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HomeMy WebLinkAboutMelozi-Horner Hot Springs Geothermal Resource Estimate App Renewable Energy Fund Round 3 Grant Application AEA 10-015 Application Page 1 of 17 10/7/2009 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. Renewable Energy Fund Grant Application Round 3 AEA10-015 Grant Application Page 2 of 17 10/7/2009 SECTION 1 – APPLICANT INFORMATION Name (Name of utility, IPP, or government entity submitting proposal) Ruby Tribal Council Type of Entity: Governmental Entity Mailing Address P.O. Box 68210, Ruby AK 99768 Physical Address Agnes M. Wright Building, 3rd Street, Ruby AK 99768 Telephone 907-468-4479 Fax 907-468-4474 Email rubynativecouncil@hotmail.com 1.1 APPLICANT POINT OF CONTACT Name Pat Sweetsir Title Tribal Administrator Mailing Address Ruby Tribal Council, P.O. Box 68210, Ruby AK 99768 Telephone 907-468-4479 Fax 907-468-4474 Email rubynativecouncil@hotmail.com 1.2 APPLICANT MINIMUM REQUIREMENTS Please check as appropriate. If you do not to meet the minimum applicant requirements, your application will be rejected. 1.2.1 As an Applicant, we are: (put an X in the appropriate box) An electric utility holding a certificate of public convenience and necessity under AS 42.05, or An independent power producer in accordance with 3 AAC 107.695 (a) (1), or A local government, or x 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 3 AEA10-015 Grant Application Page 3 of 17 10/7/2009 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) Melozi-Horner Hot Springs Geothermal Resource Estimate 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. Horner Hot Springs is on the Yukon River about 23 miles upstream from Ruby, Alaska, while Melozi Hot Springs is located on the Melozitna River, a tributary of the Yukon, approximately 36 miles northeast of Ruby. 2.3 PROJECT TYPE Put X in boxes as appropriate 2.3.1 Renewable Resource Type Wind Biomass or Biofuels Hydro, including run of river Transmission of Renewable Energy x 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 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 Ruby Tribal Council is proposing to partner with the Alaska Center for Energy and Power (ACEP) to perform a geothermal Resource Assessment of the Horner and Melozi Hot Springs geothermal resources for potential power generation and space heating for the City of Ruby and the neighboring areas. The project includes using available thermal infrared images to generate a land surface temperature and emissivity map of the study area; using available optical data to create a landcover classification map; acquiring and processing hundreds of airborne thermal infrared images; collecting in-situ field data for geometric rectification of airborne images, driving the remote sensing data analysis, and validating analysis results; conducting economic analysis of the area’s energy resource potential; and community outreach. Renewable Energy Fund Grant Application Round 3 AEA10-015 Grant Application Page 4 of 17 10/7/2009 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 future energy needs of City of Ruby are well recognized. However, the three alternate energy options proposed in energy inventory prepared by AEA in January 2009, each have huge challenges associated with them. For example, the report identifies biomass (wood) and wind energy as potential alternative sources, but also clearly cites the high capital expense and unproven technologies in the case of wood- fired Combined Heat and Power (CHP) systems. Our proposed workplan outlined in this proposal will, for the first time, result in the systematic evaluation of the geothermal potential of the study area using state-of-the-art remote sensing based exploration techniques along with an economic feasibility analysis. This non-existent baseline information is critical in long term decision making for energy production in the area. Geothermal energy has the advantage of being able to provide baseload, dispatchable power with availability approaching that of diesel generators (>99% is common). For communities with potential access to a known geothermal resource within a reasonable distance, it should be considered as preferable to other, less-dispatchable renewable sources of energy, provided that the economics are also compelling. In addition to supplying electric power, geothermal energy can also provide space heating and cooling if the resource is located close enough to the load. In this case, we do not expect it will be economic to develop geothermal resources for space heating or cooling applications for Ruby. This project also has the added benefit that it will add to our overall understanding of geothermal resources within the Central Alaskan Hot Springs Belt. There are several other communities throughout the region there are near hot springs, and the resource at Chena Hot Springs has been developed to meet electric power, heating, and cooling needs at the site. These systems are not well understood, although they are generally located near the margins of intrusive granitic pluton bodies. The systems near Ruby are no exception. Adding to the understanding of how deep fluids circulate, and overall thermal pass of the system, will help to determine whether these systems could be developed for beneficial use. Finally, the techniques proposed through this project will be transferable to other parts of the state that have low and moderate temperature geothermal resources. The ground surveys outlined in this proposal will help to verify this technique, and could save millions of dollars in future geothermal exploration efforts around the state. The University of Alaska has recently received a $4.5 million grant from the Department of Energy to better develop these techniques, which were first demonstrated in Alaska at Chena Hot Springs. 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 budget is $219,071, which will support new airborne thermal infrared data acquisition over the study area; processing and analysis of the satellite-borne and airborne data; limited field validation; economic feasibility study of developing the resource; and community outreach. 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. $219,071 Renewable Energy Fund Grant Application Round 3 AEA10-015 Grant Application Page 5 of 17 10/7/2009 2.7.2 Other Funds to be provided (Project match) n/a 2.7.3 Total Grant Costs (sum of 2.7.1 and 2.7.2) $219,071 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) $219,071 2.7.5 Estimated Direct Financial Benefit (Savings) n/a 2.7.6 Other Public Benefit (If you can calculate the benefit in terms of dollars please provide that number here and explain how you calculated that number in your application (Section 5.) See Section 5. Renewable Energy Fund Grant Application Round 3 AEA10-015 Grant Application Page 6 of 17 10/7/2009 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. The PI for the Ruby Tribal Council is Pat Sweetsir, Tribal Administrator, who will oversee the project, perform administrative duties, and assist UAF personnel with the field work. Ruby Tribal Council has identified geothermal assessments of the two project locations as a priority for the community’s decision- making process on energy issues. The PI for UAF is ACEP Director Gwen Holdmann, who previously served as PI for the geothermal exploration and development project at Chena Hot Springs Resort. The Melozi and Horner geothermal resources are both considered to be part of the Central Alaska Hot Springs Belt and are expected to contain similar hydrothermal systems. Holdmann is also the PI for a geothermal exploration project in the Pilgrim Hot Springs Area, which is now recommended for funding by the Department of Energy (DoE). Project Co-PI Dr. Anupma Prakash is a Professor at the Geophysical Institute, University of Alaska Fairbanks. Her research expertise is in using remote sensing and geographic information systems techniques for characterizing land surface composition and change in high latitude regions, and she has worked extensively with thermal infrared data (including on the Chena Hot Springs project). In addition, Ross Coen, Rural Energy Specialist at ACEP, will serve as the community outreach lead for the project and will also assist the PIs with project management tasks, including preparation of quarterly and final project reports. 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.) Tasks to meet our objectives along with technical details and timeline for these tasks are outlined below. This exploration project is expected to take one year to complete. Task 1 (July 2010) – Use available thermal infrared images from moderate resolution Earth Observing Satellites, such as Landsat and ASTER to generate a land surface temperature and emissivity map of the study area at a regional 1:50,000 scale. (Note: Archived Landsat data are available at no cost from US Geological Survey. Dr. Prakash is an approved NASA science data user and will receive archived and potentially new ASTER data over the study area at no additional cost to the project). Task 2 (July through August 2010) – Use available optical data from archived Landsat images and potentially new ASTER images, and available archived CIR air photos to create a landcover classification map at a regional 1:50,000 scale and in parts at 1:10,000 scale. This landcover map will serve as the base map to understand the landuse practice in the study area. The investigators will also use old U2 color infrared airborne images from the late 70s and available recent optical images over the study area (Figure 1) to characterize the landscape at a better spatial scale. Task 3 (July through September 2010) – Acquire airborne thermal infrared images in summer and early fall at local reconnaissance and detail survey scale. The local reconnaissance scale survey will be carried out to provide thermal infrared images at approximately 4m spatial resolution and will cover an area of about 3km*5km centered around the hot spring. The detail survey will be carried out by flying a lower height of about 750m to provide thermal infrared images at approximately 1m spatial resolution. Renewable Energy Fund Grant Application Round 3 AEA10-015 Grant Application Page 7 of 17 10/7/2009 Acquiring the data at two different times will help to reduce uncertainties in analysis introduced due to seasonal effects. The thermal infrared data will be acquired using a FLIR® Systems Automation Series ThermaCam A320 mounted on a Cessna Skywagon 185, flown by Tom George of Terra Terpret, Inc. Along with the thermal images, a near infrared camera will be mounted on the plane to acquire concurrent multispectral images that will help to further characterize the terrain and the vegetation cover and help with thermal image interpretation. A similar setup used in for a thermal survey over Chena Hot Springs, Alaska in 2004-2005 gave excellent results (Figure 2). Figure 1. Airborne optical image of the Melozi Hot Springs area. Task 4 (July through September 2010) – Field data acquisition. Concurrent to the airborne campaign, in- situ field data will be collected for assisting in geometric rectification of airborne image, driving the remote sensing data analysis and for validation of analysis results. Contingent on local field conditions and logistical support available during field season, data collection activities will include, but will not be limited to, measuring ground control points using high-precision global positioning systems (GPS); measuring contact temperatures at selected locations using thermal probes; measurement of atmospheric parameters such as air temperature humidity etc. for atmospheric correction; field photos for land cover validation; and water sampling at selected locations. Renewable Energy Fund Grant Application Round 3 AEA10-015 Grant Application Page 8 of 17 10/7/2009 Figure 2. Left: Airphoto mosaic of the Chena Hotsprings area. The pools are in the foreground, and are centered on where the greatest surface expression of heat is visible in the thermal infrared images. Right: Thermal infrared image of approximately corresponding area. The roofs of buildings and snowfall reflect sunlight in the 15-20C range. Differing vegetation shows different temperatures due to the difference in emissivity of various plants and the bare ground. Task 5 (July 2010 through May 2011) Process and analyze airborne thermal infrared images. This task will be the most time intensive part of the project. The airborne campaign will result in acquisition of hundreds of thermal infrared images, with each image frame containing 320 x 240 pixels. The individual image frames will be georectified and mosaiced to create a near seamless thermal mosaic of the study area. Again, the mosaic will be created for both the local reconnaissance scale and the detail survey scale images. Pixel integrated temperatures over a broad 7.5-13 m range (spectral range of the thermal instrument) will be calculated for each image pixel, after correcting for atmospheric conditions (humidity and temperature) and range (distance to the target). A similar mosaic will be created for the airborne optical images to facilitate direct comparison of thermal data with the optical data. The image mosaics from spring will be compared with image mosaics from late summer/early Fall to account for seasonal affects in the data. Thermally anomalous pixels will be identified using statistical analysis and thresholding to separate anomalous pixels from the background pixels. For each thermally anomalous pixel the relative heat loss in watts will be calculated after correcting for the background temperature, measuring only flux beyond the natural radiative heat of the Earth and Sun. An error analysis will be carried out to account for errors introduced by the instrument, atmosphere, aircraft orientation, and the general terrain. Task 6 (June 2011) – Economic Feasibility Study and Final Reporting. Using the results of Tasks 1-5, we will complete an economic feasibility assessment of potential project configurations to determine optimal next steps. This work will be completed by economist Markus Mager of the Alaska Center for Energy and Power. If possible, this task will include a comparison with other renewable and alternative energy options for Ruby. The final project report will be available in June 2011 at the completion of the one-year project. Task 7 (Ongoing for project duration) – Community Outreach. Community meetings will be held before the resource assessment begins to inform residents of the workplan, and following the completion of work to present project results and distribute the final report. This task also includes regular communication Renewable Energy Fund Grant Application Round 3 AEA10-015 Grant Application Page 9 of 17 10/7/2009 between Ross Coen and stakeholders in Ruby, as well as those throughout the TCC region who are interested in energy research. 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.) Project milestones include completion of each of the outlined tasks of the project during the planned timeline. An interim report will be compiled following the summer/fall 2010 field campaign. The final project report, including economic analysis, will be completed in June 2011. A separate technical paper presenting the technical components of this study, analyses of the results, and discussions and future recommendations will be compiled separately at the conclusion of the 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. Project personnel: In addition to the project managers listed in section 3.1, the program will support one postdoctoral candidate and one undergraduate student who will carry out the bulk of the image processing and data analysis task under the supervision of Co-PI Prakash. Project equipment: Major equipment (e.g., FLIR automation series camera) required for this project is already available with the PIs from the University of Alaska. The multispectral camera available with the team will require modifications, including addition of special filters to work in the near infrared regions. Nominal charges required for such adaptations have been included in the budget. 3.5 Project Communications Discuss how you plan to monitor the project and keep the Authority informed of the status. Quarterly reports will be prepared and submitted to the Alaska Energy Authority. An interim report will be completed following the summer/fall 2010 field campaign, and a final report will be completed by June 2011. 3.6 Project Risk Discuss potential problems and how you would address them. The project involves standard assessment and exploration techniques minimizing any perceived risk. Project delays may occur related to weather conditions during field activities including the aerial infrared surveys. Scheduling field activities during the summer months will mitigate most expected problems related to field work. Renewable Energy Fund Grant Application Round 3 AEA10-015 Grant Application Page 10 of 17 10/7/2009 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. Study Area and its Energy Needs: Ruby is a community of 167 people, about four-fifths Alaska Native, located on the south bank of the Yukon River in central Alaska, approximately 230 air miles west of Fairbanks. The energy needs of the city are currently met by a power plant that is operated by the City. This plant includes three Caterpillar generator sets (125 kW, 225 kW, 250 kW) the first two of which are more than 15 years old and have undergone multiple rebuilds, the last installed in 2006 and in good condition. The current average electrical load in summer is 55 kW and in winter is 85 kW. On behalf of the Alaska Energy Authority (AEA), CRW Engineering Group completed a Final Conceptual Design Report (June 2009) for a new building to house the power generation infrastructure and to replace the two outdated gen-sets. The CRW report projects that by 2019 the load will increase by about 35 kW. This increase will be due to increased population and the completion of water/sewer improvements. In assessing alternative energy options for Ruby, the CRW report states: “Rising fuel costs and mounting regulatory concern over fuel spills and power plant emissions warrant a close evaluation of potential alternative energy sources. With proper planning, design, and management, today’s alternative energy technologies could reduce rural Alaska’s dependence upon fossil fuels.” One way to proactively address the projected energy needs of the City, while keeping a low dependency on fossil fuels in the future, is by evaluating local alternative energy resources. Geothermal energy is one such alternative. Geothermal Energy as an Alternate Option: The City of Ruby is strategically located in the proximity of two known hot springs. Horner Hot Springs is on the Yukon about 23 miles upstream from the village. Melozi Hot Springs is located on the Melozitna River, a tributary of the Yukon, approximately 36 miles northeast of Ruby. Such proximity raises the likelihood of the area having the potential for geothermal energy. However, to-date, no systematic geothermal resource assessment, feasibility study, or cost-benefit analysis has been carried out for the area. This project aims at carrying out such as assessment for the study area using satellite-based, airborne and ground based exploration techniques. The feasibility study (technical, resource, and economic) of the proposal will be led by the Alaska Center for Energy and Power (ACEP) and carried out in collaboration with the Geophysical Institute (GI) at the University of Alaska Fairbanks. ACEP and GI will work in close collaboration with the City of Ruby in this larger geothermal project. We anticipate that results from this project will serve to support strategic decision making for meeting the long term energy needs for the City of Ruby. Remote Predictive Resource Assessment: For any geothermal development in this area, a systematic survey and analysis on the extent, nature, magnitude of the thermal anomaly, and a quantitative estimate of the heat flux beyond the natural radiative heat of the Earth and Sun is required and is particularly useful in determining the extent to which the resource can be exploited for sustainable power generation or direct Renewable Energy Fund Grant Application Round 3 AEA10-015 Grant Application Page 11 of 17 10/7/2009 use. Satellite remote sensing and specialized airborne surveys carried out using thermal infrared sensors (sensors operating in the thermal infrared portion of the spectrum, and therefore sensitive to land surface temperatures) are very useful in such mapping and quantitative temperature and flux estimations. The work will be complimented by limited field based surveys for new data collection and validation of remote sensing observations. The technical details of the remote sensing and field based resource exploration proposed for this study are elaborated in section 3.2 (project tasks and timeline) of this proposal. As with other areas in the vast wilderness of Alaska, this study area has accessibility issues. For example, the Melozitna River features a stretch of impassable rapids a few miles upstream from its confluence with the Yukon. Reaching the hot springs by boat requires a portage around the rapids. Remote sensing techniques, by virtue of being a non-contact method of exploration, are a practical solution to these hindrances. The proposed airborne thermal infrared imaging survey will provide a synoptic overview of the area without the logistical complexities of trying to map a large area systematically by foot. The technology proposed for this project has already been tried in the Chena Hot Springs Geothermal Area, Alaska, by the project PIs and yielded very promising results. The proposed technique is also a very low- cost exploration technique, which has the added advantage of very low risk and potentially a high benefit/cost ratio for the City of Ruby. Economic Feasibility Assessment: The overarching goal of this project is to obtain the minimal information needed to make an informed decision as to whether a sustainable geothermal project could be developed for Ruby, and then complete an economic assessment of various potential project configurations. It is generally understood that in order to determine the size of project a resource is capable of sustaining long-term, three critical pieces of information are needed: 1) total heat flow to the surface, 2) temperature at depth, and 3) depth to access the resource. The project team will determine these values by using a combination of aerial, satellite-based, and ground based surveys (see section 3.2). This information will then be integrated with existing and projected heat and electric power load data for Ruby, as well as known cost of development from other sites (power plant and transmission). It will be assumed that a Binary Organic Rankine cycle turbine will be used for power generation, similar to the turbine installed at Chena Hot Springs near Fairbanks in 2006. Outreach to Community: This project will make full use of the existing partnership between the Alaska Center for Energy and Power and Tanana Chiefs Conference (TCC) in performing community outreach. TCC is a non-profit Native consortium of 42 villages in the Interior of the state, including Ruby and the region surrounding both Melozi and Horner hot springs. The ACEP-TCC partnership was formed in early 2009 to combine the community organizing and rural service capacity of TCC with the technical and engineering expertise of ACEP in order to facilitate energy research and development in the region. Ross Coen, whose position of Rural Energy Specialist is part of this joint partnership, will oversee community relations and outreach with the residents of Ruby. Two community meetings will be held—one prior to the start of the assessment program to inform the community of the workplan, and one following completion of the project when results and final reporting will be shared. In addition, Coen will maintain regular contact with the City of Ruby, Ruby Tribal Council, Dineega Village Corporation, and Doyon, Ltd. to keep them apprised of the project’s progress. Coen will also maintain contact with the Yukon River Inter- Tribal Watershed Council, a coalition of 66 river villages that has worked on energy issues in the region, including the hydrokinetic test project currently taking place in Ruby. As a resource assessment, the objective of this project is to determine the potential extent and amount of the energy resource that is available. Specifically, the Ruby/Melozi/Horner geothermal assessment project is designed to provide baseline information for an area that is not well studied for its geothermal potential and economic analysis for future development of the resource for power generation. Geothermal resource development has been demonstrated at other sites in Alaska (Chena Hot Springs), and new technology has resulted in power production from lower temperature resources such as could potentially exist in the study area. Unlike most renewable energy systems, geothermal energy can supply baseload power and therefore is available 24 hours a day and 365 days a year. In addition to power generation, it is also a viable resource to replace conventional fossil fuel for space heating. Renewable Energy Fund Grant Application Round 3 AEA10-015 Grant Application Page 12 of 17 10/7/2009 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. There is no existing energy system at Melozi and Horner Hot Springs. The community in the neighboring City of Ruby uses diesel gen-sets for primary power generation and fuel oil for heating. 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. Diesel fuel in the City power plant is the primary energy resource for electricity production in Ruby. According to Power Cost Equalization data and an inventory prepared by the Alaska Energy Authority in January 2009, the diesel consumption in 2008 was 26,400 gallons. Space heating needs in the community are met primarily by heating oil, with wood as an alternate resource. Apart from a hydrokinetic test project being conducted the last two summers in Ruby (which, as a test project, presently generates a negligible amount of power in summer only), there are no community-wide alternative or renewable energy sources being used. This proposal is for a resource assessment only, and thus will have no effect on existing energy infrastructure and resources. 4.2.3 Existing Energy Market Discuss existing energy use and its market. Discuss impacts your project may have on energy customers. If developed, the existing energy market for the geothermal power plant would be the community of Ruby. (There have been tourist lodges at both locations—one at Horner in the 1920s, and one at Melozi that was in operation as late as the 1980s—and it remains possible that energy development at either location might again lead to tourism.) Average electric use in Ruby is 55 kW in summer and 85 kW in winter, with peak loads in the range of 108 kW. The proposed new power plant described in Section 2.2 is being designed with an estimated increase in electric use of 35 kW by 2019. This proposal will result in a resource assessment of Melozi and Horner hot springs—not actual development of the energy resource—thus its impact on energy customers will be zero. Any potential future development, however, will have to be integrated with the existing energy infrastructure. This proposal seeks to provide baseline information on a potential energy resource that will lead to informed decision-making. 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 Renewable Energy Fund Grant Application Round 3 AEA10-015 Grant Application Page 13 of 17 10/7/2009  Delivery methods This proposal is for an exploration and assessment study only and does not propose to install a system. 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. Melozi Hot Springs is located on federal land managed by the Bureau of Land Management. Horner Hot Springs is located on land owned Doyon, Ltd., the for-profit Native regional corporation in Interior Alaska. Although the project PIs have not reached formal agreements with either entity, the proposal calls only for remote-sensing data collection and non-invasive, non-disruptive field work, and the PIs do not anticipate land ownership issues to present a problem in this feasibility phase. Ruby Tribal Council, the primary applicant, intends to conduct this project in accordance with the same respect for land use and ownership it applies to its own business operations. The respective land owners will be consulted and will be kept informed of the project and its progress throughout the study. 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 Beyond any applicable permits for actual site access, we do not anticipate permits required for the field work. No invasive work that might disrupt the locations will be completed as part of this project. A complete field risk assessment will be completed through the University of Alaska as per standard protocol, and any necessary training will be completed. 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 Renewable Energy Fund Grant Application Round 3 AEA10-015 Grant Application Page 14 of 17 10/7/2009 It is not anticipated that this project will have any significant environmental impact. 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 See attached budget narratives for detailed project cost information. The project budget is $219,071, which will support new airborne thermal infrared data acquisition over the study area; processing and analysis of the satellite-borne and airborne data; limited field validation; economic feasibility study of developing the resource; and community outreach. The project PIs have extensive experience in this type of field work and data analysis. PIs determined all cost information listed in the attached budget forms based on this experience and expertise. 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.) N/A 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 N/A 4.4.4 Project Cost Worksheet Complete the cost worksheet form which provides summary information that will be considered in evaluating the project. See attached. Renewable Energy Fund Grant Application Round 3 AEA10-015 Grant Application Page 15 of 17 10/7/2009 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 The future energy needs of City of Ruby are well recognized. However, the three alternate energy options proposed in energy inventory prepared by AEA in January 2009, each have huge challenges associated with them. For example, the report identifies biomass (wood) and wind energy as potential alternative sources, but also clearly cites the high capital expense and unproven technologies in the case of wood-fired Combined Heat and Power (CHP) systems. Our proposed workplan outlined in this proposal will, for the first time, result in the systematic evaluation of the geothermal potential of the study area using state-of-the-art remote sensing based exploration techniques along with an economic feasibility analysis. This non-existent baseline information is critical in long term decision making for energy production in the area. Geothermal energy has the advantage of being able to provide baseload, dispatchable power with availability approaching that of diesel generators (>99% is common). For communities with potential access to a known geothermal resource within a reasonable distance, it should be considered as preferable to other, less-dispatchable renewable sources of energy, provided that the economics are also compelling. In addition to supplying electric power, geothermal energy can also provide space heating and cooling if the resource is located close enough to the load. In this case, we do not expect it will be economic to develop geothermal resources for space heating or cooling applications for Ruby. This project also has the added benefit that it will add to our overall understanding of geothermal resources within the Central Alaskan Hot Springs Belt. There are several other communities throughout the region there are near hot springs, and the resource at Chena Hot Springs has been developed to meet electric power, heating, and cooling needs at the site. These systems are not well understood, although they are generally located near the margins of intrusive granitic pluton bodies. The systems near Ruby are no exception. Adding to the understanding of how deep fluids circulate, and overall thermal pass of the system, will help to determine whether these systems could be developed for beneficial use. Finally, the techniques proposed through this project will be transferable to other parts of the state that have low and moderate temperature geothermal resources. The ground surveys outlined in this proposal will help to verify this technique, and could save millions of dollars in future geothermal exploration efforts around the state. The University of Alaska has recently received a $4.5 million dollar grant from the Department of Energy to better develop these techniques, which were first demonstrated in Alaska at Chena Hot Springs. 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. Renewable Energy Fund Grant Application Round 3 AEA10-015 Grant Application Page 16 of 17 10/7/2009  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 N/A 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. The scope of this proposal includes field work, mapping, and data analysis for which the project staff has extensive experience and is able to mobilize quickly. The proposal includes staff time for senior personnel and postdoctoral/student personnel, all of whom are positioned to incorporate this project into their 2010- 2011 workplan. It is expected that upon grant approval in summer 2010, the field work can begin immediately. The University of Alaska has recently received a $4.5 million grant from the Department of Energy (DoE) to better develop geothermal assessment techniques, which were first demonstrated in Alaska at Chena Hot Springs. This proposal represents an application of ground surveys that will help to verify those techniques. The DoE award demonstrates the project team’s readiness and qualifications for the work outlined in this proposal. 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. This proposal has the full support of the Ruby Tribal Council. It is also supported by Tanana Chiefs Conference (TCC), the Native non-profit consortium of forty-two villages in Interior Alaska, the Executive Board of which has made geothermal resource assessment a priority in the region. Earlier this year TCC entered into a formal partnership with the Alaska Center for Center and Power (ACEP), of which PI Gwen Holdmann is the director, on rural energy development. This proposal represents a joint effort on the part of Ruby Tribal Council and the TCC-ACEP partnership. SECTION 9 – GRANT BUDGET Tell us how much you want in grant funds Include any investments to date and funding sources, how much is being requested in grant funds, and additional investments you will make as an applicant. Include an estimate of budget costs by milestones using the form – GrantBudget3.doc See attached.   Renewable Energy Fund Round 3 Project Cost/Benefit Worksheet   RFA AEA10-015 Application Cost Worksheet Page 1 10-7-09 Please note that some fields might not be applicable for all technologies or all project phases. The level of information detail varies according to phase requirements. Note to reviewers: The proposal is a geothermal resource assessment for Melozi Hot Springs and Horner Hot Springs, both located in Interior Alaska. The nearest village is Ruby, available information for which is provided in some fields below. As the proposal does not call for construction of new facilities, few of the fields below are applicable. 1. Renewable Energy Source The Applicant should demonstrate that the renewable energy resource is available on a sustainable basis. Annual average resource availability. Geothermal resources at the two project locations will be studied in this resource assessment. Unit depends on project type (e.g. windspeed, hydropower output, biomasss fuel) 2. Existing Energy Generation and Usage a) Basic configuration (if system is part of the Railbelt1 grid, leave this section blank) i. Number of generators/boilers/other 3 gen-sets ii. Rated capacity of generators/boilers/other 125 kW, 225 kW, 250 kW iii. Generator/boilers/other type iv. Age of generators/boilers/other v. Efficiency of generators/boilers/other 9.87 kW-hr/gal b) Annual O&M cost (if system is part of the Railbelt grid, leave this section blank) i. Annual O&M cost for labor ii. Annual O&M cost for non-labor c) Annual electricity production and fuel usage (fill in as applicable) (if system is part of the Railbelt grid, leave this section blank) i. Electricity [kWh] 473,665 kW-hr ii. Fuel usage Diesel [gal] 26,400 gal Other iii. Peak Load 108 kW iv. Average Load 54 kW v. Minimum Load vi. Efficiency vii. Future trends d) Annual heating fuel usage (fill in as applicable) i. Diesel [gal or MMBtu] 72,113 gal ii. Electricity [kWh] iii. Propane [gal or MMBtu]                                                              1 The Railbelt grid connects all customers of Chugach Electric Association, Homer Electric Association, Golden Valley Electric  Association, the City of Seward Electric Department, Matanuska Electric Association and Anchorage Municipal Light and Power.      Renewable Energy Fund Round 3 Project Cost/Benefit Worksheet   RFA AEA10-015 Application Cost Worksheet Page 2 10-7-09 iv. Coal [tons or MMBtu] v. Wood [cords, green tons, dry tons] vi. Other 3. Proposed System Design Capacity and Fuel Usage (Include any projections for continued use of non-renewable fuels) a) Proposed renewable capacity (Wind, Hydro, Biomass, other) [kWh or MMBtu/hr] b) Proposed Annual electricity or heat production (fill in as applicable) i. Electricity [kWh] ii. Heat [MMBtu] c) Proposed Annual fuel Usage (fill in as applicable) i. Propane [gal or MMBtu] ii. Coal [tons or MMBtu] iii. Wood [cords, green tons, dry tons] iv. Other 4. Project Cost a) Total capital cost of new system b) Development cost c) Annual O&M cost of new system d) Annual fuel cost 5. Project Benefits a) Amount of fuel displaced for i. Electricity ii. Heat iii. Transportation b) Price of displaced fuel c) Other economic benefits d) Amount of Alaska public benefits See Section 5 of Grant Application form. 6. Power Purchase/Sales Price a) Price for power purchase/sale 7. Project Analysis   Renewable Energy Fund Round 3 Project Cost/Benefit Worksheet   RFA AEA10-015 Application Cost Worksheet Page 3 10-7-09 a) Basic Economic Analysis Project benefit/cost ratio Payback Renewable Energy Fund Grant Round III Grant Budget Form 10-7-09 Melozi-Horner / Milestone or Task Anticipated Completion Date RE- Fund Grant Funds Grantee Matching Funds Source of Matching Funds: Cash/In-kind/Federal Grants/Other State Grants/Other TOTALS (List milestones based on phase and type of project. See Attached Milestone list. ) Landsurface temperature map July 2010 $17,662 $17,662 Landcover classification map August 2010 $14,246 $14,246 Acquisition of thermal infrared images September 2010 $41,924 $41,924 Acquisition of field data September 2010 $33,291 $33,291 Image processing and analysis May 2011 $78,972 $78,972 Economic feasibility study / Final reporting June 2011 $16,578 $16,578 Community outreach ongoing $16,398 $16,398 $ $ $ TOTALS $219,071 $219,071 Budget Categories: Direct Labor & Benefits $139,944 $139,944 Travel & Per Diem $19,200 $19,200 Equipment $0 $0 Materials & Supplies $16,891 $16,891 Contractual Services $43,036 $43,036 Construction Services $0 $0 Other $0 $0 TOTALS $219,071 $219,071 Applications should include a separate worksheet for each project phase (Reconnaissance, Feasibility, Design and Permitting, and Construction)- Add additional pages as needed Ruby Tribal Council – Budget Narrative Melozi-Horner Hot Springs Geothermal Resource Estimate Senior Personnel. Funding to support 80 hours for Pat Sweetsir, Tribal Administrator for the Ruby Tribal Council, who will perform administrative duties on the project and assist UAF staff with field work at the two project locations. Total cost to Project: $4,192. Fringe Benefits. Staff benefits for Ruby Tribal Council are set at 20.5%. Total cost to Project: $859. Supplies. Funding of $393 is requested for general supplies and $262 for fuel to accompany and assist UAF staff with field work at the two project locations. Community meetings. A total of $911 (costs of building rental, light catering, and outreach supplies) is requested to fund costs of holding public meetings in Ruby before and after the field campaign to inform residents of the project and disseminate data/results. Contractual Services. Funding of $7,750 is requested for processing, documentation, and communications on the proposal and subaward. Travel. Funding of $655 is requested for boat rental for senior personnel to accompany and assist UAF staff with field work at the two project locations. Funding of $5,065 is requested to support travel for one representative of the Ruby Tribal Council and one representative of the City of Ruby to attend the Geothermal Resources Council annual meeting in Reno, NV, in October 2010. Total cost to Project: $5,720. Subaward. This project includes a subaward to the Institute of Northern Engineering (INE) and the Geophysical Institute (GI) at the University of Alaska Fairbanks (UAF), whose staff will conduct all technical aspects of the geothermal assessment in this proposal. Because the technical work comprises the bulk of the entire proposal, the subaward represents the largest block of funding. Total cost to project: $198,984. Total cost to project: $219,071 November 6, 2009 Pat Sweetsir Tribal Administrator Ruby Tribal Council Agnes M. Wright Building, 3rd Street P.O. Box 68210 Ruby, AK 99768 Re: Letter of Commitment for “Melozi Hot Springs Geothermal Resource Estimate” Dear Mr. Sweetsir: The University of Alaska Fairbanks is pleased to collaborate with the Ruby Tribal Council on the proposal entitled “Melozi Hot Springs Geothermal Resource Estimate,” which is being submitted to the Alaska Energy Authority Renewable Energy Fund, Round 3. The Principal Investigator from UAF is Gwen Holdmann, Director for the Alaska Center for Energy and Power, INE. The appropriate administrative and programmatic personnel at UAF are aware of the pertinent regulations and policies concerning this proposal, and we are prepared to enter into a subcontract with the Ruby Tribal Council that ensures compliance with all such policies, should this proposal be funded. A statement of work is outlined in the proposal, and our itemized budget for this subaward is attached. If you need additional information, please feel free to call my office at (907) 474-1851. Sincerely, Andrew Parkerson-Gray, Director Office of Sponsored Programs University of Alaska Fairbanks UAF Budget Narrative Melozi-Horner Hot Springs Geothermal Resource Estimate Senior Personnel. Funding to support 174 hours for PI Gwen Holdmann, Director of the Alaska Center for Energy and Power (ACEP), and 174 hours for Anupma Prakash, Professor of Geology at the University of Alaska Fairbanks (UAF), who will conduct and oversee all technical work on the project. Per UAF policy, executive staff receive leave benefits at a rate of 18.7% and faculty receive leave benefits at a rate of 1.7%, calculated on salary. Total cost to Project: $27,146. Other Personnel. Funding to support 100 hours for Ross Coen, Rural Energy Specialist at ACEP, who will provide project management and community outreach; 174 hours for Jack Schmid, ACEP Research Engineer, for technical assistance on the project; 2,080 hours for a postdoctoral candidate at the UAF Geophysical Institute; and 560 hours for an undergraduate summer student at ACEP. Per UAF policy, staff receive leave benefits at a rate of 20.2% and non-union faculty receive leave benefits at a rate of 2.2%, calculated on salary. Total cost to Project: $77,584. Fringe Benefits. Staff benefits for UAF are negotiated annually with the Office of Naval Research. Rates are 31.9% for faculty salaries, 28.2% for executive salaries and non-union faculty salaries, 44.1% for staff, and 8.0% for graduate students in summer only. Total cost to Project: $30,163. Travel. Funding is requested to support travel for Holdmann, Prakash, Coen, and the postdoctoral candidate to make one trip each to Ruby for field work and community outreach; Holdmann to make two trips to the Alaska State Geothermal Coordination meetings; and Holdmann and Prakash to make one trip to San Francisco, CA, to present results at the American Geophysical Union meeting. Total cost to Project: $13,480. Contractual Services. Funding is requested to support airplane charter costs to acquire airborne thermal infrared images, computer software licenses, outreach and publication costs, and communication costs. Total cost to Project: $34,375. Materials and Supplies. Funding is requested for infrared camera and mounting supplies, temperature probes, computer supplies, and archiving media supplies. Total cost to Project: $16,236. Total cost to project: $198,984 .