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HomeMy WebLinkAboutYukon River 25kW Run-of-River Hydrokinetic Turbine AppRenewable Energy Fund Grant Application Application Forms and Instructions The following forms and instructions are provided for preparing your application for a Renewable Energy Fund Grant. An electronic version of the Request for Applications (RFA) and the forms are available online at http://www.akenergyauthority.org/RE_Fund.html The following application forms are required to be submitted for a grant recommendation: Grant Application Form GrantApp.doc Application form in MS Word that includes an outline of information required to submit a complete application. Applicants should use the form to assure all information is provided and attach additional information as required. Application Cost Worksheet Costworksheet.doc Summary of Cost information that should be addressed by applicants in preparing their application. Grant Budget Form GrantBudget.xls A detailed grant budget that includes a breakdown of costs by task and a summary of funds available and requested to complete the work for which funds are being requested. Grant Budget Form Instructions GrantBudgetInstr.pdf Instructions for completing the above grant budget form. If you are applying for grants for more than one project, provide separate application forms for each project. Multiple phases for the same project may be submitted as one application. If you are applying for grant funding for more than one phase of a project, provide a plan and grant budget for completion of each phase. If some work has already been completed on your project and you are requesting funding for an advanced phase, submit information sufficient to demonstrate that the preceding phases are satisfied and funding for an advanced phase is warranted. If you have additional information or reports you would like the Authority to consider in reviewing your application, either provide an electronic version of the document with your submission or reference a web link where it can be downloaded or reviewed. REMINDER: Alaska Energy Authority is subject to the Public Records Act, AS 40.25 and materials submitted to the Authority may be subject to disclosure requirements under the act if no statutory exemptions apply. All applications received will be posted on the Authority web site after final recommendations are made to the legislature. AEA 09-004 Grant Application Page 1 of 20 9/2/2008 Renewable Energy Fund Grant Application SECTION 1 – APPLICANT INFORMATION Name (Name of utility, IPP, or government entity submitting proposal) Yukon River Inter-Tribal Watershed Council Type of Entity: IPP Mailing Address 815 Second Avenue, Suite 201 Fairbanks, AK 99701 Physical Address Same Telephone 907-451-2530 Fax 907-451-2534 Email jwaterhouse@yritwc.org 1.1 APPLICANT POINT OF CONTACT Name Brian Hirsch Title Energy Program Manager Mailing Address 725 Christensen Drive, Suite 3 Anchorage, AK 99501 Telephone 907-258-3337 Fax 907-258-3339 Email .bhirsch@yritwc org 1.2 APPLICANT MINIMUM REQUIREMENTS Please check as appropriate. If you do not to meet the minimum applicant requirements, your application will be rejected. 1.2.1 As an Applicant, we are: (put an X in the appropriate box) An electric utility holding a certificate of public convenience and necessity under AS 42.05, or X An independent power producer, or A local government, or A governmental entity (which includes tribal councils and housing authorities); Yes 1.2.2. Attached to this application is formal approval and endorsement for its project by its board of directors, executive management, or other governing authority. If a collaborative grouping, a formal approval from each participant’s governing authority is necessary. (Indicate Yes or No in the box ) Yes 1.2.3. As an applicant, we have administrative and financial management systems and follow procurement standards that comply with the standards set forth in the grant agreement. Yes 1.2.4. If awarded the grant, we can comply with all terms and conditions of the attached grant form. (Any exceptions should be clearly noted and submitted with the application.) AEA 09-004 Grant Application Page 2 of 20 9/3/2008 Renewable Energy Fund Grant 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. This is a four phase project proposal that is currently in the first two phases of development. In 2009 we will refine the deployment of a 5 kW run-of-river hydrokinetic turbine and conduct feasibility/conceptual design for a 25 kW run-of-river hydrokinetic turbine on the Yukon River. In 2010, we intend to complete the final design and construction phases for the 25kW run-of- river hydrokinetic turbine on the Yukon River. 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. We are proposing to enhance and expand the first in-stream hydrokinetic energy conversion device successfully deployed in the United States in Ruby, Alaska. In the summer of 2008, the Yukon River Inter-Tribal Watershed Council (YRITWC), along with the Tribe and City of Ruby, the local electric utility (owned and operated by the City of Ruby), and ABS Alaskan, deployed, tested, and removed a 5 kW Encurrent vertical axis hydrokinetic turbine in the Yukon River at Ruby, Alaska, before winter ice formation. This proposal is for a two-year project that will begin in 2009 with a revised resource assessment, re-design certain aspects of the turbine deployment such as anchoring and debris diversion, finalize permit acquisition, and re-deploy the 5 kW device. Based on the performance of the 5 kW turbine, and modeling feasibility for a larger system with a turbine re-designed to optimally perform at a lower current speed, in 2010 we will install a 25 kW version of the hydrokinetic turbine. All project partners will remain in place, along with Terrasond and re vision LLC, who will assist with resource assessment and feasibility analysis. 2.3 PROJECT BUDGET OVERVIEW Briefly discuss the amount of funds needed, the anticipated sources of funds, and the nature and source of other contributions to the project. Include a project cost summary that includes an estimated total cost through construction. The total project cost is estimated at 461,950. This includes $449,950 of state (AEA) funds, $7,500 of YRITWC contributions, and $7,500 of other sources (local in-kind). The YRITWC has an Energy Department that is funded through a federal program, the Administration for Native Americans, that will be able to contribute $7,500 of direct labor to the project. The Ruby Tribal Council and City of Ruby will be donating approximately $7,500 through in-kind and reduced fees for use of local equipment, facilities, and personnel. ABS Alaskan will be contributing an undefined amount of project cost-share through reduced fees and donated labor for installation along with contributions from New Energy Corporation, the turbine manufacturer. 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. AEA 09-004 Grant Application Page 3 of 20 9/3/2008 Renewable Energy Fund Grant Application At approximately $.98/kilowatt-hour, the community of Ruby currently pays among the highest unit price for electricity in all of Alaska and the United States. There are a variety of reasons for such high electricity costs, including complete reliance on diesel fuel and inefficient generators, but the outcome is that the community is deeply engaged in a search for alternatives to diesel fuel and serious about energy conservation. The power that is generated by the proposed hydrokinetic devices will be given to and distributed by the village electric utility, thus reducing diesel fuel consumption and wear on the existing gensets. We estimate that, when placed in the proper current, the 5 kW Encurrent hydrokinetic turbine will produce 7,200 kW-h annually, or $7056.00 at current retail prices. Assuming a 20 year lifetime for the equipment, this amounts to $141,120 of benefits over the life of the turbine. The 25 kW turbine is estimated to produce 41,184 kW-h annually, or $40,360 at current retail prices. Assuming a 20 year lifetime for the equipment, this amounts to $807,206 of benefits over the life of the turbine. More broadly, the Alaska public economic benefits of the project include contractual services to Alaskan businesses and organizations including wages paid to Alaskan employees of the YRITWC. These are: ABS Alaskan $17000, TerraSond Ltd. $40726, local airlines $9600, local lodging $4800, local barge lines $10000, YRITWC labor $25,000. It should be noted that Ruby is slated for a powerhouse upgrade within the next two years, and that summertime loads frequently range between 40 – 50 kW. If these turbines continue to perform well in the long-term, it is quite possible that, at least for several ice-free summer months, the hydrokinetic turbines will be able to fully meet village electric demand. With proper switch gear and controls, this will allow for long periods—on the order of hours to days—of no diesel use and complete reliance on the hydrokinetic turbines to meet village baseload needs. The early success of this project offers additional promise for long-term cost reduction and project sustainability. If it becomes possible to essentially turn off diesel generators in the ice free months because of these hydrokinetic turbines, there will be significant reduction in diesel wear and tear with corresponding cost savings, as well as a situation in which many more tank farms in remote communities will be able to hold a full year supply of diesel fuel. Currently many communities exceed the annual capacity of their tank farm and require costly flights or barges, or the community simply doesn’t have enough money to purchase a full year supply, so they must buy smaller amounts more frequently or take out a loan to buy a larger amount. Reducing the overall amount used and number of shipments will result in less chance of fuel spills, less use of loans to purchase fuel, and other ancillary benefits that are difficult to quantify but are certainly tangible. As well, developing a reliable anchoring system such as large concrete blocks deployed off the end of a barge with a crane, offer opportunities for taking advantage of economies-of-scale if these systems become widespread throughout the Yukon River watershed and in other locations. It is in this light that this initiative should be viewed as both a pilot project and a cost-effective means of renewable energy production. 2.5 PROJECT COST AND BENEFIT SUMARY Include a summary of your project’s total costs and benefits below. 2.5.1 Total Project Cost (Including estimates through construction.) $461,950 2.5.2 Grant Funds Requested in this application.$446,950 2.5.3 Other Funds to be provided (Project match)$15,000 2.5.4 Total Grant Costs (sum of 2.5.2 and 2.5.3)$461,950 2.5.5 Estimated Benefit (Savings)$ 25,673 annual avoided fuel cost annually 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.) $ 107,326 AEA 09-004 Grant Application Page 4 of 20 9/3/2008 Renewable Energy Fund Grant Application 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. Dr. Brian Hirsch, YRITWC Energy Program Manager, will be the Project Manager. He was the Project Manager for the 2008 successful installation of the 5 kW hydrokinetic device in Ruby. He has been involved in the installation and project management of wind turbines and/or solar panels in the Alaska villages of Fort Yukon, Beaver, Arctic Village, Venetie, Tanana, Chickaloon Village, Ugashik, Pilot Point, and Port Heiden as well as wind monitoring towers in several other communities. Dr. Hirsch has broad experience managing renewable energy projects in remote Alaska settings. A resume and three references are attached to this application. 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.) Ruby Project Schedule Phase 1 Reconnaissance Begin 03/08 - completed 05/09 DATE Collect data on current speed and bathymetry in Ruby 05/09 Design fish study completed 08/08 Phase 2: Feasibility: Begin 06/08 - completed 02/10 Refine 5KW turbine Installation 05/09 Redesign anchor system for permanence 05/09 Redesign power transmission cable 05/09 Redesign subsurface debris diversion method 05/09 Refine deployment method 05/09 Research alternative energy resource costs 03/09 Define Cost Effective threshold for hydrokinetic power 05/09 Design long term data collection system & procure equipment completed 09/ 08 Redeploy 5KW turbine Deploy Anchor system 06/09 Deploy Transmission cable 06/09 Redeploy turbine 06/09 Deploy Data collection devices 06/09 Complete data collection for 5kW 10/09 Analyze and report on data from 5kW 12/09 Integrate data collected into preliminary 25KW system design 02/10 Phase 3: Final Design and Permitting Begin 07/08 completed 04/10 AEA 09-004 Grant Application Page 5 of 20 9/3/2008 Renewable Energy Fund Grant Application Choose site for 25KW deployment 02/10 Finalize anchor system design 03/10 Finalize power transmission design 03/10 Finalize debris diversion design 03/10 Finalize Deployment Method 03/10 Finalize power conditioning equipment design 03/10 Contract for shipping and turbine deployment 04/10 Procure permits 04/10 Fish sampling completed 09/08 Land use 04/09 Water Rights 04/09 Fish Habitat 04/09 Coastal Zone Management 04/09 Coast Guard notification 04/09 Army Corps title 10 completed 07/08 Phase 4: Construction Begin 05/10 Completed 12/10 Procure 25KW turbine 04/10 Procure Anchoring system 04/10 Procure power transmission cable 04/10 Procure power conditioning equipment 04/10 Procure Balance of system 04/10 Ship to Site 05/10 Deploy Anchor system 06/10 Deploy Transmission cable 06/10 Deploy turbine 06/10 Deploy Data collection devices 06/10 Complete data collection for 25kW 10/10 Analyze and report on data from 25kW 12/10 3.3 Project Milestones Define key tasks and decision points in your project and a schedule for achieving them. Our experience with the successful “proof of concept” installation of a 5 kW hydrokinetic turbine in Ruby in the summer of 2008 pointed to numerous project milestones that still must be achieved for complete project success and to confirm feasibility for a larger 25 kW turbine. The following milestones have been identified: Determine optimal current and location for turbine redeployment with assistance from re vision LLC and Terrasond to confirm that adequate location exists in Ruby or consider another location (5/09). Redeploy 5kW turbine (6/09). Collect power data from 5 kW turbine during ice-free months and analyze data with assistance from re vision LLC to determine the price point/feasibility for 25kW turbine installation relative to cost of diesel and other power generation over expected turbine lifetime (12/09). AEA 09-004 Grant Application Page 6 of 20 9/3/2008 Renewable Energy Fund Grant Application Make decision to complete final design on 25 kW turbine for deployment in Ruby or consider another location for study and deployment of 25 kW turbine (2/10). Complete final design for 25 kW turbine (3/10). purchase turbine (4/10) and deploy (6/10). Collect data from 25kW installation and analyze to confirm economics of project (10/10); report on findings and recommend possible future expansion based on this data (12/10). 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. Dr. Brian Hirsch, YRITWC Energy Program Manager, will be the lead staff on this project. His resume is attached and a brief description is provided above. Monty Worthington, YRITWC Energy Technician, will also play an instrumental role in the project. Mr. Worthington’s resume is also attached. He was the lead installer and system designer on the 5 kW turbine in 2008, and has broad experience as a marine and renewable energy electrician. The YRITWC works closely with the Tribe, City, electric utility, and Native village corporation in Ruby. The Ruby Tribal Council is a leading member of the YRITWC as their Tribal Administrator, Pat Sweetsir, is an original founder and still on the Executive Committee of the YRITWC. The city owns and operates the electric utility, has been an integral partner in the first hydrokinetic installation, and will continue to participate in this proposed project. The City and Tribe will provide all necessary vehicles, boats, heavy equipment, and operators. The City, Tribe, and village Native corporation are all signatories to a cooperative Memorandum of Agreement that defines their respective roles and affirms their joint commitment to projects such as this that benefit all members of the community. The successful 5 kW turbine installation in the summer of 2008 is testament to the cooperation among the various local entities. A community history of Ruby and biographical sketch of Pat Sweetsir are included in Section 7 of this proposal. Re vision LLC is a national leader in wave, tidal, and in-stream energy conversion analysis, with clients such as the Electric Power Research Industry, the California Energy Commission, Pacific Gas and Electric, Chevron, and the National Renewable Energy Laboratory. Re vision LLC will assist us in establishing velocity distributions to identify optimal turbine placement and create an integrated turbine model to determine optimal configuration and break even points for larger hydrokinetic system deployment. A commitment letter from re vision LLC and a resume of Mirko Previsic, re vision’s President, are included in Section 7 of this proposal. Terrasond is an industry leader in bathymetric mapping and river characterization. While primarily working in the oil and gas industry, Terrasond has recently provided services to many of the more advanced hydrokinetic initiatives in Alaska, including the Alaska Power and Telephone project in Eagle and Ocean Renewable Power Company’s project in Cook Inlet. Terrasond will conduct site characterization, current speed evaluation, and bathymetric mapping to contribute to our feasibility assessment for optimal turbine placement and economic performance. A commitment letter and proposal from Terrasond are included in Section 7 of this proposal. ABS Alaskan is the Alaska distributor of Encurrent turbines and will continue to provide the equipment and a technical assistance role where appropriate, including liaising between the AEA 09-004 Grant Application Page 7 of 20 9/3/2008 Renewable Energy Fund Grant Application YRITWC and New Energy Corporation, the Canadian-based manufacturer of the Encurrent turbine. ABS Alaskan has developed expertise with the power conditioning equipment used with the turbine, namely Aurora inverters, that can enhance performance of the system. As well, because of the relationship between the YRITWC, ABS, and New Energy Corporation that was developed through the summer 2008 installation, New Energy Corporation is now re-designing their turbines to optimally perform at lower current speeds, which will be a tremendous benefit for Yukon River applications. By the time we intend to purchase the 25 kW turbine in early 2010, the turbine will be re-designed for 2 m/s current speeds instead of the existing 3 m/s design. A cost quote and in-kind commitment letter from ABS Alaskan are included in Section 7 of this proposal. The Yukon River Drainage Fisheries Association (YRDFA) is a bi-national organization consisting of commercial and subsistence fishers on the Yukon River. YRDFA conducts biological studies to assess the health and sustainability of Yukon River fisheries. YRDFA assisted us in designing a fish impact study that was approved by the Alaska Department of Fish and Game and resulted in us receiving a Fish Collection Permit in September 2008 that will be applicable for the next two years. A commitment letter from YRDFA is included in Section 7 of this proposal. We expect additional project partners as funding becomes available and we acquire additional clarity on specific tasks such as economic analysis and consideration of large-scale deployment. 3.5 Project Communications Discuss how you plan to monitor the project and keep the Authority informed of the status. The YRITWC will provide quarterly reports to the Authority and, where appropriate, all project partners. These reports will consist of progress updates, copies of all notable documents produced, project milestones, and financial analysis in the form of “budget versus actuals.” The project manager will keep in regular contact with David Lockard, AEA Ocean and River Energy Program Manager. The Ruby electric utility will conduct weekly monitoring and provide regular communication to the YRITWC for real-time, on-site project security and performance assessment. Pre-determined project milestones, listed above, will serve as an essential evaluation tool to monitor the project and ensure that it stays on-time and on-budget. Performance data will be regularly downloaded from the production site for analysis and included in additional reports to AEA and project partners. 3.6 Project Risk Discuss potential problems and how you would address them. While this is still considered an immature technology, the installation in the summer of 2008 went a long way towards establishing “proof of concept” for hydrokinetic power as a potentially significant contribution to village-scale energy, especially in the ice-free months. Underwater production during ice cover in the winter is a longer-term challenge that will not be addressed in this project but is certainly a worthy goal that will benefit from the work accomplished here. The anticipated project risks include: Confirming that adequate current speeds exist for economical power production – This will be addressed with thorough site assessment and feasibility analysis. River debris – Our summer 2008 installation appears to have addressed surface debris risks such as floating logs: an “A-frame” diversion boom was custom designed and AEA 09-004 Grant Application Page 8 of 20 9/3/2008 Renewable Energy Fund Grant Application assembled that successfully diverted floating debris. Submerged debris is more of a challenge to turbine performance by getting caught in anchor lines, rather than posing the risk of catastrophic failure. Various engineering options exist that should be able to divert the submerged debris and not significantly slow down the current speed as the water contacts the turbine. This will require some analysis and likely custom designs, but no breakthrough technology or complex process should be necessary. Mooring system – Because we are planning to remove the turbine during winter ice cover of the river, we will need a reliable and manageable mooring system that can be recovered or easily decommissioned and redeployed annually. Again, this will require some analysis and site specific designs, but we already have several plausible ideas, access to significant local knowledge and experience around this issue, and we are confident that no breakthrough technology or complex process should be necessary. SECTION 4 – PROJECT DESCRIPTION AND TASKS Tell us what the project is and how you will meet the requirements outlined in Section 2 of the RFA. The level of information will vary according to phase of the project you propose to undertake with grant funds. If you are applying for grant funding for more than one phase of a project provide a plan and grant budget for completion of each phase. If some work has already been completed on your project and you are requesting funding for an advanced phase, submit information sufficient to demonstrate that the preceding phases are satisfied and funding for an advanced phase is warranted. 4.1 Proposed Energy Resource Describe the potential extent/amount of the energy resource that is available. Discuss the pros and cons of your proposed energy resource vs. other alternatives that may be available for the market to be served by your project. We are proposing the use of hydrokinetic turbines to meet the electrical demand in the village of Ruby. This will be a phased project that begins by enhancing the existing installation that occurred in the summer of 2008 that was primarily a “proof of concept.” While this was highly successful in proving that the technology and specific turbine will produce power when anchored in the Yukon River, additional site assessment and feasibility analysis is necessary to confirm the economic viability and optimal configuration of the system, and over time, to consider larger scale and regional deployment that can seriously challenge the dominance of diesel fuel in rural Alaska, at least for the ice-free summer months. The Yukon River at Ruby is more than a half a mile wide and has ample space for the deployment of several hydrokinetic turbines. The current speeds range somewhere between 1.0 - 2.0 m/s. The feasibility phase of this project will narrow down the accuracy of this current range in precise locations and assess the actual power potential of the area, as well as the power efficiency of the particular Encurrent turbine that we are proposing for the project. Presently the Encurrent technology that we already own will operate at 50% power in a 2 m/s current, though we are now working with the manufacturer (New Energy Corporation) to re-design their turbines to optimally perform at 2 m/s. Our existing 5 kW turbine, turbine which is 1.5 meters wide by 1.5 meters deep and floating on a 10 foot by 20 foot pontoon boat, should produce 7200kW-h over the course of a summer at 2 m/s. AEA 09-004 Grant Application Page 9 of 20 9/3/2008 Renewable Energy Fund Grant Application Compared with the existing diesel power, in-stream hydrokinetic energy conversion is both cleaner and more economically stable in that it provides “flat-priced” power. Diesel-based electricity varies directly with the cost of fuel, and if recent general trends continue, it will soon be cost prohibitive in many remote Alaskan villages. In addition, if proposed new carbon taxes come into effect diesel-based electricity will become even more expensive. The CO2 produced from diesel combustion also exacerbates climate change which has amplified effects in the northern latitudes, impacting both the health of the environment and the economy. By contrast, though the initial capital cost is substantial, flat-priced hydrokinetic power is predictable and minimal once installed, requiring only periodic maintenance and seasonal decommissioning. It also produces no greenhouse gases, both safeguarding it from the economic impacts of future carbon taxes as well as alleviating the acceleration of climate change. Hydrokinetic power has a distinct advantage over other renewable energy sources in that it provides for consistent 24 hour power during its operational period. The hydrokinetic device(s) we are proposing are intended only for operation in ice-free waters and thus have an availability of about 4 months. During this time, if an adequate number of turbines are installed it could provide for community baseload power and result in completely turning off the diesel powered generation for Ruby during the summer months. Solar and wind power do not offer this advantage as they vary too greatly through the course of the day to provide baseload power to the grid without storage. The only other renewable resources that could provide this kind of stable, firm power would be traditional hydro, or geothermal, neither of which are available in the nearby vicinity of Ruby. Though this technology is considered immature, there are many lessons to be learned already available, especially from the rapid growth of the wind industry, and we expect that hydrokinetics will be able to take advantage of these lessons and mature quite rapidly. In fact, the fundamental technology and energy conversion principles are very similar to wind energy, though water is many times more dense, and hence, energetic, than wind. As well, hydrokinetic power is much more predictable and steady than either wind or solar, thus offering the opportunity to eliminate or at least significantly reduce the need for energy storage and associated costs and inefficiencies. The important point here is that Alaska has much to gain from the early deployment of this technology and with our first-in-the-nation installation this past summer, we are now positioned as a leader in this emerging technology and can continue in this role with additional project support. 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 village of Ruby's electrical power is provided by one of three diesel generators running at any given time. Two of these generators are CAT 3306's rated at 230 kW and 225 kW. The 230kW is 8 years old and the 225 kW is a 10 year old standby generator. There is also a CAT C-9 230kW generator that is 2 years old. Ruby's electrical generation has been historically very inefficient producing only 9.8 kWh per gallon of diesel in 2005. This promises to improve with recent load balancing done on the grid in June of 2008, and with the possibility of generator upgrades further improvements in efficiency are likely. AEA 09-004 Grant Application Page 10 of 20 9/3/2008 Renewable Energy Fund Grant Application 4.2.2 Existing Energy Resources Used Briefly discuss your understanding of the existing energy resources. Include a brief discussion of any impact the project may have on existing energy infrastructure and resources. Currently the only energy resource used for electricity production in Ruby is diesel fuel. The town of Ruby uses approximately 52,185 gallons of diesel fuel a year (from city records 2007) to supply its energy needs. While all three generators are quite similar in size, the loads in Ruby vary significantly on a daily basis and even more so, seasonally. The single biggest variable on the system is the school. Thus, a 225 or 230 kW diesel generator is always running, even though a much smaller generator could meet all the demand when the school is not drawing much power, such as in the summer months. This presents a tremendous opportunity to meet local demand in the summer with no diesel if other options, such as hydrokinetic devices, are configured properly. If this project is successful it could initially save 4,397 gallons of diesel fuel a year. Future expansion could fully eliminate the need for diesel generation in the summertime (approximately four months), which would save three times this amount. 4.2.3 Existing Energy Market Discuss existing energy use and its market. Discuss impacts your project may have on energy customers. The people of Ruby buy their electricity from the city owned utility for $.98 per kWh. According to the city and utility clerk, this rate is likely to increase in the near future. Even after PCE the rate is still over $.60 per kWh for residences while businesses and government customers still pay full rates. The energy produced from this project will be a charitable donation to the utility and people of Ruby to help lower one of the very highest electrical rates in the country. By saving fuel in the summer months through replacing diesel generation with hydrokinetic generation, the fuel usage could be reduced by 20% or more, and this savings can be passed on to all members of the community. This will reduce energy costs to families, businesses, and government entities in Ruby, including the school, which will then have additional funds to spend on other educational opportunities for the local youth. Currently, because of the high price of electricity, the community is already engaged in energy awareness, education, and conservation. In the spring of 2008, the YRITWC was asked to come to the community and provide an energy conservation training, which we did, and laid the foundation for the hydrokinetic turbine installation in the summer of 2008. Community members are very supportive of the project and see this as an opportunity to reduce the cost of living in the village, hopefully resulting in more people being able to afford to stay there. Many local people stated the challenges posed by high energy costs and the promise of this project not just for Ruby, but for all of the interior and other remote locations next to moving water. AEA 09-004 Grant Application Page 11 of 20 9/3/2008 Renewable Energy Fund Grant Application 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 Project Overview & Technology Specific to Location: Currently the YRITWC owns and operates an Encurrent 5kW turbine produced by New Energy Corporation. It is a vertical axis Darius style hydrokinetic turbine that is 1.5meters wide x 1.5 meters deep. It is mounted to a 20' aluminum pontoon boat. This turbine was deployed in the summer of 2008 in Ruby simply to determine “proof of concept,” though additional site characterization and resource assessment is necessary to complete feasibility analysis and confirm cost effective deployment methods. As described in Section 3.2 above, our plan is to implement phase 1 (reconnaissance), phase 2 (feasibility), and re-deploy the 5 kW turbine in the summer of 2009. Much of the site-specific recon and feasibility analysis, along with system performance evaluation of the 5 kW turbine, will then inform our final design (phase 3) and construction (phase 4) development efforts for a 25 kW that will be installed in the summer of 2010. Performance evaluation of the 5 and 25 kW turbines will provide data for final recommendations for larger scale deployment beyond the funding scope of this specific project. It is our hope that by the end of this project in December 2010, we will have operating data and experience— especially when combined with other proposed hydrokinetic projects in the region—to recommend policies and development scenarios for large-scale deployment of hydrokinetic devices. Optimum installed capacity: The average summertime load in Ruby is about 50 KW. An optimal installation would eventually involve installing several 25kW turbines that would be capable of offsetting this load, resulting in the diesel generators being completely turned off for significant portions of the summer and greatly reducing annual diesel fuel consumption. The actual number of turbines and optimal configuration necessary to accomplish this will be determined in the feasibility phase of this project with re vision LLC consulting. Anticipated capacity factor: The anticipated capacity factor for the 5kW turbine during its period of operational period of 120 days in a current of 2 m/s is 50%. Additional site characterization is necessary to determine actual current speeds in optimal locations. Assuming an operational time of 4 months leads to an annual capacity factor of 16.4%. New Energy Corporation is currently working on a lower current speed redesign of their 25kW turbine that would lead to a capacity factor of 57% during its operational period of 120 days in a 2 m/s current, or 18.8% annually. AEA 09-004 Grant Application Page 12 of 20 9/3/2008 Renewable Energy Fund Grant Application Anticipated annual generation: The annual generation in optimal 2 m/s currents for the 5kW turbine would be 7,200 kWh, this number will be ground truthed in the feasibility study. A 25kW turbine should produce 41,184 kWh in a similar time period. Anticipated barriers: -Confirming that adequate current speeds exist for economical power production; -Designing and implementing adequate debris diversion measures; -Designing and deploying a reliable and manageable mooring system that can be recovered or easily decommissioned and redeployed after the winter season. Basic Integration Concept: The power produced by the turbine will be transmitted to shore via a submersible cable. The wild, three-phase AC will then be power conditioned through a Magnetek Aurora Inverter to grid compatible power. This technology has already been successfully tested and connected into the Ruby electrical grid in the summer of 2008 and was providing on-line data to confirm system performance. Delivery Methods: The 5kW turbine was delivered to Ruby on board a Ruby Marine barge enroute from Nenana; the ancillary parts for the project were stacked on the pontoon raft. Local loaders and boats were used to transport the equipment to the job site and deploy it. A similar delivery plan will be used for the 25 kW turbine with the exception that certain parts of the installation will be contracted out to the barge line such as the deployment of the correspondingly larger anchoring and power transmission systems. As stated above, the hydrokinetic power is delivered to shore and into the grid via a submersible cable anchored to the river bottom, and then via shielded conductor cable on-shore to the nearest grid inter-connect. The system installed in the summer of 2008 required about 1,000 feet of conductor from the in-stream turbine to the nearest grid inter-connect point on shore. 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. All land adjacent to the river in the community of Ruby is owned by the municipality or the village Native corporation. Both entities are signatories to a Memorandum of Agreement committing them to cooperate on community projects. More specifically, both are project partners on this effort and are fully supportive of this initiative. The river bottom, which is necessary to access for anchoring, is owned by the state. This requires a land use permit, which is part of our implementation plan, and should be acquired by 4/09. We have already spoken with the state and they have indicated support for the project—all that remains is to finalize the permit application. We do not anticipate any obstacles to acquisition of the permit or land access in any way. AEA 09-004 Grant Application Page 13 of 20 9/3/2008 Renewable Energy Fund Grant Application 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 Fish collection permit – Alaska Department of Fish & Game (ADF&F): Secured, 9/08 Fish habitat permit – ADF&G: Already contacted, tentative support stated, permit application underway; anticipated acquisition of permit by 4/09 Water Rights – Alaska Department of Natural Resources (ADNR): Already contacted, tentative support stated, permit application underway; anticipated acquisition of permit by 4/09 Land Use permit – ADNR: Already contacted, tentative support stated, permit application underway; anticipated acquisition of permit by 4/09 Army Corps Title 10 permit: Secured, 7/08 FERC Preliminary Permit: Contacted 5/08; we were told “N/A” if no power is being sold (Verdant Ruling); City and Tribe are project partners and FERC process allows for municipal override of permit issued to others under certain circumstances Coastal Zone Management: Not clear if a permit is necessary here or not; local support will facilitate permit issuance if required; anticipated acquisition of permit if necessary by 4/09 Coast Guard notification: Likely necessary to address potential navigational issues and inform waterway users of installation; no problems anticipated; contact to be made by 1/09 4.3.4 Environmental Address whether the following environmental and land use issues apply, and if so how they will be addressed: Threatened or Endangered species Habitat issues Wetlands and other protected areas Archaeological and historical resources Land development constraints Telecommunications interference Aviation considerations Visual, aesthetics impacts Identify and discuss other potential barriers The primary environmental and land use issues that we expect to apply are fisheries and navigation. As discussed above, we are working closely with YRDFA to monitor any potential fish impacts and have already received a Fish Collection permit based on our study description plan. We will be deploying sonar monitoring and manual fish collection with fyke nets to proactively assess any turbine impacts. Because of the low rpm speed of the turbine, and no ducting that could contribute to a venturi or funnel effect to draw fish into the turbine, we expect to have very little impact and provide ample opportunity for even juvenile fish to avoid the turbine blades. Regarding navigation, US Coast Guard notification and proper marking of the pontoon boat, AEA 09-004 Grant Application Page 14 of 20 9/3/2008 Renewable Energy Fund Grant Application including LED lights, should address these concerns. The current location of the pontoon boat and turbine is close enough to shore that there is very little interference with existing river traffic, and we anticipate that even in a slightly different location that has better current velocity, we will be out of the primary traffic lanes and with proper marking and charting, will avoid any navigational safety issues. 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 Project development costs are detailed by task and funding source in the attached budget form. This proposal covers all four phases, beginning with a site assessment that will inform placement and installation of both the 5 kW turbine that we already own and the 25 kW turbine for which we are asking for support here. Total anticipated project cost is $461,950. Requested grant funding is $446,950. The remainder is provided from in-kind labor from YRITWC personnel ($7,500), $5,000 from STG for concrete anchors donated to the project, and $2,500 from the City of Ruby for use of heavy equipment. The YRITWC is also donating approximately $60,000 of capital equipment that was purchased before 8/20/08, namely the 5 kW turbine, pontoon boat, and inverter, that is not included in the project budget or benefits but will clearly add value to the project. The projected capital cost of the proposed renewable energy system is $273,200. The projected development cost of the proposed system is $188,750, though it should be noted that this includes significant investment in engineering and related work that will benefit future projects as well. 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 maintenance and operation of this system will include annual installation, retrieval, and gearbox oil replacement. During its operational period there will be minimal but regular (likely weekly) maintenance tasks of checking on the turbine and debris removal. The total anticipated costs for this O&M are: Annual installation, retrieval, and yearly lube: Labor 2 people x 8 days = $4000 Equipment Rental Boat x 8 days = $1600 AEA 09-004 Grant Application Page 15 of 20 9/3/2008 Renewable Energy Fund Grant Application Barge for anchoring deployment and retrieval 6 hours x $500/hr = $3000 Weekly maintenance over 16 weeks x 2.5 hours/week = 40 hours = $1000 Total yearly 0&M = $9,600 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 Not Applicable – power will be donated to utility 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. The information we gathered for the cost worksheet came from two sources, the existing PCE data, and city records as reported by the city clerk, Jenny Peters. The PCE data for Ruby has been historically incomplete and in order to gain the necessary information several years of records had to be looked at. The last year that the diesel efficiency was reported on was 2005 when 9.8 kWh per gallon were reported. The annual fuel used and its price, as well as the cost of diesel O&M maintenance and labor came from the more recent city records. Most other data was from the most recent 2007 PCE report. The diesel O&M saved was calculated by taking the percent of the total kWh generated that the turbine should produce and taking this corresponding percentage of 9.7% out of the non fuel O&M costs for the diesel generator. AEA 09-004 Grant Application Page 16 of 20 9/3/2008 Renewable Energy Fund Grant Application 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. As stated above, this is a cooperative, community-based project with the City, Tribe, and Native corporation as essential partners. While the YRITWC will own the turbine, the utility will be the primary operator, maintainer, and beneficiary of the project. Since all members of the community pay for electricity that is provided by the utility, reduction in diesel fuel consumed as a result of hydrokinetic energy production should result in reduced operation costs and eventually, lower rates. Thus, the utility especially but everyone in the community will have incentive to maintain the system. The YRITWC currently has two more years of funding to provide ongoing training to utility personnel to maintain the turbine and establish a sustainable structure to ensure project continuity. 4.4.6 Analysis and Recommendations Provide information about the economic analysis and the proposed project. Discuss your recommendation for additional project development work. This unique project has value as both an immediate generator of clean, reliable, cost competitive power and as an emerging technology with significant promise for Alaska’s future. Based in large part on our experience with the summer 2008 installation, it is already apparent that significant cost savings can eventually be achieved with economies of scale on the turbine size and numbers of anchors deployed. For example, if numerous turbines are being deployed, it will be much more cost effective to use a barge and crane for precise placement of the anchors as compared to the same barge and crane for use on a single turbine. This is a significant cost that could be reduced per unit if numerous turbines and their anchors are deployed at one time. Similarly, much of the engineering and related contractual work that is included in this budget will benefit future projects, but the costs are primarily being borne now. For example, development of adequate debris diversion techniques require up-front investment but once determined, will be relatively inexpensive to replicate. Contractual funds allocated toward site assessment are aimed at finding the optimal location for turbine placement and will improve the long term economics of the project. This project’s location in Ruby is timely because Ruby is scheduled for a powerhouse upgrade within the next two years, and if this technology is proven out by then, it seems possible to configure and integrate the diesel generators with the hydrokinetic turbines to baseload the hydrokinetics and completely turn off the diesels for much of the summer. This will vastly improve the economics of the project, though we are not quite ready to make that leap, but hopefully within two years we will be able to confidently and wisely invest in such a project. It should also be noted that many communities, especially those on the Yukon River and its tributaries, are already aware of this project and view it as a possible, albeit partial, solution for their own energy challenges. The turbine manufacturer, New Energy Corporation, after recently attending AEA’s Rural Energy Conference in September, 2008, saw the potential for and interest in their product and has committed to re-designing the turbine to perform better in slower current speeds. This will also improve the economics of these projects and raise the bar for other interested turbine manufactures. In fact, since the Rural Energy Conference, New Energy Corporation has donated a 5 kW turbine to the YRITWC for summer 2009 installation in the Yukon Territory, Canada in cooperation with YRITWC member First Nations in Canada. The point is that there is significant replication opportunities and YRITWC staff will have among the most experience of anyone in installing these turbines. This bodes well for future training of local people to operate and maintain the turbines and will once again reduce O&M costs over time. AEA 09-004 Grant Application Page 17 of 20 9/3/2008 Renewable Energy Fund Grant Application 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 When realized this project will have profound benefits for the people of Ruby as well as proving out a new concept in energy production for much of rural Alaska. The immediate benefit will be seen in fuel displacement for the City of Ruby, which assuming the 25 kW operates at 57% CF and the 5 kW turbine operates at 50% CF for 120 days and produces 48,384 kWh. At the current diesel generation efficiency of 9.8 kWh/gal this would lead to a savings of 4,937 gallons of fuel. At the City of Ruby's current fuel price of $5.20/gal this leads to $25,673 saved annually in avoided fuel costs. If fuel prices continue to rise as they have historically this savings will increase, while the cost O&M costs of the turbine will remain nearly flat being nearly entirely based on job creating labor to install, maintain, and remove the turbines on an annual basis. This project does not intend to sell power, but as a demonstration project would donate the electricity to the City of Ruby and hope to see a corresponding reduction in the rates paid by the customers relative to the fuel savings of the city owned utility. Having been proven out this project could then be used as a model by which other power providers could assess the economic viability of installing a similar turbine based on the purchase price, RCA tariffs, or tax incentives that might apply to their installation. Beyond the direct benefits of fuel savings and flat priced power, over the lifetime of the project there will be seasonal employment opportunities created involving the O&M of these turbines. As this means of power proves itself out in Ruby it can then be expanded to bring these benefits to the riverside communities throughout Alaska. In addition the clean power produced by these turbines will enhance and safegaurd the local environment from air pollution and the possibility of catostrophic water pollution from potential fuel spills associated with diesel power generation. It will also be safegaurded from the ecomomic threat of future carbon taxes as it is a truly carbon neutral means of energy production that will not contribute to the acceleration of climate change and its side effects. Other economic benefits to the Alaskan public will include the contractual services to Alaskan companies in the form of site characterization by Terrasond ($40,726), barge services ($10,000), business to technology providers such as ABS Alaskan ($17,200—assumed 10% profit), and support of local airlines ($9,600) and lodging ($4,800) during the project installation. Finally, though not quantified, local training and skills development will also provide benefits over time. SECTION 6 – GRANT BUDGET AEA 09-004 Grant Application Page 18 of 20 9/3/2008 Renewable Energy Fund Grant Application Tell us how much your total project costs. Include any investments to date and funding sources, how much is requested in grant funds, and additional investments you will make as an applicant. Include an estimate of budget costs by tasks using the form - GrantBudget.xls Total project cost is estimated at $461,950. This includes $172,000 in direct capital equipment expenditures for a 25 kW hydrokinetic turbine, pontoon boat, and power conditioning equipment. A price quote is included in the proposal. This also includes $101,200 for “balance of system” for both the 5 kW and the 25 kW turbines combined, including anchors, submersible conductors, on-shore conductors, electrical disconnects and other hardware, mooring lines, debris diversion for the 25 kW turbine. Direct labor and benefits for YRITWC personnel is estimated at $250/day/person, and amounts to $32,500 over the course of the project, though $7,500 of this is donated as in-kind labor. At $131,700, contractual services are a significant component of the total project cost, but we believe this is necessary because of the pilot nature of the project. Though we have confidence in the technology based upon our successful installation in the summer of 2008, we are still breaking new ground with a larger turbine (25 kW), system integration, and eventual baseloading of the hydrokinetics to fully relieve the diesels for much of summertime operation. Thus, this level of contractual labor, including detailed site assessment work by Terrasond and feasibility and system integration analysis by re vision LLC is viewed as a long term investment and will pay large dividends on future deployments and firmly establish Alaska as a leader in this new technology. Funds for additional engineering/technical assistance for anchoring the 25 kW turbine and some economic analysis of the entire project in its final stage are also included in the $131,700 contractual total. Construction services, namely the use of heavy equipment for deployment of the 25 kW turbine, are budgeted at $5000 and will be provided by the City of Ruby, with half of this donated as in-kind to the project and the other half paid for through these grant funds. Finally, travel and per diem amount to $19,550 over the total grant. This is derived from 12 airfares at $800 each ($9,600 total) over the course of the project (4 each for tasks 1, 2, and 5 as described in the grant budget spreadsheet), and the remainder for meals and lodging in Ruby ($9,950). Cost per budget task is included in the budget spreadsheet attached to this form. It should be noted that the 5 kW turbine, pontoon boat, inverter, conductor cable, and additional balance of system has already been purchased prior to August 20, 2008 and will be a significant contribution to this project. With shipping, this equipment totals about $60,000 of additional investments that are not being included as in-kind contributions but in fact add significant value to the overall project. Additional travel and site analysis and installation experience from the summer 2008 effort are also being contributed as the same personnel involved in that project will be involved in this initiative. 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 AEA 09-004 Grant Application Page 19 of 20 9/3/2008 Renewable Energy Fund Grant Application C.Grant Budget Form per application form Section 6. D.An electronic version of the entire application per RFA Section 1.6 E.Governing Body Resolution per RFA Section 1.4 Enclose a copy of the resolution or other formal action taken by the applicant’s governing body or management that: -authorizes this application for project funding at the match amounts indicated in the application -authorizes the individual named as point of contact to represent the applicant for purposes of this application -states the applicant is in compliance with all federal state, and local, laws including existing credit and federal tax obligations. F.CERTIFICATION The undersigned certifies that this application for a renewable energy grant is truthful and correct, and that the applicant is in compliance with, and will continue to comply with, all federal and state laws including existing credit and federal tax obligations. Print Name Signature Title Date AEA 09-004 Grant Application Page 20 of 20 9/3/2008