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HomeMy WebLinkAboutKISKIL Wood Gasification Energy Project Grant Proposal App Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 1 of 14 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 14 9/3/2008 SECTION 1 – APPLICANT INFORMATION Name (Name of utility, IPP, or government entity submitting proposal) Delta Mine Training Center, Inc Type of Entity: Independent Power Producer Mailing Address P.O. Box 812 Delta Jct., AK 99737 Physical Address Mile 1392 Alaska Highway Delta Jct., AK 99737 Telephone 907 895-2051 Fax 907 895-2054 Email whicks@dmtcalaska.org 1.1 APPLICANT POINT OF CONTACT Name Whit Hicks Title Executive Director Mailing Address P.O. Box 812 Delta Jct., AK 99737 Telephone 907 895-2051 Fax Email whicks@dmtcalaska.org 1.2 APPLICANT MINIMUM REQUIREMENTS Please check as appropriate. If you do not to meet the minimum applicant requirements, your application will be rejected. 1.2.1 As an Applicant, we are: (put an X in the appropriate box) 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); 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 14 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. This project will include two phases. First, reconnaissance (development of the test plan: see Appendix A) and resource assessment of biomass (noncommercial quality trees and shrubs), including harvest/processing costs and actual volume and energy yields. Second, a thorough feasibility analysis including scaled testing of primary (pyrolytic) wood gasification and combustion as the heat source for a 43 KW Stirling generator. Pending the results of this study, a conceptual design for construction and full scale implementation of a 10 unit (430 KW) power plant will be developed. 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 ultimate goal of this project is to produce electricity and employment both sustainably and locally. Thus the name “Keep It Sustainable, and Keep It Local (KISKIL) Energy project.” The project will be located thirty miles east of Delta Junction. The KISKIL Energy project will serve much of the Interior by providing electricity for Golden Valley Electric Association (GVEA) via the grid. Additionally the project will serve Delta Junction, Healy Lake, Dot Lake, Tanacross, Tok and the surrounding areas by hiring regionally, and purchasing wood for fuel locally. The model will be applicable to all small communities and/or mines or other industrial type operations with significant biomass resources nearby. KISKIL Energy is a subsidiary of Delta Mine Training Center (DMTC) organized specifically for this project. DMTC is a 501 (c) 3 nonprofit corporation. DMTC has policies and procedures in place to comply with ISO 9000 standards. KISKIL will be managed by DMTC. With assistance from the Alaska Energy Authority and the resources and capabilities of DMTC, this project will be a success. 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. Phase One- the prefeasibility study (test plan development) will cost $139,046. DMTC will provide $82,190.40 in cash and in-kind services. A grant of $56,855.60 is requested from the AEA Renewable Energy Fund. Phase Two- following the prefeasibility work and approval to proceed form the AEA, a thorough feasibility study will be conducted. Projected income from electricity sales during the feasibility study will be used to help fund the study. A more accurate cost analysis for the feasibility study will be conducted in the prefeasibility phase; however, the initial budget figures for Phase Two totals $2,673,174.70. DMTC will provide $695,813.40 in cash and in-kind services. The grant Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 4 of 14 9/3/2008 request is for $1,977,361.30 Please see Appendix B (Project Cost Summary) 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. KISKIL will not invest in developing new technologies, but instead it will leverage the millions, if not billions of dollars of research and development that has already been spent on alternative energy systems and components. By combining old technology, such as Stirling engines and wood gasification, with modern technology, PC-based supervisory control and data acquisition (SCADA) systems, we can produce electricity sustainably, locally and economically. It has yet to be seen if a biomass-fueled power plant can produce electricity cheaper than existing diesel-fueled power plants in Alaska; however, it is indisputable that biomass (noncommercial quality trees and shrubs) is renewable, available, and can create jobs in many rural and remote communities in Alaska. If a kilowatt of local-biomass-produced electricity cost the same as a kilowatt of diesel-produced electricity this project will be a tremendous success. The same dollar spent on diesel in the past can now stay in the local economy and create employment. These small wood-fueled power plants can serve rural communities both on and off the grid. Example: (untested and based on assumptions from other research) 500 kW electric power generation “We make the following assumptions in estimating delivered fuel costs: • Harvesting cost: $150 per acre • Volume of biomass: 20 tons per acre • Chipping and loading cost: $4 per green ton • Transportation cost: $0.23 per ton-mile • Average one-way transportation distance: 60 miles • Net heating value of biomass: 4,500 BTU per pound “ (Nicholls, et al 2006) Based on above assumptions: Seller’s cost to deliver to KISKIL = $506 per acre Purchase price $35 per ton = $700 per acre Gross profit to seller = $194 per acre or $53,674/year 1 acre yields 40,000 lbs, or 180 million Btu 1.0 kilowatt (kW) = 3413 Btu/hr Assume 30% efficiency for electrical power production 52740 kW/acre x 30% = 15833 kW/ acre Raw biofuel cost per kW = $.0442 Raw biofuel to produce 500 kW = $530/day or .758 acres per day Acres per year = 276.67 130,500 Btu/gallon of diesel = 38.24 kW/gallon = 313 gallons/day 500 kWh at $.135/ kW X 24 hours = $1,620/day Other benefits Fairbanks Daily News-Miner via Associated Press June 2007 “FAIRBANKS (AP) -- The bill for Alaska's fire season could come to more than $106 million to be split between the state and federal government, according to fire officials' Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 5 of 14 9/3/2008 preliminary estimates. That would be a record amount on top of the record-setting 6.7 million acres that burned across the state between June and October.” Based on the example above, these fires could have provided over 100 million megawatt hours of electricity. This could meet Delta Junction’s current electrical demand for the next 2000 years. According to the Alaska Department of Natural Resources, Division of Forestry (Hermanns, 2008), costs for creating defensible space for wildfire protection often exceeds $1200 per acre. By creating a market for previously noncommercial biomass, the cost of creating defensible space could be reduced if not eliminated. Further, slash from logging, the gas pipeline corridor and other land clearing can become a fuel source instead of a potential fire hazard or project expense. This project will investigate means of recovering fuel that would otherwise be wasted or increase the risk of wildfire. 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.) $6,134,785.50 2.5.2 Grant Funds Requested in this application. $2,034,216.90 2.5.3 Other Funds to be provided (Project match) $778,003.80 2.5.4 Total Grant Costs (sum of 2.5.2 and 2.5.3) $2,812,220.70 2.5.5 Estimated Benefit (Savings) $Undetermined 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.) $Undetermined Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 6 of 14 9/3/2008 SECTION 3 – PROJECT MANAGEMENT PLAN Describe who will be responsible for managing the project and provide a plan for successfully completing the project within the scope, schedule and budget proposed in the application. 3.1 Project Manager Tell us who will be managing the project for the Grantee and include a resume and references for the manager(s). If the applicant does not have a project manager indicate how you intend to solicit project management Support. If the applicant expects project management assistance from AEA or another government entity, state that in this section. Whit Hicks will be the project manager until the prefeasibility study is completed and approved by AEA. At that point KISKIL Energy will staff the project as needed, including a project manager. Please see Appendix C (Resume for Whit Hicks’) 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.) Phase one – Prefeasibility (test plan development) will begin July 1, 2009 and should be submitted to AEA on or by September 30, 2009. All other dates and will be determined in Phase one – Prefeasibility (test plan development) 3.3 Project Milestones Define key tasks and decision points in your project and a schedule for achieving them. Please see Appendix A (Phase I: KISKIL Energy Project Test Plan Template) Project milestones will be identified in prefeasibility. 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. Alaska Department of Natural Resources (DNR) Division of Forestry is a major contributer to this project. According to Al Edgren, Delta area forest resource manager, there are 15000 acres of forest resources available for harvest within a twenty five mile radius of the KISKIL Energy project location. Additionally, there is a timber sale available for KISKIL use immediately. 3.5 Project Communications Discuss how you plan to monitor the project and keep the Authority informed of the status. Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 7 of 14 9/3/2008 Please see Appendix A. KISKILL Energy will post a website to keep the general public abreast of the project and schedule a formal presentation with the AEA board to discuss the feasibility study once the prefeasibility work is complete. 3.6 Project Risk Discuss potential problems and how you would address them. Please see Appendix A. A risk management plan will be a product of the prefeasibility work. 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. Biomass According to Al Edgren, Delta area forest resource manager, there are 15000 acres of forest resources available for harvest within a twenty five mile radius of the KISKIL Energy project location. There are hundreds of tons of biomass burned from clearing in the region every year. If the Denali Gas Line Project comes to fruition, it will require a 200 foot wide clearing through hundreds of miles of forest, including that directly adjacent to the KISKILL facility. The prefeasibility study will collect more specific and accurate resource statistics. 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. Currently, the DMTC power plant includes four gensets that are controlled by a SCADA system. There are two 271 kW Perkins, one 100 kW perkins, and one 50 kW, John Deere gensets. 4.2.2 Existing Energy Resources Used Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 8 of 14 9/3/2008 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. Between July 1, 2007 and June 30, 2008, Delta Mine Training Center consumed 78,593.20 gallons of diesel fuel to produce electricity and heat. The cost for this fuel was $247,393.33. Please see appendix A. 4.2.3 Existing Energy Market Discuss existing energy use and its market. Discuss impacts your project may have on energy customers. Our facility is about to be connected to the GVEA grid on its far eastern end. Access to the grid will create a market for biomass generated electricity. During the prefeasibility work sales agreements and pricing will be determined. Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 9 of 14 9/3/2008 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 will be determined in prefeasibility. Please see Appendix A. 4.3.2 Land Ownership Identify potential land ownership issues, including whether site owners have agreed to the project or how you intend to approach land ownership and access issues. The land to be used for this facility is leased by DMTC from the Alaska DNR. The land manager stated that there is nothing to preclude this use. The timber resource to be used by the project is available for sale or donation from the Division of Forestry. 4.3.3 Permits Provide the following information as it may relate to permitting and how you intend to address outstanding permit issues.  List of applicable permits  Anticipated permitting timeline  Identify and discussion of potential barriers This will be determined in prefeasibility. Please see Appendix A. 4.3.4 Environmental Address whether the following environmental and land use issues apply, and if so how they will be addressed:  Threatened or Endangered species  Habitat issues  Wetlands and other protected areas  Archaeological and historical resources  Land development constraints  Telecommunications interference  Aviation considerations  Visual, aesthetics impacts  Identify and discuss other potential barriers This will be determined in prefeasibility. Please see Appendix A. Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 10 of 14 9/3/2008 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 This will be determined in prefeasibility. Please see Appendix A. 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 This will be determined in prefeasibility. Please see Appendix A. 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 This will be determined in prefeasibility. Please see Appendix A. 4.4.4 Cost Worksheet Complete the cost worksheet form which provides summary information that will be considered in evaluating the project. Please see Appendix B Budget Summary and Phase Budget Details. The labor rates are current, including the benefits. The general and administrative rates are current for DMTC for fiscal year 2009. Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 11 of 14 9/3/2008 Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 12 of 14 9/3/2008 4.4.5 Business Plan Discuss your plan for operating the completed project so that it will be sustainable. Include at a minimum proposed business structure(s) and concepts that may be considered. This will be determined in prefeasibility. Please see Appendix A. 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 will be determined in prefeasibility. Please see Appendix A. 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 This will be determined in prefeasibility. Please see Appendix A. 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 Delta Mine Training Center will contribute the overhead costs in addition to some direct costs as defined in Appendix B. DMTC has reserve capital to support the prefeasibility study. Please contact Whit Hicks whicks@dmtcalaska.org or 907 895-2051 for more details beyond that provided in this application. Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 13 of 14 9/3/2008 Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 14 of 14 9/3/2008 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 Whit Hicks Signature Title Executive Director Date November 7, 2008