HomeMy WebLinkAboutKotzebue High Penetration Wind Battery Diesel System AppKotzebue Electric Association
High Penetration Wind-Battery-Diesel System
Renewable Energy Fund Grant October 8th 2008
Kotzebue Electric Association
October 7th 2008
Proposal for
Renewable Energy Fund
Alaska Energy Authority Grant
High Penetration Wind-Battery-Diesel System
Rural Alaskans are facing some of the highest costs anywhere in the nation. Kotzebue
Electric Association is working to develop and implement long term energy solution for
electric and thermal energy needs. 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 per year. 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. Increasing the wind
capacity in Kotzebue from 1.14 MW to 4.39 MW in conjunction with an energy storage
system, such as a Vanadium Red-Ox Flow Battery, will reduce diesel consumption by over
575,288 gallons a year. In addition, excess electricity will be available for use in a heating
distribution system which would provide a large benefit to Kotzebue.
Kotzebue Electric Association
High Penetration Wind-Battery-Diesel System
Renewable Energy Fund Grant October 8th 2008
Page 2 of 39
Table of Contents
1. Applicant Information ........................................................................................................................... 3
1.1. Applicant Point of Contact.................................................................................................................. 3
1.2. Applicant Minimum Requirement ....................................................................................................... 3
2. Project Summary .................................................................................................................................... 4
2.1. Project Type ............................................................................................................................................ 4
2.2. Project Description................................................................................................................................. 4
2.3. Project Budget Overview...................................................................................................................... 4
Figure 1: Pre-Construction Cost Estimate.................................................................................................. 5
Figure 2: Construction Cost Estimate......................................................................................................... 6
Figure 3: Project Cost Share........................................................................................................................ 7
2.4. Project Benefit......................................................................................................................................... 8
2.5. Project Cost & Benefit Summary.......................................................................................................... 9
3. Project Management Plan ..................................................................................................................10
3.1. Project Manager..................................................................................................................................10
3.2. Project Milestones ................................................................................................................................14
3.3. Project Schedule..................................................................................................................................15
Figure 4: Project Schedule and Milestones.............................................................................................15
3.4. Project Resources.................................................................................................................................17
3.5. Project Communications....................................................................................................................18
3.6. Project Risk.............................................................................................................................................18
4.1. Proposed Energy Resource.................................................................................................................19
Figure 5: Kotzebue Monthly Wind Power Roses.....................................................................................19
Figure 6: Kotzebue Wind Resource Summary ........................................................................................20
4.2. Existing Energy System.........................................................................................................................20
4.3. Proposed System..................................................................................................................................22
Figure 7: Fuhrlander FL 600 Specifications ..............................................................................................22
Figure 8: Fuhrlander FL 600 Rotor and Hub Specification.....................................................................23
Figure 9: Fuhrlander FL 600 Pitch and Brake System Specifications....................................................23
4.4. Proposed System..................................................................................................................................26
4.4.3.1. Increased Wind Capacity .......................................................................................................29
4.4.3.1.1. Objective................................................................................................................................29
4.4.3.2. Vanadium Red-Ox Flow Battery.............................................................................................30
4.4.3.3. Waste Heat Recovery and Power..........................................................................................31
4.4.3.4. Solar Thermal..............................................................................................................................32
4.4.3.5. Conclusion .................................................................................................................................33
5. Project Benefit .......................................................................................................................................34
6. Grant Budget.........................................................................................................................................35
Figure 10: Pre-Construction Cost Estimate..............................................................................................36
Figure 11: Construction Cost Estimate.....................................................................................................37
7. Additional Documentation and Certification ..................................................................................38
Kotzebue Electric Association
High Penetration Wind-Battery-Diesel System
Renewable Energy Fund Grant October 8th 2008
Page 3 of 39
1. Applicant Information
Kotzebue Electric Association
Po Box 44
Kotzebue, Alaska 99752
Phone: (907) 442-2500
Fax: (907) 442-2930
1.1. Applicant Point of Contact
Katherine Keith
Project Manager
Kotzebue Electric Association
Po Box 44
Kotzebue, Alaska 99752
k_keith@kea.coop
Work: (907) 442-3491
Cell: (651) 332-0584
Fax: (907) 442-2482
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
High Penetration Wind-Battery-Diesel System
Renewable Energy Fund Grant October 8th 2008
Page 4 of 39
2. Project Summary
2.1. Project Type
This is a construction project which will generate electricity using a locally available wind
resource. It will include the installation of five Fuhrlander FL 600/50s onto an existing wind-
battery-diesel hybrid system.
2.2. Project Description
Rural residents in NW Alaska are facing some of the highest costs anywhere in the nation. In
order to proactively address the region’s energy crisis, KEA is working to implement long term
energy options. While there are a variety of alternative energy options available to the
Kotzebue region, such as wind, solar, and geothermal; wind energy has a proven track
record of success in this community.
The goals of the proposed project are:
• To increase the wind capacity of KEA from 1.14 MW to 4.39 MW using 5 Fuhrlander
650kWs.
• To integrate the increased wind capacity with a 600 kW / 1800 kWh Vanadium Red-
Ox Flow Battery.
• To utilize the excess electricity in a distributed heating system.
This is a two year project. Year one involves performing all pre-construction and foundation
construction tasks. Year two involves the wind turbine erection and commissioning.
2.3. Project Budget Overview
As detailed in Figure 1, Figure 2, and Figure 3 below, the total project cost is $14,807,535.
Currently, Kotzebue Electric Association is committed to a 19% match in the amount of
$2,800,000.
The project costs include the capital cost of five Fuhrlander 650kWs, 50 meter towers,
shipping from Germany to Seattle, estimated shipping from Seattle to Kotzebue, estimated
foundation costs, transmissions line doubling, and associated administration, and
engineering. Kotzebue will continue to seek funding through other agencies, including a low
interest Rural Utility Service loan, USDA High Cost of Energy Grant, and Clean Renewable
Energy Bonds (CERBs).
Kotzebue Electric Association
High Penetration Wind-Battery-Diesel System
Renewable Energy Fund Grant October 8th 2008
Page 5 of 39
Kotzebue Electric Association, Inc.
High Penetration Wind‐Battery‐Diesel System
October 8th 2008
Pre‐Construction Cost Estimate
Wind‐Diesel‐Battery Integration Design
Direct Labor and Benefits $13,000
Travel Kotzebue‐Anchorage $2,000
SUBTOTAL $15,000
Structural Engineering of Foundation
Contractual Services $782,410
SUBTOTAL $782,410
Civil Engineering
Contractual Services $782,410
SUBTOTAL $782,410
Electrical Interconnect Design and Engineering
Contractual Services $782,410
SUBTOTAL $782,410
Final Design and Plan
Direct Labor and Benefits $22,000
Travel Kotzebue‐Anchorage $4,000
SUBTOTAL $4,000
SUBTOTAL PRE‐CONSTRUCTION COSTS $2,366,230
SUBTOTAL CONSTRUCTION COSTS $12,441,305
TOTAL PROJECT COSTS $14,807,535
Figure 1: Pre-Construction Cost Estimate
Kotzebue Electric Association
High Penetration Wind-Battery-Diesel System
Renewable Energy Fund Grant October 8th 2008
Page 6 of 39
Kotzebue Electric Association, Inc.
High Penetration Wind‐Battery‐Diesel System
October 8th 2008
Pre‐Construction Cost Estimate
Wind‐Diesel‐Battery Integration Design
Direct Labor and Benefits $13,000
Travel Kotzebue‐Anchorage $2,000
SUBTOTAL $15,000
Structural Engineering of Foundation
Contractural Services $782,410
SUBTOTAL $782,410
Civil Engineering
Contractural Services $782,410
SUBTOTAL $782,410
Electrical Interconnect Design and Engineering
Contractural Services $782,410
SUBTOTAL $782,410
Final Design and Plan
Direct Labor and Benefits $22,000
Travel Kotzebue‐Anchorage $4,000
SUBTOTAL $4,000
SUBTOTAL PRE‐CONSTRUCTION COSTS $2,366,230
SUBTOTAL CONSTRUCTION COSTS $12,441,305
TOTAL PROJECT COSTS $14,807,535
Figure 2: Construction Cost Estimate
Kotzebue Electric Association
High Penetration Wind-Battery-Diesel System
Renewable Energy Fund Grant October 8th 2008
Page 7 of 39
Kotzebue Electric Association
KEA will apply for $2 million in Clean
Renewable Energy Bonds and put this
towards the turbine purchase (not
finalized)Cash $2,000,000
Kotzebue Electric Association Administration and Engineering In Kind $800,000
COST SHARE TOTAL $2,800,000
Total Project Cost: $14,807,535 Cost Share Total: $2,800,000 Percentage Cost Share: 18.9%
Kotzebue Electric Association, Inc.
High Penetration Wind‐Battery‐Diesel System
October 8th 2008
Organization Cost Share Item Type Amount
Figure 3: Project Cost Share
Kotzebue Electric Association
High Penetration Wind-Battery-Diesel System
Renewable Energy Fund Grant October 8th 2008
Page 8 of 39
2.4. Project Benefit
The proposed wind generation infrastructure will help stabilize energy costs, providing long-
term socio-economic benefits to Kotzebue. Kotzebue residents are confronted by the reality
that plagues much of rural Alaska: limited economic opportunity combined with an almost
astronomical cost of living. The high cost of energy is forcing residents to choose between
leaving village life behind in order to relocate to larger cities in search of affordable living.
NW Alaska suffers greatly from the high cost of electricity. 2008 residential power rates in the
region varied from $.48/kWh in Kotzebue (up from $.39/kWh in 2007). The anticipated
benefits of this project are many; primary among these is reducing the negative impact of
the cost of energy in these communities by providing a renewable energy alternative. This
alternative could help stabilize energy costs and provide long-term socio-economic benefits
to village households. Locally produced affordable energy will empower our community
residents and will help avert rural to urban migration.
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.
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 high penetration wind-
battery-diesel system 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.
• Ability to utilize excess wind power in a distributive heating system acting as a
dump load during times of high penetration.
• Ability to charge electric vehicles during off peak times with excess wind energy.
Kotzebue Electric Association
High Penetration Wind-Battery-Diesel System
Renewable Energy Fund Grant October 8th 2008
Page 9 of 39
2.5. Project Cost & Benefit Summary
2.5.1. Total Project Cost: $14,807,535
2.5.2. Grant Funds Requested in this Application: $12,075,535
2.5.3. Other Funds To Be Provided: $2,800,000
2.5.4. Total Grant Costs (Sum of 2.5.2 and 2.5.3): $14,807,535
2.5.5. Estimated Benefit (Savings):
With increased wind on the system and a Vanadium Red-Ox Flow Battery, KEA will save
the community $2,210,194 a year. Without energy storage, the increase wind
capacity’s benefits would be limited, in order to maintain a stable grid system, and the
wind plant would then save only $1,324,747 a year.
Kotzebue Electric Association
High Penetration Wind-Battery-Diesel System
Renewable Energy Fund Grant October 8th 2008
Page 10 of 39
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
Manager, 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 Engineer, 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
High Penetration Wind-Battery-Diesel System
Renewable Energy Fund Grant October 8th 2008
Kotzebue Electric Association
High Penetration Wind-Battery-Diesel System
Renewable Energy Fund Grant October 8th 2008
Kotzebue Electric Association
High Penetration Wind-Battery-Diesel System
Kotzebue Electric Association
High Penetration Wind-Battery-Diesel System
Renewable Energy Fund Grant October 8th 2008
Page 14 of 39
3.2. Project Milestones
3.2.1. Pre-Construction Program Activities
Kick-off Meeting:
Begin to coordinate with potential contractors and re-evaluate project timelines.
Geotechnical Review:
Existing geotechnical data will be reviewed for the wind site. If more information is
required for the increased foundation size a qualified geotechnical engineer will do an
appropriate analysis.
Permit Review:
Most permits have already been acquired from installation of the existing wind plant. This
will be reviewed and further action will be taken as necessary.
Wind-battery-diesel Integration:
A wind-diesel integration study; including assessments of dynamic load control, balance
of system electrical interconnect assessment, SCADA systems, heating distribution
systems, and conceptual system design.
Civil/Structural Engineering on Wind Turbine Tower Foundation:
The project team will evaluate the geotechnical report and recommend, design, and
engineer a foundation type appropriate to KEA’s wind site and suitable for the larger
turbine size.
Electrical Interconnect Design:
Design will include electrical one-line diagram and load study.
Final Design and Construction/Installation Plan:
This final step will ensure proper execution of the proposed plan.
3.2.2. Construction Program Activities
Equipment Procurement:
Procure wind turbines, towers and foundation.
Installation:
Install wind tower foundations, erect wind turbines, run a second power line from the
wind site along Feeder #4 to the power plant.
Commissioning:
Write O&M manuals, make system modifications, monitor and report on system
performance, and provide local operator training, system maintenance, and technical
support services
Kotzebue Electric Association
High Penetration Wind-Battery-Diesel System
Renewable Energy Fund Grant October 8th 2008
Page 15 of 39
3.3. Project Schedule
The installation of wind-battery-diesel hybrid power systems in Kotzebue will occur over a 24-
month period, starting October 1, 2008. The project period is divided into eight quarters, in
both Year 1 (Q1-Q4) and Year 2 (Q5-Q8). The project schedule is detailed in the following
table.
Project Schedule on Following Page Figure 4: Project Schedule and Milestones
Kotzebue Electric Association
High Penetration Wind-Battery-Diesel System
Renewable Energy Fund Grant October 8th 2008
Page 16 of 39
Project Schedule
Kotzebue Electric Association
High Penetration Wind-Battery-Diesel System
Renewable Energy Fund Grant October 8th 2008
Page 17 of 39
3.4. Project Resources
3.4.1. Personnel/Partners
Kotzebue Electric Association, KEA, is a nonprofit Rural Utility Systems cooperative that serves the
residents of Kotzebue, Alaska. KEA owns a wind-diesel power plant which has six engine/generator
sets and 17 wind turbines (with a total installed wind capacity of 1.14 MW). KEA has demonstrated
successful leadership and innovation in remote wind-diesel applications and will be a valuable
partner for this project.
Kotzebue Electric Association is partnering with Nome and Unalakleet to collectively purchase the
10 turbines, thereby achieving the minimum batch requirements, Nome and Unalakleet are
working with STG Construction do to most project management, procurement, and construction.
While KEA will do most work with our established contractors, KEA will collaborate on the 250 ton
crane required for turbine erection. STG has such a crane and will bring it up to Nome, Unalakleet,
and Kotzebue spreading that cost amount the three utilities.
Other project partners will be determined during Quarter 1 of the Pre-Construction Phase.
Kotzebue Electric Association
High Penetration Wind-Battery-Diesel System
Renewable Energy Fund Grant October 8th 2008
Page 18 of 39
3.5. Project Communications
KEA will work closely with any subcontractors to ensure that the project schedule is followed
and high quality products are delivered. KEA already has an effective management and
communication structure built in place. The management of the enlarged plant will follow
the model of the existing plant.
KEA will provide quarterly reports to the Alaska Energy Authority (AEA). Project collaborators
will provide additional reports to KEA as required by AEA. In addition, public presentations
on project progress will be given at community meetings and possibly conferences.
Informational brochures and other publications will be produced for the general public.
3.6. Project Risk
The biggest potential risk will be delay in the shipment of the wind turbines and towers. The
demand is currently very high for turbines over 1 MW in size. The few manufacturers that are
making turbines in the 500-700 kW range are taking orders 2-3 years out. Fuhrlander has
provided the three utilities with a quote stating a 12 month lead time. Due to the extremely
limited barge season, shipping delays will be a big cause of concern for this project.
This is not a new challenge to KEA. KEA is accustomed to dealing with such limitations, and
has extensive experience in addressing the difficulties associated with conducting business in
such challenging conditions. Shipping arrangements for construction equipment and
supplies will be made with ample allowance for possible delays, and sufficient flexibility will
be included in construction schedules to ensure on-time and successful completion of all
project phases. Additionally, having an in depth project plan upon completion of the pre-
construction phase will also help to avert any construction related scheduling problems.
Another challenge will be the dependency on Nome and Unalakleet receiving funding to
coordinate a mass turbine purchase. A batch of ten turbines must be purchased to go
forward with the project. KEA is currently investigating other collaborative options, but at this
time Nome and Unalakleet are both committed to their prospective wind projects.
The installation of such a high penetration wind system will have unique engineering
challenges but also present tremendous opportunity for the community. KEA will ensure that
the proper systems, such as energy storage, are in place before the turbines are online.
Kotzebue Electric Association
High Penetration Wind-Battery-Diesel System
Renewable Energy Fund Grant October 8th 2008
Page 19 of 39
4. Project Description and Tasks
4.1. Proposed Energy Resource
KEA has been actively monitoring the existing wind resource since 1992. In 1999, KEA
hired a consultant, Wind Economics & Technology, Inc (WECTEC) to summarize the wind
resource data.
Kotzebue has an annual average wind speed of 6.1 m/s. The winds are weakest from
March through July and the strongest winds are in October, November, and February.
Prevailing winds are generally from the east with some light westerly winds during early
summer. The energy producing winds generally come from due east.
The following data was compiled by Nick Szymoniak from the Alaska Energy Authority.
Figure 5: Kotzebue Monthly Wind Power Roses
Kotzebue Electric Association
High Penetration Wind-Battery-Diesel System
Renewable Energy Fund Grant October 8th 2008
Page 20 of 39
Figure 6: Kotzebue Wind Resource Summary
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)–Restricted to 1000 kW
Unit 11: 1025 kW 3512 series Cat (12 cylinder, 1800 rpm)- Restricted to 900 kW
Unit 12: 1025 kW 3512 series Cat (12 cylinder, 1800 rpm)- Restricted to 810 kW
Wind Turbines
15 Atlantic Orient Corporation (AOC) Turbines: 65kW each
1 North Wind 100: 100kW each
1 Vestas: 65 kW each
The generating plant one line diagram is provided below.
Kotzebue Electric Association
High Penetration Wind-Battery-Diesel System
Renewable Energy Fund Grant October 8th 2008
Page 21 of 39
Kotzebue Electric Association
High Penetration Wind-Battery-Diesel System
Renewable Energy Fund Grant October 8th 2008
Page 22 of 39
4.3. Proposed System
4.3.1. System Design
4.3.1.1. Rationale for a Wind Diesel System
Kotzebue Electric Association (KEA) has been a long-time leader in developing,
designing, building, and operating wind-diesel hybrid systems in remote locations in
rural Alaska. Kotzebue has a know resource which is successful. The hard work has
been done in preparing the KEA power plant to intergrate wind onto the system All
we are doing is increasing the payback.
4.3.1.2. Description of the Technology
The Fuhrlander FL 600/50 is a three-bladed, horizontal axis Wind Turbine which utilizes
variable rotational speed and full span pitch control. This means, that the FL 600/50
can be operated at optimum aerodynamically efficiency throughout the whole
operational range. At a wind speed of 11.0 m/s the machine reaches its rated
output of 600 kW. The combination of both, electrical torque control and pitch
control allows the wind turbine to be operated from 11.0 m/s through 20 m/s with
almost constant power output. The main advantages of the FL 600/50 Wind Turbine
are:
• New variable speed power electric with high efficiency, power factor
control, and negligible harmonics distortion levels
• Substantially improved economics compared to the state of the art
turbines.
Figure 7: Fuhrlander FL 600 Specifications
Kotzebue Electric Association
High Penetration Wind-Battery-Diesel System
Renewable Energy Fund Grant October 8th 2008
Page 23 of 39
The rotor has a diameter of 50m with a length of 24 m for the individual rotor
blade. The rotor blade is made of fiberglass/epoxy resin, and designed in a
multicellspar/shell structure.
Figure 8: Fuhrlander FL 600 Rotor and Hub Specification
The pitch system works as both, a primary braking system and a speed
controller during nominal output performance of the wind turbine. It consists of 3
individual servomotors, which set the blade pitch angle via gearbox/pinon gear
arrangement. A disk brake at the high speed shaft of the gearbox works as an
emergency brake as well as a parking brake for service purposes.
Figure 9: Fuhrlander FL 600 Pitch and Brake System Specifications
Kotzebue Electric Association
High Penetration Wind-Battery-Diesel System
Renewable Energy Fund Grant October 8th 2008
Page 24 of 39
Kotzebue Electric Association
High Penetration Wind-Battery-Diesel System
Renewable Energy Fund Grant October 8th 2008
Page 25 of 39
4.3.2. Land Ownership
The land proposed for use in this project owned by Kikiktagruk Inupiat Corporation, KIC,
and has been leased to KEA since 1997.
4.3.3. Permits
Most permitting has already been completed from the existing wind plant. As needed,
the project team will prepare a permit schedule denoting critical permitting milestones
and the estimated time to complete the permitting process. Potential regulatory
agencies could include the NWAB, US Fish and Wildlife Service, and the Coastal Zone
Management Program.
4.3.4. Environmental
No known hazards.
Kotzebue Electric Association
High Penetration Wind-Battery-Diesel System
Renewable Energy Fund Grant October 8th 2008
Page 26 of 39
4.4. Proposed System
4.4.1. Project Development Cost
4.4.1.1. Total anticipated project cost: $14,807,535
4.4.1.2. Requested grant funding: $12,007,535
4.4.1.3. Applicant matching funds: $2,800,000
4.4.1.4. Identification of other funding sources:
KEA will also pursue funding through USDA’s Rural Energy Grants, Rural
Utility Service’s low interest loans, and Clean Renewable Energy Bonds.
Kotzebue Electric Association
High Penetration Wind-Battery-Diesel System
Renewable Energy Fund Grant October 8th 2008
Page 27 of 39
APPLICANT COST WORKSHEET
1. Renewable Energy Source
The Applicant should demonstrate that the renewable energy resource is available on a
sustainable basis.
Annual average resource availability. Wind Resource 6.1 m/s
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
High Penetration Wind-Battery-Diesel System
Renewable Energy Fund Grant October 8th 2008
Page 28 of 39
3. Proposed System Design
a) Installed capacity 3.25 MW new installation (5-650 kW)
b) Annual renewable electricity generation
i. Diesel [gal or MMBtu] 5,980,145 kWh/year 25% total generation
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 $12,441,305
b) Development cost $2,366,230
c) Annual O&M cost of new system $50,000
d) Annual fuel cost n/a
5. Project Benefits
a) Amount of fuel displaced for
i. Electricity 575,288 gallons/year
ii. Heat
iii. Transportation
b) Price of displaced fuel At $4.25 this is $2,444,975 / year
c) Other economic benefits
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 1.05 (This is based strictly on diesel savings and does not include any
thermal energy benefit.
Payback 5.8 years
Kotzebue Electric Association
High Penetration Wind-Battery-Diesel System
Renewable Energy Fund Grant October 8th 2008
Page 29 of 39
4.4.2. 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.
KEA will also send the in house operators/engineers to Fuhrlander headquarters to
receive in-depth training. This training will enable the local operators 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.
4.4.3. 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’.
4.4.3.1. Increased Wind Capacity
4.4.3.1.1. 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.
4.4.3.1.2. 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, 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.
4.4.3.1.3. Scope of Work:
Kotzebue Electric Association
High Penetration Wind-Battery-Diesel System
Renewable Energy Fund Grant October 8th 2008
Page 30 of 39
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.
4.4.3.1.4. 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.
4.4.3.2. Vanadium Red-Ox Flow Battery
4.4.3.2.1. 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.
4.4.3.2.2. 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 of wind penetration in Kotzebue, energy storage MUST be
utilized. The simple payback for the VRFB is under three years.
4.4.3.2.3. 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
Kotzebue Electric Association
High Penetration Wind-Battery-Diesel System
Renewable Energy Fund Grant October 8th 2008
Page 31 of 39
900kW/1800kWh although the modeling is part of Phase One which is currently
being completed.
4.4.3.2.4. 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 inKotzebue.
Communication lines are very open between project partners and thiswill
continue as construction proceeds.
4.4.3.3. Waste Heat Recovery and Power
4.4.3.3.1. 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’.
4.4.3.3.2. 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.
4.4.3.3.3. Scope of Work
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.
Kotzebue Electric Association
High Penetration Wind-Battery-Diesel System
Renewable Energy Fund Grant October 8th 2008
Page 32 of 39
4.4.3.3.4. 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.
4.4.3.4. Solar Thermal
4.4.3.4.1. 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.
4.4.3.4.2. 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.
4.4.3.4.3. 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 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.
4.4.3.4.4. 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
Kotzebue Electric Association
High Penetration Wind-Battery-Diesel System
Renewable Energy Fund Grant October 8th 2008
Page 33 of 39
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.
4.4.3.5. 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
High Penetration Wind-Battery-Diesel System
Renewable Energy Fund Grant October 8th 2008
Page 34 of 39
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 per year based on 2008 fuel costs ($4.25/gallon) and
generation would have been $2,537,367. However, the cost of diesel has been
increasing exponentially and the future avoided costs will only increase. This is not
including the financial benefit of utilizing the excess wind energy in a thermal distribution
network.
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.
Kotzebue Electric Association
High Penetration Wind-Battery-Diesel System
Renewable Energy Fund Grant October 8th 2008
Page 35 of 39
6. Grant Budget
The total project cost is $14,807,535. The overall cost share will be $2,800,000. The $2,000,000 in
Clean Renewable Energy Bonds is not yet finalized. KEA will continue to pursue outside funding
with a low interest RUS loan or the USDAs High Cost of Energy grant. It should be noted at this
point that this budget lacks the detail and thoroughness that is needed. The applicant is
comfortable with these estimates but will continue to acquire more detail on foundation costs,
costs of crane usage, etc. Given the shortened grant application period it was difficult to pull
together the necessary information.
The capital cost of the turbine, towers, and including shipping is $8,694,095. This is a solid quote.
The shipping from Germany to Seattle is a solid quote, but the shipping from Seattle to
Anchorage is an estimate only. The cost to upgrade the four mile long feeder is an accurate
estimate provide to KEA by Thompson Engineering. Foundation costs in this budget represent
20% of the capital cost of the turbine. The civil, structural and electrical engineers each
represent 10% of the capital cost of the turbine. Administration and project management will be
done in house as in kind contributions to the project.
The pre-construction portion of the project will cost $2,366,230. The construction portion of the
project will cost $12,441,305.
Kotzebue Electric Association
High Penetration Wind-Battery-Diesel System
Renewable Energy Fund Grant October 8th 2008
Page 36 of 39
BUDGET INFORMATION‐PreConstruction
BUDGET SUMMARY:
Milestone or Task Federal Funds State Funds
Local
Match
Funds
(Cash)
Local
Match
Funds (In‐
Kind)
Other
Funds TOTALS
1 Wind‐Diesel‐Battery Integration $15,000 $15,000
2 Structural Engineering $782,410 $782,410
3 Civil Engineering $782,410 $782,410
4 Electrical Interconnect Design $782,410 $782,410
5 Final Design & Plan $26,000 $26,000
6 $0
7 $0
$0 $2,347,229 $0 $41,000 $0 $2,388,229
Milestone # or Task #
BUDGET CATAGORIES:1234567TOTALS
Direct Labor and Benefits $13,000 $22,000 $35,000
Travel, Meals, or Per Diem $2,000 $4,000 $6,000
Equipment $0
Supplies $0
Contractual Services $782,410 $782,410 $782,410 $2,347,230
Construction Services $0
Other Direct Costs $0
TOTAL DIRECT CHARGES $15,000 $782,410 $782,410 $782,410 $26,000 $0 $0 $2,388,230
TOTAL $2,388,230 Figure 10: Pre-Construction Cost Estimate
Kotzebue Electric Association
High Penetration Wind-Battery-Diesel System
Renewable Energy Fund Grant October 8th 2008
Page 37 of 39
BUDGET INFORMATION‐Construction
BUDGET SUMMARY:
Milestone or Task
Federal
Funds State Funds
Local
Match
Funds
(Cash)
Local
Match
Funds (In‐
Kind) Other Funds TOTALS
1 Transmission ‐ 4 miles $1,200,000 $200,000 $1,400,000
2 Furlander 650kW $7,824,095 $7,824,095
3 Shipping to Seattle $435,000 $435,000
4 Shipping Seattle‐Kotz. $435,000 $435,000
5 Foundation (20%) $1,264,800 $300,000 $1,564,800
6 Turbine Erection &
Commissioning (10%)$782,410 $782,410
7
$0
$0 $11,941,305 $0 $500,000 $0 $12,441,305
Milestone # or Task #
BUDGET CATAGORIES:1234567TOTALS
Direct Labor and Benefits $200,000 $300,000 $300,000 $800,000
Travel, Meals, or Per Diem $15,000 $15,000 $30,000
Equipment $1,200,000 $7,824,095 $1,149,800 $167,410 $10,341,305
Supplies $0
Contractual Services $100,000 $300,000 $400,000
Construction Services $0
Other Direct Costs $435,000 $435,000 $870,000
TOTAL DIRECT CHARGES $1,400,000 $7,824,095 $435,000 $435,000 $1,564,800 $782,410 $0 $12,441,305
TOTAL $12,441,305 Figure 11: Construction Cost Estimate
Kotzebue Electric Association
High Penetration Wind-Battery-Diesel System
Renewable Energy Fund Grant October 8th 2008
7. Additional Documentation and
Certification
Kotzebue Electric Association
High Penetration Wind-Battery-Diesel System
Renewable Energy Fund Grant October 8th 2008
Page 39 of 39