPC will develop a TidGen™ Project communications plan that best matches the information needs of AEA, as it also did during the initial discussion phase of its Nenana hydrokinetic test site. ORPC maintains a permanent office in Anchorage, which will be expanded to facilitate prompt reporting to AEA on the TidGen™ Project performance and timeline. ORPC will submit regular quarterly progress reports on the TidGen™ Project via email to AEA, and will schedule meetings as necessary or as requested to update AEA staff on the project. 3.6 Project Risk Discuss potential problems and how you would address them. Financial: For the TidGen™ Project to be successful, ORPC must continue to secure funding beyond its current cash reserves for the various phases of the project at the appropriate times. To this end, ORPC is pursuing funding from diversified sources including state and federal grants, private investment capital entities and individuals. Over the past four years, ORPC has successfully raised more than $33 million in private and public financing, including $17.5 million in private equity and convertible debt funding and more than $15.7 million in state and federal government awards to develop its proprietary technology and permitting. For ORPC’s Alaska projects, ORPC has received three awards from the U.S. Department of Energy: $600,000 for beluga whale studies, $240,000 for abrasion testing of TGU components for high sediment applications, and $1,034,534 for the OCGen™ Module Mooring Project, which will include geophysical work in Cook Inlet to design the Cook Inlet OCGen™ mooring system. In addition, ORPC has received a $10 million DOE award for the first TidGen™ Power System in Eastport, Maine, which will have application in Alaska. ORPC has also been awarded $830,325 from the Denali Commission for its Nenana Hydrokinetic Project. In the summer of 2009, ORPC entered into a strategic relationship and joint venture with Caithness Development, LLC, an established and respected renewable energy project developer, owner and operator. Caithness contributes significant funding and other key resources towards ORPC’s endeavors. Financial risks to the project include the following:  Delivered Cost of Energy – The delivered cost of energy from a tidal generation project is a combination of capital costs to construct and install a project, operations and long-term maintenance, and useful life, as well as the amount of energy available in the tidal stream (min/max current speeds), and the efficiency of the energy devices in extracting the mechanical energy and converting it to electrical energy and transmitting it to the on-shore transmission grid. Risks arise from estimating each of these variables, and assuming changes over time from inflation, improvements in technology, reduced or increased costs of materials and services, output degradation, etc. Based on ORPC’s experience to date in building and testing the Beta TGU, engineering for the TidGen™ Power System, product specifications and cost estimates, evaluation of the Cook Inlet tidal resources, etc., ORPC has developed the financial projections for the project, as well as sensitivities to variations in these project parameters. Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 11 of 36 7/21/2010  Revenue Assumptions – Revenues to be earned from sale of electrical energy, capacity and various renewable energy attributes and tax policy must be estimated far into the future based on current market conditions and expectations on how these will change. There is an inherent risk that these assumptions about future prices may be different from what is expected as a result of changes in supply and demand, as well as political and other economic factors.  Funding Risks – Each of the above risks results in a funding risk. Since ORPC does not have a significant balance, or investors willing to provide all of the capital needed to develop these projects, ORPC must raise capital from strategic, venture capital and private equity markets, as well as from various government agencies to fund future projects. ORPC competes with companies at a similar stage of development for funding. Until recently, ocean and tidal energy potential was generally unknown in the U.S. and venture capital was not being invested in new renewable energy technologies. But over the last 12 to 18 months, “cleantech” has become one of the fastest growing sectors and is looked upon favorably by the investment community. ORPC has been successful thus far in raising capital to support its business growth with private and public funding sources. Environmental and Permitting: The appropriate environmental studies and analyses must be completed to ensure compliance with federal and state licensing and permitting requirements, and to provide a basis for operating that minimizes any potential impacts on the marine environment. There are risks inherent in any permitting process. In the case of tidal energy projects, agencies and stakeholders are generally enthusiastic about helping them succeed. However, since it involves new technology for a new energy source, existing regulations can cause permitting delays. At the federal level, tidal energy projects are under the jurisdiction of FERC and are treated as traditional hydropower projects. However, FERC has implemented an expedited permitting system through its pilot license program to facilitate getting devices in the water before moving forward with the full long-term licensing process.  Beluga whales – Of particular focus for ORPC in the Cook Inlet area are the local beluga whales, which are now protected under the Endangered Species Act (ESA). It is of utmost importance that the TidGen™ devices are monitored to ensure that they do no harm to this whale population, and that they fully comply with all restrictions imposed by the ESA. In September 2009, the U.S. Department of Energy (DOE) awarded ORPC $600,000 to fund a thorough study of the interaction between the Cook Inlet beluga whales and the Cook Inlet Tidal Energy Project. This study will include visual and state-of-the-art passive hydroacoustic monitoring (PAM) technologies that promise to allow year-round monitoring of the beluga presence in the TidGen™ Project area. The study will provide an in-depth understanding of the project’s potential impacts on the Cook Inlet belugas. Consultations with the National Marine Fisheries Service will continue to ensure that all ORPC studies address any agency concerns and that the TidGen™ Project does not negatively affect the beluga whales.  Sediment Transport – There are two potential concerns with regard to sediment transport. The first is the possibility that due to the slowing of natural currents by the TidGen™ TGUs, sediment will be deposited and create shoals in shipping channels. The second is the concern that natural sediment transport will adversely affect the TidGen™ devices’ support structure and/or buried transmission lines. ORPC has developed a plan with the University of Alaska to model sediment transport prior to installation, and will use the TidGen™ Project to monitor and predict the future effects of TidGen™ devices on sediment patterns. ORPC will use the data collected to plan installations accordingly. Technical Feasibility: ORPC has already gained significant experience in deploying “first-of-a-kind” tidal energy projects in Cobscook Bay, Maine beginning with the prototype TidGen™ device in 2008 and now with its Beta TidGen™ Power System. By the time the TidGen™ Power System is ready for deployment in Cook Inlet, ORPC will already have deployed TidGen™ Power System in Cobscook Bay and operated it for one year. This effort will identify and overcome many of the technical challenges for TidGen™ Power System deployment and operation; however the unique environment of Cook Inlet will present new technical challenges not yet encountered or addressed through the Maine deployment. Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 12 of 36 7/21/2010  Foundation/mooring system design - ORPC will consider the difficulty of mooring in the challenging environment of Cook Inlet. Local engineering firm PND Engineers, Inc. (PND) has already begun devising conceptual designs for ORPC’s mooring systems and continues to assist with the design of the bottom support and mooring systems. PND has extensive experience in oil and gas industry mooring systems in Cook Inlet and is a primary contractor on the Port of Anchorage expansion. As part of ORPC’s grant from DOE, Terrasond will collect data on the sub bottom characteristics of ORPC’s Cook Inlet sites to provide the necessary information to complete the design of the bottom support system for the TidGen™ devices and the mooring systems for the OCGen™ modules.  Silt Abrasion - Due to the influence of several large glacially fed rivers, Upper Cook Inlet has extremely high concentrations (typically 2gm/L) of suspended sediment. The abrasive qualities of this sediment have already proven to be a challenge for machinery and vessels in the offshore oil and gas and marine service industries that operate in this environment. In assessing the vulnerability of the components of ORPC’s technology to sediment-induced abrasion, one of the greatest concerns is the effect of the sediment on the bearings and seals, since failures of these components could lead to loss of efficiency, increased maintenance and, potentially, component failures. In the TidGen™ TGU, fluid power is transferred from the turbines to the underwater sealed permanent magnet generator via a rotating shaft that passes through a seal, excluding water from the generator. Seal failure could lead to water intrusion and generator failure. Bearing wear could lead to excess energy loss and could transfer excessive load to the seals, causing their premature failure or increasing the frequency of costly maintenance operations. To address this issue ORPC and the University of Alaska Anchorage (UAA) have partnered on a DOE awarded grant to test combinations of bearings and seals being considered for use in the TidGen™ TGU. These tests are being conducted in a flume designed to circulate samples of Cook Inlet water. This laboratory testing will be completed prior to the selection of components for the TidGen™ TGU so they can be chosen based on their resistance to abrasion from Cook Inlet sediments and their necessary maintenance cycles can be quantified.  Ice – There are concerns over the effects of surface ice, beach ice (large agglomerated blocks of ice and sediment), and frazil ice on the TidGen™ devices. Initial conversations with University of Alaska experts indicate that surface and beach ice are unlikely to penetrate to a depth where they will interact with the devices, which will be installed 40' below the surface. Frazil ice is also unlikely to penetrate this deeply; indeed, U.S. Coast Guard regulations only require a water intake depth of 10 feet for ships in the inlet to avoid frazil ice in their engine water intakes. There is, however, the possibility of ice agglomerated with rock or sediment being suspended in the water column in the area of the TidGen™ devices. ORPC will conduct studies utilizing a Shallow Water Ice Profiler (SWIP) to determine the extent, if any, of this ice at the planned deployment depths, and implement any necessary modifications to the design to accommodate ice in this portion of the water column. The main concern with the ice in Cook Inlet will be the effect of surface ice on maintenance activities. ORPC can avoid this potential constraint by adjusting the TidGen™ Project maintenance schedule accordingly.  Power Transmission - The power transmission system must be safe and reliable. Local contractors with relevant experience in this area and outside companies with extensive knowledge in this field will be engaged to design and deploy the system to ensure its safety and effectiveness. The TidGen™ Project will also share power transmission infrastructure with CIRI’s Fire Island Wind Project. ORPC maintains ongoing communication with CIRI to ensure synchronized construction timing between the two companies. It is important to note that this wind project has not yet finalized its power purchase agreements with the local utilities. While ORPC is optimistic that this will occur in a timely manner, allowing for the project to move forward, there is still risk that the wind project will be slowed or even stalled during contract negotiation. If this is the case, ORPC is prepared to either delay the installation of the TidGen™ Power System, or to consider relocating the project to another suitable site. Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 13 of 36 7/21/2010 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. As an example of tidal energy potential in the northern Cook Inlet, a June 2006 Electric Power Research Institute (EPRI) report found that the Cairn Point portion of northern Cook Inlet near the mouth of Knik Arm has an average flow potential of 116 MW1. Since this data comes from transects done for the proposed Knik Arm bridge crossing rather than for power generation, locations for maximum energy extraction were not optimized. Even so, a conservative 15% would mean an average 17.4 MW of extractable power, peaking at larger amounts during stronger tidal flows, in this small area of northern Cook Inlet alone. Though the full potential of the northern Cook Inlet’s developable portion is yet to be determined, the feasibility phase of the Cook Inlet Tidal Energy Project will make substantial progress towards this determination. ORPC has located the pilot project installation to an area 1.25 km north of Fire Island, where in the summer of 2009, TerraSond confirmed an average energy density of 1.34 kW/m2 over a full lunar cycle. This compares favorably with depth-averaged energy densities ranging from 1.1 to 1.8 kW/m2 in the Cairn Point area of the project site documented in the EPRI report. Graph 1. Power Densities over 6 week period at Fire Island site At the present time, most of the power for the Anchorage ML&P and Chugach service areas comes from natural gas. While this has been a reliable resource for power generation in the past, most Railbelt utilities are approaching the end of their natural gas contracts, and decreasing resource availability, along with price escalation, is a serious concern. Current estimates of the Cook Inlet natural gas resource indicate that it could be depleted as soon as 2020, with wintertime demand outstripping supply within just a few years. If a spur gas transmission line from the proposed natural gas pipeline were built, or if Alaska begins importing liquefied natural gas, it would alleviate this shortage, but because prices for this supply would depend on the world market price for natural gas, the cost of electricity would dramatically increase. The 1 1 Brian Polagye and Mirko Previsic, “System Level Design, Performance, Cost and Economic Assessment – Knik Arm Alaska Tidal In-Stream Power Plant” (EPRI – TP – 006 AK), Electric Power Research Institute (EPRI), June 10, 2006. Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 14 of 36 7/21/2010 TidGen™ Project will offer emission-free power that will both decrease the use of natural gas and provide a flat-priced alternative as natural gas prices continue to rise. Since the TidGen™ Project will produce no greenhouse gases, it will also be protected from the future carbon taxes that will likely be applied to electricity produced by natural gas; this will further improve the project’s economic benefits to the local energy market. CIRI’s Fire Island Wind Project, a 54 MW-capacity project scheduled for installation in 2012, will make an excellent complement to ORPC’s TidGen™ Project, since the transmission line from Fire Island to Point Worenzof can be used with both the wind and the tidal resources. The power generated by ORPC’s TidGen™ Project will also be more predictable and reliable than wind power, and will be able to be dispatched more easily, thus curbing the oscillations in power output inevitably produced by wind energy. Right now, since wind technology is much more developed than tidal technology, it is more economical. However, because tidal energy has the added advantage of predictability, it promises to be a comparably more reliable and cost-effective resource once the industry reaches its commercialization phase. Traditional hydropower plants already exist on the Railbelt grid, and others, such as a 330 MW Lake Chakachamna project, are being investigated for possible development. While these traditional projects offer reliable power that is also economical, upfront costs are quite high. They tend to couple well with renewable projects whose output varies periodically, since modern hydro turbine controls allow them to ramp up and down with the availability of other resources, thereby conserving and effectively utilizing reservoir capacity. Hydropower plants already balance wind resources well in this manner, and the predictable nature of tidal energy will make this kind of integration easier and even more efficient. Environmentally, hydropower has created longstanding concerns about its impact on fish habitat, since its turbines are potentially harmful to fish that pass through them, and since the intakes often funnel or “suck” fish into them. Where andronomous fish like salmon spawn, such as in Lake Chakachamna, hydropower plants become a particular issue, by diverting returning fish toward the turbines’ outflow rather than toward their natural spawning stream; any Lake Chakachamna project will need to address this. With tidal power, however, there is no ducting and no “sucking” pressure funneling fish into the turbines; moreover, the slow speed (40rpm) of the turbine foils poses minimal risk to the fish. Subsequent TidGen™ Project monitoring will verify these fundamentals. There is potential for future geothermal development in Alaska, particularly at Mount Spurr near the Beluga power infrastructure. Although geothermal energy promises to be a clean, stable, renewable energy source, there are technical challenges in implementing it in seismically active and glacially dynamic areas such as Mount Spurr. Any geothermal project installed there would also integrate well with tidal power (as with hydropower) by acting as a system balance. Another alternative being investigated by local Railbelt utilities is coal-fired power plants. Tidal energy has significant environmental advantages over coal-fired power, as well as the potential to be more economically competitive, as economies of scale drive costs down and the fully embedded cost of coal continues to rise. Coal-fired power produces not only CO2, which adds to the effect of global warming, but also mercury, a toxic contaminant that accumulates in the food chain and has become a recent concern in wild Alaskan salmon. Tidal power has none of these disadvantages, as it is a totally clean renewable energy resource. 4.2 Existing Energy System 4.2.1 Basic configuration of Existing Energy System Briefly discuss the basic configuration of the existing energy system. Include information about the number, size, age, efficiency, and type of generation. This is a Railbelt Energy Project – N/A. Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 15 of 36 7/21/2010 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. Currently, most of the power used in both the ML&P and Chugach service areas of Anchorage comes from the Beluga natural gas field and power plant. While ML&P has a more stable supply of natural gas than other utilities, it is well known that this resource is dwindling. The natural gas infrastructure in Upper Cook Inlet spans an area that is also ideally suited to tidal energy development. The locations of platforms, generation facilities and power transmission would allow for the integration of tidal energy into this power generation system. It is estimated that the current reserves and known gas resources in Cook Inlet will be depleted by 2020, and that winter demand will outstrip supply within just a few years, likely necessitating the importation of much more costly liquefied natural gas that is necessarily tied to costlier Henry Hub natural gas prices. In addition, if a spur from the proposed gas pipeline becomes a reality, the gas in Alaska will no longer be considered “stranded” gas and thus will also be at the mercy of much higher world market prices. In the short term, the Cook Inlet Tidal Energy Project would combat these problems by helping to displace the use of gas, thus extending the resource’s viability. In the long term, benefits would also accrue from the introduction of an alternative energy source that integrates well with natural gas powered plants, existing hydro plants such as Eklutna and Bradley lakes, and/or the future development of other energy resources such as Lake Chakachamna hydro, the Fire Island Wind Project, or Mount Spurr geothermal. The 600 kW TidGen™ Project installation will have a minor impact on the local energy market, and the power transmission infrastructure associated with the Fire Island Wind Project will more than accommodate this. As the subsequent stages of the Cook Inlet Tidal Energy Project are built up to 3 MW, it will be possible to examine how the energy generated from the project will interface with wind energy generation. While it is unlikely that coincident peaks in the output of both projects would exceed the design capacity of the transmission line, if this were to happen either ORPC’s TidGen™ Power System or the wind generators can be taken offline in a phased manner to manage the power output. In the future, ORPC sees the possibility of developing the tidal energy of Cook Inlet in the East Foreland area of the Upper Inlet as well, where ORPC has recently applied for a preliminary permit from FERC. Here, the infrastructure of the oil and gas platforms could potentially be repurposed to be used as junction points for arrays of tidal energy devices, and the power transmission infrastructure associated with the industrial plants near Nikiski would be ideally suited to integrate the power into the Railbelt Grid. The timing of the peak tidal currents in this area and the Northern Cook Inlet are such that the peak output is offset by approximately two hours, allowing the generation from these two locations to achieve a stable and nearly base load power source with complementary peaks and valleys in power output levels. As natural gas production drops off, ORPC foresees the possibility of a gradual shift to tidal energy generation as a means to augment, and eventually replace, natural gas. 4.2.3 Existing Energy Market Discuss existing energy use and its market. Discuss impacts your project may have on energy customers. The energy market on the Railbelt grid will require significant alternative power production as natural gas supplies decline. The TidGen™ Project will provide stable, predictable, economical, emission-free power to customers on the Railbelt grid. In addition, commercializing ORPC’s proprietary technology in Cook Inlet will allow tidal technology to expand into the rural energy market in Alaska, where it will offer customers relief from the high cost of power associated with diesel generation facilities. Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 16 of 36 7/21/2010 4.3 Proposed System Include information necessary to describe the system you are intending to develop and address potential system design, land ownership, permits, and environmental issues. 4.3.1 System Design Provide the following information for the proposed renewable energy system:  A description of renewable energy technology specific to project location  Optimum installed capacity  Anticipated capacity factor  Anticipated annual generation  Anticipated barriers  Basic integration concept  Delivery methods The core technology component and “engine” for all of ORPC’s hydrokinetic power systems is the Turbine Generator Unit (TGU). The TGU uses proprietary advanced design cross flow turbines to power an underwater permanent magnet generator mounted at its center on a single driveshaft. It is constructed primarily of composite materials that will not corrode, and has a gearless, direct-drive design that requires no lubricants and so leaks nothing into the surrounding water. The TGU produces zero emissions, including greenhouse gases. ORPC is developing three distinct hydrokinetic power systems based on the proprietary TGU, each designed for commercial deployment in specific applications and water depths: • The TidGen™ Power System, consisting of one or more TidGen™ devices (Figure 1) (TGUs, each with a rated capacity of 150 to 175 kW, mounted on bottom support frames) connected to an on-shore substation using underwater power and control cables. This system is designed for tidal energy applications in water depths from 60 to 150 feet. • The RivGen™ Power System, consisting of one or more RivGen™ devices (Figure 2) (TGUs, each with a rated capacity of 50 kW, mounted on bottom support frames) connected to an on-shore substation using underwater power and control cables. This system is designed for smaller river applications, including those in remote, off-grid communities, in water depths of 25 feet or more. • The OCGen™ Power System, consisting of one or more OCGen™ modules (Figure 3) (two to four TGUs, each with a rated capacity of 150 to 175 kW, “stacked” to create a larger generating platform that is positively buoyant, provides dynamic lift and is held at a specific water depth using a deep sea mooring system) connected to an on-shore substation using underwater power and control cables. This system is designed for deep tidal energy and offshore ocean currents. ORPC has filed several U.S. PCT and individual country patent applications for its advanced design cross flow turbine, its underwater permanent magnet generator, and its TGU. In the TidGen™ Project, the first phase of the Cook Inlet Tidal Energy Project, four TidGen™ devices will be deployed in a phased approach. Each TidGen™ device has a rated capacity of 150 kW, corresponding to a total rated generating capacity of 600 kW. ORPC will install the first TidGen™ device in June 2012. This device will be interconnected to the power infrastructure on Fire Island associated with the Fire Island Wind Project via a submarine cable transmitting 13.5 kV Medium Voltage DC current to shore, where it will be power- Figure 3: OCGen™ module. Moored with 4 TGU’s Rated capacity = 600 kW Figure 2: RivGen™ device Including TGU and support frame. Rated capacity = 30kW Figure 1: TidGen™ device Including TGU & support frame. Rated capacity = 150 kW Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 17 of 36 7/21/2010 conditioned to grid compatible 34.5 kV three phase AC power through power electronics located in the Shore Station. This will comprise the initial TidGen™ Power System that will then be monitored for performance through the winter. Provided the initial TidGen™ device has met its performance expectations and proven its environmental compatibility, three additional TidGen™ devices will be deployed in the summer of 2013 to complete the full TidGen™ Power System. In 2013, ORPC will also begin deployment of its OCGen™ Power System by deploying the first OCGen™ module in Cook Inlet; while this is outside the scope of this grant application, it is part of the same FERC licensed pilot project. After ORPC has tested and monitored the OCGen™ module through the winter and provided it has met its performance and environmental compatibility expectations, ORPC will continue with the deployment of the full 8-module OCGen™ Power System at the same site. Due to depth constraints at ORPC’s Fire Island site, each device in the OCGen™ Power System will consist of two 150 kW TGUs (shown in Figure 3), giving it a rated capacity of 300 kW (345 kW peak). This will increase the site’s rated generating capacity to 0.9 MW in 2013, 3 MW in 2014, and eventually to the site’s full potential (up to 100 MW) by 2020. Peak generating capacity will be approximately 115% of rated generating capacity and will be reached when current flow exceeds 5.4 knots. The ultimate generating potential of tidal energy in the entire Cook Inlet has not yet been determined, but will likely be in the hundreds of megawatts. Based on the relatively small footprint of the 3 MW project it is apparent that a project size on the order of 100 MW is feasible in the Upper Cook Inlet alone. ORPC’s East Foreland site may have the potential for 100 to 200 MW of additional generating capacity. In the tidal currents at the Fire Island site, which are modest in comparison to the other sites in Cook Inlet, such as Cairn Point or the Forelands, it is estimated that ORPC technology will produce 2,989 MWh per 1 MW of installed nameplate capacity in the early years and 3,366 MWh per 1 MW of installed nameplate capacity once the technology is fully commercial (in 2016 and beyond). The electricity produced by this installation will be transmitted to ORPC’s shore station on Fire Island via a submarine cable. There, the electricity will be power-conditioned to grid-compatible three-phase power, and will be connected to the power transmission infrastructure associated with the CIRI Fire Island Wind project, which is scheduled to be installed in 2012. The submarine cable associated with the Wind Project Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 18 of 36 7/21/2010 will transmit the power to Chugach Electric’s International Substation; from there it will be dispatched to the purchasing utility on the Railbelt grid. The Cook Inlet environment presents challenges that must be overcome, including ensuring that ice, particularly frazil ice, does not interfere with the TidGen™ Project. Initial investigations, however, suggest that the project’s deployment will be well below the range of either frazil ice or conglomerated surface ice. Another site-specific challenge is the heavy silt content of the Cook Inlet waters. It will be essential to ensure that this does not affect the design life of the TGUs, but since the TGU has very few moving parts, this should not be a major concern. UAA will complete materials testing of various technology components to identify and appropriately modify any materials showing vulnerability to silt erosion. ORPC, in partnership with UAA, was recently awarded a $240,000 U.S. Department of Energy award to fund this study. Mooring and foundations in the Cook Inlet environment will be another technical challenge. Alaskan companies such as PND Engineers, Inc., who have extensive experience in dealing with mooring issues in Cook Inlet oil and gas developments, will help overcome this challenge. 4.3.2 Land Ownership Identify potential land ownership issues, including whether site owners have agreed to the project or how you intend to approach land ownership and access issues. The subsurface lands that will be used for mooring and power transmission systems are state property, and will thus be subject to appropriate Alaska Department of Natural Resources (DNR) land use permitting requirements. ORPC recently received its first submerged land use permit from DNR for the deployment of scientific monitoring equipment at the site through December 2014. On Fire Island, there are three landowners with whom ORPC has been in consultation: Cook Inlet Region Inc. (CIRI), the U.S. Coast Guard, and the FAA. The current proposed power transmission route includes the use of CIRI and USCG lands. All of the landowners have been receptive to allowing ORPC to use their land. In August 2009, ORPC constructed and utilized a tower on USCG land for beluga observations, and successfully licensed and complied with USCG land use policies for this installation. Similarly, ORPC has worked with CIRI to secure land use permits for the work it has completed on the island to transit to the beluga observation tower, and to perform surveys of the proposed power transmission line. 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  FERC preliminary permit: Secures site for ORPC Alaska; was obtained in April 2007; subsequent preliminary permit was obtained in August 2010  FERC pilot project license: Allows for initial testing of hydrokinetic device in preliminary site area; draft application was filed on March 31, 2009; the final pilot project application will be filed by December 31 2011  Fish Habitat Permit (ADF&G): The Fish Habitat Permit requires a 50 day review period that includes a public notice and comment period coinciding with the Coastal Zone Management review. This permit will be applied for by February 2012 and procured by April 2012.  Army Corps of Engineers (ACOE) Title 10 permit: Requires 60-90 days for approval and Coastal Zone consistency for final authorization; permit will be applied for by January 2012 and procured by April 2012.  Coastal Zone Management: Requires 50 days within ACOE permitting timeline; will be applied for with ACOE title 10 permit by January 2012 and procured in April 2012.  Alaska Department of Natural Resources (DNR) Water Rights: Waived; not necessary for non- freshwater  U.S. Coast Guard (USCG) Notification: The USCG will conduct a waterways assessment in Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 19 of 36 7/21/2010 conjunction with the ACOE permitting process and will recommend approval/disapproval.  U.S. Coast Guard land use license: Obtained in June 2009 for the purpose of constructing a tower for beluga whale observations.  DNR submerged Land Use Permit: Required for deployment of scientific monitoring equipment; obtained in August 2010. 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 Of prime importance to the success of the TidGen™ Project is ensuring that it has no adverse impact on the Cook Inlet beluga whale population, which has recently been added to the endangered species list. To address the beluga issue, ORPC will continue to consult with National Marine Fisheries Service to guarantee that the TidGen™ Project does not further endanger the beluga population and to ensure that the project complies with the Endangered Species Act. ORPC has already relocated its initial pilot project to an area off of Fire Island known for its low beluga usage. LGL Alaska Research Associates, Inc., in collaboration with HDR|DTA, has been contracted to design and implement the necessary baseline beluga studies and turbine monitoring to prevent any negative interactions with the belugas. Additionally, ORPC has secured a $600,000 grant from the U.S. Department of Energy to monitor beluga whale activity pre- and post-deployment with advanced passive acoustic monitoring (PAM) technology. This funding will allow for a rigorous assessment of the interactions between the beluga whales and the TidGen™ Project that will more than satisfy permitting requirements. Deployment and testing of these PAM devices began in August 2010. ORPC has also completed a pre-deployment fisheries study of the project area and has provided a draft report on the findings of this study to agencies and interested stakeholders. Under consultation with USFWS, ORPC has further refined this report to communicate the data in a format that is the most useful for interpretation by agency biologists. ORPC will be submitting a final draft of this report by December 2010, and will be developing a plan for any post deployment monitoring under consultation with agency personnel. Critical beluga habitat and salmon habitat are both a concern. Studies on these habitats will be conducted as required through consultation with NMFS and the USFWS. ORPC has been in consultation with the State Historic Preservation Office (SHPO) to determine whether there are any archaeological or historical sites that will be impacted by the TidGen™ Project. ORPC performed a magnetometer survey of the submarine portion of its project and found no anomalous ferrous signals indicative of a shipwreck. This fall, ORPC with the assistance of Stephen Braund and Associates will complete consultations with landowners, tribes, and the SHPO, and will perform any necessary terrestrial surveys of the proposed power transmission route to identify any cultural resources that might exist along the path of its power transmission line. There is no expected impact on or use of wetlands, since ORPC devices will be mounted underwater in the deepest Cook Inlet channels. The same applies to telecommunications interference and aviation considerations. Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 20 of 36 7/21/2010 The main land development constraints will involve the use of state subsurface lands, which will be addressed through the Alaska Department of Natural Resources (ADNR) land use permit, and the use of surface land to transmit power once it is delivered to shore. Currently, all of the landowners on Fire Island have expressed willingness to work with ORPC and to make land available for power transmission and infrastructure. ORPC has already begun work with ADNR by establishing a submerged land use permit (LUP) for the installation of hydro-acoustic devices as part of the DOE funded beluga monitoring study and other scientific equipment at the Fire Island site. One additional issue to address will be the effect of the TidGen™ devices on sediment transport. There is a possibility that the devices will alter the local currents that normally transport sediment, thereby causing silt to accrue in navigable channels or local ports. The University of Alaska has particular expertise in this area, since it was contracted for similar studies on the Knik Arm bridge crossing study. From initial discussions, it seems that a simple 1-D model can be made to assess the local impacts of a single device, and that further 3-D modeling will allow simulations of larger installations. This modeling will allow their effects on sediment transport to be understood, and these findings to be incorporated into future plans so as to avoid a negative impact on shipping channels and local ports. 4.4 Proposed New System Costs and Projected Revenues (Total Estimated Costs and Projected Revenues) The level of cost information provided will vary according to the phase of funding requested and any previous work the applicant may have done on the project. Applicants must reference the source of their cost data. For example: Applicants Records or Analysis, Industry Standards, Consultant or Manufacturer’s estimates. 4.4.1 Project Development Cost Provide detailed project cost information based on your current knowledge and understanding of the project. Cost information should include the following:  Total anticipated project cost, and cost for this phase  Requested grant funding  Applicant matching funds – loans, capital contributions, in-kind  Identification of other funding sources  Projected capital cost of proposed renewable energy system  Projected development cost of proposed renewable energy system The Grant Budget Form (Section 9.C.) summarizes the TidGen™ Project funding plans between August 2011 and December 2013 (the AEA Funding Period). ORPC has already invested significant resources into developing and permitting the Cook Inlet Tidal Energy Project, which encompasses the TidGen™ Project. These efforts have been funded entirely by ORPC, totaling $931,496 as of September 1, 2010, and have included work on obtaining and complying with FERC permitting; site characterization work; environmental data collection; meetings with communities, agencies, stakeholders, contractors, public officials and others involved or affected by the project; and participation in organizations, conferences and industry meetings. An additional $1,430,834 of ORPC funds and two U.S. Department of Energy grants ($600,000 and $240,000) discussed below will be spent on the Cook Inlet Tidal Energy Project prior to commencement of the construction phase. ORPC attributes the monies spent on project development prior to 2011 to the expanded 3 MW Cook Inlet Tidal Energy Project and future commercial scale build out rather than to the 600 kW TidGen™ Project. The completion of the TidGen™ Project during the AEA Funding Period will require $8,050,538 to be funded as follows: (1) $6,050,538 by ORPC and $2,000,000 by the AEA, pursuant to this Renewable Energy Fund Round IV grant application. ORPC’s funding commitments will count as cost share within the AEA Funding Period. ORPC’s funding request of $2,000,000 from the AEA thus corresponds to 25% of the TidGen™ Project’s funding requirements during the AEA Funding Period, with ORPC providing 75%. Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 21 of 36 7/21/2010 The following phases have been funded or will be funded as follows: Phase 1 – Reconnaissance The reconnaissance phase of the Cook Inlet Tidal Energy Project has already been completed and revealed that the project is feasible and no insurmountable challenges to its implementation were identified. A total of $283,000 has been spent on this phase and has been funded solely by ORPC. The budget for this phase is attributed to the 3 MW Cook Inlet Tidal Energy Project, as well as the larger commercial scale build out, rather than to the 600 kW TidGen™ Project. Phase 2 – Feasibility and Conceptual Design The feasibility phase of the Cook Inlet Tidal Energy Project will have a total budget of $872,073 and will be completed prior to the submission of the FERC final pilot license application on December 31, 2011, as it is necessary that agency consultations and final design for the project be essentially complete. ORPC has supplied all of the funding for this phase of the project to date, amounting to $648,196 and will fund the remaining $223,577 as part of the full Cook Inlet Tidal Energy Project. The budget for this phase is attributed to the 3 MW Cook Inlet Tidal Energy Project as well as the larger commercial scale build out, rather than to the 600 kW TidGen™ Project. Phase 3 - Final Design/Engineering and Permitting The final design/engineering and permitting of the Cook Inlet Tidal Energy Project is estimated to cost $2,047,257. This will include the final design and detailed engineering of four TidGen™ devices and OCGen™ modules specifically for Cook Inlet; final designs of the power transmission, bottom support frame, mooring systems and deployment plan; the implementation of environmental studies and monitoring in compliance with the FERC pilot project license; and the procurement of all the necessary permits and approvals required to install the first four TidGen™ devices, including the submission of the FERC final pilot license application. The permitting portion of this phase will include work completed under a $600,000 DOE grant (DE-EE0002657) to implement a study monitoring the interactions between the Cook Inlet beluga whale population and the Cook Inlet Tidal Energy Project. The information gathered will be used to obtain and comply with the FERC pilot project license. This phase also includes a $240,000 grant from DOE to fund a study that will be performed at the University of Alaska Anchorage to implement laboratory testing of TGU components in a high silt environment to better inform design and materials choices for these components. The budget for this phase will be attributed to the full 3 MW Cook Inlet Tidal Energy Project, with the corresponding 20% or $409,451 attributed to the 600 kW TidGen™ Project. Phase 4 – Construction/Installation/Operation/Monitoring The construction phase of the 600 kW TidGen™ Project is expected to cost $8,050,538, consisting entirely of capital costs. ORPC is requesting $2,000,000 from AEA to fund a portion of the capital equipment costs for this phase of the project. The remaining $6,050,538 needed for completion of this phase will be provided by ORPC through funding raised from private investment and other public funding opportunities. ORPC’s cost estimates for this phase of the project are based on ORPC’s experience in construction, installation, operation and monitoring of previous iterations of ORPC technology and on cost estimates for the first TidGen™ Power System to be installed in Maine in 2011. The budget for this phase includes the costs for procurement, manufacturing and fabrication of all the TidGen™ device components; the assembly of the TidGen™ TGUs and device components; the shipping of those components to the Port of Anchorage, and the full assembly of the TidGen™ devices; the deployment of the initial TidGen™ device in 2012 and of three additional TidGen™ devices in 2013; the operation and monitoring of the TidGen™ devices through December 2013; and the analysis and reporting of data collected from the project. The entire budget for this phase is attributed to the construction, installation, operation and monitoring of the 600 kW TidGen™ Project. Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 22 of 36 7/21/2010 4.4.2 Project Operating and Maintenance Costs Include anticipated O&M costs for new facilities constructed and how these would be funded by the applicant. (Note: Operational costs are not eligible for grant funds however grantees are required to meet ongoing reporting requirements for the purpose of reporting impacts of projects on the communities they serve.) The annual maintenance will require raising the TidGenTM devices to the surface for cleaning and inspection, while the major maintenance would involve towing them to shore to do a generator overhaul, general tune up, and bearing and seal replacement. Based on recent experience with the Beta Power System, ORPC has carefully projected O&M Costs for the TidGen™ Project. The initial annual O&M budget is $260,000 for the 600 kW TidGen™ Project, with virtually all of these expenses incurred in Alaska for parts, supplies, labor, and service contracts to local marine service companies. For the 3 MW Cook Inlet Tidal Energy Project, annual O&M costs are projected to be $980,000 per year. ORPC is not anticipating applying for grant funding for this portion of the project but rather plans to support these costs through internal funding sources. 4.4.3 Power Purchase/Sale The power purchase/sale information should include the following:  Identification of potential power buyer(s)/customer(s)  Potential power purchase/sales price - at a minimum indicate a price range  Proposed rate of return from grant-funded project The potential buyers for the electricity generated by the TidGen™ Project include all the local Railbelt utilities. At this point, however, ML&P, Chugach Electric and Matanuska Electric Association are the primary utilities being considered, as they own the nearby electrical infrastructure. A power purchase agreement will be negotiated in the feasibility phase of the TidGen™ Project. Initial estimates of power purchase rates for Railbelt utilities range from $0.04 per kWh with local utility ML&P to $0.135 per kWh with Fairbanks utility GVEA. For the Project to be economically attractive to potential investors, the electricity generated needs to be sold at rates above the current “avoided cost” of fossil fuel based generation in Alaska. The cost competitiveness of ORPC’s tidal energy generation relies initially on federal and state subsidies, tax rebates, waivers, and incentives available to ORPC or to the utilities distributing ORPC’s renewable energy. Currently, the cost of electricity generated from ORPC’s systems exceeds the wholesale price of electricity in most markets in the U.S., especially those heavily dependent on fossil fuels, such as Alaska; therefore, without incentives, ORPC’s systems may not produce electricity at rates that make economic sense to utilities that purchase or distribute the electricity. Since the Cook Inlet Tidal Energy Project will be built out in stages over a multi-year period, different phases of the project will attract varying returns as certain common costs can be amortized over a larger base, and high power prices and sales of renewable energy attributes will likely become available for later project stages, enhancing project returns. ORPC has determined an internal rate of return on pre-tax cash flow of 12% to be a reasonable goal to attract private investment capital to fund the capital requirements of the expanded project. As a result the power sales rate should be set at an initial price of $0.174 per kWh in 2010 dollars. 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. See attached. Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 23 of 36 7/21/2010 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 ORPC's Cook Inlet Tidal Energy Project promises to bring long term, diversified benefits to the state of Alaska and its people. Through the TidGen™ Project, ORPC will develop and install a power system that produces clean, reliable, schedulable and reasonably priced electrical energy from locally available hydrokinetic resources, replacing environmentally unsound, volatile priced fossil fuels. Significant, far-reaching benefits include: (1) developing Alaska’s world-class tidal energy resources using the most environmentally benign form of electricity generation utilizing U.S. technology—and by doing so, attracting hundreds of millions of dollars of new investment to the state; (2) creating new high-paying technical jobs; (3) bringing in significant new tax revenues; and (4) creating numerous non-economic public benefits for Alaskans. Table 1 below summarizes the numerous quantifiable benefits of the TidGen™ Project and subsequent expansion of the Cook Inlet Tidal Energy Project. As the first stage of a much larger project, the 600 kW TidGen™ Project should be viewed as a pilot project. On a dollars per MW basis, the pilot will be extremely expensive compared to the local utility’s existing generation options, primarily due to the high costs of permitting and licensing (which must be amortized over a very small project), and other economies of scale, which will come with future project installations. In addition, at fuel prices published in AEA’s July 30, 2010 Fuel Price Projections 2010-2030, in the foreseeable future, no hydrokinetic project would be able to compete with Alaska’s existing natural gas based generation options. However, when the external environmental cost of fossil fuels, avoidance of carbon offset payments, job creation, ORPC’s investment, and the Alaskan content of the project’s O&M expenditures are taken into account, even the 600 kW TidGen™ Project becomes economically attractive. Moreover, as Table 1 illustrates, once ORPC expands the generating capacity of the Cook Inlet Tidal Energy Project to 100 MW, the project’s advantages are more than considerable. Generation costs avoided by Alaskan Utilities calculated in Table 1 are the product of electricity generated by the proposed project (in kWh) and natural gas and O&M costs on a per kWh basis supplied in AEA’s July 30, 2010 Fuel Price Projections 2010-2030 (Railbelt South of Alaska Range). These values are calculated annually for a 15-year project life for the pilot (600 kW and 3 MW) phases of the Project and for a 25-year project life for the commercial phases. A net present value calculation at a 3% discount rate is then performed. For a 600 kW facility, the NPV of the generation costs for Alaskan utilities is calculated to be $1,389,939. The generation costs of the proposed 600 kW TidGenTM Project are restricted to O&M costs, as ORPC’s hydrokinetic projects use no fossil fuels. For a project of this size and for the stage of commercialization of this project, O&M costs are quite high, at $0.014 per kWh. The NPV of these costs over a 15-year project life at 3% is $3,192,767. The net benefit of the proposed project is thus -$1,802,829 (Section 2.7.5). This negative value is primarily due to the “pilot” nature of the proposed project. As Table 1 illustrates, “Generation Benefits” gradually increase as the Cook Inlet Tidal Energy Project expands to 100 MW. ORPC has quantified the “Other Public Benefits” of the 600 kW Project to be $4,422,385 (See Section 2.7.6.), consisting of $280,889 of Carbon Taxes Avoided, an estimate of $3,033,129 for the Alaska content of the proposed project’s O&M costs, $303,313 for multiplier effect of new jobs created in the Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 24 of 36 7/21/2010 local economy, and $805,054 for multiplier effect of ORPC’s new investment in the region (such as grid upgrades to adjust to renewable generation). Each of these items is described more fully below. Table 1. Cook Inlet Tidal Energy Project Benefits and Costs Project Size 600 KW 3 MW 20 MW 100 MW Project Life Assumed 15 15 25 25 Project Benefits Generation Benefits (NPV @ 3%) Generation Cost Avoided by Alaskan Utilities $1,389,939 $6,527,935 $69,938,828 $301,599,300 Less: Generation Costs of Proposed Project $3,192,767 $11,325,534 $57,608,420 $240,913,045 Generation Benefits -$1,802,829 -$4,797,599 $12,330,408 $60,686,255 Carbon Taxes Avoided @ 15.2 ($2010@/mton) $280,889 $1,339,201 $17,734,244 $80,019,615 Generation Benefits w Carbon Taxes -$1,521,940 -$3,458,398 $30,064,652 $140,705,869 Other Benefits Portion of O&M Spent in AK (95%) $3,033,129 $10,759,257 $54,727,999 $228,867,393 Multiplier Effects on Local Economy Multiplier Effect of New Jobs (10% of AK O&M) $303,313 $1,075,926 $5,472,800 $22,886,739 Multiplier Effect of Investment (10% of New Investment) $805,054 $1,185,692 $7,449,520 $30,503,075 Total Multiplier Effects $1,108,367 $2,261,617 $12,922,320 $53,389,814 TOTAL PROJECT BENEFITS $2,619,556 $9,562,477 $97,714,971 $422,963,076 Project Costs Capital Cost $8,050,537 $17,114,576 $89,609,776 $393,640,525 Development Costs $409,451 $3,202,330 $5,202,330 $6,202,330 TOTAL PROJECT COSTS $8,459,988 $20,316,906 $94,812,106 $399,842,855 Benefit to Cost Ratios Generation Benefits / Cost Ratio -0.21 -0.24 0.13 0.15 Generation Benefits (w/ Carbon Taxes) /Cost Ratio -0.18 -0.17 0.32 0.35 Generation and Other Benefits/Cost Ratio 0.18 0.36 0.89 0.92 All Benefits/Cost Ratio 0.31 0.47 1.03 1.06 The capital and development costs for each stage of the ORPC project include all expenditures that occurred for the prior stage of the project. Utility Generation is calculated using Railbelt South of Alaska Range prices supplied by AEA, which include fuel costs and local O&M costs. Cost of ORPC generation consists of ORPC's O&M Costs which start at $0.144 per KWh for the 600 KW project, declining to $0.05 per KWh (2013$) for the 20 MW and larger projects. Fossil Fuel Displacement: ORPC’s proprietary technology can contribute significantly to reducing the use of fossil fuels and their associated polluting greenhouse gas and other emissions (NOx, SOx). Table 2 below illustrates the annual amounts and costs of natural gas displaced and the amount of CO2 emissions avoided over the next ten years as the first and subsequent stages of the Cook Inlet Tidal Energy Project progress. By the end of 2013, as Table 2 illustrates, the TidGen™ Project will displace over 19 million cubic feet of natural gas, corresponding to $106,254 of cost savings and 1,013 tons of avoided CO2 emissions for the state. By 2020, the subsequent stages of the Cook Inlet Tidal Energy Project will successfully displace over 43 billion cubic feet of natural gas each year, saving the state $21.6 million in fuel costs and avoiding 168,811 tons of CO2 emissions annually. This analysis uses Alaska Energy Authority’s projections for natural gas costs (2009 CEA/CP Gas Contract using PACI), but because natural gas costs have been historically volatile, the cost savings over time may be substantially greater, since ORPC’s proprietary technology uses absolutely no fossil fuels. The rapid increase in capacity shown in Table 2 is possible because the ORPC’s proprietary Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 25 of 36 7/21/2010 technology is scaled up through replication, rather than by building increasingly larger or distinctly different units. The core of the technology is always the TGU. Once ORPC installs the first successful TidGen™ Project and obtains its FERC operating licenses for full development of the site, expanding beyond 3 MW will incur limited additional development costs or permitting delays. OCGen™ modules (consisting of stacked, buoyant TGUs) will be deployed in moored, underwater arrays on the same site. The inherent flexibility of this type of stacked, arrayed deployment allows ORPC to adapt its technology to a wide variety of sites, eliminating the need to develop site-specific devices and to rapidly and economically build out a site once the lengthy licensing/permitting process is completed. Table 2. Fossil Fuel Displacement, Fuel Cost Savings, CO₂ Emissions, and Carbon Tax Avoided as a Result of ORPC's Cook Inlet Tidal Energy Project Year 2013 2014 2017 2020 Megawatts Installed Capacity 0.60 3.00 20.00 100.00 Kilowatt-hours Generated 1,792,512 8,962,560 67,325,029 336,625,14 3 Natural Gas Use Avoided (Using AEA's 10,640 Btu/kWh) (000 cubic feet) 19,072 95,362 635,744 3,178,721 2009 CEA/CP Gas Contract using PACI (Source: AEA) ($/Mcf) $5.57 $5.53 $5.80 $6.04 Natural Gas Cost Avoided $106,254 $527,550 $4,157,413 $21,617,29 9 Avoided Metric Tons of CO₂ Emissions 1,013 5,064 33,762 168,811 Associated Carbon Tax (Source: AEA)(15.2 $2010/Metric Ton esc 5% per yr) 17.60 18.48 21.39 24.77 Carbon Tax Avoided $17,827 $93,589 $722,276 $4,180,622 Job Creation and Capital Investment: The project is an essential part of the commercialization of ORPC’s proprietary technology at the most robust tidal sites in the United States. From 2013 through 2020, ORPC anticipates installing 100 MW of capacity through the various stages of the Cook Inlet Tidal Energy Project, which at a cost of approximately $14,000 for the first kilowatt to $3,800 for the nth kilowatt will correspond to approximately $400 million of capital investment in Alaska (Table 1). ORPC’s investment in Alaska will also result in substantial job creation and support. The success of the ORPC’s project development subsidiaries has depended heavily on their ongoing dialogue with the local communities at all of their project sites. ORPC first proved its positive economic impact on local communities in Maine through its 2008 prototype TGU project, which at its height employed 37 direct hire and local subcontractors. Next, the fabrication, assembly, installation and testing of the Beta TidGen™ Project supported 40 to 60 jobs, and has introduced several million dollars into the local economy. In Alaska, ORPC estimates that within eighteen (18) months, at the peak of fabrication and installation, the TidGen™ Project will support 15 to 20 new and existing jobs across a variety of skill levels -- scientific/engineering R&D, manufacturing and assembly, and marine services sectors -- driven by R&D; the procurement of components; the assembly, and deployment and ongoing monitoring of equipment. Over the long-term operating period, the TidGenTM Project should result in five new jobs. Based on its recent hiring experience, ORPC forecasts that jobs in this sector will pay an average of $55,000 per year, resulting in an aggregate payroll of approximately $825,000 to $1.1 million annually at the peak of fabrication and installation, and $275,000 annually during long- term operation. The recipients of this income will in turn spend money, creating multiplier effects that will bring even more economic benefits to the region, leading to additional new jobs, increased wages, and more personal disposable income. In Maine, according to the 2008 E2 Tech Council Study (Economic Profile of the Environmental and Energy Technology Sector in Maine), this multiplier Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 26 of 36 7/21/2010 effect is 80 percent. Since Anchorage and Alaska are generally more urban/industrial than rural Maine, ORPC uses a modest 10 percent multiplier in Table 1. By 2020, ORPC will have invested hundreds of million dollars of capital in Alaska, resulting in 100 to 200 jobs at the peak of project construction and 30 jobs over the long term. Table 1 does not account for the benefits of construction period jobs; to be conservative, only the benefit of long-term operating period jobs is shown. ORPC currently has a staffed office in Anchorage and has already begun expanding staff with the development of the first Alaskan projects (Cook Inlet and Nenana), which are currently being permitted and have retained local contractors for much of this activity. ORPC intends to hire local fabricators, assembly and deployment contractors, a full time project manager, and technical personnel. In addition, local marine service companies will be contracted for deployment and maintenance; local scientific companies will be used for site analysis and environmental impact assessments; local engineering firms will be contracted for design of mooring and power transmission systems, and the local ports will be contracted for TidGen™ Project support. Final assembly of TidGen™ Power Systems and OCGen™ Modules for Cook Inlet and subsequent projects will be done at the Port of Anchorage and Port MacKenzie with Alaskan labor. Local ports and marine service industries will secure significant long term contracts in the installation, operation, and maintenance of the TidGen™ and OCGen™ systems, and local scientific companies will be utilized to continually monitor and refine the installations. ORPC has partnered with many Alaskan companies and institutions, such as Terrasond LTD, LGL Alaska Research Associates, Inc., Aquacoustics, PND Engineers, Inc., local marine service companies, and local ports. In addition, the University of Alaska, Anchorage and the Alaska Center for Energy and Power are engaged as partners in the TidGen™ Project, creating opportunities for educators, researchers and students alike by bringing a tidal energy focus to the university system. Operation and Maintenance: ORPC has carefully projected O&M Costs for the TidGenTM Project. The initial annual O&M budget would be $260,000 for the 600 kW TidGenTM Project, increasing to approximately $980,000 once the project is expanded to 3 MW and $17.4 million (2010 dollars) for the 100 MW project. Essentially all of the O&M budget for the Cook Inlet Tidal Energy Project will be spent locally in Alaska. (Table 1 assumes 95% is spent locally.) Revenues: The Project will be interconnected to the Railbelt Grid through Chugach Electric, and the electricity generated will be sold to the Railbelt utilities. For the Project to be economically attractive to potential investors, ORPC will need revenue support above the current “avoided cost” by the State of Alaska and Alaska’s local utilities to establish a power purchase/sales price that takes the externalities of fossil fuels and utilization of a local renewable source into account. The Project will need to sell its power at an initial price of at least $0.17 per kWh (in 2010 dollars) to provide the minimum rates of return and cash flows to attract private investment capital and debt to fund the project’s capital requirements. This tariff level does not include additional premia, prevalent in other parts of the country, for the renewable, emission free attributes of the energy sold and may be below what would be needed if additional renewable energy attributes do not become available. If Alaska or the nation adopts a Renewable Portfolio Standard, then the additional revenue from the sale of renewable energy credits could enhance the revenue stream to ORPC and economic appeal of the TidGenTM Project. Table 3 below shows ORPC’s forecast for revenues from electricity sales as the Cook Inlet Tidal Project progresses, growing from $324,441 in 2013 to $70 million in 2020 and beyond Table 3. Revenues from the Multi-Stage Cook Inlet Tidal Energy Project Year 2013 2014 2017 2020 Megawatts Installed Capacity 0.6 3 20 100 Kilowatt-hours Generated 1,792,512 8,962,560 67,325,029 336,625,143 Power Price to be Negotiated ($ per kWh) 0.181 0.185 0.196 0.208 Electricity Sales Revenues $324,441 $1,654,647 $13,190,167 $69,987,553 Production Tax Credit ($ per kWh) 0.011 0.011 0.011 0.011 PTC Revenues $19,718 $98,588 $740,575 $3,702,877 TOTAL $344,158 $1,753,235 $13,930,742 $73,690,430 Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 27 of 36 7/21/2010 Potential Additional Annual Incentives (i.e. tax credits): Marine and hydrokinetic energy production with a minimum capacity of 150 kW is eligible for federal renewable electricity production tax credits (PTC) of $0.01 per kWh. Table 3 above shows the PTC contributing an additional annual incentive of $19,718 in 2013, growing to about $3.7 million by 2020. ORPC anticipates that future tax credits will increase to match the $0.02 per kWh currently offered for wind and biomass projects, leading to higher all-in sales revenues to ORPC and shorter payback periods. Potential Additional Annual Revenue Streams (i.e. green tag sales or other renewable energy subsidies or programs that might be available) Carbon Offset Payments: The avoided carbon offset payments in Tables 1 and 2 are calculated at $15.2 per metric ton (in 2010) of CO2 emissions (according to Alaska Energy Authority’s Fuel Price Projections 2010-2030, dated July 30, 2010), resulting in $17,827 in savings for Alaska from the 600 kW TidGenTM Project alone; this will increase to $4.2 million once the expanded project’s generating capacity grows to 100 MW. Investment Tax Credits: On February 17, 2009, President Obama signed the American Recovery and Reinvestment Act of 2009. Section 1603 of the Act’s tax title appropriates payments to qualified applicants in an amount generally equal to 10% or 30% (depending on property type) of a property’s basis. To qualify, an energy property must be placed in service during 2009 or 2010 (or after 2010 if construction was begun on the property during 2009 or 2010); it is likely that these deadlines will be extended, as they have been for other renewable energy technologies in the past. The TidGenTM Project meets this criterion, and ORPC expects to take advantage of this benefit, reducing the capital investment required in the project and enhancing the economic returns to project investors. (See Payback Period discussion below.) Renewable Energy Credits: Along with carbon offsets and other incentive programs, Renewable Energy Credits (REC) are part of a growing movement. Also called Green Tags or Tradable Renewable Certificates, RECs are certificates issued by a government agency to a power company (such as ORPC) that utilizes environmentally friendly methods of generating electricity. Potential RECs on the order of $0.04 per kWh would add $71,700 of annual revenues for the 600 kW TidGenTM Project and $13.5 million annually for the 100 MW project. Since ORPC has already taken PTCs (in lieu of investment tax credits) of $0.011 per kWh into account, to be conservative, no RECs are shown in Table 1. (Notably, a provision of a national renewable portfolio standard, which would result in a national market for RECs, is included in current draft energy legislation before Congress.) Payback Period: Total payback period corresponds to the amount of time required for annual operating income to accrue sufficiently to cover the cumulative installed project costs of adding capacity to the system. If ORPC were to consider solely the time that the expanded Cook Inlet Tidal Energy Project will take to reach a generating capacity of 100 MW, the total payback period for the project would be 13.5 years. However, calculating with investment tax credits (ITC) rather than with PTC effectively reduces the capital cost by about 30%. Although the ITC is scheduled to expire in several years, it has been extended for eight years for the solar industry, and ORPC assumes that it will be similarly extended for the tidal energy industry. This extended ITC would shorten the payback period for an investor in this project to 10.8 years (Table 4). ORPC’s increase in the Cook Inlet site’s generating capacity from600 kW to 100 MW will occur between 2013 and 2020, a period of seven years, and will cost $391 million over this time period. Once installed capacity reaches 100 MW, the healthy operating income of the project can therefore pay for the costs of the much larger project in only 5 years, or 3 years after taking into account the ITC and foregoing the PTC, which is an option under current law. Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 28 of 36 7/21/2010 Table 4. Cook Inlet Tidal Energy Project Payback Calculation ($000) End of Year: 2013 2015 2017 2019 2021 2023 2025 Project Years: 1 2 & 3 4 & 5 6 & 7 8 & 9 10 & 11 12 & 13 Assumptions: MW Added Every Two Years 7.4 12 50 30 0 0 MW Produced 0.6 8 20 70 100 100 100 Cost of Additional MW $8,460 $35,224 $51,129 $191,547 $113,484 $0 $0 Investment Tax Credit Assumed 30% MWH Produced 1,793 32,863 114,453 387,119 673,250 673,250 673,250 Sales Price per kWH esc at 2%/yr $0.181 $0.188 $0.196 $0.204 $0.212 $0.221 $0.230 Operating Income Calculations ($000): Revenues from Electricity Sales 324 6,155 22,242 78,302 141,375 147,086 153,029 O&M Costs 257 2,929 7,467 21,109 38,113 39,652 41,254 Operating Income (Excludes PTC) 67 3,227 14,775 57,193 103,262 107,434 111,774 Payback Calculations ($000): Beginning Project Costs 0 5,855 27,285 48,300 125,190 101,366 0 Plus: Incremental Project Costs 8,460 35,224 51,129 191,547 113,484 0 0 Less: Investment Tax Credit 2,538 10,567 15,339 57,464 34,045 0 0 Less: Operating Income 67 3,227 14,775 57,193 103,262 107,434 111,774 Ending Project Costs 5,855 27,285 48,300 125,190 101,366 0 0 Payback Years 22.00 For the 600 kW TidGenTM Project Payback Years 10.80 For the Cook Inlet Tidal Energy Project as it Expands from 600 kW (Pilot Phase) to 100 MW (Commercial Phase) Payback Years 3.00 Once Capacity is 100 MW (By 2020) Non-Economic Public Benefits to Alaskans (over the lifetime of the project): Tidal energy represents one of the most environmentally benign and potentially cost effective methods for generating electricity, and Alaska’s world class tidal energy resources are as robust as any in the United States. Because these resources’ power density is so high, developing them is both technically and environmentally appealing. Working in collaboration with ORPC, the University of Alaska, already widely recognized for excellence in the fields of environmental science and power generation, will gain even more technical experience through its connection to a world class, first of its kind green power resource like the TidGen™ Project. In the long run, with the mass production of ORPC’s proprietary technology, many areas of rural Alaska with high energy costs will become new markets for this technology, at prices that will be attractive compared to those of existing power technologies. Numerous sites in the Gulf of Alaska, the Aleutian Islands and Southeast Alaska have already demonstrated exceptional tidal energy potential. As ORPC develops this industry and capacity within the state of Alaska, it will also expand and contribute its knowledge and skills toward the development of new projects around the world. In this way, the TidGen™ Project will help to make Alaska the center of tidal energy generation expertise. Alaska, which is located along major shipping and future circumpolar routes, and which possesses the second highest tidal range in the world (Cook Inlet) as well as an estimated 95% of the nation’s total tidal power potential (estimated at an astounding 109 TWh per year) is perfectly situated to become a central figure in the world's tidal energy industry. Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 29 of 36 7/21/2010 SECTION 6– SUSTAINABILITY Discuss your plan for operating the completed project so that it will be sustainable. Include at a minimum:  Proposed business structure(s) and concepts that may be considered.  How you propose to finance the maintenance and operations for the life of the project  Identification of operational issues that could arise.  A description of operational costs including on-going support for any back-up or existing systems that may be require to continue operation  Commitment to reporting the savings and benefits Business Structure: ORPC’s business plan includes the goal of developing tidal and hydrokinetic technology and projects to serve the Railbelt and rural Alaskan needs. To accomplish this, ORPC is pursuing a two pronged approach: 1) to develop utility-scale technology that delivers emission-free, predictable, reliable electricity to the Railbelt energy grid at a price that is competitive with existing and future power generation options; and 2) to concurrently develop rural micro-gird scale technology that will be portable, easy to deploy and maintain with rural Alaskan infrastructure, and that will be price-competitive with existing diesel electrical generation systems as well as future energy options. The rural micro-grid technology is the RivGen™ Power System, which will be deployed at ORPC’s Nenana site. The utility-scale development will take place through ORPC’s Cook Inlet Tidal Energy Project. In the early phases of the Cook Inlet Tidal Energy Project, ORPC has focused on the preparation needed to develop the world-class tidal energy site of Cook Inlet. During this period, company staffing has consisted of two Alaskans. The Alaska Projects Director, Doug Johnson, continues to lead strategic development, developing and managing the relationships with communities, partners and agencies that are needed for successful business growth through new projects. The Alaska Director of Project Development, Monty Worthington, manages the day-to-day activities that ensure project success. Mr. Worthington has coordinated the work of many local firms under contract to assist with site assessment and permitting for the Cook Inlet Tidal Energy Project. ORPC is preparing to staff up in response to the continued growth of the company by hiring a project manager to be focused on each of ORPC’s efforts in Alaska. In the near term this will include the hiring of a project manager for the Nenana Hydrokinetic Project and a project manager for the Cook Inlet Tidal Energy Project. Upon completion of the early phases of the Cook Inlet Tidal Energy Project, a new organizational structure will be developed with a detailed staffing plan to support the assembly, deployment and testing of the initial TidGen™ Power System for Cook Inlet. TidGen™ device testing will take place over a full year; upon its completion, ORPC will first build the Cook Inlet site in stages to 3 MW, and then develop the site to its full potential (100 MW or more). Several Alaska-based companies have contributed to the feasibility and reconnaissance work on the project, and will be contracted for deployment and maintenance of the system once it is in place. In anticipation of the TidGen™ Power System deployment in 2012, ORPC will begin staffing by the summer of 2011. Power purchase agreements will be developed and executed with local utilities to assure the sustainability of the project. ORPC has entered into early conversations with the utilities and continues to provide them with periodic updates on the TidGen™ Project’s progress. Subsequent expansion of OCGen™ Power Systems within the Cook Inlet site will take place as funding is secured and production is ramped up. During this period, the business structure will change from a development company model to an operating company model. As Cook Inlet settles into a power production mode, ORPC will develop other tidal and river sites throughout the state and systematically bring them into production. Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 30 of 36 7/21/2010 Funding of Maintenance and Operation: ORPC will fund TidGen™ Project maintenance by reinvesting revenue generated by the project back into its O&M. Revenue will be diverted to support this function before being utilized in any other aspect of ORPC’s business in Alaska. If needed, ORPC can also utilize funds from its parent company to subsidize any lack of internal revenue during the early stages of the TidGen™ Project’s development. Operational Issues: Operational issues associated with the TidGen™ Project are similar to operational issues in the marine industry. ORPC has developed the following table to address these potential issues and the contingency plan associated with each: Contingency Probability Impact Mitigation Response TidGen™ TGU complete breakaway from bottom support frame Improbable TGU floats to the surface and becomes a navigation hazard High safety factor on attachment of TidGen™ TGU to bottom support frame and a pressure activated GPS beacon to notify control center and track position Recover TGU and repair TidGen™ TGU partial breakaway from bottom support frame Low Reduced TGU output and efficiency High safety factor on attachment to bottom support frame Recover TGU and repair Foreign object strikes TGU Low No impact on TGU - No loss of output Structural damage to TGU - No loss of output Structural failure of TGU- loss of TGU output Device operates at depths below floating objects and above the ocean floor Device is designed to operate at partial output None Recover and effect repairs Recover and replace while repairs are effected Flotsam and jetsam entangles TGU Low Loss of TGU output - reduced device output Device is designed to operate at partial output; notice to mariners of device deployment area Clear debris Loss of electrical power connection Low Loss of output power Connectors are protected by structural members from strikes by foreign objects Retrieve device and repair Loss of electrical data connection Low Loss of instrumentation data Connectors are protected by structural members from strikes by foreign objects Retrieve device and repair TGU generator failure Low Reduced output power Generator is sealed against water intrusion and designed to operate at the depths and temperatures contemplated Retrieve device and repair Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 31 of 36 7/21/2010 TGU mechanical failure-couplings, shaft, bearings, foils Low Reduced output power Materials and bearings will be lab tested in water with high silt content to ensure they can withstand Cook Inlet environmental conditions. Schedule maintenance at appropriate intervals indicated by materials testing Excessive vibration Low Increased wear Rigid design with high strength. Evaluate and repair if excessive Emergency shut down Moderate Loss of output power Power electronics will unload the generators and short all generator windings to electrically halt the TGUs Determine cause; restart when prudent or repair if necessary Operational costs: Operational costs will include the ongoing annual maintenance described earlier, as well as continual TidGen™ Project monitoring to ensure it is operating within expected parameters with no operational issues. The bulk of this monitoring will be done automatically, but periodical manual checks of these parameters will also be performed. It is expected that this ongoing operation, combined with maintenance for the 600 kW TidGen™ Project will cost $240,000 annually. Since the TidGen™ Project will utilize the Railbelt Grid for power distribution; there are no expected ongoing costs for back up. Reporting: ORPC will collect data on the performance and ongoing costs of the TidGen™ Project throughout the duration of the FERC pilot license for the project. As this information will be critical in assessing the economics of a larger commercial scale build out in Cook Inlet, it will be essential to ORPC that it is accurate and rigorously analyzed. ORPC will commit to share this data on energy produced, associated operating costs, and project benefits and savings with the Alaska Energy Authority and the public. SECTION 7 – READINESS & COMPLIANCE WITH OTHER GRANTS Discuss what you have done to prepare for this award and how quickly you intend to proceed with work once your grant is approved. Tell us what you may have already accomplished on the project to date and identify other grants that may have been previously awarded for this project and the degree you have been able to meet the requirements of previous grants. Readiness for Proposed Grant Concurrent with its Cook Inlet Tidal Energy Project, ORPC has advanced its proprietary ocean current generation technology and announced on August 18, 2010 that its Beta Power System, the largest ocean energy power plant ever installed in U.S. waters, has successfully generated grid-compatible power from tidal currents at its Cobscook Bay site in Eastport, Maine. The system’s core component, the proprietary Turbine Generator Unit (TGU), has a maximum design capacity of 60 kW. Performance test results show that the TGU’s electrical output meets or exceeds expectations for the full range of current velocities encountered and demonstrates ORPC’s readiness to advance the Cook Inlet Tidal Energy Project. ORPC will use the data obtained from the Beta Power System to fine tune the design of its commercial TidGen™ Power System, planned for installation in Eastport in late 2011 and funded in part through a $10 million U.S. Department of Energy award. The TidGen™ Power System will be connected to the New England grid through the Bangor Hydro Electric Company system. ORPC has been working on its Cook Inlet Tidal Energy Project since 2007. In the second round of the Alaska Renewable Energy Fund (REF), the AEA recommended ORPC for full funding for the Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 32 of 36 7/21/2010 Reconnaissance and Feasibility Phases of the Cook Inlet Tidal Energy Project; but due to state budget concerns, this funding was never awarded. In the third round of the REF, AEA recommended ORPC for full funding for the Final Design and Construction Phases, and again last minute budget cuts reduced the available funding and ORPC’s project was not funded. Despite the lack of state funding, ORPC has been able to raise sufficient private funds to complete two environmental tasks on the Cook Inlet Tidal Energy Project. If awarded AEA funding in 2011, ORPC is poised to use it immediately, to complete the final design of the TidGen™ Project in time to release components for manufacture by the first quarter of 2011. ORPC will also begin staffing for the TidGen™ Project in advance of the 2011 deployment year. Currently, ORPC’s Director of Project Development, Monty Worthington, works full time, and will hire additional employees in 2010. ORPC has entered into strategic partnerships with contractors, landowners, municipalities, utilities, and nonprofit organizations that will streamline the implementation of the TidGen™ Project as it progresses. The TidGen™ Project has been entirely privately funded to this point. ORPC, however, has recently received NEPA clearance to begin a $600,000 DOE project to study interactions between the TidGen™ Project and beluga whales. Other Grants/Awards To date, ORPC has received commitments of approximately $33 million in private and public financing, including $17.5 million in private equity and convertible debt funding and more than $15.7 million in state and federal government awards (see table below). Ocean Renewable Power Company, LLC State and Federal Government Awards Governmental Agency Purpose Date Awarded Amount Massachusetts Technology Collaborative Seed Loan for OCGen™ TGU Demo Project July 2007 $240,000 Maine Technology Institute DA1614 Development Award for OCGen™ TGU Demo Project June 2007 $300,000 Maine Technology Institute DA1903 Development Award for OCGen™ TGU Demo Project January 2008 $2 1,200 Maine Technology Institute Asset Commercialization Fund Award for OCGen™ TGU Commercialization Project December 2008 $150,000 Maine Technology Asset Fund MTAF 2030 for Beta OCGen™ TGU Project January 2009 $806,138 Maine Technology Institute MTI 2513 OCGen™ Mooring System February 2010 $285,000 U.S. Coast Guard Demonstration of Use of Tidal Energy for CG Station Eastport, ME Pier August 2009 $100,000 U.S. Department of Energy STTR Phase I, Refinement of Cross Flow Hydrofoils February 2010 150,000 U.S. Department Of Energy OCGen™ Module Mooring Project June 2010 $1,034,534 Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 33 of 36 7/21/2010 U.S. Department Of Energy Acoustic Monitoring of Beluga Whale Interactions with ORPC’s Cook Inlet Tidal Energy Project February 2010 $600,000 U.S. Department of Energy STTR Phase II, Refinement of Cross Flow Hydrofoils August 2010 $750,000 U.S. Department of Energy Sub-recipient, University of Maine, Maine Tidal Power Initiative July 2010 75,000 U.S. Department of Energy TidGen™ Power System Commercialization September 2010 $10,000,000 U.S. Department of Energy Abrasion Testing of Critical Components of Hydrokinetic Devices September 2010 $240,000 Alaska Denali Commission RivGen™ Power System August 2010 $830,325 Total $15,772,197 Massachusetts Technology Collaborative (MTC) Seed Loan and Maine Technology Institute (MTI) Development Awards – In 2007, ORPC received an MTC Seed Loan of $240,000, a $300,000 MTI Development Award, and a $211,200 MTI Development Award to partially fund the OCGen™ Prototype Turbine Generator Unit Demonstration Project (OCGen™ TGU Demo Project). ORPC completed the OCGen™ TGU Demo Project on April 30, 2008. The Seed Loan was subsequently repaid in June 2009 in conjunction with ORPC’s private equity SeriesA funding. Since ORPC was granted the second Development Award to fund a significant portion of the deployment and testing phase of the OCGen™ TGU Demo Project, the original Development Award budget was closed out in January 2008. The budget for the second Development Award subsequently covered expenses from this point until Phase III was completed on April 30, 2008. ORPC successfully met the project objectives, including testing and proving the technical viability of the OCGen™ TGU design in a tidal application. Maine Technology Institute (MTI) Asset Commercialization Fund (ACF) Award – In December 2008, ORPC received a $150,000 ACF award from MTI. This ACF award, combined with matching funds provided by other investors in ORPC, was used to supply bridge funding to advance project site development, the commercialization of OCGen™ technology, and other ongoing working capital requirements until ORPC successfully arranged for Venture A funding in June 2009. At the time of closing on the Venture A funding, the $150,000 Convertible Preferred Funding was converted into Class D Membership interest in the founding company, ORPC Holdings, LLC, which holds a fifty percent (50%) ownership in ORPC. MTI Maine Technology Asset Fund (MTAF) 2030 – In July 2009, ORPC received an MTI MTAF award of $806,138 to fund the engineering, design, procurement, assembly, installation and testing of the Beta Pre- Commercial OCGen™ TGU (Beta OCGen™ TGU Project). This project was completed in March 2010. A second MTAF application (MTAF 3020) is pending: a $1,200,000 request for TidGen™ Power System Commercialization (notification in October 2010). U.S. Coast Guard HSCG32-09-R-R00018 – In August 2009, ORPC was awarded a $100,000 contract to demonstrate how tidal energy can be delivered to the U.S. Coast Guard for use at its Eastport station through a battery electrical supply system that is charged aboard ORPC’s research vessel, the Energy Tide 2. Successfully completed in August 2010, this was the first application of tidal energy by a federal agency. U.S. Department of Energy STTR Phase I & II DE-SC0003622 – ORPC received a $150,000 Small Business Technology Transfer (STTR) Phase I award with the University of Maine to increase the Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 34 of 36 7/21/2010 efficiency of ORPC’s cross flow hydrofoils in December 2009. This project was completed in August 2010. Subsequently in September 2010, ORPC received a $750,000 STTR Phase II award to continue this study with UMaine. U.S. Department of Energy DE-EE000265 – In June 2009, DOE awarded ORPC $1,034,534 for the OCGen™ Module Mooring Project. Design work has begun on this project. U.S. Department of Energy DE-EE0002657 – In February 2010, DOE awarded ORPC $600,000 to study the interactions between Cook Inlet beluga whales and ORPC’s Cook Inlet Tidal Energy Project. U.S. Department of Energy DE-FOA-0000293 – For TidGen™ Commercialization Project, $10,000,000. Awarded September 2010. U.S. Department of Energy DE-FOA-0000293 – For Abrasion Testing of Critical Components of Hydrokinetic Devices, $240,000. Awarded September 2010. Alaska Denali Commission Emerging Energy Technology Grant – In August 2010, ORPC was awarded $830,325 in support of the RivGen™ Power System Project. Application Submitted, Award Decision Pending: MTI MTAF 3020 – For TidGen™ Commercialization Project, $1,200,000. Notification October 2010. SECTION 8– LOCAL SUPPORT Discuss what local support or possible opposition there may be regarding your project. Include letters of support from the community that would benefit from this project. ORPC’s Cook Inlet Tidal Energy Project has enjoyed enthusiastic support from diverse sectors of the public, private industry, and government organizations. Public support for the project continues to be pervasive, and private companies and public institutions have written of their support. Nearly every government agency that has worked on project permitting has expressed enthusiasm for the project’s success. Alaskan organizations, communities and people see the potential it has to help supply Alaska’s rural and Railbelt electrical needs. No significant concern to the project has been raised except in relation to the project’s coexistence with endangered beluga whales. The National Marine Fisheries Service has made it clear that the project must not compromise the local population of beluga whales, and ORPC is working through the permitting process to ensure that adequate means to monitor the whales’ welfare are in place and is studying this issue through a $600,000 DOE award. ORPC continues to consult with stakeholders, agencies, and the public through regular project update mailings and meetings, to ensure that any concerns are identified and addressed in a collaborative, proactive manner. In these ways, ORPC maintains ongoing community involvement and public support of the project (See Section 9.D.). ORPC has forged strong relationships with the University of Alaska system through the Alaska Center for Energy and Power and Alaska Hydrokinetic Energy Research Center (AHERC) at UAF and through working with researchers at the UAA campus. ORPC has already begun collaborating on joint efforts with UAF institutions on our Nenana RivGen™ Power Project including receiving joint funding from the Denali Commission to develop the Project with assistance from AHERC researchers. More recently, ORPC has solidified efforts to partner with UAA through the recent DOE award to study the effects of silt abrasion on technology components, and is also working with University researchers and faculty on the beluga monitoring project. ORPC has also developed relationships with local municipalities, the Anchorage Economic Development Council, the Port of Anchorage, Port Mackenzie and others to ensure that parties with interest in the project are onboard and supportive of ORPC’s efforts. Letters of support from many of these organizations, institutions, and private companies have been included with this grant application. Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 35 of 36 7/21/2010 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 Provide a narrative summary regarding funding sources and your financial commitment to the project. The completion of the TidGen™ Project during the AEA Funding Period will require $8,050,538, to be funded as follows: $6,050,538 by ORPC; and $2,000,000 by the AEA, pursuant to this Renewable Energy Fund Round IV grant application. ORPC’s and the DOE’s funding commitments will count as cost share within the AEA Funding Period. ORPC’s funding request of $2,000,000 from the AEA thus corresponds to 25% of the TidGen™ Project’s funding requirements during the AEA Funding Period, with ORPC providing 75%. The Grant Budget Form (Section 9.C.) summarizes the TidGen™ Project funding plans between August 2011 and December 2013 (the AEA Funding Period). ORPC has already invested significant resources into developing and permitting the Cook Inlet Tidal Energy Project, which encompasses the TidGen™ Project. These efforts have been funded entirely by ORPC, totaling $931,496 as of September 1, 2010, and have included work on obtaining and complying with FERC permitting; site characterization work; environmental data collection; meetings with communities, agencies, stakeholders, contractors, public officials and others involved or affected by the project; and participation in organizations, conferences and industry meetings. An additional $1,430,834 of ORPC funds and $840,000 of DOE grant funds will be spent on the Cook Inlet Tidal Energy Project prior to the availability of AEA grant funding in August 2011. ORPC attributes these monies spent on project development prior to August 2011 to the expanded 3 MW Cook Inlet Tidal Energy Project, not to the 600 kW TidGen™ Project. AEA Renewable Energy Fund Grant Application Round IV ORPC Alaska: Cook Inlet TidGen™ Project SECTION 9.A. Contact Information & Resumes • AEA Renewable Energy Fund Grant Application Round IV ORPC Alaska: Cook Inlet TidGen™ Project SECTION 9.B. COST WORKSHEET Renewable Energy Fund Round 4 Project Cost/Benefit Worksheet RFA AEA11-005 Application Cost Worksheet Page 1 7-21-10 Please note that some fields might not be applicable for all technologies or all project phases. The level of information detail varies according to phase requirements. 1. Renewable Energy Source The Applicant should demonstrate that the renewable energy resource is available on a sustainable basis. Annual average resource availability. 95% Availability Factor Unit depends on project type (e.g. windspeed, hydropower output, biomasss fuel) 2. Existing Energy Generation and Usage a) Basic configuration (if system is part of the Railbelt 1 i. Number of generators/boilers/other grid, leave this section blank) ii. Rated capacity of generators/boilers/other iii. Generator/boilers/other type iv. Age of generators/boilers/other v. Efficiency of generators/boilers/other b) Annual O&M cost (if system is part of the Railbelt grid, leave this section blank) i. Annual O&M cost for labor ii. Annual O&M cost for non-labor c) Annual electricity production and fuel usage (fill in as applicable) (if system is part of the Railbelt grid, leave this section blank) i. Electricity [kWh] ii. Fuel usage Diesel [gal] Other iii. Peak Load iv. Average Load v. Minimum Load vi. Efficiency vii. Future trends d) Annual heating fuel usage (fill in as applicable) i. Diesel [gal or MMBtu] ii. Electricity [kWh] iii. Propane [gal or MMBtu] iv. Coal [tons or MMBtu] v. Wood [cords, green tons, dry tons] vi. Other 1 The Railbelt grid connects all customers of Chugach Electric Association, Homer Electric Association, Golden Valley Electric Association, the City of Seward Electric Department, Matanuska Electric Association and Anchorage Municipal Light and Power. Renewable Energy Fund Round 4 Project Cost/Benefit Worksheet RFA AEA11-005 Application Cost Worksheet Page 2 7-21-10 3. Proposed System Design Capacity and Fuel Usage (Include any projections for continued use of non-renewable fuels) a) Proposed renewable capacity (Wind, Hydro, Biomass, other) [kW or MMBtu/hr] 600 KW (Expanding the TidGenTM b) Proposed annual electricity or heat production (fill in as applicable) Project scope to 900 KW by end of 2013, to 3 MW by end of 2014 and 100 MW by 2020) i. Electricity [kWh] 1,792,512 (at 600 KW Phase) ii. Heat [MMBtu] c) Proposed annual fuel usage (fill in as applicable) i. Propane [gal or MMBtu] ii. Coal [tons or MMBtu] iii. Wood [cords, green tons, dry tons] iv. Other 4. Project Cost a) Total capital cost of new system $8,050,537 b) Development cost $409,451 c) Annual O&M cost of new system $257,225 in 2013 or $3,192,767 on an NPV basis (Includes allowance for Major Maintenance) (NPV Calculations are performed using a life of 15 years and a discount rate of 3%) d) Annual fuel cost 0 5. Project Benefits a) Amount of fuel displaced for i. Electricity 19,072 Mcf Natural Gas per Year for the 600 KW Project (Based on Emerman heat rate of 10,640 Btu/KWh supplied by AEA) (growing to 3.2 million Mcf at 100 MW stage of the expanded project) ii. Heat iii. Transportation b) Current price of displaced fuel $106,254 in 2013 or $1,289,086 on an NPV basis (Based on 5.57 $2009 per Mcf – 2013 value of 2009 CEA/CP Gas Contract using PACI) (NPV Calculations are performed using a life of 15 years and a discount rate of 3%) c) Other economic benefits (1) Carbon Tax Avoided: $17,827 in 2013 or $280,889 on an NPV basis (1,013 mtons of CO 2 (2) O&M Component of Alaska Utility’s Generation Cost: $8,963 in 2013 or $100,853 on an NPV basis (Based on 0.005 $2009 per kWh – 2013 value of 2009 CEA/CP Gas Contract using PACI) (NPV Calculations are performed using a life of 15 years and a discount rate of 3%) avoided X 15.20 2010$ per metric ton w/5% esc per yr) (NPV Calculations are performed using a life of 15 years and a discount rate of 3%) Renewable Energy Fund Round 4 Project Cost/Benefit Worksheet RFA AEA11-005 Application Cost Worksheet Page 3 7-21-10 d) Alaska public benefits $4,141,496 on an NPV basis (over 15 years and using a 3% discount rate) (Includes an estimate of $3,033,129 for Alaska content of the proposed project’s O&M costs, $303,313 for multiplier effect of new jobs created in the local economy, and $805,054 for multiplier effect of ORPC’s new investment in the region (such as grid upgrades to adjust to renewable generation). Please see Section 5 of the application for more details. 6. Power Purchase/Sales Price a) Price for power purchase/sale $0.17 per KWh in 2010 dollars 7. Project Analysis a) Basic Economic Analysis Project benefit/cost ratio Ratio of Generation Benefits to Project Costs: -0.21 Ratio of Generation Benefits Plus All Other Economic and Public Benefits to Project Costs: +0.31 Payback (years) 22 Years for 600 KW Pilot Project (10.8 Years for 100 MW Commercial Project) AEA Renewable Energy Fund Grant Application Round IV ORPC Alaska: Cook Inlet TidGen™ Project SECTION 9.C. GRANT BUDGET FORM Renewable Energy Fund Grant Round IV Grant Budget Form 7-21-10 Milestone or Task Anticipated Completion Date RE- Fund Grant Funds Grantee Matching Funds Source of Matching Funds: Cash/In-kind/Federal Grants/Other State Grants/Other TOTALS Confirmation that all design and feasibility requirements are complete Jan-12 $ - $ 95,749 Cash $ 95,749 Bids received for TidGen™ Power System and first TidGen™ device components; components released for manufacture (long lead time items including generator and foils released for manufacture in early January) Feb-12 $ - $ 426,784 Cash $ 426,784 Deployment and operations contractors selected; contracts signed Mar-12 $ 125,000 $ 250,550 Cash $ 375,550 TidGen™ Power System and first TIdGen™ device components procured, prepared for shipment May-12 $ 125,000 $ 220,350 Cash $ 345,350 TidGen™ Power System and first TidGen™ device components arrive at Port of Anchorage May-12 $ 250,000 $ 302,656 Cash $ 552,656 Bottom support frame fabrication complete, TidGen™ TGU assembled at Port of Anchorage June-12 $ 500,000 $ 296,656 Cash $ 796,656 Bottom support frame, Shore station and terrestrial power transmission system deployed Jul-12 $ 500,000 $ 225,650 Cash $ 725,650 Initial TidGen™ device and power transmission system deployed; TidGen™ Power System brought online Jul-12 $ - $ 762,553 Cash $ 762,553 Reporting on TidGen™ Power System with first TidGen™ device complete Dec-12 $ - $ 265,252 Cash $ 265,252 Bids received for three additional TidGen™ device components; components released for manufacture Jan-13 $ 250,000 $ 495,985 Cash $ 745,985 Three Additional TidGen™ device components procured and prepared for shipment May-13 $ 125,000 $ 750,525 Cash $ 875,525 Three additional TidGen™ device components arrive at Port of Anchorage; three additional bottom support frames complete; report on continued operation of initial TidGen™ Power System with first May-13 $ 125,000 $ 952,650 Cash $ 1,077,650 Renewable Energy Fund Grant Round IV Grant Budget Form 7-21-10 TidGen™ device complete Deployment of three additional TidGen™ devices complete; full 600 kW TidGen™ Power System brought online. Jul-13 $ - $ 855,650 Cash $ 855,650 Report on operation and performance of complete 600 kW TidGen™ Power System Dec-13 $ - $ 149,528 Cash $ 149,528 TOTALS $ 2,000,000 $ 4,092,709 $ 8,050,537 Budget Categories: Direct Labor & Benefits $ - $ 513,813 Cash $ 513,813 Travel & Per Diem $ - $ 48,000 Cash $ 48,000 Equipment $ 2,000,000 $ 2,665,000 Cash $ 4,665,000 Materials & Supplies $ - $ 69,975 Cash $ 69,975 Contractual Services $ - $ 397,500 Cash $ 397,500 Construction Services $ - $ 2,356,250 Cash $ 2,356,250 Other $ - $ - $ - TOTALS $ 2,000,000 $ 6,050,538 $ 8,050,538 Applications should include a separate worksheet for each project phase (Reconnaissance, Feasibility, Design and Permitting, and Construction)- Add additional pages as needed Renewable Energy Fund Grant Round IV Grant Budget Form 7-21-10 Project Milestones that should be addressed in Budget Proposal Reconnaissance Feasibility Design and Permitting Construction 1. Project scoping and contractor solicitation. 2. Resource identification and analysis 3. Land use, permitting, and environmental analysis 5. Preliminary design analysis and cost 4. Cost of energy and market analysis 5. Simple economic analysis 6. Final report and recommendations 1. Project scoping and contractor solicitation. 2. Detailed energy resource analysis 3. Identification of land and regulatory issues, 4. Permitting and environmental analysis 5. Detailed analysis of existing and future energy costs and markets 6. Assessment of alternatives 7. Conceptual design analysis and cost estimate 8. Detailed economic and financial analysis 9, Conceptual business and operations plans 10. Final report and recommendations 1. Project scoping and contractor solicitation for planning and design 2. Permit applications (as needed) 3. Final environmental assessment and mitigation plans (as needed) 4. Resolution of land use, right of way issues 5. Permit approvals 6. Final system design 7. Engineers cost estimate 8. Updated economic and financial analysis 9. Negotiated power sales agreements with approved rates 10. Final business and operational plan 1. Confirmation that all design and feasibility requirements are complete. 2. Completion of bid documents 3. Contractor/vendor selection and award 4. Construction Phases – Each project will have unique construction phases, limitations, and schedule constraints which should be identified by the grantee 5. Integration and testing 6. Decommissioning old systems 7. Final Acceptance, Commissioning and Start-up 8. Operations Reporting AEA Renewable Energy Fund Grant Application Round IV ORPC Alaska: Cook Inlet TidGen™ Project SECTION 9.D. LETTERS OF LOCAL SUPPORT TerraSond Limited y 1617 S. Industrial Way, Suite 3 y Palmer, AK 99645 y Phone 907-745-7215 y Fax: 907-745-7273 September 13th, 2010 Monty Worthington Alaska Projects Manager OCEAN RENEWABLE POWER COMPANY 725 Christensen Drive, Suite 4A Anchorage, AK 99501 SUBJECT: LETTER OF COMMITMENT PROFESSIONAL SERVICES FOR AEA RENEWABLE ENERGY FUND ROUND IV. To Monty Worthington: TerraSond Ltd. is submitting a Letter of Commitment to provide professional geodetic and geophysical measurement services for the ORPC's Cook Inlet Tidal Energy Project. TerraSond is prepared to support the efforts of ORPC regarding marine logistics, general scientific monitoring, remote sensing, geospatial acquisition and mapping, hydrokinetic interpretation, and tidal power forecasting. TerraSond has the knowledge and ability necessary to accomplish this work in a professional manner, has a comprehensive understanding of the complexities of hydrographic surveying in Alaska, and owns the necessary state of the art equipment (or has access to the technologies) in order to fully support the goals of ORPC, the project stakeholders, and the needs of permitting agencies. TerraSond has extensive experience with ORPC and has a specific understanding of the demands for this project. Our previous contributions to the work effort initiated by ORPC have resulted in information pertaining to preliminary site reconnaissance, resource assessment and tidal power forecasting, the permit process, and site geologic characterization. We have a good understanding for how to best service the needs of ORPC as they move forward with their project responsibilities. We are looking forward to working with ORPC and strengthening our business relationship. TerraSond Limited Signature September 13th, 2010 Date Established in 1971 ALASKA • CALIFORNIA • TEXAS • LOUISIANA • ONTARIO • BRITISH COLUMBIA • NEWFOUNDLAND • RUSSIA LGL Alaska Research Associates, Inc. 1101 E. 76th Avenue, Suite B, Anchorage, Alaska USA 99518 Tel: (907) 562-3339 Fax: (907) 562-7223 www.lgl.com Alaska Energy Authority 813 West Northern Lights Blvd. Anchorage, AK 99503 FAX (907) 771-3942 Phone (907) 771-3048 September 8, 2010 Subject: Alaska Energy Authority Renewable Energy Fund Grant Application of ORPC Maine, LLC The purpose of this letter is to express the support of LGL Alaska Research Associates, Inc. (LGL) for ORPC Alaska, LLC (ORPC) in their activities related to the pursuit of a tidal energy project in Upper Cook Inlet. This support includes that for ORPC’s application for funding of their Cook Inlet Tidal Energy Project with the Alaska Energy Authority’s Renewable Energy Fund round 4 for phase 4, Construction. LGL is an international environmental research and consulting firm with offices around the world, including Anchorage, Alaska. Since May 2009, LGL has been performing beluga whale observations of the ORPC Tidal Project site in Upper Cook Inlet, Alaska. This beluga whale study has been funded entirely by ORPC. LGL is also partnering with ORPC, HDR/DTA, the University of Alaska, the Alaska Department of Fish and Game, and Greeneride Sciences in a Department of Energy-funded project to develop and implement acoustic and visual methods to monitor for beluga whales in and around the ORPC Tidal Project site. Sincerely, Michael R. Link President, LGL group of companies        September 3rd, 2010   To:  Renewable Energy Fund Review Committee  From :  Gwen Holdmann, Director, Alaska Center for Energy and Power  Re:    Ocean Renewable Power Co. (ORPC) Renewable Energy Fund Round IV Proposal    Dear Review Committee;    I am writing this letter in support of the proposal submitted by ORPC entitled ‘ORPC  Cook Inlet Tidal Energy Project’. As you know, we are very excited about the  opportunities for hydrokinetic devices in Alaska.  Cook Inlet is one of the premier sites in  the world for tidal energy, and we support the leadership role ORPC is playing in  developing the technology to harness this resource.    We also hope that ORPC’s project, which includes the University of Alaska Anchorage,  will serve as an opportunity to foster greater collaboration between University of Alaska  researchers based in Anchorage and Fairbanks. We appreciate the proactive approach  ORPC has taken in involving researchers and students from both UAA and UAF in their  projects, which is helping to build research capacity in Alaska as well as developing a  workforce with hands‐on experience in this technology area.      Sincerely,  Gwen Holdmann  Director, Alaska Center for Energy and Power  University of Alaska Fairbanks  gwen.holdmann@alaska.edu  907.590.0879    Sept. 8, 2010  To whom it may concern,    Ocean Renewable Power Corporation (ORPC) is applying for RE Fund Round 4 funding for phase 4  (construction) ‐ for their Cook Inlet Tidal Energy Project. This letter is being written in support of ORPC’s  application.     The University of Alaska, Anchorage (UAA) School of Engineering (PI Tom Ravens) has been working  collaboratively with ORPC to design studies and to pursue funding to understand the environmental  effects of the tidal installation and to ensure that ORPC’s hydrokinetic devices will be able to withstand  the high suspended sediment concentrations. Recently, we learned that ORPC and UAA received a DOE  award to conduct “Abrasion Testing of Critical Components of Hydrokinetic Devices”.  These tests will  ensure that ORPC uses the best possible materials to withstand the highly sedimented Cook Inlet  waters. Two years ago, we developed a Department of Energy (DOE) proposal to study the flow and  sediment transport impacts of hydrokinetic devices in Cook Inlet. Unfortunately, the project was not  funded despite being favorably reviewed.     I have found the ORPC staff very conscientious in their efforts to develop renewable energy in Cook Inlet  in an environmentally sound manner.    Sincerely,    Dr. Tom Ravens  Professor and Chair  Department of Civil Engineering  University of Alaska, Anchorage  September 13, 2010 Monty Worthington, Director of Project Development, Alaska ORPC Alaska, LLC 725 Christensen Drive, Suite 4A Anchorage, AK 99501 Dear Mr. Worthington: This is a letter of support for ORPC’s Alaska Renewable Energy Fund application to the Alaska Energy Authority to develop tidal power in Cook Inlet. The National Renewable Energy Laboratory (NREL) is the nation’s primary laboratory focused on energy efficiency and renewable energy. NREL is a government-owned-contractor-operated facility managed and operated by the Alliance for Sustainable Energy, LLC (“Alliance”) under U.S. Department of Energy (DOE) Contract No. DE- AC36-08GO28308. As a project partner in which we are devoting some of our own resources, NREL will be working closely with ORPC in developing Cook Inlet’s substantial tidal energy potential. As well, NREL and ORPC are currently developing a Cooperative Research and Development Agreement (CRADA) to facilitate NREL’s further involvement in ORPC’s turbine development program. NREL will bring our expertise in computer modeling and technology development to accelerate ORPC’s improvements in turbine efficiency over the next several iterations of ORPC’s technology. This is a typical role we play with technology developers, most notably with the wind industry as they have successfully advanced their technology maturity and reliability. We aim to apply this well documented and tested approach to the emerging tidal and in-stream hydrokinetic industry, and Alaska holds tremendous promise to be a leader in this field. Through the US Department of Energy, NREL has recently located staff directly in Alaska in recognition of the energy challenges and opportunities throughout the state. NREL is well aware of Alaska’s ocean energy potential, including over 90% of the entire nation’s tidal energy. Harnessing this energy is both an exciting and important initiative that could catapult Alaska and the nation into the forefront of clean energy production. We believe this is an important project that can contribute to the Railbelt and ideally the nation’s energy security. Please contact me if you have any questions or would like additional information. Best of luck on your application. Sincerely, Brian Hirsch, Ph.D. Senior Project Leader – Alaska Brian.Hirsch@nrel.gov Alaska office: 420 L Street, # 305 Anchorage, AK 99501 907-271-3633 AEA Renewable Energy Fund Grant Application Round IV ORPC Alaska: Cook Inlet TidGen™ Project SECTION 9.D. Electronic Version of the Entire Application on CD See enclosed. AEA Renewable Energy Fund Grant Application Round IV ORPC Alaska: Cook Inlet TidGen™ Project SECTION 9.F. AUTHORIZED SIGNERS FORM AEA Renewable Energy Fund Grant Application Round IV ORPC Alaska: Cook Inlet TidGen™ Project SECTION 9.G. GOVERNING BODY RESOLUTION AEA Renewable Energy Fund Grant Application Round IV ORPC Alaska: Cook Inlet TidGen™ Project SECTION 9.H. CERTIFICATION AEA Renewable Energy Fund Grant Application Round IV ORPC Alaska: Cook Inlet TidGen™ Project SECTION 9.I. Project Schedule Phase 4 - Construction 1. Confirmation that all design and feasibility requirements are complete 1/1/12 2. Bids received for TidGen™ Power System and first TidGen™ device components; components released for manufacture (long lead time items including generator and foils released for manufacture in early January) 2/1/12 3. Deployment and operations contractors selected; contracts signed 3/31/12 4. TidGen™ Power System and first TIdGen™ device components procured, prepared for shipment 5/1/12 5. TidGen™ Power System and first TidGen™ device components arrive at Port of Anchorage 5/31/12 6. Bottom support frame fabrication complete, TidGen™ TGU assembled at Port of Anchorage 6/30/12 7. Bottom support frame, Shore station and terrestrial power transmission system deployed 7/15/12 8. Initial TidGen™ device and power transmission system deployed; TidGen™ Power System brought online 7/31/12 9. Reporting on TidGen™ Power System with first TidGen™ device complete 12/31/12 10. Bids received for three additional TidGen™ device components; components released for manufacture 1/1/13 11. Three Additional TidGen™ device components procured and prepared for shipment 5/1/13 12. Three additional TidGen™ device components arrive at Port of Anchorage; three additional bottom support frames complete; reporting on continued operation of initial TidGen™ Power System with first TidGen™ device complete 5/31/13 13. Deployment of three additional TidGen™ devices complete; full 600 kW TidGen™ Power System brought online. 7/31/12 14. Report on operation and performance of complete 600 kW TidGen™ Power System 12/31/13