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HomeMy WebLinkAboutNugagak NETC AEA - Community Wind Power Project - Grant Application Section Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 1 of 23 Nushagak Community Wind Power Project 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 23 Nushagak Community Wind Power Project SECTION 1 – APPLICANT INFORMATION Name (Name of utility, IPP, or government entity submitting proposal) Nushagak Electric and Telephone Cooperative (NETC) Type of Entity: “not-for-profit” cooperative utility Mailing Address PO Box 350 Dillingham, AK 99576 Physical Address 557 Kenny Wren Rd, Dillingham, AK Telephone 907-842-5251 Fax 907-842-2780 Email nushtel@nushtel.com 1.1 APPLICANT POINT OF CONTACT / GRANTS MANAGER Name Frank Corbin Title Chief Executive Officer / General Manager Mailing Address PO Box 350 Dillingham, AK 99576 Telephone 907-842-5251 Fax 907-842-2780 Email fcorbin@nushagak.coop 1.2 APPLICANT MINIMUM REQUIREMENTS Please check as appropriate. If you do not to meet the minimum applicant requirements, your application will be rejected. 1.2.1 As an Applicant, we are: (put an X in the appropriate box) X An electric utility holding a certificate of public convenience and necessity under AS 42.05, or An independent power producer in accordance with 3 AAC 107.695 (a) (1), or A local government, or A governmental entity (which includes tribal councils and housing authorities); Yes 1.2.2. Attached to this application is formal approval and endorsement for its project by its board of directors, executive management, or other governing authority. If the applicant is a collaborative grouping, a formal approval from each participant’s governing authority is necessary. (Indicate Yes or No in the box ) Yes 1.2.3. As an applicant, we have administrative and financial management systems and follow procurement standards that comply with the standards set forth in the grant agreement. Yes 1.2.4. If awarded the grant, we can comply with all terms and conditions of the attached grant form. (Any exceptions should be clearly noted and submitted with the application.) Yes 1.2.5 We intend to own and operate any project that may be constructed with grant funds for the benefit of the general public. Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 3 of 23 Nushagak Community Wind Power Project 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) Nushagak Community Wind Power 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 project will be located near the Kanakanak hospital and will be tied into the grid serving Dillingham and Aleknagik, AK. The figure below shows the proposed location. Figure 1. Kanakanak near Dillingham, AK and location of met tower 2259 (yellow) and proposed wind turbines (red triangles). Dillingham is located at the northern end of Nushagak Bay in northern Bristol Bay, at the confluence of the Wood and Nushagak Rivers. It lies 327 miles southwest of Anchorage, and is a 6 hour flight from Seattle. Dillingham can be reached only by air and sea. The current population is 2,347 (2008 DCCED Certified Population) Average summer temperatures range from 37 to 66; average winter temperatures range from 4 to 30. Annual precipitation is 26 inches, with 65 inches of snow. Heavy fog is common in July and August. Winds of up to 60-70 MPH may occur between December and March. Aleknagik is located at the head of Wood River on the southeast end of Lake Aleknagik, 16 miles northwest of Dillingham. Aleknagik is located in the Bristol Bay Recording District. The area encompasses 11.6 sq. miles of land and 7.2 sq. miles of water. Average summer temperatures range from 30 to 66 °F. Average winter temperatures range from 4 to 30 °F. Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 4 of 23 Nushagak Community Wind Power Project Average annual precipitation is 20 to 35 inches, and average annual snowfall is 93 inches.The current population is 229 (2009 DCCED Certified Population). Nushagak Electric Cooperative in Dillingham provides electricity to Aleknagik. General Kanakanak site characteristics: 1. Close proximity to class 3 winds that blow off Nushagak Bay (approximately one mile to the East (1.6 km)). 2. Owned by Choggiung Ltd., a community partner in the project 3. Lies within ½ mile (0.8 km) of a three phase utility grid 4. Surrounded by low vegetation consisting of tundra vegetation and willow less than 8’ in height. 5. Large areas for potential expansion of wind farm 6. There are existing communication towers and buildings (Bristol Bay Area Health Corporation Behavioral Health and FAA housing) near proposed turbine site. 2.3 PROJECT TYPE Put X in boxes as appropriate 2.3.1 Renewable Resource Type X Wind Biomass or Biofuels Hydro, including run of river Transmission of Renewable Energy Geothermal, including Heat Pumps Small Natural Gas Heat Recovery from existing sources Hydrokinetic Solar Storage of Renewable Other (Describe) 2.3.2 Proposed Grant Funded Phase(s) for this Request (Check all that apply) Reconnaissance X Design and Permitting Feasibility X Construction and Commissioning X Conceptual Design 2.4 PROJECT DESCRIPTION Provide a brief one paragraph description of your proposed project. The Nushagak Community Wind Power Project proposes to erect two wind turbines (approximately 200-300 kW . e.g. Aeronautica 29-225kW ) and connect them into the adjacent electric grid operated by Nushagak Electric and Telephone Cooperative (NETC) serving Dillingham and Aleknagik, Alaska. This installation will deliver annually up to 900 mega watt hours of electric power and replace more than 64 thousand gallons of diesel fuel. The proposed Kanakanak site has enough wind to be considered a commercially viable site for a small commercial sized mid-scale turbine. Such a device would produce in excess of $155,000/yr. Further, such wind turbines will serve as an important educational tool for NETC to gain the important skills and expertise to operate and maintain state of the art renewable technology. Such knowledge is a central component to NETC developing a sustainable energy system that will integrate renewable power sources with existing diesel technology. Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 5 of 23 Nushagak Community Wind Power Project 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.) This project is designed explicitly to reduce diesel fuel consumption in the remote area served by NETC and to help build the capacity to integrate renewable energy into the existing NETC grid. These actions will stabilize NETC electricity production costs by promoting community and business growth. Although such small scale turbines will have minimal effects on the overall electrical cost to ratepayers, it will significantly increase NETC capacity to expand further into renewable energy in the near future. The project will also help to reduce regional energy dependence by introducing technology with a stable price production, as the price of diesel has been very volatile over the last 10 years. (Figure 1) Figure 1. Extracted from Ameresco, Inc.’s Price Proposal- see attachment Further, the project will serve as an important educational tool for both NETC and the surrounding community for future expansion of renewable energy systems. The institutional and technical knowledge learned will substantially decrease time, effort, and money hurdles for future expansion into other renewable energy projects. Although the dollar value for the educational benefits is difficult to measure, it is significant in terms of human and social capital. 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. Ninety percent of the projected costs are anticipated to be grant funds with a ten percent NETC match. The operational and maintenance cost for wind turbines acquired will be paid through conventional means by the operating utility. 2.7 COST AND BENEFIT SUMARY Include a summary of grant request and your project’s total costs and benefits below. Grant Costs (Summary of funds requested) 2.7.1 Grant Funds Requested in this application. $ 3,199400.10 2.7.2 Other Funds to be provided (Project match) $ 355,488.90 2.7.3 Total Grant Costs (sum of 2.7.1 and 2.7.2) $ 3,554,889 Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 6 of 23 Nushagak Community Wind Power Project 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) $ 3,554,889 2.7.5 Estimated Direct Financial Benefit (Savings) $ 155,000.00/yr 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.) $ 20,000 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. Mr. Michael Favors, Project Manager and Engineer for Nushagak Cooperative will be the on-site project manager for the wind power project. Mr. Michael Bartlett, Alaska Business Development Manager for Ameresco, Inc. will serve as the off-site project manager, working in collaboration with Mr. Favors Project Manager. Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 7 of 23 Nushagak Community Wind Power Project 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.) 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.) Conceptual Design, Design and Permitting Milestones Project scoping and contractor solicitation for planning and design Oct 2010 Permit applications (as needed) Oct 2010 Final environmental assessment and mitigation plans (as needed) Nov 2010 Resolution of land use, right of way issues Nov 2010 Final System Design Dec 2010 Engineers cost estimate Dec 2010 Permit approvals Jan 2011 Updated economic and financial analysis May 2011 Negotiated power sales agreements with approved rates May 2011 Final business and operational plan May 2011 Construction and Commissioning Milestones Confirmation that all design and feasibility requirements are complete. Jan 2012 Completion of bid documents March 2012 Contractor/vendor selection and award April 2012 Construction Phases March 2012 -Sept 2012 Final Acceptance, Commissioning and Start-up Oct 2012 Training Oct 2012 Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 8 of 23 Nushagak Community Wind Power Project 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. NETC will ultimately be responsible for the successful completion of the project, working in collaboration with partners that have managed similar projects and installed similar systems. NETC’s Mr. Michael Favors has over 35 years in the communications industry serving remote and rural areas of Alaska. He has successfully engineered and managed installation and commissioning of numerous microwave systems in the 2, 6 and 23 Ghz frequency ranges. Mr. Favors is experienced in remote mountaintop site repair, maintenance and design experience at large USAF facilities and smaller private communications from small solar only sites to diesel powered 20 Kw sites. His skill and experience in managing multiple projects from design through completion and ability to problem solve and propose solutions to prevent future occurrences, will be an asset to the Nushagak Community Wind Power Project and compliments the services provided by the contractors. NETC will be contracting with AMERESCO Inc., located in Anchorage, Alaska. AMERESCO Inc. 6643 Brayton Dr. Anchorage, AK 99507 907-277-1049 Every member of Ameresco's staff is a resource of dedicated knowledge. They are experienced in demand-side management, energy savings performance contracts, cogeneration facilities, renewable energy sources, energy procurement, risk management, billing services and power plant development, financing, construction and operations. This experience enables Ameresco to bridge the knowledge gap between customers' objectives and state-of-the-art solutions to energy challenges. The Ameresco Inc. team has overseen and participated in the design, development, implementation and management of over $5 billion in successful energy projects. Ameresco, Inc.’s, Michael Bartlett has 17 years of facility management, energy engineering, project development, and project management experience. He has project development leadership experience on over $200 million worth of energy savings and generation projects in 16 states and overseas. His project leadership and experience includes 35 performance based projects over the past 10 years in the roles of engineering development, project and construction management, operation and maintenance, and measurement and verification. Michael holds certifications as a Project Management Professional, Certified Energy Manager, Certified Business Energy Professional, and LEED AP. Michael also has a Bachelor of Science Degree in Industrial Engineering from the University of Minnesota. His background, education, and certifications make him an ideal project manager for this wind project. Ameresco, Inc.’s Mr. Gary E. Gagnon brings a wide range of expertise in the areas of senior management, engineering development, business and sales development, and project management. For the past 16 years, Mr. Gagnon has worked in every aspect of providing energy solutions to customers. Projects have ranged from the de-centralization of high pressure steam plants to electric hot water heating systems for schools. Projects have all been Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 9 of 23 Nushagak Community Wind Power Project “Turn Key” with one point of project responsibility for the customer to include design, procurement, construction, commissioning and if required continuing service and maintenance. Potential Wind Turbine System: Aeronautica 29-225 wind turbines have been proposed for this project. Aeronautica Windpower is a manufacturing and marketing company that builds and markets mid-scale commercial and industrial (225 to 750 Kw) wind turbines. (Please see attached spec sheet.) Additional important partners to this project include: • Choggiung Ltd is the landowner of the proposed site. NETC and Choggiung, Ltd. currently have an informal agreement on the site. If funded they intend to enter into a formal agreement. • UAF Bristol Bay Campus will utilize the turbines as educational tools for degree programs and for workforce development on sustainable energy. • The City of Dillingham offers their strong support of this project for the benefit of the community. 3.5 Project Communications Discuss how you plan to monitor the project and keep the Authority informed of the status. The Nushagak Community Wind Project will be jointly managed by Michael Favors (NETC Project Manager/Engineer 907.842.5251) and Michael W. Bartlett (AMERECO Account Executive 508.598.4683) The project managers will be responsible in keeping the Nushagak Board of Directors up to date on progress and will monitor milestones. The project managers will also be responsible for compiling periodic progress reports for use by the Board of Directors, community partners, and the Alaska Energy Authority. 3.6 Project Risk Discuss potential problems and how you would address them. The construction of wind turbines in rural Alaska carry with them both standard and site specific risks that needs to be managed. Standard risks include design flaws, manufacturing defects or increasing cost escalation, which can occur throughout all phases of any wind farm project development, affecting the project’s profitability. Site specific risks relate to the isolated nature of the construction site and include securing and delivering of equipment Risk management will provide a science‐based approach to assess the potential impacts that a wind energy project may have. It will be based on industry standards for risk analyses and risk management frameworks - risk frameworks will reflect accepted scientific judgments and learning through precautionary or adaptive approaches - designed by qualified experts. In order to reduce the risks and secure the investment in turbines training packages risk management will be applied during the development stages. Risk management will provide help the project to: • Assign objectives in terms of cost, scheduling and performance • Improve cost estimates by managing realistic and relevant contingencies • Maintain schedule milestones and performance indicators • Enforce occupational, health, safety and environmental targets • Assure greater certainty about financial and project execution outcomes • Select proven technologies and suppliers that have delivered in rural Alaska Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 10 of 23 Nushagak Community Wind Power Project 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. Wind turbines offer a much needed source of renewable electrical energy to many remote communities where fossil fuels are difficult and expensive to deliver. Now that wind turbines are designed to withstand the harsh conditions of arctic environments, they can be a cost-effective choice for isolated Alaskan communities. Modern turbines such as the Aeronautica 29-225 provide a reliable and cost effective electric power . Aeronautica 29-225 is being considered as it is simple and inexpensive to transport and install. There are about 365 turbines of this sort installed in Denmark, the U.S., Germany, and Sweden. Wind analysis of the Dillingham Kanakanak areas have shown potential for wind energy development. The Kanakanak site was determined to be the most viable site exhibiting class 3 winds at 30m.At 30m wind shear and turbulence was also measured and determined to be present sue to trees the east and south and other building further to the west. Sustained wind speeds should increase with height making the site more desirable. Thus the Kanakanak site is considered to be in an area with a commercial wind resource. Although higher wind locations may be in the region their increased distances from the grid make them less cost effective (i.e. Cinnabar Mountain on Lake Aleknagik [estimated Class 6-7 and Snake Lake Mountain [estimated Class 6-7]). The Kanakanak site was chosen based on three important criteria: 1) proven wind resources using met tower measurements, 2) close proximity of power grid, and 3) land use agreement in place with land owner. The wind was appraisal using published wind maps (AEA) that used computer modeling. Further, met towers collected wind data from 2005-2006 at the Kanakanak site (Table 1). Table 1. Wind data from Kanakanak site collected from 2005 to 2006 Hub Height Wind Speed Min. wind Max Wind Mean energy (kW/hr/m2/yr 20 5.00 0.40 22.4 1,293 30 5.62 0.40 23.4 1,846 Current wind installations: There are two operating residential wind turbines in Dillingham area, one near Kanakanak and the other on Wood River Road. The Kanakanak installation consists of two Skystream 3.7 turbines that are providing 22% efficiency and the second installation consists of one Skystream Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 11 of 23 Nushagak Community Wind Power Project 3.7 turbine. Energy production data is being logged at both locations and each show that there is enough wind at these residential sites to meet most electrical loads. Other energy resources that have been investigated in the Dillingham region include hydroelectric in the Wood Tikchik State Park, peat, biomass (municipal waste and wood), and tidal. Of all these alternatives wind has the highest return on investment. (see supporting documents) 4.2 Existing Energy System 4.2.1 Basic configuration of Existing Energy System Briefly discuss the basic configuration of the existing energy system. Include information about the number, size, age, efficiency, and type of generation. The current generation system consists of seven diesel generators of various sizes which are operated in optimal load matching configurations in order to supply the variances in the load demand. NETC DIESEL GENERATORS Generator Number Year Mfg. Kilowatt Capacity 1 1988 1135 2 2001 1050 3 2006 1050 4 2006 1050 5 2008 1050 6 2008 1050 7 2009 455 Total kW Capacity: 6,840 Average kW Load: 2,000 Average kWh per Year: 17,520,000 Since 2007 NETC has operated a solar array for telecommunications at Clarks Point. NETC also has distributed generation guidelines for households including private wind turbines and commercial connections to the NETC grid. NETC has helped the University of Alaska Fairbanks Bristol Bay Campus to connect a 4 kwt solar array as well as two member owners to connect residence scale wind power. 4.2.2 Existing Energy Resources Used Briefly discuss your understanding of the existing energy resources. Include a brief discussion of any impact the project may have on existing energy infrastructure and resources. The existing energy resource is 100% diesel generation with waste heat recovered and used as space heating and adjacent buildings. This wind project proposal is considered a low-penetration wind-diesel system and it will not have any significant negative impacts on the existing energy resources. Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 12 of 23 Nushagak Community Wind Power Project 4.2.3 Existing Energy Market Discuss existing energy use and its market. Discuss impacts your project may have on energy customers. NETC currently serves about 1200 residential meters in the Dillingham/Aleknagik area. NETC’s local electric demand runs approximately two thirds residential service (half of which qualifies for PCE) and one third commercial load. This project is a result of community request to develop renewable energies in the region. 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 • A description of renewable energy technology specific to project location The energy production from any wind turbine is a function of the swept area of the turbine’s blades, the size and efficiency of the mechanical system, and the aerodynamic efficiency of the blades. These factors combine to determine values for an individual machine’s ‘capacity factor’ (the percent of time the turbine is estimated to be operating at the rated output over the course of the year). When multiplied by the number of hours in a year, this allows the calculation of an energy curve for individual turbines. While various wind turbines will operate at slightly better or worse capacity factors, in general they will fall within a range of values which can be used to illustrate the amount of power from various standard size turbines. The renewable energy system proposed has two Aeronautica 29-225 wind turbines installed at 50m hub height at the Kanakanak site. Table 2 shows the estimated energy output in KwHrs/yr using reference date from the Kanakanak met tower (no. 2259) Table 2. Estimated Aeronautics29 turbine output at 95% availability at the Kanakanak site Turbine Aeronautics29 Wind speed (m/s) Time at zero output (%) Time at rated output Mean net power output Mean net energy output Capacity factor At 40 meters 6.09 15.2 1.5 50.2 439,650 22.3 At 50 meters 6.28 14.1 1.8 54.0 473,631 24.0 Data from AMERESCO 2010 • Optimum installed capacity Maximum rated capacity of two Aeronautica 29-225 is 450 kw. • Anticipated capacity factor Anticipated capacity is 23%. Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 13 of 23 Nushagak Community Wind Power Project • Anticipated annual generation Expected annual generation is 906 mW/year. • Anticipated barriers Anticipated barriers are limited as proven technology is used and delivery method is through existing grid. • Basic integration concept Integration will be low penetration into the existing grid. Therefore, minimal impact to the current electrical system. • Delivery methods An addition of 1 mile of transmission lines to the existing NETC Grid. 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. Choggiung LTD owns the real estate that the proposed wind turbine is to be located. Consultation with Choggiung LTD and their board, has indicated that there should be no issues drawing up a cost effective lease agreement for the land-use. (see attached letter of support under required attachments) 4.3.3 Permits Provide the following information as it may relate to permitting and how you intend to address outstanding permit issues. • List of applicable permits • Anticipated permitting timeline • Identify and discussion of potential barriers Permits needed: • Alaska Coastal Management Program – This program (ACMP) evaluates projects within the Coastal Zone (up to 200 miles inland) for consistency with statewide standards and local enforceable policies, also as review involving all federal and state permitting authorities and the Coastal District where the project is located. • Land-use Permit - City of Dillingham • Aviation Safety FAA application - Permit needed for towers taller than 200 feet or within a few miles of an airport. The exact distance depends on the type of airport - use form 7460 • Fish impacts – ADF&G – Fishery Act and Anadromous Fish Act – streams General Permit as streams are not impacted. • Wetland Regional General Permits (GP) US Army Corps Engineers, Alaska Regulatory District • Habitat Conservation & Incidental Take Permit – when a potential exists for harm to federally listed endangered or threatened species. Bird Collisions - USFWS – (Threatened and Endangered Species, Migratory Bird Treaty Act and Bald and Golden Eagle Protection Act) pre and post monitoring for bird mortality. • History and Archaeology and State Historic Preservation – study and review of project by Office of History and Archaeology (OHA) and State Historic Preservation Office(SHPO) required by Section 106 of the National Historic Preservation Act. • Land Lease– land ownership use permission (Choggiung LTD) Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 14 of 23 Nushagak Community Wind Power Project Permitting timeline • Jan 2011 identify all permits necessary and contact relevant agencies our intent to apply and request information on application procedures. • Apr 2011 Have application written and ready for review • April 2011 begin submitting permits • June 2011 Permits approved 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 Environmental issues: • Threatened or Endangered species There are no known threatened or endangered species in the project site. This issue will also be addressed by pre and post monitoring for bird mortality at the site • Habitat issues There are minor habitat issues as approximately 2 acres of tundra habitat will be influenced by the wind turbine construction and operation. Issues will be studied and described in habitat report. • Wetlands and other protected areas The project will not impact wetlands • Archaeological and historical resources No known archaeological and historical sites at the project site, but archeologist should survey site before construction • Land development constraints Wind turbines will be constructed on private land so there are no land development constraints • Telecommunications interference Wind turbines will not interfere with telecommunications • Aviation considerations The Dillingham airport is approximately 2.7 miles (4.1 km)from the proposed wind turbines. Thus filing a FAA 7460-1 is required .Since no military airports are in the vicinity, the DOD is not likely to have any concerns about the site. The use of lighting on mid-scale machines may probably be required, but it is suggested that a confirmation of this fact be obtained from the FAA or Dillingham airport as part of the permitting process. Thus, necessary permits from FAA must be obtained before construction • Visual, aesthetics impacts Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 15 of 23 Nushagak Community Wind Power Project Wind turbines are located in an area where there are existing communication towers the have visual impacts. Turbines may be visible from Kanakanak area so community meetings and scoping on issues will be conducted • Identify and discuss other potential barriers General Noise Issues - Noise considerations generally take two forms, state regulatory compliance and nuisance levels at nearby residences: Modern turbines are quiet enough to meet these considerations as they are masked by the sound of the rushing wind. No other major barriers are currently foreseen but community meetings and scoping will occur to identify potential regional issues 4.4 Proposed New System Costs and Projected Revenues (Total Estimated Costs and Projected Revenues) The level of cost information provided will vary according to the phase of funding requested and any previous work the applicant may have done on the project. Applicants must reference the source of their cost data. For example: Applicants Records or Analysis, Industry Standards, Consultant or Manufacturer’s estimates. 4.4.1 Project Development Cost Provide detailed project cost information based on your current knowledge and understanding of the project. Cost information should include the following: • Total anticipated project cost, and cost for this phase • Requested grant funding • Applicant matching funds – loans, capital contributions, in-kind • Identification of other funding sources • Projected capital cost of proposed renewable energy system • Projected development cost of proposed renewable energy system Total anticipated project cost is Total Phase III & IV: $356,160 Total Phase V: $3,198,729 Total Project Costs: $3,554,889 Total requested grant funding: $3,199,400.10 Total applicant matching funds: $355,488.90 o Total Funding: $3,554,889 Identification of other funding sources; N/A. Projected capital cost of proposed renewable energy system: $3,350,000 Projected development cost of proposed renewable energy system: $200,000 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.) Operational and maintenance costs for two turbines are estimated to be $4,000.00/yr. Funds for this cost will be incorporated into NETC standard O&M protocols for the entire electrical system. Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 16 of 23 Nushagak Community Wind Power Project 4.4.3 Power Purchase/Sale The power purchase/sale information should include the following: • Identification of potential power buyer(s)/customer(s) • Potential power purchase/sales price - at a minimum indicate a price range • Proposed rate of return from grant-funded project • Identification of potential power buyer(s)/customer(s) Customers will include NETC rate payers, both commercial and residential • Potential power purchase/sales price - at a minimum indicate a price range $0.1781 kwh avoided fuel cost value • Proposed rate of return from grant-funded project is 6:1 for matching cash contribution and 0.6:1 for total project expenditures. 4.4.4 Project Cost Worksheet Complete the cost worksheet form which provides summary information that will be considered in evaluating the project. The Project Cost Worksheet is attached. The “Price Proposal for the Design and Installation Wind Power Project” prepared by Ameresco, Inc., for NETC provided the main source of data included in the Project Cost Worksheet. (attached) Diesel Generators Generator Power Production Capacity (kW) 6,840 Estimated Average Load (kW) 2,000 Net Power Production KWH/Year 17,520,000 Annual Fuel Consumption (From NETC) 1,250,000 Fuel Consumption Rate (kWh/gal) 14.016 Price per gal Diesel (2010) $2.53 Net Fuel Cost Power Production $3,162,500.00 Fuel Cost Per kWh ($/kWh) $0.1805 Annual O&M Costs (non-fuel) (as per NETC) $10,000.00 Wind Turbines (2x225 kW) Power Production Capacity (kW) 450 Gross/Max Power Production (kWh/Year) 3,942,000 Capacity Factor (as per Ameresco report, pg. 8) 0.228 Anticipated Net Power Production (kWh/Year) 898,776 Wind-Diesel Integration Analysis Fuel Consumption Rate (kWh/gal) 14.016 Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 17 of 23 Nushagak Community Wind Power Project Wind Supplement kWh/Year 898,776 Fuel Displaced gal/Year 64,125 Price per gal Diesel (2010) 2.53 Total Fuel Displacement Savings $162,236.25 Fuel Cost Displaced per kWh ($/kWh) $0.1805 Percent Total Fuel Cost Displaced 5.13% Percent Non-Fuel O&M Cost Displaced (based on a percentage) $513,000.00 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 Potential benefits include: • Potential annual fuel displacement (gal and $) over the lifetime of the evaluated renewable energy project: 160,000 gallons/yr at $2.53/gallon (2010) for 15 years = 2.4 million gallons. • Anticipated annual revenue (based on i.e. a Proposed Power Purchase Agreement price, RCA tariff, or avoided cost of fuel based rate): $0.1781 kwh at 897mwh/yr = $159,756 – O&M of $4,000 = $155,756 over 15 years = $2,336,340 • Potential additional annual incentives (i.e. tax credits): There is a potential for future tax credits and selling of green tags • Discuss the non-economic public benefits to Alaskans over the lifetime of the project - Educate NETC and the public about the importance of developing renewable energy from local sources. - In cooperation with the UAF Bristol Bay Campus and BBNA the turbines will serve as educational tools for university degrees and workforce development on sustainability energy. The project will generate about $20,000 in educational funds to the community through the offering of courses at the UAF Bristol Bay Campus (one class generated about $100/student per college credit for food lodging and fees – ten students in 20 classes for life of turbine = approximately $20,000) - Develop a pathway for energy security by developing the human capital and capacity for local expansion of renewable energy systems. Social and human capital benefits include: • Increased capacity for NETC to build and sustain advanced and integrated energy systems. The training and hands on experience gained will be valuable as NETC expands beyond diesel power generation systems. • These small scale wind turbines will allow NETC to gain experience in integrating energy Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 18 of 23 Nushagak Community Wind Power Project systems that will help the region develop economically and socially. SECTION 6– SUSTAINABILITY Discuss your plan for operating the completed project so that it will be sustainable. Include at a minimum: • Proposed business structure(s) and concepts that may be considered. • How you propose to finance the maintenance and operations for the life of the project • Identification of operational issues that could arise. • A description of operational costs including on-going support for any back-up or existing systems that may be require to continue operation • Commitment to reporting the savings and benefits • Proposed business structure(s) and concepts that may be considered. The costs of the matching funds and annual O&M will be included into cooperative overheads on a pro-rated annual basis. • How you propose to finance the maintenance and operations for the life of the project Grant funded at the onset and O&M from rate payers and general operation of coop. through the electric rate base. • Identification of operational issues that could arise. Issues that might arise include variability in bird collisions, accessibility of spare parts and maintenance equipment • A description of operational costs including on-going support for any back-up or existing systems that may be require to continue operation. Total project cost includes specific technical training. • Commitment to reporting the savings and benefits: NETC will assign a project manager to report savings and benefits to rate payers. Reports will be delivered at monthly at NETC Board meetings and annually to members at the Annual General Meeting 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. 1) Reconnaissance: a. Project scoping and contractor solicitation: NETC is a small utility that provides electric power via an electric grid for the Dillingham/Aleknagik area. The average load is about 2.1 MW, with the maximum of about 3.4 MW and minimum of about 1.4 MW. Except for a couple of existing non-utility renewable energy systems, (less than 20 kW) all electric power is currently produced via diesel generators. Because of the high cost of diesel and concerns about energy security, NETC chose to explore renewable energy power generation and conduct a baseline data study. Tom Marsik from the UAF Bristol Bay Environmental Science Lab was contracted. Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 19 of 23 Nushagak Community Wind Power Project b. Resource identification and analysis: The purpose of the completed baseline study was to compile information to determine what further studies needed to be done to then determine the best alternative to diesel. (see attached study by Marsik) Alternatives considered in the baseline study were wind, conventional hydro, solar, biomass, hydrokinetic/tidal, and geothermal. Working with AEA, NETC has identified the wind resources for the project. For the Dillingham/Aleknagik region, analysis of current wind data and AEA’s wind resource maps suggest there are areas worth consideration to install wind turbines. These include: i. Kanakanak, an area on the south side of Dillingham – Met tower data and AEA’s wind resource map shows a Class 3 wind resource. An important consideration of this site is the close proximity of existing three phase power lines, thus a low cost for grid tie-in. ii. Wind hot spots – Many wind hot spots likely exist in the region but distance to grid tie-ins may add significant cost. These sites are worth considering because of the potentially valuable of the wind resource. Examples of potential hot spots include China Cap (predicted Class 4 to Class 5), Cinnabar Mountain (predicted Class 7), Snake Lake Mountain (predicted Class 7). iii. NETC has a letter of intent with Ameresco, Inc. develop an advanced feasibility study to construct wind turbines with diesel integration. c. Land use, permitting, and environmental analysis: NETC has cultivated an understanding from land owners and other stakeholders about the needs for this wind project. Such stakeholders include Choggiung Ltd (land holder), BBAHC, and the City of Dillingham. d. Preliminary design analysis and cost: (see attached “Basic Study of Renewable Energy Alternatives for Electricity Generation in Dillingham/Aleknagik Region” prepared by Tom Marisk UAF Bristol Bay Environmental Lab) e. Cost of energy and market analysis: (see attached “Basic Study of Renewable Energy Alternatives for Electricity Generation in Dillingham/Aleknagik Region”) f. Simple economic analysis: Preliminary economic analysis and energy cost/benefit analysis is complete and demonstrates that two 225 kw turbines have the best payback period of all scenarios analyzed. (Ameresco) g. Final report and recommendations: Contractor supplied NETC with final report with projected costs and recommendations to proceed with wind project. (Ameresco and Marsik reports 2) Feasibility and Conceptual Design: a. Project scoping and contractor solicitation. Based on an AEA wind data study conducted from 2005 – 2006 it was concluded that wind offered a viable renewable energy source. Next, Ameresco, Inc. submitted a price proposal for the design and installation of the wind turbines in response a request from NETC’s Board of Directors. b. Detailed energy resource analysis: Energy production has been measured at the Kanakanak site and shows there is enough wind for commercial turbines. (Table 1). Further the wind was appraisal using published wind maps (AEA) that used computer modeling. Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 20 of 23 Nushagak Community Wind Power Project Table 1. Wind data from Kanakanak site collected from 2006 to 2007 Hub Height Wind Speed Min. wind Max Wind Mean energy (kW/hr/m2/yr 20 5.00 0.40 22.4 1,293 30 5.62 0.40 23.4 1,846 Table 2 shows the estimated energy output in KwHrs/yr using reference date from the Kanakanak met tower (no. 2259) Table 2. Estimated Aeronautics29 turbine output at 95% availability at the Kanakanak site Turbine Aeronautics29 Wind speed (m/s) Time at zero output (%) Time at rated output Mean net power output Mean net energy output Capacity factor At 40 meters 6.09 15.2 1.5 50.2 439,650 22.3 At 50 meters 6.28 14.1 1.8 54.0 473,631 24.0 Data from AMERSCO 2010 c. Identification of land and regulatory issues: Choggiung LTD presently owns the real estate that the proposed wind turbine is to be located. A consultation with Choggiung LTD, and their board, has indicated that there should be no issues drawing up a cost effective lease agreement for the land-use for wind turbines d. Permitting and environmental analysis: All required permits have been identified; from a preliminary review/assessment there should not be any environmental or land use issues to hinder the proposed project (see sections 4.3.3 and 4.3.4) e. Detailed analysis of existing and future energy costs and markets: The current costs of diesel electrical power production are compared to the capital for infrastructure, operations, and maintenance costs of wind technology, thus at this point it has been concluded that a Kanakanak wind power project has a 10 to 20 year payback period, thus is a viable, cost-effective option (Ameresco Report 2010) f. Assessment of alternatives: Other energy resources have been investigated in the Dillingham region including hydroelectric in the Wood Tikchik State Park, peat, biomass (municipal waste and wood), and tidal. (see Marsik’s 2009 report) g. Conceptual design analysis and cost estimate: The renewable energy system proposes two 225 kw Aeronautica 29 wind turbines or equivalent (450 kW gross output) to be installed at 50m hub height at the Kanakanak site. A wind turbine output comparison was conducted on:  WT50S, 30 hub height  WT50S, 40 hub height  NW100/21, 37 m hub height  Aeronautica 29-255, 40 m hub height  Aeronautica 29-255, 50 m hub height The results are included in the attached “Price Proposal” prepared by Ameresco, Inc. h. Detailed economic and financial analysis: The installation of two turbines will deliver annually up to 900 mega watt hours of electric power and replace more than 64 thousand gallons of diesel fuel. Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 21 of 23 Nushagak Community Wind Power Project Anticipated annual revenue (based on i.e. a Proposed Power Purchase Agreement price, RCA tariff, or avoided cost of fuel based rate): $0.1781 kwh at 897mwh/yr = $159,756 – O&M of $4,000 = $155,756 over 15 years = $2,336,340 Replace more than 64,000 gallons of diesel fuel annually with diesel cost at $2.50/gal = $160,000 ($3,320,000 over 20 years) diesel cost at $3.50/gal = $224,000 ($4,480,000 over 20 years diesel cost at $4.00/gal = $256,000 ($5,120,000 over 20 years) Potential annual fuel displacement (gal and $) over the lifetime of the evaluated renewable energy project: 160,000 gallons/yr at $2.53/gallon (2010) for 15 years = 2.4 million gallons. i. Conceptual business and operations plans: These will be completed as part of the design process. Final plans should be ready by May 2011 j. Final report and recommendations: The proposed Nushagak Community W ind Power Project was presented to the community on Sept. 2, 2010 in the Dillingham City Council chambers. SECTION 8– LOCAL SUPORT Discuss what local support or possible opposition there may be regarding your project. Include letters of support from the community that would benefit from this project. Local agencies in support of the Nushagak Community Wind Project include Bristol Bay Area Health Corp., Bristol Bay Economic Development Corp., Chogguing Ltd, City of Dillingham, Curyung Tribal Council, and UAF BBC. All NETC members would benefit from the added energy security, cleaner air, and diesel savings this wind project will provide. One local company, Chogguing Ltd., has already invested in a 15 kW wind turbine in downtown Dillingham which as a projected payback period of 6 years. The UAF Bristol Bay Campus has invested heavily in renewable energy education and started a “Sustainable Energy Initiative” in 2009. On 2-Sept- 2010 the Nushagak Community Wind Power Project was presented to the Dillingham City Council where it was enthusiastically supported. The consumption of fossil fuels for electricity, heating, and transportation has increased significantly in rural Alaska over the last 5 years. This volatile pricing has limited economic investment in the community. Further the increased use of fossil fuels results many undesirable environmental influences including global warming, ocean acidity, acid rain, and water pollution. Because of these negative environmental effects NETC realizes the need to reduce fossil fuel use and is initiating a number of policies and programs including this wind project. NETC see this project as a major step towards reducing its fossil fuel dependency and to promote investments for a sustainable energy future. In addition to the electrical energy produced and the deferred diesel cost, the project will serve as an important education tool for sustainable development. The heavy use of fossil fuels in rural Alaska is an issue of major concern as most communities are 100% dependent on diesel. The ever increasing cost of diesel significantly increases the cost of living as well as creating a difficult climate for economic growth and community development. In 2008, AEA awarded Bristol Bay Area Health Corp (BBAHC) $100,000 in grant funds to investigate the potential of wind as an energy source in the larger Dillingham regional area. This larger wind study is still ongoing. Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 22 of 23 Nushagak Community Wind Power Project SECTION 9 – GRANT BUDGET Tell us how much you want in grant funds Include any investments to date and funding sources, how much is being requested in grant funds, and additional investments you will make as an applicant. Include an estimate of budget costs by milestones using the form – GrantBudget3.doc Provide a narrative summary regarding funding sources and your financial commitment to the project. NETC will provide ten percent matching funds for this project. Funding for this match will come from general NETC funds provided by ratepayers. O&M cost will be paid through general Nushagak funds. Renewable Energy Fund Grant Application Round IV AEA11-005 Grant Application Page 23 of 23 Nushagak Community Wind Power Project SECTION 9 – ADDITIONAL DOCUMENTATION AND CERTIFICATION SUBMIT THE FOLLOWING DOCUMENTS WITH YOUR APPLICATION: A. Contact information, resumes of Applicant’s Project Manager, key staff, partners, consultants, and suppliers per application form Section 3.1 and 3.4. B. Cost Worksheet per application form Section 4.4.4. C. Grant Budget Form per application form Section 9. D. Letters demonstrating local support per application form Section 8. E. An electronic version of the entire application on CD per RFA Section 1.6. F. Authorized Signers Form. G. Governing Body Resolution or other formal action taken by the applicant’s governing body or management per RFA Section 1.4 that: - Commits the organization to provide the matching resources for project at the match amounts indicated in the application. - Authorizes the individual who signs the application has the authority to commit the organization to the obligations under the grant. - Provides as point of contact to represent the applicant for purposes of this application. - Certifies the applicant is in compliance with applicable federal, state, and local, laws including existing credit and federal tax obligations. H. CERTIFICATION The undersigned certifies that this application for a renewable energy grant is truthful and correct, and that the applicant is in compliance with, and will continue to comply with, all federal and state laws including existing credit and federal tax obligations. Print Name Frank Corbin Signature Title Date