HomeMy WebLinkAboutKotzebue Vanadium Red-Ox Flow Battery Storage Project AppKotzebue Electric Association Vanadium Red-Ox Flow Battery
Energy Storage Project
Renewable Energy Fund Grant
October 8th 2008
Page 1 of 52
Kotzebue Electric Association
October 7th 2008
Proposal for
Renewable Energy Fund
Alaska Energy Authority Grant
Vanadium Red-Ox Flow Battery Energy Storage Project
The purpose of this proposed project is to successfully install and integrate a
1.08MWh Vanadium Red-Ox Flow Battery energy storage system thereby
achieving a fifteen percent reduction in diesel based peak power. This energy
storage system will act as a grid stabilizer allowing for a larger amount of
distributed generation on Kotzebue’s grid system without affecting grid stability
and reliability. The National Renewable Energy Laboratory’s HOMER software
modeled and optimized a system for Kotzebue showing that a VRFB could
displace 137,821 gallons a year of diesel fuel and reduces CO2 emissions by
3,013,797 kg/yr. A fifteen percent reduction in diesel based peak power will
directly lower the cost of electricity generation while allowing for a higher level of
wind penetration. As a hub to the Northwest Arctic Borough, the entire region
will benefit from knowledge gained by the city of Kotzebue as the region works
to resolve the current energy crisis.
Kotzebue Electric Association Vanadium Red-Ox Flow Battery
Energy Storage Project
Renewable Energy Fund Grant
October 8th 2008
Page 2 of 52
Table of Contents
1. Applicant Information...........................................................................................................4
1.1. Applicant Point of Contact..................................................................................................4
1.2. Applicant Minimum Requirement.......................................................................................5
2. Project Summary....................................................................................................................6
2.1. Project Type............................................................................................................................6
2.2. Project Description ................................................................................................................6
2.3. Project Budget Overview .....................................................................................................6
2.4. Project Benefit......................................................................................................................11
2.5. Project Cost & Benefit Summary .......................................................................................12
3. Project Management Plan.................................................................................................13
3.1. Project Manager..................................................................................................................13
3.2. Project Schedule..................................................................................................................17
3.3. Project Milestones................................................................................................................20
3.4. Project Resources ................................................................................................................21
3.5. Project Communications....................................................................................................25
3.6. Project Risk............................................................................................................................25
4.1. Proposed Energy Resource................................................................................................27
4.2. Existing Energy System.........................................................................................................30
4.3. Proposed System..................................................................................................................33
4.4. Proposed New System Costs..............................................................................................41
5. Project Benefit......................................................................................................................49
6. Grant Budget........................................................................................................................50
7. Additional Documentation and Certification.................................................................51
Kotzebue Electric Association Vanadium Red-Ox Flow Battery
Energy Storage Project
Renewable Energy Fund Grant
October 8th 2008
Page 3 of 52
Table of Figures
Figure 1: Project Cost Estimate ......................................................................................................7
Figure 2: Project Cost Share ...........................................................................................................8
Figure 3: Notice of Capital Budget Funding................................................................................9
Figure 4: Notice of DOE Award....................................................................................................10
Figure 5: Kotzebue Vanadium Red-Ox Flow Battery Schedule..............................................18
Figure 6: VRB Power Systems Deliverables Schedule ...............................................................19
Figure 7: Vanadium Red-Ox Flow Battery Schematic..............................................................28
Figure 8: KEA Power Plant One Line............................................................................................32
Figure 9: VRFB Plant Layout ..........................................................................................................34
Figure 10: VRFB Elevation...............................................................................................................34
Figure 11: General Notes for Design ...........................................................................................35
Figure 12: Power Plant Layout- Proposed Energy Storage Facility.........................................36
Figure 13: Economic Analysis of VRB with existing wind system .............................................39
Figure 14: Economic Analysis of VRB with increased wind capacity ....................................39
Figure 15: Budget Information......................................................................................................50
Figure 16: KEA Board Resolution ..................................................................................................51
Figure 17: Northwest Arctic Borough Resolution.......................................................................52
Kotzebue Electric Association Vanadium Red-Ox Flow Battery
Energy Storage Project
Renewable Energy Fund Grant
October 8th 2008
Page 4 of 52
1. Applicant Information
Kotzebue Electric Association
Po Box 44
Kotzebue, Alaska
99752
Phone: (907) 442-3491
Fax: (907) 442-2482
1.1. Applicant Point of Contact
Katherine Keith
Project Manager
Po Box 44
Kotzebue, Alaska
99752
k_keith@kea.coop
Work: (907) 442-3491
Cell: (651) 332-0584
Fax: (907) 442-2482
Kotzebue Electric Association Vanadium Red-Ox Flow Battery
Energy Storage Project
Renewable Energy Fund Grant
October 8th 2008
Page 5 of 52
1.2. Applicant Minimum Requirement
1.2.1. As an Applicant, we are an electric utility holding a certificate of public
convenience and necessity under AS 42.05
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 participants governing
authority is necessary.
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.
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.)
Kotzebue Electric Association Vanadium Red-Ox Flow Battery
Energy Storage Project
Renewable Energy Fund Grant
October 8th 2008
Page 6 of 52
2. Project Summary
2.1. Project Type
This is an energy storage project which will capture wind energy and allow for an
increased efficiency in operating diesels.
2.2. Project Description
Kotzebue Electric Association’s Cost of Energy Reduction Program will achieve a 25%
reduction is diesel based power by installing, in part, a Vanadium Red-Ox Flow Battery
Energy Storage System (VRFB) which will be able to provide 600 kW of power for three
hours. This battery bank will increase voltage stability, increase the efficiencies of
operating diesel generators, and capture excess wind energy during off-peak hours.
While this installation will serve Kotzebue, the demonstrated technology could offer
significant benefits to other villages as more wind energy is harnessed.
The VRFB will benefit the KEA existing system in three specific ways. Diesel turbines run
most efficiently when operating to the fullest capacity. Charging the battery, when the
generator would otherwise operate below ideal conditions, will increase overall system
efficiency. Secondly, KEA runs one EMD year round and supplements this with a second
CAT generator when the load demands it. Instead of starting the second generator, the
VRFB will supply the electricity. Normally, the CAT gen set is run approximately 3,200 hrs
per year. This will be reduced less than 350 hrs per year with the VRFB online. This results
to a direct reduction in diesel consumption. Thirdly, in order to realize the benefits of
increasing the level of wind penetration in Kotzebue, energy storage MUST be utilized.
The simple payback for the VRFB is under three years.
2.3. Project Budget Overview
As detailed in Figure 1 and Figure 2 below, the total project cost is $3,930,399. Currently,
Kotzebue Electric Association is able to show a 20% match in the amount of $786,000.
The project costs include the material and installation cost of the VRFB, Energy Storage
Facility, and the associated engineering and administrative fees.
Kotzebue Electric Association Vanadium Red-Ox Flow Battery
Energy Storage Project
Renewable Energy Fund Grant
October 8th 2008
Page 7 of 52
Excavation Work $80,000 included $80,000
Foundation Materials and Slab Work $175,000 included $175,000
Pre‐Fabricated Steel Building $50,000 included $50,000
Building Erection $40,000 included $40,000
Interior Modifications $80,000 $80,000
Civil Design $30,000 $30,000
SUBTOTAL $3,402,943
10%$340,294 $340,294
5%$187,162 $187,162
$3,930,399TOTAL PROJECT COST
Engineering & Administration
Contingency
Kotzebue Electric Association, Inc.
Vanadium Redox Flow Battery Energy Strorage System
Equipment
Site Civil Work
VRB Energy Storage System *Includes
all equipment necessary for install*$2,907,943 $40,000 $2,947,943
Item Cost TotalFreight
Figure 1: Project Cost Estimate
Kotzebue Electric Association Vanadium Red-Ox Flow Battery
Energy Storage Project
Renewable Energy Fund Grant
October 8th 2008
Page 8 of 52
State of Alaska
KEA has been awarded a state earmark for
the Flow Battery Project. The specific
objective is to begin installation. Cash $200,000
Kotzebue Electric Association Materials Cash $161,600
Kotzebue Electric Association Administration and Engineering In Kind $276,800
COST SHARE TOTAL $786,000
Total Project Cost: $3,930,399 Cost Share Total: $786,000 Percentage Cost Share: 20%
Kotzebue Electric Association, Inc.
Vanadium Redox Flow Battery Energy Strorage System
Organization Cost Share Item Type Amount
Department of Energy
KEA has been awarded a federal earmark for
the Flow Battery Project from the Golden
Field Office ‐ Department of Energy. The
specific objective of this award is to complete
initial engineering work.
Cash $147,600
Figure 2: Project Cost Share
Letters indicating the above cost share funding are provided below.
Kotzebue Electric Association Vanadium Red-Ox Flow Battery
Energy Storage Project
Renewable Energy Fund Grant
October 8th 2008
Page 9 of 52
Figure 3: Notice of Capital Budget Funding
Kotzebue Electric Association Vanadium Red-Ox Flow Battery
Energy Storage Project
Renewable Energy Fund Grant
October 8th 2008
Page 10 of 52
Figure 4: Notice of DOE Award
Kotzebue Electric Association Vanadium Red-Ox Flow Battery
Energy Storage Project
Renewable Energy Fund Grant
October 8th 2008
Page 11 of 52
2.4. Project Benefit
Installation of the VRFB will benefit Kotzebue financially, economically, and
environmentally. Financially this installation has a simple payback of 3.24 years.
This stems from a greater system efficiency caused by running the operating
diesel at a preferred load and by using the VRFB during peak periods instead of a
second Caterpillar gen-set. The installation of energy storage onto Kotzebue’s
grid will allow for an increased wind penetration. KEA is proposing to increase the
capacity of the wind plant from 1.14 MW to 4.39 MW which currently exceeds the
electrical needs of the community but will open up a non-diesel based method
of procuring thermal energy for residential and commercial heating.
Environmentally, by reducing diesel consumption, the VRFB will reduce the power
plant’s greenhouse gas emissions.
Many communities in rural Alaska have excellent to superb wind resource
potential. Several communities already have or are planning to install wind farms
which will help to offset the high cost of diesel. High penetration wind plants
without any energy storage are not fully optimized. Energy storage allows excess
power to be absorbed and then released during peak loads or used for thermal
applications. General benefits of a Vanadium Red-Ox Flow Battery in rural Alaska
include:
• Lower electricity generation costs
• Low environmental risks and damage
• Energy security
• Increased energy independence and reliance on renewable local
energy resources.
• Power quality and reliability improvement for electric customers
• Overall improvement of electrical distribution infrastructure asset utilization
and load factor
• Constant voltage regulation and VAR support.
Kotzebue Electric Association Vanadium Red-Ox Flow Battery
Energy Storage Project
Renewable Energy Fund Grant
October 8th 2008
Page 12 of 52
2.5. Project Cost & Benefit Summary
2.5.1. Total Project Cost: $3,930,399
2.5.2. Grant Funds Requested in this Application: $3,144,399
2.5.3. Other Funds To Be Provided: $786,000
2.5.4. Total Grant Costs (Sum of 2.5.2 and 2.5.3): $3,930,399
2.5.5. Estimated Benefit (Savings):
2.5.5.1. $907,374 with current wind plant
2.5.5.2. Ultimately, with increased wind on the system, the battery will enable
KEA to save the community $2,210,194 a year. Without this energy
storage, the increase wind capacity’s benefits would be limited, in
order to maintain a stable grid system, and would save $1,324,747 a
year.
2.5.6. Public Benefits:
The cost of NOT installing an energy storage system can be calculated by the
financial risk of increased fuel prices. Costs have increased exponentially in the
past few years and this trend is not expected to end. It is not unreasonable to
assume that the region will have to pay $10.00/gallon for diesel as some
communities already are paying this amount. If so, the cost of energy will
increase from $.52/kWh to $.91/kWh. Using HOMER to model the scenarios, the
cost of not doing anything will be over $4,000,000 per year. The public can not
afford to sit still.
Kotzebue Electric Association Vanadium Red-Ox Flow Battery
Energy Storage Project
Renewable Energy Fund Grant
October 8th 2008
Page 13 of 52
3. Project Management Plan
3.1. Project Manager
KEA will be responsible for producing and maintaining all project schedules and budgets and
handling all major procurements. Brad Reeve, KEA General Manager, and Katherine Keith, KEA
Project Engineer, will oversee all engineering, procurement and construction and will
coordinate all system installations and integration. Once systems are installed, KEA will ensure
that operations and maintenance training is provided to personnel.
KEA has a staff of 15 full time employees including the General Manager, a mechanical
engineer, power plant operators, diesel mechanics, electrical technicians, trained linemen,
and administrative staff. Brad Reeve, KEA General Manager since 1988, has extensive
business, construction, and management experience of projects and programs in rural Alaska.
Mr. Reeve has overseen the installation of major power generation units as well as power
distribution upgrades. He has also managed the installation multiple wind turbine generators
and their integration into the KEA utility power grid. Katherine Keith, KEA Project Manager, has
extensive background in Renewable Energy Engineering.
In the application of wind energy technology, KEA has become a regional center of
engineering and technical expertise and often provides other small village utilities with support
and training.
The vitae of key personnel are included below.
Kotzebue Electric Association Vanadium Red-Ox Flow Battery
Energy Storage Project
Renewable Energy Fund Grant
Kotzebue Electric Association Vanadium Red-Ox Flow Battery
Energy Storage Project
Renewable Energy Fund Grant
Kotzebue Electric Association Vanadium Red-Ox Flow Battery
Energy Storage Project
Renewable Energy Fund Grant
Kotzebue Electric Association Vanadium Red-Ox Flow Battery
Energy Storage Project
Renewable Energy Fund Grant
October 8th 2008
Page 17 of 52
3.2. Project Schedule
3.2.1. Overall Schedule.
The first Gantt chart displays the overall project schedule. The project will be
completed one year later on 9/15/09. During that time the battery will be
constructed, delivered, and installed in Kotzebue. While modeling is
expected to continue for 2 years, KEA wants to see the immediate benefit
as soon as possible.
3.2.2. VRB Design and Engineering Schedule.
For the first phase of engineering VRB has provided KEA with a detailed
schedule of deliverables up until completion of the final report on 12/05/08.
Kotzebue Electric Association Vanadium Red-Ox Flow Battery Energy Storage Project Renewable Energy Fund Grant October 8th 2008 Page 18 of 52 Figure 5: Kotzebue Vanadium Red-Ox Flow Battery Schedule
Kotzebue Electric Association Vanadium Red-Ox Flow Battery Energy Storage Project Renewable Energy Fund Grant October 8th 2008 Page 19 of 52 Figure 6: VRB Power Systems Deliverables Schedule
Kotzebue Electric Association Vanadium Red-Ox Flow Battery
Energy Storage Project
Renewable Energy Fund Grant
October 8th 2008
Page 20 of 52
3.3. Project Milestones
3.3.1. Task One: Design and Procurement
3.3.1.1. KEA has contracted with VRB Power Systems to complete the
preliminary design and engineering of the Vanadium Red-Ox Flow
Battery. This work was begun 9/8/08 and will be completed on
12/05/09. Their Scope of Work is detailed in Figure
3.3.2. Task Two: Modeling
3.3.2.1. In order to determine exactly how the VRB will stabilize the grid, KEA
will complete a detailed model which will be available for other
communities as wind-diesel power plants begin to include energy
storage. KEA will increase the intensity of the existing SCADA system’s
data collection in order to capture dynamic response. KEA will model
Kotzebue’s existing wind-diesel hybrid power plant using Simulink.
3.3.3. Task Three: Battery Construction
3.3.3.1. VRB will build the VRFB in accordance with the guidelines discussed
with KEA. The VRFB will be built at the VRB Energy Systems factory then
shipped up to be installed in Kotzebue. This includes the engineering
and supply of the cell stacks, electrolyte storage tanks, pumps and
pump modules, instrumentation, power conversion system, and
process control system hardware.
3.3.4. Task Four: Site Work
3.3.4.1. While the VRFB is being constructed, KEA will begin the design, and
engineering of the Energy Storage Facility which will be constructed to
house the battery system. The foundation work will require that the soil
be replaced with non-frost susceptible material with thermo-siphons
placed at 8 foot intervals. A concrete slab will be poured on grade
with radiant heat (supplied by power plant’s waste heat) and will
support a 30’ by 60’ pre-fabricated steel building.
The building will be specifically designed to meet the needs of the
VRFB. This will include measures for electrolyte containment and
proper ventilation. The process area will need to be curbed to act as a
containment area and sloped toward the tank area, sealed off with a
suitable coating, and contain a sump.
Kotzebue Electric Association Vanadium Red-Ox Flow Battery
Energy Storage Project
Renewable Energy Fund Grant
October 8th 2008
Page 21 of 52
3.3.5. Task Five: Battery Delivery
3.3.5.1. The battery will be delivered ten months after the contract has been
signed.
3.3.6. Task Six: Battery Installation
3.3.6.1. VRB Power Systems will be responsible for the actual installation of the
battery in Kotzebue. They will remain on site until after initial
commissioning to help optimize system performance and ensure
proper operation.
3.3.7. Task Seven: Reporting
3.3.7.1. The periodic, topical, and final reports will be submitted in
accordance with the Alaska Energy Authority’s specifications. KEA will
also be responsible for journal publications which will report on all
aspects of the VRFB, how it pertains to the Kotzebue grid system, and
how it could benefit other remote communities.
3.4. Project Resources
3.4.1. Personnel/Partners
Thompson Engineering
KEA also has long-time associations with contracting firms who provide
engineering, legal, and financial services to KEA. One such company is
Thompson Engineering Co., Inc. Thompson Engineering has been KEA’s engineers
of record since 1989. Thompson Engineering has extensive experience in power
generation, transmission, and distribution; power studies and electric utility
planning; industrial/commercial power distribution and control; pipelines; oil and
fuel facilities; waste heat recovery; generators; construction management in
Arctic environments; contract engineering management; etc. Thompson
Engineering has a staff of three employees including two professional electrical
engineers, and one administrative/technical assistant. Thompson Engineering is
located at 721 Sesame St. Suite 2B, Anchorage, Alaska 99503, Phone: 907-562-
1552, Fax: 907-562-1530.
VRB Power Systems
Resumes are listed below.
Kotzebue Electric Association Vanadium Red-Ox Flow Battery
Energy Storage Project
Renewable Energy Fund Grant
October 8th 2008
Kotzebue Electric Association Vanadium Red-Ox Flow Battery
Energy Storage Project
Renewable Energy Fund Grant
October 8th 2008
Kotzebue Electric Association Vanadium Red-Ox Flow Battery
Energy Storage Project
Renewable Energy Fund Grant
Kotzebue Electric Association Vanadium Red-Ox Flow Battery
Energy Storage Project
Renewable Energy Fund Grant
October 8th 2008
Page 25 of 52
3.5. Project Communications
KEA will schedule monthly meetings between VRB and KEA to ensure proper
communication. KEA will work closely with all subcontractors to ensure that the
project schedule is followed and a high quality product is delivered. KEA will provide
quarterly reports, and any additionally requested reports to the Alaska Energy
Authority (AEA). KEA will submit reports directly to AEA. In addition, public
presentations on project progress will be given at city meetings and possibly
conferences. Informational brochures and other publications will be produced for the
general public.
3.6. Project Risk
Any aggressive risk management process begins with the identification of any
uncertain future events which might impact the success of the project. These risks
need to be assessed to determine the level of threat that is posed to the project.
There are two categories in which risks are evaluated. The first determines how likely
it is that a risk could happen. The second determines how significant such an impact
could have on the success of a project. Highly probable risks with a large impact
need to be acted upon.
The risk evaluation for this project surveyed management risks, technology risks,
resource risks, timing risks, and political risks. The question asked is weather the risk
poses a large enough threat to the project in order to warrant further action. The
following list details such risks that need to be addressed.
3.6.1. Technology Risk:
3.6.1.1. While VRB is now commercially producing Vanadium Red-ox Flow
Batteries, delays could be caused in trying to integrate the battery
onto KEA’s grid system.
VRB Power Systems Inc. has proven themselves to be very
responsive to problems with the VRFB installed at the University of
Alaska, Fairbanks Arctic Energy Technology and Development
Lab. The way to avoid allowing this risk to interfere with project
success is by forecasting where technological challenges could
delay the project and by having a strong networked team who is
capable of properly managing and maintaining the system.
3.6.1.2. The newer technology will limit the availability of field experts.
Same as above.
Kotzebue Electric Association Vanadium Red-Ox Flow Battery
Energy Storage Project
Renewable Energy Fund Grant
October 8th 2008
Page 26 of 52
3.6.1.3. In trying to make a cost effective commercial product, cheaper
components are used which could lead to more delays and down
time where there is a product failure.
This is a known problem with the VRFB at the University of Alaska,
Fairbanks. For example, they have experienced pump failure and
leakage in the cell stacks due to corrosion. This is partially due to
trying to find a balance between economic viability and technical
feasibility. Once Kotzebue Electric Association enters into
negotiations with VRB Power Systems, this issue can be discussed in
greater detail so as to avoid this risk while remaining within our
projected budget.
Kotzebue Electric Association Vanadium Red-Ox Flow Battery
Energy Storage Project
Renewable Energy Fund Grant
October 8th 2008
Page 27 of 52
4. Project Description and Tasks
4.1. Proposed Energy Resource
Energy storage techniques are quickly becoming very critical to the economic
viability of rural communities. As the nation begins to restructure the utility industry
and incorporate larger amounts of distributed generation (DG) in the form of wind,
solar, and geothermal power, utility scale energy storage technologies will be
needed in the electrical transmission and distribution system. Renewable
technologies cannot be actively controlled to match the load and therefore can
cause fluctuations in voltage and frequency which leads to grid system instability [4].
Properly placed energy storage systems could provide peak power to remote areas,
reduced voltage loss and flicker, while providing voltage and frequency regulation
as well as a spinning reserve [2]
Over time various electrical, mechanical, and electrochemical storage techniques
have been used including, but not limited to, flow batteries, fuel cells, flywheels,
hydroelectric, solar thermal, hydrogen, hydrocarbon fuels, and bio-fuels. The most
common energy storage application is pumped hydroelectric storage with over
80GW of installed capacity globally [2]. However, hydroelectric storage is very site
specific. A flow battery is an electrochemical method of storing energy. Meaning
that energy is stored by chemical changes in an electrolyte solution which contain
one or more dissolved electroactive species [3]. This solution is pumped through a
fuel cell to either electrically discharge or charge the system. The typical proton
exchange membrane (PEM) fuel cell converts the chemical energy to electrical by
dissociating the protons and electrons from the electrolyte solution. The protons
move through the existing membrane while the electrons travel along an external
circuit which then supplies power.
The VRFB is an electrical energy storage system based on the patented vanadium-
based red-ox regenerative fuel cell. Energy is stored chemically in different ionic
forms of vanadium in a dilute sulphuric acid electrolyte. One plastic storage tank
contains vanadium (45/VV++) vanadium and the other is vanadium (23/VV++).
They are then pumped through a PEM where one solution is electrochemically
oxidized and the other is electrochemically reduced. The reaction takes place on
inert carbon polymer composite electrodes. As vanadium ions are the only species
used the risk of cross contamination of ions through the PEM, which was a previous
problem with flow batteries, is eliminated [1]. The picture below provides a basic
picture of flow battery operation [5].
Kotzebue Electric Association Vanadium Red-Ox Flow Battery
Energy Storage Project
Renewable Energy Fund Grant
October 8th 2008
Page 28 of 52
Figure 7: Vanadium Red-Ox Flow Battery Schematic
\
The critical feature of the VRFB is that the reaction is reversible and can be charged
and discharged continually with no loss of efficiency or damage to the system. The
system is also very modular and can be designed to meet specific power and
storage needs as they are independent of each other. The system power is
controlled by the number of cells in the stack and the size of the electrodes while the
storage capacity is determined by the concentration and volume of the electrode.
The system’s storage capacity can be increased by simply adding more electrolyte
solution.
The technology to confidently rely on distributed generation is still new. Utilizing an
energy storage device, such as a Vanadium Red-Ox Flow Battery (VRFB), would
enable an irregular energy source such as wind power, to be stored and then
supplied during periods of peak power. Batteries offer power stabilization, load
leveling from renewable energy, and could manage power transmission line loads.
The Kotzebue installation will reduce peak power load by fifteen percent and by
installing high speed data acquisition systems we will be able to thoroughly
understand the system dynamics and responsiveness of a wind-battery-diesel hybrid
power plant.
VRB Power Systems Inc. (VRB) of Vancouver, BC, Canada has this technology
currently in a pre-commercial state. From their experience they find many
advantages of a VRFB energy storage system. They are listed verbatim [1]:
Layout & Design
• Rapid design and construction including environmental since no appreciable air,
waste or sound emissions are produced. Balance of plant items such as piping,
tanks, wiring and inverter are all off-the-shelf and are readily available, enabling
rapid construction and commissioning. Expected time from order to
commissioning for a multi-megawatt facility is in the 12 – 16 month range.
Kotzebue Electric Association Vanadium Red-Ox Flow Battery
Energy Storage Project
Renewable Energy Fund Grant
October 8th 2008
Page 29 of 52
• Existing systems can be readily upgraded - additional storage capacity can be
added (at low incremental costs) by increasing the volume of electrolyte (liters)
and/or output power can be increased by adding additional cell stacks.
Operations & Maintenance
• Low operating temperatures and minimal sensitivity to ambient temperature
variations.
• SCADA interface via internet or dial up modem.
• Use of advanced multi-quadrant power flow control allowing phase control of
outputs, voltage sag/dip compensation, low harmonic distortion, reactive power
flow compensation, high short term and instantaneous overload capacity – ideal
for stability enhancement. Multi-layer, encrypted password access to the control
PLC.
• Designed for unattended (remote) operation with very low maintenance costs.
Performance
• Availability of greater than 98%.
• No degradation from repeated deep charges and discharges. The VRB-ESS
membrane has been charged and discharged more than 13,000 times in a
laboratory setting without deterioration of system efficiencies.
• System round-trip efficiencies of 65 - 75%.
• Charge/discharge ratio of 1:1 – a significantly higher charge rate than other
battery systems and ideal for wind generation applications.
Electrolyte
• Cross mixing of electrolytes does not lead to the contamination of electrolytes.
• Indefinite life of electrolyte - no disposal or contamination issues and high residual
values at the end of plant life.
• Low self-discharge.
Environmental
• Characterized by the lowest ecological impact of all energy storage
technologies and unlike most conventional energy storage systems, does not rely
on toxic substances such as lead, zinc or cadmium.
• An assessment of the environmental impact of both VRB-ESS and lead-acid
batteries for use in stationary applications indicates that the VRB-ESS produces 75
- 93% fewer emissions of key environmentally damaging components (CO2, SO2,
CO, CH4, NOx) during its life cycle.
VRFB’s have been successfully installed in many locations and applications since
2001, including but not limited to:
• 6 MWh installation at Hokkaido Island in January 2005.
• 2 MWh installation at Castle Valley, Utah in February 2004.
Kotzebue Electric Association Vanadium Red-Ox Flow Battery
Energy Storage Project
Renewable Energy Fund Grant
October 8th 2008
Page 30 of 52
• .8 MWh installation at King Island, Australia in November 2003.
• .52 MWh installation at Stellenbosch, South Africa
• 1 MWh installation for Hydro Tasmania, Australia
The Castle Valley installation was done for PacifiCorp who needed to secure and
stabilize their energy supply to remote locations in southeast Utah. This was the first
large-scale commercial VRFB in North America and is still remains a successful
project.
The Kind Island installation was developed in order to improve power supply and
quality to a rural community with a high wind penetration wind-diesel system. King
Island has an approximate installed wind capacity of 2.5 MW with four 1.5 MW diesel
generators.
4.2. Existing Energy System
4.2.1. Basic Configuration of Existing Energy System
The diesel generator plant is located about 4.5 miles from the wind turbine site,
with an existing feeder line (voltage 12.5 kV, 3 phase) capable of carrying up to
2.5 MW. Power for the KEA grid is generated by the diesel generators at 4,160V
and stepped up through transformers to 12,500 VAC, three-phase, three-wire for
distribution throughout the town.
The existing power grid has the following electrical characteristics:
Grid Voltage: 12.5 kV
Frequency: 60 Hz ± 0.5 Hz
Efficiency: 14.5 kWh/gal
Power Factor: 0.92 lagging
Average load: 2500 kW
Maximum Load: 3700 kW
Minimum Load : 1700 kW
Diesel Powered Generators:
Unit 10: 3080 kW EMD 710 series (20 cylinder)
Unit 9: 2600 kW EMD 645 series (16 cylinder)
Unit 14: 2800 kW EMD 710 series (16 cylinder)
Unit 7: 1025 kW 3516 series Cat (16 cylinder, 1200 rpm)-
Unit 11: 1025 kW 3512 series Cat (12 cylinder, 1800 rpm)
Unit 12: 1025 kW 3512 series Cat (12 cylinder, 1800 rpm)
Wind Turbines
15 Atlantic Orient Corporation (AOC) Turbines: 65kW each
1 North Wind 100: 100kW each
1 Vestas: 65 kW each
Kotzebue Electric Association Vanadium Red-Ox Flow Battery
Energy Storage Project
Renewable Energy Fund Grant
October 8th 2008
Page 31 of 52
The generating plant one line diagram is provided below.
Kotzebue Electric Association Vanadium Red-Ox Flow Battery
Energy Storage Project
Renewable Energy Fund Grant
October 8th 2008
Page 32 of 52
Figure 8: KEA Power Plant One Line
Kotzebue Electric Association Vanadium Red-Ox Flow Battery
Energy Storage Project
Renewable Energy Fund Grant
October 8th 2008
Page 33 of 52
4.3. Proposed System
4.3.1. System Design
Kotzebue Electric Association has been working closely with VRB Power Systems
to determine the appropriately sized system for Kotzebue’s existing wind-diesel
hybrid system. The results of the first phase of engineering, due to be completed
on 12/05/08, indicate that the most optimum size for the KEA system will have a
power capacity of 600kW with a storage capacity of 1800kWh. The optimum size
for KEA, once the wind plant has an increased capacity, is actually closer to
900kW with 2400 kWh storage. However the higher capital cost of that installation
causes KEA to consider that sizing after additional turbines are installed.
The most recent plan drawings are provided below. More current and specific
plans are being currently generated, but at the time of this submission are not
completed. The single-line, elevation, and plan view are therefore, not
construction ready, but only to provide a conceptual sketch.
A plant layout is also provided to show where the proposed construction site is for
the Energy Storage Facility.
Kotzebue Electric Association Vanadium Red-Ox Flow Battery
Energy Storage Project
Renewable Energy Fund Grant
October 8th 2008
Page 34 of 52
Figure 9: VRFB Plant Layout
Figure 10: VRFB Elevation
Kotzebue Electric Association Vanadium Red-Ox Flow Battery
Energy Storage Project
Renewable Energy Fund Grant
October 8th 2008
Page 35 of 52
Figure 11: General Notes for Design
Kotzebue Electric Association Vanadium Red-Ox Flow Battery
Energy Storage Project
Renewable Energy Fund Grant
October 8th 2008
Page 36 of 52
Figure 12: Power Plant Layout- Proposed Energy Storage Facility
Kotzebue Electric Association Vanadium Red-Ox Flow Battery
Energy Storage Project
Renewable Energy Fund Grant
October 8th 2008
Page 37 of 52
Figure 13: Proposed Energy Storage Facility Dimensions
Kotzebue Electric Association Vanadium Red-Ox Flow Battery
Energy Storage Project
Renewable Energy Fund Grant
October 8th 2008
Page 38 of 52
National Renewable Energy Laboratory produced an analytical software tool
titled HOMER. HOMER has been used to model existing systems and proposed
diesel hybrid and renewable systems to help determine the economic viability of
projects. HOMER is able to sort through a wide variety of inputs and variables to
determine what configuration has the most promising economics. It is also able to
calculate and quantify other benefits such as greenhouse gas emissions.
To model Kotzebue Electric Associations existing system, as well as establish the
base case for proposed projects, HOMER requires slight system simplifications. The
system architecture is as follows:
Wind Turbines: 19 Entegrity eW15
This differs in the fact that the wind plant has only 15 Entegrity turbines, 1
Northwind, and 1 Vestas.
EMD 710: 2865 kW
Cat 36512: 900 kW
Cat 3516: 1000 kW
This differs in the fact that KEA has six turbines. However, this accurately
represents what is running at any one time according to the existing load.
In order to set up a basis for comparison the fuel, load, economic settings
include:
Diesel price: $1.3/L
Lower heating value: 43.2 MJ/kg
Annual real interest rate: 5.25%
Project lifetime: 20 years
Scaled annual average load: 63,000 kW/d
Scaled peak load: 3,588 kW
Load factor: .732
Annual average thermal load: 15,000 kWh/d
O&M Entegrity Turbines: 250 $/kW/yr
O&M EMD 710 2865 kW: 332 $/hr
O &M Cat 3512 900 kW: 72 $/hr
O&M Cat 3516 1000 kW: 104 $/hr
The same inputs were used as above in the base case. However, now a VRB-ESS
battery and a converter were added.
Battery power: 600 kW
Battery storage: 1800 kWh
Converter: 600 kW
Kotzebue Electric Association Vanadium Red-Ox Flow Battery
Energy Storage Project
Renewable Energy Fund Grant
October 8th 2008
Page 39 of 52
Dispatch strategy: Cycle Charging
As a rule of thumb, a battery should be approximately 20% of wind capacity as a
minimum just to stabilize power. This would suggest that a VRFB for KEA’s existing
wind system should be 238 kW. Two factors encourage a larger sizing. KEA will
use the VRFB during peak periods instead of turning on a second diesel turbine.
The typical power requirement for this is between 300-700 kW causing 600 kW to
be an ideal size. Additionally, as KEA begins to expand the wind plant, larger
capacity will be required.
A payback is shown below on a system with KEAs current wind capacity 3.1 years.
Metric Value
Present Worth $8,615,789
Annual Worth $706,084/yr
Return on Investment 33.10%
Internal Rate of Return 31.80%
Simple Payback 3.12 yrs
Discounted Payback 3.50 yrs
600 kW x 3 hr with Current Wind
Figure 14: Economic Analysis of VRB with existing wind system
A payback is shown below on a system with INCREASED WIND capacity in less
than 1.5 year.
Metric Value
Present Worth $12,661,682
Annual Worth 613,802/yr
Return on Investment 82.90%
Internal Rate of Return 81.10%
Simple Payback 1.23 yrs
Discounted Payback 1.31 yrs
600 kW x 3 hr with Increased Wind
Figure 15: Economic Analysis of VRB with increased wind capacity
Another benefit that it not listed in the above table is the increased system
stability. This energy storage will allow KEA to put on additional wind turbines and
other distributed generation that otherwise wouldn’t be possible.
Kotzebue Electric Association Vanadium Red-Ox Flow Battery
Energy Storage Project
Renewable Energy Fund Grant
October 8th 2008
Page 40 of 52
4.3.2. Land Ownership
The land sited for the Vanadium Red-ox Flow Battery is owned by Kotzebue
Electric Association and will not be the cause for any conflict, delay, or additional
expense.
4.3.3. Permits
No permitting issues will cause a problem or increased cost to this project. The
only permit requirements that will be required are those with regards to building a
facility to house the battery. This will include a city building permit and a fire
permit.
4.3.4. Environmental
There are no associated environmental obstacles seen with this technology.
Kotzebue Electric Association Vanadium Red-Ox Flow Battery
Energy Storage Project
Renewable Energy Fund Grant
October 8th 2008
Page 41 of 52
4.4. Proposed New System Costs
4.4.1. Project Development Cost
4.4.1.1. Total anticipated project cost: $3,930,399
4.4.1.2. Requested grant funding: $3,144,399
4.4.1.3. Applicant matching funds: $786,000
4.4.1.4. Identification of other funding sources:
KEA will also pursue funding through USDA’s Rural Energy Grants.
4.4.2. Project Operating and Maintenance Costs
4.4.3. Power Purchase/Sale
Not Applicable
4.4.4. Cost Worksheet
Kotzebue Electric Association Vanadium Red-Ox Flow Battery
Energy Storage Project
Renewable Energy Fund Grant
October 8th 2008
Page 42 of 52
1. Renewable Energy Source
The Applicant should demonstrate that the renewable energy resource is available on a
sustainable basis.
Annual average resource availability. N/A for Energy Storage
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)
i. Number of generators/boilers/other 6
ii. Rated capacity of generators/boilers/other (#7-1,135 kW); (#15-2,865 kW); (#10-3,080 kW) (#11-1,000 kW);
(#12-850 kW); (#14-2,865 kW)
iii. Generator/boilers/other type (#7-CAT 3516); (#15-EMD 16-710); (#10-EMD 20-710) (#11-CAT 3512);
(#12-CAT 3512); (#14-EMD 16-710)
iv. Age of generators/boilers/other (#7-1987); (#15-1983); (#10-1992) (#11-1992);
(#12-1992); (#14-1994)
v. Efficiency of generators/boilers/other 14.5 kWh/gallon
b) Annual O&M cost
i. Annual O&M cost for labor $36,390 in ’07
ii. Annual O&M cost for non-labor $43,142 in ’07
c) Annual electricity production and fuel usage (fill in as applicable)
i. Electricity [kWh] 21,000,000 kWh per year
ii. Fuel usage (if system is part of the Railbelt grid, leave this section blank
Diesel [gal] 1,400,000 gallons per year
Other
iii. Peak Load 3700 kW
iv. Average Load 2500 kW
v. Minimum Load 1700 kW
vi. Efficiency 14.5 kW/gallon
vii. Future trends
d) Annual heating fuel usage (fill in as applicable)
i. Diesel [gal or MMBtu] n/a
ii. Electricity [kWh] n/a
iii. Propane [gal or MMBtu] n/a
iv. Coal [tons or MMBtu] n/a
v. Wood [cords, green tons, dry tons] n/a
vi. Other n/a
Kotzebue Electric Association Vanadium Red-Ox Flow Battery
Energy Storage Project
Renewable Energy Fund Grant
October 8th 2008
Page 43 of 52
3. Proposed System Design
a) Installed capacity 600 kW/1800 kWh
b) Annual renewable electricity generation
i. Diesel [gal or MMBtu]
ii. Electricity [kWh]
iii. Propane [gal or MMBtu]
iv. Coal [tons or MMBtu]
v. Wood [cords, green tons, dry tons]
4. Project Cost
a) Total capital cost of new system $3,402,943
b) Development cost $527,456
c) Annual O&M cost of new system $91,669
d) Annual fuel cost n/a
5. Project Benefits
a) Amount of fuel displaced for
i. Electricity Being very conservative 137,821 gallons
ii. Heat
iii. Transportation
b) Price of displaced fuel At $4.25 this is $585,739.
c) Other economic benefits Ability to increase wind capacity:
d) Amount of Alaska public benefits
6. Power Purchase/Sales Price
a) Price for power purchase/sale n/a
7. Project Analysis
a) Basic Economic Analysis
Project benefit/cost ratio Total 20 year NPC Existing System $158,117,824 / NPC Proposed 149,502,048
= 1.05.
Payback 3.12 years
Kotzebue Electric Association Vanadium Red-Ox Flow Battery
Energy Storage Project
Renewable Energy Fund Grant
October 8th 2008
Page 44 of 52
4.4.5. Business Plan
Kotzebue Electric Association is a known wind industry leader whose knowledge
has been relied upon for operations and maintenance on renewable energy
systems. KEA already has in place standard protocols for operations and
maintenance which have been successful in Kotzebue. To further guarantee
optimum performance KEA will create a business plan using templates created
by the Alaska Department of Commerce and Economic Development. VRB
Power Systems has developed operations and maintenance manuals for their
Energy Storage Systems and KEA will receive from them a manual specific to the
Kotzebue installation.
KEA will also send the in house operators/engineers to VRB Power Systems
headquarters to receive in-depth training. This training will enable the local
operator to have detailed discussions with many of the lead engineers,
programmers, and operations personnel. This will be done before project
commissioning. A manufacturer’s representative will also be on-site post
installation to review and refine operating procedures.
4.4.6. Analysis and Recommendations
Kotzebue Electric Association has created a Cost of Energy Reduction Plan ,
CERP, which collectively addresses many aspects of our current energy crisis.
The CERP is detailed here to provide a more complete picture of how the
proposed project fits into KEAs ‘big picture’.
4.4.6.1. Increased Wind Capacity
4.4.6.1.1. Objective
Kotzebue Electric Association’s current wind plant has an
installed capacity of 1.14MW which provides the city of Kotzebue
with 1.2 million kilowatt-hours. This meets roughly 8% of the
community’s electrical demand and displaces an average of
140,000 gallons per year. KEA is planning to increase the installed
capacity to 4.59 MW by fall of 2010 in order to further reduce
diesel dependency.
4.4.6.1.2. Benefits
There is no doubt of the urgency to reduce diesel dependency.
Kotzebue’s current load averages 2.7 MW. A 4.59 MW wind plant will
exceed the electrical demand of Kotzebue. In addition to electricity,
Kotzebue Electric Association Vanadium Red-Ox Flow Battery
Energy Storage Project
Renewable Energy Fund Grant
October 8th 2008
Page 45 of 52
thermal energy needs also to be addressed. When the wind allows the
turbines to operate near capacity excess electricity, will be ‘dumped’ into
thermal loads which can then be used for space and water heating in the
homes and businesses of Kotzebue. The overall goal will be to drastically
reduce diesel consumption both for electric and thermal generation.
4.4.6.1.3. Scope of Work:
Adding 3.25 MW of wind will be done by installing five Furlander 650kW
turbines. This will be done in conjunction with the utilities of Nome and
Unalakleet. Larger turbines need to be purchased in batches of ten or
more. Combining efforts with these utilities will reduce the overall cost of
shipping, of both the necessary crane and turbines. KEA would like to
begin construction and foundation work in the summer of 2009. The wind
turbines have a lead time of 12 months, allowing for turbine erection in the
spring of 2010.
4.4.6.1.4. Challenges:
At most KEA currently has 50% wind energy on the grid system at any one
time. This allows for a stable and reliable grid. A system which has over
100% wind energy can not function without considerable creative
measures. One of which is the installation of a VRB Flow Battery which is
designed to absorb any surges caused by wind gusts and provide the
needed frequency control. These design issues are being addressed.
4.4.6.2. Vanadium Red-Ox Flow Battery
4.4.6.2.1. Objective
The installation of a Vanadium Red-Ox Flow Battery Energy Storage
System (VRFB) will increase voltage stability, increase the efficiencies of
operating diesel generators, and capture excess wind energy during
off-peak hours.
4.4.6.2.2. Benefits
The VRFB will benefit KEA’s existing system in three specific ways. Diesel
turbines run most efficiently when operating to the fullest capacity.
Charging the battery, when the generator would otherwise operate
below ideal conditions, will increase overall system efficiency. Secondly,
KEA runs one EMD year round and supplements this with a second CAT
generator when the load demands it. Instead of starting the second
generator, the VRFB will supply the electricity. Normally, the CAT gen set is
run approximately 3,200 hrs per year. This will be reduced less than 350 hrs
per year with the VRFB online. This results to a direct reduction in diesel
consumption. Thirdly, in order to realize the benefits of increasing the level
Kotzebue Electric Association Vanadium Red-Ox Flow Battery
Energy Storage Project
Renewable Energy Fund Grant
October 8th 2008
Page 46 of 52
of wind penetration in Kotzebue, energy storage MUST be utilized. The
simple payback for the VRFB is under three years.
4.4.6.2.3. Scope of Work
Phase one, Initial Design and Engineering, of this system has been funded
and will be completed on October 31st, 2008. Phase Two, summer 2009,
will consist of the construction of an Energy Storage Facility and the
installation of a 600kW/1800kWh system. Phase Three will continue in 2010
and will be sized for the increased wind capacity. The sizing of this system
will most likely be 900kW/1800kWh although the modeling is part of Phase
One which is currently being completed.
4.4.6.2.4. Challenges
KEA doesn’t expect any major obstacles. However, any newer
technology will have issues to resolves. VRB’s history of proactive O & M
with the University of Alaska, Fairbanks Arctic Energy Technology and
Development Laboratory enables KEA to be confident in VRB’s
commitment to a project in Kotzebue. Communication lines are very
open between project partners and this will continue as construction
proceeds.
4.4.6.3. Waste Heat Recovery and Power
4.4.6.3.1. Objective
The installation of a stack heat recovery unit and an ammonia absorption
cycle waste heat power plant will allow KEA to fully utilize diesel fuel
whenever the diesel turbines are in operation. Only one third of a fuel’s
energy content is used for electricity generation. The remaining two thirds
are turned into thermal energy or ‘waste heat’. KEA currently utilizes one
third in its district heating system, water heating for the city’s water line,
and in the absorption chiller which generates ice for the commercial
fishing industry. The remaining third exits the exhaust stack. A heat
exchanger can be installed in the stack heat to capture this thermal
energy. Energy Concepts has designed a turbine which will generate
150kW from that ‘waste heat’.
4.4.6.3.2. Benefits
The capital cost of this equipment is low relative to the benefits it
provides. The simple payback for a waste heat project of this scope is
under 2 years. This technology could be of great benefit to any village
using diesel turbines.
4.4.6.4. Scope of Work
Kotzebue Electric Association Vanadium Red-Ox Flow Battery
Energy Storage Project
Renewable Energy Fund Grant
October 8th 2008
Page 47 of 52
Only one third of a fuel’s energy content is used for electricity generation.
The remaining two thirds are turned into thermal energy or ‘waste heat’. KEA
currently utilizes one third of that ‘waste heat’ in its district heating system,
water heating for the city’s water line, and in an absorption chiller (designed
by Energy Concepts) which generates ice for the commercial fishing industry.
The remaining third exits the exhaust stack. A heat exchanger can be
installed in the stack heat to capture this thermal energy. Energy Concepts
has designed a turbine which will generate 150kW from that ‘waste heat’.
This turbine will be installed in the summer of 2009. The existing Absorption
Chiller consists of outdated technology. Energy Concepts will simultaneously
update this system while installing the turbine.
4.4.6.5. Challenges
Stack heat recovery has not been met with much success in Alaska.
There are challenges which need to be addressed but the technology
has evolved to the point where these are not insurmountable, but only
need to be discussed and properly engineered. Waste heat power
generation is also not new technology. Chena Hot Springs Resort has had
very much success with their Organic Rankine Cycle turbine which gets its
heat source from a geothermal reservoir.
4.4.6.6. Solar Thermal
4.4.6.6.1. Objective
In an effort to mitigate the rising costs of home heating KEA will investigate
the success of solar thermal systems. Partnering with NIHA, KEA will install a
total of nine systems spread out in Kotzebue, Deering, Ambler, and
Buckland.
4.4.6.6.2. Benefits
Modeling done in Ret Screen has shown that the Northwest Arctic Region
can obtain a 50% solar fraction on a properly designed system. Meaning
solar energy can reduce their current energy use by half. The payback
for solar averages out to be 6-8 years depending on system design and
current energy methods and costs.
4.4.6.6.3. Scope of Work:
Of the nine installed systems, two will consist of evacuated tubes and
these will need to be located in Kotzebue. These tubes have the potential
to be more troublesome, but more advantageous, than their flat panel
counterparts. The tank less water heats (two using propane and two using
Kotzebue Electric Association Vanadium Red-Ox Flow Battery
Energy Storage Project
Renewable Energy Fund Grant
October 8th 2008
Page 48 of 52
electricity). The remaining 3/7 will have storage tanks. Half of the systems
will use an antifreeze looped system and the others will utilize a drain back
system. This combination of techniques will allow NIHA and KEA to
determine what type of system will be most beneficial to residents will
being simple to maintain and operate.
4.4.6.6.4. Challenges
Not many people have experimented with solar thermal in the Arctic.
Cold Climate Housing Research Center has recently installed both an
evacuated tube space heating solar thermal system and a glazed panel
water heating solar thermal system in Fairbanks. Each system has its
advantages and disadvantages. The challenge will be in maintaining the
systems and retrieving data. However, the partnership between KEA and
NIHA will ensure this success. There are unique design issues when above
the Arctic Circle. Systems which are perfect in Arizona will not necessarily
be a good match in the Arctic. This study will obtain much needed data,
provide the training and education for potential installers, increase
awareness of solar thermal, and prepare the community for more
installations to follow.
4.4.6.7. Conclusion
By increasing wind capacity, introducing energy storage, and capturing waste
heat for power generation KEA will effectively combat that trends of rising fuel
costs. The projects will require significant capital for development but when
combined these projects will save over 700,000 gallons of diesel every year.
Kotzebue Electric Association Vanadium Red-Ox Flow Battery
Energy Storage Project
Renewable Energy Fund Grant
October 8th 2008
Page 49 of 52
5. Project Benefit
5.1.1. Environmental Benefits
Environmental benefits and impacts of the project, based on reduction of
hydrocarbon use, include reduced potential for fuel spills/contamination
episodes in transport, storage, or use (thus protecting vital water and subsistence
food sources), improved air quality, decreased contribution to global climate
change from fossil fuel use, decreased coastal erosion due to climate change.
5.1.2. Financial Benefits
The avoided costs in Kotzebue for 2008 would have been $760,622 based on the
cost of fuel being $4.25/gallon. However, the cost of diesel has been increasing
exponentially and the future avoided costs will be much greater.
5.1.3. Non-Income Benefits
Faced with the challenges of high costs, limited local employment options and
the need to support their families, rural Alaskans are being faced with the choice
of leaving village life behind in order to relocate to larger cities in search of
employment and affordable living. In such small communities, each household is
important to the well-being of the entire community. With more affordable
energy available in the villages, more of our region’s households will be able to
afford to stay in their communities, promoting community stability and wellness
and helping to stem the tide of rural migration. The proposed energy storage
system will help stabilize energy costs and allowing the increased level of wind
penetration.
Kotzebue Electric Association Vanadium Red-Ox Flow Battery
Energy Storage Project
Renewable Energy Fund Grant
October 8th 2008
Page 50 of 52
6. Grant Budget
The total project cost for the Vanadium Red-Ox Flow Battery is $3,930,400, of which
$3,144,399 is requested in grant funds. The remaining $786,000 will be matched with a
federal earmark from the Department of Energy for $147,600, a state earmark for
$200,000, and $438,400 from in-kind and cash contributions from Kotzebue Electric
Association.
• Project engineering, design, modeling, and reporting will cost $185,500.
• The construction of the Energy Storage Facility will cost $455,000.
• The capital cost of the battery, including shipping, is $2,947,943.
• The battery installation and balance of plant will cost $114,795
On the total project budget is added a 5% contingency to allow for increase in material
and shipping costs in FY09 and any other unknown externalities.
BUDGET INFORMATION‐Kotzebue Electric Association
BUDGET SUMMARY:
Milestone or Task
Federal
Funds State Funds
Local Match
Funds (Cash)
Local
Match
Funds (In‐
Kind)
Other
Funds TOTALS
1 Design and Procurement $95,000 $40,000 $135,000
2 Modeling $2,700 $27,800 $30,500
3 Battery Construction $10,000 $2,898,943 $39,000 $2,947,943
4 Site Work $233,400 $161,600 $60,000 $455,000
5 Battery Delivery $15,000 $25,000 $40,000
6 Battery Installation $39,900 $9,895 $65,000 $114,795
7 Reporting $20,000 $20,000
$147,600 $3,157,238 $161,600 $276,800 $0 $3,743,238
Milestone # or Task #
BUDGET CATAGORIES:1234567TOTALS
Direct Labor and Benefits $33,000 $25,000 $80,000 $20,000 $65,000 $20,000 $243,000
Travel, Meals, or Per Diem $7,000 $2,000 $5,000 $14,000
Equipment $3,500 $2,907,943 $250,000 $49,795 $3,211,238
Supplies $0
Contractual Services $95,000 $80,000 $20,000 $195,000
Construction Services $40,000 $40,000 $80,000
Other Direct Costs $0
TOTAL DIRECT CHARGES $135,000 $30,500 $2,947,943 $455,000 $40,000 $114,795 $20,000 $3,743,238
$187,162
TOTAL $3,930,400
5% Contingency
Figure 16: Budget Information
Kotzebue Electric Association Vanadium Red-Ox Flow Battery
Energy Storage Project
Renewable Energy Fund Grant
October 8th 2008
Page 51 of 52
7. Additional Documentation and
Certification
Figure 17: KEA Board Resolution
Kotzebue Electric Association Vanadium Red-Ox Flow Battery
Energy Storage Project
Renewable Energy Fund Grant
October 8th 2008
Page 52 of 52
Figure 18: Northwest Arctic Borough Resolution