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HomeMy WebLinkAboutMt. Spur Resource Assessment Ormat App Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 1 of 37 11/10/2008 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 37 11/10/2008 SECTION 1 – APPLICANT INFORMATION Name (Name of utility, IPP, or government entity submitting proposal) Ormat Nevada, Inc. Type of Entity: IPP Mailing Address: 6225 Neil Road Reno NV, 89511 Physical Address: 6225 Neil Road Reno NV, 89511 Telephone 775-356-9029 Fax 775-823-5401 Email gsuemnicht@ormat.com 1.1 APPLICANT POINT OF CONTACT Name Gene Suemnicht Title Exploration & Development Manager Mailing Address 6225 Neil Road Reno NV, 89511 Telephone 775-356-9029 ext 2254 Fax 775-823-5401 Email gsuemnicht@ormat.com 1.2 APPLICANT MINIMUM REQUIREMENTS Please check as appropriate. If you do not to meet the minimum applicant requirements, your application will be rejected. 1.2.1 As an Applicant, we are: (put an X in the appropriate box) An electric utility holding a certificate of public convenience and necessity under AS 42.05, or X An independent power producer, or A local government, or A governmental entity (which includes tribal councils and housing authorities); X 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 ) X 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. X 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 37 11/10/2008 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 Ormat is proposing under this grant application is for a geothermal power project which is in the resource assessment stage of development. The project, at this stage, consists of a resource assessment, which will determine the viability of a geothermal power plant to be located at the site. Such project is defined as eligible under Section 1.5.2 of the RFA. The funding for the project being pursued is for Phase 2 Resource Assessment activities. Some reconnaissance activities have been completed in the past at this site, and Ormat Nevada, Inc. has completed some project analysis, feasibility studies, and reconnaissance activities itself and plans to continue reconnaissance activities in 2009 at its own expenses (see budget breakdown). We will describe any completed items below, and will describe the activities we would like to obtain for funding for Phase II activities. 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 Mount Spurr area represents one of the best opportunities in Alaska for to develop a utility-scale geothermal power plant. Phase 1 exploration efforts must be performed before moving forward to project development. The target site is located 70 miles west of Anchorage on state land. Field work was performed at the site in 1985. It is likely that the project would serve communities along the Railbelt and the power purchased by one of the Railbelt electric utilities. The grant request is for initial resource studies and assessment. The plan assumes a timeline of three years with the bulk of the field work done in the summer months. The plan calls for an initial geological scouting, mapping and sampling work, with progression to aerial and ground geophysics work, culminating in a gradient and slim holes drilling program. Field surveys and surface studies during the Summer of 2009, which Ormat would finance 100% from its own funds. The grant would cover additional field surveys and geophysical studies and shallow temperature gradient wells during the summer of 2010. A slim hole drilling program would occur during the Summer of 2011, if justified. There are about 13 miles between the nearest road and the southeast flank of Crater Peak to our leases. The objective of this field survey aspect of the potential geothermal area should be an early focus as to cost for infrastructure and project development, including access roads and transmission. The primary obstacle for this phase is the short time window (May through September) for exploration to avoid extreme weather. 2.2 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. Section 3.2 Project Schedule, discusses the stages for the resource assessment. The overview below describes the primary expenses that make up the budget for those stages. A final budget summary is displayed at the bottom of this section. Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 4 of 37 11/10/2008 Stage I During the summer of 2009, Ormat plans to perform reconnaissance activities at Mount Spurr. The time period for these activities will be short, with the primary costs including direct labor, contracting for remote sensing, geology tools and communications equipment, and soft costs such as legal and insurance. The total cost for this stage is estimated to be $553,200. Because the grant will not be awarded by the time these activities commence, Ormat will assume all financial responsibility. However, we are including these activities in the grant application as part of our match. Stage II During the summer of 2010, a more rigorous exploration program will be performed. Direct labor, camp set up and supplies, geology tools and communications equipment, and soft costs such as legal and insurance will make up one part of the cost. Other major costs will include: • Geophysical surveys we estimate will cost $250,000. • Helicopter services for the length of the summer we estimate will cost $800,000. • Rig mobilization and demobilization we estimate will cost $100,000. • Drilling four temperature gradient wells we estimate will cost a half-million per well; with a grand total of $2 million. The total cost for this stage is estimated to be $4,967,484 Ormat is requesting $3,973,987 Ormat plans to contribute $993,497 Stage III During the summer of 2011, a rigorous exploration program will continue. Slim hole rigs will be transported to the site. These rigs are smaller than a big rig used for production wells, but larger than rigs used for temperature gradient holes. Direct labor, camp set up and supplies, geology tools and communications equipment, and soft costs such as legal and insurance will once again make up one part of the cost, as will rig mobilization and demobilization. Other major costs will include: • Office accommodations and rental payments we estimate will cost $75,000. • Helicopter services for the length of the summer we estimate will cost $1,800,000; to accommodate a larger staff on-site. • We expect to have a Crane Chopper which will cost an additional $1,500,000 through the period of drilling. • Drilling two slim holes we estimate will cost $3.5 million per well; with a grand total of $7 million. The total cost for this stage is estimated to be $14,658,243. Ormat is requesting $11,726,594 Ormat plans to contribute $2,931,648 Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 5 of 37 11/10/2008 Summary Stage I, total $ 553,200 Stage II, total $ 4,967,484 Stage III, total $ 14, 658, 243 Suggested grant application Stages I, II, and III and the total Ormat's part Grant's part 0% $ 553,200 $ 0 80% $ 993,497 $ 3,973,987 80% $ 2,931,648 $ 11,726,595 77.8% $4,478,345 $15,700,582 2.3 PROJECT BENEFIT Briefly discuss the financial benefits that will result from this project, including an estimate of economic benefits (such as reduced fuel costs) and a description of other benefits to the Alaskan public. The investment made in this effort could yield substantial benefits for Alaska. For one thing, if the size of the resource is between 50 and 150 MW (or greater), it could supply a significant, reliable base-load power source for at least 30 years. Even at 50 MW, the benefits to Alaska’s economy can be significant. For example, according to a 2006 study by the Geothermal Energy Association in Washington D.C. (prepared for the U.S. Department of Energy) an average 50 MW geothermal plant would provide direct, induced, and indirect jobs for 212 full-time jobs and employ an average of 800 man -year during construction. Such a plant would cost $85M ($1700/kW) + for the gathering system $30 M ($600/kW), based on current cost in Nevada. We assume the same costs in Alaska because the efficiency is higher (higher resource temperature, much lower ambient temperature) the physical size of plant (especially heat exchangers) is smaller, which mitigates the higher construction costs in Alaska. The project will have an output of 12 million MWh over 30 years; it will avoid the use of 900 thousand barrels of oil (diesel fuel) per year and avoid emission of 250 thousand tons of CO2 per year. Source – Geothermal Energy Association: http://www.geo- energy.org/publications/reports/Socioeconomics%20Guide.pdf Although the resource assessment itself will not generate renewable electric power, the activity will create jobs, establish local infrastructure, and help develop strategic partnerships. All of which may benefit other resource development projects in the region. Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 6 of 37 11/10/2008 2.4 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.) Not applicable for this project 2.5.2 Grant Funds Requested in this application. $ 15,700,582 2.5.3 Other Funds to be provided (Project match) $ 4,478,345 2.5.4 Total Grant Costs (sum of 2.5.2 and 2.5.3) $ 20,178,927 2.5.5 Estimated Benefit (Savings) enables a project having a potential of at least 900,000 BBL/yr of oil 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.) enables a project having a potential of at least 250,000 tons CO2/yr Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 7 of 37 11/10/2008 SECTION 3 – PROJECT MANAGEMENT PLAN Describe who will be responsible for managing the project and provide a plan for successfully completing the project within the scope, schedule and budget proposed in the application. 3.1 Project Manager Tell us who will be managing the project for the Grantee and include a resume and references for the manager(s). If the applicant does not have a project manager indicate how you intend to solicit project management Support. If the applicant expects project management assistance from AEA or another government entity, state that in this section. The Project Manager is Gene Suemnicht; Exploration & Development Manager, Ormat Nevada, Inc. Other critical managers for whom we are providing resumes include Brigette Martini of Ormat Nevada, Inc. and Larry Junker of Precision Power Company. 3.2 Project Schedule Include a schedule for the proposed work that will be funded by this grant. (You may include a chart or table attachment with a summary of dates below.) The plan assumes a timeline of three years with the bulk of the field work done in the summers. The plan calls for an initial geological scouting, mapping and sampling work, with progression to aerial and ground geophysics work, culminating in a gradient and slim holes drilling program. Please note the terminology ‘stages’ is used here to distinguish from previous documents on the subject of Mt. Spurr development that uses ‘phases’ to describe future planning. In our case more than one stage might occur in a single phase. Stage I Stage I assumes 1 to 2 field teams to be exploring when weather and local conditions allow. This could be a single team of two geologists, or two teams of a geologist and a skilled companion; usually a geology student. A two team configuration allows for increased area coverage and sampling. Best case scenario outing for teams would be transportation to a selected area for a few days work and return to Anchorage for processing and analysis. This would minimize helicopter flying time and cost while optimizing safety. For base operations it is recommended to rent an accommodation in Anchorage. Rental is advantageous for many reasons (to be outlined when required). It is recommended to purchase most of the equipment needed since rental fees for equipment would be several times higher than purchasing, and the equipment is going to be used for several years anyway. 2009 Schedule - • Jan – April: previous existing data analysis. Logistics preparations • May: project geologist in Anchorage for detailed local preparations • June: two geologists single team field work • July – Sep: two teams field work and aerial geophysics • Oct: conclusion of field work, decommission of logistics and storage • Nov – Dec: begin data analysis, field work and logistics planning for next year Stage II Stage II will be a continuation of field work if needed, preferably with the geological teams from the previous year, and beginning of ground geophysical work. Up to four temperature gradient holes are also planned to an average depth of 1,000 feet. With the possibility of at least half a dozen people working in the field area, a small base camp is recommended. This will reduce flying time considerably, but introduces a different set of logistical challenges and costs. The size and capabilities of camp have to be decided upon. It is recommended have Ormat deal with a third party to set-up camp, which will host as well the geophysical crews. Hiring a turn-key geophysical operation will be more expensive. Still, camp cost differences have to be investigated to verify cost versus convenience. Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 8 of 37 11/10/2008 2010 Schedule: • Jan – April: continued data analysis and logistics preparations • May: project geologist in Anchorage for detailed local preparations • June: two geologists single team field work, and camp setup • July – Sep: field work as needed / ground geophysics • August – Sep: drilling • Oct: conclusion of field work, decommission of logistics and storage • Nov – Dec: begin data analysis, field work and logistics planning for next year Stage III Stage III will include drilling two slim holes. Again, cost versus convenience needs to be compared for lower cost camp outsourcing versus turn-key operation. As well, this stage will include considerable flying time with crew and logistics flights, as well as probably a second heavier crane helicopter for the drilling equipment. The cost of a 4WD road should be compared as an alternative to flight time. Considering the cost expenditure, it is recommended to have a geologist present during the gradient drilling. Current plan calls for 2 slim holes at a depth to be determined. 2011 Schedule: • Jan – April: continued data analysis and logistics preparations • May: project geologist in Anchorage for detailed local preparations • June – Sep: drilling • Oct: conclusion of field work, decommission of logistics and storage • Nov – Dec: begin data analysis, field work and logistics planning for next year 3.3 Project Milestones Define key tasks and decision points in your project and a schedule for achieving them. The key tasks and decision points for the work that will be funded by the grant are described in the answer to Section 3.2 above. 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. Ormat will be utilizing its internal abilities to manufacture various components of the project at its factory. This will include the project management capabilities of the individuals listed in Section 3.1 above. Resumes are attached to our response. Additionally, Ormat will be contracting for the services or various equipment suppliers and vendors for certain equipment and services during the construction of this project. The selection of these suppliers and vendors is typical with any project developed by Ormat, whereby Ormat solicits bids from various approved vendors and suppliers and chooses the bid which best suits the requirements of Ormat for the specific project. The list of specific approved vendors and suppliers is confidential but can be supplied upon the execution of a confidentiality agreement between Ormat and the AEA. Ormat Nevada Inc., a wholly owned subsidiary of Ormat Technologies Inc. (NYSE: "ORA") is a vertically- integrated company primarily engaged in the geothermal and recovered energy-based power plants around the world. Additionally, the Company designs, manufactures and sells geothermal and Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 9 of 37 11/10/2008 recovered energy power units and other power generating equipment, and provides related services. The Company has more than four decades of experience in the development of environmentally-sound power, primarily in geothermal and recovered-energy generation. It also supplies remote power units such as those supplied with 60 remote gate valve buildings on the Trans Alaska Pipeline in operation since 1975. Ormat products and systems are covered by more than 75 patents. Ormat currently operates the following geothermal and recovered energy-based power plants: in the United States – Brady, Heber, Mammoth, Ormesa, Puna, Steamboat and OREG1; in Guatemala – Zunil and Amatitlan; in Kenya – Olkaria; and in Nicaragua – Momotombo. Ormat has supplied, developed, constructed or rehabilitated over 1000 MW of geothermal and REG power plants in 23 countries, including the USA, including geothermal rights acquisition, exploration, drilling, power sales, engineering and construction, project financing and operation. Ormat geothermal power plants are operating from resources with temperatures up to 600o F. The company currently owns and operates 410 MW of geothermal and recovered energy generation projects world wide, 270 MW of generating capacity in the USA with 415 employees in Hawaii, California, and Nevada. Ormat resource team comprises 15 geologists, hydrologists and reservoir engineers. Ormat also has a wholly own subsidiary: GeoDrill Inc. which ha four rigs and employs 85. Ormat’s total revenues for 2007 were $295 M with an operating income of $26M. For 9 months ending September 30, 2008 they were respectively $249M and $38M 3.5 Project Communications Discuss how you plan to monitor the project and keep the Authority informed of the status. Ormat typically prepares periodic written status reports of project status and activities during the project development, construction, testing and commercial operation. In the case of Mount Spur Resource Assessment, this reporting would document exploration activities, planning and procurement activities, permits, and other critical items that move the project forward towards meeting critical milestones. This type of report, one provided verbally, and another in writing, would be provided to AEA during the phase of the project for which grant funding has been requested. The frequency for these reports can be discussed and agreed with between Ormat and AEA prior to start of project activities. Attendance at events in Alaska pertinent to renewable energy would be good opportunities for in-person meetings with the Authority, and would be likely at least once or twice every six months. 3.6 Project Risk Discuss potential problems and how you would address them. Safety Risks Because of Mount Spurr’s remote location, early exploration activities require all crew and their equipment to be helicoptered into the site. Thus, it is critical to adhere to all safety measures and ensure all staff is fully trained to maintain the highest safety standards. Ormat’s geothermal leases are located immediately adjacent to Crater Peak, the currently active vent of Mt. Spurr that erupted in 1992 covering the immediate area (including where a geothermal plant might be located) in pyroclastic materials and debris flows or lahars. The 1992 eruption forcibly ejected large blocks up to 3.3 feet (1m) across in a concentrated zone of fallout up to 1.9 miles (3 km) southeast of Crater Peak and blocks and bombs up to 6 miles (10 km) from Crater Peak vent,. Explosive phases of the Crater Peak eruption sent ash and pulverized rock in an eruptive plume to more than 14 km (46,000 ft) altitude and during at least one explosive phase, ash was blown as far away as Manley Hot Springs, 264 mi (425 km) north of the volcano .As the eruption progressed, avalanches of hot debris cascading down the south flank of Crater Peak mixed with snow to form debris flows or lahars that reached the Chakachamna River. Successive pyroclastic flows formed overlapping tongues of coarse debris that coursed down the slopes of Crater Peak and funneled into preexisting drainages. The farthest-traveled Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 10 of 37 11/10/2008 pyroclastic flows moved about 1.8 mi (3 km) from the crater rim, descending more than 3280 ft (1000 m) in elevation. Ormat currently operates a 30 MW geothermal facility, operating since 1993, in a volcanically active area on the Big Island of Hawaii as well as plants near volcanoes in Momotombo, Nicaragua; Zunil and Amatitlan in Guatemala There is several geothermal power facilities worldwide located around or near active volcanoes. Further, geothermal exploration has been performed in many of these settings by the geothermal industry. Emergency plans will be developed for securing the facilities and evacuating personnel if necessary. Although the risk of another Mt. Spurr volcanic eruption is not considered eminent, Ormat will plan for contingencies should volcanic activity intensify. Additionally, exploration work at Mount Spurr will be done primarily during months when the weather is more temperate. This is generally between late May and through September. Man camps will need to be established far enough away from the mountain to enable crew to ride out extreme weather events at the exploration site, if and when they may occur. To extend the exploration effort outside of summer months, surface exploration activities may include use of remote testing facilities that can run unmanned. Such facilities can provide some useful data at times when our field team cannot work. Financial Risks Exploration at Mount Spurr will be an expensive undertaking. Therefore, careful pre-planning is required to ensure that logistics are understood and budgeted properly. Ormat has analyzed Mount Spurr-specific costs by consulting with contacts in Alaska. Ormat will work to secure necessary equipment and plan for other contingencies far in advance. In the long-term construction risks and operations and maintenance risks will be a critical concern. These include building and maintaining infrastructure, as well as acquiring insurance for the power plant. At this time, we are evaluating these risks, however our primary focus for this application is on exploration efforts that can confirm the presence of a resource. We expect to learn a great deal about the construction and operations and maintenance risks from our exploration program. Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 11 of 37 11/10/2008 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. Mount Spurr is located 35 miles northwest of the village of Tyonek. A site-specific assessment of available energy resource is proposed for this phase of the project. The grant money being requested would help fund logistics, surface exploration activities, and initial drilling. Essentially, this is an assessment of geological data from surface investigation and initial test wells. The potential of the energy resource is unknown at this time. The purpose of this project is to assess that potential to determine whether evidence of a resource exists sufficient to justify exploration drilling. If we move forward with the project, we would need evidence to show a utility-scale resource that makes economic sense to develop and transmit power a long distance. The Mt. Spurr volcanic complex is extensive, with volcanic rocks covering at least 100 square kilometers. Steep topography characterizes the area with elevations from about 1,000 feet near the Chackachatna River to over 10,000 feet at the summit of Mt. Spurr. Glacial ice covers most of the complex above 5,000 feet elevation. A major feature of the area is a 4-mile wide horseshoe-shaped caldera or depression developed in the summit area, which is open to the south and southeast. Crater Peak, at about 7,500 feet elevation, is an active volcano which has produced two significant explosive eruptions in the 20th century. The field work for the existing reports on Mt Spurr and the reports themselves were generated in the early to mid-1980’s and the survey techniques were probably not as sophisticated as could be applied today. Electrical surveys for example would look at the area in much more detail if conducted with today’s equipment. The geochemical surveys provide real data but optimism over the significance of the helium and mercury anomalies may be more a sign of those times rather than a true evaluation of potential resource at depth. With these issues yet to be resolved, the Plan for Exploring and Defining the Potential geothermal Resource at Mt. Spurr is as follows: 1. Surface thermal features: Surface thermal features include large areas of steaming ground above 10,000 feet near the summit of Mt. Spurr, and fumaroles discharging in the Crater Peak eruptive vent. A warm spring with a temperature of 40 deg C is located 2 miles south of Crater Peak at an elevation of 2,200 feet. The dissolved silica content in the water indicates a reservoir temperature of 150 deg C. Overall, reservoir temperatures are expected to be higher, ranging up to 250 deg C. Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 12 of 37 11/10/2008 2. Water Chemistry: Only one water sample was available for the study. This sample is unlikely to be a direct leak from the reservoir but instead is provided heat from volcanic gases that leak to the surface ground waters and provide heat. This conclusion is based on the HCO3 and SO4 dominance over Cl. A high-Cl content would characterize a high enthalpy reservoir leakage. This does not mean that a high-Cl water could not underlie the area but the chemical work conducted to date does not define such a water. The report of warm seeps over a one-mile zone is encouraging. Modestly high silica and boron do provide encouragement for higher temperature waters nearby. The high Mg, however, points to cold water input to the sample and lack of high temperature equilibration, with actual reservoir waters as yet undetected. 3. Soil Mercury Survey: Mercury (Hg) is a volatile element often concentrated in soils in areas of geothermal activity. Soil Hg samples were collected over a 30 square-mile area on the south flank of Mt. Spurr at elevations below 5,000 feet. Elevated soil Hg levels, some 18 times higher than background levels, were encountered within a 1.5 square mile area about 1.5 miles southeast of Crater Peak. The 40 deg C warm spring is located on the western edge of the Hg anomaly. The data is an indication that potentially reservoir heat is driving the mercury to the surface. The high mercury values are confined to one rock unit, a recent lava flow from the Crater Peak volcanic vent. An alternative explanation for the mercury “high” is that these are normal mercury levels for the lava flows. 4. CSAMT Resistivity Survey: Controlled-source audio magnetotellurics (CSAMT) is a geophysical technique to measure subsurface resistivity for geothermal exploration. At Mt. Spurr, a CSAMT survey was conducted over the south flank of the volcano. The CSAMT data revealed a very low resistivity layer on the southeast flank of Crater Peak, overlapping with the area of the self-potential and soil Hg anomalies. One station with very low resistivity was confirmed to lie within the overlapping Hg and self-potential anomalies. 5. Heat Source: The Crater Peak vent area on the flank of Mt. Spurr continues to have active fumaroles leaking steam to the surface. There is no question of high temperature in this area. The source water for the fumaroles appears to be local snow-melt recharge. Studies of the volcano system do not identify a high-level silicic magma chamber that could be the heat source and so there is some question as to the presence of a high level heat source to maintain a geothermal reservoir on the south flank of Crater Peak. Attached is a generic model for the Mt. Spurr-type geothermal systems. Referring to the diagram, we know that the vent area (Solfatara) is active and a warm spring (the area shown as HCO3/SO4 increasing) is present. We do not know if the neutral chloride water (reservoir) exists but suspect that the low resistivity may define such a zone. The advantage of geothermal power is that it is base-load, renewable, and a clean power source with near- zero emissions of greenhouse gases and other pollutants. Development in the Western Cook Inlet, such as mineral exploration may rely principally on diesel-fired generation. Such generation has become increasingly expensive and is likely an economic deterrent to development, since the cost of procuring diesel fuel may overwhelm the costs of the project beyond the value of the minerals extracted. The Railbelt relies principally on natural gas, although they are attempting to diversify. Geothermal would help diversify their resource mix. The challenge is that geothermal has to be developed at the geothermal site, and the power source cannot be trucked or shipped like diesel can, nor can the geothermal fluid be piped miles away so the plant can be built near transmission lines. 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. Not Applicable Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 13 of 37 11/10/2008 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. There is currently no infrastructure in this area, thus no existing energy resources will be used. The nearest transmission lines are roughly 40 miles to the east where the Beluga Natural Gas Plant serves the Railbelt Electric Grid. If developed, it is possible that the generation would be connected to the grid at this location. During the resource assessment phase, it is possible that the project may actually create infrastructure in the area, including a 13-14 mile road to the project site or additional over-ground routes to the work site. 4.2.3 Existing Energy Market Discuss existing energy use and its market. Discuss impacts your project may have on energy customers. The Mount Spurr geothermal resource, if developed, would likely serve customers in the Railbelt, although other potential customers would be considered. For the Railbelt, however, these communities are heavily reliant on natural gas resources produced in-state. On page 35 of the Mount Spurr Geothermal Lease Sale No. 3; Final Finding of the Director. Alaska Department of Natural Resources Division of Oil and Gas: June 16, 2008 (Attached), the Alaska Department of Natural Resources concluded that “Although current electrical demand is largely met by natural gas, gas reserves are finite and eventually Southcentral Alaska will have to find another energy source. Geothermal development resulting from this lease sale could contribute to the area’s future energy supplies. Additionally, introduction of a competing energy source in Southcentral Alaska may result in downward natural gas price pressure on local utilities.” Natural gas production in the Cook Inlet is depleting rapidly, causing concern over future supplies for electricity. Thus, a renewable base-load renewable energy project could help bring stability to energy prices by offsetting the need to use these natural gas supplies for electricity production. Geothermal also offers a clean alternative to coal-fired generation, which may otherwise be utilized for electricity production in Alaska. Further, due to the climate in Alaska, plants can be air-cooled, with no need to consume ground-water resources for the cooling process. Geothermal power is a field proven technology with approximately 10,000 MW installed worldwide. Plants can be monitored from a central location to avoid the need for permanent staff to be located at the facility. The lifetime supply of fuel for the plant is capitalized, thus there is no fuel price risk. As a result of these attributes, geothermal power can be used to mitigate future supply shortages of natural gas. Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 14 of 37 11/10/2008 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 This resource assessment will help define the system design that would be used for a power plant in this location. However, this is not the primary objective of the resource assessment. Ormat has standard patented equipment that we have employed for over 1,000 MW of generation capacity mostly air-cooled in our facilities installed across the globe. Naturally, site work for resource assessment will help with assessment of the project site, including geotechnical characteristics. It will help us better define the conceptual integration design and the identification of technical barriers to developing a power plant. The proposed system design for an eventual power plant would be based on patented power generation technology that is currently used at Ormat installed power generation facilities throughout the world. Due to Alaska’s climate, air-cooled condensers would most likely be used for the plant cooling system. See Figures 1-5 showing models for the power plant and the resource. The optimum installed capacity is undetermined, although a likely size will be between 50 and 150 MW, possibly built in phases. Geothermal power plants generally have a capacity factor averaging between 90 and 95%. Anticipated barriers • Gravel will be a major cost for road access and may not be available near the site • Development would require a 13-14 mile road to the site with at least one river crossing • Acquiring insurance • Managing extreme weather • Maintaining infrastructure • Crew safety Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 15 of 37 11/10/2008 Figure 1 above is a conceptual model of Mt. Spurr type resources. Figure 2 above is a map of the project location Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 16 of 37 11/10/2008 Figure 3 – Simplified Binary Cycle Process Diagram In the binary cycle of Figure 3, the Geothermal Fluid is produced under pressure and passes through the tubes of a tube and shell heat exchanger (the “vaporizer”), where it transfers thermal energy to an organic working fluid (pentane or n-pentane) contained in the shell side. The organic fluid vaporizes and these vapors drive the special slow speed turbine (1,800 rpm) direct coupled to the generator. The generated power is conditioned to utility standards and fed to the grid. The geothermal fluid remains under pressure and is 100% injected without any contact with the turbine train components. The organic fluid vapors leave the turbine under positive pressure and are efficiently condensed into liquid form in an air-cooled condenser. This process under normal operation produces near zero air emissions and has the lowest environmental impact of any geothermal technology. Figure 4 – 84 MW Steamboat Geothermal Complex supplies electricity sufficient for all households in Reno, NV Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 17 of 37 11/10/2008 Figure 5 – 125 MW Upper Mahiao Geothermal Power Plant, the Philippines; in operation since 1996 Ormat supplied 125 MW Upper Mahiao Combined Cycle Geothermal Power Plant, Philippines. A geothermal combined cycle is most effectively applied to a steam-dominated resource. The high-pressure steam from the separator drives a back pressure turbine, which is the most efficient use of steam at this stage in the cycle. The low-pressure steam exits this turbine at a positive pressure and flows into the vaporizer of a bottoming OEC. The heat of condensation of the low-pressure stream is used to vaporize the organic motive fluid and the expansion of these vapors drives the organic turbine. The organic vapors are then condensed in a condenser, and pumped back into the pre-heater and the geothermal fluid is re-injected. Since the steam pressure in the vaporizer remains positive, the non-condensable gases (NCG) can simply be vented without any loss of power. The steam condensed in the OEC heat exchangers is re-injected as condensate to the reservoir. 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. Ormat Nevada, Inc. has acquired 35,806.9 acres of geothermal leases on Alaska State lands. Site control requirements established by Alaska Department of Natural Resources in the: Mount Spurr Geothermal Lease Sale No. 3; Final Finding of the Director. Alaska Department of Natural Resources Division of Oil and Gas: June 16, 2008 (Attached) Because these are state lands, authorization to perform exploration activities on the land will be through the Alaska DNR. The Alaska DNR has specific guidelines regarding mitigation measures for exploration and development activities on the site. 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 Ormat will need to obtain authorizations from all applicable agencies for any use of land or resources for feasibility activities. To our knowledge, the description below constitutes the major permits required for the exploration activities that would receive grant funding under the terms proposed in this application. The primary permit that needs to be secured for the Summer 2010 exploration program is a Geophysical Exploration permit from the Alaska Division of Oil and Gas. This permit takes 50-90 days to process. We Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 18 of 37 11/10/2008 would expect to submit a Plan of Exploration to the Division of Oil and Gas prior to applying for this permit. We will submit a Plan of Exploration prior to October 2009 pursuant to our lease agreement with the Alaska Department of Natural Resources. Other applicable permits that may need to be secured prior to the summer 2010 exploration program include: Borough/Local Government (Kenai Peninsula Borough) • Development permits • Approval for pad use (if applicable for temperature gradient wells) Division of Mining Land & Water (DMLW) • Land use permit [11 AAC 96] – for staging areas • ROW [AS 38.05.850] – for roads, trails, ditches, or field gathering lines Division of Oil and Gas (DO&G) • Drilling Permits (if applicable for temperature gradient wells) Office of Habitat Management & Permitting (OHMP) • Fish habitat permits [AS 41.14.840] for activities within or across a stream used by fish (if OHMP determines that such use could represent an impediment to the efficient passage of fish) - culvert installation; water withdrawals; stream realignment/diversion; dams; low-water crossings; construction/placement/removal of material below ordinary high water. Office of Project Management & Permitting (OPMP) • ACMP consistency determination Applicable permits that may need to be secured prior to Summer 2011 exploration program include: Alaska Department of Environmental Conservation (ADEC) • Temporary storage of drilling waste • Oil discharge prevention and contingency plan • Certificate of financial responsibility • Domestic water and wastewater permits Borough/Local Government (Kenai Peninsula Borough) • Development permits • Approval for pad use US Army Corps of Engineers (ACOE) • Any dredging of filling - 404 Permit Division of Oil and Gas (DO&G) • Drilling Permits Other general permits • Permits may be required for establishing man camps and for transporting equipment into the field site. However, the extent and timeline for receiving these permits is undetermined. It is assumed that these permits will not delay the exploration program. • Additional stipulations on required actions prior to certain exploration activities are discussed in Section R. Mitigation Measures and Lessee Advisories of the Mount Spurr Geothermal Lease Sale Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 19 of 37 11/10/2008 No. 3; Final Finding of the Director. Alaska Department of Natural Resources Division of Oil and Gas: June 16, 2008 (Attached) Regulatory; Permitting barriers • At this time, Ormat has not identified any major regulatory barriers that would effect the resource assessment. We intend to work with local partners, including Native Corporations, to assist with the permitting to ensure all permits are obtained in a timely manner. • As progress is made during resource assessment, Ormat will ascertain barriers to construction and interconnection. However, these barriers are not within the scope of this application. 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 Specific environmental and land issues were identified by the Alaska Department of Natural Resources in the Mount Spurr Geothermal Lease Sale No. 3; Final Finding of the Director. Alaska Department of Natural Resources Division of Oil and Gas: June 16, 2008 (Attached) Mitigation measures are specified in this document. Ormat Nevada, Inc. will adhere to these mitigation measures in order to comply with the terms of the lease agreement. Additionally, all of the items listed above shall be addressed based upon the specific circumstances of the host site as the site specific requirements are determined. Ormat has a staff which is trained to handle environmental and permitting issues on a site specific basis. Ormat also contracts out for services for environmental assessments and site work, including permitting. Telecommunication interference is evaluated by Ormat’s engineering team. Aviation considerations have not been an issue for geothermal power facilities due to the limited height of the installation. Visual and aesthetic impacts are also addressed and handled on a site by site basis. Design, paint, and visual requirements at the host site are incorporated into the final design of the project. Due to the small footprint and limited height of the recovered energy generation facility, satisfying these requirements at prior installations has not been a concern for Ormat. 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 Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 20 of 37 11/10/2008 • Requested grant funding • Applicant matching funds – loans, capital contributions, in-kind • Identification of other funding sources • Projected capital cost of proposed renewable energy system • Projected development cost of proposed renewable energy system • Total anticipated project cost, and cost for this phase Estimated total project cost of exploration, drilling and construction: $200 million Estimated cost for this phase: $20,178,927 • Requested grant funding: $15,700,582 • Applicant matching funds: capital contributions,: $553,200 + • Identification of other funding sources: all funding is intended to be from internal sources • Projected capital cost of proposed renewable energy system: $140 million • Projected development cost of proposed renewable energy system: $60 million 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 There are no costs for operation and maintenance anticipated for this phase of the project. No grant funding has been requested for operation and maintenance for this phase of the 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 Mount Spurr geothermal resource, if developed, would likely serve customers in the Railbelt electric grid, although other potential customers would be considered as the region gears up for resource development, such as minerals development in the Western Cook Inlet. At a minimum the price range for power may be between $100 and $300 per MWh. However, we do not have enough data at this time to assign a potential range for the rate of return. We do not anticipate signing an energy purchase agreement with any buyer until the resource assessment is complete. Thus, if a resource is identified by this resource assessment, such an agreement may be signed. 4.4.4 Cost Worksheet Complete the cost worksheet form which provides summary information that will be considered in evaluating the project. See attached 4.4.5 Business Plan Discuss your plan for operating the completed project so that it will be sustainable. Include at a minimum proposed business structure(s) and concepts that may be considered. The sustainability of such a generation facility is directly related to the fuel source. Geothermal is considered sustainable because the resource is produced naturally from underground reservoirs of hot Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 21 of 37 11/10/2008 geothermal brine and injected back into the reservoir. If resource assessment is successful and Ormat completes a geothermal power plant, it is critical to note that Ormat employs an operating division located within North America that handles operations and maintenance of existing operating geothermal generating facilities in the United States which are owned by Ormat. Ormat maintains an operating program for its own facilities that intends to minimize unit downtime with the goal of maximizing revenues while also reducing operation and maintenance costs. Our operations group is continuing to hire additional qualified employees to expand our O&M capabilities for our geothermal power plants. Ormat has significant experience and expertise in operating and maintaining its own equipment, since it has constructed over 950MW of geothermal power plants. Ormat’s operations division is expanding to handle this additional capacity and will continue to do so for any new projects constructed for which Ormat will provide O&M services. 4.4.6 Analysis and Recommendations Provide information about the economic analysis and the proposed project. Discuss your recommendation for additional project development work. Based on the analysis performed on the Mount Spurr geothermal resource and the assessments of economics for this project, Ormat Nevada decided to move forward to participate in the Mount Spurr Lease Sale No. 3 where we acquired 35,806.9 acres of geothermal leases on Alaska State lands. We determined that once leases were acquired, the next step would be a resource assessment necessary to determine the viability and extent of the geothermal anomaly. This resource assessment would be performed through three stages over three years, with the continuation of each phase dependent on results of the preceding phase. These phases are discussed in our answers in Section 3.2. The goal for the resource assessment is to define and delineate the geothermal resource. This will help define project design and construction activities, however, this is not the primary objective of this phase of the project; nor is drafting an operational and business plan. The purpose is to define whether there is a resource that is large enough to be developed and whether this can be done economically. 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 long-term purpose of this project is to generate a clean, reliable, sustainable power source to serve the region. Until the resource is assessed it is difficult to assume the potential savings from annual fuel displacement. Answers provided in Question 2.4 provide some estimates for the generation of revenue and for fuel savings for a geothermal power plant. In our answer to Section 4.2.3 “Existing Energy Market” we discussed some of the major public benefits Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 22 of 37 11/10/2008 to Alaskans over the lifetime of the project. Certainly environmental sustainability is one of those benefits, as well as jobs and infrastructure. 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 The Grant budget form is attached. Total project costs are provided in that form as well as in Sections 2.4 and 4.4.1. A budget overview is provided in Section 2.2. To date, the primary investment made in this project is in acquiring the 35,806.9 acres of Alaska State lands. Ormat spent approximately $3.3 million to acquire these leases through a competitive lease auction which concluded on September 10th, 2008. No field studies have yet been performed by Ormat staff. However, project analysis and feasibility studies have been performed, including a fly over of the site and several fact finding trips to Alaska to attend conferences and meet with stakeholders on project planning and feasibility. Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 23 of 37 11/10/2008 SECTION 7 – ADDITIONAL DOCUMENTATION AND CERTIFICATION SUBMIT THE FOLLOWING DOCUMENTS WITH YOUR APPLICATION: A. Resumes of Applicant’s Project Manager, key staff, partners, consultants, and suppliers per application form Section 3.1 and 3.4 B. Cost Worksheet per application form Section 4.4.4 C. Grant Budget Form per application form Section 6. D. An electronic version of the entire application per RFA Section 1.6 E. Governing Body Resolution per RFA Section 1.4 Enclose a copy of the resolution or other formal action taken by the applicant’s governing body or management that: - authorizes this application for project funding at the match amounts indicated in the application - authorizes the individual named as point of contact to represent the applicant for purposes of this application - states the applicant is in compliance with all federal state, and local, laws including existing credit and federal tax obligations. F. CERTIFICATION The undersigned certifies that this application for a renewable energy grant is truthful and correct, and that the applicant is in compliance with, and will continue to comply with, all federal and state laws including existing credit and federal tax obligations. Print Name Signature Title Date Renewable Energy Fund Grant Application Renewable Energy Fund Grant Application Renewable Energy Fund Grant Application . Renewable Energy Fund Grant Application Renewable Energy Fund Grant Application Renewable Energy Fund Grant Application Renewable Energy Fund Grant Application Renewable Energy Fund Grant Application Renewable Energy Fund Grant Application Renewable Energy Fund Grant Application Renewable Energy Fund Grant Application Renewable Energy Fund RFA AEA 09-004 Application Cost Worksheet revised 9/26/08 Page 35 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. The average annual heat source availability is dependent on the resource characteristics of the geothermal field. This information will not be available until the resource assessment is complete, which is the purpose for obtaining the funding in this grant application. Unit depends on project type (e.g. windspeed, hydropower output, biomasss fuel) The geothermal power facility is dependent on the temperature, fluid production, chemistry, and resource characteristics of the geothermal resource 2. Existing Energy Generation a) Basic configuration (if system is part of the Railbelt1 grid, leave this section blank) Not Applicable at this time 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 (if system is part of the Railbelt grid, leave this section blank) Not Applicable at this time i. Annual O&M cost for labor ii. Annual O&M cost for non-labor c) Annual electricity production and fuel usage (fill in as applicable) (if system is part of the Railbelt grid, leave this section blank) It will not be known until the resource assessment on the project site is completed whether the project will be located within the Railbelt grid and the details of the project design. Regardless of the location, the geothermal power facility will not consume any fuel for the production of electricity. 1 The Railbelt grid connects all customers of Chugach Electric Association, Homer Electric Association, Golden Valley Electric Association, the City of Seward Electric Department, Matanuska Electric Association and Anchorage Municipal Light and Power. Renewable Energy Fund RFA AEA 09-004 Application Cost Worksheet revised 9/26/08 Page 36 i. Electricity [kWh] Not applicable at this time ii. Fuel usage Diesel [gal] Not applicable at this time Other Not applicable at this time iii. Peak Load Not applicable at this time iv. Average Load Not applicable at this time v. Minimum Load Not applicable at this time vi. Efficiency Not applicable at this time vii. Future trends Not applicable at this time d) Annual heating fuel usage (fill in as applicable) Not applicable at this time 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 3. Proposed System Design a) Installed capacity Not yet determined b) Annual renewable electricity generation i. Diesel [gal or MMBtu] n/a ii. Electricity [kWh] Not yet determined iii. Propane [gal or MMBtu] n/a iv. Coal [tons or MMBtu] n/a v. Wood [cords, green tons, dry tons] n/a vi. Other 4. Project Cost a) Total capital cost of new system Not yet determined b) Development cost Not yet determined c) Annual O&M cost of new system Not yet determined d) Annual fuel cost There is no fuel cost once a facility is up and running Renewable Energy Fund RFA AEA 09-004 Application Cost Worksheet revised 9/26/08 Page 37 5. Project Benefits These calculations would all be dependent upon the offset that is being made by the geothermal power facility. In the event it is offsetting electric grid power, then the calculation would be based upon the fuel type of the generation which is offset by the purchasing utility. In the event it would be offsetting the installation of a diesel fired generator to provide electricity, then the offset cost would be tied to diesel oil costs. The figures and benefit calculation requested below cannot be provided until the resource assessment work is completed on the project and an evaluation of the electric grid and electricity prices has been evaluated. a) Amount of fuel displaced for i. Electricity Not applicable at this time ii. Heat Not applicable at this time iii. Transportation Not applicable at this time b) Price of displaced fuel c) Other economic benefits d) Amount of Alaska public benefits 6. Power Purchase/Sales Price The power sales price below cannot be provided until the resource assessment is completed on the project and an evaluation of the electric grid and electricity prices has been evaluated. a) Price for power purchase/sale 7. Project Analysis The economic analysis below cannot be performed until the resource assessment work is completed on the project, an evaluation of the electric grid and electricity prices has been evaluated, and the final design has been completed to determine the actual capital cost for this project. a) Basic Economic Analysis Project benefit/cost ratio Cannot be determined at this time Payback Cannot be determined at this time