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HomeMy WebLinkAboutPoint Hope Wind Application (2) Renewable Energy Fund Grant Application For Point Hope - Wind Diesel Generation Project North Slope Borough Project Location Point Hope, Alaska Renewable Energy Fund Grant Application AEA 10/015 Grant Application Page 2 of 31 11/10/2009 SECTION 1 – APPLICANT INFORMATION Name (Name of utility, IPP, or government entity submitting proposal) North Slope Borough Type of Entity: Government and Electric Utility Mailing Address P.O. Box 69 Barrow, Alaska 99723 Physical Address [same] Telephone (907)852-0884 Fax (907)852-4145 Email Brett.goodwin@north-slope.org 1.1 APPLICANT POINT OF CONTACT Name K.C. Miller Title Grants Administrator Mailing Address P.O. Box 69 Barrow, AK 99723 Telephone (907) 852-0467 Fax (907) 852-4145 Email KC.Miller@north-slope.org 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, or X 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 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.) Renewable Energy Fund Grant Application AEA 10/015 Grant Application Page 3 of 31 11/10/2009 SECTION 2 – PROJECT SUMMARY Provide a brief 1-2 page overview of your project. 2.1 PROJECT TYPE Describe the type of project you are proposing, (Reconnaissance; Resource Assessment/ Feasibility Analysis/Conceptual Design; Final Design and Permitting; and/or Construction) as well as the kind of renewable energy you intend to use. Refer to Section 1.5 of RFA. P oint Hope Wind Diesel Generation Project: We propose a project to complete the final design, permitting, and construction of a system to add electrical generation from wind power to the existing electrical generation and distribution system in Point Hope, Alaska 2.2 PROJECT DESCRIPTION Provide a one paragraph description of your project. At a minimum include the project location, communities to be served, and who will be involved in the grant project. Our project involves the final design, permitting, construction, erection, startup, and commissioning of three wind turbines to supplement the existing power generation and distribution system for the community of Point Hope. Participants in the project include North Slope Borough, a contracted A&E firm, a contracted General Contractor, and a supplier for the wind turbines and supporting towers. The North Slope Borough will provide overall project management. The contracted A&E firm will provide civil and electrical system engineering for the project. The General Contractor will be responsible for the installation of all civil works, erection of the wind turbines and supporting towers, and installation of all ancillary electrical systems. The supplier for the wind turbines and supporting towers will also provide startup & commissioning services. Note: Northern Power Systems of Barre, Vermont, is supplier of wind turbines and supporting towers that have been proven to work effectively in Alaska. References to Northern Power provided Northwind 100/21 B model wind turbines within the remaining sections of this application are for descriptive purposes only to indicate that product or a comparable product. 2.3 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. Include a project cost summary that includes an estimated total cost through construction. The project requires $3,857,047 to complete. We anticipate AEA funding of $3,506,406. NSB will provide a project match of 10% of the AEA funding amount for the project, in in-kind and cash donations valued at $350,641. 2.4 PROJECT BENEFIT Briefly discuss the financial benefits that will result from this project, including an estimate of economic benefits (such as reduced fuel costs) and a description of other benefits to the Alaskan public. The primary financial benefit from this project will be reduced fuel costs to the people of North Slope Borough. Simulations of wind resource versus load demand result in an estimated gross fuel savings of over 70,000 gallons of diesel fuel per year at the Point Hope plant, from Renewable Energy Fund Grant Application AEA 10/015 Grant Application Page 4 of 31 11/10/2009 efficiency improvements due to new automated switchgear, from diesel-powered generation being displaced by wind, and by displacing diesel-fired hot water heating with excess electrical energy from the wind turbines. In addition to the direct fuel reduction are the benefits of: • reduced long-term dependence on outside sources of energy; • reduced exposure to fuel price volatility; • reduced air pollution resulting from reducing fossil fuel combustion; • reduced possibility of spills from fuel transport & storage; and • reduced overall carbon footprint and its contribution to climate change. 2.5 PROJECT COST AND BENEFIT SUMARY Include a summary of your project’s total costs and benefits below. 2.5.1 Total Project Cost (Including estimates through construction.) $3,857,047 2.5.2 Grant Funds Requested in this application. $3,506,406 2.5.3 Other Funds to be provided (Project match) $350,641 2.5.4 Total Grant Costs (sum of 2.5.2 and 2.5.3) $3,857,047 2.5.5 Estimated Benefit (Savings) $272,000 per year (1st year, estimated 2010 fuel price of $3.80/gal) 2.5.6 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 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. North Slope Borough’s project management approach to this project, and to its overall energy upgrade program, is to utilize a team approach consisting of North Slope Borough staff, external consultants, and general contractors. Mr. Kent Grinage will be the Program Manager. His resume is attached. He is employed as the Fuels Division Manager for North Slope Borough. North Slope Borough provides a project team from its operating staff. The Program Manager (PM) provides oversight to Project Administrators (PA) who interface with the Engineering Consultant and General Contractor (GC). The PM and PA group provides internal focus and coordination of special projects including project development, planning, construction coordination, and reporting. The Engineering Consultant of the North Slope Borough provides technical input on generation and distribution issues to the team. Additionally, the engineering group provides specifications, design, and drawings for North Slope Borough construction of diesel power plants and distribution systems. The Engineering Consultant provides construction administration and commissioning input on behalf of new construction performed by the North Slope Borough contractor. The manager of administrative services provides support in Renewable Energy Fund Grant Application AEA 10/015 Grant Application Page 5 of 31 11/10/2009 accounting, payables, financial reporting, and capitalization of assets in accordance with NSB guidelines. The Grants Administrator serves as the Primary Point of Contact to assure that all contracts and invoices are in compliance with grant requirements. The project management team’s structure is designed to provide flexibility for the North Slope Borough participants. They have operational responsibilities to the Borough as well as project development responsibilities. The functional-interface relationships allow engineering tasks, village government and public relations tasks, procurement functions, and internal construction operations to be dovetailed into the project development process. Cross utilization of talent and resources is an advantage to the project delivery process, providing economies of scale for using project resources. For project delivery, an amalgamated team approach is utilized. To support the North Slope Borough team, design consultants and construction services managers are selected. Both disciplines are derived from a resource bank of professional firms with applicable histories of performance in rural Alaska. The construction services manager works concurrently with the design consultant through design development to provide constructability insight and value engineering to maximize the overall effectiveness of the final construction documents. Concurrent with design development, material and equipment procurement packages are formulated by the General Contractor in collaboration with North Slope Borough’s Program Manager and Grant Administrator. Each package is competitively procured or issued from NSB materials. Purchase orders are formulated with delivery dates consistent with dates required for barge or air transport consolidation. The GC tracks the shipments and provides handling services to and around the destination project sites. The GC is responsible for the construction activities for all project components of the facility upgrade. Local labor forces are utilized to the maximum extent possible to construct the projects. Local job training is provided as a concurrent operation under the management and direction of the GC. All construction costs, direct and indirect are reimbursed on a Fixed Fee reimbursement to the GC or paid directly by North Slope Borough. For the facilities applied for in this application, North Slope Borough is responsible for managing the commissioning process in content with the GC, designers, and vendors. That entails testing and training of operational personnel, as well as providing for all contract closeout documents. North Slope Borough’s concern and objective is to have a managed project delivery approach from inception, through operation, and closeout. 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.) The following presents an easily accomplished schedule for completion of the project by end of summer 2012. However, if the initial RFP’s, awards, and permitting can be completed in time to allow for delivery of the towers and turbines to the Seattle dock before the 2011 barge’s scheduled departure, construction could actually be completed in 2011. NSB will vigorously attempt to meet a more aggressive schedule t o allow completion of project constru ction in Renewable Energy Fund Grant Application AEA 10/015 Grant Application Page 6 of 31 11/10/2009 2011 rather than waiting until 2012. • Grant Award Announcement: 09/01/2010 • Issue RFP for Design Engineers: 10/01/2010 • Response from Design Contractor: 10/30/2010 • Award Contract to Design Contractor: 12/01/2010 • Authorization to Proceed: 01/01/2011 • Permitting: 02/01/2011 • Order Wind Turbines & Towers: 03/30/2011 • Complete Electrical System Design: 03/30/2011 • Complete Civil Works Design: 03/30/2011 • Issue RFP for Construction Contractor: 5/30/2011 • Response from Construction Contractors: 6/30/2011 • Award Installation Contractor: 08/30/2011 • Turbines Ready to Ship: 06/01/2012 • Complete Civil Works: 06/30/2012 • Turbines On Site: 8/17/2012 (approximate date) • Complete Turbine Erection & Electrical Works: 9/12/2012 • Complete Turbine Commissioning: 9/26/2012 • Complete Secondary Load Controller Commissioning: 10/23/2012 3.3 Project Milestones Define key tasks and decision points in your project and a schedule for achieving them. • Authorization to Proceed: required as early as possible to allow turbines to be ordered. • Order Wind Turbines & Towers: 6 months required from order to ready-to-ship date. • Permits Obtained: required by 2/1/2010 to allow time to hire contractor to be ready for start of construction season. • Complete Civil Works: foundations and access roads need to be done by time turbines arrive on site. • Complete Turbine Commissioning: needs to be done early enough in the season to allow time to commission and tune the secondary load controller. 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. North Slope Borough will ultimately be responsible for successful completion of the project, using partners that have successfully installed similar systems in the recent past. Electrical system engineering will be subcontracted, using current internal procurement practices and selection of engineering service providers from prequalified organizations. The contracted A & E firm will design the wind turbine foundations. NSB will subcontract for construction of the foundations and Contracted A & E firm will manage that construction. Renewable Energy Fund Grant Application AEA 10/015 Grant Application Page 7 of 31 11/10/2009 NSB anticipates using one hundred kilowatt Northwind 100/21 B (NW100/21) wind turbines such as those supplied by Northern Power (or a comparable product should one be available). The permanent magnet, direct-drive NW100/21 is the latest wind turbine model from Northern Power, based on earlier Northwind 100 kW wind turbine models that Alaska Village Electric Cooperative (AVEC) has installed and operated in wind/diesel applications for several years now. Developed in conjunction with NASA, NREL, and NSF specifically for remote use in extreme environments, the NW100/21 embodies the most recent design practices in the industry. Northern Power’s experience with wind/diesel control systems complements North Slope Borough’s wind power needs. 3.5 Project Communications Discuss how you plan to monitor the project and keep the Authority informed of the status. North Slope Borough will assign a project manager to the project. One responsibility of the project manager will be to compile periodic progress reports for use by the Authority. Weekly and monthly project coordination meetings will be held with the project team to track progress and address issues as they arise. 3.6 Project Risk Discuss potential problems and how you would address them. In general, logistics, construction activities and weather all contain significant risks. North Slope Borough routinely purchases Builder’s Risk insurance to mitigate its exposure to these risks. In addition to outside insurance, the experienced team of North Slope Borough and Contracted A & E firm with projects much like this one in similar circumstances reduces much of the risk. Logistics and weather are routinely issues in rural Alaska. The North Slope Borough has extensive experience working in rural Alaska under these conditions. Crucial to successful completion of projects in these environments are advance planning and flexibility in timing. 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 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 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. An excellent source of wind data was available for analyzing the wind resource in Point Hope: AEA’s Weather Station Wind Resource Summary for Point Hope. This summary used the airport’s ASOS or Renewable Energy Fund Grant Application AEA 10/015 Grant Application Page 8 of 31 11/10/2009 weather station 10 meter data collected from 1990 to 2004; a fourteen year period. The annual average wind speed measured was 6.7 m/s at 10 meters, with a calculated wind power density of 397 W/m2 (also at 10 meters). This indicates an outstanding wind resource and classifies at wind power class 6. Note also that NSB installed a met tower in Point Hope in June 2009 and has collected about three months of data to date. But, considering the long data collection period of the airport data and the relative ease and accuracy of scaling data to higher elevations in sites that are open tundra – no trees or other obstructions – the airport data was used for HOMER modeling to predict power plan system performance with wind turbines. Other wind characteristics such as Weibull k and autocorrelation factor were calculated by reference to the one year’s worth of Point Lay met tower data analyzed by NREL (note that Point Lay is located on the Arctic Ocean coast northeast of Point Hope). The Village of Point Hope is blessed with abundant winds but finds its fuel supply limited and costly. Solar power from photovoltaic solar arrays is a potential alternative, but suffers from higher capital cost and lower resource availability than wind at this site. 4.2 Existing Energy System 4.2.1 Basic configuration of Existing Energy System Briefly discuss the basic configuration of the existing energy system. Include information about the number, size, age, efficiency, and type of generation. The existing power plant at Point Hope consists of six separate diesel-powered engine generator sets: three at 320 kW output, two at 665 kW output, and one at 910 kW. Individual efficiency is not available, but an aggregate efficiency of 14.9 kWh/gal was reported in NSB’s September 2009 PCE report to AEA. 4.2.2 Existing Energy Resources Used Briefly discuss your understanding of the existing energy resources. Include a brief discussion of any impact the project may have on existing energy infrastructure and resources. The existing power plant produces electrical energy by burning diesel fuel in engine-driven generators. By adding wind turbines to the existing system, we expect the project to provide the same amount of electrical energy using substantially less diesel fuel than is true today. In addition to offsetting much of the diesel-generated electricity, we also expect to use whatever wind-generated energy that exceeds electrical demand to heat water, also displacing diesel fuel that is presently burned in boilers. 4.2.3 Existing Energy Market Discuss existing energy use and its market. Discuss impacts your project may have on energy customers. Point Hope sits on the west coast of Alaska on the Arctic Ocean, 85 miles southwest of Barrow. It is subject to severe cold winter temperatures, extended periods of darkness and blowing snow. Reliable electric service is essential to maintaining home heating systems necessary to safeguard the health of the population. Point Hope is classified as an isolated village, relying on air transportation for delivery of medical goods and transport of sick or injured individuals or mothers nearing childbirth. Reliable electric Renewable Energy Fund Grant Application AEA 10/015 Grant Application Page 9 of 31 11/10/2009 service is essential to maintaining vital navigation aids for the safe operation of aircraft. Runway lights, automated weather observation stations, VASI lights, DME’s and VOR’s are all powered by electricity. Emergency medical service is provided in Point Hope by a health aide. Therefore medical problems and emergencies must be relayed by telephone or by some other communication means for outside assistance. Operation of the telephone system requires electricity. Reliable telephone service requires reliable electric service. The heaviest consumers of power in villages of the North Slope Borough are the water and sewer facilities. Additionally the underground utilities are thawed by electrical heat trace. If one of these heat traces is left without power, systems will freeze up and shut down. Water in Point Hope comes from a fresh water lake and must be processed for use as potable water. Reliable electric service is required for the continuous operation of the water and wastewater systems and to prevent freezing of the systems which would cause extensive damage, interruptions in service, and expensive repairs. Point Hope is subject to long periods of darkness. Reliable electric service is essential for the operation of home lighting, streetlights and security lighting. Outside lighting reduces safety hazards, such as deep snow and the infrequent visit of polar bears, for pedestrian school children. Residents of Point Hope rely on a subsistence lifestyle where food is gathered and harvested and then stored for later use. Refrigeration is essential for the extended storage of perishable food stuffs. We expect the addition of wind turbines to the electric generation system to reduce the amount of diesel fuel used on the island for both power generation and for heating. 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 Renewable energy technology description Wind power is the renewable energy option of choice for Point Hope. Northern Power’s Northwind 100, 100 kW B model turbine with a 21 meter rotor (NW100/21) is proposed. The Renewable Energy Fund Grant Application AEA 10/015 Grant Application Page 10 of 31 11/10/2009 NW100/21 (B model) represents a new generation of wind turbines. Its permanent-magnet, direct-drive architecture is the current state of the art for advanced wind turbine design. That architecture overcomes many of the challenges of connecting old-style induction generators to electrical distribution grids. The permanent-magnet generator is connected to a full power converter that converts its variable, low-frequency, alternating-current output to direct current, then back to tightly regulated alternating current for output to the grid. The permanent-magnet generator requires no reactive power to energize its magnetic field, removing that influence from the grid. The power converter allows a broad degree of control over the form and quality of the power output to the grid. The capacitance and active controls in the power converter allow reactive power to be either consumed or produced by the NW100 regardless of its real power output, even in the complete absence of wind. The turbine controls allow power output to be controlled by dynamic grid conditions, including automatic output reduction or complete shutdown, regardless of wind conditions. The combination of advanced controls and integrated disk braking allows gradual ramping of turbine output up or down, minimizing flicker and maximizing usable power. The system we plan consists of three (3) NW100/21 turbines to operate with the existing diesel plant as a wind-diesel hybrid power system. Installed wind power capacity will be 300 kW. Optimum installed capacity HOMER software was used to model three NW100/21 turbines to estimate capacity factor and system penetration, or renewable fraction. Because HOMER considers the wind turbine to be available 100% of the time, it calculated an optimum renewable fraction of 16.0%. Using Point Hope airport ASOS data as discussed in section 4.1, at 100% availability the turbines’ capacity factor would be 42.0%. With 90% expected wind turbine availability, a 37.7% capacity factor is anticipated. Note: an analysis of turbine metrics by Northern Power for NW100 turbines in operational status in Alaska yielded an approximate 90% average availability. Anticipated capacity factor In the initial analysis, Homer software indicates annual wind production of 1,102,498 kWh with zero kWh/yr of excess energy (0.0% of electrical production) that could be diverted to a secondary load boiler (100% turbine availability). Anticipated annual generation With expected turbine availability of 90%, annual wind production of 992,200 kWh is anticipated. Anticipated barriers No barriers to successful installation and integration of a wind turbine in Point Hope are expected. The project design is modeled on recent successful projects of similar design. Basic integration concept The integration design concept is comprised of three NW100 turbines, a secondary load boiler to augment an existing diesel generator heat recovery loop (if deemed necessary after further analysis), a secondary load controller to manage the “dumping” of excess electricity (if necessary), a SCADA system to manage the combine operation of the diesel generators and wind turbine, and the SmartView system to enable remote monitoring and control of the wind-diesel hybrid power plant. Alternatively, and this would require more analysis, if there will not be significant excess electricity generated and it appears from preliminary analysis that there may not be, a secondary load controller and boiler could be replaced by a dispatch control feature that Renewable Energy Fund Grant Application AEA 10/015 Grant Application Page 11 of 31 11/10/2009 would serve to curtail one of the wind turbines during the rare occurrences where wind power output equals or exceeds the load demand. Delivery methods The wind-generated electrical energy will be delivered using the existing electrical distribution grid. 4.3.2 Land Ownership Identify potential land ownership issues, including whether site owners have agreed to the project or how you intend to approach land ownership and access issues. North Slope Borough and the Village Corporation have substantial land holdings in the villages and will make the necessary agreements to provide the optimal site for each turbine. 4.3.3 Permits Provide the following informationas 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 Application for permits will be made no sooner than one year prior to construction to be valid for the construction period. The following permits and/or authorizations will be necessary for installation of the wind turbines: • North Slope Borough permitting • USACE Section 404/401 Wetlands permit and Water Quality Assurance • ADNR, OC&OM Coastal Zone Consistency Determination Renewable Energy Fund Grant Application AEA 10/015 Grant Application Page 12 of 31 11/10/2009 • Title 16 Fish Habitat Permit • SHPO “No Historic Properties Affected” • Storm Water Pollution Prevention Plan • Alaska Pollutant Discharge Elimination System • Vegetation Clearing Not Permitted between May 20 and July 20, except for black scoter habitat where the end of the avoidance period is August 10 • FAA 7460-1 Notice of Proposed Construction or Alteration Environmental & Permitting Review and Due Diligence Deliverable. The deliverable of this step is a 5 page report detailing findings of the agency meeting and discussions. 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 Point Hope is located near the tip of the Lisburne Peninsula, on a large gravel spit that extends approximately 15 miles into the sea. The spit is reportedly the “westernmost extension of Northwest Alaska into the Chukchi Sea” (Alaska Consultants Incorporated 1983f; DCED 2004). The climate is arctic with temperatures ranging from –49 to 79 degrees Fahrenheit. Precipitation averages 10 inches annually, with 36 inches of snow (DCED 2004). North Slope Borough will instruct the contracted A & E firm to coordinate with the ADNR and the Borough Program Manager for the Wind Diesel Project to identify and discuss appropriate permit issues and provide agency perspective on the proposed development. Discussions should include actions to avoid, minimize, and mitigate wetlands impacts. 4.4 Proposed New System Costs (Total Estimated Costs and proposed 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 Renewable Energy Fund Grant Application AEA 10/015 Grant Application Page 13 of 31 11/10/2009 This application is for the initial phase to completion of the project. We anticipate that the project will cost $3,857,047 to complete. We are requesting $3,506,406 from AEA. North Slope Borough will provide a project match valued at $350,641 as a cash and in-kind contributions toward the project. Cost data is based on engineer’s estimates for previous, similar projects constructed in the Northwest Arctic Borough, Alaska, as well as from conversations with Northern Power associates. 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. • Total anticipated project cost for this phase • Requested grant funding The new Northwind 100/21 B model requires only one maintenance visit each year. The three turbines for Point Hope will require a combined annual maintenance cost of $9,000. This cost will be funded by a NSB operations budget. No additional grant funding will be requested to cover these costs. 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 North Slope Borough is also the owner/operator of the utility in this community; therefore, no wholesale Power Purchase/Sale is required. 4.4.4 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. Cost data sources: • 2008 and 2009 fuel cost data from NSB • Powerplant fuel usage data from NSB • Powerplant configuration data from NSB • Generator efficiency data from NSB’s Sept 2009 PCE report • Wind turbine power curve from Northern Power Systems (NPS) • Wind turbine capital and O&M costs from NPS • 2010 fuel price assumed (average of 2008 and 2009 prices) See attached cost/benefit worksheet – Attachment “B”. Renewable Energy Fund Grant Application AEA 10/015 Grant Application Page 14 of 31 11/10/2009 4.4.5 Business Plan 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. The project will be incorporated into North Slope Borough’s existing power plant operations. The North Slope Borough is a sustainable entity and the business plan will follow the existing successful operations practices of the Borough. 4.4.6 Analysis and Recommendations Provide information about the economic analysis and the proposed project. Discuss your recommendation for additional project development work. The wind turbines and control systems provided as part of this project will be fully incorporated into North Slope Borough’s power plant operations. From that perspective, the wind turbines will be treated as generating equipment, just like the generator sets. Maintenance schedules will be routinely developed and managed. The result will be improved reliability from the existence of additional generating sources and reduced fuel consumption from the use of wind. We do not anticipate any additional project development work at this site following this project. 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 avoided cost of ownership) • 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 HOMER software predicts an annual fuel savings of 64,400 gallons with three NW100/21 turbines operating at 90% availability. Over a 20 year project life, lifetime fuel savings would equal 1,289,000 gallons (90% availability). Beginning with an estimated 2010 fuel cost of $3.80 per gallon, a 20 year project life, a 2.5% inflation rate, and considering the annual cost of turbine maintenance visits, the cumulative project benefit is $6.412 million. The benefit/cost ratio for our proposed project is 1.83 with a 12.2 year payback period. The non-economic benefits to the Alaskan population at large will be from the reduced carbon footprint of the power plant. By reducing the amount of fuel burned at the Point Hope power plant by 16%, we will prevent 713 metric tons of carbon dioxide from entering the atmosphere each year. Other significant emissions improvements are a reduction of 1,760 kg/year of carbon monoxide and 15,700 kg/year of nitrogen oxides. Additional benefits include local jobs associated with local generation of power. The program will work in conjunction with Northern Power to train local power plant operators with the Renewable Energy Fund Grant Application AEA 10/015 Grant Application Page 15 of 31 11/10/2009 operations and maintenance of the wind diesel system. This training will have a multiplier effect, by increasing the knowledge base and furthering the competencies of the local workforce. We will explore other tax credits as a benefit to the project. Also, any future value laid to carbon offsets will contribute to additional savings as a result to the project. Finally, the controls system associated with wind diesel systems can help facilitate a change-over from a manual, traditional system to that of smart grid and general, village-wide control integration. SECTION 6 – GRANT BUDGET Tell us how much your total project costs. Include any investments to date and funding sources, how much is requested in grant funds, and additional investments you will make as an applicant. Include an estimate of budget costs by tasks using the form - GrantBudget.xls Provide a narrative summary regarding funding sources and your financial commitment to the project. The cost of this project is $3,857,047. We are asking for $3,506,406 from the Alaska Energy Authority. The North Slope Borough is committed to a project match valued at $350,641 in cash and in-kind toward the completion of this project. The North Slope Borough will also provide the necessary land site for construction of these towers and turbines. See attached Grant Budget – Attachment “C” SECTION 7 – 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 6. D. An electronic version of the entire application per RFA Section 1.6 E. Governing Body Resolution per RFA Section 1.4 Enclose a copy of the resolution or other formal action taken by the applicant’s governing body or management that: - authorizes this application for project funding at the match amounts indicated in the application - authorizes the individual named as point of contact to represent the applicant for purposes of this application - states the applicant is in compliance with all federal state, and local, laws including existing credit and federal tax obligations. Renewable Energy Fund Grant Application AEA 10/015 Grant Application Page 17 of 31 11/10/2009 Attachment A RESUMES Renewable Energy Fund Grant Application AEA 10/015 Grant Application Page 23 of 31 11/10/2009 Attachment B COST WORKSHEET Renewable Energy Fund Grant Application AEA 10/015 Grant Application Page 24 of 31 11/10/2009 Please note that some fields might not be applicable for all technologies or all project phases. The level of information detail varies according to phase requirements. 1. Renewable Energy Source The Applicant should demonstrate that the renewable energy resource is available on a sustainable basis. Annual average resource availability. ~80% (wind speed > 3.5 m/s) (estimated) Unit depends on project type (e.g. windspeed, hydropower output, biomasss fuel) 2. Existing Energy Generation and Usage a) Basic configuration (if system is part of the Railbelt 1 grid, leave this section blank) i. Number of generators/boilers/other 5 generators ii. Rated capacity of generators/boilers/other 2,880 kW (2x320 kW, 2x665 kW, 1x910 kW) iii. Generator/boilers/other type diesel iv. Age of generators/boilers/other v. Efficiency of generators/boilers/other 14.9 kWh/gal (PCE report to AEA, Sept 2009) b) Annual O&M cost (if system is part of the Railbelt grid, leave this section blank) i. Annual O&M cost for labor $630,859 ii. Annual O&M cost for non-labor $1,893,640 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] 6,905,000 (estimated based on Sept 2009 generator efficiency in PCE report) ii. Fuel usage Diesel [gal] 463,400 (NSB Fuel Division data, 8-08 thru 7-09) Other iii. Peak Load 1,287 kW (estimated, AK Village calculator) iv. Average Load 788 kW (estimated, AK Village calculator) v. Minimum Load 420 kW (estimated, AK Village calculator) vi. Efficiency 14.9 kWh/gal (Sept 2009 PCE report) vii. Future trends 2.8% annual increase in powerplant fuel usage, 2000 to 2009 d) Annual heating fuel usage (fill in as applicable) i. Diesel [gal or MMBtu] ii. Electricity [kWh] iii. Propane [gal or MMBtu] iv. Coal [tons or MMBtu] v. Wood [cords, green tons, dry tons] vi. Other 1 The Railbelt grid connects all customers of Chugach Electric Association, Homer Electric Association, Golden Valley Electric Association, the City of Seward Electric Department, Matanuska Electric Association and Anchorage Municipal Light and Power. Renewable Energy Fund Grant Application AEA 10/015 Grant Application Page 25 of 31 11/10/2009 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] Wind power – 300 kW installed capacity (three NW100 turbines) b) Proposed Annual electricity or heat production (fill in as applicable) i. Electricity [kWh] 1,102,500 (HOMER software; 100% turbine availability) 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 $9,000 (for three wind turbines) d) Annual fuel cost No fuel cost for wind power. 5. Project Benefits a) Amount of fuel displaced for i. Electricity 71,600 gal (271,000 L) (HOMER software; 100% turbine availability; no excess electricity to SL boiler) ii. Heat iii. Transportation b) Price of displaced fuel 2010 price: $3.80/gal (estimated) 2009 price: $3.068/gal ($0.810/L) 2008 price: $4.503/gal ($1.190/L) c) Other economic benefits d) Amount of Alaska public benefits 6. Power Purchase/Sales Price a) Price for power purchase/sale N/A 7. Project Analysis a) Basic Economic Analysis Project benefit/cost ratio 1.83 Payback 12.2 Renewable Energy Fund Grant Application AEA 10/015 Grant Application Page 26 of 31 11/10/2009 Attachment C GRANT BUDGET FORM Milestone or Task Anticipated Completion Date RE- Fund Grantee Matching Source of Matching Funds: TOTALS Grant Funds Funds Cash/In-kind/Federal Grants/Other State Grants/Other Project Scoping 8/1/2010 $10,000 North Slope Borough (NSB) $ Finalize Feasibility Study 10/1/2010 $117,500 Identification/Resolution of land and regulatory issues 11/1/2010 $12,000 $12,000 $ Environmental analysis 12/1/2010 $120,000 $25,000 NSB $ Permit applications & Approval 12/31/2010 $5,000 $15,000 $ Final system design 4/15/2011 $475,000 $10,000 $ Final business and operational plan 4/1/2011 $24,000 Equipment Purchase & Procurement 1/15/2011 $1,380,000 $24,000 Equipment Transportation 6/1/2011 $100,000 Construction Contractor Selection 6/1/2011 $24,000 NSB In-kind Construction & Installation Phases 9/1/2011 $1,327,406 NSB Commissioning, Integration and Testing 10/15/2011 $75,000 $75,000 NSB Operations Reporting 11/1/2011 $12,000 $14,141 NSB TOTALS $3,506,406 $350,641 3857047 Budget Categories: Direct Labor & Benefits 0 $96,067 $ Travel & Per Diem $48,217 $ Equipment $144,652 $14,465 $ Materials & Supplies $1,242,000 $138,000 $ Contractual Services $385,705 $38,570 $ Construction Services $1,402,406 $63,539 $ Other $283,426 $ TOTALS $3,506,406 $350,641 $ Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 28 of 31 9/2/2008 Attachment D Electronic Version Renewable Energy Fund Grant Application AEA 10-015 Grant Application Page 29 of 31 11/10/2009 Attachment E GOVERNING BODY RESOLUTION Renewable Energy Fund Grant Application AEA 10-015 Grant Application Page 30 of 31 11/10/2009 Renewable Energy Fund Grant Application AEA 10-015 Grant Application Page 31 of 31 11/10/2009