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HomeMy WebLinkAboutKake Biomass gasifer Grant App Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 1 of 13 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 13 9/3/2008 SECTION 1 – APPLICANT INFORMATION Name (Name of utility, IPP, or government entity submitting proposal) Central Council Tlingit and Haida Indian Tribes of Alaska Type of Entity: Tribal Government Mailing Address 9097 Glacier Highway, Juneau, AK 99801 Physical Address 9097 Glacier Highway, Juneau, AK 99801 Telephone 1-800-344-1432 Fax Email PFrisby@ccthita.org 1.1 APPLICANT POINT OF CONTACT Name Teresa Chan Obo Percy Frisby, CCTHITA Title Senior Vice President Mailing Address AIG Tribal Growth 175 Water Street, 29th Floor New York, NY 10038 Telephone 212-458-3432 Fax 212-298-8491 Email Teresa.Chan@aig.com 1.2 APPLICANT MINIMUM REQUIREMENTS Please check as appropriate. If you do not to meet the minimum applicant requirements, your application will be rejected. 1.2.1 As an Applicant, we are: (put an X in the appropriate box) An electric utility holding a certificate of public convenience and necessity under AS 42.05, or An independent power producer, or X A local government, or A governmental entity (which includes tribal councils and housing authorities); Yes 1.2.2. Attached to this application is formal approval and endorsement for its project by its board of directors, executive management, or other governing authority. If a collaborative grouping, a formal approval from each participant’s governing authority is necessary. (Indicate Yes or No in the box ) Yes 1.2.3. As an applicant, we have administrative and financial management systems and follow procurement standards that comply with the standards set forth in the grant agreement. Yes 1.2.4. If awarded the grant, we can comply with all terms and conditions of the attached grant form. (Any exceptions should be clearly noted and submitted with the application.) Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 3 of 13 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 proposed project is a heating and power platform utilizing wood waste from lumbering and milling operations in Kake and elsewhere, as well as fish processing waste and recyclable paper, to provide both district heating and biomass sourced power to the City’s municipal buildings, residences and businesses. The project encompasses all phases from Reconnaissance; Resource Assessment/Feasibility Analysis/Conceptual Design; Final Design and Permitting, if necessary, and Construction. The following phases have been completed or are close to completion, the team having begun its work in February 2008: Reconnaissance; Resource Assessment/Feasiblity Analysis/Conceptual Design. This Application is for funding of portions of work performed and completed phases as allowable by the Fund, and for the last phases of Final Design and Permitting, and Construction. Since the proposed system is modular in nature and the technology is already commercially available, the initial phases of the project were completed readily and any necessary reports can be made available when needed. 2.2 PROJECT DESCRIPTION Provide a one paragraph description of your project. At a minimum include the project location, communities to be served, and who will be involved in the grant project. The project will be located in the City of Kake, and will serve the entire Kake community. The City of Kake, the Organized Village of Kake and Kake Tribal Corporation have committed to a joint effort, sponsored by the City Council of Tlingit and Haida, the Applicant for this Grant, to implement this project. The project involves the installation of commercially viable, modular technology consisting of a biomass gasifier combustor system (in use for 10+ years) integrated with hot water electrical generating equipment (in use for 20+ years) to provide lower cost electric power generation to remote villages in Alaska that presently rely on high cost diesel fuel to meet their energy needs, for both heating and power. This system is easily replicated in any village or for a particular business operation, the equipment is available within 16 weeks of order, can be installed in less than 12 months and the system can be immediately operational once installed. 2.3 PROJECT BUDGET OVERVIEW Briefly discuss the amount of funds needed, the anticipated sources of funds, and the nature and source of other contributions to the project. Include a project cost summary that includes an estimated total cost through construction. The estimated cost of the project is $5MM, which includes the cost of the technology/equipment, installation/construction, land, buildings, project finance advisory fees, engineering consulting and project management fees, as well as financing costs. 2.4 PROJECT BENEFIT Briefly discuss the financial benefits that will result from this project, including an estimate of economic benefits(such as reduced fuel costs) and a description of other benefits to the Alaskan public. The cost to generate power will be reduced to $.27/kwh versus $.49/kwh, per IPEC. The IRR is in the range of 16%. Based on conversations with the Department of Energy, the USDA, Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 4 of 13 9/3/2008 Bureau of Indian Affairs, Governor Palin, Senate President Green, and the Kake community, the need for reasonably priced power is acute. Just as urgent is the need for affordable heating. Since geographic dispersion has resulted in minimal load centers and difficult transmission logistics, Alaskan villages have had to rely on distributed generation however tied to high priced diesel. Towns and village like Kake are shrinking and are threatened with extinction as their economic bases erode. In addition to lower heating and power costs, the proposed system will decrease CO2 emissions, decrease the financial burden on the State Treasury by decreasing Power Cost Equalization subsidies, create new jobs through new and sustained business development and decrease dependence on volatile oil prices. The savings will enable a reallocation of financial resources to other pressing needs of the community. The proposed system will also provide low grade hot water suitable for greenhouse use, in an identical fashion to Chena Hot Springs Resort. This will enable the local residents to provide a much needed source of fresh-grown vegetables, fruits and flowers, which can also be sold into the regional markets in Juneau. Further, the exhaust gases from the combustor can be sued for drying alder chips to be sold into the salmon and meat smoking industries. 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.) $5,000,000 2.5.2 Grant Funds Requested in this application. $4,750,000 2.5.3 Other Funds to be provided (Project match) $250,000 2.5.4 Total Grant Costs (sum of 2.5.2 and 2.5.3) $5,000,000 2.5.5 Estimated Benefit (Savings) $ see below 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.) $ see below The estimated benefit and savings are based on the fact that the cost of power is reduced from $.49/kwh to $.27/kwh, and that the heating benefit from the proposed system is an added benefit that is generated at no additional cost once the system is in operation. Thus, since most (80%) of the diesel purchased is for heating, the substitution of hot water heating through the proposed system would eliminate a significant portion of the heating expenses of the residents of Kake. Kake’s current purchase of diesel is 480,000 gallons per year, most of which would be displaced by the proposed system. 2007 expenditures for electricity approximate $650,000 not including the $934,000 PCE subsidy according to the AEA Power Cost Equalization Program. Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 5 of 13 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. The manager of the project will be E3 Consulting, LLC, whose business description is attached as Exhibit A and is available at www.e3consulting.com. E3 Consulting is a strategic energy consulting group, with significant experience in renewable and conventional power and energy development projects. 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.) Project is modular and operational in 6 months due to modularization. 3.3 Project Milestones Define key tasks and decision points in your project and a schedule for achieving them. Project is modular and operational in 6 months due to modularization. 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. Advanced Recycling Equipment, Inc. based in Pennsylvania will be providing the biomass gasifier combustor system while UTC Power Corporation will be providing the PureCycle Organic Rankine Cycle electrical generating equipment. Information regarding both vendors and their projects is available online at www.are.com and www.utcpower.com. The Project Finance Advisory division of AIG Global Marine and Energy, as well as E3 Consulting, have been retained to provide project finance, engineering and project management services to the Applicant. The hiring of local vendors and service providers, including construction, will be maximized. 3.5 Project Communications Discuss how you plan to monitor the project and keep the Authority informed of the status. The project will be monitored by both PFA and E3, and monthly updates will be provided on the achievement of milestones, work schedule changes and timeliness, as well as projected activities. AIG PFA will track the contract budget with expenditures and handle drawer requests. Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 6 of 13 9/3/2008 3.6 Project Risk Discuss potential problems and how you would address them. Technical risk: None. Major components have in excess of 10-20 years of operational history. System Integration risk: Minimal and supported by a “No Fatal Flaws Analysis”. Also strong vendor warranties. Construction risk: Minimal since modules are factory produced, skid mounted, and delivered to site, minimizing onsite work. Economic risk: Minimal with locked in fuel costs and displacement of significantly more costly fuel. Market risk: Minimal since system is designed to satisfy existing demand and due to modularization, incremental capacity can be integrated at any time. 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. Kake Tribal Corporation has researched and presented a plan for a wood handling facility that would produce the needed 25 tons per day (equivalent to one dump/garbage truck) of chipped wood to feed the gasifier, and has been in promising discussions with Sealaska Corporation to access their 200,000+ tons/year of wood waste in a mutually beneficial business arrangement. There is also the option of adding fish processing waste as well as recyclable paper products which will add to the efficiency of the proposed system. The benefits to using wood waste is multifold. It reinvigorates the wood handling industry in which the residents have experience in working thereby creating jobs and creating the likelihood of developing new businesses around the use, processing and sale of the derivative products. There is an abundance of this resource that is easily accessible to the village, and there are additional resources available elsewhere. Cleaning the surroundings of such wood waste and delivering it as a fuel source will also lead to the enhancement of related industry, like the overgrown ports that can be put back into use. The proposed system will burn cleaner than current diesel fired power and thus have a positive environmental impact. 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 Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 7 of 13 9/3/2008 the number, size, age, efficiency, and type of generation. Currently, each of the five (5) members of IPEC has a separate power plant in their village and power is diesel generated. Power is generated and delivered by IPEC via above ground transmission lines. 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, diesel fuel is used for the generation of power to the IPEC members, including Kake. For heating, there is no infrastructure and residents and government have little or no option but to use diesel fired generators for power and for building and home heating purposes. This Project will significantly reduce the village’s dependence on diesel and bring deep cost savings to individuals, government and business. It is expected that the existing transmission systems will be used to distribute electric power and, that a relatively low cost network of piping will effectuate district heating. 4.2.3 Existing Energy Market Discuss existing energy use and its market. Discuss impacts your project may have on energy customers. Currently, Kake purchases approximately 40,000 gallons of diesel per month. The impact of this Project on customers is entirely positive – low cost heat and low cost electricity. Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 8 of 13 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 The Project will consist of the Challenger biomass gasifier combustor systems manufactured by Advanced Recycling Equipment, Inc. (Challenger) together with the PureCycle® Organic Rankine Cycle (PureCycle) electrical generating equipment manufactured by UTC Power Corporation, with particular emphasis on the ability of the selected equipment to provide lower cost electric power generation and heating to remote villages in Alaska that presently depend upon high cost diesel fuel to meet their energy needs. The Alaska Biomass Energy Challenger/PureCycle Generation Project (the “Project”) is intended to deliver a modular thermal power generation system that is capable of being deployed in remote locations and can utilize locally derived biomass as its source of energy, thus displacing significant diesel fuel consumption. The system will be designed to provide for all electrical and heating needs of each village. Installed capacity will be 500 kw of electricity generation and all necessary heat to for residential, municipal and commercial structures. Capacity factor is anticipated to be in excess of 98%. No barriers are anticipated provided the existing IPEC system can be used to load balance the system and distribute the electricity to the individual structures. Basic integration is to tie into the existing IPEC grid which will result in local delivery. 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. Kake Tribal Corporation will contribute/match this funding program with the contribution of the land and the building that will house the new system. This property is owned by KTC and thus would require a transfer of title of the land and the structure 4.3.3 Permits Provide the following informationas it may relate to permitting and how you intend to address outstanding permit issues.  List of applicable permits  Anticipated permitting timeline  Identify and discussion of potential barriers As required, however it is our understanding that because of the minimal size of the project it does not reach threshold where most permits are required, particularly where proposed Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 9 of 13 9/3/2008 system is environmentally beneficial. 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 The proposed system with have a positive impact on the environment in that it will reduce current CO2 emission levels by significantly reducing the use of diesel for both heating and power generation. There will be minimal land development activities given the use of existing structure and little or no change in visual or aesthetic qualities because the system will be fully contained within an existing structure. There is no impact on:  Threatened or endangered species  Habitat  Wetlands and other protected areas  Archeological and historical resources  Telecommunications 4.4 Proposed New System Costs (Total Estimated Costs and proposed Revenues) The level of cost information provided will vary according to the phase of funding requested and any previous work the applicant may have done on the project. Applicants must reference the source of their cost data. For example: Applicants Records or Analysis, Industry Standards, Consultant or Manufacturer’s estimates. 4.4.1 Project Development Cost Provide detailed project cost information based on your current knowledge and understanding of the project. Cost information should include the following:  Total anticipated project cost, and cost for this phase  Requested grant funding  Applicant matching funds – loans, capital contributions, in-kind  Identification of other funding sources  Projected capital cost of proposed renewable energy system  Projected development cost of proposed renewable energy system  Total anticipated project cost, and cost for this phase ----------------------$5,000,000  Requested grant funding------------------------------------------------------------$4,750,000  Applicant matching funds – loans, capital contributions, in-kind----------$ 250,000  Identification of other funding sources-------------------------------------------USDA Grant and loan guarantee; Debt equity  Projected capital cost of proposed renewable energy system-------------$2.8MM + heating + fair market value of land/structure estimated at $250,000, above  Projected development cost of proposed renewable energy system----$660,000 (Project Finance Advisory and Project Management and Engineering Services for 12 mths not Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 10 of 13 9/3/2008 including expenses to date since ) 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 is no incremental O&M because the Project is augmenting existing power system and utilizing primarily the same human resources. 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 power and heating purchasers will be the residents of Kake, the government of Kake and the businesses of Kake. The Potential Power purchase/sales price is $.30/kwh The proposed rate of return from the project is in the range of 16% for the power/electricity only and does not include the added benefit of heating. 4.4.4 Cost Worksheet Complete the cost worksheet form which provides summary information that will be considered in evaluating the project. Download the form, complete it, and submit it as an attachment. Document any conditions or sources your numbers are based on here. Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 11 of 13 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. It is proposed that Kake Tribal Corporation will operate the plant. There would also be creation of new jobs in fuel preparation and greenhouse operations. 4.4.6 Analysis and Recommendations Provide information about the economic analysis and the proposed project. Discuss your recommendation for additional project development work. The cost of power will be reduced from $.49 to $.31 per kwH. The cost of heating will be reduced from $40 per million BTU to $3. 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  Lower cost, reliable power. 98% availability of the system. Lifetime  Lower cost heat.  Improvement in village economic environment to support business.  Job creation in the wood handling facility.  Reduced dependence on diesel fired capacity.  Please see fuel displacement information in Section 2.5 Project Cost and Benefit Summary 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 Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 12 of 13 9/3/2008 AIG has been advising the team about funding resources and is actively engaged in completing grant/loan applications on behalf of the Applicant(s). These sources include USDA and private sector funding as necessary. The Applicant’s commitment to the project is driven by the simplicity of the system, the availability of the alternative source of fuel and the dire consequences of not seeking options for its constituents. The Applicant assumes responsibility as the Director of Energy Development in SE Alaska to lead Projects to fruition. Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 13 of 13 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 Teresa Chan OBO Percy Frisby Signature Title Senior VP Date 11/7/08