HomeMy WebLinkAboutDelta Junction Wind Farm App&GE" ALASKA Renewable Energy Fund
-) ENERGY AUTHORITY 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
GrantApp.doc
Application form in MS Word that includes an outline of
Form
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
Costworksheet.doc
Summary of Cost information that should be addressed
Worksheet
by applicants in preparing their application.
Grant Budget
GrantBudget.xls
A detailed grant budget that includes a breakdown of
Form
costs by task and a summary of funds available and
requested to complete the work for which funds are being
requested.
Grant Budget
GrantBudgetlnstr.pdf
Instructions for completing the above grant budget form.
Form Instructions
• 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 18 9/2/2008
OLD ALASM
Renewable Energy Fund
Grant Application
SECTION 1 — APPLICANT INFORMATION
Name (Name of utility, IPP, or government entity submitting proposal)
Alaska Environmental Power LLC
Type of Entity:
Independent Power Producer
Mailing Address
Physical Address
3411 Airport; Way, Fairbanks, AK 99709
Same
Telephone
Fax
Email
907-388-9917
907-474-9376
macraft@acralaeka.net andlor steff@alaska.net
1.1 APPLICANT POINT OF CONTACT
Name
Title
Mike Craft
Managing Partner
Mailing Address
3411 Airport Way, Fairbanks, AK 99709
Telephone
Fax
Email
907-388-9917
907-474-9376
macraft@acealaska.net
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
XX
An independent power producer, or
A local government, or
A governmental entity (which includes tribal councils and housing authorities);
X_-Yes
1.2.2. Attached to this application is formal approval and endorsement for its project by
or
its board of directors, executive management, or other governing authority. If a
No
collaborative grouping, a formal approval from each participant's governing
authority is necessary. (Indicate Yes or No in the box ) (Exhibit A)
X-Yes
1.2.3. As an applicant, we have administrative and financial management systems and
or
follow procurement standards that comply with the standards set forth in the
No
grant agreement.
X-Yes
1.2.4. If awarded the grant, we can comply with all terms and conditions of the
or
attached grant form. (Any exceptions should be clearly noted and submitted
No
with the application.)
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4W-D ENERGY AUTHORITY 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 project will be the "Construction" of a "Wind Farm" with a name plate capacity of
2 MW (megawatts) of production as clean, gYheen, renewable energy on the Railbelt
grid.
We have collected meteorological information using a 50-meter tower with Campbell
instruments at 10 meters, 30 meters, and 50 meters using 10-minute data
collection. We are using a program called "Windographer" to analyze the Campbell
data. We have two (2) tower sites in Alaska, one in Delta Junction and the other in
Healy. We have included a disc containing 9.9 months of collected data for your
review of our Campbell wind data (Exhibit B) plus the Windographer print outs (see
Exhibit B1). We are using a new 51M card and an updated program to include standard
deviation estimates for GE power at both sites.
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.
This project will consist of twenty (20) wind turbines to make a collective 2MW "wind
farm" in Delta Junction and will be the first project of its kind to integrate into the
Railbelt Grid using an "experimental" program by Golden Valley Electric Association
(GVEA), by using "proven" cold -weather technology (Northwind 100 turbines with
direct -drive motors) which have already been successfully used in Alaska's cold
weather, as well as a proven "test" turbine (the first of twenty 100kW turbines) at
the came location just erected and Successfully tested by GVEA. This will serve all
communities that are on the Railbelt Grid and can produce enough electricity to
power 600 homes each year without any emissions or environmental harm of an"y
kind. Mike Craft, Managing Partner for Alaska Environmental Power, LLC (AEP) will be
spearheading this project as it's P.M. (Project Manager), in conjunction with Golden
Valley Electric Association (GVEA), and a team of well qualified individuals and
businesses necessary for the construction and erection of the wind turbines for final
connection to GVEA's power source connecting it to the Railbelt Grid and all those
consumers who receive power from the Grid. We are ready to install at 2009 break-
. We have secured a contract with the manufacturer -Northern Power 5ystems
(Exhibit C), the crane company -Precision Crane (Exhibit D), the bolt manufacturer -
Williams Form Engineering (Exhibit E), the PVC supplier -Crescent Electric (Exhibit F),
embedment rings and concrete forms -Greer Tank and Welding (Exhibit T), concrete
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and pump truck -University Redi-Mix (Exhibit U) and a twenty-year experimental power
purchase agreement (PPA)with Golden Valley Electric Association (GVEA) (Exhibit G),
at a 5.59 meters per Second wind regime ae determined by our meteorological data.
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 amount required for this project i5 approximately $8.3 million (more precise
estimates are on the attached Project Cost 5ummary-(5ee Exhibit H). In addition to
grant funds being requested from AEA, there are a Significant amount of "in -kind"
contributions in the form of gravel, construction -grade equipment, construction of a
neceaoary acceee road, Bite clearing, land purchase, etc.
Funds requested: $6,269,750
We anticipate the State of Alaska, through the Alaska Energy Authority on behalf of
the State Legislature, will Support this project with a matching grant of 75% with all
other funds coming from Alaska Environmental Power (AEP) and its partnere.
The partnership of AEP has, and will, Spend in -kind and real dollars of approximately
$2.1 million and will stand behind any unforeseen coot overruns through private cash
guarantees without encumbering the project. We realize that the project will not in
any way be leveraged or encumbered for the first 20 yeare. We commit our personal
reeourcee to that end.
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
The first benefit ie a more diversified power grid.
The Public, a5 well aS the Utilitiee, will benefit from the enormous amount of
information from our research and development over the next 20 years.
By the end of 2009, the member-con5umere of GVEA, and anyone else on the Railbelt
Grid, will begin receiving CLEAN,"1 11, RENEWABLE power at the avoided fuel cost
of diesel generated power.
A5 an added incentive, our experimental Power Purchaee Agreement (PPA) has been
written at the avoided fuel coot, not a fixed amount. Therefore, over the 20-year life
of the PPA, when newer and even less expensive Alternative Energy Projects are
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completed and brought on-line such as natural gas, biomass, hydroelectric, and more
efficient wind systems, the cost of our "wind power" to the utility will drop as well as
continuing to save the public even more as we incorporate systems that offer lower
avoided fuel costs into the future.
This project will save the State of Alaska a minimum of 5 million dollars in
development costs compared to other site options because of its relatively
inexpensive development costs to achieve the interconnection study that is weighing
so heavily on GVEA's engineers. The industrial complex of Delta Junction is well suited
to the construction and development of wind farm facilities. The availability of
concrete manufacturers, electrical contractors, the labor pool, hotels, restaurants
and the easy access on developed roads makes the Delta Junction facility site
perfect. The only thing required in addition to these attributes, are the turbines
themselves. We don't have to worry about a 30-mile road or huge power line
infrastructure improvements. The time factor is also very relevant here because we
are ready to put into service an expedited plan with the overall goal, of cheaper,
cleaner renewable power through this exercise.
In addition, we are confident that the overall efficiency of GVEA'o 105-mile
transmission line between Fairbanks and Delta Junction will be improved because of
the additional VAR5 that we will be putting in at the end of the line.
We also feel that the local property valuer, will increase; there will be local economic
development with new jobs and long-term career opportunities for local residents;
and, the training of anyone willing to participate in the construction, maintenance,
and overall operations of the facility throughout its expected life span. We can spend
money testing our theories on paper but at some point we have to build a wind farm.
We can do that now and we will be prudent. We can help the State by giving others
confidence to move forward with the scale of projects that will bring cheaper, cleaner
power to the Railbelt Grid.
Total Cost of Project:
Grant Funds Requested:
Matching Funds:
Total Cost of Project:
$8,363,886
$6,269,750
$2,094,136
$8,363,886
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.
$8,363,886
2.5.2 Grant Funds Requested in this application.
$6,269,750
2.5.3 Other Funds to be provided (Project match)
$2,094,136
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2.5.4 Total Grant Costs (sum of 2.5.2 and 2.5.3) $8,363,886
2.5.5 Estimated Benefit (Savings)
$5,000,000 (minimum)
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.)
Savings: $5,000,000.00
Utility 5avinge for experimental processes to gain information on wind eystemr,
integration (i.e. Eva Creek, Donnelly Dome, Fire Island and other as yet unknown wind
farm facilities).
GVEA, Chugach Electric, the military complex and the Alaska Energy Authority will be
able to move forward on larger Scale 20-30 megawatt projects in those locations and
not be forced to use these excellent locations with the high cost of rite development
that can only be considered on a much larger scale of development.
Public Benefit:
1. To show that we are moving forward quickly to solve the high cost of energy
i55ue.
2. To build confidence in renewable resource development.
3. To move toward the 2012 goal of "20% Green".
4. Economic development in Delta Junction (i.e. jobs and increased property
valuer)
5. The environmental advantages to GVEA and the public though carbon credits
and green tags to offeet the effects of coal and diesel generated electricity.
6. The military it also working on a 2012 deadline for renewable energy to support
its military complex in Alaska. This will help with some of the BKAC
requirements.
7. Possible opportunity to develop in -state tower production capabilities using
Greer Tank and Welding, a Fairbanks business (see Exhibit 5) Note: We are
not submitting this quote at thin time using Greer due to the prohibitive
co5tr associated with the in -state manufacturing, but would like to advise
that there opportunities exist.
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.
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Renewable Energy Fund
Grant Application
Type in your answer here and follow same format for rest of the application.
Michael A. Craft, Alaska Environmental Power Managing Partner, will oversee all
aspects of the Delta Junction wind farm project. (See resume attached Exhibit 1)
The plan for completing the proposed project is to first be awarded the AEA grant
funding. With Mike Craft already taking the lead on this project, we have already
completed a great deal of the proposed project goals and site requirements in the
last 45 days, such as;
➢ land acquisition;
➢ obtained wetlands determination -none noted;
➢ power lines;
➢ roads;
➢ site clearing;
➢ developed gravel quarry on site;
➢ soils testing;
➢ environmental assessment;
➢ permitting requirements;
➢ wind analysis completed for 12 months;
➢ contracts with necessary suppliers
➢ have trained local labor.
The complexity of this project requires intricate details that Mike Craft understands
and is intimately familiar with but that are not necessarily applicable to your plan
requirements. However, if there is additional interest in things like rigging
requirements, component weights, crane capacities, how to un-nestle the tower
sections, approved blueprint for foundation design, concrete specification
requirements, torque patterns for tower sections and blade pitch procedures, please
advise.
Mike Craft either accomplished or assisted in every phase of the construction and
erection of the first turbine (raised on 9/5/08, commissioned on 9/14/08 and
producing power on the grid as of 10/4/08). Using all of the same business
partners/contractors, with some adjustment for efficiencies, the plan of this project
is to repeat this process nineteen times. In preparation for this project we have
considered all details, such as having a stockyard established at the site to
accommodate 40 truck loads of equipment and 100 loads of concrete. After
successfully completing the installation of our first Northwind 100 kW wind turbine
and having a Power Purchase Agreement (PPA) in effect, we fully realize the scope of
this project and have gained great confidence not only in our own abilities but the
abilities of our business partners to successfully complete this project.
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MUD ENERGYAUTHORTY Grant Application
Mr. Craft has two other partners, Mr. Mchard Clymer and Mr. Marvin Hall who are
active in the administrative portion of this business. They are both practicing
accountants and will be responsible for the financial reporting and disbursements
throughout this project. Their resumes are attached. (See Exhibits Y and Z)
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.)
See Exhibit H
3.3 Project Milestones
Define key tasks and decision points in your project and a schedule for achieving them.
Key tasks include:
• Foundation Excavation
• Pouring of Concrete Foundation
• Ordering of Key Components/Commodities
• Tower Erection
• Final EIE Connections
• Commission
We have already completed the required site preparation, i.e., power line; access road;
land acquisition; wind resource analysis; power purchase agreement; and,
environmental assessment.
0;�1MIN
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.
pvr�nnnpl�
Mike Craft, Project Manager, together with six (6) additional Alaska Environmental
Power employees (specific names not complete to date), will work in concert with the
following list of "contractors" who have been negotiated and signed with:
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Contractors:
➢ contracted with Northern Power, the turbine supplier;
➢ contracted with NorCon Electrical Contractors;
➢ contracted with Precision Crane Company,
➢ contracted with H & H Concrete in Delta Junction;
➢ contracted with Greer Tank & Welding in Fairbanks to produce 19 embedment
rings, 19 alignment rings and 19 steel foundation forms;
➢ contracted with Williams Engineering of Colorado for 190015-foot tower bolts;
➢ contracted with GVEA who will assist in establishing the connection to the
Grid;
➢ contracted with A85 Alaska for the met towers;
➢ contracted with Crescent Electric to provide the PVC piping;
➢ contracted with Oelta Wireless Internet for computer networking;
➢ contracted with King Bee for gravel hauling;
➢ U.S. Fish and Wildlife
All site work concerning excavation and backfill will be completed using the following:
Equipment:
D-8
TD9 Dozer
9808 Loader
320L Excavator
Cat 612 Poad Grader
3.5 Project Communications
Discuss how you plan to monitor the project and keep the Authority informed of the status.
Mike Craft will be on -site to monitor all phases of the project. He will coordinate two
foremen to run two crews. Additionally, Mike will coordinate all work schedules and
assignments.
We will follow AEA's policies for established reporting schedules; on all matters we will
include photos of benchmarks.
Attached for your review are photos of the site, development, electrical connections,
equipment, access road and turbine during every stage of installation. (Exhibit X)
3.6 Project Risk
Discuss potential problems and how you would address them.
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Renewable Energy Fund
Grant Application
Because of the established wind turbines that we're using and the short
construction period, there are very few cost risks in developing this project.
The only real risk is to AEP in that we may have overestimated the avoided fuel cost
for the revenue stream over the 20-year life of the project.
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.
The potential of Delta and the surrounding areas to produce great quantities of
renewable energy is staggering relative to wind resource and bio-heat, grain, field
cutting, and canola oil. The real measure of potential relies on grid capability.
Currently, 5 to 8 megawatts moves along the line to Delta. 15+ megawatts can be
transmitted on current infrastructure. We believe this is why the 2 MW experimental
PPA with AEP was established. We feel that at some point in the next 24 months we
can prove out that "more is better".
We would like to move onto that 15+ MW scale as soon as we have supporting data,
i.e., the experimental PPA with GVEA and its findings.
The only advantages wind has over bio-heat is that fuel is free and there are no
emissions.
They are both very dispatch able now. bio-heat would be a great spinning reserve to
offset the capacity factors on wind power, but one thing at a time for us.
4.2 Existing Energy System
4.2.1 Basic configuration of Existing Energy System
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Renewable Energy Fund
Grant Application
Briefly discuss the basic configuration of the existing energy system. Include information about
the number, size, age, efficiency, and type of generation.
See Exhibit J
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 GVEA uses fossil fuel energy and this project will begin to reduce the need
for fossil fuel dependency for electricity.
We understand that if we continue to rely on diesel fuel we will pay more for power as
inflation "kicks in". We understand that natural gas has the same associated
inflation factors, and that a hydroelectric project of significant influence is still far off
in the future.
We believe that a substantial amount of wind, 50-100 MW (megawatts), disbursed
throughout the State, would have a positive effect relative to efficiency and cost of
power to the consumer. Hopefully, this will bring us closer to the 2012 goal of "20%
Green by 2012",
4.2.3 Existing Energy Market
Discuss existing energy use and its market. Discuss impacts your project may have on energy
customers.
The greater bulk of power goes to Fort Knox, Pogo Mine, Usibelli Coal Mine, Alyeska
Pump stations, and the Military Complex. This requires high spinning capacity, the
effect of large scale consumers like mines and such drive up the coot to residential
consumers by creating a less efficient system. Coal has its problems with carbon and
sulfur emissions; oil with carbon dioxide and sulfur emissions; including the refinery
emissions and carbon from mining and transportation of coal.
In Fairbanks, we are dealing with thermal inversions that trap noxious fumes over our
town at -201. Additionally, we will be dealing with increased wood smoke because of
fuel prices this winter. The EPA already has significant problems with the Fairbanks
North Star Borough (FN513) air quality. 2 megawatts would offset the power needs of
600 homes. It's not a huge amount, but it is a start and it is 0,J1-l'REE;i FC WF� -`V�: .
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ALASAUTORITY
40U) ENERGYHKA
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
• 20 ea -100 kW Northwind 100 turbines with a 37-meter tower, 21-meter blades
with a direct -drive permanent magnet generator that is cold -rated to -50°C.
• Optimum installed capacity of 2MW (megawatts)
• Anticipated capture factor of 23.2%
• Anticipated annual generation of 4,468,020 kWh
• At this time, there are no known barriers to the successful completion of this
project
• We are using a 3-pole switch shut-off to buss bars connecting to 480v x
14,400v transformers into the tower to on -board computers to control power
production and failsafe programs. There are GVEA fuses next to the high
voltage meter and fuses in the turbine. We can provide the one -line submitted
to GVEA for interconnection, if desired (see Exhibit V)
• Delivery will be at the GVEA meter as specified in the PPA and absorbed into the
grid via a 14,400 volt 3-phase power line
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.
At this time there are no Land Ownership issues. We own the land proposed for this
project, free and clear. See attached title policy, (Exhibit K)
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
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ALASAUTENERGYHKA
Renewable Energy Fund
Grant Application
No permits have been, or are, required to build this wind farm project. We meet all
requirements of the U.5. Fish and Wildlife (Exhibit L) and the Corps of Engineers
(Exhibit M)
There is no local oversight in the Delta area, no zoning, no covenants, no land use plan
other than agricultural use on adjoining properties. We have been welcomed by the
community (Exhibit N). We see no potential barriers.
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
Threatened or Endan erg ed 512ecies: There have been no threatened or endangered
species observed at the Delta Junction landsite.
Habitat Issues: We are using the landsite in the same manner as the current
agricultural projects established by the State Dept. of Natural Resources (DNR).
Wetlands and other protected areas: Wetland determination was clean. We met and
have worked with the Corps of Engineers.
Archaeological and Historical resources: We have found no previous use of this land.
It is a glacial moraine and no fossils of any kind have been found.
Land Development constraints: There are no land use constraints at the wind farm
site. Soils are gravel. There is no zoning. Like use as adjoining parcels.
Telecommunications interference: This is a non -issue and due to limited access of
telecommunications, we have been approached to put towers at this location, on an
adjoining parcel, for microwave repeaters by Delta Wireless Internet.
Aviation considerations: There are no Aviation issues due to the rural setting. The Ft.
Greely Dept. of Public Works has expressed interest in acquiring a wind farm for their
own use.
Visual, Aesthetics impact: These turbines are visible from many points on the local
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ENERGY AUTHORITY Grant Application
road system. The comments we have received are favorable, i.e., "it's beautiful"
referring to the first 100 kW turbine that is currently in place.
We do not see any other potential barriers.
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
See Exhibit H
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
Due to the short construction timeframe of this project, any anticipated costs for
operations and maintenance incurred during the construction phase will NOT be paid
from any grant monies received and will be the sole responsibility of Alaska
Environmental Power.
Operating Costs - consist of 24/7 remote monitoring by the turbine manufacturer at
the Home Office at $3,000 per year per turbine and as stated above, AEP will be
covering the cost of all Operations and Maintenance. (see Exhibit W)
Maintenance Costs - each turbine will annually require approximately 6 hours to check
the torque of the bolts and to apply grease for lubrication at a negligible cost as AEP
will be responsible for these duties alone.
4.4.3 Power Purchase/Sale
The power purchase/sale information should include the following:
• Identification of potential power buyer(s)/customer(s)
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• Potential power purchase/sales price - at a minimum indicate a price range
• Proposed rate of return from rant -funded project
GVEA has entered into a 20-year Power Purchase Agreement (PPA) for up to 2 MW of
nameplate capacity. (see Exhibit G)
The price is based on the avoided fuel cost for GVEA.
This project is a rg eat Research Project on integrating wind farms into the Railbelt
grid. Due to the very low annual rate of return (POP,) (or return on investment (R01),
1.65%, that this project is expected to produce, it would make a poor business
investment without the 5tate'5 help. But the information derived from this project
for future wind farms for the Railbelt Grid will be immeasurable and invaluable to the
people of Alaska. Please see attached average rate of return (ROR). (5ee Exhibit 0)
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.
5ee attached Cost Worksheet (Exhibit P)
Also 5ee Exhibit 0
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.
Our Business Plan is to expand this facility to a 15-20 MW facility that either GVEA or
the Railbelt Grid can use. We have committed our resources for the "long run" to
achieve 15-20 MW nameplate capacity, contingent on GVEA's findings on the impact
of this experimental 2 MW project.
The Operations and Maintenance (0 & M) costs will be paid from revenues received.
We will create a reserve account in anticipation of unforeseen expenses plus end -of -
project reclamation costs.
4.4.6 Analysis and Recommendations
Provide information about the economic analysis and the proposed project. Discuss your
recommendation for additional project development work.
AEA 09-004 Grant Application Page 15 of 18 9/3/2008
/44MK1?D ALASHKA
Renewable Energy Fund
Grant Application
There are Economies to Scale in wind farms, but because we are limited to 2 MW at
this point because of our experimental PPA with GVEA, we feel that in this instance
20 ea 100kW turbines is a better way to approach it because it is more realistic
relative to larger scale farms to achieve efficiency through redundancy of a multiple
turbine farm.
Better economies to scale can be achieved by larger swept area ratios of 1 MW+
turbines and our location can easily support 20 MW of production. We would like to
move forward with a 20 MW facility as soon as GVEA is satisfied with the findings
and results of our 2 MW experimental power purchase agreement (PPA) and are ready
to negotiate on a 20 MW PPA. (see Exhibit 0)
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
❖ Our estimate of displaced fuel (oil) is 137,019.27 gallons of fuel per year,
and over the 20-year project, is estimated at 2,740,385.5 gallons
❖ The current avoided fuel cost is $0.1385 per kWh. We opted for the
"floating" avoided fuel cost instead of a fixed price assumed to be at a
premium according to GVEA documents (see Exhibit G). The estimated
annual revenue is projected to be approximately $562,953 per year,
dropping slightly for the projected injection of natural gas which will
lower the avoided fuel price somewhat, and then a significant drop in the
avoided fuel price when the 5usitna hydroelectric project comes on line
and drops the avoided fuel price substantially, again dropping our annual
revenue to less than approximately 1/2 of it's beginning amount.
❖ The tax credits only apply to the percentage of non -grant capital
production values.
❖ All green tag carbon credits are the property of GVEA.
❖ The non -economic benefits to the public are;
1. To move forward on the development of wind farm technology;
2. GVEA will be able to use green tags to offset environmental issues in
the system;
AEA 09-004 Grant Application Page 16 of 18 9/3/2008
OR` ALASKA Renewable Energy Fund
ME: ENERGY AUTHORITY Grant Application
3. The overall efficiency of the grid will improve;
4. To offset or "displace" 2.7 million gallons of hydrocarbon power;
5. Help meet the 2012 goal of "20% rf-,en";
6. Diversified Generation Capabilities.
SECTION 6 - GRANT BUDGET
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 - GrantBud et.xls
Provide a narrative summary regarding funding sources and your financial commitment to the
project.
Alaska Environmental Power is committed to bringing this 2MW facility to fruition
which has been convincingly demonstrated through the financial commitment a5 well
a5 time commitment already spent on the beginning of this project. Attached is the
Grant Budget form as well ae the company's Balance Sheet further demonstrating
the financial commitment to this project ($1,050,000 already Spent) in addition to
tene of thousands in in -kind time and equipment plus much more of both once this
project is under way. A more convincing commitment to a project we cannot imagine.
This project, while research in nature, has so many po55ibilitie5 and benefits to the
Utilities as well a5 the State and the Public. 5o much can be learned from this
"experiment" plus the added benefit of putting 100% green power onto the grid and
our Small part in slowing Global Warming. It is ALL good news.
(see Exhibit Q - Grant Budget)
(see Exhibit R - AEP Balance Sheet)
AEA 09-004 Grant Application Page 17 of 18 9/3/2008
��� ALASKA Renewable Energy Fund
411111) ENERGY AUTHORITY Grant Application
SECTION 7 — ADDITIONAL DOCUMENTATION AND CERTIFICATION
SUBMIT THE FOLLOWING DOCUMENTS WITH YOUR APPLICATION:
A. Resumes of Applicant's Project Manager, key staff, partners, consultants, and
suppliers per application form Section 3.1 and 3.4
B. Cost Worksheet per application form Section 4.4.4
C. Grant Budget Form per application form Section 6.
D. An electronic version of the entire application per RFA Section 1.6
E. Governing Body Resolution per RFA Section 1.4 (Could not locate 1.4 but
presume you are referring to 1.2.2-attached Exhibit A)
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
Mike Craft
Signature
Title
Managing Partner, Alaska Environmental Power, LLC
Date
q 0Z7 /0�
AEA 09-004 Grant Application Page 18 of 18 9/3/2008