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Home My WebLink About6.B Costworksheet Banner Wind Project 100708Renewable Energy Fund RFA AEA 09-004 Application Cost Worksheet Banner Wind Project Page 1 Application Cost Worksheet: BANNER WIND PROJECT, NOME, AK Please note that some fields might not be applicable for all technologies or all project phases. Level of information detail varies according to phase requirements. 1.Renewable Energy Source The Applicant should demonstrate that the renewable energy resource is available on a sustainable basis. Annual average resource availability.Class 5 and 6 Wind Resource –Banner Ridge, Nome Alaska. 18 Turbine Wind Farm, Entegrity Wind Turbine EW50: 1.17 MW Max Capacity with production of 2,936,000 kWh annual production estimate from wind farm array including array losses which represents a 29% capacity factor on the maximum output capability of the turbine. This is based on actual data analysis and actual array layout design modeled for the site and location from the Snake River Anemometer installed by AEA. Turbine Availability Assumed 95%, production estimation 2,789,200 =27% Capacity Factor (NOTE: Entegrity is achieving 98% availability on turbines with full O&M Package as WCE is providing that are maintained properly) (Also, this does not take into account the expected substantial increased output for air density in the coastal arctic location) OUTPUT IS DEPENDENT ON WIND SPEED Unit depends on project type (e.g. windspeed, hydropower output, biomasss fuel) 2.Existing Energy Generation a)Basic configuration (if system is part of the railbelt grid, leave this section blank) Existing Generating Equipment (Brand & Model #)Size (kW) Age (Years) Avg. Efficiency (kWh/Gal Diesel) EMD #20-645F4B 2,865 23 13.08 EMD #12-645E4 1,500 19 12.84 Renewable Energy Fund RFA AEA 09-004 Application Cost Worksheet Banner Wind Project Page 2 Caterpillar #3616 3,660 17 16.39 Caterpillar #3516B-LS 1,875 9 14.35 Wärtsilä #12V32B 5,211 3 16.32 Wärtsilä #12V32B 5,211 3 16.32 Caterpillar #3456B 430 3 Black start; haven't had to run it enough to get # Boiler 1.5M BTU 3 Emergency use; haven't run to get # Boiler 1.5M BTU 3 Emergency use; haven't run to get # b)Annual O&M cost i.Annual O&M cost for labor $ 1,187,403 ii.Annual O&M cost for non-labor $ 6,958,135 c)Annual electricity production and fuel usage (fill in as applicable) i.Electricity [kWh]30,542,141 ii.Fuel usage (if system is part of the Railbelt grid, leave this section blank Diesel [gal]1,932,287 Other 0 iii.Peak Load 5,080 iv.Average Load 4,030 v.Minimum Load 2,173 vi.Efficiency 15.81 vii.Future trends Above numbers is based on 2007 data. The addition of the Rock Creek Mine coming online September 2008 is expected to approximately triple the numbers from 2007. d)Annual heating fuel usage (fill in as applicable) i.Diesel [gal or MMBtu]Not Available ii.Electricity [kWh]Not Available iii.Propane [gal or MMBtu]Minimal iv.Coal [tons or MMBtu]Not Used v.Wood [cords, green tons, dry tons]Minimal vi.Other Diesel is the primary source for heating in Nome. Renewable Energy Fund RFA AEA 09-004 Application Cost Worksheet Banner Wind Project Page 3 3.Proposed System Design a)Installed capacity 1.17 MW Maximum, 900 kW Nominal, 18 Entegrity Wind Turbines b)Annual renewable electricity generation i.Diesel [gal or MMBtu]NA ii.Electricity [kWh]2,789,200 annual kWh up to over 3,300,000 kWh in possible range expectations based on wind Class 6 estimations for Banner Ridge (Assume 3,000,000 average annual kWh) iii.Propane [gal or MMBtu]NA iv.Coal [tons or MMBtu]NA v.Wood [cords, green tons, dry tons]NA vi.Other NA 4.Project Cost a)Total capital cost of new system $5.157 Million b)Development cost $0 Development all project costs are included in the Total Capital Cost of Project c)Annual O&M cost of new system O&M Plan is a PayAhead Deposit Program for Future Needs –Budget Increases with Fleet Age, These are high O&M Estimates but these turbines will be in high production and require maintenance: Years 1-5: $0 Actual Cost, Covered by Western Community Energy and Entegrity Completely. Budget Retained annually for O&M account in future years: $75k per year minimum –Target of $90,000 per year (Approx $0.03 per kWh). Years 6-10:Beginning Balance in O&M Account. Assume O&M Budget continues with contribution of $90K per year as O&M and component (blade/brakes/etc.) replacement/upgrade funds in later years.(Approx $0.03 per kWh) Years 10-20: Assume $0.04 per kWh budgeted for future increased O&M and upgrades. Years 20+: Assume $0.05 per kWh budgeted as part of new contract at that date or other arrangements. d)Annual fuel cost $0 5.Project Benefits Renewable Energy Fund RFA AEA 09-004 Application Cost Worksheet Banner Wind Project Page 4 a)Amount of fuel displaced for i.Electricity Up to 200,000 gallons of diesel fuel annually (expected range from 175,000 to 209,000 gallons per year from production estimations and actual utility value of 15.81 kwh per gallon.) ii.Heat None iii.Transportation None b)Price of displaced fuel At $ 3.72 per Gal.(actual last purchase price)* 200,000 gallons = $744,000 one year of savings based on last actual purchase c)Other economic benefits Local Jobs for Project Construction:(3 major local (Anchorage)consultants contracts for project design phase)(major local contractor (Anchorage) for construction activities) (4 local contracts (Nome Companies)for trucking, loading, tower assembly, electrical)(construction jobs up to 30 Full Time people at once for several weeks on site) Revenue for local energy production stays in local economy instead of leaving local economy to imported fuel. Project helps lower energy price for residents. Profits from project are distributed to many local residents who are then more able to pay their energy costs.Percentage of profits dedicated to other village renewable energy projects. O&M Employment (1+ ongoing technicians)Local O&M presence creates lasting employment in a highly skilled new technology job opportunity. Expansion of Projects to Other Villages (more local technicians, more local benefits in region)(more diesel fuel savings in region) (more project reliability in villages based on Nome O&M centralized support) d)Amount of Alaska public benefits Creation of Nome Renewable Energy Technician Training Center –Training Facility to Provide Skilled People for New Job Opportunities and Growth of Wind Industry. Reduced cost of energy to local businesses at critical time –increases local economy and encourages growth vs. increased energy costs depress economy and discourage even staying in business in rural locations. Increased sustainability for decreased dependence on imported diesel fuel for energy production. Less risk of running out of energy “when the tank is low” with more locally installed wind generation. Renewable Energy Fund RFA AEA 09-004 Application Cost Worksheet Banner Wind Project Page 5 6.Power Purchase/Sales Price a)Price for power purchase/sale Depends on the outcome of the grant, approximately $0.09 per kWh with full grant funding and approximately $0.21 without.Estimated avoided cost calculation is at $0.23 per kWh minimum. Base Project Cash Requirements for Capital Contribution (approx $1.1M) Return on Investment: $0.05 per kWh, Land Lease: $0.01 per kWh, and O&M at $0.03 per kWh work out to minimum Energy Sales rate of $0.09 per kWh if the Grant is fully funded to keep the Owner’s investment at $1.1M Total. 7.Project Analysis a)Basic Economic Analysis Project benefit/cost ratio The first benefit this project provides to the community is a departure from the 100% dependency on imported fuels from outside of Alaska. Though the State of Alaska benefits from the sale of Oil as an export. The villages are dependent on imported fuel from outside the state as their only source of energy. The first step towards a sustainable future requires a project like this that reaches out and is implemented for the sake of the future of the community. This AEA Renewable Energy Fund Grant provides to the Ratepayers and Community a direct savings on their energy rate of $0.12 per kWh for every kWh produced and sold to the Utility. Instead of selling the energy at $0.21 (which is still below the avoided cost) the project will sell the energy at $0.09.With a target expectation of 3,000,000 kWh per year (at $0.12 per kwh discount)that represents a direct savings to the community of $360,000 per year while still providing a reasonable return on the substantial local investment of over $1M in the project. This savings will continue year after year for 20 years in the community and provide a meaningful percentage of energy that is produced locally. Over a 20 year period that savings amounts to $7,200,000 in the community for a direct benefit. Thus the benefit cost ratio for the grant is $7.2M over a cost of $4.126M which equals:1.74. If the savings were to be calculated based on the last actual purchase of Diesel Fuel and that price was assumed constant for 20 years they would be calculated at $744,000 per year or a total of $14.880M and the benefit cost ratio would be over 3.6. If the cost of diesel continued to escalate, that ratio would do the same. Payback The payback for the grant to the direct benefit to the community on energy sales price alone is LESS THAN 11.5 YEARS (5.5 years using the diesel savings of $744k per year for current price)