HomeMy WebLinkAboutLandfill Gas to Energy Project Alaska Wind Energy AppAlaska Energy Authority
AEA-09-004 –Renewable Energy Grant Application
813 West Northern Lights Boulevard
Anchorage, AK 99503
Phone: 907-771-3000
Landfill Gas to Energy Project
Renewable Energy Fund
Anchorage Landfill Gas to Energy
Project Grant Application
AEA 09-004 Grant Application Page 1 of 20 10/8/2008
Alaska Wind Energy, LLC
SECTION 1 –APPLICANT INFORMATION
Name (Name of utility, IPP, or government entity submitting proposal)
Alaska Wind Energy, LLC, dba Wind Energy Alaska (WEA)
Type of Entity:Alaska limited liability corporation
50-50 owned subsidiary of the Cook Inlet Region Incorporated (CIRI) and enXco, Inc.
Mailing Address
2525 C Street
Anchorage, AK 99508
Physical Address
2525 C Street
Anchorage, AK 99508
Telephone
(907) 333-0810
Fax
(907) 333-0810
Email
steveg@enxco.com
1.1 APPLICANT POINT OF CONTACT
Name
Steve Gilbert
Title
Alaskan Projects Manager
Mailing Address
6921 Howard, Anchorage, AK 99504
Telephone
(907) 333-0810
Fax
(907) 333-0810
Email
steveg@enxco.com
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.)
Renewable Energy Fund
Anchorage Landfill Gas to Energy Project Grant Application
AEA 09-004 Grant Application Page 2 of 20 10/08/2008
Alaska Wind Energy, LLC
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.
Final Design,Permitting and Construction of a Landfill Gas Electric Power Generation Project.
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.
Wind Energy Alaska (WEA)wishes to construct a 3.2 megawatt (MW)Landfill Gas (LFG)to
Energy Generation Facility at the Anchorage Regional Landfill,located east of the Glenn
Highway near Eagle River, Alaska.The Anchorage Regional Landfill is owned and operated by
the Municipality of Anchorage (MOA), Solid Waste Service (SWS).With an in-service date of
April, 2010, this project is designed for incremental growth beginning with 3.2 MW and up to 6.4
MW within the next 15 years with additional capacity as needed. Landfill gas flow records and
projected fill rates at the landfill over the next 20 years support the potential for this level of
electric power production.MOA would receive royalty payments to compensate for use of land
and LFG for the project. This revenue could be used to offset tipping fees at the landfill to
benefit the public.In addition to power generation, the proposed project will include a heat
recovery system that will recover waste heat from the LFG engines to be used in nearby office
and storage building presently heated with a natural gas. The natural gas fuel cost savings will
reduce landfill operating costs.The landfill is located near the existing power lines that feed into
the electric system and the Railbelt grid.The U.S. Army Fort Richardson,Elmendorf Air Force
Base,ML&P,Chugach Electric Association (CEA), Matanuska Electric Association (MEA),
MOA’s Anchorage Regional Landfill and SWS are potential power customers.WEA has
contracted HDR Alaska, Inc. to provide design engineering, permitting, and construction
management of the project.HDR has LFG design experience and has assisted in the
development of cost estimates for this project.
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 project development cost for the Anchorage LFG Project is anticipated to total $8.3 million
including a 15 percent contingency.The total grant request is $2.1 million, approximately 25
percent of total project development.WEA will fund the remainder of the project development
cost and has already invested about $25,000 in the project; in addition to approximately
$100,000 that the MOA has spent studying the feasibility and options of LFG energy.
The project development costs are summarized in the table below and in the budget worksheet
attached.
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Alaska Wind Energy, LLC
Project Development Cost Total Grant Request Funded by WEA
Total Anticipated Project Cost $8,257,850 $2,100,000 $6,157,850
Reconnaissance (complete)$ 15,000
Conceptual Design
(complete)
$ 10,000
Final Design and Permitting $ 250,000
Construction and
Commissioning
$2,100,000 $6,432,850
Source: Project cost estimated developed by HDR for WEA, LLC.
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.
LFG offers many benefits as a renewable energy resource. LFG is an economically viable,
proven,and safe fuel source for electrical generation.The 25.3 million kilowatt-hours (kWh)
generated annually by the proposed project will offset more than 2,800 Anchorage homes
served by natural gas generation.As the landfill grows, gas production will increase and so will
benefits.This project will reduce Railbelt dependence on volatile natural gas markets.With a
long term LFG supply agreement in place with the MOA, fuel costs for the proposed project will
be steady.The MOA can use revenues generated from the sale of LFG to offset tipping fees,
thereby providing an economic benefit to the wider Anchorage and Railbelt communities.In
addition, the heat recovery system on the LFG engines will recover heat to be used in the
nearby MOA offices and storage buildings. The existing natural gas fuel boiler will be needed
only to provide supplemental heat.Revenue from gas sales could be used to reduce tipping
fees and heat recovery to reduce operating cost of the landfill.
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.)
$8,257,850
2.5.2 Grant Funds Requested in this application.$2,100,000
2.5.3 Other Funds to be provided (Project match)$WEA will pay for the
remainder of the project
2.5.4 Total Grant Costs (sum of 2.5.2 and 2.5.3)$2,100,000
2.5.5 Estimated Benefit (Savings)25.3 million kW h annually
$0.06/kWh sales price
$1.52 million electricity
sales
$150,000 in average annual
royalty payments and
reduced tipping fees and
operating costs to MOA
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.)
Reduced tipping fees at
Anchorage landfill from
royalty revenues for LFG
and building heat.
Increased reliability and
base load green power for
Railbelt.See 2.5.5 above.
Renewable Energy Fund
Anchorage Landfill Gas to Energy Project Grant Application
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Alaska Wind Energy, LLC
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.
Steve Gilbert,enXco’s Alaskan Projects Manager, will be the project manager for the WEA
Landfill Gas Project.enXco will manage operations and maintenance of the project after the
plant enters commercial operation.
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.)
The project schedule is included as Appendix G.
3.3 Project Milestones
Define key tasks and decision points in your project and a schedule for achieving them.
AEA Grant Award –December 2008
Engineering –Start: December 1, 2008 (5.5 months)
Conduct Geotechnical
Building Design
Interconnection
Mechanical
Design/Specification Review by WEA/AEA Long Lead Items (Mar-Apr 2009)
Permitting –December 1, 2008 (5.5 months)
ADEC Air Quality Permit
Disruption Gas to Electric System
During Construction, SWPPP
Major Equipment Procurement –Start: December 1, 2008 (9.8 months)
Engine Generator Set (12 months)
Generator Step-Up Transformer (10 months)
12.5 kV Switchgear (8 months)
Gas Compressor Skid (6 months)
Construction RFP Responses and Review –Start: March 1, 2009
Construction –Start:June 15, 2009 (8.8 months)
Commissioning and Startup –Start January 1, 2010
Commercial Operation –April 1, 2010
Renewable Energy Fund
Anchorage Landfill Gas to Energy Project Grant Application
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Alaska Wind Energy, LLC
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.
WEA will provide overall project management of the Anchorage LFG to Energy Project. Mr.
Steve Gilbert,WEA’s Alaskan Projects Manager will oversee day-to-day management of the
design, construction, operations, and maintenance of the facility. enXco Services, a partner
company with WEA, will provide operations and maintenance of the facility. Mr. Gilbert will be
the liaison between the AEA, enXco Services, and the project developers CIRI and enXco,
project engineering design and permitting contractor HDR, and the construction contractor.Mr.
Claude Cahen is the Construction Manager for WEA for LFG projects. Summary resumes are
included in Section 7 Appendix A.Below is an organization chart for the Project.
3.5 Project Communications
Discuss how you plan to monitor the project and keep the Authority informed of the status.
WEA partners, CIRI and enXco, have substantial experience with management of multi-million
dollar projects. WEA will make project status and achievement of milestones a regular part of
the project’s communications protocol. At the commencement of the project, WEA will confer
with Alaska Energy Authority on project status reporting requirements and methods and
frequency desired for delivery of the reports. WEA’s project manager can offer periodic written
Renewable Energy Fund
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Alaska Wind Energy, LLC
status reports to Alaska Energy Authority’s project point of contact on a monthly basis;
however, should any issues arise that may require more frequent tracking, we will make
adjustments as needed. We envision providing status briefs to Alaska Energy Authority via
electronic mail. Should issues arise, WEA’s project manager may notify Alaska Energy
Authority via telephone and follow up with written notification for the project record.
3.6 Project Risk
Discuss potential problems and how you would address them.
As part of the overall project execution plan,WEA will include contingency planning and budget
for critical milestones throughout the design and construction phases of the project. At this time,
we do not foresee problems or risks that would cause project delays, other than unpredictable
delays in delivery of equipment required for the construction of the LFG Project.
Project partner, enXco successfully has through its parent company EDF-EN,completed more
than 20 MW of LFG projects worldwide, utilizing similar equipment and infrastructure.Also, we
do not anticipate public opposition to the project, considering growing public advocacy voiced in
favor of renewable energy resources. However, WEA will prepare a public information plan that
will include methods of communicating and informing the public of the project.
The current project cost estimate has an uncertainty of +/-20 percent that adds a risk of cost
over-runs that will not be covered by grant money.In addition, there could be construction
delays or equipment delivery delays that would extend the schedule or increase costs.To
mitigate this risk WEA is committed to covering costs above those estimated in this proposal
The risks associated with negotiations for the project include inability to successfully negotiate
land use agreement, LFG purchase agreement, or power sales agreement. To mitigate these
risks, WEA will not apply any grant funds to project costs until these agreements are signed and
royalty payments to Municipality of Anchorage determined.
There are also risks associated with the LFG fuel. If the quantity of LFG is lower than
anticipated because of reduced landfill volumes or gas production, the ultimate size of the
project could be reduced to match the LFG volumes. If the LFG quality is changed, especially
with increased concentrations of siloxane or hydrogen sulfur that may cause engine damage;
the LFG will require pretreatment and this equipment will have to be added to the project.
Renewable Energy Fund
Anchorage Landfill Gas to Energy Project Grant Application
AEA 09-004 Grant Application Page 7 of 20 10/08/2008
Alaska Wind Energy, LLC
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 proposed project will be built, owned, and operated by WEA. The LFG plant will be
modularly designed and sized to use the LFG produced by the Anchorage Regional Landfill.
Recent economic analyses for LFG energy projects have produced estimates of landfill gas
generation as show in the chart below (Source:Landfill Gas Utilization Economic Evaluation for
Anchorage Regional Landfill,Municipality of Anchorage,September 2004).
The proposed project is designed to use the volume of gas available by 2010 (about 1100
standard cubic feet per minute [scfm]). The estimated heat value of the LFG is 495 Btu/scf.
The current volume of LFG generated by the Anchorage landfill can be accurately measured
using the existing LFG collection system and flare installed at the landf ill in 2006. Based on
Renewable Energy Fund
Anchorage Landfill Gas to Energy Project Grant Application
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Alaska Wind Energy, LLC
projected fill rates for the landfill, there should be sufficient LFG to double the generation
over the next ten years. Due to their modular design, engines can be added as increasing
LFG allows.The plant design allows for the addition of engines when necessary.
An advantage to the WEA LFG to Energy Project is that it uses an efficient proven spark-
ignited reciprocating engine technology that,with the heat recovery system,gains the
maximum energy benefit from the LFG. The proposed project will use the LFG to generate
3.2 MW or 25.3 million kWh per year as well as recovered heat from the engines (8
MMBtu/hour). The modular design of the proposed project will allow for future increase in
electricity and heat recovery to use all available LFG, estimated to be 6.2 MW or about 50
million kWh per year.If the gas flow increases beyond the estimated rate in 10 to 15 years,
more engines can be added.
The engines used by this project are designed for LFG fuel operation used in more than half
of existing LFG to Energy projects.WEA is an experienced and proven energy project
developer with completing 20 MW of LFG projects through its parent company EDF-EN.
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 proposed project will sell power into the Railbelt grid.
Summary of the installed capacity for ML&P and Chugach (CEA) from REGA Report (Sept 2008)
The thermal units owned and operated by ML&P are shown below from the REGA Report.
Renewable Energy Fund
Anchorage Landfill Gas to Energy Project Grant Application
AEA 09-004 Grant Application Page 9 of 20 10/08/2008
Alaska Wind Energy, LLC
Thermal Units from REGA Report (Sept 2008)
Summary of Hydroelectric Generation for Chugach (CEA) and HEA from REGA Report.
Renewable Energy Fund
Anchorage Landfill Gas to Energy Project Grant Application
AEA 09-004 Grant Application Page 10 of 20 10/08/2008
Alaska Wind Energy, LLC
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.
The WEA LFG to Energy Project will have a positive impact on the existing energy infrastructure
by diversifying the energy resources used to serve the Railbelt base load demand. Currently, the
generation resources used to meet base load are dominated by natural gas fuel.LFG is one of
the few renewable energy resources that has a high enough capacity factor (90 percent) to be
available to meet base load electric demand (i.e. it is available to generate power 24/7). By
adding non-natural gas fueled generation to the electric supply capacity, the project will increase
Railbelt system reliability,especially if there were to be natural gas fuel supply disruption or
curtailment.The heat recovery system will also displace natural gas used to heat the offices and
storage facility near the Anchorage Landfill location. This heat will be available even if there were
a disruption or curtailment in the natural gas fuel supply.
4.2.3 Existing Energy Market
Discuss existing energy use and its market. Discuss impacts your project may have on energy
customers.
The WEA LFG to Energy Project will have a positive impact on the existing energy use and
markets by utilizing an energy resource that is currently being wasted and by reducing demand
for natural gas in the Railbelt.The LFG at the Anchorage Landfill is currently being flared and
the energy potential of this LFG resource is being wasted. By diverting the LFG from the flare
into the engines and heat recovery system, electric power and useful heat can be generated.
The electricity generated by the LFG project will have an affect on natural gas markets and could
reduce energy costs long term by displacing Cook Inlet natural gas.The price that electric
utilities are paying for natural gas to fuel 90 percent of the power plants in the Railbelt is likely to
continue to increase dramatically.
The existing gas supply contracts for CEA expire after 2010 and CEA must negotiate new
supply. See figure 13 below from the REGA study. The most recent supply contract for natural
gas from Cook Inlet was negotiated between Marathon, ConocoPhillips and Enstar in 2007.
While the specific terms and price for the contract are not publicly available, it is clear from RCA
hearings in August 2008 that future pricing for natural gas from Cook Inlet will be based on
“tiered” system depending on total natural gas demand. The highest priced natural gas will be
for supply used to meet “needle peak” or the periods with highest total demand. This is likely to
occur on the coldest winter days when demand is highest for both electricity and natural gas.
Renewable Energy Fund
Anchorage Landfill Gas to Energy Project Grant Application
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Alaska Wind Energy, LLC
The project could reduce overall electricity and natural gas prices by reducing demand for
natural gas during highest demand periods when gas will have the highest tier prices.As a base
load energy resource, the LFG project will serve as a benchmark, allowing utilities and the MOA
to negotiate better gas supply deals.The LFG project provides an alternative base load energy
resource that does not rely on natural gas.
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
The WEA LFG Project will use a spark-ignited reciprocating engine, which is a widely used
engine for these types of projects.Over 70 percent of the landfill gas to energy projects in
operation use this technology.The gas produced by natural decomposition of landfill waste is
sufficient to generate 3.2 MW of electric power initially;with a heating value of approximately 495
Btu/ft3 and current volumes estimated at 1,100 cubic-feet per minute (cfm). Currently, the gas
moves through pipes to a gas treatment plant, then heated and flared off to reduce the emissions
of methane.The LFG Project will be designed to grow incrementally from 3.2 MW to 6.4 MW in
15 years, with additional capacity as needed. Thermal efficiency to convert LFG to electricity is
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Alaska Wind Energy, LLC
over 40 percent.The average annual capacity factor will be 90 percent. The annual electric
generation will be 25.3 million kWh for the 3.2 MW project and more than double that in the
future.
The waste heat from the engines (about 8 MMBtu/hour)will be recovered and made available to
heat the Municipality of Anchorage’s office space and vehicle and equipment on-site storage
facility. This will increase the power plant’s overall efficiency to more than 55 percent.
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.
WEA will require permission from the MOA SWS to locate the LFG facility at the Anchorage
Regional Landfill, or as an alternative, from the US Army to locate the facility on Fort Richardson.
Normally, this is done through a land lease and LFG lease agreement negotiated between WEA
and MOA. The term of the lease would be about 20 years with options for continuance and
include a royalty payment to MOA that compensates the MOA for use of the land and LFG.
4.3.3 Permits
Provide the following information is 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
During the Permitting and Feasibility stage of the project, applicable permits will be identified.
Consultation with the federal, state, and local authorities will be conducted to ensure an efficient
and expedient permitting approval process.
The proposed project will be developed adjacent to the current Anchorage Municipal Landfill, a
Class 1 permitted solid waste facility (Permit No.SW1A001-11). Application for a minor permit
modification to reflect changes in the use of methane gas at the facility will be submitted to
Alaska DEC. This will be a minor modification request and due to the beneficial use of the gas,
no barriers are expected with approval of this change.
.
The Anchorage Regional Landfill currently operates two spark-ignited Landfill Gas Flares under
Permit Number 624TVP01.Both are Passive Solar Vent Flares,one is permitted at 20 to 200
scfm and one is permitted at 5 to 50 scfm.It is anticipated that the emissions of NOx under the
proposed LFG to Energy Project may increase slightly from current operation. The current
permit will be reviewed and coordination with Alaska DEC, Air Permits Program will be
conducted to determine if the current permit may be reissued with proposed project changes or if
a new Title V Operating Permit will be needed.
Construction of the facility and maintenance building associated with the project will require a
Building Permit for Commercial Buildings from the MOA including the Storm Water Treatment
Plan Review Requirements.The building will require water connections and house two
restrooms. An on-site well or septic tank will not be needed and a determination from the On-Site
Water and Wastewater Program at the Building Safety Division will be requested.
During construction of the facility, a Storm Water Pollution Prevention Plan (SWPPP) will be
required outlining temporary controls to be taken to manage wastewater during the construction
phase.It is anticipated that project studies, facility design, permit applications and permit
approvals, as applicable, will take approximately 12 to 18 months.
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No major barriers are anticipated in the permitting process.Understaffing at the agency level
may result in delays in schedule,but would not impact approval of the required permits.
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 proposed project will be developed adjacent to the current Anchorage Municipal Landfill.
Major project features are already in place at the landfill. Additional features will include spark-
ignited reciprocating engines and a maintenance facility. The project is designed to have limited
environmental impact and therefore, very few barriers are expected.The United States Fish and
Wildlife Services (USFWS), the Alaska Department of Fish and Game (ADF&G), the Alaska
Department of Environmental Conservation (DEC), Alaska Department of Natural Resources
(DNR), Mining, Land and Water, Division of Ocean and Coastal Management, and the Federal
Aviation Administration (FAA) will be consulted at the early stages of project development.
A biological survey and habitat delineation may be conducted at the planning stage of the project
to identify boundaries of general vegetation types and habitats. Each community description will
be augmented to include an expanded description and list of dominant plant species.It is
believed the proposed project does not impact sensitive habitats, including wetlands, or
archaeological resources.
Environmental studies will also identify:
Any species that is listed, or proposed for listing, as threatened or endangered (T/E) by
the United States Fish and Wildlife Service (USFWS) under the provisions of the
Endangered Species Act (ESA);
Any species designated by the USFWS as a “candidate” for listing; and
Any species listed and protected by the State of Alaska.
Bryant Army Guard Field is the nearest airport to the landfill. The highest features ar e already in
place at the landfill. Additional features for the proposed project should not interfere with aviation
or current flight paths, due to distance from the airport. No barriers as they relate to aviation are
believed to exist.
Additional features constructed on-site will be minor compared to the landfill, itself, and will not
impact the visual aesthetics of the current surroundings. Construction and operation will comply
with the Anchorage Noise Ordinance. Noise levels will be monitored regularly to comply with
noise standards.
It is believed that no environmental barriers exists for this project and any potential issues can be
avoided by appropriate placement of project features.
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Alaska Wind Energy, LLC
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
The project development cost for the WEA Landfill Gas to Energy Wind Project is anticipated to
total $8.3 million including a 15 percent contingency.The total grant request is $2.1 million,
approximately 25 percent of total project development.WEA will fund the remainder of the
project development cost and has already invested about $25,000 in the project. The project
development costs are summarized in the table below and in the budget worksheet attached.
Project Development Cost Total Grant Request Funded by WEA
Total Anticipated Project Cost $8,257,850 $2,100,000 $6,157,850
Reconnaissance (complete)$ 15,000
Conceptual Design
(complete)
$ 10,000
Final Design and Permitting $ 250,000
Construction and
Commissioning
$2,100,000 $6,432,850
Source: Project cost estimated developed by HDR for WEA, LLC.
The projected capital cost for the LFG to Energy project is about $6.6 million as outlined in the
table below. The grant funds will be used to fund site preparation and the construction of a
building large enough to house all engines planned for the project and to allow for more engines
later, if needed. The initial project will be two engines with a total capacity of 3.2 MW. As the
landfill reaches completion the amount of LFG will more than double. To take advantage of the
increased gas flow, additional engines can be added to use the LFG fuel. Constructing a building
and site large enough to accommodate all four engines at the start of the project will save
approximately $700,000 in long term capital costs as well as facilitate faster and easier
expansion in the future. According to project gas flows, there will be enough LFG produced by
the landfill by 2017 to accommodate the second set of engines.
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Anchorage Landfill Gas to Energy Project Grant Application
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Alaska Wind Energy, LLC
Projected Capital Cost of the Proposed Renewable Energy System
Project Capital Cost Total Grant Request Funded by Wind
Energy Alaska
Building and site preparation $2,100,000 $2,100,000 $
Engines $2,639,000 $2,639,000
Electrical Interconnection $ 400,000 $ 400,000
Heat Recovery $ 60,000 $ 60,000
LFG Pretreatment & Handling $ 500,000 $ 500,000
Contingency 15 percent $ 855,000 $ 855,000
TOTAL $6,554,000 $2,100,000 $4,454,000
Source: Project cost estimate developed by HDR for WEA
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 anticipated O&M costs for the LFG project are estimated to be $0.019 per kWh amounting to
about $570,000 per year for production of 25.3 million kWh.However, WEA is not requesting
grant funding for O&M costs.
The grant funds will reduce debt service cost by reducing the amount of capital costs that must
be financed. The $2,100,000 will save approximately $200,000 per year in debt service costs. In
addition, the grant funding will reduce the overall cost of the entire LFG project by reducing the
cost of the building by $700,000. Therefore, the grant funding will reduce the cost of power
generated by the project.
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
4.4.4 Cost Worksheet
Complete the cost worksheet form which provides summary information that will be considered
in evaluating the project.
See Appendix D for the cost worksheet form for the Project.
Renewable Energy Fund
Anchorage Landfill Gas to Energy Project Grant Application
AEA 09-004 Grant Application Page 16 of 20 10/08/2008
Alaska Wind Energy, LLC
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.
WEA proposes to operate this project to maximize the useful energy produced by the LFG from
the Anchorage landfill that is currently being flared. The efficiency of the proposed project
exceeds 55 percent with heat recovery included.The grant money will be used to reduce capital
costs on aspects of the project (building and site preparation) that will save an estimated
$700,000 in future costs to expand the project to utilize future LFG volumes.The grant money
will also serve to reduce the overall cost of power from the project by reducing capital costs.
Business Plan Highlights:
Estimated annual power generation = 25,300,000 kWh
Estimated annual power sales (Estimated price $0.06/kWh) = $1,520,000
Estimated annual production tax credit of $0.009/kWh = $228,000
Estimated annual operating costs ($0.019/kWh) = $481,000
Estimated annualized capital costs for grant funded project = $633,000
Estimated annual net revenue = $2,917,000
The Production Tax Credit is available to renewable energy power producers and WEA plans to
take advantage of this credit. Current tax credit rates for LFG projects are about one-half the rate
for wind energy projects ($0.019 per kWh). Therefore, we assume a tax credit of $0.009 per
kWh. This tax credit will offset debt service cost and serve to reduce the cost of power produced
by the LFG project.
In addition to the power sales, the Municipality of Anchorage will receive royalty payments for
land lease and LFG use. The royalty payment is estimated to be about 5 percent of power sales
or about $150,000 per year average over the lifetime of the expanded project ($80,000 -
$250,000, depending on the year).
4.4.6 Analysis and Recommendations
Provide information about the economic analysis and the proposed project. Discuss your
recommendation for additional project development work.
There is a demonstrated need for new non-natural gas-fueled power generation in the Railbelt to
support growing electric demand and the need to diversify and replace aging generation
resources. Some of the factors supporting the need for this project include:
1. Need to increase Railbelt electric generation capacity. The recent REGA study conducted by
AEA found that there will be a need for more than 300 MW of new electric generation capacity
by 2015. See Table 26 from the REGA report.
Renewable Energy Fund
Anchorage Landfill Gas to Energy Project Grant Application
AEA 09-004 Grant Application Page 17 of 20 10/08/2008
Alaska Wind Energy, LLC
Source: Alaska Railbelt Electrical Grid Authority (REGA) Study Report. September 12, 2008.
2.The project will help local utilities meet demand for green power. The US Air Force has been
recognized by the US EPA for the past several years as the one of the top purchasers of
green power. In 2007, the Air Force was recognized for its voluntary purchase of 457,500
megawatt-hours of Green Power Partnership-qualified power, representing more than 4
percent of the service's annual electricity usage.The purchases are a portion of the Air
Force's 990,300 megawatt hours of total renewable purchases and on-base renewable
production. The combined renewable purchases represent nearly 10 percent of its electricity
consumption.The military installations located near the project (US. Army Fort Richardson
and Elmendorf Air Force Base) are likely purchasers of the proposed project’s power and may
be willing to pay a premium for green power. Renewable power projects located at federal
government installations such as the fuel cell project at the US Postal Service facility
demonstrate the willingness of the federal government to purchase green power at a premium
price above avoided cost.
3.Carbon legislation compliance. There have been several recent proposals to regulate
emissions of greenhouse gases (including carbon dioxide, methane, nitrous oxide, and
fluorinated gas) in the 110th US Congress. It is probable that in the next 10 years, Alaskan
power producers will have to comply with some type of carbon emission constraint or tax. The
proposed LFG project will be in compliance with proposed legislation and power generated by
this project will become more valuable as the price for fossil fueled generation increases
because of carbon constraints.
Based on these factors, it is recommended that the highest priority for grant funding be
designated for this project. The $2.1 million in grant funding will save $700,000 in expansion
costs for the LFG to energy project in the future as well as generate $150,000 or more per year
in royalty payments to the Municipality of Anchorage that could be used to benefit the public
through lower landfill tipping fees. The estimated payback (without discount rate) is 10 years and
expanded use of LFG.
Renewable Energy Fund
Anchorage Landfill Gas to Energy Project Grant Application
AEA 09-004 Grant Application Page 18 of 20 10/08/2008
Alaska Wind Energy, LLC
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
The benefits for the WEA Landfill Gas to Energy Project include the following:
1.Potential annual fuel displacement of natural gas need to generate 25,300,000 kWh.
2.Estimated annual power sales (Estimated price $0.06/kWh) = $1,520,000
3.Production Tax Credit of ($0.019/kWh) = $481,000.
4.Annual average revenue of about $150,000 to the Municipality of Anchorage from royalty
payments from land lease and LFG sales ($80,000 to $250,000, depending on the year).
The non-economic benefits from WEA Landfill Gas to Energy Project include:
1.Reduce tipping fees at Anchorage Regional Landfill –Royalty revenues to the Municipality of
Anchorage amounting to about average of $150,000 per year could be used to reducing
tipping fees and cost of waste disposal for the public. In addition, Anchorage could also
reduce operating costs by using waste heat from the LFG engines to displace existing
natural gas boilers in nearby offices and storage buildings.
2.Lower air emissions from Railbelt power generation –The WEA Landfill Gas to Energy
Project will result in lower air emissions from power generation by displacing natural gas
generation in the Railbelt as well as reducing emissions from the existing LFG flare.
3.Diversification of Railbelt power supply making electric delivery and transmission more cost-
effective over time. The WEA Landfill Gas to Energy project will diversify the electric
generation mix for the Railbelt by adding renewable generation to a generation mix
dominated by natural gas fuel. In addition,as a renewable source of power that can be used
to meet base load demand, the LFG project will have an important role in truly diversifying
the Railbelt generation mix.
4.The grant money for the project will be used to reduce the costs for future expansion of the
LFG project and maximize the useful energy produced by from the LFG resource. As the
volume of LFG increase with the size of the Anchorage landfill, the grant money will serve to
allow for expansion the power generation. Furthermore, with the heat recovery system, the
proposed project will have an efficiency of 55 percent or higher.
5.The project will provide employment in Anchorage and Mat-Su Valley.The project will
provide construction jobs during project development and long term jobs for project
operation and maintenance.
6.The project will support Anchorage and other local government revenues through local
project purchases and taxes. Project workers will indirectly support the local economy
through purchases by workers and their families at local businesses and services.
Renewable Energy Fund
Anchorage Landfill Gas to Energy Project Grant Application
AEA 09-004 Grant Application Page 19 of 20 10/08/2008
Alaska Wind Energy, LLC
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 -GrantBudget.xls
WEA,a partnership between enXco and CIRI,will be the primary funding source for the LFG to
Energy Project. The grant funding of $2.1 million is being requested to cover the capital costs of
site preparation and building. The building will be sized to accommodate four engines so that as
LFG volumes increase in the future the cost to expand the energy project will be reduced. By
sizing the building at the start to serve four engines will ultimately save approximately $700,000
in site preparation and building construction costs. These savings will reduce the cost of power
produced by the LFG project.
The grant request is $2,100,000 for the following costs:
Site Preparation $ 600,000
Building $1,500,000
TOTAL GRANT REQUEST $2,100,000
See Appendix C for the GrantBudget.xls form.
.
Renewable Energy Fund
Anchorage Landfill Gas to Energy Project Grant Application
AEA 09-004 Grant Application Page 20 of 20 10/08/2008
Alaska Wind Energy, LLC
SECTION 7 –ADDITIONAL DOCUMENTATION AND CERTIFICATION
Renewable Energy Fund
Anchorage Landfill Gas Project Grant Application
Appendix A
Resumes
A-2
Renewable Energy Fund
Anchorage Landfill Gas Project Grant Application
Appendix B
Cost Worksheet
Renewable Energy Fund
RFA AEA 09-004 Application Cost Worksheet revised 9/26/08 Page 1
Application Cost Worksheet
Please note that some fields might not be applicable for all technologies or all project
phases. Level of information detail varies according to phase requirements.
1.Renewable Energy Source
The Applicant should demonstrate that the renewable energy resource is available on a
sustainable basis.
Annual average resource availability.90% annual average resource availability.
3,200 kW
25,300,000 kWh per year
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 Railbelt1 grid, leave this section blank)
i.Number of generators/boilers/other Railbelt grid
ii.Rated capacity of generators/boilers/other
iii.Generator/boilers/other type
iv.Age of generators/boilers/other
v.Efficiency of generators/boilers/other
b)Annual O&M cost (if system is part of the Railbelt grid, leave this section blank)
i.Annual O&M cost for labor
ii.Annual O&M cost for non-labor
c)Annual electricity production and fuel usage (fill in as applicable)(if system is part of the
Railbelt grid, leave this section blank)
i.Electricity [kWh]
ii.Fuel usage
Diesel [gal]
Other
iii.Peak Load
iv.Average Load
v.Minimum Load
vi.Efficiency
vii.Future trends
d)Annual heating fuel usage (fill in as applicable)
1 The Railbelt grid connects all customers of Chugach Electric Association, Homer Electric Association, Golden
Valley Electric Association, the City of Seward Electric Department, Matanuska Electric Association and Anchorage
Municipal Light and Power.
Renewable Energy Fund
RFA AEA 09-004 Application Cost Worksheet revised 9/26/08 Page 2
i.Diesel [gal or MMBtu]
ii.Electricity [kWh]
iii.Propane [gal or MMBtu]
iv.Coal [tons or MMBtu]
v.Wood [cords, green tons, dry tons]
vi.Other Landfill Gas –1100 standard cubic feet per minute
@ 495 Btu/cf = 286,000 MMBtu per year or 579 million
scf per year.
3.Proposed System Design
a)Installed capacity 3,200 kW expandable to 6,400 kW
b)Annual renewable electricity generation
i.Diesel [gal or MMBtu]
ii.Electricity [kWh]25,300,000 kWh per year expandable to 50,600,000 kWh
iii.Propane [gal or MMBtu]
iv.Coal [tons or MMBtu]
v.Wood [cords, green tons, dry tons]
vi.Other 8 MMBtu/hour waste heat recovery that could be used to
heat nearby offices and storage building.
4.Project Cost
a)Total capital cost of new system $6,554,000
b)Development cost $8,257,800
c)Annual O&M cost of new system $570,000
d)Annual fuel cost Royalty payment for land lease and landfill gas
estimated to be 5% of electricity sales. Payment
estimated to start at $80,000/year in 2011 and
increase to $250,000/year after second set of
engines installed in 2017.
5.Project Benefits
a)Amount of fuel displaced for
i.Electricity 25,300,000 kWh per year and 8 MMBtu/hour of heat for buildings.
ii.Heat
iii.Transportation
b)Price of displaced fuel $5.50/mcf for natural gas
c)Other economic benefits Royalty payments to Municipality of Anchorage
($80,000 to $250,000 per year)
Renewable Energy Fund
RFA AEA 09-004 Application Cost Worksheet revised 9/26/08 Page 3
Reduced operating costs for Municipality of Anchorage
for building heat at office and storage building.
Reduce future expansion costs for LFG to energy
project by an estimated $700,000 by constructing
building that can accommodate up to four engines with
initial project construction.
d)Amount of Alaska public benefits 1)Reduced landfill or tipping fees if royalty payments
and operating savings are applied to landfill costs.
2) Useful power and heat from LFG resource that is
currently flared.
3)Lower air emissions from Railbelt power generation.
4) Increased Railbelt system reliability by diversifying
generation resources.
5) Reduced energy costs throughout the Railblet
system because project will displace natural gas
generation during the highest price tiers of the new
natural gas supply contracts.
6)The project will provide employment in Anchorage
and Mat-Su Borough.
7) The project will help utilities and Anchorage comply
with future climate change legislation such as carbon
taxes or greenhouse gas emission caps.
6.Power Purchase/Sales Price
a)Price for power purchase/sale $0.06/kWh power sales price estimate for grant
application purposes.
7.Project Analysis
a)Basic Economic Analysis
Project benefit/cost ratio Project benefit/cost ratio = 1.8
Project benefit = reduced landfill fees and operating costs between
$80,000 and $250,000 per year.Estimated average annual payment
for 20 year lifetime ($150,000)
Expansion cost savings for LFG to energy project = $700,000
Grant amount = $2,100,000
Project lifetime 20 years
Payback 10 years
Renewable Energy Fund
Anchorage Landfill Gas Project Grant Application
Appendix C
Grant Budget Form
Alaska Energy Authority - Renewable Energy Fund
BUDGET INFORMATION
BUDGET SUMMARY:Wind Energy Alaska - Anchorage LFG Project
Milestone or Task Federal Funds
Grant Request/
State Funds
Local Match
Funds (Cash)
Local Match
Funds (In-Kind)Other Funds TOTALS
Reconnaissance (complete)$15,000.00 $15,000.00
Conceptual Design (complete)$10,000.00 $10,000.00
Final Design and Permitting $250,000.00 $250,000.00
Construction and Commissioning $2,100,000.00 $5,882,850.00 $7,982,850.00
Operation and Reporting $0.00
TOTAL $0.00 $2,100,000.00 $6,157,850.00 $0.00 $0.00 $8,257,850.00
Milestone # or Task #
BUDGET CATAGORIES:
Reconnaissance
(complete)
Conceptual
Design
(complete)
Final Design and
Permitting
Construction and
Commissioning
Operation and
Reporting TOTALS
Direct Labor and Benefits $0.00
Travel, Meals, or Per Diem $0.00
Equipment $4,895,925.00 $4,895,925.00
Supplies $0.00
Contractual Services $15,000.00 $10,000.00 $250,000.00 $275,000.00
Construction Services $3,086,925.00 $3,086,925.00
Other Direct Costs $0.00
TOTAL DIRECT CHARGES $15,000.00 $10,000.00 $250,000.00 $7,982,850.00 $0.00 $0.00 $8,257,850.00
P
RFA AEA09-004 Budget Form
Renewable Energy Fund
Anchorage Landfill Gas Project Grant Application
Appendix D
Grant Application (CD-ROM)
Renewable Energy Fund
Anchorage Landfill Gas Project Grant Application
Appendix E
Governing Body Resolution
Renewable Energy Fund
Anchorage Landfill Gas Project Grant Application
Appendix F
Certification
Renewable Energy Fund
Anchorage Landfill Gas Project Grant Application
Appendix G
Project Schedule
Renewable Energy Fund
Anchorage Landfill Gas Project Grant Application
Appendix H
Photographs
1 –Aerial View of Anchorage Regional Landfill and
Proposed LFG Plant Location
2 –Existing LFG Flare
3 – Representative LFG Projects Owned by EDF EN, enXco's
Parent Company
Proposed LFG plant location
Existing scrubbing plant
Anchorage Regional Landfill
MEA Line
Ft Richardson
Centaure Landfill:
The landfill gas to electricity project in La Ciotat France was
designed, permitted and built in 11 months from contract
signature to commercial operation. This facility uses 20
Capstone micro turbines to produce 1.2 MW. Still in operation,
this project purchases the gas from the city’s landfill and is
currently owned and maintained by an EDF EN partner
Verdesis.For reference please contact Guillaume Bernaert at
+33 (6) 63 58 96 74.
Claye Souilly
The largest landfill in France, located at Claye Souilly, utilizes
proprietary equipment to remove siloxanes and supply fuel to Solar
Turbines to generate 20 MW of power for the local grid. Solar
Turbine, subsidiary of Caterpillar, recommended the use of the
proprietary gas cleaning system. With this major improvement, the
landfill has been able to expand the gas collection system and to
double the installed capacity.A long term performance contract
was signed for operation and maintenance.
For reference please contact Turbomach, distributor of Solar
turbines in Europe.
Turbomach SA
Via Campagna 15
CH-6595 Riazzino, Switzerland
Tel: +41 91 851 15 11
Lopez Canyon Landfill
The Lopez Canyon landfill gas application is using micro-turbines
for cogeneration. The project design is for 800 SCFM at 75 psig.
The SAGTM system was designed to remove all siloxanes to low
ppb levels for power generation equipment protection. Lopez
Canyon was the first large scale microturbine installation on a
California landfill. The SAGTM System provides guaranteed non-
detectable siloxane removal including sampling and analysis with
the AFT SIL 1TM Field Test Kits for siloxane detection. AFT
provides complete testing and full service at this facility. For
further contact with the owners of this turnkey solution please
contact Don Trinen @ 818 771 4503
American Landfill
Another one of AFT’s high profile High Btu projects was at the American
Landfill near Warrenville, OH. The landfill is operated by Waste
Management and AFT provided a gas processing solution for Toro
Energy Partners. The landfill gas is processed removing non-methane
content, VOCs and siloxanes and the pipeline quality gas is sent to
Dominion East Ohio Natural Gas.If you have further questions pertaining
to this unique landfill gas solution please contact Darrin Wiecheman at
716.857.7539.
Madison waste treatment plant
Here is the most recent turnkey installation (May 2008) on a digester in
Madison, Wisconsin.
Contact person: Todd Gebert @ 608 222 1201 ext 235
Renewable Energy Fund
Anchorage Landfill Gas Project Grant Application
Figure 1
Anchorage Landfill Gas Project
Preliminary Layout