HomeMy WebLinkAboutTurnagain Arm Tidal AppRenewable Energy Fund Round 3
Grant Application
AEA 10-015 Application Page 1 of 154 10/7/2009
AIDEA
TURNAGAIN ARM TIDAL
ELECTRICAL GENERATION
PROJECT
TATEP
LITTLE SUSITNA CONSTRUCTION CO. INC.
11/10/2009
Contact:
Dominic Lee
Tammie Smith
Address:
821 N St., Suite 207
Anchorage, AK 99501
Tel. 907-274-7571
FAX 907-277-3300
E-Mail:littlesu@ak.net
Website: littlesu.com
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TABLE OF CONTENTS
Grant Application (Section 1-Section 9)……………………………………………….. 3 - 29
Resumes (Section 3.1 & 3.4) ……………………………………………………….…. 30 - 51
Cost Worksheet (Section 4.4.4)…………………………………………………….…. 52 - 54
Grant Budget (Section 9).…………………………………………………………….... 55 - 90
Construction Schedule (Section 3.2)……………………………………………….…. 91 – 100
Letters of Local Support (Section 8)…………………………………………………… 101 - 116
Governing Body Resolution (Section 1.4)……………………………………….……. 117 - 118
Maps and Platform/Turbine Design .……………………………………………..……. 119 - 123
LSCC Licenses…………………………………………………………………………… 124 - 131
Additional Information About Davis Turbine Systems from Blue Energy of Canada.. 132 - 154
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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-III.html
Grant Application
Form
GrantApp3.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
Costworksheet3
.doc
Summary of Cost information that should be addressed by
applicants in preparing their application.
Grant Budget
Form
GrantBudget3.d
oc
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
GrantBudgetInst
ructions3.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.
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SECTION 1 – APPLICANT INFORMATION
Name (Name of utility, IPP, or government entity submitting proposal)
Little Susitna Construction Co., Inc.
Type of Entity: Independent Power Producer and Electric Utility Co. (Authorized by State
of AK Dept. of Commerce)
Mailing Address
821 N St., Suite 207
Anchorage, AK 99501
Physical Address
821 N St. Suite 207
Anchorage, AK 99501
Telephone
907-274-
7571
Fax
907-277-3300
Email
littlesu@ak.net
1.1 APPLICANT POINT OF CONTACT
Name
Dominic Lee, P.E.
Title
President and CEO
Mailing Address
821 N St., Suite 207, Anchorage, AK 99501
Telephone
907-274-
7571
Fax
907-277-3300
Email
littlesu@ak.net
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
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
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funds for the benefit of the general public.
SECTION 2 – PROJECT SUMMARY
This is intended to be no more than a 1-2 page overview of your project.
2.1 Project Title – (Provide a 4 to 5 word title for your project)
Type in your answer here and follow same format for rest of the application.
Turnagain Arm Tidal Electric Generation 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.
Answer here.
Turnagain Arm in an area between Anchorage and Point Possession and south of Fire
Island. (See Map, p. 119)
Communities that will benefit will include all customers of participating electrical
companies on the existing or future electrical grid along the railbelt area from Homer,
AK to Fairbanks, AK., including municipalities of Anchorage, Kenai, Soldotna, Homer,
Seward, Palmer, Wasilla, and Fairbanks, AK.
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 X Transmission of Renewable Energy
Geothermal, including Heat Pumps Small Natural Gas
Heat Recovery from existing sources X Hydrokinetic (Tidal Energy)
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
X Feasibility Construction and Commissioning
Conceptual Design
2.4 PROJECT DESCRIPTION
Provide a brief one paragraph description of your proposed project.
The Turnagain Arm Tidal Electrical Generation Project (TATEP) consists of the installation of
patented and proven Davis tidal electrical generation turbines in areas with at least 80 ft. of
water at high tide and 54 ft. low tide, housed in piling supported platforms designed to allow ice
flow beneath the platforms. Specific sites of the platforms will be selected after further research
into environmental, hydrodynamics of tides and water movement in specific areas of the inlet.
The plan calls for 200 10MW generators with a total capacity of 2000 MW at 60% efficiency
which produces 1200MW net electricity. Platforms will be connected by transmission lines and
submarine cable will bring the electricity produced to Chugach Electric on the Anchorage side
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and to Homer Electric on the Kenai side, accessing existing utility corridors as much as
possible. Electricity produced by the project will be available for purchase by all the electric
utilities in the railbelt area at a rate between 6¢ to 8¢ per kilowatt hour, which will reduce the
cost of electricity to railbelt consumers by 50% to 67% and will benefit the70% of the Alaskan
population who live in this area. (See Map.)
2.5 PROJECT BENEFIT
Briefly discuss the financial and public benefits that will result from this project, (such as
reduced fuel costs, lower energy costs, etc.)
The project will require no fuel, is renewable, and produces no greenhouse gas emissions or
CO₂, replacing the use of natural gas and solving the problem of shortage of natural gas in the
railbelt area. Building a natural gas pipeline to Prudhoe Bay will increase the cost of energy in
the railbelt region, while the TATEP will reduce cost of energy to the region. The installation
costs are $1200/kW. Electricity could be sold to railbelt utilities as low as 6¢ to 8¢ per kWh,
lower than the current cost of fuel. The average cost for electricity for a home in the Anchorage
area at 750 kWh/month is $120. at 16¢/kWh and in Fairbanks is $180. at 24¢/kWh. Monthly
electrical bills for an average house would be reduced to $45 at 6¢/kWh.
2.6 PROJECT BUDGET OVERVIEW
Briefly discuss the amount of funds needed, the anticipated sources of funds, and the nature
and source of other contributions to the project.
The project is expected to cost $2.5 billion in 2009 dollars.
Little Susitna Construction Co. will invest up to $1 million dollars of engineering design,
permitting and feasibility studies in kind toward the project cost. Blue Energy of Canada, the
designer and manufacturer of the patented Davis turbines used in the project will invest the
patented tidal electrical generation technology developed by that company over the past 30
years which includes know-how, intellectual property, provision of consulting during design and
construction, oversee the fabrication of the Davis Tidal turbine, the generator, the blades, and
the steel shaft manufacturing.
A Memorandum of Understanding between LSCC and Singa Mas Investments Holding Ltd. of
Hong Kong has been signed. The funds will provide 20% ($500,000,000.) as a major investor
of this project.
LSCC is asking for $4,000,000.00 from the Alaska Renewable Energy Fund Grant, Round 3, for
the Feasibility Study.
When preliminary studies are completed, LSCC will apply for a Federal Loan Guarantee for
Innovative Energy Efficiency, Renewable Energy and Advanced Transmission and Distribution
Technologies or comparable loan guarantee from the U.S. Department of Energy for 80% ($2.0
billion) under the U.S. Department of Energy. LSCC is soliciting funds from potential investors
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to fund the Feasibility Study, the Preliminary Engineering Design, and Federal Energy
Regulatory Commission permitting as well as land lease from Alaska State Department of
Natural Resources.
2.7 COST AND BENEFIT SUMARY
Include a summary of grant request and your project’s total costs and benefits below.
Grant Costs
(Summary of funds requested)
2.7.1 Grant Funds Requested in this application.$4,000,000.00
2.7.2 Other Funds to be provided (Project match)$None at this time
2.7.3 Total Grant Costs (sum of 2.7.1 and 2.7.2)$4,000,000.00
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)
$2,500,000,000.00
2.7.5 Estimated Direct Financial Benefit (Savings) $359,400,000.00/year
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.)
$ Elimination of 100
million tons of CO₂, SO₂
emission to the
atmosphere.
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 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.
Dominic S.F. Lee, P.E. (See Resume, p. 31 & 32.)
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.)
See Spread Sheet for a schedule of the entire project over 6 years. (See Attachment, p. 91-
100.) The proposed grant will be used only for the Feasibility Phase.. See table with
Planned Schedule for Feasibility. (See Attachment, p. 93-96)
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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.
Feasibility Phase: (AEA Grant Application)
LSCC has completed the Reconnaissance Phase. We will use the funds from the Renewable
Energy Fund to partially fund the Feasibility Phase. LSCC is working with Blue Energy of
Canada, the patent holder of the Davis turbine which is planned for this project. (See Resumes
of Blue Energy of Canada for more information about the company and the personnel who are
working with us, and see “Additional Information About the Davis Turbine”, p. 131-153.)
Jim Holeman of the Louis Berger Group International has submitted a proposal to LSCC to act
as Director of Preparation of the Pre-Application Document and Notice of Intent to File with the
Federal Regulatory Energy Commission. He will oversee the process of hiring sub-consultants
to prepare studies, perform research, and arrange for meetings with stakeholders as required by
the FERC licensing process. He will also be involved in advising on activities for Public
Relations. We will begin the permitting process for FERC as soon as possible so that data can
be integrated into the planning and engineering of the project. (See Resumes for additional
information on the Louis Berger Group and Jim Holeman.)
Throughout the project, Blue Energy of Canada will act as a primary consultant on the project.
In the Feasibility Phase, Blue Energy and Little Susitna Construction Co. will work together to
perform and oversee the other milestones and tasks.
Design and Permitting and Construction Phase
In the later stages, LSCC plans to engage a national engineering firm. LSCC has held a
meeting with both CH2M-Hill and Fluor, USA, and both have expressed an interest in being
involved in the engineering for the project. Arrangements will be made with one or both for the
engineering and construction phase. Blue Energy will custom modify the design of the Davis
Turbine for the Turnagain Arm site and arrange for manufacture of the turbines.
In Phase 4, LSCC plans to engage a nationally recognized company as a General Contractor
who will build the project. ($2.3 billion). As yet, no final decision has been made on a General
Contractor for the project, but Fluor USA has been contacted.
3.5 Project Communications
Discuss how you plan to monitor the project and keep the Authority informed of the status.
Little Susitna will submit a quarterly report to FERC, to ADNR, to Corps of Engineers and Coast
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Guard to report progress on the project and send a copy to Alaska Energy Authority.
3.6 Project Risk
Discuss potential problems and how you would address them.
Questions about the effect of tidal turbines and platforms in Turnagain Arm on fish and sea
mammals, especially Beluga whales will need to be addressed. A thorough review of existing
studies will be done by a qualified scientist. Mitigation will be planned, especially for any
specially designated species. While turbines are designed to turn very slowly (2.4
sec/revolution) and to allow fish and beluga whales to pass through with an opening of 30 ft. X
30 ft.,, the design of the turbines/platform will allow much space for passage both between
turbines, above, and around them, other alterations will be studied, such as sensors which stop
turbines when approached by larger mammals. Experimental tests will be designed for the site
to examine how fish and sea mammals are likely to behave near the turbines. (See p. 127 for a
discussion of mitigation for fish and sea mammals from Blue Energy.)
At the present time, we are aware of Cook Inlet beluga whales listed as endangered under the
ESA. We are also aware that they have been observed to feed near the mouth of 16 Mile Creek
just south of Possession Point, and that they have been observed to follow the tides for feeding
to that area. We will need to mitigate against any harm or harassment of marine mammals.
Silt seems to be a concern to many in the public, although it is unclear what adverse reactions
are feared. Experimental tests will be designed and performed to determine how patterns of
movement of silt and sediments in the inlet will impact the use of tidal turbines in the inlet.
Because the turbines are located deep under water, the silt may prove to be less of a problem
than it is in the more shallow areas. According to the State of Alaska Division of Oil and Gas,
Department of Natural Resources, “Most of this sediment is deposited on the extensive tidal
flats or is carried off shore through Shelikof Strait and eventually deposited in the Aleutian
trench beyond Kodiak (AEIDA, 1974:109).
(http://www.dog.dnr.state.as.us/oil/products/publicaations/cookinlet/cia1999_final-
finding/chap2.htm(5 of 19) [11/2/2009] In any event, this issue will be thoroughly studied and
mitigation of drifting sediment or interference with moving parts will be applied to deal with any
problems observed. For example dredging or use of pressured high velocity air can be used to
disperse silt from settling near the turbines.
It is important for the public to understand that the turbines are turned by water even when
moving at 1 knot and generate electricity to eliminate the impression that electricity is generated
only during tidal movement and does not produce electricity during slack tide. However,
according to Blue Energy pilot projects and test results, the venturi velocity under the securing
channel will increase and crate a “Betz Effect” which will keep the turbines turning even during
slack tide periods. The leading U.K. environmentalist, Ms. Hazel Henderson and Mr. Edward
Goldsmith, publisher of U.K. environmental Ecologist magazine have endorsed Blue Energy’s
Davis turbine as one of the best environmentally friendly renewable energy products in the
world. The elimination of fuel and emissions is what our world needs to reduce greenhouse
gases in the atmosphere and is user friendly to fish and marine mammals.
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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.
Turnagain Arm of Cook Inlet has the fourth highest tide in the world with 25 feet (7.6 m) between
low tide and high tide. The TATEP would use only tidal energy, and the energy is not only
inexpensive, it is free, constant, completely predictable, renewable, unending, and produces no
greenhouse gases whatsoever. Other renewable energy projects such as wind turbines will
produce only a fraction of the power that can be produced by tidal power. The Susitna Dam
Hydroelectric Project will cost $7-9 billion, at least 3 times as much as TATEP and will produce
less than 500 MW of electricity, while the TATEP would produce 1200 MW.
Compared to natural gas, the source of energy in use presently, tidal energy produces no
greenhouse gases, is abundant, renewable, and utterly predictable. At the present time, natural
gas is in short supply in the Alaska rail belt region, and a 30 in. pipeline to bring natural gas from
producers in Prudhoe Bay would cost at least $7 billion, and natural gas would cost at least
double the present cost, making the cost of natural gas prohibitive.
TATEP provides another advantage in that it would be less likely to be affected by seismic
activity, and the results would be less dire than those that could be experienced in flooding from
a hydroelectric dam project.
The Davis Turbine has been determined to be extremely environmentally friendly, and the
installation of tidal platforms and turbines would likely be less disruptive to ecosystems than the
disruption produced by building a dam and power plant and flooding a large area of land. In the
case of the tidal project, existing infrastructure and utility grid would be used, again reducing the
extent of environmental disturbance. A technical paper by Mr. Barry Davis, the inventor, has
been presented to the American Society of Chemical Engineers in Honolulu, Hawaii in 1996 with
great acceptance by the Society. (See Additional Information About Davis Turbines.)
The Davis Turbine has been in development and testing since the 1980’s, and is now being
installed in a tidal project in Scotland. The turbine is patented and is ready to be implemented
unlike other tidal turbines which are still in developmental phases.
The location of the tidal platforms in Turnagain Arm is unlikely to interfere with aesthetic or
recreational activities, as the platforms would be several miles from the coast line and there are
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few recreational or commercial fishing activities in the deepest part of Turnagain Arm. The bore
tide which makes Turnagain unfriendly for recreation would be put to useful purpose and the
aesthetics of the inlet would be preserved.
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.
UTILITY CO GENERATION
PEAK
CAPACITY
GENERATION
BASELINE
CAPACITY
CHARGE/Kwh FUEL USE
Chugach
Electric
480 megawatts 240 megawatts 16¢/Kwh Gas
Matanuska
Electric
0 (Purchase
CEA)
0 16¢/Kwh 0
Anchorage
Municipal
Power &Light
183 megawatts 100 megawaatts 13¢/Kwh Gas
Homer Electric 90 megawatts 50 megawatts 24¢/Kwh Gas
Golden Valley
Electric
223 megawatts 120 megawatts 15¢/Kwh Coal
Ft. Wainwright
(US Army)
20 megawatts 10 megawatts N/A Coal
Seward Electric 50 megawatts 25 megawatts 16¢/Kwh Coal
Total *1046
megawatts
545 megawatts
*CO₂Emissions for 1048 megawatts create an estimated 100 million tons of CO₂per
year.
The rail belt region utility companies have not installed new plants for generating electricity. The
G.E. and Solar Turbines they are using are 30 to 40 years old and are at the end of their useful
life. The baseline generation is about 545 megawatts capacity, and at peak power, the capacity
can go up to 1,046 megawatt capacity. The efficiency is low compared to the new turbines. To
replace the old models with newer models would cost approximately $1.3 billion.
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.
At the present time, the railbelt area utilities are using natural gas and coal for electricity
production. Most homes in the area use natural gas for home heating and some appliances
through natural gas lines to homes in the municipalities of Anchorage, Palmer, Wasilla, Kenai,
and Soldotna. Fairbanks uses imported liquefied natural gas purchased from the Kenai plant.
Natural gas in the railbelt area comes from Cook Inlet and Kenai area, but is becoming rapidly
depleted and expected to run out in 5 years. The oil companies who control the gas wells in
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Cook Inlet are exporting 1 million tons annually to Japan in LNG, which is further accelerating the
depletion of gas field reserves.
The proposed bullet line to Prudhoe Bay would cost $5-$7 billion, and the cost of gas would triple
the current price of gas due to debt service on the pipeline and cost of transportation. The price
of electricity to utilities and customers would increase significantly. Any federal carbon tax would
add to the cost. The debt service on $6 billion at 7% interest bond for 20 years is $420 million
per year. Fuel cost, operation, and maintenance of the line is another $807 million per year.
The cost would be prohibitive to customers.
Coal is used in Fairbanks, Ft. Wainwright Army Base, Eielson Air Force Base, and Seward
Electric. However, if cap and trade legislation is passed by the Federal Government, cost will go
up due to taxation of utilities. Coal is increasingly seen as undesirable because of greenhouse
gas emissions and it also damages the clean air of Alaska and causes health problems in
Fairbanks residents.
Tidal energy is renewable and does not produce emissions. It has no fuel cost or transportation
cost. Once in place, a tidal energy electrical generation plant could provide cheap energy for the
rail belt region indefinitely.
Under the TATEP plan, the existing energy resources of the six rail belt utilities would be used
for peak power production while the TATEP power will be used as a rail belt base line 500 to 600
MW to make up the 1046 MW peak power need. The extra power generated by TATEP would
be sold to other industries such as mining, iron and aluminum refining, other petrochemical
industries, and military bases.
In the spring of 2010, TATEP will have an open season and ask all the rail belt utilities for a
Power Purchase agreement or Memorandum of Understanding. Once an agreement or
memorandum of understanding is reached, TATEP will design the project capacity to fulfill the
need.
4.2.3 Existing Energy Market
Discuss existing energy use and its market. Discuss impacts your project may have on energy
customers.
Existing Energy Use and its Market.
The existing rail belt is powered by natural gas and coal. It is a 500 MW baseline electricity
production. The market is presently too small to justify a large expenditure for energy such as
that required for a bullet line to Prudhoe Bay.
Impacts of TATEP on energy customers
1. Customers in the rail belt area where 70% of the state’s population live will benefit
tremendously with cheaper electricity provided by tidal electricity production. At 6¢ to 8¢ per
kilowatt hour, the current customer electricity bill will be reduced by 50% to 60%.
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2. The use of tidal energy would solve the current dilemma of a natural gas shortage in the rail
belt area. At the same time, the use of tidal energy in this region would free the State of Alaska,
pipeline owners, and natural gas producers to export natural gas instead of developing a
prohibitively expensive pipeline system to service a small number of customers in the rail belt
region. Natural gas could continue to be developed in the rail belt region for backup use and
peak power use, while excess could be used for heating homes and exported.
3. Rail belt customers might choose to switch from a natural gas boiler to an electric boiler for
home heating (if they have hydronic heating systems) which will ease the demand for natural gas
in the rail belt region and eliminate the necessity to build an expensive bullet pipeline to Prudhoe
Bay.
4. Cheap electricity will energize the state’s other industries such as mining, petrochemical, and
other industries with heavy electricity usage.
5. Carbon based to renewable ocean surge base.
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
4.3 Proposed System
Little Susitna Construction Co. (LSCC) has applied for a Preliminary Permit from the Federal
Energy Regulatory Commission (FERC). The permit has been accepted and has been
published locally for comment. We are awaiting final award of the preliminary permit. Our
request asked for an area of Turnagain Arm of Cook Inlet that is between Anchorage and Point
Possession south of Fire Island. (See Map) This area of Turnagain Arm is conducive to
development of a tidal project, as it has areas with enough depth and swiftness of tide, and at
the same time, it is outside the major shipping routes and recreational boating preferences. The
location of the project will be as follows:
USGS Quad Map:A-1, A-2, A-8, D-1, D-2, D-3, D-4, D-8
LATITUDE / LONGITUDE
A. W150˚-28’0” N61˚-0’-48”
B. W150˚-28’-0” N61˚-2’-12”
C. W150˚-20’-0” N61˚-7’-12”
D. W150˚-10’-0” N61˚-7’-12”
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E. W150˚-4’-10” N61˚-9’-48”
F. W150˚-3’-0” N61˚-8’-48”
G. W150˚-10’-0” N61˚-0’-0”
H. W150˚-17’-0” N61˚-0’-0”
I. W150˚-23’-0” N61˚-2’-26”
J. W150˚-28’-0” N61˚-0’-24”
K. W150˚-15’-0” N60˚-46’-12”
The project was at first conceived as using a bridge leading from the Kenai side of the inlet to the
bridge area housing the turbines, but a series of platforms with turbines located at the base
seems to be a better fit for the contour of the inlet. The platforms would be built on pilings and
placed in areas of at least 15 fathoms depth. The turbines would sit at the bottom of the platform
on a base made of rock. The turbines are 30 ft. diameter and 30 ft. high. As shown in the
following drawing, the turbines would be placed about 5 fathoms below water at low tide and
about 10 fathoms below water at high tide. The area between the turbines and the platform
would allow space for ice flow to pass beneath the platform and would also allow space for fish
and sea mammals to swim above the turbines. They can also swim through the turbines without
injury, as the turbine moves at a slow pace (1 rotation every 2.4 seconds) the same speed
regardless of the strength and velocity of the tide. A sonar system can also be placed on the
turbines to stop them if large mammals come near.
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The foundation for the turbines will rest on the inlet floor. Transmission lines will be buried in the
inlet floor and across the tidelands leading to Campbell Point and to a utility corridor on the Kenai
side (See Map). Once on shore, transmission lines will be placed in utility corridors on
transmission towers both on the Kenai side of the inlet leading to a switch yard for connection to
Homer Electric and to Chugach Electric on the Anchorage side.
The gear box and generator will rest on the platform where they can be maintained from a boat
or helicopter.
Platforms can be built to house up to 10 turbines.
The tidal platform will be comprised of the turbine modules in a linear array on concrete
pilings. Structures will include a platform which will house the tidal turbines. Platforms can
house up to 10 turbines and the project can be expanded to 20 platforms, containing up to 200
turbines.
The Davis Turbine was developed by Mr. Barry Davis in the 1980’s under a 12 year $1.3
million research and development grant sponsored by the National Research Council Hydraulics
Laboratory in Ottawa, Canada and Energy Mines and Resources Canada. His work evolved
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from a vertical axis wind turbine concept patented by Darrieus in 1929, into a tidal current driven
turbine. This turbine is comprised of vertical hydrofoils attached to a central shaft transmitting
torque to a generator. The kinetic energy from tidal flows can thus be efficiently harnessed and
converted to electrical energy. Contrary to the traditional drag driven paddle wheel design, the
Davis Turbine rotor is designed to be lift driven, much like the modern wind turbines, thus
allowing the blades to operate at a significantly higher efficiency. In order to further increase the
efficiency of the turbine, the entire rotor assembly is housed in a thin-shell marine concrete
caisson structure that channels the water flow and acts as housing for the generator and
electrical components. The shape of the caisson inner walls accelerates the velocity of the water
flow through the turbine rotor by acting as a vortex and controls flow direction to provide more
uniform turbine performance. In addition, the Davis turbine is designed to work through the
entire tidal range with a typical cut-in speed of 1m/s. (See the technical paper presented to the
American Society of Chemical Engineers in “Additional Information About Davis Turbines.”)
It should be noted that the rotors move at a uniform speed, 2.4 seconds per revolution. This
speed is maintained as long as the water is moving at a speed of at least 1 knot/second, and the
same amount of electricity will be produced whether the water is moving more or less rapidly.
There is often a perception that during slack time, therre would be no electricity produced:
however, that is not the case, as water on the bottom will continue to move at 1 knot/second or
more.
Blue Energy is the major consultant and turbine supplier for LSCC and will build and install
the turbines which will be custom made for the Turnagain project. Blue Energy of Canada is
currently using the Davis turbines in a tidal bridge in Scotland at Churchill Barrier to produce 800
megawatts of electricity. Blue Energy also has Memorandums of Understanding with India to
build a 20,000 megawatt tidal project near Bombay and a Memorandum of Understanding with
Philippines to build a 2,000 megawatt tidal project approved by the President of the Philippines.
In addition to a rigorous technological development, Blue Energy is taking advantage of recent
improvements in generators mostly spurred by the wind turbine industry, as well as the
development of composite materials, manufacturing processes, and grid inter-tie and
transmission controls. All of these factors serve to enhance the efficiencies, cost benefit ratios,
and ultimately the net saleable power output of the turbines.
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The platforms will be connected by transmission lines which will be buried in the floor of the
inlet. Electricity will be collected from all the platforms and transmitted by a buried transmission
line for approximately 9 miles to Campbell Point where a control building will be located and then
to 5601 Electron Drive in Anchorage. A buried transmission line will also run from the platform
area to a control building on the Kenai side of the inlet. (See Map.) From the Kenai control
building, transmission lines will run to the nearest substations at Nikiski (about 50 miles) in utility
corridors.
A control building near Possession Point in Kenai Borough on Kenai Peninsula Borough land
near the inlet will control the turbines and the intertie of transmission line to existing grids and the
electrical substation grid. (See Map.) A second control building will be built somewhere along
Raspberry Road in Anchorage. (See Map.) The control buildings are expected to be 100’ X 60’,
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two-story, 12,000 sq. ft. buildings to accommodate 10 workers, three shifts. All electric lines will
run from the tidal fence to Homer Electric on the Kenai side and to Chugach Electric on the
Anchorage side. (See Map.) The generators will be direct drive DC generators, and will be
conditioned to the appropriate AC power onshore. A switch yard will be built to connect and
disconnect electricity produced by the tidal bridge to the existing power grid. The control building
will be staffed to control the entire project operation.
On the Kenai side, the Kenai Peninsula Borough has allotted a 300 ft. utility corridor adjacent
to an easement for a roadway to be built along the inlet in the future. Currently, a trail exists on
the easement which will be used as a service road to the control building and tidal fence. The
coastal area below Point Possession and running along the coast to Nikiski and Kenai is owned
by the Kenai Peninsula Borough. (See Map.) The transmission line will be built within this
corridor, running approximately 52 miles along the coast to the unincorporated community of
Nikiski, located at Point K (See Map.) approximately N60˚-46’-12” North Latitude and W 150˚-
15’-0”West Longitude. Nikiski is located in the Kenai Recording District, about 18 miles north of
Kenai on the Kenai Spur Highway. The transmission line will tie into Homer Electric grid at the
Homer Electric Association substation near Nikiski, making the transmission line 52 miles long
from the tidal fence on the Kenai side.
On the Anchorage side of the tidal platforms, the transmission line will be laid under the inlet
for 9 miles and built across the Pt. Campbell area of Anchorage along Raspberry Rd. for 10
miles to the substation of Chugach Electric at 5610 Electron Dr. The transmission line will be
approximately 19 miles long. A loop between Chugach Electric and Homer Electric will be
created by the transmission lines. Altogether, the transmission line will be 71 miles long. (See
Map.)
Three potential sites for the placement of tidal platforms have been identified. (See Map. )
After further research, specific sites will be chosen and the platforms built in phases to expand
power.
The corridor for the transmission line on the Kenai side of Cook Inlet is adjacent to the Kenai
National Wildlife Refuge and Alaska Native Claims Settlement Act (ANSCA) land of Cook Inlet
Regional Corporation on Point Possession and along the western side of the Kenai Peninsula
Borough coastal land. However, the transmission line itself will run within Kenai Peninsula
Borough utility corridor. The transmission line on the Anchorage side will run across Anchorage
State Coastal Wildlife Refuge. It is expected that the transmission line will be buried.
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The connection between Homer Electric Association and Chugach Electric will create a loop
with the existing transmission grid that crosses the Chugach National Park and the Sterling
Highway. At the Chugach Electrical Association’s Engineering Department’s suggestion, the
transmission line voltage shall be 230 KV and transmission lines will be built in pairs for
redundancy. The State of Alaska Energy Authority is currently asking for a proposal to build a
230 KV railbelt grid line from Homer to Fairbanks. The transmission line from the Turnagain
project will tie into Chugach at Anchorage to feed electrical power into the Alaska state railbelt
grid to be built in the near future.
Land Ownership
The land under the inlet is owned by the State of Alaska. LSCC has filed a lease application with
the Alaska Department of Natural Resources and is currently working to perfect their application.
It is anticipated that LSCC will obtain a 3-year permit which will allow LSCC to perform tests and
research of the inlet area. The area actually to be used for the TATEP project will be more
precisely identified so that only the specific areas used will be leased when the engineering is
completed.
Permits
LSCC has begun the process of obtaining approval, licensing, or permits for the project. LSCC
has applied to the Federal Energy Regulatory Commission for a preliminary permit, and has
completed the application process for the permit to the satisfaction of the agency. We are
waiting for the permit to be awarded. At that point, we will continue the process of preparing a
Notice of Intent to File and a Preliminary Application for a Permit, which will take at least two
years.
LSCC has also filed a Questionnaire and Certification Statement with the Alaska Department of
Natural Resources and has held a meeting with all the agencies concerned with this project, in a
pre-application assistance meeting at the State and Federal level. LSCC is continuing to work
with DNR to provide additional information leading to a final review of our application.
Permits or approvals from the State of Alaska will include the following:
1. DNR Lease Agreement on Project Site
2. DNR Agencies Approval of the Project
Division of Coastal and Ocean Management
Division of Mining, Land, and Water – Land Section
Department of Fish and Game
DEC Division of Water
3. Municipality of Anchorage Coastal Coordinator
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4. Kenai Borough Coastal Coordinator
5. State Historic Preservation Office
Permits, waivers, or permission from the U.S. Federal Government will include the following:
1. U.S. Corps of Engineers
2. U.S. Coast Guard
3. Federal Energy Regulatory Commission
4. National Marine Fisheries Services
5. U.S. Department of Interior
6. Bureau of Land Management
7. Federal Aviation Administration
8. U.S. Environmental Protection Agency
9. U.S. Fish and Wildlife Services
Environmental Issues
The greatest environmental issue we are aware of at this time is the need to mitigate for Cook
Inlet Beluga whales which have been listed as an endangered species under the ESA and
recently have been reported to continue to decline in population. We will need to mitigate
against any harm or harassment of marine mammals.
4.3.1 System Design
A description of renewable energy technology specific to project location.
The Davis turbines are designed to work specifically with high tidal energy such as that
characteristic of Turnagain Arm which has been identified as a prime location for this technology.
The turbines and the entire technology will be modified to meet specific conditions and
environmental challenges in the specific location as further research is completed and the exact
sites are confirmed by investigation of tidal flows and other conditions. The technology will be
custom engineered and modified for the specific site as more information is developed.
Maximum Installed Capacity
The plan calls for 200 Davis Turbines, each with a 10 megawatt capacity for a total of 2000
megawatt capacity. The tested capacity efficiency factor is 60%. (0.6 X 2,000 MW = 1200 MW
capacity).
Anticipated Annual Generation
1,200 MW X 24 hours/day X 365 days/year = 10,312,000,000 000 W = 10.312 trillion W
Anticipated Barriers
Fish and marine mammals, mitigation for beluga whales will be essential.
Basic Integration Concept
The electricity produced by the Davis Turbine will be transmitted to land by submarine cables;
then transmission towers will lead to the switch yards of utility companies and tie into the existing
grids and delivered by existing utilities.
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Transmission line to both CEA and HEA and from there, transmission by existing 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.
LSCC has submitted a Lease Application to Alaska Department of Natural Resources. It is
anticipated that LSCC can obtain a permit for testing and exploration in the area designated and
licensed by FERC, restricted to use of testing equipment that can be removed from the inlet
within 24 hours. After permitting process and engineering are completed, LSCC expects to
lease the specific land used for the project.
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 or approvals from the State of Alaska will include the following:
1. DNR Lease Agreement on Project Site
2. DNR Agencies Approval of the Project
Division of Coastal and Ocean Management
Division of Mining, Land, and Water – Land Section
Department of Fish and Game
DEC Division of Water
3. Municipality of Anchorage Coastal Coordinator
4. Kenai Borough Coastal Coordinator
5. State Historic Preservation Office
Permits, waivers, or permission from the U.S. Federal Government will include the following:
1. U.S. Corps of Engineers
2. U.S. Coast Guard
3. Federal Energy Regulatory Commission
4. National Marine Fisheries Services
5. U.S. Department of Interior
6. Bureau of Land Management
7. Federal Aviation Administration
8. U.S. Environmental Protection Agency
9. U.S. Fish and Wildlife Services
LSCC anticipates receiving a Preliminary Permit from the Federal Energy Regulatory
Commission in Jan. 2010.
Preliminary permit from FERC: Anticipated Jan. 2010. The other Federal agencies (Corps of
Engineers, Coast Guard, National Marine Fisheries) have said they see FERC as the lead
agency and will follow their lead. The next phase of the FERC process will answer a great many
of the questions for both the Federal and State agencies, as a survey of all available information
on environmental, historical, and geological along with preliminary engineering design is done.
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We would hope to have a license application prepared by June, 2011.
We hope to have a temporary Land Lease from DNR by December 2010 which will allow LSCC
to do research and investigation in the same area as that designated in our FERC Preliminary
Permit with a permanent lease to be issued before construction.
4.3.4 Environmental
Address whether the following environmental and land use issues apply, and if so how they will
be addressed:
Threatened or Endangered species
Habitat issues
Wetlands and other protected areas
Archaeological and historical resources
Land development constraints
Telecommunications interference
Aviation considerations
Visual, aesthetics impacts
Identify and discuss other potential barriers
Threatened or Endangered species
Cook Inlet Beluga whales have been listed as threatened by ESA. Scientific literature
and recent research and project reports on fish and whales in the inlet will be evaluated
by biologists and integrated with engineering plans. LSCC will work with National Marine
Fisheries Services to meet the standards for protecting the threatened species as well as
other important species in the inlet.
Habitat issues
Habitat issues will be identified in the process of researching existing literature on the
inlet and further research indicated by the results. A specialized consultant will be hired
for this task. Mitigation plans for any identified habitat issues will be coordinated with
State, Federal, and engineering designers to avoid or mitigate issues that are identified.
Reports will be prepared for the PAD for application for the FERC license.
Wetlands and other protected areas
LSCC anticipates minimal disturbance of coastal wetlands with the burial of submarine
cable. This will be done in a 3 ft. deep trench across wetlands on both the Anchorage
and the Kenai side. The work will be planned in coordination with the borough coastal
planners and DNR to avoid any disturbance of protected species of plants or animals. An
investigation of affected wetlands will be done by specialized consultants in preparation
of the PAD for the application for the FERC license and information will be used in the
engineering plans to mitigate for any potential hazards.
Archaeological and historical resources
A historical archeologist will research Native activity in the areas involving the project and
will address the issues discovered in planning and engineering design and construction.
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Land development constraints
The major portion of the project is located in the water, and involves a land corridor for
transmission lines. LSCC plans to use existing utility corridors for transmission lines.
The land underlying the inlet is controlled by the State of Alaska, and LSCC is applying to
the State for a lease for the specific land used. There will also be two control buildings:
one located in the Municipality of Anchorage and the other in the Municipality of Kenai.
Telecommunications interference
The project would not interfere with telecommunications. Existing phone services would
be used to communicate with the project site in the inlet.
Aviation considerations
The project will not interfere with aviation. The tallest transmission line will be about 40 ft.
above ground which is within FAA guidelines.
Visual, aesthetics impacts
Because the location of the project will be at a distance of several miles from the shore,
and the turbines will be under water with only the platform about 10 ft. above the high tide
level, the site will not be noticeable from the coastline, and the aesthetics of the inlet
should not be altered.
Identify and discuss other potential barriers
We are not aware of any other barriers.
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
4.4 Proposed New System Costs and Projected Revenues
Costs include use of construction cost data catalogue, manufacturer’s estimate, preliminary
engineering analysis, Blue Energy engineers and administrators acting as consultant to LSCC.
Estimated total cost is $2.527 billion. Projected revenues are $840,960,000/year at 8¢/kW
hour.
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4.4.1 Project Development Cost
Phase Estimated Cost
Permitting, Feasibility Study $ 10,000,000.00
Engineering Design $ 200,000,000.00
DOE Loan Guarantee App. $ 17,000,000.00
Construction $ 2,300,000,000.00
Total $ 2,527,000,000.00
Requested grant funding
$4,000,000.00
Applicant matching funds – loans, capital contributions, in-kind
$1,000,000.for permitting, preliminary engineering, in-kind.
Identification of other funding sources
An Asian investment company, Singa-Mas will provide 20% of the $2.5 billion
construction cost, or $500 Million for the project. DOE will provide a $2.0 billion loan
guarantee for funds obtained from a U.S. bank.
Projected capital cost of proposed renewable energy system
The project capital cost of proposed renewable energy project is $2,527,000,000.00
The development cost would be $10 million for the feasibility study and permitting.
Another $17 million would be needed to apply for the DOE loan guarantee (a non-
refundable application fee).
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 project operating and maintenance cost is about 1¢ per kW of net output for 1200 megawatt
power plant. The project would produce 1200 MW X 24 hours/day X 365 days X $0.01/kWh =
$105,120,000./year.
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 power buyers are the six rail belt utility companies; namely, CEA, ML&P, Homer
Electric, Seward Electric, Golden Valley Electric, and two military bases in Fairbanks.
The potential power purchase price would be between 6¢ and 8¢ per kilowatt hour.
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For the price of 6¢/kilowatt hour, the return to investors would be about 7.22%; for 8¢/kilowatt
hour, the return would be 10.63%. These numbers are based on full operation revenue less
operation and maintenance; real estate tax of 2%; Federal tax of 35%; State income tax of
22.5%. The profit after tax on a total investment of $2.577 billion dollars would be
$273,932,900.00
INVESTMENT RETURN CALCULATION PER YEAR AT 8¢/KILOWATT HR
Capital Investment $2,527,000,000.00
Revenue per year 840,960,000.00
Less Operation and Maintenance (105,120,000.00)
Less 2% Property Tax ( 50,202,000.00)
Less Debt Service (170,040,000.00)
*20 Year Depreciation at 5%/year 128,850,000.00
Profit Before Tax 644,548,000.00
Federal Tax 35% <225,591,800.00>
State Income Tax 22.5% <145,023,300.00>
Profit After Tax $ 273,932,900.00
$273,932,900/$2,527,000,000 = 10.63%
* The 20-yr. depreciation schedule may not be allowed by the IRS and may change to 40
years.
** The investor return may change according to CPA review of what investments are
considered.
Case 2: Selling Electricity at 6¢/kilowatt hour.
Using the same formula to calculate the investment return will yield about 7.2%.
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.
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 annual fuel displacement (gal and $) over the lifetime of the evaluated
renewable energy project
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Calculating the annual displacement of natural gas and coal over the lifetime (20 years)
would yield the following:
1200 MW X 24 h/day X 365 days/year X 20 years
= 10.312 trillion W X 20 years = 206.24 trillion W
= 206.24 trillion W X 16¢ per kW/hr
= $32,994,400,000. Or $32.99 billion dollars if the natural gas costs $0.16/kW hour
Anticipated annual revenue (based on i.e. a Proposed Power Purchase Agreement price,
RCA tariff, or cost based rate)
Anticipated annual revenue for full production would be as follows:
1200 MW X 24 hr X 365 days X $0.08/kW = $840,960,000. per year
Potential additional annual incentives (i.e. tax credits)
At 2¢ per kW hour tax credit, a savings of $210,240,000 would be realized. We hope the
State of Alaska S.B. #31 will pass next session for tax relief.
Potential additional annual revenue streams (i.e. green tag sales or other renewable
energy subsidies or programs that might be available)
The only other additional saving is that the D.O.E. has a low interest renewable energy
loan program which will yield savings over a convention bank loan of 14.5% to perhaps
6% which is a savings of $218,450,000 in debt service.
Discuss the non-economic public benefits to Alaskans over the lifetime of the project
The non-economic public benefits for Alaskans over 20 years will be as follows:
No emissions of CO₂and SO₂into the atmosphere will eliminate 20 X 100 million tons of
CO₂and SO₂that would otherwise be emitted. All Alaskans will breathe easier. It will
save over 200,000 lives if currently, 10,000 Alaskans are dying of lung related sickness.
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 project will sell electricity to six rail belt utilities and mining companies and other
heavy electricity using industries such as petrochemical and LNG plants. The annual
revenue will cover all the expenses.
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How you propose to finance the maintenance and operations for the life of the project
In full production, if the electricity is sold at 8¢ per kilowatt hour, it will bring in
$840,960,000. Per year. The cost of operation and maintenance will be 1¢ per kilowatt
hour or $105,120,000 per years which will be funded by the project’s income.
Identification of operational issues that could arise.
The operational issues are similar to those of any utility company: some caused by failure
of equipment; some caused by human error. Both can be resolved by training an
experienced crew to operate the facility and minimize risk factors and identify potential
risks.
A description of operational costs including on-going support for any back-up or existing
systems that may be require to continue operation
The six rail belt electrical generation utilities will be used in peak demand and other
emergency situations. The existing system will keep on working, but at a lower capacity,
or just a few hours per day.
Commitment to reporting the savings and benefits
TATEP will have an open book and transparency policy to satisfy FERC and State
regulatory agencies. Any saving and benefits will be passed along to consumers and
investors.
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.
LSCC’s TATEP has submitted a Preliminary Permit application to the Federal Energy Regulatory
Commission. We expect to have the permit early next year, which will give us a maximum of 3
years to complete the full construction permit. LSCC has started some preliminary engineering
studies and designs. Once the grant is approved, LSCC will hire an international engineering
firm, Louis Berger Group, to direct the process of license application and oversee or perform
studies, consultations with stakeholders, permit applications, and testing required by FERC. We
expect this process to be underway in 2010.
We have also begun initial consultation with the Alaska Department of Resources and have
applied for a lease with DNR. We hope to obtain a preliminary permit for the same area
described in the FERC Preliminary Permit Application.
SECTION 8– LOCAL SUPORT
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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.
LSCC will seek local support such as IBEW, AFL-CIO Union support, ABC Alaska, Chamber of
Commerce, Municipality of Anchorage and Kenai Peninsula Borough support. This project will
create 5,000 jobs for five years.
Possible opposition could come from environmentalist groups concerned about the threatened
Cook Inlet Beluga whale population. LSCC will work with State and Federal agencies to mitigate
any potential dangers and prevent any harm from coming to beluga whales or other fish or
wildlife in the area.
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 grant budget of $4,000,000. will be used for project feasibility studies, engineering survey,
hiring of a consultant from the Louis Berger Group to assist us in the Federal Energy Regulatory
Commission application for a license, and for preliminary engineering design, construction cost
estimate, and application fee for D.O.E. Renewable Energy Loan Guarantee for the first two
rounds, and other financial arrangement fees.
LSCC’s initial funding source for this project is from an investment company from Singapore
(Singa-mas) that wants to invest 20% of the construction cost ($2.5 billion) with the condition
that LSCC obtain a 80% loan guarantee from the U.S. Department of Energy Renewable
Energy Loan Guarantee program presently being offered by the U.S. government. The D.O.E.
guaranteed loan will be $2 billion. The $4 million AEA grant we are applying for will be used to
continue the Reconnaissance Phase work LSCC has completed and use this money for the
Feasibility Phase, which will allow us to have the reports needed to apply for the D.O.E.
Renewable Energy Loan Guarantee loan. LSCC and Blue Energy will also be providing $6
million worth of various Feasibility Phase work. Without the $4 million AEA funding, LSCC will
have to go to different investors to raise the money for this phase of the work, which will delay
the project and possibly cause LSCC to miss the D.O.E. Renewable Energy Loan Guarantee
program deadline (this D.O.E. program has a limited funding source with funding on a first
come, first serve basis).
SECTION 9 – ADDITIONAL DOCUMENTATION AND CERTIFICATION
SUBMIT THE FOLLOWING DOCUMENTS WITH YOUR APPLICATION:
A. 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.
Renewable Energy Fund Round 3
Grant Application
AEA 10-015 Application Page 29 of 154 10/7/2009
Renewable Energy Fund
Grant Application Round 3
AEA10-015 Grant Application Page 30 of 154 10/7/2009
RESUMES
SECTION 3.1 and 3.4