HomeMy WebLinkAboutKipnuk High Penetration Wind Diesel Heat App
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Applicati on Page 1 of 39 9/2/2008
SECTION 1 – APPLICANT INFORMATION
Name (Name of utility, IPP, or government entity submitting proposal)
Kipnuk Light Plant
Type of Entity: Electric Utility
Mailing Address:
c/o Sam Carl
General Manager
Kipnuk Light Plant
P.O. Box 70
Kipnuk, AK 9 9614
Physical Address:
Kipnuk, Alaska
Telephone
907-896-5427
Fax
907-896-5022
Email
scarlklp@gmail.com; scarlklp@yahoo.com
1.1 APPLICANT POINT OF CONTACT
Name
Sam Carl
Title
Utility Manager
Mailing Address
c/o Sam Carl
General Manager
Kipnuk Light Plant
P.O. Box 70
Kipnuk, AK 99614
Telephone
907-896-5427
Fax
907-896-5022
Email
scarlklp@gmail.com; scarlklp@yahoo.com
1.2 APPLICANT MINIMUM REQUIREMENTS
Pleas e 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)
X An electric utility holding a certificate of public convenience and necessity under AS
42.05, or ( Certificate of Public Convenience LO #700514
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
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Grant Application
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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.)
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.
Construction of High Penetration Wind Heat and Power System for the Community of
Kipnuk
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.
$ 8,588,000 in construction funding is being requested by the Kipnuk Light and Power Utility
Board to build a wind-diesel- heat and power system . This system will reduce diesel fuel
consumption used for both power generation and heating for 180-residences by 40%.
The wind system will generate 4,000,000 kilowatt-hours (kWh) of electricity. The wind energy
will displace (save) 200,000 gallons of diesel fuel, 75,000 gallons of which is now being used to
generate power, and 125,000 gallons of which will be captured and stored for use as heat. The
system as proposed will consist of:
1. Two (2) 750 kW e (kilowatt electrical) Wind turbines mounted on 40-meter-tall tubular
towers
2. Control integration equipment for power regulation and system stability
3. Energy recovery boi lers at the school and central water station
4. Smart electrical metering system
5. Installation of 180 residential thermal energy storage units
The construction and maintenance will be overseen by the Kipnuk Light and Power Utility
Board and the Chaninik Wind Group Board of Directors. Project Management will be
provided by Dennis Meiners of Intelligent Energy Systems (IES), with Construction and
Project Management Assistance provided by STG, Inc.
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Grant Application
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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.
Furnish and Install Wind Turbines $ 7,440,000
Integration, Control and Stabilization $ 1,563,000
Heat Recovery, Storage, Metering and Management $ 779,000
Project Engineering and Management $ 406,000
Project Cost $ 10,188,000
Cash Match From Utility $ 1,600,000
Grant Funds Requested $ 8,588,000
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.
Primary benefits to the Village of Kipnuk and the Alaskan public:
1. Annual reduction of fuel usage by 200 ,000 gallons
2. Reduced power and heating costs
3. Increased local employment
4. Increased revenues to utility
5. Reduced PCE (Power Cost Equalization) payments
Outline of Estimated Financial Benefits if the System is Installed as Proposed:
A note on calculation of financial benefits:
For the purposes of calculating the v alue of the economic benefits to the Vi llage,, the wind-displaced
diesel fuel is valued at $5.00 per gallon as cited in the AEA Conceptual Design Report. The $5.00 per
gallon value is used as an average price paid by the utility for fuel over the life of the project. The value
of home heating fuel is given at $8.00 per gallon.
Estimated Power Generation
Savings from Reduced Fuel
Usage (in gallons and $,
rounded for approximations)
Gallons Saved Cost per G allon Total Savings
Fuel Savings 75,000 $5.00 $ 375,000
Recovered Heat Savings 18,000 $5.00 $ 90,000
Residential Home Heating
Savings
125,000 $8.00 $1,000,000
Total $1,465,000
Based upon the data and calculations in the table below, Key Benefits include:
The Net Reduction in Heating Bills to Customers = $ 563,110
In crease in Utility Revenues = $ 439,000
Renewable Energy Fund
Grant Application
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Wind Turbine Energy Production and Savings (Benefit) to the Village
Note: Calculations are based upon the following value and methods :
1) # 1 diesel fuel = 133,000 BTU/gallon, conv ersion efficiency range ( 70- 90% efficiency), so the net
BTUs @ 90% = 119,700.
3) The two turbines are estimated to generate 5,934,000 kWh per year, of which 4,394,542 kWh
excess of electricity (beyond present electrical needs) that could be used for home heating.
4) 4,394,542 kWh x 3,412BTU/ kWh @ 100% efficiency = 14,994,177,304 BTUs = 125,264 gallon
equivalent available for clean, efficient wind energy used for heating.
5) Using the 125,260 gallons @ $8.00 per gallon = $1,002,117 on heating annually.
6) If the utility (as proposed) sells the excess electricity to be used for heating at a rate of $.10/kWh,
revenues to the utility increase by $439,454.
7) The net savings to the village residents is $563,110 annually, or approximately $3,128 sav ings to
each residence annually.
8) $.10/kWh is the equivalent of heating fuel sold at $2.60 per gallon (presently sold at $8.00 per
gallon).
Operations and Maintenance Costs:
Utility E mployment Increases (benefit) after Wind Energy Installation:
Category/Position Number
of
Workers
Hourly
Wage
Fringe
Benefits
Annual
Hours
Worked
Labor Cost
Utility Manager 1 $20 35% 1540 $ 41,580
Operator
/Windtech 1
1 $18 35% 2500 $ 60,750
Operator/Windtech
2
1 $18 35% 2500 $ 60,750
Backup operator
and Windtech-in
training
1 $15 35% 500 $ 10,125
Backup operator
and Windtech-in
training
1 $15 35% 500 $ 10,125
Office and
Accounting
1 $15 35% 1040 $ 21,060
Office and
Accounting
1 $ 12 35% 520 $ 8,424
9100 $ 212,814
Present Employment (before Wind Energy Installation $ 73,000
Net Increase in Employment after Wind Energy Installation $ 139,814
Wind Turbine
Annual
Energy
Production
(kWh/yr)
Excess
kWh s for
heat
Equivalent
Residential
Fuel
Displacement
Cost to
Residential
Customer@
$ 8.00/gal
Equivalent
Heating to
residential
customer @
$.10/kWhr
Community
savings
1 each AWE 750 2,670,000 1,627,800 46,400 $371,600 $ 162,780 $208,412
2 each AWE 750 5,934,000 4,394,542 125,260 $ 1,002,117 $ 439,000 $563,110
Renewable Energy Fund
Grant Application
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Local labor increases :
Total increase local manhours = $ 96, 000
Management wages increase = $ 43,000
Annual Maintenanc e support from mfg = $ 48,000
Set aside for Major Repairs; $.02/kWh = $100,000
Total Estimated O&M Costs: = $ 287,000
General Benefits :
Some direct benefits are:
1. The expansion of the economical use of wind power in this village, and creating a replicable
model for other villages within the state.
2. The reduction of heat and power cost to consumers .
3. The creation of a new method of rural construction, larger turbines, summer installations.
4. The use of the "Smart Grid" to improve energy management
5. The enhancement of local econom ies by expanding employment opportunities .
The investments of the Renewable Energy Fund can create social value above and beyond their
purchasing power. This can be accomplished by leveraging state funds to attract other investment.
This is accomplished by demonstrating new and more cost-effective ways of generating and managing
energy. Selection and support of technologies such as large village wind heat and smart grids, with
energy storage are important elements which can be used in other communities across the state. If
those investment choices lead to lower cost operations, others will spend their own funds to achieve the
same level of performance. By evaluating a nd actively supporting the objectives of this project, the
State improves the return on its investment by establishing new performance objectives for all village
renewable energy systems, while creating new knowledge, and fostering innovation and new
efficienc ies . This project fits with a strategy of addressing larger energy needs of the community other
than electricity. The success of this project will influence larger public and private investments .
Influencing private capital and local investment brings more resources to the problem and multipl ies the
value of the State’s investment.
Renewable Energy Fund
Grant Application
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Cost and Benefits Summary
(figures rounded for calculation)
Utility Fuel Savings = $ 375,000
125,000 gallons of diesel in residential at $ 8.00 = $ 1,000,000
18,000 gallons in public facility recovered heat = $ 90,000
Increased local employment = $ 139,000
Green Tag Sales $ 4.50/MWhr = $ 22,500
Increased Revenues to Utility = $ 439,000
Home Owner reduced heating fuel costs = $ 563,000
Estimated Project Savings = $ 2,628,500
Less Cost of Increased Operations and Maintenance = - $ 287,000
Estimate d Total Benefits (per year ) = $ 2,341,500
2.5 PROJECT COST AND BENEFIT SUMARY
Include a sum mary of your project’s total costs and benefits below.
2.5.1 Total Project Cost
(Including estimates through construction)
$ 10,188,000
2.5.2 Grant Funds Requested in this application $ 8,588,000
2.5.3 Other Funds to be provided (Project match) $ 1,600,000
2.5.4 Total Grant Costs (sum of 2.5.2 and 2.5.3) $ 10,188,000
2.5.5 Estimated Benefit (Savings) $ 2,341,50 0 annually, NPV, 3%,
20 yrs = $24,647,600
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.)
Benefit $ 2,341,500 (annual)
Benefit to Cost Ratio:
2.41
IRR= 22.59%
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Grant Application
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SECTION 3 – PROJECT MANAGEMENT PLAN
Describe who will be responsible for managing the project and provide a plan for successfully
completing the project within the scope, schedule and budget proposed in the application.
3.1 Project Manager
Tell us who will be managing the project for the Grantee and include a resume and references
for the manager(s). If the applicant does not have a project manager indicate how you intend to
solicit project management Support. If the applicant expects project management assistance
from AEA or another government entity, state that in this section.
Project Supervision/Project Management Board: Chaninik Wind Group Board of Directors,
and Kipnuk Light and Power Utility Board;
Project Manager: Dennis Meiners, Intelligent Energy System s (see attached résumé and
references ).
Project Management assistance: STG, Inc.
Chief Electrical Engineer: Dale Letourneau, P.E. (see attached résumé and references ).
Project Engineers: Albert Sakata, P.E. (see attached résumé and references )
Metering Project M anager: Doug Riffle: metering, monitoring and web based support tools,
systems engineer
Control and Integration; Power System Stability: Gavin Bates of Powercorp, Alaska
Construction: Dave Meyers, STG, Inc .
Wind Turbine Training and Support: AWE Wind Turbines , Roger Tuck of Tuck Enterprises,
and American Wind Energy, the turbine supplier. Roger Tuck is a private consultant who is
experienced in wind turbine and wind farm operation. Mr. Tuck is a master electrician and
maintenance instructor.
Note: The wind turbines and power system have advanced remote diagnostics and monitoring
capability. Autom ated system reports can be generated. Thus the performance of the system
can be monitored via phone modem or Ethernet connection -- without the need for special
software -- through the use of secure web-based visualization software.
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 wind site selected is near the Kugkaktlik River shore, and gravel access pads for turbine
construction and service will be constructed. The site is underlain with a soil layer at a depth of
55 feet, and is sufficient to support the wind turbines. The Construction schedule will be highly
dependent on the date of grant ward notification. If grant award notification is given on or prior
to February 1, 2009, sufficient funds are available locally to purchase the turbines and
necessary peripheral equipment in advance of actual deposit of grant funds, thus allowing the
equipment to be barged in during 2009, and advancing the time schedule by a full year. If the
grant award notification occurs after February 1, 2009, the schedule will remain as listed below,
and Construction will begin in Spring of 2010 and be completed by December 2010. A crane will
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Grant Application
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then be barged-in and -out during the Summer of 2010. This crane will be used to drive the
foundation pilings , and erect the wind turbines .
Control and integration work will begin in September 2009, and be completed during the Spring
and Summer of 2010. This project is being coordinated with other work in the community for
which a crane and other heavy equipment has been mobilized, and in conjunction with the
Chaninik Wind Group projects in Kong, Kwig, Kipnuk and Tuntatuliak.
Overview of Tasks and Approximate Timetable
Activity Start Date
Design and Permitting Winter 2008
Procurement Fall 2009 (Approx. Sept. 15, 2009)
Build gravel pads and access Summer 2009 (Approx. July 1-Aug. 15,
2009)
Mobilization/ Materials delivery Spring 2010 (Approx. May 10, 2010)
Begin Site Construction Summer 2010 (Approx. June 1, 2010)
End Construction/Commissioning Winter 2010 (Approx. Dec. 31, 2010)
1 year Project Support Complete November 2011
3.3 Project Milestones
Define key tasks and decision points in your project and a s chedule for achieving them.
Key
Milestones
Summer
2009
Fall
2009
Spring
2010
Summer
2010
Fall
2010
Winter
2010/2011
2011
(whole year)
Funding
Available
X
Complete Final
Designs and
Construction
Agreements
X
Procurement of
Turbines and
long lead-time
items
.
X
X
Barge
shipments
X
Install Turbines
X
Installation of
Control and
Integration
Upgrades
Jun.
Installation Of
Smart Grid
System
Aug.
Thermal
Storage
Installations
Oct.
Commissioning Nov . Dec.
Project Support X
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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.
Proposed Suppliers and Subcontractors:
Intelligent Energy Systems
Dennis Meiners, Project C oordination
IES is supported by the following engineers and technicians
Albert Sakata P.E Electrical Engineer
Dale LeTourneau, Electrical Engineer
Doug Riffle, Industrial Controls, Communications and Metering Applications Engineer
Powercorp Alaska
Controls and integration, engineering, supply, install, commission and support
Gavin Bates, system engineer, Russell Cahill, electrical technician and Erin MacLarnon, office
manager
STG, Inc.
Construction. Contact Dave Meyers, P.E, and Jim St. George
3.5 Project Communications
Discuss how you plan to monitor the project and keep the Authority informed of the status.
IES will submit m onthly status reports via the internet and/or fax during project procurement,
construction and implementation. The Status Report will be filed within the first 5 working days
of the month following the reportable activity and specifically after each milestone is
completed/attained.
Once operational, the project is capable of being monitored for output, efficiency, and any
possible failures through Web-based monitoring and Web-based high speed diagnostics for
recomm issioning.
3.6 Project Risk
Discuss potential problems and how you would address them.
The primary obstacles to the cost-effective implementation of wind technology for villages has
been:
1) The need for a large-enough scale system to enable economical production and operation
2) The need for the power system to instantaneous ly absorb large amounts of wind, while
m aintaining high power quality
3) The need to be able to store wind energy for later use.
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The proposed system design has been proven to meet all three needs and accomplish all three
objectives.
Important Aspects to be Considered for Project Success:
Power System Stability
Power system stability is important because there is great variation in available wind power from
season to season, hour to hour, minute to minute and even second to second. The presence of
short- term wind speed fluctuations (turbulence) and the frequent passage of weather systems
can lead to highly variable power production. Making use of the available wind requires some
long-term (several hours) storage systems, and the ability to instantaneous ly absorb large
amounts of wind and maintain a stable power system.
Components and Controls
The Components and Control methods selected for this project have been repeatedly proven
and are known to be highly dependable. The thermal storage devices are simple, and have
proven to operate for many years without maintenance. Full integration of the central
supervisory c ontroller signals with the metering system will be done onsite and backed up by a
web-based server. The communications between the supervisory controller of the power system
(which designates the amount of excess wind energy available for "green heat") will be
accomplished with the use of two redundant mechanisms: a powerline carrier signal from the
powerhouse, and through the electrical metering system , via wireless link. Both of these
systems will enable the receivers on the stoves through the pow erplant supervisory controller.
The meters will account for differing energy sales rates , depending on time of day and amount
of excess energy available.
Summer Construction
Many costly delays result from an inability to efficiently complete construction during the
Summer months when there are barge and other equipment and materials shipping options
available, and when daylight and weather are much more favorable. This project proposes to
build short access pads to construct the turbines. A small batch plant will be mobilized to pour
the concrete pile cap and turbine attachments, during the summer months.
Break-in Period and Oversight
The primary project challenge will be solving numerous small-scale issues that commonly occur
after comm issioning and continue through the break-in and training period. A full-time qualified
project engineer will be assigned to t he project from September 2009 through September of
2011 to oversee, address, and solve each issue as it arises .
System Resources Management
Resource Management issues are likely to become fairly common in the initialization and
implementation of a new wind- heat system . New metering and management methods will
need to be developed for the utility. Common issues will include and which will require
additional support are: Management of the prepaid system ; potential rationing of available wind
energy for home heating; careful allocation of PCE; and education of customers . The control
system in light winds now calls for rotation of meters on a first in first out basis, and a re-
prioritizing of the availability of excess wind energy on a daily basis.
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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 fun ds.
· 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, subm it information sufficient to demonstrate that the preceding phases
are satisfied and funding for an advanced phase is warranted.
4.1 Proposed Energy Resource
Describe the potential extent/amount of the energy resource that is available.
Discuss the pros and cons of your proposed energy resource vs. other alternatives that may be
available for the market to be served by your project.
The Draft Regional Wind Development Plan for the Bethel Region was developed by the Alaska
Energy Authority to screen potential wind development opportunities. Kipnuk is designated in this
report as having an outstanding Class 6 wind regime. Regional onsite wind monitoring was
placed in Kongiganak for one year. This data was correlated by meteorologist Ed McCarthy of
W ECTEC, Inc. to correlate Kipnuk weather and airport data with Kongiganak, Kwig and Bethel
long-term data to confirm the suitability of the resource. The results of the wind resource
evaluation indicate an excellent wind resource exists with an average wind speed is 7.78 m/s,
and with the power distribution well-suited for the capture of wind energy. The wind data was
analyzed in the Homer model and compared with the power curves of various candidate wind
turbines.
Alternative Sources of Energy and Ener gy Efficiencies
In order to accurately address future fuel uses and opportunities, the viability of other potential
alternative energy sources were considered.
These include:
1. Waste Heat Recovery; A waste heat recovery system is incorporated into the existing
powerplant, and jacket water heat is captured and used to heat the Village Corporation,
and Kipnuk Tribal Council offices, and accounts for 100 % of the building heat.
Powerplant operators indicate that additional heat is available but there are n o other
nearby facilities that can use the surplus heat. Additionally, this amount of heat will be
somewhat reduced with the reduction of diesel fuel usage, when wind is added.
2. Conservation. An energy use survey of each home is underway. The purpose of this
study by the Chaninik Wind Group and the Kipnuk Light Plant is to identify the level of
energy efficiency upgrades that have taken place and to identify additional efforts which
could have significant impacts on energy usage. This study is still underway, and
preliminary results provide a basis for the expanded use of wind energy to displace
heating fuel.
3. Geothermal Energy: Based on a review of the 2003 Department of Energy map of
Alaska Geothermal Resources, and discussions with elders and with the s taff of the
Department of Natural Resources, no viable geothermal energy source is believed to
exist within the area. However, the use of ground sourced heat pumps which are
supplemented with electric thermal storage devices (which can utilize excess wind
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energy) could be the lowest cost source of heating, and deserves further investigation.
4. Hydroelectric. AEA studies (RW Beck, 1981, Acres -1982, and ISER 1976-1995) do not
indicate any viable sources of hydroelectric energy.
5. Alternative Fuels:
A) Diesel Upgrades: Changes to the new power plant will enable the utility to switch
from #1 to #2 diesel, which will increase fuel efficiency by 5%, or about 7400 gallons
per year. Diesel efficiency improvements at the powerplant are planned for 2009.
B) Wood: Drift wood and scrap wood, when it is available, is harvested and used to
heat homes and steam houses. The Coastal Villages Regions Fund also delivers a
limited amount of beetle-killed tim ber from Kenai. This is used for steam houses
and heating.
C) Other Alternatives Fuels: No other alternative fuels exist locally in significant
quantities
to be considered.
An analysis of the above-listed options shows that there are really only three main options for
producing heat for the village. Wood heating is possible, but is unreliable and other than
occasional deliveries of beetle-killed timber, is entirely dependent upon the whims of nature. As
such, it c an only really be viewed as a supplemental source. Diesel powerplant-generated
electricity and home heating fuel are both reliable and currently in use, but are not good long-
term strategies due to climbing costs and environmental concerns. The only real option for the
long-term energy needs of Kipnuk and other villages where wind is plentiful is the use of wind-
driven turbines that will not only meet the village's present energy needs, but will drive down the
cost of heating homes and businesses with an environmentally sound resource while providing
increased revenue for the local utility and increased employment opportunities. In short, wind
energy is a win-win situation for Kipnuk and other Alaskan villages like it.
4.2 Existing Energy System
4.2.1 Basic configuration of Existing Energy System
Briefly discuss the basic configuration of the existing energy system. Include information about
the number, size, age, efficiency, and type of generation.
The existing power plant has a potential power generation capacity of 635 kW from three diesel
generators with individual capacities of 250 kW, 250 kW, and 135 kW. The average community
load is 220 kW and peak load is 370 kW. The existing power generation facility has a heat
recovery system providing heat to the Kugkaktlik Limited, Traditional Council and Power Plant
Offices. The community has had to frequently ration power, and numerous times has had to
purchase fuel locally in small amounts at retail prices of up to $8.00 per gallon to continue to
generate power until the barge shipments arrive.
A new powerplant and bulk fuel storage facility is proposed for construction in 2010. The Wind
Heat project could be constructed in conjunction with this project and fully integrated into the
system. The new power plant will have a generation capacity of 1,200 kW of diesel generation.
The generators will be sized to meet the current power needs of the community as projected for
the next 10 years. Four generators with the following capacities of 370, 370, 230 and 230 kW
are planned for installation in 2010. The generators will be integrated with an automated control
system which can optimize the selection of gensets.
Population data for Kipnuk show a constant population growth since 1990. The current
population is 680. Data for the last 5 years showed a growth of 7% which has slowed to 1.5%
annually.
New facilities and new loads include:
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AVCP 25 single family dwellings, in next 10 years.
ADOT, new airport facilities, 120 kW
ANTHC, clinic, 50 kW
Coastal Villages Regions Fund (CVRS) Fisheries Support Center potential fish plant.
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.
The viability of various sources of energy was assessed in the Kipnuk, Alaska Rural Power
System Upgrade Conc eptual Design Report 2007. The report, states on page 11: "It is
assumed that upgrades to the community electrical power system incorporating
supplemental wind energy, is a priority and will be conducted within the next ten years."
This report was conducted when fuel prices were below $2.00 per gallon delivered in bulk to the
utility. Last year, bulk fuel wholesale purchases were $4.26 per gallon. This translated to home
heating fuel costs of $8.00 per gallon.
Annual electrical load growth and step increases in demand were projected through 2017.
Demand is projected to grow from a present peak of 339 kW to a projected peak of 709 kW.
The alternatives for meeting these increased loads were narrowed to three:
1. Increased diesel efficiency
2. Conservation
3. Development and Implementation of Wind Energy
The current fuel efficiency of the diesel generation plant can be increased from 10 kWh per
gallon to 14 kWh per gallon. This would result in annual fuel savings of 50,000 gallons per year.
Switching from #1 to #2 diesel fuel could save as much as 7,400 gallons per year because of the
greater BTU production of #2 diesel.
The conceptual design report finds “there are not other economic uses for the surplus heat from
the generators, as no potential users are located in the general area.”
There are many opportunities for conservation being presently explored within the village. The
end result of these explorations are not yet known, but it is quite possible that they will not prove
to be significant.
Wind energy as electricity is a desirable and known resource and provides the best, most
favorable renewable and environmentally sound long-term solution.
4.2.3 Existing Energy Market
Discuss existing energy use and its market. Discuss impacts your project may have on energy
customers.
Electric Power:
In general, the wind-energy system can be expected to displace in excess of 40% of the fuel
currently being used to generate electricity, regardless of the efficiency of the diesel generation
system.
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AEA 09-004 Grant Application Page 14 of 39 11/10/2008
Using a basis of 1,800,000 kWhs per year of average required generation, these savings range
from 80,000 to 47,000 gallons annually.
Heat:
A survey was conducted of heating fuel usage of each residence, and these results are being
correlated with other records. This information indicates that, o n average, a typical residence in
Kipnuk uses 766 gallons of heating fuel annually, leaving an estimated 136,000 gallons of
heating fuel available for displacement with wind.
Heating fuel represents the single greatest cost of maintaining a residence. Typical costs last
year exceeded $ 6,000 per hous ehold. The availability of wind correlates well with heating
needs. The ability to store this wind energy at night and when the loads are low, sell this wind
energy for half the cost of heating fuel, and store the wind energy for use when needed, can
reduce average residential fuel costs by approximately $3,000 annually per household.
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
Kipnuk High Penetration Wind -Power and Village Heating System
It has been demonstrated that low -penetration wind-diesel systems in which the proportion of wind to diesel
rarely exceeds 30%, are not economical and construction costs are disproportionately high. More importantly
such systems fail to address the most serious problem of soaring home heating costs which are five (5) to
eight (8) times the cost of electricity and are responsible for crippling rural community economies. The
primary objective of this project is to use wind energy to annually displace 75,000 gallons of diesel fuel used to
generate electricity and 125,000 gallons used for residential and community heating. This represents a 40%
community-wide reduction in fuel usage. The multiple benefits of this project are returned to the community
through increased utility revenues, increased local employment and lower energy costs.
The requested funds are to be used to construct an integrated high-penetration wind-diesel village heat and
power system .
The system includes:
4 Two 750 kW, direct drive wind generators
4 Wind-diesel control and integration upgrades
4 Heat recovery boiler at the school
4 180 residential high efficiency thermal storage heaters
4 A Smart metering system
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 15 of 39 11/10/2008
Overview: Two wind turbines with a rated output of 750 kilowatts for a total rated output of
1500 kW, are paired with multiple diesel engines, a flywheel gr id stability device, 1800 kW of residential
energy s torage, and 200 kW of energy storage and heat recovery located in the school. The regulation of
electrical system voltage and frequency is stabilized using a flywheel energy storage system which allows the
diesel generation to be decreased and all available wind energy to be captured and used.
A supervisory control system monitors the electrical load demand and configures various system operating
modes. As wind energy becomes available, which occurs frequently at night most of the winter, the
supervisory control system would signal the electrical meters on each home that excess wind energy is
available to customers at a reduced rate. The meter would then send a signal which enables the Electric
Therma l Storage heaters to automatically absorb and store excess wind energy as heat. The supervisory
control system would determine the amount of available wind energy, while optimizing power production and
component output. The metering system would account separately for diesel-only and wind-only energy sales
and calculate the bills accordingly. Thermal Storage Devic es in each home would allow customers to capture
excess lower-cost wind energy and store it for use throughout the day or for several days.
Below is a diagram of the proposed system. This diagram contains three future elements, the addition of
more wind turbines, solar panels, and distributed residential energy storage. These three components are
shown only to indicate the extent of the system potential. The diagram indicates the future implementation of
plug-in vehicles for local transportation.
The project design offers a very simple and reliable wind-diesel architecture, which will achieve 50% fuel
savings at the electric utility, and 50% of the fuel requirements of the community.
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 16 of 39 11/10/2008
System Components
Wind-Diesel Integration
In all high-penetration applications, close generation, load controls and the ability to stabilize the grid are key
features. The controls must not only trigger diesel generators to start and stop, but must also issue power set
points for each component in the system and send enable/disable commands to the wind turbines as well as
control any demand-managed devices, such as the thermal stoves.
In this application, the output of the wind plant is designed to be oversized to the load. The excess power is
sent over the electrical distribution system to select valuable thermal storage devices which are interruptible
loads. A fast acting Dynamic Grid Interface is connected to a boiler in the school and connected into the heat
recovery system of the powerplant. These loads will be the initial wind energy absorption loads and will be
used to heat the school and maintain all diesel generators in a hot and read y-to-operate setting. The
commercial boiler in the school will be used to capture a limited amount of the excess wind energy and will be
used as the first energy sink to keep grid frequency from rising. The grid interface instantaneously absorbs
power fluctuations caused by changes in turbine output. When coupled to a flywheel energy storage system,
the diesel powerplant will be able to operate using its smallest generator set, and can be modified to operate
in a diesel's off-mode. The flywheel provides bursts of real power to cover any loss of output from the wind
turbines or sudden increases in electrical load until sufficient diesel capacity can be initiated.
The power system is managed by a computerized supervisory controller, which monitors all sys tem
parameters and makes decisions based on sub-second time scales to regulate each component of the wind-
diesel system. The supervisory controller tracks the wind and engine output along with load demand and
upon meeting preset criteria for changing conditions, automatically carries out instructions with safety margins
such as selecting, turning engines on/off, managing heat recovery loads, and shutting wind turbines on and
off. When the wind power is insufficient, the supervisory controller selects and starts the most efficient engine
or combination of engines, brings those engine(s) up to synchronous speed, and commands the wind turbines
to turn off. To achieve significant fuel savings , high-penetration wind-diesel systems must be able to operate
indefinitely at instantaneous wind penetrations of greater than 100%. There are a number of configurations to
high penetration wind diesel systems, which are not covered or compared in this study. However, the keys to
high penetration reliability remain the same: control of the diesel station, wind turbines and other components,
and a method to stabilize the grid while reducing diesel loading.
The output of the wind turbines, can be controlled through p ower set point control, in which the turbine
controller pitches the rotor blades to maintain a s pecified output.
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 17 of 39 11/10/2008
Project Location: The aerial photo below shows up to 4 turbines, for future permitting purposes.
Figure 3 shows the control and communications relationships of the pow er system components. The design
enables high wind penetration at all times, with the existing power system stabilized at low loads with the
flywheel to support any changes in power requirements or loss of wind output, while decreasing diesel fuel
usage.
The remote heat recovery boiler will be placed at the school, to absorb a limited amount of excess wind
energy, and the smart meter enabled thermal energy storage units in each of 180 residences will capture the
remaining wind. In low winds, the diesel power system will operate in a high -penetration mode, with the
smallest genset on line or possibly turned off, and any excess wind captured to displace fuel used to generate
electricity. As wind speeds increase greater proportions of wind energy are captured as heat.
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 18 of 39 11/10/2008
Figure 3 Wind-Diesel System diagram.
Single Line Medium High Penetration Wind Diesel Control and
Integration Schematic
REV
B
Powerstore Flywheel Energy Storage and
Hierarchical Control System
Created: 9/3008 DM and GLB
Powercorp Alaska, and IES LLC
GS
DI
Ctrl
GS
DI
Ctrl
GS
DI
Ctrl
GS
DI
Ctrl
D
Power
store
Ctrl
370 kW
Diesel
Genset
370 kW
Diesel
Genset
230 kW
Diesel
Genset
230 kW
Diesel
Genset
Power Electronics
Interface
Village LoadTo Wind
Farm
BGI
Ctrl
Boirer,
Bi-directional
Power electronics
interface
School Heating System
Distrubuted
Integrated
Control
Interface
Fiber-Optic/Wireless Ethernet
Link
Fiber-Optic/WirelessEthernet LinkFdr
Ctrls
Wind
Turbine
DI Ctrl
M
Kipnuk Wind
Diesel System
Wind
Turbine
DI Ctrl
180, 10 kW
Residential
Thermal
Energy
Storage
ABS - Wind
Farm Isolator
AWE 750 kW
Wind Turbines
Diesel Powerplant Control
The main features of diesel operation include: precise fuel management, increased operating temperatures,
special engine monitoring and control, and reverse power protection. This design anticipates the installation
of new generators sets which can operate efficiently over a range of load conditions in parallel operation with
the wind turbines. The control system and pow er electronics design would select the most efficient generator
to always be on line.
Heat Recovery Boiler Grid Interface
The remote heat recovery boiler with dynamic response capabilities will be placed at the school. The Boiler is
controlled by a grid interface which has three distinct roles:
1. To provide a demand-managed device, capable of delivering he at to a heating loop in a
complementary manner to the availability of the wind energy.
2. To provide frequency stabilization through the high speed frequency monitoring and the rapid
adjustment of load from the boiler grid interface.
3. To provide a fully adjustable load with small 100W steps and an adjustable power factor without
inducing damaging harmonics into the power system.
Powerstore Flywheel Grid Stabilization
Basic Stabiliz ation and Functionality
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 19 of 39 11/10/2008
There is great variation in available wind power from season to season, hour to hour, minute to minute and
second to second. Since the power of the wind is proportional to the cube of the wind speed, the presence of
short term wind speed fluctuations (turbulence) and the frequent passage of weather systems can lead to
highly variable power production. This would not be a problem for systems with proportionally small wind
capacity, or if the load could be exactly correlated to the wind, but this is not the case. The Pow erStore
consists of a flywheel which is electrically coupled to the power system. The flywheel and power electronics
interface by itself is capable of basic stabilization of both the voltage and frequency of the power system
without any additional information from external sources. The PowerStore system achieves stabilization
through sensing of the grid and step-less absorption and exportation of real power for frequency variation and
reac tive power for voltage support. The energy stored in the flywheel reduces cyclic loading and smoothes
out short term fluctuations as the electric load and wind turbine outputs no matter how rapidly they change.
This level of stabilization translates into large savings due to the ability to operate smaller more fuel efficient
generator sets, lower diesel set points , reduced spinning reserve and diesel maintenance.
Operating M odes:
Diesel + PowerStore
In this m ode the Power store is used to reduce spinning reserve requirements and to provide energy for short
overloads. This saves fuel by allowing the smallest generator to operate for longer periods, while reduc ing the
number of engine generator starts and stops, configuration changes and maintenance on the generators.
Diesel + PowerStore + Wind Turbine
In this mode, the Diesel + PowerStore operates in parallel, with the Wind Turbines. This mode has all of the
previous functions, including a significantly reduced requirement for spinning reserve and the frequency and
voltage fluctuation reduction. In addition, the wind turbine output is monitored and the wind turbines are
allowed to run at their maximum output until the power output. The load on the diesel generators is reduced
to a preset parameter usually 10% - 40% of prime power output. At that point the supervisory controller
signals the metering system that a specified level of excess wind energy is available for sale, and the meter
enables the thermal storage devices on the system to operate at appropriate levels. For instance if there is
insufficient wind energy to meet all the customer needs, certain areas of town can be energized or the number
of elements in a particular device can be limited.
Diesel + PowerStore + Limited Wind Turbine
The Diesel + PowerStore + Limited Wind Turbine mode operates as the previous mode, with the addition of a
control loop to limit the output from the wind turbines such that the diesel generators are never under-loaded
which is detrimental to both the stability of the power system and the mechanical operation of the diesel
generators.
For the pitch-controlled wind turbines such as the AWE 750 and Fuhrlander 600 machines, the output of the
wind turbine can be limited in order reduce the amount of power generated without losing all of the power
generated by the machine. The controller can also turn off the wind turbines one-by-one in order to maximize
the amount of power delivered by the wind turbines without causing an over-power situation.
Future Operating modes, Diesel-Off M ode:
As the operators become more confident with the wind-diesel operation, the control system can be
programmed to operate the PowerStore as the voltage and energ y source for the system, allowing the diesel
gensets to be shut off entirely for extended periods of time. This operational mode is not proposed at this
time.
Electric Thermal Storage
A baseline energy use survey was conducted in Kipnuk. This study indicates that an average home in Kipnuk
uses over 760 gallons of heating fuel annually. An average home consumes 150 gallons of fuel per month
November through Febr uary, and this consumption increases with the presence of wind. During a windy week
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 20 of 39 11/10/2008
in the winter, home owners report fuel consumption from 30 to 55 gallons.
This project proposes to capture the wind and use it to heat homes throughout the year using Electric Thermal
Storage (ETS). ETS is the method of capturing excess wind generated electricity as heat and storing it for
use at a later time. An ETS unit is an ins ulated metal box, about the same size as a Toyo Stove, which
contains electric heating elements which lie within special, high-density ceramic bricks. These bricks are
capable of storing vast amounts of heat for extended periods of time. During periods of excess wind energy, a
signal from the powerplant supervisory controller is sent to the metering system. The meters then enable the
relays which turn on elements which heat the bricks. Operation of the system is completely automatic. A
sensor monitors the outdoor temperature to regulate the amount of heat the systems stores in the bricks. A
thermostat regulates the delivery of the heat to the room. Each unit has a built in microprocessor that allows
the owner to configure the operation for their needs. There are over 100,000 of these units in operation in the
mid-west states and off-peak heating is common in Europe. The system provides a lower-cost low
maintenance method of home heating.
Operating on an eight-hour night time charge schedule, with supplemental charging in periods of high wind, a
10 kW thermal storage unit would supply the main room of a house with 14,000 BTU/per hour per unit for 24
hours per day. This is similar in size and energy output of a Toyo Stove. The pictures below present both an
exterior and interior view of a room unit. The dimensions are 58 inches in length, 24.5 inches in height, and
10.5 inches in depth, and when filled with heat charge bricks , each unit weighs 690 lbs.
The room units (shown above) are non-ducted and are designed to heat the room or area into which they are
placed. These heaters can be used in new construction applications or as a retrofit or supplement to an
existing heating system, and only require an electrical connection to operate.
Stored heat is circulated evenly and quietly by a fan inside the unit as the room thermostat calls for heat.
Individual units are easy to operate and require very little maintenance. The amount of heat stored in the brick
core of the heater is regulated (either manually or automatically) according to seasonal weather conditions
using an outdoor temperature sensor and an onboard microprocessor.
The Smart metering system enables the ETS to charge, and allocates the costs differently between off-peak
wind and diesel-only generation. The metering system working with control signals from the diesel plant
insures that customers are only charged for the reduced rates excess wind rate for heating. .
This project proposes to install 180 residential ETS room heaters. Because of the poor condition of many
electrical service entrances, upgrading of approximately 100 service entrances are required. The budget
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 21 of 39 11/10/2008
includes the replacement of 100 service entrances and meter bases in order to receive accommodate the new
installation in a safe manner.
Metering System
Implementation of the wind/thermal storage requires a method of notifying the stoves of the availability of
low -cost wind energy, and a way to account for the difference in cost of wind versus diesel-generated
electricity. This is done through new meters, which will be placed on each home. The proposed metering
platform creates a wireless communications link which provides fully automated, intelligent two-way
communications between the powerplant and each meter. The advanced meters offer many additional
features that will allow the utility to be managed more effectively, and optimize diesel station operation.
The m etering system will consist of three (3) collector meters one at the school, one at the washeteria/water
plant, and the last at the powerhouse. Each residential customer will have a single-phase meter at his or her
home. These meters will communicate with the data collecting three-phase meters to create a mesh network.
The meters are designed for plug-and-go capability, which eliminates programming and simplifies installation.
This same metering system has been selected for use because it has proven to be a best practice
management tool for the Alaska Village Electric Cooperative.
Three of the most important features are:
1. Demand control capability that allows the utility to control Thermal Storage Devices
remotely. Thermal stoves will be enabled for green energy pricing only when a signal
from the utility indicates that an excess of wind energy is available. The meter can
switch the stoves on and off according to the amount of excess wind energy available.
The meters can also control other electrical devices such as water heaters and/or
lighting and thermostats.
2. User interface: The meters come with an in-home display device that can be used to
inform the customer about his or her cost and energy usage. In the future they can be
enabled to enter credit card information to pay bills directly.
3. Pre payment option; T he proposed meters can be configured with a prepay option,
which requires consumers to pay in advance of their use. This feature is requested by
small utilities, because it mitigates the financial risks associated with power sales and
reduces embarrassing utility disconnects, billing disputes and damage to local
relationships . The user display in each home, allows the customer, real-time,
information about consumption.
Through smart metering, the utility will:
· Enable time of use and green energy management rate structures
· Activate thermal storage devices when wind is available
· Understand load profiles, and enable demand control schemes
· Fairly and more accurately allocate costs of utility service according to actual consumption
· Encourage conservation of electricity
· Detect system problems and imbalances
· Lower the cost of utility service to improve profitability
· Recover related costs of utility service to improve revenues
The need for low -cost residential heating represents the largest potential load for the Kipnuk Light Plant and
the community of Kipnuk.
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 22 of 39 11/10/2008
Wind Turbines:
Two candidate wind turbines were primarily considered for this project, these are: The Fuhrlander 650 and the
AWE 750. An analysis using both turbines was made for cost effectiveness. The c omparative economic
feasibility favors the use of the AWE 750. As experience is gained with this turbine, options exist to implement
a large rotor to turbines and increase the turbine output to 900 kW each. Both turbines are pitch-controlled
and asynchronous generators. The economics favor installing larger wind turbines, and more importantly,
sufficient wind turbine capacity must be installed to enable significant fuel savings, and sufficient energy
available for the community.
These turbines were selected for performance and availability. The AWE 750 is assembled in Little Rock
Arkansas, and quotes deliveries in Summer 2009. The Fuhrlander has a lead time of 22 months.
Cost estimates for turbine installation were developed after geotechnical investigations and load analysis, and
are summarized in Table 3. Installation costs estimates were developed for both types of turbines. Gross
annual estimated energy production for each turbine was arrived at through comparison of power curves and
wind resource information using HOMER. The results are summarized in Table 4. A 20-year investment
horizon and a 3% nominal interest rate were used for economic analysis.
Table 3 – Wind Turbine Assumptions
Per-Turbine Costs Fuel Saving gallons Turbine
Model
Rated
Power
(kW)
Hub
Height
(m)
Lifetime
(yr) Capital
Replacement O&M Power
Generation*
Recovered
Heat*
AWE
750
750 40 20-25 $3,200,000
3,500,000
$ 1,500,000 $75,000 60000
450,000
9,000
2, AW E
750 1500 40 20-25 $6,400,000 $ 3,000,000 $150,000 75000 18000
Table 4 – Wind Turbine Energy Production
Wind Turbine
Annual
Energy
Production
(kWh/yr)
Excess
kWh s for
heat
Equivalent
Residential
Fuel
Displacement
Cost to
Residential
Customer@
$ 8.00/gal
Equivalent
Heating to
residential
customer @
$.10/kWhr
Community
savings
1 each AWE 750 2,670,000 1,627,800 46,400 $371,600 $ 162,780 $208,412
2 each AWE 750 5,934,000 4,394,542 125,260 $ 1,002,117 $ 439,000 $563,110
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 23 of 39 11/10/2008
The AWE 750 Wind Turbine:
American Wind Energy,Inc . is a medium -sized wind turbine manufacturer headquartered in Little Rock,
Arkansas. AWE is manufacturing Lagerway wind turbines under license, and offers one primary size wind
turbine, which has a generator rating of up to 900 kW, depending on the blade set with which it is fitted
AWE 750 Wind Turbine Specifications
Component
Cut in Wind Speed 3 m/s
Cut out Wind Speed 25 m/s
Power regulation Individual blade pitch control
Generator type Asynchronous, 3 phase, 1000-2000 rpm, nominal 1800 rpm, 60
Hz, 690 VAC
Rotor Diameter 52 meter ( m optional)
Tower 40 meter
Control Pitch regulated, and load set point
Tower weight 37000 kg
Rotor weight 11,600 kg
Nacelle weight 23,000 kg
The AWE 750 is a three bladed, horizontal axis wind turbine which utilizes variable rotor rotational speed (13
26 rpm, 23 rpm nominal) and full pitch control. This allows the turbine to operate aerodynamically efficiently
over a wide range of wind speeds. The AWE is one of a handful of a very l imited number of variable speed
wind turbines in this size range, and is about the largest turbine that can be installed and serviced with locally
available equipment.
The rotor has a diameter of 52 meters, and the turbine has a rated output of 75 0 kW , but can be outfitted for
low wind speed conditions with a larger 54 meter rotor. An important feature of this turbine for off-grid
applications is that the permanent magnet generator is connected to an IGBT inverter with variable voltage
and frequency, resulting in high electrical efficiency, minimal harmonics and no reactive power requirement.
This project proposes to install two (2) AWE 750 kWe wind turbines, on 40 meter tubular steel towers. The
turbines will be supported on pile foundations. The foundations will be underlain with gravel work pads and
pile caps connected with a poured concrete base connection. These turbines are located near the shore of
the Kugkaktlik River and construction can take place anytime of the year with Summer and Fall the planned
construction periods.
These turbines will be placed approxim ately 750 feet apart, with the first turbine located 15 00 feet from the
existing 12.47 kV transmission line.
Communications:
To enable the advanced features of grid stabilization for high wind penetration systems, and maximum
utilization of wind energy, the PowerStore system must operate in a coordinated manner with the other major
system components distributed throughout the grid. This is done through a network of distributed integrated
controllers. These controllers are designed to interface with existing diesel station controls and are typically
mounted into existing control cabinets. These devices communicate over the Ethernet and are most reliably
connected via fiber optic cable. Each device is driven by advanced software applications which allows each
component in the system to recognize and coordinate its activities with the other controllers on the system.
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 24 of 39 11/10/2008
The addition of an intelligent, distributed network of component c ontrollers which are linked by high speed
communications is a key feature in ac hieving optimiz ing wind energy capture, improving efficiency, and getting
the full benefit of every component in the system. The controllers can be built into the automation controls of
the powerplant or can be provided as an overlay that works with an existing system. A DICN controller would
be embedded in the PowerStore module, as well as in the wind turbine and (potentially) within the diesel
controllers. Thus , the modular distributed control system controller can be used as a complete or
supplementary Supervisory Control and Data Acquisition (SCADA) system which will issue start, stop, step
point c ommands, drive user interfaces, and enable remote diagnosis and alarming of system problems.
These features are essential for high availability, and keeping downtime to a minimum. The system consists
of small DIN-rail mountable modules which are interfac ed to component controllers and use industry standard
Ethernet communication hardware.
M onitoring the Wind Turbines
The wind turbines are provided with a customer interface to the wind turbine controller (WTC).
Monitoring modules are added in order to communicate with the wind turbines. These modules send
information and receive information -- such as the state of the machine (running, stopped, on-line and off-line,
power generated, alarms, nacelle position, etc.)-- back and forth between to the PowerStore supervisory
controller and the other individual controllers. Commands can be initiated from the wind turbine controller or
from the PowerStore. Typically, instructions include: starting machines, stopping machines, and reducing the
power output of the machine through pitch regulation or power set point control. The WTC would
communicate via fiber optic cable.
Heat Recovery and Demand-M anaged Devices
This system is designed so that output of the wind farm typically exceeds the electric requirements of the
community. Under these conditions, wind turbine output can be curtailed, and loads can be managed to
capture or control this energy. Two methods are available in this configuration: heat recovery and demand
control.
At the school, an electric boiler and grid interface, (Dynamic Boiler Grid Interface, DGI), would be installed.
The boiler grid interface uses the electric boiler elements, and a variable load inverter system to provide very
fast frequency, voltage and power factor correction and capture of excess wind energy. This boiler power
demand would be controlled and used to respond to balance the power system during times of collapsing
wind power generation. In this instance, the DGI captures the first 200 kW of wind energy and follows the
load very closely, balancing the energy generation to the demand through direct frequency control. The DGI
assists the PowerStore by rapidly absorbing longer bursts of energy, on a much smaller scale. The electric
heat recovery boiler would be plumbed into the existing heating system, and regulated as part of the heating
system, using the same thermostatic controls. Excess wind energy, when available, would be captured in
this boiler and the heat used to offset fuel costs of running the high school. The school represents a large
interruptible energy storage system. The heat recovery load at the high school will require separate metering
and a service panel, including cables and breakers. The system would use the existing temperature controls
and act as demand-managed devices controlled through the master control overlay. The method of
communication proposed is Ethernet.
Major community buildings with large heating requirements, such as the school, city offices, clinic, city shop,
and water and s ewer treatment facilities , represent potential customers with large heat demand that could also
benefit from excess energy produced by an expanded wind plant.
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 25 of 39 11/10/2008
Available Wind Energy:
The following Figure shows a good seasonal correlation between when the wind energy is available and
heating fuel usage is required The available wind is lower during the Summer months and increases in the
W inter.
The figure below is a representation of the available wind compared to the electrical load. This information is
available from the Homer analysis, and shows a strong correlation that there are large amounts of available
wind energy when the load demand is low, for example, at night in the W inter. To be valuable , this energy
must be captured and stored. Below is an example of the load profile versus available wind for typical week in
January.
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 needed for the project has been granted to the utility by the village corporation. A signed affidavit to
that effect is included below .
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 26 of 39 11/10/2008
Renewable Energy Fund
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AEA 09-004 Grant Application Page 27 of 39 11/10/2008
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
No potential barriers to the project's use of Alaska state funds have been identified. The construction of the
wind and power project will require some of the following review and/or permitting,
1. Coastal Project Questionnaire
Since Kipnuk is located in a coastal zone, the project requires submittal of a Coastal Project
Questionnaire to the State of Alaska, Department of Natural Resources (DNR). The DNR
coordinates review of the questionnaire by various state agencies and assists in identifying
required permits pertinent to the project. The standard review spans about a 30-day period.
2. Fire Marshall Plan Review
The construction of the new power generating facilities will require submittal of a complete set
of construction documents to the State of Alaska, Department of Public Safety, Division of Fire
Protection (Fire Marshal) for plan review and approval. The State Fire Marshall then issues a
Plan Review Certificate to verify compliance with adopted Building, Fire, and Life Safety codes.
Final stamped drawings must be submitted along with the application fee for project review. A
minimum of one month is anticipated before comments may be received from the Fire Marsha
3. Alaska Department of T ransportation
If the construction of a tie-in to the existing elec trical distribution system falls within an existing
Department of Transportation (DOT) right-of-way, a utility permit from the DOT will be required.
4. Alaska Department of Environmental Conservation Review
The Alaska Department of Environmental Conservation (ADEC) regulates the operation of
diesel power generation facilities by a consistency review process. The Application for the Pre
Approved Limit Diesel Generation Facility must be submitted prior to the facility startup,
provided that the nitrogen dioxide emissions do not exceed 100 tons/year. The review is set up
to accommodate future growth of a power plant, provided that the growth is requested during
the initial application, and it does not exceed the 100 ton/year on nitrogen oxide emissions.
Power plants which fall into the sizes necessary for Alaska villages will not exceed the 100
ton/year level. The addition of the Wind System will significantly reduce the emissions of
harmful air pollutants.
5. Regulatory Commission of Alaska Certification
The Regulatory Commission of Alaska (RCA) regulates public utilities by certifying qualified
providers of public utility and pipeline services and facilities at just and reasonable rates , terms,
and conditions. This keeps rates as low as possible while allowing the utility to earn a fair
return. The commission also determines the eligibility and the per kilowatt-hour support for
electric utilities under the Power Cost Equalization program.
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 28 of 39 11/10/2008
6. State Historic Preservation Office
The State Historic Preservation Office (SHPO) is required, under Section 106 of the National
Historic Preservation Act, to review any state of federally funded project for potential of
disturbing cultural resources.
7. Federal Requirements
· U.S. Fish and Wildlife Service
The U.S. Department of the Interior Fish and Wildlife Service will require that any construction
project be reviewed for impact to endangered species. The Fish and Wildlife Service has been
consulted with respect to this project, and has requested further review due to the known
presence of listed species and/or designated critical habitat in the action area, or to the
suspected presence of listed species in the vicinity of the action area. Because of the absence
of federal funds , no formal consultation is required.
· U.S. Army Wetlands Permit
Projects that disturb or place fill material on existing soil requires a request for a wetlands
determination from the U.S. Army Corps of Engineers and, if found to be wetlands, application
for a Department of the Army Permit must be submitted for, and granted, before construction
begins.
· Federal Aviation Administration Review
Projects located less than 5 miles from a runway or airport, such as this Wind System, should
complete Form 7460-1, “Notice of Proposed Construction or Alteration,” and submit all
necessary elevation and height of structure information to the Federal Aviation Administration
(FAA), Alaska Region, prior to construction. The FAA reviews the plans and determines
whether the construction of the project will present a hazard to air traffic in the vicinity. The
FAA is very responsive and typically provides project determinations within one week of the
completed form submittal.
· Bureau of Indian Affairs
If the construction of a tie-in to the existing electrical distribution system falls within an existing
right-of-way through Native allotment(s), a permit from the Bureau of Indian Affairs (BIA) will
likely be required.
· Federal Regulatory Commission
If the construction of a tie-in to the existing electrical distribution system falls within an existing
right-of-way through federal lands, a utility permit from the Federal Energy Regulatory
Commission (FERC) may be required.
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
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 29 of 39 11/10/2008
· Archaeological and historical resources
· Land developm ent constraints
· Telecommunications interference
· Aviation considerations
· Visual, aesthetics impacts
· Identify and discuss other potential barriers
In analyzing potential environmental and land issues, it is important to note that:
1) The land for the project has been selected by the local village corporation, and there is no Federal money
involved.
2) No significant filling of wetlands is anticipated.
3) There are no endangered species present
4) There are no anticipated conflicts or threats to migratory birds
5) The sites selected are do not represent hazards to flight operations
6) The sites selected are not located in archeologically sensitive areas
After contacting the USFWS, the FAA and the Corp of Engineers, it has been determined that no permits to
construct this project are needed. In each location, the powerline to the wind turbines will be extended
underground from nearby 3 phase power. No power poles will be installed, and no aerial transmission lines,
(which could present a hazard to migrating birds ) are being constructed. The wind turbines will be placed on
pile foundations, which will require the construction of minimal filling of wetlands, and don’t require a Section
404 permit by the Corp of Engineers. It is not anticipated that any of the Chaninik projects will interfere with or
result in the mortalities of any endangered species or migratory birds. The USFWS, Corp of Engineers, FAA
and State permitting agencies have been contacted. USFWS concerns have requested that powerlines be
buried if possible, to refrain from using guyed towers, and to maintain lattice towers by keeping them free of
raven nests. Preliminary locations were presented to the FAA, and they have requested a final review of the
selected sites, and that the wind turbines be surveyed within one month of installation. We will be providing all
necessary information to the USFWS, the Corp of Engineers, the FAA and the Alaska State Division of
Governmental Coordination. Andrew Grossman has been hired as an environmental cons ultant for the
Chaninik Wind Group projects. He is a retired USFWS and NMFS biologist experienced in permitting of
construction projects in Alaska.
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
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 30 of 39 11/10/2008
Cost Estimate:
The costs include the cost of the wind turbines, interconnection and control equipment. The interconnection
and control equipment are included with the wind turbine balance of station costs, along with foun dations,
installation, spare parts inventory, site surveying and preparation, O&M facilities, equipment, project
management, and engineering services. Although several federal and state agencies would need to be
contracted if federal funds are involved, n o licenses or permits are expected to be needed, and therefore only
minor provisions in the cost estimate have been made for permitting, and licensing.
Some documentation of environmental issues is expected to be required to obtain permits required by local
authorities, such as the FAA, the USFWS, and the Army Corp of Engineers. In addition no provisions have
been provided for development agreements such as those needed to sell excess wind energy to a public
facility for use as heat.
The following Syste m Costs are calculated based on construction experience and supplier quotes:
Furnish and Install Wind Turbines $ 7,240,000
Integration, Control and Stabilization $ 1,563,000
Heat Recovery, Storage, metering and management $ 779,000
Project Engineering and Management $ 606,000
Project Cost $ 10,188,000
Cash Match From Utility $ 1,600,000
Grant Funds Requested $ 8,688,000
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
The operations and maintenance costs for this project will be funded by revenues.
Operations and Maintenance Costs:
The wind turbines should receive ½ hour of daily inspection with the addition of 2 hours per week allocated
per turbine.
Total 4400 local system manhours = $ 96, 000
1720 hours of management = $ 43,000
Annual Maintenanc e support from mfg = $ 48,000
Set aside for Major Repairs; $.02/kWh = $100,000
Total Estimated O&M Costs: = $ 287,000
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 31 of 39 11/10/2008
Explanation of O&M Costs:
Control and Communications/ Metering System:
The control system and flywheel come with a two year maintenance contract and an extended warranty is
available for a fee of $1000 per month. The local operators will be trained to use the control and integration
system. Typically automated operation reduces the local labor burden.
Wind Turbines:
The wind system is estimated to operate 350 days or 50 weeks per year with 2 weeks of scheduled
maintenance. Service and maintenance agreements as well as loss or damage insurance is available from
the manufacturer, and the cost of the turbine includes a 24 month service agreement. The terms of these
agreements are negotiated at the time of purchase, and include many options which range from complete
coverage and performance guarantees. A budget of $1000 per month per turbine, or $.02/kWh per year is
set aside. The cost of the turbine includes one week of factory training for two local operators, and one week
on site training. The turbines have advanced diagnostic package with remote diagnostics which enable full
time monitoring, remote programming and remote technical assistance.
The wind turbines should receive ½ hour of daily inspection with the addition of 2 hours per week allocated
per turbine.
(350 days per year x ½ hour per day = 175 hours
2 weeks x 40 hours annual maintenance = 80 hours
8 hrs per turbine per month = 72 hours
Weather factor = 24 hours
Administration and management = 100 hours
Total man-hours per turbine = 4400 man-hours per year per turbi ne (includes
two technicians per turbine and associated
utility work)
Cost of maintenance materials:
Misc. Grease and lubricants = $ 120
Replacement parts, brake pads, etc. = $ 120
Maintenance budget = $ 240
Current local wages for powerplant operators are $16 per hour, with no benefits.
The project proposes to pay the operators $18/hour and increasing hours based on the production of energy
from the turbines. This project proposes to install a total of 2 turbines, with a combined output of over
5,000,000 kWhrs.
Utility Operation Costs, before Implementing Wind Generation
Category/Position Number of
Workers
Hourly Wage Fringe Benefits Annual Hours
Worked
Labor Cost
Utility Manager 1 $18 0% 1040 $ 18,720
Operator 1 $16 0% 1040 $ 16,640
Operator 1 $16 0% 1040 $ 16,640
Office and
accounting
1 $15 0% 1040 $ 15,600
Office and
accounting
1 $12 0% 520 $ 6,240
Total 4680 $ 73,840
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 32 of 39 11/10/2008
Utility Operation Costs, after Implementing Wind Generation
Category/Position Number of
Workers
Hourly Wage Fringe Benefits Annual Hours
Worked
Labor Cost
Utility Manager 1 $20 35% 1540 $ 41,580
Operator /Windtech 1 1 $18 35% 2500 $ 60,750
Operator/Windtech 2 1 $18 35% 2500 $ 60,750
Backup operator and
Windtech in training
1 $15 35% 500 $ 10,125
Backup operator and
Windtech in training
1 $15 35% 500 $ 10,125
Office and accounting 1 $15 35% 1040 $ 21,060
Office and accounting 1 $ 12 35% 520 $ 8424
Total 9100 $ 212,814
Local Turbine Maintenance:
Maintenance can be divided into three categories: routine, unscheduled and scheduled.
Routine maintenance is required to maximize performance, maintain safety, and ensure a full operating life of
each turbine. An estimate of the cost of annual and 10 year maintenance is provided below. This installation
cost estimates include a cost for specialists to be brought in for the first year to perform these functions, and
provide additional on-site specialized training to local personnel.
This estimate includes setting aside an amount annually for extended and unscheduled maintenance.
Excluding major component inspections and replacements, the following maintenance schedules generally
apply to each turbine type.
Weekly and Monthly Inspections
· Visually inspect turbine and site for obvious problems
· Record meter and run time readings
· Inspect for loose fasteners
Bi-Annual Inspections and Service
· Rotor fasteners torqued, and blades inspected and cleaned.
· Inspect, and lubricate drive train. Check gearbox oil. Tighten seals and covers. Inspect couplers.
· Inspect generator for signs of overload and excess heating. Grease front and rear generator bearings,
inspect cable terminations and connections.
· Inspect, clean and grease yaw system.
· Inspect, clean and adjust wind speed wind direction instruments, as needed.
· Inspect parking brake pads for excessive pad or disk wear, and replace when there is 4mm or less of
material left on the pads. Inspect calipers, lines and hydraulic station and compete static pressure
tests. Replace pads approximately every two years.
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 33 of 39 11/10/2008
· Tower: Fasteners are to be checked in accordance with a torque list. All base nuts inspected for
torque movement of torque marks, wear or corrosion. Inspec t tower welds and safety cables.
· Controller: System checks inspect wiring and connections. Repeat acceptance testing annually.
10 Year Inspections
Every 10 years, the wind turbines should be thoroughly inspected. Particular attention should be paid to the
blades. Most manufacturers recommend that the blades be removed and deflection tested for integrity and
strength. This exercise can be conducted using a tower-attached jib crane. Each blade would be removed
and lowered to the ground, where the blades would be placed in a jig and tested for deflection. At this time
the blades would be either replaced, resurfaced, and/or repaired as needed.
Repair and replacement fund for failure of major components
An annual replacement account will be set aside to replace major components on the turbine. This set aside
account would be based on an annual production estimate of $.02/kWh. This amount could be readjusted
based on rising costs and the comparable cost of fuel.
Other System Maintenance
Metering Systems
The metering system comes with a two year maintenance and technical as sistance agreement which
includes:
Installation and training of onsite personnel. Hardware maintenance agreements are available on the
hardware. Local personnel will be required to deal with c
Electric Thermal Storage Units
The Electric Thermal Storage (ETS) unit is a simple technology whereby wind-generated electricity can be
stored as heat so that it can be used for heating 24 hours per day. The wind diesel control and metering
system will make wind energy available when it is in excess and thus available at an affordable cost, which
will be sold at approximately $.10/kWh.
The ETS units are highly reliable, and typically operate for many years with little more than cleaning. An
annual set-aside of $50 per unit per year for maintenance is a reasonable figure.
Training is provided both at the factory and in the field by factory personnel. Most components that are likely
to fail, such as the blower fan or controller, are modular and replacement parts can be mailed and easily
replaced by the home owner.
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 34 of 39 11/10/2008
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
Energy Purchases:
Kipnuk Light Plant provides electricity to the community and holds the certificate of public convenience.
A household survey was conducted, and the results indicate that residential customers are desperate for
lower cost heating options, as heating fuel is becoming unaffordable at $ 8.00 per gallon. Electric Thermal
Storage is a method by which excess wind generated electricity can be stored as heat so that it can be used
24 hours per day. The excess wind energy will be offered to customers at $.10/kWh, which is equivalent to
heating oil equivalent of $ 2.60 per gallon. Since there is no local wood, or peat or coal, wind heat in this
application will be the lowest cost heating source, and highly desirable.
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.
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.
Andrew Crow, from the University of Alaska Anchorage, is working with the Chaninik Group to develop
a regional wind system business plan, based on a cooperative business model. The primary elements
of this plan include utilizing combined funding from the savings of displaced diesel fuel to pay for
system maintenance, and overall administration. The greater the number of wind turbines, the more
fuel displaced, the more viable will be the financial strength of the group.
One of the principles of successful operation will be to create a well-paid job in each community to
support the wind system operation, and to create a network of trained operators, one in each village
who can support each other.
The overall business plan would be administered by the Chaninik Group with the assistance of the
automated meter reading and information technology systems. In each village the system would be
administered through the use of prepaid meters. The business plan in developed will provide a
detailed management and financial plan, and outline utility performance standards.
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 35 of 39 11/10/2008
4.4.6 Analysis and Recommendations
Provide information about the economic analysis and the proposed project. Discuss your
recommendation for additional project development work.
The financial burdens of rising and increasingly volatile utility and fuel costs in rural Alaska have been
well documented by the state studies such as ISER’s “Effects of Rising Energy Costs on Household
Budgets, 2000-2006.” This study showed that in rural communities where good jobs are few,
households pay an inordinately large share of their income to heat their homes. This study was written
in 2007, before impacts of that year's fuel price increases, followed by doubling diesel prices in 2008
could be included.
The installation of large commercial grade wind turbines in Kipnuk and other rural communities makes
sense. When the wind blows, more fuel is used to heat homes, public buildings and businesses.
Every household in Kipnuk, and most places in rural Alaska, is struggling to pay their heating bills.
Electrical usage is important, but by comparison, the costs are not as crippling as paying for heating
fuel. The installation of commercial grade wind turbines intended to generate large amounts of excess
of energy, when combined with metering and storage systems are needed to make energy affordable
in rural Alaska. This method reduces heating and electrical bills, while stabilizing local economies
through increased jobs and utility revenues. This approach makes sense from a long-term technical
and financial perspective because large commercial grade wind turbines are well designed and
reliable, and generate sufficient energy value to support long term maintenance and investment.
This application of wind is the type of innovation and demonstration that is needed to significantly
reduce costs.
Kipnuk Light Plant as a member of the Chaninik Wind Group conducted an Alternate Energy Survey to
help determine the us es and need for energy in the community. The questionnaires showed that wind
power was an obvious alternative to diesel generation, and that the real problem to be addressed is
not reducing the cost of electricity; it is more critical to reduce the cost of residential heating.
The questionnaire was returned by almost every household, here is a sampling of comments
(verbatim transcription) received:
"We try our best to keep up with the costs of fuels and lights, in order to have transportation to survive"
– Sarah David.
"Wind generators will lower energy costs and improve the fuel efficiency of the power generators in my
village. The wind generators should be placed to the west side of the village along with the new power
generators and tank farm where is will be away from residential areas. The community can get its
electrical needs all from wind generators without depending on diesel generators. This will save the
community thousands of dollars every year." -- Bonnie Amik
"We would like anything to try to lower energy costs. Our gasoline is rising from $5.35 to $7.10 or
something like that. Our heating fuel rise to $8.10. I think we are going to have hardships for some
people who don’t have jobs this coming winter. Freight is increasing also." -- Jesse Paul
"I think that the community should go for the wind energy system. If the wind, high winds will not wreck
them by blowing them off their site locations. That would save energy costs of high living conditions
that has to do with paying for our bills and transporting with the skyrocketing costs of fuel oil." – Nick
Paul
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 36 of 39 11/10/2008
SECTION 5– PROJECT BENEFIT
Explain the economic and public benefits of your project. Include direct cost savings, and how
the people of Alaska will benefit from the project.
The benefits information should include the following:
· Potential annual fuel displacement (gal and $) over the lifetime of the evaluated renewable
energy project
· Anticipated annual revenue (based on i.e. a Proposed Power Purchase Agreement price, RCA
tariff, or avoided cost of ownership)
· Potential additional annual incentives (i.e. tax credits)
· Potential additional annual revenue streams (i.e. green tag sales or other renewable energy
subsidies or programs that might be available)
· Discuss the non-economic public benefits to Alaskans over the lifetime of the project
Primary benefits to the Village of Kipnuk and the Alaskan public:
1. Annual reduction of diesel fuel usage by 220,000 gallons annually ,4,400,000 over project life
2. Reduced power and heating costs
3. Increased local employment
4.Increased revenues to utility
5. Reduced PCE (Power Cost Equalization) payments
Outline of Estimated Financial Benefits if the System is Installed as Proposed:
A note on calculation of financial benefits:
For the purposes of calculating the value of the economic benefits to the Village and the Alaskan
Public, the wind-displaced diesel fuel is valued at $5.00 per gallon as cited in the AEA Conceptual
Design Report. The $5.00 per gallon value is used as an average price paid by the utility for fuel over
the life of the project. The value of home heating fuel is given at $8.00 per gallon. The actual cost this
year is $8.10 /gallon.
Estimated Power Generation
Savings from Reduced Fuel
Usage (in gallons and $,
rounded for approximations)
Gallons Saved Cost per Gallon Total Savings
Fuel Savings 75,000 $5.00 $ 375,000
Recovered Heat Savings 18,000 $5.00 $ 90,000
Residential Home Heating
Savings
125,000 $8.00 $1,000,000
Total $1,465,000
Based upon the data and calculations in the table below, Key Benefits include:
The Net Reduction in Heating Bills to Customers = $ 563,110
Increase in Utility Revenues = $ 439,000
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 37 of 39 11/10/2008
Wind Turbine Energy Production and Savings (Benefit) to the Village
Note: See Section 2.4 for a full discussion of the calculations and methodology used in determining values in th e above
table.
Utility Employment Increases (benefit) after Wind Energy Installation:
Category/Position Number
of
Workers
Hourly
Wage
Fringe
Benefits
Annual
Hours
Worked
Labor Cost
Utility Manager 1 $20 35% 1540 $ 41,580
Operator
/Windtech 1
1 $18 35% 2500 $ 60,750
Operator/Windtech
2
1 $18 35% 2500 $ 60,750
Backup operator
and Windtech-in
training
1 $15 35% 500 $ 10,125
Backup operator
and Windtech-in
training
1 $15 35% 500 $ 10,125
Office and
Accounting
1 $15 35% 1040 $ 21,060
Office and
Accounting
1 $ 12 35% 520 $ 8,424
9100 $ 212,814
Present Employment (before Wind Energy Installation $ 73,000
Net Increase in Employment after Wind Energy Installation $ 139,814
Benefits to all Alaskans:
The investments by the State of Alaska in renewable energy c an create social value above and
beyond their purchasing power. by leveraging new and more cost-effective ways of using renewable
energy to lower community costs. The successful completion of this project will demonstrate the
expanded use of wind energy in small communities to lower heating and electrical generation costs ,
improvements in energy and utility management through use of the smart grid, and a method of
preserving capital in small communities and strengthening local economies. .
Each of these elem ents improves the state’s return on its investment, and leads the way to lower
overall costs. By evaluating and actively supporting this project, the State creates new knowledge ,
and fostering new ways making and using electricity. This project will influence larger public and
private investments, thus bringing more resources to the problem of rural energy and thus multiplying
the value of the State’s investment.
Wind Turbine
Annual
Energy
Production
(kWh/yr)
Excess
kWh rs
for heat
Equivalent
Residential
Fuel
Displacement
Cost to
Residential
Customer@
$ 8.00/gal
Equivalent
Heating to
residential
customer @
$.10/kWhr
Community
savings
1 each AWE 750 2,670,000 1,627,800 46,400 $371,600 $ 162,780 $208,412
2 each AWE 750 5,934,000 4,394,542 125,260 $ 1,002,117 $ 439,000 $563,110
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 38 of 39 11/10/2008
Cost and Benefits Summary
(figures rounded for calculation)
Utility Fuel Savings = $ 375,000
125,000 gallons of diesel in residential at $ 8.00 = $ 1,000,000
18,000 gallons in public facility recovered heat = $ 90,000
Increased local employment = $ 139,000
Green Tag Sales $ 4.50/MWhr = $ 22,500
Increased Revenues to Utility = $ 439,000
Home Owner reduced heating fuel costs = $ 563,000
Estimated Project Savings = $ 2,628,500
Less Cost of Increased Operations and Maintenance = - $ 287,000
Estimated Total Benefits (per year) = $ 2,341,500
Project Cost and Summary
Total Project Cost
(Including estimates through construction)
$ 10,188,000
Grant Funds Requested in this application $ 8,588,000
Other Funds to be provided (Project match) $ 1,600,000
Total Grant Costs $ 10,188,000
Estimated Benefit (Savings) $ 2,341,500 annually, NPV, 3%, 20 yrs =
$24,647,600
Public Benefit Benefit $ 2,341,500 (annual)
Benefit to Cost Ratio:
2.41
IRR= 22.59%
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 39 of 39 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
- authorize s 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
T he 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.
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