Loading...
HomeMy WebLinkAboutChalkyitsik Final ApplicationChalkyitsikWood Energy Heating Program Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 1 of 15 9/2/2008 Application Forms and Instructions The following forms and instructions are provided for 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.html The following application forms are required to be submitted for a grant recommendation: Grant Application Form GrantApp.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 Costworksheet.doc Summary of Cost information that should be addressed by applicants in preparing their application. Grant Budget Form GrantBudget.xls A detailed grant budget that includes a breakdown of costs by task and a summary of funds available and requested to complete the work for which funds are being requested. Grant Budget Form Instructions GrantBudgetInstr.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 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. • 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. Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 2 of 15 9/3/2008 SECTION 1 – APPLICANT INFORMATION Name (Name of utility, IPP, or government entity submitting proposal) Chalkyitsik Village Council Type of Entity: Government Mailing Address Chalkyitsik Village Council P.O. Box 57 Chalkyitsik, AK 99788 Physical Address Telephone 907-848-8117 Fax 907-848-8986 Email willie_salmon07@yahoo.com] 1.1 APPLICANT POINT OF CONTACT Name William A. Wall, PhD Title Project Manager Mailing Address PO Box 988 Seeley Lake, MT 59868 Telephone 406-210-9984 Fax Email williamwall11@gmail.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, 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 09-004 Grant Application Page 3 of 15 9/3/2008 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. Wood Heat Project in Chalkyitsik which will develop the following from Phases 2-3: Complete Phase 2 , Schematic Design; Final Business Plan, Forest Management & Harvest Plan, 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. The project is a wood energy district heating project located in Chalkyitsik for two groups of buildings: District Heat 1: the school, school housing and water system; District Heat 2: the washeteria/water plant and Village/Tribal Office. The applicant is the Chalkyitsik Village Council. The project will be a two year project with completion of project development Phases 2-3 to occur in 2009 and construction Phase 4 to occur in 2010. A level one feasibility boilers and a reconnaissance of forest wood resources has been performed in the summer of 2008 under a DOE Tribal energy grant for Yukon Flats through CATG. A table comparing round wood boiler and chip fed boilers is attached to demonstrate initial analysis and initial potential designs. It is anticipated that round wood fired boilers will be used for simplicity of the harvest system. This will require installation of 2 district heating systems one at the school with 3 stick- fired boilers and the second at the Chalkyitsik Village Council office which will require 2 boilers. Each system will require firing up to 4 times per day on peak heat days and will require approximately 450-500 cords of wood annually to displace 40,750 gallons of fuel oil for heat. A forest survey by boat and plane revealed a good wood resource near the village. There is a small wood harvester entrepreneur interested in increasing his operations to fill the needs of the district heating system. The village council owns equipment which could be used for increasing harvest, or a small harvesting system built around a farm tractor could be installed. A small amount of harvest equipment maybe part of the construction phase. Partners in the project will be CATG Resource Department, Alaska Wood Energy Associates which includes Bill Wall, PhD, Peter Olsen and Greg Koontz. 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. This application requests $88,500 of state funds for a project totaling $108,500 of which $20,000 is in-kind match. State funds will be used to complete phase 2 & 3. Phase 4 construction will include final design and build for the district heating system and will include any additional harvest equipment needed. Projected total construction will be approximately $1,540,425 for boilers and $100,000 for additional harvest equipment. This portion of the project not only includes development of the technical information, but also business training and planning through development of the business plan as a collaborative interactive process with the staff of the Chalkyitsik Village Council and other local participants in the process. These funds will be used for developing a wood delivery design as well as the wood yard and a schematic design for the District heating system. Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 4 of 15 9/3/2008 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. A wood energy project in Chalkyitsik will affect energy costs at 2 scales in the village. The first are local households and the second, which is the key economic driver, are the three commercial buildings, school, school housing & washeteria/water plant. A reliable source of firewood at a cost of approximately $250 per cord split and delivered to households will help displace an unknown amount of fuel oil in the village and reduce heating costs to households. A full cord of seasoned spruce burned at 80% efficiency will displace approximately 100 gallons of heating fuel at $7.00/gallon. This benefit is not reflected in the savings and cost analysis of the project in section 2.5 as it would be only an approximation. The key to this household benefit is that wood delivery is reliable and split ready for use. A household that burns 500 gallons of fuel will spend $3500 on fuel. If that is displaced by 80% with wood, then there is a savings of $2800 per household. Reliable sources of wood in combination with house heating education (a planned village workshop) will encourage investment in cleaner wood burning appliances, thus yielding an environmental benefit as well. A level 1 feasibility and side by side comparison of chip fired boilers and stick fired boilers is attached (see tables 1&2). Expected optimum installation would be a small district heating loop connecting the school, school housing and water plant in conjunction with a waste heat project to capture the heat form the power plant generators. The following are the potential savings: ƒ Target Savings: displace 40,747 gallons with 5 stick fired boilers @ two plant @ $8.00/gallon = $325,976 annual displacement of fuel oil importation. ƒ Wood cost: 450 cords @ $250/ cord seasoned wood = $112,500 for wood ƒ Total net simple savings: $213,476 per year or $3,202,140 over 15 year life of project. A wood energy program can also reduce wildfire risk through forest thinning, enhance wildlife habitat, and most importantly, create local jobs and economy through import substitution. Schools are one of the most expensive buildings to heat in the village and a client that will help with economies of scale for supporting development of a wood energy business model. Reducing energy costs for schools reduces public support costs for education and health care. Wood energy business fits with subsistence lifestyles and creates a greater level of self sufficiency within the village. The process of developing and creating business, management and planning capacity enhances opportunities for increasing long term opportunities for youth to stay in the village with well paying resource based jobs. An integrated wood energy system is one of the best energy and community economic develop projects available to villages with good wood resources and high cost of heating fuels. Equipment selection will be based on the types of lands and forest to be harvested, the transportation system identified, and the type of boilers installed. A fully integrated process from the forest to boiler operation is critical for efficiency and sustainable success of the installation. 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.) $1,540,023 2.5.2 Grant Funds Requested in this application. $88,500 2.5.3 Other Funds to be provided (Project match) $20,000 2.5.4 Total Grant Costs (sum of 2.5.2 and 2.5.3) $108,500 2.5.5 Estimated Benefit (Savings) $329,976 gross annually 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.) $ 4,949,640 gross 15 year life of projects Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 5 of 15 9/3/2008 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. Bill Wall, PhD of Alaska Wood Energy Associates will be the project developer and manager for the project. 3.2 Project Schedule Include a schedule for the proposed work that will be funded by this grant. (You may include a chart or table attachment with a summary of dates below.) A Table of Milestones, Decisions and Activities is attached. The project will be initiated immediately after notification of a positive response to this application. The intent is to complete this project over a two year period (2009-2010) with installation of 3 individual boilers in 2010 in a district heating loop for three buildings. Phase 2-3 will be completed in 2009. A detailed project implementation and projected construction plan will be developed first quarter of 2009 in collaboration with Chalkyitsik City Council. This will also serve a business capacity training exercise as well. A schematic design for boilers will be developed prior to application for construction funds in 3rd quarter of 2009 for installation in 2010. All elements in Phases 2-3, including sales agreements, environmental analysis and landowner ownership agreements will all be completed by October, 2009. 3.3 Project Milestones Define key tasks and decision points in your project and a schedule for achieving them. A Table of Milestones, Decisions and Activities is attached. Decisions: • Level one analysis of stick fired and chip fired boilers has been made. However, a final feasibility report (in progress) and development of final business plan will occur through this project. Final decision on type of boiler systems and feasibility of a successful and sustainable wood energy project will be made prior to requesting funds for construction. • Current analysis has been conducted using Köb Boilers (chip) versus Garn (stick fed). Additional review of chip boilers will occur prior to making a final decision on brand of chip boiler. Tasks: See Milestone Table – below are specific tasks in Phase 2& 3 to be completed prior to Phase 4. • Completion of schematic for each of the boiler installations • Development of the business structure specifically for Chalkyitsik • Completion of business plan • Completion of BTU sales agreements for specific customers • Completion of permitting • Completion of landownership agreements • Completion of environmental analysis These tasks will be completed prior to seeking permission to continue to construction phase and by the end of the first quarter. Responsibilities are listed in table. Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 6 of 15 9/3/2008 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. Ben Stevens: Executive Director of CATG has a background in Business Administration and has been a leader in support of wood energy program in Fort Yukon. CATG is a partner in the project as the CATG Resource Department will support development of a forest management plan through their GIS. Ben will support the program through CATG. Bill Wall, PhD: Project Manager is developing a reconnaissance study for the Yukon Flats villages with a level 1 analysis for a wood heating system in Chalkyitsik. He has worked to develop a sustainable wood energy model for interior villages. Peter Olsen: Forester has developed a cost model for wood harvest in the interior. Peter will support the Forest Harvesting and Management portion of the program. Greg Koontz, ME: Engineer contractor conducting the feasibility analysis and side by side comparison of stick and chip fired boilers. Has experience in biomass operations and energy savings analysis. Greg will develop the optimal schematic design for the boiler installations. Doug Johnson: Professional Growth Systems will support the business develop, business plan and board/employee training to increase business capacity Chalkyitsik and CATG. 3.5 Project Communications Discuss how you plan to monitor the project and keep the Authority informed of the status. Project communications will focus on three areas: 1. Support team and local implementation partners 2. Chalkyitsik Community 3. Funding Partners A detailed implementation matrix of activities, responsibilities and due dates will be developed using a dynamic planning process once full funding is secured. This will be developed as part of a planned training and planning exercise with the Chalkyitsik Village Council, the Chalkyitsik Tribal Council and interested residents. This process creates a full understanding on the part of the community of what is required for a wood heating project to be successful and sustainable. The matrix will be kept current by the project manager and shared monthly with key members of the implementation team. A community meeting will be scheduled in Spring of 2009 or at the implementation kick off to discuss issues with the community. The schedule matrix will be used as the basis to for a quarterly report to inform all granting agencies of implementation progress and any key issues. Thus AEA will receive a quarterly report and informal discussions and calls to the AEA project manager. 3.6 Project Risk Discuss potential problems and how you would address them. Risk during phase 2-3 is low. A collaborative process with the community is designed to keep them informed and used as training for what will be required for a successful and sustainable project. Since this project is anticipated to be a round wood, stick fired boiler project, technical risk is low as well. The primary risk with any wood energy project is developing and maintaining a sustainable and reliable supply of wood and that someone will feed the boiler during cold weather. Determination of the capacity for this to occur is made during the project development process of phases 2-3 and the collaborative development of a business model and plan. Only if there is believed to be a reasonable capacity and determinations to make the project work will the project manager recommend that the project move to the construction phase. Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 7 of 15 9/3/2008 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. A forest survey/reconnaissance was conducted for Chalkyitsik lands in summer of 2008 by Peter Olsen and Bill Wall, PhD. A forest resource review was conducted at that time by boat, plane flyover and on the ground via 4-wheeler. Two recent fires have burned behind the village and will provide a significant amount of seasoned fire wood. An average of 12-15 tons/acre of harvestable woody biomass is available on fully stocked stands of mixed hardwoods and white spruce. An individual entrepreneur has an organized fire wood business. With a small amount of additional equipment, this business could easily supply the 300-350 cords required annually to meet the District Heating installation needs. Wood is the only alternative source of energy readily available to displace fuel oil on a village scale in Chalkyitsik. The positive attributes of a wood energy program are that the program is both an alternative energy program and an economic development program. Harvest and conversion of wood for energy is import substitution and creates local jobs. The greatest local economic benefit occurs when ownership and operations are kept local. A key limiting factor which must be addressed with implementation is to develop the local capacity business, planning and forest management capacity for harvesting operations and feeding boilers. 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 school, school housing and water system are heated with oil boilers as is the washeteria/water system and village office. A system to capture waste heat from the generator is also used at the school water system. The heat capture system maybe dysfunctional at this time and will be part of the investigation and schematic design. Additional information on the specific age of boilers will be collected. A level 1 analysis is in process and not yet completed. The summary is attached in Tables 1 & 2. Each building has a dual installation of Weil McClain or Burnham Boilers. Sizes by BTU/ hour were inventoried and used for feasibility analysis. It is the intent of this project to continue to use the current oil boilers as a back up system to wood boilers. 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. Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 8 of 15 9/3/2008 The existing heat energy resources are locally harvested wood and fuel oil purchased at rack prices for houses and bulk fuel for most of the major commercial buildings. At the household level, a wood energy program as described in this project will create a consistent supply of fire wood for households and may positively affect the willingness of households to invest in efficient and clean burning appliances. At the commercial scale displacing approximately 40,747 gallons of fuel will reduce, but not eliminate, the need for bulk deliveries of fuel into the village. This reduction in the amount of fuel will reduce the frequency of deliveries into the village and probably not affect the price. Chalkyitsik has to fly in all of its liquid fuels. 4.2.3 Existing Energy Market Discuss existing energy use and its market. Discuss impacts your project may have on energy customers. There are two levels of market for each village, households and commercial buildings. The commercial buildings will drive the actual economies of scale for a feasible project to include a harvesting and wood energy utility business. Prices were modeled in the level 1 analysis at $8.00/ gallon. This project will reduce the cost of heat and stabilize the continuous increases being experienced to date for house holds and the commercial buildings service. This project is proposing to create a consistent, inexpensive supply of fire wood for residences and to displace up to 90% of the heating fuel used by up to 5 major buildings with 2 district heating systems one at the school with three boilers installed and one at the washeteria/ water plant with 2 boilers installed. 4.3 Proposed System Include information necessary to describe the system you are intending to develop and address potential system design, land ownership, permits, and environmental issues. 4.3.1 System Design Provide the following information for the proposed renewable energy system: • A description of renewable energy technology specific to project location • Optimum installed capacity • Anticipated capacity factor • Anticipated annual generation • Anticipated barriers • Basic integration concept • Delivery methods • A description of renewable energy technology specific to project location A Level 1 feasibility analysis has been conducted but not available in report form as yet. A tradeoff analysis between Garn 3200 boilers and various models of Köb chip fired boilers has been conducted. A side by side analysis is attached. The analysis identifies 5 buildings which can be formed into 2 district heating systems: 1. the school, school housing and water system; 2. the washeteria & village office. Three Garn 3200 boilers will have to be fired a maximum of 4 times a day during greatest heat loads at the school and 2 Garn 3200 boilers will have to be fired up to 4 times a day at the village offices. An automated chip fired system has a similar net simple payback. Chip fired systems are automated, but the harvest, wood processing and storage are more complex. At this size of system it may make the most sense to use the stick fired approach, as long as labor is available to reliably feed the boiler. However, optimum installation configuration is still being determined in the final boiler feasibility analysis. A final schematic design with costs will be conducted prior to going to a full design. • Optimum installed capacity The optimum installed capacity is to displace 90-100% of the fuel oil used in commercial buildings. This is 40,747 gallons annually and will require 450-500 cords of seasoned Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 9 of 15 9/3/2008 wood annually. • Anticipated capacity factor The anticipated capacity factor displacement of current fuel consumption in a district heating system using stick fed boilers is 90-100%. However, this is dependent on consistent feeding of the district heating system on the coldest days of the year and may drop to below 90% if oil boilers must turn on during extreme cold. • Anticipated annual generation – 450-500 cords per year. • Anticipated barriers There are two key barriers: o a reliable supply of good quality round wood delivered into the village; o reliable labor to feed the boiler; Both of these issues can be dealt with in the project development and design. Part of the feasibility analysis is to determine how best to deal with these issues. • Basic integration concept Heat integration in each of the installations will be designed where the wood boiler is the primary and the existing oil boilers are back up. Integration is critical between the wood harvest and delivery systems and the types of boilers and feeding mechanisms installed. • Delivery methods A wood harvest, delivery, storage and feeding system will be developed during phase 2-3 of the project. 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. Chalkyitsik Native Corporation owns 91,790 acres of lands with a good forest resource. No issues are anticipated regarding either wood harvest or location of the boilers. 4.3.3 Permits Provide the following information is 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 List of permits – • Permits for wood boilers are not required by the State of Alaska for the expected boiler size. However, once a final design and boiler size is determined, the state will be consulted to determine what, if any, regulations apply. • Forest harvesting – The provisions of the Alaska State Forest Practices Act will be incorporated into harvest and delivery of biomass plans. Development of stream crossings, ice roads and summer and winter harvest operations may require special permits. These permits are granted annually, based on harvest and transportation plans. The permitting request process will begin at least one month prior to seasonal operations allowing for 30 days in which the plan can be adjusted based on State suggests. • A clearance from the Alaska State DEC Division of Air Quality will be sought as soon as a final design is developed and prior to construction on boilers. • No major barriers are expected on permitting issues. Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 10 of 15 9/3/2008 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 This section will address both the current application for boilers and the project for biomass harvesting: • Threatened and Endangered Species – no listed species in the project area • Habitat issues – an initial Forest Survey has been completed for the Chalkyitsik ownership near the village. Opportunities for enhancing moose habitat will be sought and developed. No significant negative habitat impacts outside the natural range of variation in this fire driven ecosystem are expected. Harvesting of over mature spruce and hardwood stands is not expected to be a major portion of the target for biomass production, but their use could have some small scale local impacts on Neotropical migratory bird species. • Wetlands and other protected areas – The Alaska State Forest Practices Act will be followed in all harvest operations. Accessing or crossing wetlands will only be done during winter when frozen. CATG Resource Department has an excellent GIS system and has done mapping on key sensitive areas for each of the villages in Yukon Flats region. These will be noted during forest harvest transportation planning. • Land Development Constraints – none are anticipated at this time. • Telecommunications Interference – none are anticipated at this time. • Aviation Considerations – none are anticipated at this time, • Visual and aesthetic impacts – Harvesting of biomass can create unaesthetic impacts on the forest. FPA required buffers keep harvesting from banks and visibility corridors. Forest planning can deal effectively with these issues. The wood yard will be fenced and located on the edge of the village (both current sites). Wood chip deliveries to sites where noise maybe an issue will be scheduled such that minimum impact will occur. • Potential Project Barriers – The approach that the project developers have taken in the development of the Chalkyitsik program to date is that this will be a community based project of converting a village to substantial wood use for heating. We have tried to anticipate many of the barriers and provide ways to bridge these barriers. However, some additional barriers will emerge as the project moves forward. Key barriers identified: o Organization cooperation: developing cooperation among the various key organizations that are now acting as partners is critical. Chalkyitsik is a member of CATG and will have working relationship with the CATG Resource Department for land management support. o For Profit Model Simultaneous Development of Supply, Delivery & Demand Creating a local structure for a for-profit model for harvesting and converting biomass and a wood energy utility was key to being confident that both the biomass supply side and BTU demand side were installed in sync. Thus we have 2 projects: biomass harvest – supply; and boiler installation and operations – demand. Appropriate economic incentives are being put in the correct places for economic sustainability. A final business plan will be developed to fit the situation in Chalkyitsik. The Chalkyitsik Village Council will most likely be the owner of the Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 11 of 15 9/3/2008 District heating system and a local entrepreneur will likely be the wood supplier. 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 Total Cost Phase2-3: $108,500 Total Cost Phase 4: $1,540,023 Total grant funding requested Phase 2-3 : $88,500 In-Kind Funds: $20,000 Capital Costs: $1,169,202 Development Costs: $401,222 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 Project O&M costs will be estimated through this project. If a decision is made that 2 district heat systems with 5 stick fired boilers installed, then maintenance costs are minimal and operations are primarily the cost of labor to feed the boilers and cost wood fuel. 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 primary largest customer in town is the school district which includes the school and teacher housing. The next largest customers are the water plant and washeteria operated by the city, who may also be the owner of the district heating system. Letter of support from the School Superintendent is attached. An RBEG from DOE has allowed the development of a draft template BTU purchase agreement, which is culturally relevant to rural Alaska as well as a stumpage sale agreement. These templates will be used as the starting point for development of final agreements. 4.4.4 Cost Worksheet Complete the cost worksheet form which provides summary information that will be considered in evaluating the project. Attached Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 12 of 15 9/3/2008 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. A final business plan will be completed at the initiation of phase 3 of the project. The basic business model with financial modeling for all phases has been conducted (see attached Tables 1&2). Financial modeling to date includes an initial harvest cost analysis which includes cost of forest harvesting equipment, labor, maintenance, insurance, and fuel costs. The models for wood harvest and boiler performance are attached. A final business plan will be developed in collaboration with the Chalkyitsik Village Council and others as a business training exercise with the following major topics: • Executive summary • Community information • Management infrastructure • Financial data • Key assumptions • Capital replacement schedule • Funding legal authority and issues • Inter-agency and organization relationships. 4.4.6 Analysis and Recommendations Provide information about the economic analysis and the proposed project. Discuss your recommendation for additional project development work. An economic level 1 analysis has been conducted on two types of boiler chip-fired and round wood attached in tables 1& 2. Net simple paybacks are 5-6 years for two small district heating systems. Only a reconnaissance survey has been conducted of the forest demonstrating that there is a sustainable wood supply. A more detailed analysis on boilers costs needs to be conducted. At this point both a chip system and a stick-fired system appear to payback about equally and be worthy of installation. One is automated the other requires had feeding and trade offs beyond costs needs to be conducted. A cost analysis based on equipment available for wood harvest in comparison to purchase of some additional harvest equipment needs to be made. A full feasibility analysis which includes all aspects of sustainability ecological, economic and social needs to be developed to determine if the project will be sustainably operated. Recommend a full study which includes Phase 2-3 be conducted prior to deciding on construction and purchase of additional harvest equipment. 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 Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 13 of 15 9/3/2008 Project Benefit: • Fuel Displacement: Annual fuel displacement is 40,747 gallons @ current price of $8.00 per gallon is $325,976. At a project life of 15 years total gallons displaced are 611,205 with a total gross savings of $4,889,640. • Anticipate Revenues: At a delivered wood fuel price of $250/cord for 20% moisture total demand of 450 cords the wood harvest and delivery company will derive an annual gross income of $112,500. The intent of the program is to be both an economically viable wood utility and a service to the community and primary commercial customers. • Annual Incentives: Tax credits or other annual incentives have not been explored as yet. • Green Credits: CATG has been contacted by several organizations regarding the potential sale of green credits. Until the scope of the project and the need for additional incentives has been fully understood within the context of the partners, Green Credits have not been explored as yet. • Non-economic benefits: The woody biomass harvest and boiler installations, in combination create significant non-economic benefits. In multiple discussions and presentations, community members have commented on how wood energy will create local jobs that are consistent with their subsistence lifestyles. Community leaders have commented on how utilizing local resources helps create a culture of sustainability and self sufficiency, and reduce dependence on outside energy sources. A wood energy program can also reduce wildfire risk through forest thinning, enhance wildlife habitat and most importantly create local jobs and economy through import substitution. Schools are one of the most expensive buildings to heat in the village and a client that will help with economies of scale for supporting development of a wood energy business model. Reducing energy costs for schools and clinic reduces public support costs for education and health care. Wood energy business fits with subsistence lifestyles and creates a greater level of self sufficiency within the village. The process of developing and creating business, management and planning capacity enhances opportunities for increasing long term opportunities for youth to stay in the village with well paying resource based jobs. An integrated wood energy system is one of the best energy and community economic develop projects available to villages with a sustainable source of wood. 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 Investments to date include a grant from DOE Tribal Energy Program to CATG for a Yukon Flats Village level one reconnaissance and feasibility study. The $150,000 grant was shared among 5 villages that expressed interest in developing a wood energy program. Chalkyitsik was one of the villages. Phase II: Project Feasibility Task One: Project Initiation and Dynamic Planning – A major facilitated planning meeting will be held at the outset of the project to develop a specific dynamic planning outline among all the major partners to coordinate work, responsibilities, and timing of activities. • Total costs = $19,500 ƒ Requested Funds = $14,500 ƒ Travel Funds = $2,000 ƒ Cash Match = $ ƒ In-Kind = $5,000 Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 14 of 15 9/3/2008 Task Two: Completion of all elements of Phase 2 in project development in association with Chalkyitsik Village Council • Total Costs = $32,000 • Requested funds = $27,000 • Travel Funds = $2,000 • In-kind support = $5,000 Task Three: Boiler Installation Schematic Design – Total Cost = $9,000 ƒ Requested Funds = $9,000 ƒ Travel Funds = $1000 ƒ In-kind = $ Task Four: Harvest Delivery Final Deign and wood cost modeling ƒ Total Cost $6,000 ƒ Requested funds = $6000 ƒ Travel funds = $1000 ƒ In-kind support = $ Task Five: Final Business plan wood harvest and boiler operations – Collaborative process with Chalkyitsik Village Council ƒ Total costs = $15,000 ƒ Requested funds = $10,000 ƒ Federal funds = ƒ In-kind Match = $5,000 l Task six: Project management and administration. ƒ Total cost $32,000 ƒ Requested funds = $27,000 ƒ Travel Funds = $2000 ƒ In-kind = $5000 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 09-004 Grant Application Page 15 of 15 9/3/2008 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 William A. Wall, PhD Signature Title Authorized Project Manager Date November 9, 2008  Renewable Energy Fund   Application Cost Worksheet - Chalkyitsik Please note that some fields might not be applicable for all technologies or all project phases. Level of information detail varies according to phase requirements. 1. Renewable Energy Source -- Harvested Wood The Applicant should demonstrate that the renewable energy resource is available on a sustainable basis. Annual average resource availability. > 1000 tons/cords annually – sustainable harvest potential – 450-500 cords needed for project Unit depends on project type (e.g. windspeed, hydropower output, biomasss fuel) 2. Existing Energy Generation a) Basic configuration (if system is part of the railbelt grid, leave this section blank) i. Number of generators/boilers/other 2 boilers per building x 5 buildings = 10 ii. Rated capacity of generators/boilers/other Range from 135KBTU/hr – 805KBTU/hr iii. Generator/boilers/other type Oil fired boilers iv. Age of generators/boilers/other Variable 2-10 years v. Efficiency of generators/boilers/other Oil boilers = 85% b) Annual O&M cost i. Annual O&M cost for labor $25,000 ii. Annual O&M cost for non-labor $20,000 c) Annual electricity production and fuel usage (fill in as applicable) i. Electricity [kWh] ii. Fuel usage (if system is part of the Railbelt grid, leave this section blank Diesel [gal] Other iii. Peak Load iv. Average Load v. Minimum Load vi. Efficiency vii. Future trends d) Annual heating fuel usage (fill in as applicable) i. Diesel [gal or MMBtu] 40,747 gallons for heat targeted for displacement ii. Electricity [kWh] iii. Propane [gal or MMBtu] iv. Coal [tons or MMBtu] v. Wood [cords, green tons, dry tons] 450-500 seasoned cords needed to displace fuel oil vi. Other Current wood use unknown RFA AEA 09-004 Application Cost Worksheet Page 1  Renewable Energy Fund   3. Proposed System Design a) Installed capacity 5 Garn 3200 2 district heat systems – displace 40,747 gallons b) Annual renewable electricity generation 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] 450-500 cords seasoned wood required vi. Other 4. Project Cost a) Total capital cost of new system $1,168,202 b) Development cost $401,222 c) Annual O&M cost of new system $45,000 d) Annual fuel cost $112,500 5. Project Benefits a) Amount of fuel displaced for i. Electricity ii. Heat 40,747 gallons of fuel iii. Transportation b) Price of displaced fuel $325,976 annually c) Other economic benefits Local employment, import substitution into village d) Amount of Alaska public benefits Reduce costs of heating school, district office, 6. Power Purchase/Sales Price a) Price for power purchase/sale Sell heat BTUs @ between $28.88 – $36.10/MMBTUs Sell chips @ $175-$200/green ton & $250/cord split 7. Project Analysis a) Basic Economic Analysis Project benefit/cost ratio 3:1 on 15 year project Payback 5 years @ school & 6 years @ village office RFA AEA 09-004 Application Cost Worksheet Page 2 Alaska Energy Authority ‐ Renewable Energy FundChalkyitsik Wood Energy Project Phases 2‐3 FYI 2009BUDGET INFORMATIONBUDGET SUMMARY:Milestone or Task Federal FundsState FundsLocal Match Funds (Cash)Local Match Funds (In‐Kind)Other FunTOTALS1 Project Planning & business training $12,500 $5,000 $17,5002 Completion Phase 2 $20,000 $5,000 $25,0003 Boiler installatin schematic design $8,000 $8,0004 Harvest/ delivery system final design $5,000 $5,0005 Final Business Plan ‐ wood harvest and boilers $10,000 $5,000 $15,0006 Project Management & Administration $25,000 $5,000 $30,0007 Travel support $8,000 $8,000Totals $88,500 $20,000 $108,500Milestone # or Task #BUDGET CATAGORIES:1 2 3 4 5 6 TOTALSDirect Labor and Benefits $5,000 $5,000 $5,000 $5,000 $20,000Travel, Meals, or Per Diem $2,000 $2,000 $1,000 $1,000 $2,000 $8,000Equipment$0Supplies$0Contractual Services $12,500 $20,000 $8,000 $5,000 $10,000 $25,000 $80,500Construction Services$0Other Direct Costs$0.00TOTAL DIRECT CHARGES $19,500 $27,000 $9,000 $6,000 $15,000 $32,000 $108,500RFA AEA09-004 Budget Form Table 1. Summary of stick fired and chip fired boilers for Chalkyitsik. Summary Chalkyitsik >Three buildings were looked at individually, and then a potential district heating plant to serve all three was studied. In each case, a stick-fired option and a chip-fired option was studied. In general, the chip-fired options require a large building (or DH plant) to have enough economy of scale to be cost effective. >The three buildings are the Washeteria/Water Plant, the School, and the School Housing >See the TAB "V - C Inputs" for base assumptions for the model, including the cost of oil and wood chips. >Estimated project costs include construction, as well as design, construction admin, commissioning, and contingency (soft. costs). Only the major line items are shown here. >Do not make changes to any parameters in this sheet; it is just a Summary. To change parameters, go to V-C Inputs TAB. Summary of Results School Water Treat Sch Housing DH Plant Comm CenterCC + Village Off Stick-fired Performnace baseline oil consumption :20,586 7,304 4,977 32,866 14,404 17,881 proposed biomass, cords/yr :179 63 43 285 129 157 fraction of oil displaced :1.000 1.000 1.000 1.000 1.000 1.000 Garn model : WHS 3,200 WHS 2,000 WHS 1,500 WHS 3,200 WHS 3,200 WHS 3,200 No. of boilers : 21132 2 Maximum wood loads per day req. : 4.0 3.8 3.9 4.0 2.7 3.2 Stick-fired Cost and savings : boilers, shipped and installed : $268,221 $125,959 $118,307 $402,331 $268,221 $268,221 Slab/Building for Boilers : $20,000 $15,000 $15,000 $25,000 $15,000 $25,000 direct buried piping :$16,400 $16,400 $16,400 $117,650 $16,400 $58,500 interconnection :$35,000 $35,000 $35,000 $105,000 $35,000 $70,000 other :$15,000 $15,000 $15,000 $60,000 $15,000 $37,500 subtotal :$354,621 $207,359 $199,707 $709,981 $349,621 $459,221 soft costs : $112,592 $65,836 $63,407 $225,419 $111,005 $145,803 total : $467,213 $273,195 $263,114 $935,400 $460,625 $605,023 baseline oil cost :$164,688 $58,429 $39,814 $262,931 $115,232 $143,047 final oil cost : cord wood cost : $44,853 $15,783 $10,791 $71,341 $32,222 $39,326 total savings : $119,835 $42,646 $29,023 $191,590 $83,010 $103,721 Chip-fired Performnace : baseline oil consumption :20,586 7,304 4,977 32,866 14,404 17,881 proposed biomass, tons/yr :235 59 11 398 165 220 fraction of oil displaced :0.769 0.543 0.155 0.815 0.769 0.829 Kob model : Pyrot 220 Pyrot 100 Pyrot 100 Pyrot 300 Pyrot 150 Pyrot 150 No. of boilers : 11111 1 Chip-fired Cost and savings : boilers, shipped and installed : $228,898 $202,537 $202,537 $259,347 $216,184 $216,184 Slab/Building for Boilers : $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 direct buried piping :$16,400 $16,400 $16,400 $117,650 $16,400 $58,500 interconnection :$20,000 $20,000 $20,000 $60,000 $20,000 $40,000 other :$15,000 $15,000 $15,000 $60,000 $15,000 $40,000 subtotal :$285,298 $258,937 $258,937 $501,997 $272,584 $359,684 soft costs :$90,582 $82,213 $82,213 $159,384 $86,545 $114,200 total : $375,880 $341,150 $341,150 $661,382 $359,129 $473,884 baseline oil cost :$164,688 $58,429 $39,814 $262,931 $115,232 $143,047 final oil cost : $38,031 $26,705 $33,662 $48,546 $26,669 $24,445 chip cost : $41,181 $10,315 $2,000 $69,704 $28,795 $38,562 total savings : $85,476 $21,410 $4,152 $144,681 $59,768 $80,040 Net Simple Payback stick-fired :3.9 yrs 6.4 yrs 9.1 yrs 4.9 yrs 5.5 yrs 5.8 yrs chip-fired : 4.4 yrs 15.9 yrs 82.2 yrs 4.6 yrs 6.0 yrs 5.9 yrs Table 2. Assumptions used for boiler analysis. Global Inputs Venetie - Chalkyitsik fuel : cost of oil :$8.00 per gallon assumption heat content of oil :134,000 BTU/gal ASHRAE : cost of chips :$175.00 per green ton assumption heat content of wood chips, dry :8,300 BTU/lb assumption average moistue content when used, MC :0.400 assumption average fuel temp :45 deg F assumption heat content of chips at MC :4,252 BTU/lb calc unit cost :20.58 $/mmBTU calc : cost of cordwood :$250.00 per cord assumption heat content of air-dried cordwod :16.2 mmBTU/cord wood heat reference storage tank losses as a percent of capacity :0.005 assumption unit cost :15.43 $/mmBTU calc : electricity :$0.55 per kWh : Boiler efficienc y : Kob chip-fired :0.880 Garn stick-fired :0.840 No 1 oil-fired :0.830 : Insulpex Pipe : assume carrier pipe nominal ID :3.56 in basis of calc assume casing OD :6.40 in basis of calc k value of insulation :0.0150 BTU*ft/hr*sf*deg F mfg data heat loss per foot per deg F delta T :0.1609 BTU/ft/deg F calc : glycol : fraction of glycol (propelyne):0.60 standard in the area density at 180 deg F :62.610 lb/ft^3 tables heat capacity at 180 deg F :0.864 BTU/lb*deg F tables density specific heat product :433.9 BTU/hr/gpm/deg F calc : at peak load : HWS :180 deg F assumption building delta T :20 deg F assumption ground temp, active layer (insulpex):0 deg F Dwayne Miller permafrost temp (utilidor):10 deg F assumption : From Rehau catalog 4", 180 deg F delta T, 40" bury, wet soil, 40" deep :41.6 BTU/ft (heat loss)mfg data 2", 180 deg F delta T, 40" bury, wet soil, 40" deep :22.5 BTU/ft (heat loss)mfg data : max flow rate at 5 ft/100, 1", 180 deg F, 50% gly :6 gpm mfg data max flow rate at 5 ft/100, 1.5", 180 deg F, 50% gly :16 gpm mfg data max flow rate at 5 ft/100, 2", 180 deg F, 50% gly :34 gpm mfg data max flow rate at 5 ft/100, 2.5", 180 deg F, 50% gly :55 gpm mfg data max flow rate at 5 ft/100, 3", 180 deg F, 50% gly :90 gpm mfg data max flow rate at 5 ft/100, 3.5", 180 deg F, 50% gly :150 gpm mfg data max flow rate at 5 ft/100, 4", 180 deg F, 50% gly :250 gpm mfg data Soft Costs soft costs as a percent of construction cost :0.318 based on Ft Yukon Chalkyitsik Wood Energy Program Milestone & Activity Table * WW William Wall – Project manager CH Chalkyitsik Village Council PO Peter Olsen – Forester GK Greg Koontz – Engineer DJ Doug Johnson – Training and facilitation – Professional Growth Systems AWEA Alaska Wood Energy Associates MILESTONES, DESCISIONS & ACTIVITIES WHO* START Month END Month EXPECTED OUTCOMES 1st 2nd 3rd Quarter (April- December 2009 ) Phase 2-3 Complete contract with AEA & Ven & AWEA Finalize project implementation plan – Dynamic planning Finalize feasibility Complete Schematic Design for boilers Final Business Plan Permitting process Land ownership agreements Environmental Analyses Power Sales Agreement Quarterly reports due WW, CH WW, PO, DJ, CH WW, PO, GK WW, GK Ven, DJ,PO WW, CH WW, CH WW, CH WW, CH WW 1 1 1 1 1 1 1 1 2 3 1 3 9 9 9 5 5 5 5 3, 6, 9 Initialize work on Alternative Energy Grant Establish work completion timelines Finalize feasibility study Schematic Design delivered to contract Engineers Facilitated collaborative development of final business plan All necessary applications made for permits as required All necessary land agreements are made with cooperators Final checks on any key environmental issues completed Power sales agreements negotiated and completed Quarterly Report due to AEA Yukon Flats School District P. O. Box 350 Fort Yukon, AK 99740 P: (907) 662-2515 or 1.800.322.2515 F: (907) 662-3094 or 2519 www.yukonflats.net Arctic Village Beaver Central Chalkyitsik Circle Fort Yukon Stevens Village Venetie February 8, 2008 William R. Walz, Superintendent Yukon Flats School District RE: Letter of Intent to Use Wood Heat for School and Gym in Fort Yukon To Whom It May Concern: The Yukon Flats School District is fully supportive of the woody biomass energy program being developed in Fort Yukon and Yukon Flats Region. I personally am aware of the community benefits of a woody biomass program as an economic development project as well as the potential cost savings on fuel to heat our school and gym. I have experience with the ‘fuels for schools’ programs in the lower 48 and have an understanding of what is involved in a project such as this. Through a Statement of Interest, the district applied to the Alaska Wood Energy Development Task Group last summer. A pre-feasibility study demonstrated that the Fort Yukon School and Gym use over 30,000 gallons of fuel oil annually for heat at $4.00 per gallon and an annual cost of $120,000 dollars. We are working with AVI to conduct feasibility and payback analysis on installing either a Garn boiler or an automated chip fed boiler. We expect that this installation and purchase of wood fuel offer significant savings over the life of the project. Pending Yukon Flats School Board approval of final design and securing funding, it is our intent to utilize woody biomass for heat and to purchase this fuel from GZ Corporation. I fully support this application for funds to help “jump start” the integrated woody biomass program in Fort Yukon and the Yukon Flats Region. Sincerely; William R. Walz Superintendent .