HomeMy WebLinkAboutHomer Tidal Application w All Attachments
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 1 of 21 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 21 9/3/2008
SECTION 1 – APPLICANT INFORMATION
Name (Name of utility, IPP, or government entity submitting proposal)
City of Homer
Type of Entity:
Municipal government
Mailing Address
491 E. Pioneer Avenue
Homer, AK 99603
Physical Address
491 E. Pioneer Avenue
Homer, AK 99603
Telephone
907-235-8121
Fax
907-235-3148
Email
wwrede@ci.homer.ak.us
1.1 APPLICANT POINT OF CONTACT
Name
Carey Meyer
Title
Public Works Director, City of Homer
Mailing Address
3575 Heath Street
Homer, AK 99603
Telephone
907-235-3170
Fax
907-235-3145
Email
cmeyer@ci.homer.ak.us
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 21 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.
The project proposed here is a Reconnaissance and Resource Assessment/Feasibility
Analysis/Conceptual Design initiative to determine tidal energy potential in Kachemak Bay,
Alaska. Specifically, the communities of Homer, Seldovia, and Port Graham are collaborating to
determine potential sites, energy output, system designs, costs, institutional issues, and related
parameters for future tidal energy development.
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 City of Homer, with participation from Seldovia Village Tribe and the Port Graham Village
Council, proposes to assess the tidal energy potential and development feasibility of four sites
within Kachemak Bay. The National Oceanic and Atmospheric Administration (NOAA) will be the
lead technology provider through the Center for Operational Oceanographic Products and
Services (CO- OPS) and the Kasitsna Bay Laboratory, which is the Coastal Marine Ecosystem
Research Laboratory for NOAA in Kachemak Bay. NOAA will deploy both stationary and roving
Acoustic Doppler Current Profiling (ADCP) devices, conduct bathymetric mapping, and integrate
other existing and new data to construct a comprehensive tidal, energetic, and circulation flow
model of the entire Kachemak Bay region. This model will be focused on providing the neces-
sary outputs to determine power densities and to conduct detailed and site specific tidal energy
feasibility studies, but it will also have multiple public benefits beyond assessing tidal energy,
such as improved spill response, mariculture siting, and impact assessment of local develop-
ment projects. Terrasond, an industry leading terrestrial and marine floor mapping consultancy
firm, will provide additional technical assistance on data collection and spatial data analysis to
contribute to the circulation model and generate power density values. Re vision consulting
LLC, a lead investigator and author on numerous Electric Power Research Institute (EPRI) and
other utility ocean energy studies, will then process the NOAA- generated data and model to
conduct technical and economic feasibility studies on four selected sites within Kachemak Bay—
two near Homer and one each near Seldovia and Port Graham/Nanwalek. A conceptual design
for optimal tidal energy production will emerge from the feasibility studies. The Kachemak Bay
Research Reserve, a collaboration between NOAA and the Alaska Department of Fish & Game,
will investigate potential biological impacts, inventory biological resources in areas identified
for potential development, and assist with associated permitting issues. Deerstone Consulting,
a renewable energy consulting firm working with the City of Homer on implementation of the
City’s Climate Action Plan, will provide additional technical assistance in the areas of
permitting, data collection and analysis, and project coordination. An assumed project start
date of July 1, 2009 will result in project completion in 12 months, i.e., July 1, 2010. The total
project budget is $1,154,341, of which $482,387 is requested via this proposal, and the
remainder, $671,954, is provided as matching contributions, for a 58% cost- share. Of the
$482,287 requested from AEA, Phase 1 (reconnaissance) would require $79,910 of AEA funds
and phase 2 (feasibility and conceptual design) would require $403,387 of AEA funds.
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.
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 4 of 21 9/3/2008
The total project budget proposed here for the reconnaissance and feasibility stages is
$1,154,341. This total includes $482,387 requested from AEA and confirmed $671,954 in
cost- share contributed by NOAA, re vision consulting, Deerstone Consulting, and the City of
Homer. These contributions amount to a 58% match. Total phase 1 requested funds are
$79,910 and matching funds are $60,100. Total phase 2 requested funds are $403,387 and
matching funds are $610,994.
The total project cost through construction of a hypothetical 250 kW tidal turbine is based on
assumptions of future installed cost per kW from published industry data, namely a recent 1.2
MW project in the United Kingdom by Marine Current Turbines, which stated a $5,377/kW
installed figure. This leads to a total project cost of $2,498,591, which includes the proposed
budget for the feasibility phase of $1,154,341, and a design and construction budget of
$1,344,250. It should be noted that a 250 kW project is of relatively small size, but given the
early stage of development of the technology, we are assuming a project of this size as a “proof
of concept” that, if successful, would likely lead to more and larger projects. The feasibility
study proposed here would have application for other and larger projects as well, and thus
would be even more cost effective in leveraging these funds for additional renewable energy
development. Based on the assumed 250 kW turbine, it is estimated that the $1,344,250
project completion costs would be evenly split; i.e., $672,125 each, between final design and
construction phases.
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.
According to estimates of future avoided cost of electricity, HEA will be paying at least $.109
per kWh in 2012 (stated by Chugach Electric). For a 250kW system in a current peaking at
6 knots, this would lead to $71,613 in annual revenue less $5,748 in annual parts and supplies.
Over the 20 year lifetime of this project this will come to $1,317,300 in net revenue. This is
likely a very conservative number because if the tidal resource is determined to be viable, then
it is probable that systems and projects larger than 250 kW would be installed. If this is the
case, then the cost of this single feasibility study, which could lead to multiple installations
throughout Kachemak Bay, would be spread over more revenue than what is generated by a
single 250 kW installation and the project economics would be much improved.
Additional public benefits will include $49,228 in contracts to Alaskan businesses in the
feasibility study. Through project construction an additional estimated $336,062 in contracts to
Alaskan businesses will be expected.
The operation and maintenance of the 250kW turbine is expected to cost $22,995 annually
($0.035/kWh and 30% capacity factor for production). Of these operation and maintenance
costs, an estimated 25% will be for parts and supplies and the remaining 75% will be in
contractual costs to Alaskan marine service companies, amounting to $17,246 annually. Over
the 20 year lifetime of the project this will total $344,925. It is assumed that the parts and
supply costs will not be spent in Alaska (and thus, are not included as public benefits), but the
contractual costs will go to an Alaska company, and are considered public benefits.
Additional public benefits associated with this project include ancillary uses of the tidal
circulation flow model that will be produced by NOAA, which include the mariculture industry,
oil spill response, and fisheries management. Kachemak Bay is world renowned for its oysters.
This mariculture industry is valued at approximately $1 million annually. We estimate that
improved management associated with this model will result in increased value of $25,000
annually. Over a 20 year lifecycle of the installed project, this would amount to $500,000. In
terms of improved spill response, Kachemak Bay is considered a port of refuge for damaged
vessels in Cook Inlet. This was dramatically demonstrated two years ago when an oil tanker
docked in Nikiski suffered damage and required towing to Homer. This situation did not result
in any oil spilled but publicly highlighted the issue. It was stated at the time that spill response
contingencies needed improvement, including better understanding of the tides and currents in
Kachemak Bay in case of an oil or other toxic chemical spill. Given the increased interest in oil
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 5 of 21 9/3/2008
exploration in the region, it is expected that an improved understanding of tides and currents
in Kachemak Bay could result in improved spill response and reduced harm to existing natural
resources. Assuming even one fairly large spill during the 20 year lifetime of the proposed
project, this can be reasonably estimated to provide $100,000 of additional public benefit.
It is widely recognized that Alaska has some of the best potential of anywhere in the world for
generating tidal energy. This proposed Kachemak Bay project, in combination with other nearby
initiatives such as upper Cook Inlet, could help to establish an Alaska- based industry and
global leadership in tidal power. While there are perhaps numerous locations throughout the
state that may be feasible, there are many reasons to begin establishing this industry in
population centers on the road system to reduce early development costs. An initial investment
of less than $500,000 by AEA in this project will allow a leveraging of more than an additional
$670,000 through direct project cost- share. This is a substantial public benefit that will not
occur without AEA’s support.
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.) $2,498,591
2.5.2 Grant Funds Requested in this application. $482,387
2.5.3 Other Funds to be provided (Project match) $672,125
2.5.4 Total Grant Costs (sum of 2.5.2 and 2.5.3) $1,154,341
2.5.5 Estimated Benefit (Savings) $71,613 annually; $1,432,260
over project lifetime
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.)
$1,330,215 – see section 2.4
for explanation
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.
Project manager for the Kachemak Bay tidal feasibility project will be Carey Meyer. Mr. Meyer, a
professional engineer, has been the Public Works Director for the City of Homer since 1999. His
resume and references are attached. We have established a team of City and Tribal staff,
contracted technical experts, and government agency personnel who will all contribute to the
project. This team is described in more detail below.
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.)
Proposed project schedule (N o t e: c o m p l e t i o n d a t e s b e l o w a r e b o l d a n d u n d e r l i n e d ):
1 . S i t e r eco n n a i s s a n ce (P h a s e 1 ) - Be g i n 7 /0 9 ; C o m p l e t e 8 /0 9
Sub- tasks:
a. Project partner kick- off meeting; coordinate data needs and establish data
transition plans – 7 /0 9
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 6 of 21 9/3/2008
b. Collect all existing relevant data such as bathymetry, ownership maps, biological
data, possible electrical grid interconnection points and other existing
infrastructure, navigational information, current flows, traditional knowledge,
etc. – 7 /0 9
c. Determine what data is necessary but does not yet exist, such as additional
bathymetric maps, current flows, land ownership, etc. – 7 /0 9
d. Establish detailed monitoring plan to collect additional data to determine current
speeds, power density, biological and navigational impacts – 8 /0 9
2 . F e a s i b i l i t y S t u d y (P h a se 2 ) – Be g i n 8 /0 9 ; C o m p l e t e 5 /1 0
a. Deploy Acoustic Doppler Current Profiling (ADCP) devices (stationary and mobile)
to determine tidal flows and current speeds over a range of time and selected
areas – 1 0 /0 9
b. Conduct necessary biological studies to determine potential conflicts and
preliminary impacts to biota from tidal energy development – 2 /1 0
c. Process data to determine power densities over time and space; generate report,
model, and graphical overlays – 2 /1 0
d. Based on 2.c above, select optimal site(s); conduct technical and economic
analysis under various assumptions to determine power production costs,
output, and availability – 5 /1 0
e. Identify necessary permits and apply where necessary – 5 /1 0
f. Determine feasibility of overall project. If “not feasible,” terminate the project. If
“feasible,” continue with next step – 5 /1 0
3 . C o n ce p t u a l D e s i g n (P h a s e 2 ) – Be g i n 5 /1 0 ; C o m p l e t e 7 /1 0
a. Select an optimal design and system to harness tidal energy – 5 /1 0
b. Develop a more precise construction budget – 5 /1 0
c. Examine and select preferred institutional configuration(s) – 6 /1 0
d. Draft and distribute final report – 7 /1 0
3.3 Project Milestones
Define key tasks and decision points in your project and a schedule for achieving them.
The following project milestones have been identified:
P h a s e 1 :
! Partner meeting to coordinate roles, expectations, timelines, and data transitions from
collection to processing/analyzing (7/09)
! Report identifying existing data gaps and strategies to fill in those gaps (7/09)
! Detailed monitoring plan for tidal characterization and circulation model; agreed to by
all project partners (8/09)
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 7 of 21 9/3/2008
P h a s e 2 :
! Field work: successful deployment of ADCP sensors and collection of tidal data for at
least a full lunar cycle (10/09)
! Technical report and graphical outlay based on model and collected tidal data analysis
delivered by NOAA to identify high energy areas within Kachemak Bay (2/10)
! Four sites selected for detailed feasibility analysis (or, determine that there are no
adequate sites, and terminate project) (2/10)
! Preliminary biological assessment complete; report delivered (2/10)
! Technical and economic feasibility study completed (5/10)
! Permits identified and applied for, if warranted (5/10)
! If feasible, compare technologies and develop preliminary construction budget (5/10)
! Final report completed (7/10)
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.
The City of Homer will be working closely with representatives from other government agencies
(e.g., Alaska Department of Fish and Game and the National Oceanic and Atmospheric Admini-
stration), along with leaders from Kachemak Bay tribal organizations (Seldovia Village Tribe and
Port Graham Village Council), and with private contractors (re vision consulting, Terrasond, and
Deerstone Consulting). This project team combines high- level national expertise and tremen-
dous local knowledge in this collaborative effort, and demonstrates how renewable energy can
bring together diverse and unique interests.
While Homer is the largest community on Kachemak Bay and connected by the main road
system, both Seldovia and Port Graham on the south shore of the Bay are not connected by
road, but are connected by power lines. Both of these smaller, more remote communities are
participating in this project as well, and will provide local personnel, traditional knowledge for
siting and potential impacts, and local support for data collection. Based on a cursory
assessment of tidal flows in the region, it is also expected that these locations may have some
of the strongest currents, and thus, best opportunities for tidal power generation.
The NOAA National Ocean Service (NOS) Center for Operational Oceanographic Products and
Services (CO- OPS) is the leading US authority on tides and tidal currents. CO- OPS and its
predecessors have been providing tidal predictions to promote safe and efficient navigation
since 1807. The CO- OPS National Current Observation Program (NCOP) meets the Nation's
needs for current observations, tidal current predictions, and other tidal current products. The
products from this program primarily support safe, efficient and environmentally sound marine
commerce, hazardous material response, research, and recreational users. NCOP has recently
completed a survey of tidal currents and calculated updated predictions for inclusion in the US
Tidal Current Tables at over 30 locations in Cook Inlet including the entrance to Kachemak Bay.
CO- OPS will be the technical lead on the data collection effort. They currently have a tidal
model for lower Cook Inlet and recent bathymetric maps of Kachemak Bay. The existing model
provides low resolution output, but will be useful to guide the proposed data collection effort to
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 8 of 21 9/3/2008
produce a comprehensive tidal and circulation flow model. This new model will provide high
quality output to determine site specific power densities for all of Kachemak Bay, and will guide
the feasibility analysis. As well, this new model will be useful for other purposes such as spill
response, mariculture, fisheries management, and related resource management activities.
NOAA/CO- OPS will be providing $650,000 of in- kind contributions to this effort and have
stated a strong interest in expanding their contribution to this type of work throughout Alaska
and nationally, with this being the pilot project.
Terrasond, a private consulting firm who works closely with NOAA on similar projects in other
locations, and is the technical lead on a similar tidal characterization effort in upper Cook Inlet,
will also provide technical assistance on this effort to ensure consistency and smooth transition
for feasibility analysis of the data and application of the new model.
The Alaska Department of Fish and Game (ADF&G), through the Kachemak Bay Research
Reserve, has also committed to conduct a biological literature and permit review to identify
issues, obstacles, and potential solutions that may be confronted by this project. They will be
contributing vast expertise, credibility, and previous site- specific data collection and processing
from other projects, such as the current expansion of the Homer Harbor, that will inform the
technical reviews.
Re vision consulting and Deerstone Consulting will be involved in the feasibility analysis based
on the data output and model generated by NOAA. Re vision consulting is a nationally recog-
nized firm on ocean energy issues, working with the Electric Power Research Institute and many
utilities throughout the US, and will be the technical lead on the feasibility component of the
project. Deerstone Consulting is a Homer- based firm working with various communities and
governments throughout Alaska o renewable energy and community development, including
the City of Homer on implementing its Climate Action Plan. Deerstone will be involved in project
coordination, permitting, and targeted research for additional inputs to the feasibility study.
Homer Electric Association, the electric utility provider in the area, has been notified of this
project and has expressed interest and support. Based on the outcome of the feasibility study,
we expect to have more substantive discussions with HEA to conduct a system integration study
and determine how this power can best fit on their grid.
See attached resumes and/or statements of work provided by possible project partners and
consultants. All of these individuals have assisted in the preparation of this application. It
should be noted, however, that no contracts have been offered or will be offered other than in
accordance with City of Homer procurement policies. The City’s procurement policies will also
be followed in purchasing major equipment. Key procurement policy provisions are included in
this application as an attachment.
3.5 Project Communications
Discuss how you plan to monitor the project and keep the Authority informed of the status.
The City of Homer will comply with all AEA reporting requirements should a grant be awarded.
This will include providing monthly and quarterly status reports by email to the AEA Project
Manager to update the Authority on the project’s progress, regulatory and compliance issues,
possible delays, and grant expenditures during the month; summarize the progress made on
grant tasks during the month; and identify any difficulties in completing tasks or meeting goals
or deadlines. We will include copies of any work products due to the Authority during the
reporting period.
Should questions, concerns, or issues arise during the implementation of the project that would
benefit from consultation with AEA, project staff will contact the AEA Project Manager by phone
or email. Site visits will be welcome. Because of the complex nature and diverse entities
involved in this project, we have explicitly identified a “project coordination” role that will
involve both intra- project communications among participants, and also external communica-
tions with AEA and others such as Homer, Seldovia, and Port Graham residents and the general
public.
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 9 of 21 9/3/2008
3.6 Project Risk
Discuss potential problems and how you would address them.
There are three types of potential problems that we have identified: 1) Technical,
2) Institutional, and 3) Environmental.
Regarding technical challenges, we will have the most experienced and informed group in the
industry conducting the data collection effort, and have built in redundancy with Terrasond
providing back- up to NOAA where necessary. Both Terrasond and NOAA have experience in the
region doing precisely this type of work, so we believe we have addressed this challenge by
working with the best people in the field. By conducting a data reconnaissance with multiple
experts before a complete collection plan is developed and implemented, we will hopefully
provide checks and balances and create a more robust data collection regimen that meets
everyone’s needs, thus addressing the technical challenges by anticipating and thinking them
through before we are out in the field. As well, collaboration with the tribal governments in
Seldovia and Port Graham will provide local knowledge and support for the data operations that
should help minimize technical challenges related to working in the more remote and ener-
getically dynamic parts of the Bay. In the long run, past the feasibility stage proposed here, the
technical challenges are essentially beyond the scope of the project. The tidal energy industry is
progressing significantly, with full- scale projects now producing electricity in other parts of the
world, and our assumption is that if Kachemak Bay current speeds are within the range of
expectations, the technology will continue to improve and we will be able to effectively and
efficiently produce power. In fact, the construction cost estimates used here are based on other
projects that are expected to reduce their costs over time.
Institutional problems could emerge as a result of the diverse interests and entities involved in
the project. As stated above, we have tried to anticipate and address this challenge by explicitly
planning for a project coordination role, starting with a project kick- off meeting to bring all the
participants together and develop a broad implementation plan agreed to by all. Throughout
implementation of the project, Deerstone Consulting will continue to provide this coordination
role. We will also integrate this project with other City initiatives, such as the Climate Action
Plan, that will assist in public outreach and communications. We will continue to communicate
with Homer Electric to inform them of our progress and seek opportunities for collaboration
with them. Finally, we will explicitly address institutional options for development of tidal power
in the feasibility study to further anticipate and address any challenges this project may
confront.
Environmental problems, if any, would likely not occur during the actual reconnaissance and
feasibility study, but rather once the actual device would be installed. In anticipation of any
problems, we are working closely with Alaska Department of Fish & Game through the
Kachemak Bay Research Reserve. During the proposed project period, this will include a
biological study and permit review with the intent of developing a full study regimen for in- the-
field impact assessment if the project moves forward to construction. We would anticipate
needing to hire additional contractors to conduct impact assessments on fish, marine
mammals, sea birds, and other biological resources in the area if a project is constructed. This
feasibility study will help to identify the costs required to meet this need during the
construction and long- term operation phases.
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 10 of 21 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.
The tidal power potential of Kachemak Bay is a little understood or studied resource. To date
there has been one study of the tidal potential, but only in the area of the Seldovia harbor. This
study was limited to looking at the resource from the perspective of a potential tidal barrage or
impoundment style installation. The purpose of this proposed study is to examine the resource
potential of tidal currents adjacent to Kachemak Bay communities and then to analyze the
technical and economic feasibility of the development of a tidal project in these areas using
modern hydrokinetic devices. Kachemak Bay itself has an extreme tidal range of up to 7 meters
which generates exceptional currents within the bay. Near the villages of Port Graham and
Nanwalek, at the mouth of the bay, the tidal currents of greater Cook Inlet are encountered,
driven by the second largest tidal range in the world. The extent, peak velocity, and average
power densities of this area is not known, but it is certain that there exist adequate currents for
tidal power generation here, and likely near the Homer Spit and the mouth of Seldovia Bay in
Kachemak Bay as well. The point of this feasibility study will be to determine if viable currents
exist in areas that have the necessary components for an economically viable tidal power
installation including depth, lack of conflicts with other uses, and reasonable transmission
distances to existing power infrastructure. The feasibility study will identify realistic boundaries
for the generation potential within the region and in specific sites. It should also be noted that
NOAA’s data collection and modeling effort will essentially cover the entirety of Kachemak Bay,
not just focus on a few specific sites. The value of this comprehensive model is that it can then
be applied to virtually any specific site within the Bay to perform more detailed power density
and feasibility analysis. This will provide an opportunity to more fully and accurately quantify the
tidal power potential of the region.
Currently natural gas (with some conventional hydropower) is the main fuel source for the
generation of power purchased by Homer Electric Association and sold to its members. While
natural gas has offered a stable price in the past, the contract for natural gas that supplies HEA's
electricity is set to expire in 2010, at which point prices for this power will increase an unknown
amount and other alternatives will be needed. Natural gas fired power plants also emit CO2
which may make the technology subject to future carbon taxes and thus higher prices.
Bradley Lake Hydro, situated just above Kachemak Bay, is the largest hydroelectric plant in
Alaska. While it is run by HEA, the cooperative does not own it or the power it produces. At the
same time, hydro plants have potential to be “resource following” generation facilities that could
incorporate resources like tidal power efficiently, ramping their power up and down with
(precisely predicted) tidal resource availability, thus reserving the capacity of the Bradley Lake
reservoir over a longer period of time. It is possible that Bradley Lake's use could be changed
from that of a “dispatchable” resource to a “following” resource through a renegotiation of the
wholesale cost of power between utilities. This would allow wind and tidal projects to be
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 11 of 21 9/3/2008
efficiently absorbed and utilized by the local grid infrastructure.
Wind projects are also being studied on the lower Kenai Peninsula, including in the area near the
tip of the peninsula and the Gulf of Alaska near Nanwalek. Wind power projects would provide a
resource that is clean like tidal power, but not as predictable. While wind power can be econ-
omical, lack of predictable output minimizes its value in terms of energy capacity. Tidal power,
due to its predictable nature, can be used not only to offset energy use, but also to offset capa-
city for a given utility and thus is potentially much more valuable as a resource than wind power.
As the technology commercializes, tidal power promises to become price competitive with wind
power as well.
Another potential power source that HEA has been looking into is the Healy Clean Coal Plant
(HCCP). While this plant has received significant investment as a cleaner coal burning technology
it has yet to prove itself viable and thus it has sat idle almost since its construction. In addition
this particular “clean coal” technology does nothing to capture and sequester CO2 and thus
produces just as much if not more CO2 per kWh than a normal coal plant. Finally, while HEA
currently has the contractual right to develop and re- start HCCP, the actual facility is far
removed from HEA’s service territory and any electricity generated from this plant would not
serve HEA customers, but be subject to wheeling tariffs, or traded with other utilities’ power that
is closer to HEA’s service territory. If a “true” economic analysis of HCCP were conducted, and
legal costs and ongoing risk of carbon taxes, etc., were all included, this power option would
perhaps be the most expensive of all. In any case, if the feasibility study proves out, the tidal
project proposed here would offer a clean alternative to HCCP that will likely prove itself to be
economically competitive with coal power in the long run.
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.
Railbelt Energy Project - NA
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.
Currently the energy used in the Homer Electric Association service area is purchased by
contract from Chugach Electric. HEA is contractually obligated to purchase Chugach power until
December 31, 2013. Chugach Electric's energy comes primarily from the Beluga natural gas
plant and the gas that supplies this plant comes by contract from Marathon Oil. The contract for
this natural gas will expire in 2010, at which time Chugach will be renegotiating its contracts to
purchase gas and HEA’s electricity purchase price will also be impacted. HEA has stated that
this dynamic is leading them to pursue diversified resources for electricity generation. Both
Chugach and HEA also receive some power from the state- owned Bradley Lake hydro facility on
the south side of Kachemak Bay.
The feasibility phase of this project will preliminarily address potential interconnection issues to
integrate tidal power onto the railbelt grid. Currently there is a 25KV transmission line that
crosses Kachemak Bay from the end of the Homer Spit to McKewan flats and on to Seldovia.
Tying into this transmission line would allow for energy on the scale of this project and larger
to be transmitted onto the local grids. From Seldovia on to Port Graham and Nanwalek there is
only a single- phase transmission line that would need to be upgraded to accommodate
significant power transmission. HEA is already looking into funding for such an upgrade to allow
for commercial fish rearing facilities that require three phase power to be built in Nanwalek. This
transmission line would also be useful for the transmission of power from a tidal installation in
this area.
As well, if a three- phase transmission line is not constructed on the south side of Kachemak
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 12 of 21 9/3/2008
Bay, it may make more sense for the communities to generate tidal power for local consumption
to replace both electricity and heating fuel that is currently “imported.” Heating fuel especially is
quite expensive because these communities are not on the road system, so the value of locally
produced electricity used for heat that replaced fuel oil and propane would be substantial. We
have not explicitly included this option in our economic analysis but if the tides prove feasible,
this could markedly improve the project economics for both the smaller Kachemak Bay
communities and provide distributed generation and avoid additional transmission costs
incurred by HEA.
4.2.3 Existing Energy Market
Discuss existing energy use and its market. Discuss impacts your project may have on energy
customers.
Homer, Seldovia, Port Graham and Nanwalek all fall within the Homer Electric Association service
area. Currently all of the power sold here is purchased by HEA from Chugach Electric, whose
current natural gas contracts are set to expire in 2010. At that time both the price and availa-
bility of power for HEA members will be less certain. While HEA is investigating small scale hydro
power and wind projects, there is a need for more project development to provide stable and
economical electrical service for HEA customers into the future. This tidal project could provide
an economical, stable, and flat priced alternative power source for this market. The potential of
this resource is not yet known, but it is likely that the developable tidal resource in the nearby
vicinity of Kachemak Bay communities could have a significant impact on the local energy
market.
Additionally, it is possible that tidal generation in the selected areas could be smaller scale for
primarily local use. Especially for the more remote communities on the south side of Kachemak
Bay (Seldovia, Port Graham, and Nanwalek), where the unit price of electricity is higher (per HEA
tariff) and diesel fuel is much more expensive because of no road access, it may be possible for
tidal energy to replace electricity and heat currently purchased by the communities. For
example, transmission constraints may make it difficult and too expensive for large scale tidal
development in, say, Port Graham, but perhaps the locally available resource could be developed
to power and heat the entire village, including the Tribal fish hatchery and other commercial
applications. A village- scale (as compared to utility- scale) hydrokinetic device and construction
project may be the most appropriate in certain locations to minimize ecological impact and
shorten the development timeline.
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
At this time there are several companies developing tidal hydrokinetic technologies for the tidal
energy market. These include axial flow turbines such as those under development by Verdant
Power, Lunar Energy, Open Hydro, and Marine Current Turbines (MCT), as well as cross flow
turbines being developed by Ocean Renewable Power Company and New Energy Corporation,
among others. New Energy Corporation currently has an in- stream hydrokinetic device installed
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 13 of 21 9/3/2008
on the Yukon River in interior Alaska. At this stage, this proposed project is not committed to a
particular technology but will study the development and commercialization of these tidal
technologies as part of the feasibility study. For purposes of economic feasibility, we will select a
particular technology and apply power curves and related information to determine projected
production costs. As well, at the four selected locations, we will consider site specific issues that
may assist in choosing a particular turbine and installation system. For example, different depths
at selected locations may lead to different turbines and system designs, or similarly, differential
ease and cost of access to on- shore transmission lines may dictate turbine selection and system
design. One of the ongoing questions along these lines is if Kachemak Bay—or specific locations
within the Bay—are sufficiently ice-free to consider a floating pontoon structure, or if it will be
necessary to submerge the device. It is anticipated that by the time this project has moved into a
Final Design phase in 2011–2012, significant advances, modifications, and proving out of these
various technologies will have taken place, which will make for more prudent decisions in
technology selection.
The optimum installed capacity of tidal systems will be determined in the feasibility phase based
on resource availability, and the ability of the nearby power infrastructure to utilize or transmit the
energy. It is anticipated that individual units ranging in size from 250kW to 1MW will be feasible in
this area with possible build- outs to 5MW or more being conceivable. As these tidal systems
increase in size, this will significantly improve the project economics from the calculations here.
For example, MCT’s projected capital costs per kW installed are reduced by 50% when expanding
from a 1.2 MW project installed in 2007 and a 10 MW project currently under installation and
slated for commissioning in 2009.
The anticipated capacity factor will depend on the final technology selection but capacity factors
of around 30% in a 6 knot current are typical of tidal technologies under development. It should be
noted that while 30% capacity factor is similar to wind energy, tidal energy has the distinct advan-
tage of being predictable and thus, can serve as a component of baseload energy.
At this capacity factor a 250KW turbine would produce 657MWh per year. A 1MW turbine would
produce 2,628 MWh per year. For economic calculation purposes here, we have selected a single
250 kW turbine for simplicity, but it is expected that if this “proof of concept” project was
successful, there would be additional projects installed in Kachemak Bay over time.
A n t ic i p a t e d b a r r i e r s:
! Confirming adequate current velocities exist in the project areas.
! Confirming that it is possible to economically develop the sites that have adequate
currents.
! Assuring that these tidal installations will not interfere with current uses including
subsistence and commercial fisheries and marine navigation.
! Assessing the local environmental impact of potential tidal technologies in respect to their
effects on marine life including fish and marine mammals.
Ba s i c I n t e g r a t i o n C o n ce p t:
The power produced by this tidal project would be integrated into the local grid via the 25KV
transmission line at the end of the Homer spit or in Seldovia. In Port Graham or Nanwalek
integration of the power would currently be limited to single phase transmission capacity. As
mentioned earlier there is the potential for this service to also be upgraded to a three phase 25KV
transmission line in the near future that would allow additional power to be fed north into the
railbelt grid. The power would be integrated into the grid at a capacity that is manageable and
dispatchable in accordance with the interconnect study to be completed in this feasibility study
phase of the project.
As well, if a three- phase transmission line is not constructed to Port Graham and Nanwalek, it may
make more sense for the communities to generate tidal power for local consumption to replace
both electricity and heating fuel that is currently “imported.” Heating fuel especially is quite
expensive because these communities are not on the road system, so the value of locally
produced electricity used for heat that replaced fuel oil and propane would be substantial, and
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 14 of 21 9/3/2008
system integration costs would be much reduced. This would also limit the amount of power
generated but also reduce the cost. These trade- offs will be examined in the feasibility study.
D e l i v e r y M e t h o d s:
Being on the road system and having a deep water port, Homer is capable of receiving system
components via overland or marine shipping. From there items can be either shipped or put on
the regular Alaska Marine Highway ferry service to Seldovia. Port Graham and Nanwalek would
require utilizing local marine freight companies to ship items from Homer. Local marine service
companies would also be used for system deployment.
It is anticipated that the power itself would be delivered from the hydrokinetic marine
installation—either near surface or submerged—to shore via underwater cable. This is a well
understood technology that is already deployed in the area with local expertise to support such
installation.
4.3.2 Land Ownership
Identify potential land ownership issues, including whether site owners have agreed to the project
or how you intend to approach land ownership and access issues.
The City of Homer intends to utilize City property, utility easements, and rights- of- way whenever
possible for this project. The City of Homer does have title to submerged lands adjacent to the
Homer spit, which is a likely location for future development. If access is needed over private
property, the City intends to work with willing landowners to secure the proper easements. At this
level of feasibility study, there will not be much, if any, need to access private property. Similarly
in the communities of Seldovia and Port Graham, it is not expected that we will need any access to
private property. However, for placement of the stationary ADCP devices at the bottom of
Kachemak Bay, we will likely need land use permits from the state (discussed below). Land
ownership or access issues for any future project will be explicitly considered in site selection and
more fully addressed in the feasibility study. Site selection for full feasibility analysis will likely be
constrained, in part, by access to grid interconnection, which should minimize land ownership
challenges. In general, because of the nature of the project, it is not land use- intensive and we do
not expect to have problems or issues with this aspect.
4.3.3 Permits
Provide the following information as it may relate to permitting and how you intend to address
outstanding permit issues.
! List of applicable permits
! Anticipated permitting timeline
! Identify and discussion of potential barriers
The City of Homer has extensive experience permitting major public works projects, including
those involving submerged lands, such as the Homer deep water dock facility. If the proposed
tidal power project is determined to be feasible and the City pursues construction funding, we will
undertake and complete all required permitting, in accordance with the Alaska Coastal Zone
Management Act.
For these reconnaissance and feasibility stages of the project, we anticipate needing to secure a
land use permit from Alaska Department of Natural Resources to access the ocean floor. We have
contacts with this agency and do not anticipate any problems securing this permit. The agency has
previously indicated support for this type of project.
An important part of the feasibility study will be to identify all necessary permits and the required
path, timeline, and expected costs for securing them. We have explicitly budgeted time and money
in the feasibility study to address these concerns. Primary among the permits we will need to
acquire will be the Federal Energy Regulatory Commission (FERC) preliminary permit. The outcome
of the feasibility study will provide the “go/no go” decision point for pursuing this permit, on
which all else will depend.
If a tidal energy project is determined feasible and worthy of pursuit, other permits we expect to
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 15 of 21 9/3/2008
need include the following:
! Fish collection permit – Alaska Department of Fish & Game (ADF&F)
! Fish habitat permit – ADF&G
! Water Rights – Alaska Department of Natural Resources (ADNR)
! Title 10 permit – US Army Corps of Engineers
! Coastal Zone Management: local support will facilitate permit issuance if required
! Coast Guard notification: Will be necessary to address potential navigational issues and
inform waterway users of installation
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
Because of the expected location of a tidal energy device, i.e., under the water in Kachemak Bay,
minimal impact in regard to avian, telecommunications, archaeological, visual and aesthetic issues
would be expected. It should be noted that the City of Homer has title to submerged lands near
the Homer Spit that may be good sites for tidal energy production, which will simplify some of
these potential land use issues. The primary concerns will likely be biological and habitat, as
Kachemak Bay is a National Estuarine Research Reserve and receives special protection. The bay
supports significant marine, avian, and terrestrial wildlife. The proposed feasibility study,
including biological impacts, will consider the potential environmental issues of concern. By
partnering with ADF&G from the beginning, we will be able to identify and address any potential
problems. The Department has stated its support for the project and has provided a list of species
of concern that we will take special care to address:
SPECIES AND STATUS OCCURANCE RANGE IN ALASKA
Endangered
Blue whale (Balaenoptera musculus) Rare Bering Sea, Gulf of Alaska, N. Pacific
Bowhead whale (Balaena mysticetus) Regular Chukchi Sea, Beaufort Sea
Cook Inlet beluga whale (Delphinapterus leucas) Regular Cook Inlet
Fin whale (Balaenoptera physalus) Regular
Chukchi Sea, Bering Sea, Gulf of Alaska, N.
Pacific
Humpback whale (Megaptera novaeangliae) Regular Bering Sea, Gulf of Alaska, N. Pacific
Leatherback sea turtle (Dermochelys coriacea) Rare Gulf of Alaska
North Pacific right whale (Eubalaena japonica) Rare Bering Sea, Gulf of Alaska, N. Pacific
Sei whale (Balaenoptera borealis) Rare Gulf of Alaska, N. Pacific
Short-tailed albatross (Phoebastria albatrus) Rare Bering Sea, Aleutian Islands, Gulf of Alaska
Sperm whale (Physeter macrocephalus) Regular Bering Sea, Gulf of Alaska, N. Pacific
Steller sea lion (Eumetopias jubatus) west of 144° Regular Bering Sea, N. Pacific
Threatened
Green sea turtle (Chelonia mydas) (incl. agassizi) Rare Gulf of Alaska
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 16 of 21 9/3/2008
Loggerhead sea turtle (Caretta caretta) Rare Gulf of Alaska
Northern sea otter (Enhydra lutris kenyoni) Regular Aleutian Islands, Alaska Peninsula, Kodiak Island
Spectacled eider (Somateria fischeri) Rare Western and Northern Alaska (coastal)
Steller sea lion (Eumetopias jubatus) east of 144° Regular Bering Sea, Gulf of Alaska, N. Pacific
Steller's eider (Polysticta stelleri) Regular Southwestern, Western, and Northern Alaska
Candidate
Kittletz’s Murrelet (Brachyramphus brevirostris) Regular Southern, Northwestern Alaska (coastal)
It is expected that additional biological studies, evaluations, and reviews will be necessary before
full construction. Such activities will be clarified in the feasibility report, including identification of
all required permits and qualified contractors.
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
The total anticipated cost of this project through construction of a hypothetical 250 kW turbine is
estimated to be $2,492,591. The cost for the first two phases of the project proposed here
(reconnaissance and feasibility/conceptual design) is $1,154,341. The request for funding from
AEA for this part of the project comes to $482,387. Applicant matching funds amount to
$671,954 in in- kind contributions from NOAA, re vision consulting, Deerstone Consulting, and
the City of Homer. Total anticipated costs through construction of a 250 kW turbine are based on
published capital and development costs of a 1 MW project completed in 2007 by Marine Current
Turbines in the United Kingdom
(http://www.all-energy.co.uk/UserFiles/File/2007PeterFraenkel.pdf). Of the two phases
proposed here, phase 1 project costs are $79,910 (AEA requested) and $60,100 (matching)
and phase 2 project costs are $403,387 (AEA requested) and $610,944 (matching).
If the resource assessment and feasibility study determine that there are viable tidal power
projects in Kachemak Bay, there are several options for future funding. These options will depend
in large part on who actually develops the projects, which could be the local utility (HEA),
independent power producers, local governments, or a combination of the above. Certainly federal
and state grants will be investigated, but other possibilities include local bonds, local dedicated
revenue generation, conventional capital markets and/or venture capital. Federal production tax
credits for renewable energy projects currently in place, as well as expected future green energy
incentives and/or carbon taxes for fossil fuel generation, would also be incorporated into a
funding package for project development and improved economic returns.
The estimated capital cost of this project is based on actual installed costs of tidal pilot projects.
These costs apply to installations in the 1MW range, but it is anticipated that reduced efficiencies
from diseconomies of scale for smaller 250kW systems will be offset by overall costs being driven
down by the commercialization of these technologies. Assuming that the capital costs will be
roughly 50% of the overall project installation costs, as is typical, at $5377 per kW installed cost
this would lead to a capital cost for a 250kW system of $672,125. This would make the balance of
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 17 of 21 9/3/2008
the project cost including design, another $672,125 with the overall project development cost,
including the feasibility study, totaling $1,826,466. With future and likely larger systems, it is
expected that the development costs per unit energy would significantly decrease, both in
absolute terms and in relation to per unit capital costs.
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
While it is difficult to estimate O&M for the different technologies that will be considered for this
project, based on industry expectations a very conservative value would be $.035 per kWh
produced for small- scale projects such as a 250 kW turbine. This would likely include at least an
annual inspection, servicing and replacement of worn parts. For a 250 kW system with a 30%
capacity factor, this would result in $22,995 of annual O&M expenditures. It is reasonable to
assume that as the size of the project and amount of energy generated increased, the per unit
O&M cost would decline as well. Such costs would be incorporated into the power sales and
system servicing agreements, which would vary depending on the institutional and business
structure that eventually emerges to develop these projects.
We are requesting no O&M costs for this resource assessment and feasibility project.
4.4.3 Power Purchase/Sale
The power purchase/sale information should include the following:
! Identification of potential power buyer(s)/customer(s)
! Potential power purchase/sales price - at a minimum indicate a price range
! Proposed rate of return from grant-funded project
The potential buyers for the power purchased from this project include all of the railbelt utilities.
The most likely one, however, would be Homer Electric Association since the power would be tied
into the HEA service area. Current avoided cost rates for HEA are $0.04043 per kWh, though this is
projected to increase in direct proportion to Chugach Electric's avoided cost which is forecast to
reach $0.109 per kWh by 2012 when current contracts for natural gas purchase are no longer in
place and both new fuel and new generation hardware will be necessary. This would be the more
likely time frame for project implementation and the beginning of power sales to HEA.
As stated several times above, it is also possible—and this will be considered explicitly in the
feasibility study—that the more remote villages in Kachemak Bay may want to purchase the power
for local use, and not sell back to HEA. This will likely replace not just conventional electricity use
but heating fuel and eventually, if electric vehicles become more widespread, liquid transportation
fuels as well. In these communities, because they are not road- connected, liquid fuels require
expensive marine transport from Homer. If a relatively inexpensive energy source such as tidal
power can be harnessed, there will likely be strong interest in maximizing local use of this energy,
especially as a replacement for imported and expensive liquid fuels. Currently liquid fuels sell for
over $5.50 per gallon for gasoline and more for diesel.
Costs per kWh of power produced by tidal turbines are highly variable and in some cases
theoretical for the various technologies. Manufacturers predict eventual commercialization and
economies of scale from larger build outs bringing power into the realm of $0.08 per kWh. On the
scale and timeframe of this project, which would likely be a smaller capacity installation due to
existing energy infrastructures, the cost of power produced would be targeted around $.11- $.15
per kWh assuming a conservative 20 years of operation before major upgrades are needed. With
any increase in projected avoided cost and renewable tax credits or green power incentives this
will lead to a profitable energy source by the time of its installation around 2012 or soon
thereafter. As well, once proven out, larger projects following on the heels of a pilot project such
as that described here would likely realize increased efficiencies, improved economies of scale,
and lower per unit production costs.
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 18 of 21 9/3/2008
4.4.4 Cost Worksheet
Complete the cost worksheet form which provides summary information that will be considered in
evaluating the project.
See attached cost worksheet.
Capital cost based on Marine Current Turbines published figures ($5,377/kW installed).
Annual O&M cost based on industry projections plus $0.01/kWh for conservative estimate of
smaller system (assumed total of $0.035/kWh).
Fuel displacement estimated based on 30% capacity factor of 250 kW turbine (657,000 kWh
annually).
Price of displaced fuel based on Chugach Electric projection of $0.109/kWh avoided cost in 2012.
Alaska public benefits include value of Kachemak Bay tidal circulation flow model to spill response
and mariculture industry, along with O&M service contracts to Alaska marine energy firms and the
portion of the reconnaissance and feasibility study funds that will be awarded to Alaska firms.
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.
If the proposed economic and technical analyses indicate that construction of tidal energy
production devices merits further consideration, the feasibility study will examine institutional
and business structures that best take advantage of the resource development opportunities.
Likely options include:
! Collaboration with, or “hand- off” to Homer Electric Association;
! Solicitation of independent power producers (IPP) and/or technology providers such as
Ocean Renewable Power Company (who is engaged in a similar project in upper Cook
Inlet and could perhaps generate synergies with this proposed effort);
! Some combination of utility and IPP and local government;
! Small- scale development, perhaps led by local government and/or other local entities,
designed to meet local needs, perhaps including liquid fuel substitution, and avoid
transmission upgrades.
An important component of the feasibility study will be to more thoroughly investigate and
compare these options. Because of the site specific nature of the resource and the unique
infrastructure characteristics and location of each community, it is possible that different
locations may require different institutional/business structures to best take advantage of the
tidal development potential. For example, it may be preferable to consider large scale tidal
development near Homer to “feed” the railbelt grid, while smaller scale projects that meet local
needs may be preferable on the south side of Kachemak Bay where transmission constraints
currently exist and both electricity and liquid fuels are incrementally more expensive.
Finally, as discussed above, if the resource and technology to harness the resource proves
viable, it is likely that much larger systems than the 250 kW turbine proposed here will emerge.
This will improve the project economics, shorten the payback, increase competitiveness, and
generally alter the dynamic and status quo of power generation in the region. At a larger scale,
and in combination with similar projects in Cook Inlet, a tidal energy industry would develop and
perhaps require different business models.
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 19 of 21 9/3/2008
4.4.6 Analysis and Recommendations
Provide information about the economic analysis and the proposed project. Discuss your
recommendation for additional project development work.
This proposed project is a diverse partnership that holds promise for national significance. In
particular, the commitment demonstrated by NOAA’s in- kind contribution of $650,000, and
their expressed interest in pursuing this work throughout Alaska and the rest of the coastal U.S.
to facilitate tidal development, will be a boon for the tidal energy industry. As a result of the
discussions that formalized the commitment documented in this proposal, NOAA has stated
their desire to collaborate with AEA in the future to advance tidal resource assessment through-
out the state. Alaska’s potential tidal resource is widely recognized globally, and with the recent
installation of the first in- stream hydrokinetic energy device in the U.S., Alaska is poised to
become a national, if not global, leader in harnessing hydrokinetic energy, both ocean and in-
stream.
Though not explicitly included as in- kind contributions for this budget, there is also significant
value embedded in the bathymetric mapping of part of Kachemak Bay conducted by NOAA last
year, and expected to be continued for the rest of the Bay this upcoming summer. Specifically,
NOAA stated that 20 days of NOAA ship time at $20,000 per day plus 100 hours of Cessna flight
time at $3,000 per hour, plus substantial data analysis and processing time, were required to
complete the bathymetric maps. This information will be quite valuable when constructing the
comprehensive tidal circulation flow model for Kachemak Bay that will emerge from this
proposed project.
Feasibility studies such as the one proposed here are necessary for any potential large scale
energy project, but these become even more important—and groundbreaking—when the
technology is so new and rapidly advancing. While hydrokinetic technology in general is still
considered immature, many lessons from the wind energy industry are transferable and have
contributed to a steep learning curve, which we expect to continue. This dynamic will result in
significant cost reductions in short time periods.
It should be noted that we have based construction costs on recently published figures from
Marine Current Turbines’ project in the United Kingdom, while they continue to show major cost
reductions and expect to find more efficiencies in the future. It is quite reasonable to assume
that we will benefit from, and take advantage of, this learning curve and reduced costs over
time. Thus, the economic analysis presented here should be viewed as conservative since even
an optimistic development timeline would not see project construction until at least 2012, at
which time additional cost savings will likely be achieved. As well, as projects become larger in
size, further cost savings will occur from increasing economies of scale. In Kachemak Bay, that
would mean that the feasibility study costs proposed here would be spread over more projects
and more kWh’s generated, thus reducing the relative cost of the feasibility study on a per unit
basis of energy generated.
In terms of a clean, locally available, reliable resource, tidal energy in Kachemak Bay holds
tremendous promise. Supporting multi- community, leading edge initiatives such as this will
pave the path for other efforts. An extensive feasibility study is necessary to learn as much as
possible at this early stage and ensure that no catastrophic mistakes occur that harm the
fledgling industry. The early tidal projects constructed in Alaska should be near communities
that can provide relatively low cost logistical and technical support, and obviously have a good
tidal resource. We believe that Kachemak Bay fits these criteria, and that an extensive feasibility
study is worth the investment to make a “go/no go” decision regarding construction. As well,
other potential tidal projects in the region, namely upper Cook Inlet, will result in a critical mass
of expertise and community support for these initiatives that will propel Alaska’s economy
through the 21st century.
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 20 of 21 9/3/2008
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
The project proposed here is essentially a resource assessment and feasibility study of
Kachemak Bay’s tidal energy potential. The communities of Homer, Seldovia and Port Graham
are collaborating on this effort, along with project partners NOAA, ADF&G, Terrasond, re vision
consulting, and Deerstone Consulting. In- kind contributions to the project total $671,044.
If the feasibility study determines positive project economics, we are proposing the construction
of a 250 kW tidal turbine to demonstrate “proof of concept.” At 30% capacity factor with 6 knot
peaking tidal currents, this amounts to 657 MW of electricity generated annually. Chugach
Electric has stated their expected avoided cost in 2012, once current natural gas contracts run
out, will be at least $0.109. The expected cost of replacing aging capital may increase this
figure, but for conservative estimation of benefits, we have used this avoided cost value to
calculate $71,613 in annual benefits derived from power sales and fuel displacement. We have
reduced this value by $5,748 annually because of the assumed O&M component (25% of total)
required to purchase parts and supplies. Assuming a 20- year lifetime of the project yields
$1,317,300 in net revenue. If larger projects come on- line over time, the net revenues will be
significantly more.
Additional public benefits will include $49,228 in contracts to Alaskan businesses in the
feasibility study. Through project construction an additional estimated $336,062 in contracts to
Alaskan businesses will be expected.
The operation and maintenance of the 250kW turbine is expected to cost $22,995 annually
($0.035/kWh and 30% capacity factor for production). Of these operation and maintenance
costs, an estimated 25% will be for parts and supplies and the remaining 75% of this will be in
contractual costs to Alaskan marine service companies amounting to $17,246 annually. Over the
20 year lifetime of the project this will total $344,925. It is assumed that the parts and supply
costs will not be spent in Alaska (and thus, are not included as public benefits), but the
contractual costs will go to an Alaska company, and are considered public benefits.
Additional public benefits associated with this project include ancillary uses of the tidal
circulation flow model that will be produced by NOAA, which include the mariculture industry,
oil spill response, and fisheries management. Kachemak Bay is world renowned for its oysters.
This mariculture industry is valued at approximately $1 million annually. We estimate that
improved management associated with this model will result in increased value of $25,000
annually. Over a 20 year life cycle of the installed project, this would amount to $500,000. In
terms of improved spill response, Kachemak Bay is considered a port of refuge for damaged
vessels in Cook Inlet. This was dramatically demonstrated two years ago when an oil tanker
docked in Nikiski suffered damage and required towing to Homer. This situation did not result
in any oil spilled but publicly highlighted the issue. It was stated at the time that spill response
contingencies needed improvement, including better understanding of the tides and currents in
Kachemak Bay in case of an oil or other toxic chemical spill. Given the increased interest in oil
exploration in the region, it is expected that an improved understanding of tides and currents in
Kachemak Bay could result in improved spill response and reduced harm to existing natural
resources. Assuming even one fairly large spill during the 20 year lifetime of the proposed
project, this can be reasonably estimated to provide $100,000 of additional public benefit.
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 21 of 21 9/3/2008
It is widely recognized that Alaska has some of the best potential of anywhere in the world for
generating tidal energy. This proposed Kachemak Bay project, in combination with other nearby
initiatives such as upper Cook Inlet, could help to establish an Alaska- based industry and global
leadership in tidal power. While there are perhaps numerous locations throughout the state that
may be feasible, there are many reasons to begin establishing this industry in population centers
on the road system to reduce early development costs. An initial investment of less than
$500,000 by AEA in this project will allow a leveraging of more than an additional $670,000
through direct project cost- share. This is a substantial public benefit that will not occur without
AEA’s support.
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
This proposal requests $79,910 for phase 1 and $403,387, for a total of $483,297 from AEA.
All project partners combined will be contributing $60,100 in phase 1 and $610,944 in phase
2, for a total of $671,044 of cost- share. This amounts to a total project cost of $1,154,341.
Within phase 1, requested funds include $33,410 for travel, meals, and per diem. This will be
used to bring all project partners together for a project kick- off meeting in Homer, and for
ongoing costs for the NOAA researchers who will remain in the area for data reconnaissance
and background research. The remainder of the AEA requested funds for phase 1 are for
contractual expenses for NOAA’s information technology support ($20,000); re vision
consulting ($10,000); Seldovia and Port Graham personnel ($1,000 each); ADF&G ($2,500);
Deerstone ($7,000); and Terrasond ($5,000). Cost- share contributions in phase 1 include
$50,000 of donated labor from NOAA personnel; $5,600 in donated labor from re vision
consulting; $2,500 in donated labor from Deerstone Consulting; and $2,000 in donated labor
from the City of Homer.
Within phase 2, AEA requested funds include $70,000 in travel, meals, and per diem for NOAA
researchers to conduct 35 days of field work in Kachemak Bay; $50,000 for NOAA vessel
support for field work; $130,000 in contractual for NOAA IT support in data analysis; $120,659
in contractual for re vision consulting; $2,000 in contractual for both Seldovia and Port Graham;
$5,480 in contractual for ADF&G; $21,800 in contractual for Deerstone Consulting; and $1,448
in contractual for Terrasond. Cost- share contributions in phase 2 include $150,000 in equip-
ment (ADCP devices) from NOAA; $150,000 in supplies to install and use the ADCP devices
from NOAA; $300,000 of labor from NOAA personnel who will be collecting and processing the
tidal data; $4,700 of labor from Deerstone Consulting; and $6,244 of labor from the City of
Homer for project management.
By task, and as illustrated in the attached GrantBudget.xls form, task 1 requests $79,910 in AEA
funds and will provide $60,100 in cost- share; task 2 requests $353,928 in AEA funds and will
provide $607,500 in cost- share; and task 3 requests $49,459 in AEA funds and will provide
$3,444 in cost- share.
Renewable Energy Fund
RFA AEA 09-004 Application Cost Worksheet Page 1
Application Cost Worksheet
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
The Applicant should demonstrate that the renewable energy resource is available on a
sustainable basis.
Annual average resource availability. Anticipated peak currents of 6 knots, but remains to
be confirmed in the feasibility study.
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
ii. Rated capacity of generators/boilers/other
iii. Generator/boilers/other type
iv. Age of generators/boilers/other
v. Efficiency of generators/boilers/other
b) Annual O&M cost
i. Annual O&M cost for labor
ii. Annual O&M cost for non-labor
c) Annual electricity production and fuel usage (fill in as applicable)
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]
ii. Electricity [kWh]
iii. Propane [gal or MMBtu]
iv. Coal [tons or MMBtu]
v. Wood [cords, green tons, dry tons]
vi. Other
Renewable Energy Fund
RFA AEA 09-004 Application Cost Worksheet Page 2
3. Proposed System Design
a) Installed capacity 250kW
b) Annual renewable electricity generation
i. Diesel [gal or MMBtu]
ii. Electricity [kWh] 657000 kWh
iii. Propane [gal or MMBtu]
iv. Coal [tons or MMBtu]
v. Wood [cords, green tons, dry tons]
vi. Other
4. Project Cost
a) Total capital cost of new system $672,125 (estimate based on industry published
figures)
b) Development cost $1,826,466 (estimate based on industry published
figures PLUS cost of this proposed feasibility study)
c) Annual O&M cost of new system $22,995 (assume $0.035/kWh)
d) Annual fuel cost $0
5. Project Benefits
a) Amount of fuel displaced for
i. Electricity 657,000kWh annually
ii. Heat
iii. Transportation
b) Price of displaced fuel $71,613 annually (based on $.109/kWh avoided cost in
2012); $1,432,260 over 20 year project lifetime
c) Other economic benefits
d) Amount of Alaska public benefits $1,330,215 over 20 year project life
6. Power Purchase/Sales Price
a) Price for power purchase/sale $.109 avoided cost in 2012
7. Project Analysis
Renewable Energy Fund
RFA AEA 09-004 Application Cost Worksheet Page 3
a) Basic Economic Analysis
Project benefit/cost ratio 1 .0 6 o v e r 2 0 y e a r l i f e t i m e o f p r o j ect*
* The benefit of the project was the sum of the public benefits
of $1,330,215 and the lifetime net revenue from the project.
The lifetime net revenue was calculated by taking the annual
gross revenue of $71,613 minus the parts and supplies of the
annual O&M budget of $5748 to give $65,865 annually, or
$1,317,300 over 20 years.
The benefit of the project thus came to $2,647,515.
The cost of the project was calculated at $2,498,591.
The project benefit/cost ratio was then calculated by dividing
the overall benefit by the overall cost over 20 years.
The pay back ratio was thus $2,647,515/$2,498,591 = 1.06
Payback 18.1years*
* The payback period was calculated by taking the total
project cost of $2,492,591 less the public benefits of
Alaskan contracts totaling $385,290 and the economic
benefits to mariculture and oil spill response of $600,000.
This gives a net total project cost of $1,507,301.
The annual project revenue was determined to be $71,613
from power sales minus the parts and supplies of the O&M
budget of $5748 plus the labor portion of the annual O&M
budget of $17,246 since this will be a contract to an Alaska
company and thus a public benefit.
This results in an annual net revenue of $83,111
Dividing the total project cost of $1,507,301 by annual
Revenue of $83,111 yields a payback period of 18.1 years.
Alaska Energy Authority - Renewable Energy Fund
BUDGET INFORMATION
BUDGET SUMMARY:
Milestone or Task Federal Funds State Funds
Local Match Funds
(Cash)
Local Match
Funds (In-Kind)Other Funds TOTALS
1 Site Reconnaissance (Phase 1) $50,000.00 $79,910.00 $2,000.00 $8,100.00 $140,010.00
2 Feasibility Study (Phase 2) $600,000.00 $353,928.00 $5,000.00 $2,500.00 $961,428.00
3 Conceptual Design (Phase 2) $0.00 $49,459.00 $1,244.00 $2,200.00 $52,903.00
$650,000.00 $483,297.00 $8,244.00 $12,800.00 $1,154,341.00
Milestone # or Task #
BUDGET CATEGORIES:1. Site Recon 2. Feasibility 3. Concept Design TOTALS
Direct Labor and Benefits $0.00
Travel, Meals, or Per Diem $33,410.00 $70,000.00 $0.00 $103,410.00
Equipment $0.00
Supplies $50,000.00 $50,000.00
Contractual Services $46,500.00 $233,928.00 $49,459.00 $329,887.00
Construction Services $0.00
Other Direct Costs $0.00
TOTAL DIRECT CHARGES $79,910.00 $353,928.00 $49,459.00 $0.00 $0.00 $0.00 $483,297.00
TIDAL ENERGY POTENTIAL IN KACHEMAK BAY
RFA AEA09-004 Budget Form
City of Homer Procurement Policy
(Summary of key provisions)
Contracts and Purchases
Homer City Code (Section 3.16.010) authorizes the City Manager or his designee to carry out a
contract for purchase or issue purchase authorizations for all supplies, materials, equipment and
services for the offices, departments and agencies of the City as well as contract for the
construction, repair or improvements of City facilities.
Purchases or contracts valued under $25,000 may be made in the open market without publishing
notice in a newspaper. If the value is between $10,000 and $25,000 there shall be at least three
competitive written bids from three vendors with the contract awarded to the lowest responsive
bidder. If the value is more than $25,000 contracts may be made only after a notice calling for bids
is printed in a newspaper of general circulation within the City.
Sealed proposals shall be received at the time and place designated in the request for proposals.
Proposals shall be opened avoiding disclosure of their contents to competing proponents during the
process of negotiation. Proposals and evaluations are open to public inspection only after the
contract award.
In determining the lowest responsive and responsible bidder, the City will consider the price, ability,
capacity and skill of the bidder to perform the contract within time and price specified, the reputation
and experience of the bidder, and bidder performance and payment under a previous contract.
Awards will be made to the proponent whose final proposal is determined to be most advantageous
to the City.
The City of Homer may give preference to City of Homer residents, workers, businesses,
contractors, producers and dealers when the contract does not exceed the lowest non-local bid by
more than the following percentages:
! For contract/purchase up to $500,000 – 5% higher than non-local bid.
! For contract/purchase greater than $500,000 – 5% higher than non-local bid on first
$500,000 and 2.5% higher than non-local bid on amount in excess of $500,000.
The City Council may approve the procurement of a supply, equipment, service or construction item
without competitive bidding if it has been determined that there is only one available source or
single provider. Based on the review and recommendation of the Director of Finance, the City
Manager may approve this Sole Source exception to the procurement policy.
¹
0 105
Miles
Kache mak
Bay
Cook Inlet
Legend
Homer Tidelands
City Limits
Homer
Seldovia
Port
Graham
English
Bay
Kachemak Bay
UNITED STATES DEPARTMENT OF COMMERCE
National Oceanic and Atmospheric Administration
\ ~ NATIONAL OCEAN SERVICE"'~4 ~ ~'.. r£sQf"'" Silver Spring. Maryland 20910
November 10,2008
Mr. Walt Wrede
City Manager, City of Homer
491 East Pioneer Avenue
Homer, Alaska 99603
Dear Mr. Wrede:
This letter is to confirm the support of the National Oceanic and Atmospheric
Administration (NOAA) Center for Operational Oceanographic Products and Services
(CO-OPS) for the City'S proposed project to the Alaska Energy Authority's (AEA)
Renewable Energy Grant program to determine the tidal energy potential in Kachemak
Bay, Alaska.
CO-OPS will provide technical assistance, collect historical water current data, collect
additional water current information, implement a hydrodynamic model and analyze the
data for tidal energy in support of this project. The primary deliverable that CO-OPS will
provide will be a technical report, based on model and collected tidal data analysis, as to
where the energy potential exists in Kachemak Bay. As outlined in the proposal, CO-
OPS will provide approximately $650,000 of in-kind support for this proposal, which is a
combination of data collection equipment ($150,000), supplies ($150,000), and staff time
($350,000). CO-OPS support is contingent on additional funding of$300,000 as
identified in the grant proposal.
CO-OPS is the leading U.S. authority on tides and tidal currents and has, with its
predecessors, been providing tidal predictions to promote safe and efficient navigation
since 1807. The CO-OPS National Current Observation Program (NCOP) meets the
Nation's needs for current observations, tidal current predictions, and other tidal current
products. We are very interested in exploring new ways in which our expertise in tidal
information can facilitate development of tidally-based renewable energy projects.
Alaska provides one of the best sites in the Nation for such projects and, if funded, we
anticipate that this project with the City of Homer and other Kachemak Bay communities
will be a model for our participation in additional collaborations statewide.
We look forward to working with you on this exciting project.
Sincerely,
4'~~~
Michael Szabados
Director, Center for Operational Oceanographic
Products and Services
® Printed on Recycled Paper
Laura Rear is the manager of the NOAA/NOS/CO-OPS/National Current Observation
Program. She has filled this role for the last three years. Laura is responsible for
determining the priority areas and maintaining the budgets for updating and adding new
current prediction locations in the US Tidal Current Tables. Prior to becoming the
program’s manager, Laura was the project lead for the Hudson River Tidal Current
Resurveying project in 2005 and 2006. For that project, Laura planned and oversaw the
deployment of 30 current meters in the Hudson River. The first year of the project was
completed in-house, the last year of the project was contracted out to Evans Hamilton Inc
and Laura was the Task Manager. Ms. Rear received an MS in Oceanography in 2002
from the University of Connecticut graduating with a thesis titled “Observations of Tidal
Current and Stratification Profiles on the Continental Shelf outside Block Island Sound.”
Recent Publications, Presentations and Posters
Burke, P B; Paternostro, C L; Glebushko, K; Rear, L V. 2008. Comparison of Tidal
Currents in the Hudson River During Spring and Fall 2006. AGU/ASLO/TOS
Ocean Sciences 2008, Orlando, FL. Poster.
Rear, L. and R. Bourgerie. 2005. Redetermining the Tidal Current Predictions for the
Hudson River, NY. Oceans 2005. Washington, D.C. Presentation.
Rear, L., S. Gill, K. Tronvig, and E. Mountz. 2005. Application of Water Level and
Datum Information to Coastal Zone Management in Mississippi and Alabama: A
Partnership Program, Coastal Zone 05, New Orleans, LA. Presentation.
Codiga, D. L., and L. V. Rear. 2004. Observed tidal currents outside Block Island Sound:
Offshore decay and effects of estuarine outflow, J. Geophys. Res., 109,
C07S05, doi:10.1029/2003JC001804.
Rear, L. 2004. Girl Scouts Dive to the Aquarius with NOAA Ocean Exploration. Current:
The Journal of Marine Education. 20 (1).
Rear, L. and D. Codiga. 2002. Tidal Current and Stratification Profiles on the Inner
Continental Shelf at the Mouth of an Estuary, AGU/ASLO Ocean Sciences 2002,
Honolulu, HI, Poster.
Dear Mr. Wrede,
491 E Pioneer ave.
Homer AK, 99603
The proposed Kachemak Bay Tidal Power project is likely to occur within the Kachemak Bay
Critical Habitat Area and the Kachemak Bay National Estuarine Research Reserve. It is possible
that this project will have adverse effects on fish and/or wildlife resources in this region and
these impacts will need to be investigated before implementation and construction can begin.
These investigations are proposed to take place in two phases: Phase 1 investigations will include
an extensive literature review examining biological marine resource impacts associated with
marine hydro and tidal power generation. Phase 1 investigations will also include determination
of permits and licenses that may be required for both the fish and habitat sampling, as well as
construction and operation of a tidal power generation facility within Kachemak Bay. Phase 2
funding is not included in this proposal. Phase 2 investigations would take place after Phase 1 is
complete and would only be conducted if the project is still considered feasible for
implementation. Phase 2 investigations would consist of a comprehensive marine and habitat
inventory of the project area and surrounding environment. These inventories will describe the
fish, invertebrate, submerged vegetation, bird, and mammal communities in projected impact
area. These inventories will take place throughout the year to entirely characterize the
communities in the projected impact area.
There are several species of known interest or concern within Kachemak Bay and the Gulf of
Alaska. These Species can be seen in Table 1 below. Special concern will be taken with respect
to these species to identify any potential adverse impacts that might result from the Kachemak
Bay tidal power development project. Specifically information will be collected on how to avoid
impacting the below listed species.
Table 1. Species of known interest or concern within Kachemak Bay and the Gulf of Alaska
OCCURANCE RANGE IN ALASKA
Endangered
Blue whale (Balaenoptera musculus )Rare Bering Sea, Gulf of Alaska, N. Pacific
Bowhead whale (Balaena mysticetus )Regular Chukchi Sea, Beaufort Sea
Cook Inlet beluga whale (Delphinapterus leucas )Regular Cook Inlet
Fin whale (Balaenoptera physalus )Regular Chukchi Sea, Bering Sea, Gulf of Alaska, N. Pacific
Humpback whale (Megaptera novaeangliae )Regular Bering Sea, Gulf of Alaska, N. Pacific
Leatherback sea turtle (Dermochelys coriacea )Rare Gulf of Alaska
North Pacific right whale (Eubalaena japonica )Rare Bering Sea, Gulf of Alaska, N. Pacific
Sei whale (Balaenoptera borealis )Rare Gulf of Alaska, N. Pacific
Short-tailed albatross (Phoebastria albatrus )Rare Bering Sea, Aleutian Islands, Gulf of Alaska
Sperm whale (Physeter macrocephalus )Regular Bering Sea, Gulf of Alaska, N. Pacific
Steller sea lion (Eumetopias jubatus ) west of 144°Regular Bering Sea, N. Pacific
Threatened
Green sea turtle (Chelonia mydas ) (incl. agassizi )Rare Gulf of Alaska
Loggerhead sea turtle (Caretta caretta )Rare Gulf of Alaska
Northern sea otter (Enhydra lutris kenyoni )Regular Aleutian Islands, Alaska Peninsula, Kodiak Island
Spectacled eider (Somateria fischeri )Rare Western and Northern Alaska (coastal)
Steller sea lion (Eumetopias jubatus ) east of 144°Regular Bering Sea, Gulf of Alaska, N. Pacific
Steller's eider (Polysticta stelleri )Regular Southwestern, Western, and Northern Alaska
Candidate
Kittletz’s Murrelet (Brachyramphus brevirostris )Regular Southern, Northwestern Alaska (coastal)
SPECIES AND STATUS
Work to be performed by the Kachemak Bay Research Reserve:
I. A comprehensive literature review on the potential impacts of tidal power generation systems
of various design to fish and wildlife fauna will be conducted. Internal and external data mining
will be conducted with respect to fish and wildlife resource studies conducted in this region. This
information will be synthesized into a final report of findings.
II. A review of both federal and state permits required will be conducted for all aspects of this
project pertaining to biological resource impact. Initial information including applications
packets, due dates, and requirements will be presented with a short review of findings indicating
any potential set backs or problems anticipated with biological resource permitting.
BUDGET:
I. Literature review and report 15 personnel days - $5250
II. Permit review and report 5 personnel days - $1750
KBRR Project Subtotal $7000
KBRR Overhead 14% $980
KBRR Total $7980
Leveraging Non-AEA Resources
Kachemak Bay Research Reserve (KBRR) will provide in-kind contributions in the form
previous data collected from other studies in this region. Cost of data collection: $78,000. KBRR
can also provide bunkhouse accommodations for field crews, field vehicles, field vessels,
laboratory space, office space, and field equipment.
The Kachemak Bay Research Reserve (KBRR) is a team of researchers, educators and support
staff working to develop a better understanding of the physical and ecological processes in the
Gulf of Alaska, with an emphasis on Lower Cook Inlet and Kachemak Bay. The KBRR is a
cooperative agency nestled in the Sport Fish Division of the Alaska Department of Fish and
Game with the National Oceanographic and Atmospheric Association (NOAA) acting as an
equal partner. The KBRR has 10-plus years of experience conducting scientific research in a
variety of disciplines throughout Kachemak Bay and the Gulf of Alaska. KBRR has conducted
numerous preliminary and biological feasibility studies pertaining to development projects and
are experts in this field. Currently KBRR is in the process of finishing a biological feasibility
study for the proposed Homer harbor expansion. This project was contracted through the Army
Corp of Engineers and examined habitats adjacent to one of the proposed tidal power generation
sites. This data and feasibility study will be pertinent to and used in any assessment conducted
by KBRR for this proposed tidal energy study.
Sincerely,
Joel Markis
Fisheries Biologist II
Re vision consulting, LLC
5115 11th Ave
Sacramento, CA 95820
October 4, 2008
Brian Hirsch, Ph.D.
Energy Program Manager
Yukon River Inter-Tribal Watershed Council
Dear Brian,
Re vision is excited about the opportunity to work with you on the Homer tidal power
feasibility project and will support the project by providing technical consulting and
support services throughout the project. Re vision will also provide 40 hours of in-kind
support by our senior engineer, valued at $5,600.
Re vision consulting, LLC has played a pivotal role in the development of marine
hydrokinetic programs in the US and abroad, most recently providing a technical lead
role in EPRI’s ocean energy programs. In this role, the company has conducted many
conceptual level feasibility studies similar to the one proposed in this project. It will
leverage this experience and know-how to assist in making the Homer tidal project a
success.
We are looking forward to be a part of this important project.
Thank you,
Mirko Previsic
President – re vision consulting, LLC
re vision consulting, LLC
Work Statement and Cost Proposal
The purpose of this project is to create a conceptual feasibility study for potential tidal
sites near Homer, Alaska. The project will consist of 2 phases; 1. Resource Assessment
Phase and 2. Feasibility Study phase. Similar studies have been conducted by re vision
consulting for the Electric Power Research Institute (see list of references). For each site,
a conceptual design for a pilot/demonstration and a commercial plant will be established.
The pilot plant will consist of a single device deployed at the site and the commercial-
scale plant will be limited by: 1. extracting < 15% of the hydrokinetic power at the
transect of interest and 2. siting constraints such as water depth and deployment site
dimensions. The following tasks will be accomplished as part of this study.
Task 1: Kickoff Meeting / Site Assessment
A kickoff meeting in Alaska with visits to the deployment sites of interest will provide a
good understanding of the site characteristics, existing infrastructure and parties involved.
Also, during the kickoff meeting a detailed measurement plan will be defined to ensure
that site velocity measurements are carried out in a way that is consistent with
methodologies developed for the assessment of tidal sites.
Task 2: Assessment of Stationary Measurement Data
Stationary measurement data (at least 28 days long) will be post-processed to derive tidal
forcing constituents at the deployment site. These tidal forcing constituents will then be
used to generate long-term time series of tidal velocities (18.5 years), based on which
statistical data sets can be generated suitable for the assessment of device performance at
the site. In addition, the total hydrokinetic energy contained within the transect and
average power density and vertical velocity shear will be evaluate to characterize the site
potential. A short report will be issued detailing the site resources and relevant
infrastructure components.
Task 3: Device Selection
Based on a preliminary assessment of the site conditions and a list of available
technology options, the stakeholders will select a single device technology which will be
used to carry out the conceptual level design, performance, cost and economic analysis.
Devices that are in an advanced stage of development and for which parametric models
are already established will be favored over less mature devices. Re vision consulting,
LLC will provide a short-list of potential device options to choose from. By selecting
mature device technologies, technology-specific uncertainties can be reduced to a
minimum.
re vision consulting work statement and cost proposal, Page 2 of 5
Task 4: Conceptual Level Feasibility Study
A conceptual-level feasibility study will be conducted, which includes; 1. Conceptual
design, 2. Device Performance, 3. Cost Assessment and 4. Economic analysis using a
Municipal Utility economic modeling framework which will be calibrated using the
utilities economic assumptions. For examples of the extent of similar feasibility studies,
sample reports can be downloaded from EPRI’s ocean energy website at
www.epri.com/oceanenergy. A final report will be issued summarizing the findings. The
conceptual feasibility study will be conducted in accordance with methodologies
developed by EPRI detailed in the following reports downloadable from www.epri.com;
TP-001-NA Rev 3 Guidelines for Preliminary Estimation of Power Production, TP-002-
NA Rev 2 Economic Assessment Methodology, and TP-005-NA Methodology for
Conceptual Level Design of TISEC devices. Re vision has developed parametric vendor-
specific device models for a total of 4 different Tidal Power Conversion devices. These
parametric models have been reviewed by independent experts and the device developers
themselves to make sure they are accurately reflecting the device technology. These
models will form the baseline for developing and finetuning models that allow us to scale
the technology of interest to the target deployment site, and incorporate region specific
elements such as available infrastructure components, workboats, weather windows and
supply-chain cost.
Integrated modeling is an approach that allows a rapid evaluation of different generation
options and design alternatives. The basic concept is that changing one design aspect
will have a ripple effect in terms of both cost and design to other components within the
overall system. The following displays the elements of such an integrated model.
re vision consulting work statement and cost proposal, Page 3 of 5
Re vision has established integrated models for a wide range of emerging technology
options in River In-Stream, Tidal and wave energy conversion for a wide range of clients,
including EPRI, Chevron, California Energy Commission and Chevron.
Deliverables
A site assessment report will be issued characterizing the relevant site characteristics.
Such characteristics will include grid infrastructure, available tidal resources at each one
of the sites and port infrastructure which could be used for deployment and operational
purposes of a future tidal installation. A second report will be issued detailing the results
of the outcomes of the conceptual design, performance, cost and economic assessment.
Cost Proposal
Task 1: Kickoff Meeting / Site Assessment
Travel Cost $2,500
Principal Engineer - 40 hours @ $140/hour $5,600
Task 2: Assessment of Stationary Measurement Data and Site report
Principal Engineer – 60 hours @ $140/hour $8,400
Task 3: Device Selection
Principal Engineer – 40 hours @ $140/hour $5,600
Task 4: Conceptual Level Feasibility Study
Principal Engineer – 704 hours @ $140/hour $98,560
Coordination and Management (15%) $18,099
In-kind contribution – 40 hours @ $140/hour -$5,600
Total $133,159
re vision consulting work statement and cost proposal, Page 4 of 5
References of similar design studies performed by re vision consulting
All of the below listed reports are available for download from
www.epri.com/oceanenergy.
1. Wave Energy Potential for the State of California, California Energy Commission 2006
2. Economic Assessment Methodology for Offshore Wave Power Plants, EPRI 2004
3. E2i EPRI Assessment Offshore Wave Energy Conversion Devices, EPRI 2004
4. Methodology for Conceptual Level Design of Offshore Wave Power Plants, EPRI 2004
5. System Level Design, Performance and Costs – Hawaii State Offshore Wave Power Plant,
EPRI 2005
6. System Level Design, Performance and Costs – Maine State Offshore Wave Power Plant,
EPRI 2005
7. System Level Design, Performance and Costs – Massachusetts State Offshore Wave Power
Plant, EPRI 2005
8. System Level Design, Performance and Costs – Oregon State Offshore Wave Power Plant,
EPRI 2005
9. System Level Design, Performance and Costs – San Francisco Energetech Offshore Wave
Power Plant, EPRI 2005
10. System Level Design, Performance and Costs – San Francisco Pelamis Offshore Wave Power
Plant, EPRI 2005
11. Bridging the Gap Phase 1.5 Study – California Wave Power Demonstration Project, EPRI
2005
12. Economic Assessment Methodology for Tidal In-Stream Power Plants, EPRI 2006
13. Methodology for Conceptual Level Design of Tidal In Stream Energy Conversion (TISEC)
Power Plants, EPRI 2006
14. Survey and Characterization Tidal In Stream Energy Conversion (TISEC) Devices, EPRI
2006
15. Methodology for Conceptual Level Design of Tidal In Stream Energy Conversion (TISEC)
Plants, EPRI 2006
16. System Level Design, Performance, Cost and Economic Assessment - San Francisco Tidal
In-Stream Power Plant, EPRI 2006
17. System Level Design, Performance, Cost and Economic Assessment – Knik Arm Alaska
Tidal In-Stream Power Plant, EPRI 2006
18. System Level Design, Performance, Cost and Economic Assessment – Tacoma Narrows
Washington Tidal In-Stream Power Plant, EPRI 2006
19. System Level Design, Performance, Cost and Economic Assessment – Muskeget Channel
Tidal In-Stream Power Plant, EPRI 2006
20. System Level Design, Performance, Cost and Economic Assessment – Maine Western
Passage Tidal In-Stream Power Plant, EPRI 2006
21. System Level Design, Performance, Cost and Economic Assessment – New Brunswick Head
Harbor Passage Tidal In-Stream Power Plant, EPRI 2006
re vision consulting work statement and cost proposal, Page 5 of 5
22. System Level Design, Performance, Cost and Economic Assessment – Minas Passage Nova
Scotia Tidal In-Stream Power Plant, EPRI 2006
Client References
David Lockhard
Alaska Ocean Energy Program Manager (AEA)
Email: DLockard@aidea.org
Ph: 907-771-3062
Roger Bedard
Ocean Energy Lead
Electric Power Research Institute (EPRI)
Ph: 650-855 2131
Email: rbedard@epri.com
Alejandro Moreno
Technology Manager, Water Power Activities
Energy Efficiency and Renewable Energy
U.S. Department of Energy
Ph: (202) 586-8171
Email: Alejandro.Moreno@ee.doe.gov
Corporate Office BBranch Offices
Palmer, AK 907.745.7215 Houston, TX 713.690.4900
www.terrasond.com Corpus Christi, TX 361.884.1780
Seattle, WA 206.420.8304
November 8, 2008
Brian Hirsch
Deerstone Consulting
PO Box 15177
Homer, AK 99603
Re: Letter of Commitment: Kachemak Bay Tidal Power Resource Assessment
Dear Mr. Hirsch,
TerraSond is pleased to commit our services to the City of Homer’s goal for tidal power
assessment at four (4) communities in Kachemak Bay. TerraSond supports your efforts
regarding long term, environmentally benign, and carbon-free renewable power generation for
the Kachemak region.
Although flexible in our capabilities, TerraSond has understood that we may be of use to your
project in the following ways:
Task 1.) Technical assistance during the design phase of data collection.
Task 2.) Consultation and assessment for both the draft & final circulation flow models.
Task 3.) Identification of available historical current data, including the assessment for
wither these data can meaningfully contribute to the circulation flow model or to
the resources assessment.
Task 4.) Consultation and general client representation for data integrity. TerraSond will
review the available data, identify deviations from the intended acquisition, and
communicate/translate pertinent information to all stakeholders invested in the
success of the current model through the power model phase.
As an available service, TerraSond can provide data oversight and quality control service as a
client representative. However, TerraSond understands that this is not a desired service at this
time. TerraSond is simply providing a differentiation between task four (4), listed above, and the
more time intensive service of quality control and oversight.
Mr. Hirsh
Letter of Commitment: Kachemak Bay Tidal Power Resource Assessment
November 8, 2008
Page 2
Kachemak Bay Resource Assessment
Task Paid Hours Rate ($/hr)Cost of Service
Task 1 16 $104.00 $1,664.00
Task 2 10 $104.00 $1,040.00
Task 3 20 $104.00 $2,080.00
Task 4 16 $104.00 $1,664.00
Total:$6,448.00
Travel expenses will be billed at in two methods:
Over night rates will be billed at a rate as: $570
Partial day trips will be billed at a rate as: $340
Please feel welcome to contact me regarding the contents of this letter or for clarification of the
services which TerraSond may be asked to provide.
Sincerely,
Attachments: 09 Commercial Rates.pdf, 2008_CV_DAVID OLIVER - Resume_DSO.doc
Cc: Thomas Newman, CEO
Brian Busey, General Manager
Raj Bhangu, Director of Operations and Production
Karl Woods, Chief of Surveys
PO Box 15177 Homer, AK 99603
Tel: 907-235-6842 Email: hirsch@alaska.net
November 7, 2008
City of Homer
Walt Wrede, City Manager
491 East Pioneer Avenue
Homer, AK 99603
RE: Participation in Kachemak Bay Tidal Energy Feasibility Study Proposal
Dear Walt:
Please accept this letter as confirmation of Deerstone’s commitment to the above-referenced proposal and
grant application to the Alaska Energy Authority’s Renewable Energy Fund.
As we have discussed, Deerstone Consulting will contribute to the project with regard to permitting, data
collection and analysis, and project coordination. The table below details this commitment for both paid and
in-kind labor.
Task Paid
Hours
In-kind
Hours
Rate ($/hr)Total
Requested ($)
Total
Donated ($)
Permitting Research 60 20 90 5,400 1,800
Data Collection & Analysis 180 20 90 16,200 1,800
Project Coordination 80 40 90 7,200 3,600
Total 320 80 -- 28,800 7,200
We believe this is an exciting project that has the potential to bring together various Kachemak Bay
communities; federal, state, local, and tribal governments; technology providers; natural resource harvesters;
and conservation interests. Deerstone’s contribution to this project will be provided by David Mogar, Monty
Worthington, and me. All of our resumes are included for submission with the proposal.
We look forward to continuing our collaboration in the implementation of the City of Homer’s Climate
Action Plan, in which pursuing tidal power was identified as an action item. Best of luck on your proposal.
Sincerely,
Brian Hirsch, Ph.D.
President
3