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HomeMy WebLinkAboutChena Power Hybrid Bio Solar Application Renewable Energy Fund Round 3 Grant Application AEA 10-015 Application Page 1 of 16 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 16 10/7/2009 SECTION 1 – APPLICANT INFORMATION Name (Name of utility, IPP, or government entity submitting proposal) Chena Power, LLC Type of Entity: Limited Liability Company Mailing Address PO Box 58740 Fairbanks, AK 99711 Physical Address 2040 Richardson North Pole, AK 99705 Telephone (907)488-1505 Fax (907)488-4058 Email harding247@hotmail.com 1.1 APPLICANT POINT OF CONTACT Name Jesse Warwick Title Project Manager Mailing Address PO Box 58740 Fairbanks, AK 99711 Telephone (907)488-1505 Fax (907)488-4058 Email harding247@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) X An electric utility holding a certificate of public convenience and necessity under AS 42.05, or An independent power producer in accordance with 3 AAC 107.695 (a) (1), or A local government, or A governmental entity (which includes tribal councils and housing authorities); Yes 1.2.2. Attached to this application is formal approval and endorsement for its project by its board of directors, executive management, or other governing authority. If the applicant is a collaborative grouping, a formal approval from each participant’s governing authority is necessary. (Indicate Yes or No in the box ) Yes 1.2.3. As an applicant, we have administrative and financial management systems and follow procurement standards that comply with the standards set forth in the grant agreement. Yes 1.2.4. If awarded the grant, we can comply with all terms and conditions of the attached grant form. (Any exceptions should be clearly noted and submitted with the application.) Yes 1.2.5 We intend to own and operate any project that may be constructed with grant funds for the benefit of the general public. Renewable Energy Fund Grant Application Round 3 AEA10-015 Grant Application Page 3 of 16 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) Hybrid Biomass and Solar Combined Heat and Power System 2.2 Project Location – Include the physical location of your project and name(s) of the community or communities that will benefit from your project. The project is located at the Chena Hot Springs Resort located 56.5 Mile Chena Hot Springs Road. 2.3 PROJECT TYPE Put X in boxes as appropriate 2.3.1 Renewable Resource Type Wind X Biomass or Biofuels Hydro, including run of river Transmission of Renewable Energy Geothermal, including Heat Pumps Small Natural Gas Heat Recovery from existing sources Hydrokinetic X Solar Storage of Renewable Other (Describe) 2.3.2 Proposed Grant Funded Phase(s) for this Request (Check all that apply) Reconnaissance X Design and Permitting Feasibility X Construction and Commissioning Conceptual Design 2.4 PROJECT DESCRIPTION Provide a brief one paragraph description of your proposed project. This proposed $1.86M program including 50% applicant cost share will develop and demonstrate a 10kW hybrid solar/biomass system powered entirely by renewable resources with more than 65% combined cycle efficiency, more than 95% thermal efficiency, and very low emissions. Using a high efficiency biomass boiler, high efficiency solar collectors, and organic Rankine cycle (ORC) technology to make this possible. The carbon-neutral emissions may be contained for use in greenhouses to aid the year round growth of produce and net reduction of CO2 GHG. The program will be completed in 1  years and the product can then be commercialized for markets in Alaska and the lower 48. The main objective of this project is to demonstrate a 10 kW carbon neutral combined heat and power (CHP) systems using entirely renewable resources. The CHP system is designed to utilize heat from a biomass boiler and solar sources to power an ORC turbine system and produce electricity. The excess heat from the ORCs and thermal energy source will be used for water and space heating and directed into colocated greenhouses where produce will be grown. The carbon dioxide from the biomass combustion will be sequestered for the produce in the greenhouses. Renewable Energy Fund Grant Application Round 3 AEA10-015 Grant Application Page 4 of 16 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.) Application of this solar/biomass system may be realized in all climates, all seasons and everywhere that wood byproducts are available. This introduces a small, scalable solar/biomass CHP system that will be viable for both large and small population centers. Once solar/biomass units are made commercial, they will provide the customer a 70% minimum reduction in fuel costs, stable electricity costs, possibility to sell excess electricity, energy freedom, and provide communities with food security. Each system will be operated from carbon negative renewable resources. The solar collectors are a non carbon-emitting source of power and heat. Biomass is a renewable carbon neutral source of energy. Chena Power, LLC will explore enhancing produce growth by supplying the emissions to a year round greenhouse located at Chena Hot Springs Resort. The annual diesel fuel savings is $34,084 for electricity and $51,126 for thermal for a net fuel savings of $85,210. The environmental benefit for the reduction of more than 26,462 gal of diesel is 587,456 lbm of CO2 per year per Federal Reg 40 CFR 500.113 and the Intergovernmental Panel on Climate Change. The projected reduction in CO2 emissions over the 20 yr life of the equipment is 11,749,128 lbm of CO2. 2.6 PROJECT BUDGET OVERVIEW Briefly discuss the amount of funds needed, the anticipated sources of funds, and the nature and source of other contributions to the project. The total project cost will be $1,861,500 and Chena Power, LLC is asking for $930,750 in funding from the AEA with a matching cost share of $930,750 from Chena Power, LLC. Chena Power’s cost share will be contributed with funds and in-kind contributions. 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. $930,750 2.7.2 Other Funds to be provided (Project match) $930,750 2.7.3 Total Grant Costs (sum of 2.7.1 and 2.7.2) $1,861,500 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) $1,861,500 2.7.5 Estimated Direct Financial Benefit (Savings) $85,210/yr 2.7.6 Other Public Benefit (If you can calculate the benefit in terms of dollars please provide that number here and explain how you calculated that number in your application (Section 5.) $ 1,000,000 Renewable Energy Fund Grant Application Round 3 AEA10-015 Grant Application Page 5 of 16 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 project manager for this project will be William Bilbow. William Bilbow is the founder of WMB Enterprises and has over 27 years of experience in the gas turbine, HVAC and distributed power generation industries. He has made significant product development contributions to United Technologies low-grade geothermal ORC system that has been successfully operating at Chena Hot Springs, AK since 2006. He has also worked with United Technologies in the development and fabrication of every other derivative ORC system for various market applications. Additionally, he has advanced the development of Ocean Thermal Energy Conversion (OTEC) technology and contributed as a leading engineer for the GE LM6000 gas turbine. 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.) Schedule is attached. The total project duration including the 6 months of monitoring and reporting period is 1  years. 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.) P3.1 – 10/01/2010 – Project Scope P3.2 – 10/29/2010 – Regulatory Applications P3.3 – 11/26/2010 – System Design P3.4 – 12/10/2010 – Phase 3 Review (Permits, Design) P4.1 – 04/29/2011 – Procurement & Fabrication P4.2 – 01/14/2011 – Contractor Selection P4.3 – 02/11/2011 – Site Preparation P4.4 – 05/27/2011 – Installation P4.5 – 06/24/2011 – Commissioning & Startup P4.6 – 06/27/2011 – Operation Reporting (Start) P4.7 – 08/22/2011 – Phase 4 Review 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 Renewable Energy Fund Grant Application Round 3 AEA10-015 Grant Application Page 6 of 16 10/7/2009 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. Role and Contribution of Each Team Member Chena Power will be the prime for this project. Chena Power will work with WMB Enterprises to complete the majority of the design, installation, and operation for the plant. United Technologies Corporation will supply the technologies required for the plants to Chena Power, as well as provide technical support and expertise. Relevant Corporate and Individual Experience Chena Power has played a significant role with UTC and WMB Enterprises in the advancements of ORC development for low-grade geothermal and waste heat resources as recently demonstrated through the PureCycle 200 systems at Chena Hot Springs, AK that generate electrical power from geothermal fluids at 157 ºF and cooling water at 40 ºF. The PureCycle 200, a design created by UTRC, is a waste-to-heat power plant module based on inexpensive refrigeration components. This project was awarded an R&D 100 Award, as well as being named “Project of the Year” in the Renewable Energy Category from Power Engineering Magazine. It has also been included in the Geothermal Timeline produced by DOE as a notable milestone in the evolution of US geothermal technology. To build on the success of the geothermal power plant, Chena Power, in cooperation with WMB Enterprises, UTRC and other strategic partners, will demonstrate the use of an ORC power plant in conjunction with a CHP District Heating System that will provide space/water heat and supply greenhouses with the resources needed to have a neutral greenhouse-gas impact while supplying produce for the local market. Experience and Availability of Key Personnel The project team is composed of several highly motivated people with diverse skills and long track records of pioneering success, collectively comprising a project team that brings great talent, relevant experience and commitment to this program. Chena Power employs mechanical and chemical engineers, electricians, pipefitters, and many more specialties that will contribute to the project. Adequacy of Facilities The existing facilities at Chena Power, WMB Enterprises, and UTRC have the resources and infrastructure to design, assemble and test all of the equipment on this project. The project site at Chena Hot Springs Resort is ready to commence installation of the power plant. 3.5 Project Communications Discuss how you plan to monitor the project and keep the Authority informed of the status. In order for this to project to be commercialized, Chena Power, LLC will need to continuously monitor the project to provide marketable results. All biomass will be recorded by type and weight as well as information on dryness. Electrical generation will be recorded to develop an accumulative total and output over time periods. Chena Power, LLC will be able to develop information on efficiencies. Chena Power, LLC will evaluate how CO2 levels effect greenhouse production by monitoring the air compositions of the feed air, greenhouse air, and exiting air. Turbine hours will be tracked for a development of a maintenance schedule. Temperature measurements will be done to quantify the space and water heating performed by the biomass. Renewable Energy Fund Grant Application Round 3 AEA10-015 Grant Application Page 7 of 16 10/7/2009 All purchases for the project will be recorded and records kept with the accounting department at Chena Power, LLC. The project manager will work closely with accounting to track the financials of the project. Project manager will submit all relevant information obtained to the AEA through quarterly reports and by requests. 3.6 Project Risk Discuss potential problems and how you would address them. Risk – Biomass boiler stability & control Risk – Biomass boiler heat transfer performance Risk – Long term performance of the biomass boiler Risk – Climate control systems unbalanced Risk – Performance of the limestone particulate filter Risk –Weather during construction Risk –System performance does not meet project objectives In the development of the project scope and plan, a comprehensive risk assessment was completed for all phases and work classifications. The risks were evaluated for probability and severity to assess the overall project risk. All risks were classified as medium and low, with no high risks. Risks identified in the future, known today as “unknown-unknowns”, will be documented when known, impact evaluated, communicated with the project lead for actionable leadership, and effective mitigation plans addressed for those which represent a barrier to achieving all program objectives. Renewable Energy Fund Grant Application Round 3 AEA10-015 Grant Application Page 8 of 16 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. The potential for biomass as a renewable energy across the state is immense. Many homes currently supply their home heating with biomass. Biomass is one of the most likely energy sources for the survival of many of Alaska’s villages. Current use of biomass for heating needs is very inefficient because it is not a very controllable source of heat. Many places consume biomass very inefficiently because they burn more than is needed and they burn it at low temperatures leading to incomplete combustion leading to many pollutants releasing into the atmosphere. Different types and combinations of biomass will be used to gather information for future operations of the biomass boiler. This project will prevent the wasted energy by creating electricity off thermal energy not needed for water and space heat. CO2 will be supplied to year round greenhouses enhancing produce growth while reducing emissions from the combustion. Solar energy is used on a small scale in the state primarily with photovoltaic panels. Photovoltaic panels are expensive and intermittent. Thermal solar collectors will be used to work in conjunction with the biomass by heating the same working fluid. A reservoir for storing the heated working fluid, therminol, will allow for times where the solar collectors and biomass boiler to have down time and still maintain space/water heating and electricity production. 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. Chena Hot Springs Resort requires an average of 410 kW of electricity that is generated on site by two geothermal ORC power plants and two diesel generators. The geothermal generators can produce 200 kW of electricity each and the diesel generators have capacities of 500kW and 400kW. The geothermal generators are three years old and the diesel generators are 2 years old. Water/space heating needs at Chena Hot Springs Resort were converted to geothermal energy in 1998. Potential customers of this product would be replacing electricity supplied by the local grid or in the case of remote locations possibly providing their own power replacing gas and diesel generators. Potential customers are currently using diesel, natural gas, electricity, and inefficient wood stoves for water/space heating needs. These fuels are used for radiant and forced air space Renewable Energy Fund Grant Application Round 3 AEA10-015 Grant Application Page 9 of 16 10/7/2009 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. Geothermal energy is currently being used for space and water heating at Chena Hot Springs Resort. The solar/biomass CHP unit will reduce the water/space heating load on the geothermal resource allowing for more of the resource to be applied to electricity generation furthering the displacement of diesel. Electricity is generated at Chena Hot Springs Resort by geothermal energy and diesel generators. 10 kW of solar/biomass electricity generation will correspond to less diesel used for electricity. The most common methods of space and water heating around the state are done by fuel oil, natural gas, electricity, and wood. The urban areas around the state generate electricity with hydro energy, natural gas, coal, and diesel. Most villages generate electricity with diesel generators. Widespread use of the solar/biomass can dramatically reduce fossil fuel usage in urban and rural areas by increments of 10kW. The scalable aspect allows for a gradual shift from non-renewable sources towards the solar/biomass CHP method. 4.2.3 Existing Energy Market Discuss existing energy use and its market. Discuss impacts your project may have on energy customers. This project will reduce the diesel consumption at Chena Hot Springs Resort by more than 250,000 gallons over the equipment life. The year round produce production at Chena Hot Springs Resort will increase reducing vegetables that are from outside sources. This project has the potential to greatly reduce the amount of diesel that is used in the state through power generation and electrical generation. The diesel infrastructure for space/water heating and electricity generation will allow solar/biomass to supplement the energy needs for the consumers. The solar/biomass system will lead to declining use of diesel allowing the infrastructure to change over a period of time. The emerging market for biomass CHP systems is estimated to be more than 150,000 units in Alaska alone. With a conservative market capture of 5%, the commercial volume would be 7,500 systems, representing a reduction in diesel or fossil fuel use of 118,845,000 gal per year at market maturity. Renewable Energy Fund Grant Application Round 3 AEA10-015 Grant Application Page 10 of 16 10/7/2009 4.3 Proposed System Include information necessary to describe the system you are intending to develop and address potential system design, land ownership, permits, and environmental issues. 4.3.1 System Design Provide the following information for the proposed renewable energy system: • A description of renewable energy technology specific to project location • Optimum installed capacity • Anticipated capacity factor • Anticipated annual generation • Anticipated barriers • Basic integration concept • Delivery methods The high efficiency (95%) solar collector provides thermal energy to drive the ORC. If no solar energy is available, stored thermal energy may be used. If there is shortage of the stored thermal energy, then the biomass burner is engaged to drive the ORC and charge the thermal storage. The ORC includes a therminol [3] loop and an R245fa [4] loop. The ORC is a well-known technology [5-8]. The therminol loop includes a pump, heat transfer channels in the biomass burner, heat transfer channels in the solar collector, the aforementioned reservoir used as a thermal energy storage, a therminol-to-water heat exchanger for domestic water heating, a heat exchanger for space heating, and an evaporator which provides a thermal contact between the therminol loop and the R245fa loop. The pump directs the therminol to the thermal energy storage reservoir through the solar collector, or the biomass burner, or through a bypass line parallel to the collector and the burner. The hot therminol stream enters the therminol-to-water heat exchanger and/or the space heating heat exchanger to execute the heating duty. Then the therminol stream is cooled in the evaporator causing evaporation of liquid R245fa. Then the pump induces the therminol outgoing from the evaporator and the cycle is repeated. The R245fa loop uses heat rejected by the therminol loop in the evaporator. The loop includes a pump, the evaporator, a turbine, and a condenser. It may or may not include a regenerative heat exchanger, depending post turbine temperature and cost of the heat exchanger. The condenser provides a thermal contact between the R245fa loop and ambient air or cooling water. The pump directs liquid R245fa into the evaporator. In the evaporator, the liquid R245fa fully evaporates and is superheated. The superheated R245fa vapor is expanded in the turbine generating electrical power. Then the vapor is condensed in the condenser and the cycle is repeated. The therminol loop has solenoid valves, which enable heating and/or power generation operating modes. The space heating may be implemented via a direct air-heating device or via an indirect heating device. The indirect heating device implies heating a water stream by the hot therminol, and then, space heating by the heated water stream. The water stream circulates through a water loop, which consists of a pump, a therminol-to-water heat exchanger heating water, and a water-to-air heat exchanger heating air. A permanent magnet generator coupled with the turbine generates electrical power. The generated electrical power charges a 3kWh battery and supplies the house and/or the utility grid with AC Renewable Energy Fund Grant Application Round 3 AEA10-015 Grant Application Page 11 of 16 10/7/2009 electrical power. The hot water in the evaporator is cooled causing evaporation of the liquid refrigerant. The hot water temperature drop in the evaporator is limited by the refrigerant evaporating temperature and pressure since the hot water temperature profile cannot cross the refrigerant temperature profile in the evaporator. Evaporation pressure reduction allows increasing the hot temperature drop and the extent of the thermal energy utilization, but, at the same time, it leads to reduction of pressure ratio and enthalpy difference across the turbine. The first factor, the hot water temperature drop increase, leads to an increase of the net power output. The second factor, the pressure ratio reduction, leads to a decrease of the net power output. A combination of a hot water temperature drop and an evaporating pressure providing a maximum net power is a compromise between these two factors has to be found as a result of the cycle optimization. 4.3.2 Land Ownership Identify potential land ownership issues, including whether site owners have agreed to the project or how you intend to approach land ownership and access issues. The land to be used for this project is owned by Chena Hot Springs Resort, a sister company of Chena Power, LLC. 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 This project is a small-scale solar/biomass CHP system that will produce minimal emissions away from urban areas. The organic Rankine cycle power plant is a closed loop system. Permitting for environmental regulations will not be required, however Chena Power, LLC will support certification and permitting activities the EPA and any other government authority deems necessary. 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 ORC generators have been shown at Chena Hot Springs Resort to be aesthetically appealing and Renewable Energy Fund Grant Application Round 3 AEA10-015 Grant Application Page 12 of 16 10/7/2009 operate under low noise. The land at Chena Hot Springs Resort used for the project doesn’t pose any problems for environmental or land use issues. The biomass that is used will be a combination of willow grown and harvested at Chena Hot Springs Resort and state land that has been approved for wood harvesting. In choosing land for willow production, Chena Power will choose land that does not pose any environmental issues. All decisions that could pose environmental problems will undergo analysis headed by the project manager. 4.4 Proposed New System Costs and Projected Revenues (Total Estimated Costs and Projected Revenues) The level of cost information provided will vary according to the phase of funding requested and any previous work the applicant may have done on the project. Applicants must reference the source of their cost data. For example: Applicants Records or Analysis, Industry Standards, Consultant or Manufacturer’s estimates. 4.4.1 Project Development Cost Provide detailed project cost information based on your current knowledge and understanding of the project. Cost information should include the following: • Total anticipated project cost, and cost for this phase • Requested grant funding • Applicant matching funds – loans, capital contributions, in-kind • Identification of other funding sources • Projected capital cost of proposed renewable energy system • Projected development cost of proposed renewable energy system The 10 kW solar/biomass power system project cost will be $1,861,500. Chena Power is requesting $930,750 in funding from the AEA Renewable Energy Fund Grant Round 3. Chena Power will have matching funds of $930,750 in the form of capital and in-kind contributions. The capital cost of the new system will be $455,000 and the development cost will be $1,400,000. The capital costs will be used for the biomass boiler and the ORC electric generator. The development cost will primarily be used for the boiler, ORC generator and battery backup design. Commercialized 10 kW solar/biomass power systems are expected to cost approximately $20,000. 4.4.2 Project Operating and Maintenance Costs Include anticipated O&M costs for new facilities constructed and how these would be funded by the applicant. (Note: Operational costs are not eligible for grant funds however grantees are required to meet ongoing reporting requirements for the purpose of reporting impacts of projects on the communities they serve.) The annual O&M costs and fuel costs for the project are $1,000 and $5,500 per year respectively, which equates to approximately $.074/kWh in operating costs. The operating costs for this project are less than the current diesel costs thus ensuring this system will surely be continuously operated at Chena Hot Springs Resort. The added space/water heating capacity of this system will also allow Chena Power, LLC reduce geothermal heating needs and supply more geothermal resource to the current power plant and generate more electricity. Chena Power is also committed to bringing this project to the commercial market for which the testing is required. Renewable Energy Fund Grant Application Round 3 AEA10-015 Grant Application Page 13 of 16 10/7/2009 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 power produced will be supplied to Chena Hot Springs Resort to displace 26,462 gallons of diesel usage per year. The rate of return will be high due to the development costs. This program would represent the enabler to a commercial product for sale throughout Alaska and the lower 48 within 3 years. The net business return from sale of commercial units is projected at 6 years. Commercial units are expected to have a consumer payback period of 4 years. 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 This project will save Chena Hot Springs Resort $85,210 in diesel costs per year. The solar/biomass will provide 85,920 kWh/year in electricity production reducing diesel needs by 10,585 gal and $34,084. The 298.9 MMBtu/year of thermal energy provided by the system will allow geothermal resource needed to heat the resort to generate more electricity in the geothermal plant on site. In a typical situation the 298.9 MMBtu/year of thermal energy would be able to displace 15,877 gal diesel per year leading to $51,126 in annual savings. The total $85,210 per year in saved diesel costs will provide a reduction of $78,710 in operating costs after the $6500 in O&M and fuel costs for the solar/biomass system are factored in. This system will have positive environmental impact by having a net negative greenhouse gas emission. Renewable Energy Fund Grant Application Round 3 AEA10-015 Grant Application Page 14 of 16 10/7/2009 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 This project will be sustainable because the O&M costs are will provide cost savings compared to current diesel energy costs at the resort. The O&M costs will be financed through revenue generated by visitors to Chena Hot Springs Resort. Previous experience with ORC generators has given Chena Power an understanding of expected problems and how to solve various problems that can occur with this solar/biomass system. The annual operation costs for the solar/biomass system will be $1,000 for O&M costs and $5,500 for wood. The existing electrical infrastructure at Chena Hot Springs Resort already has the operating costs associated with maintaining the grid so the addition of the biomass will not increase overall operation costs. Chena Power has a commitment that goes beyond resort energy production savings. Chena Power is committed to testing this system to take this product to the commercial market. In order to commercialize the system Chena Power will report the savings and benefits and that information will be submitted to the AEA. 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. Chena Power has had ongoing discussions and positive feedback with turbine designers, including UTC, regarding developing a 10kW ORC turbine. Once the grant is approved Chena Power will immediately work with a turbine manufacturer to design and build a 10kW turbine. Chena Power has also contacted small-scale biomass boiler manufacturers about this project and has received positive feedback from them. Chena Power will immediately get a manufacturer to design and build a biomass burner that will heat therminol to supply thermal energy for electricity generation and heating needs. The equipment will be designed and built with the intention of commercial production of the equipment. The project manager will work closely with the manufactures of the primary equipment. The project manager will set up a strategy for executing the project. Renewable Energy Fund Grant Application Round 3 AEA10-015 Grant Application Page 15 of 16 10/7/2009 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. Chena Power doesn’t anticipate any opposition to this renewable energy project. This project has the possibility of allowing a scalable renewable energy system to have widespread use throughout the state. 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 Chena Power is requesting $930,750 in grant funds to complete this project. All the grant funding is being requested from the AEA. Chena Power will provide a match of $930,750 in cost share for this project. Upon successful implementation of the solar/biomass system Chena Power will invest the necessary money to bring 10kW solar/biomass power generators to market. Renewable Energy Fund Grant Application Round 3 AEA10-015 Grant Application Page 16 of 16 10/7/2009 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. C. Grant Budget Form per application form Section 9. D. Letters demonstrating local support per application form Section 8. E. An electronic version of the entire application on CD per RFA Section 1.6. F. Governing Body Resolution or other formal action taken by the applicant’s governing body or management per RFA Section 1.4 that: - Commits the organization to provide the matching resources for project at the match amounts indicated in the application. - Authorizes the individual who signs the application has the authority to commit the organization to the obligations under the grant. - Provides as point of contact to represent the applicant for purposes of this application. - Certifies the applicant is in compliance with applicable federal, state, and local, laws including existing credit and federal tax obligations. F. CERTIFICATION The undersigned certifies that this application for a renewable energy grant is truthful and correct, and that the applicant is in compliance with, and will continue to comply with, all federal and state laws including existing credit and federal tax obligations. Print Name Signature Title Date