HomeMy WebLinkAboutDelta Wind Project App
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 1 of 17 9/2/2008
Application Forms and Instructions
The following forms and instructions are provided for preparing your application for a
Renewable Energy Fund Grant. An electronic version of the Request for Applications
(RFA) and the forms are available online at
http://www.akenergyauthority.org/RE_Fund.html
The following application forms are required to be submitted for a grant recommendation:
Grant Application
Form
GrantApp.doc Application form in MS Word that includes an outline of
information required to submit a complete application.
Applicants should use the form to assure all information is
provided and attach additional information as required.
Application Cost
Worksheet
Costworksheet.doc Summary of Cost information that should be addressed
by applicants in preparing their application.
Grant Budget
Form
GrantBudget.xls A detailed grant budget that includes a breakdown of
costs by task and a summary of funds available and
requested to complete the work for which funds are being
requested.
Grant Budget
Form Instructions
GrantBudgetInstr.pdf Instructions for completing the above grant budget form.
If you are applying for grants for more than one project, provide separate application
forms for each project.
Multiple phases for the same project may be submitted as one application.
If you are applying for grant funding for more than one phase of a project, provide a plan
and grant budget for completion of each phase.
If some work has already been completed on your project and you are requesting funding
for an advanced phase, submit information sufficient to demonstrate that the preceding
phases are satisfied and funding for an advanced phase is warranted.
If you have additional information or reports you would like the Authority to consider in
reviewing your application, either provide an electronic version of the document with your
submission or reference a web link where it can be downloaded or reviewed.
REMINDER:
Alaska Energy Authority is subject to the Public Records Act, AS 40.25 and materials
submitted to the Authority may be subject to disclosure requirements under the act if no
statutory exemptions apply.
All applications received will be posted on the Authority web site after final
recommendations are made to the legislature.
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Grant Application
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SECTION 1 – APPLICANT INFORMATION
Name (Name of utility, IPP, or government entity submitting proposal)
Alaska Wind Power LLC
Type of Entity:
Private Wind Energy Developer, eventually to be an Independent Power Producer
Mailing Address
10600 Prospect Drive
Anchorage, AK 99507-6494
Physical Address
10600 Prospect Drive
Anchorage, AK 99507-6494
Telephone
907 248-7188
Fax
907 248-7278
Email
lapres@gci.net
1.1 APPLICANT POINT OF CONTACT
Name
David W. Lappi
Title
Member
Mailing Address
10600 Prospect Drive
Anchorage, AK 99507-6494
Telephone
907 248-7188
Fax
907 248-7278
Email
lapres@gci.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
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.)
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Grant Application
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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.
On April 17, 2007, the Alaska Department of Natural Resources (DNR) issued a Land Use Permit to Alaska
Wind Power LLC to construct temporary meteorological towers on state property within the Delta River area
south of Delta Junction. The data collected by the towers support moving forward to develop the area’s wind
energy resources. We are now in the Final Design/Permitting phase of the Delta Wind Project. These grant
funds will be used to help conduct avian studies to identify potential problems with our proposed wind
turbine siting. These are key studies intended to finalize our wind farm design and help complete our
permitting requirements.
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.
The Delta Wind Project is designed to contribute clean, renewable wind power to the railbelt energy grid. The
project area is about 25 miles south of Delta Junction on Coal Mine Road. We are currently funding an
Interconnection Study with Golden Valley Electric Association (GVEA) to identify costs associated with
putting wind power on their transmission system near Delta Junction. The results of the interconnection
study will be used to formulate a power tariff for sale of our power to GVEA. The size of our project is
dependent on our ability to sell power, not on the wind resource, but we expect that a 40 to 50 MW project
could be achievable. The communities served will include all communities within the GVEA’s service area
that purchase power from GVEA, including Delta Junction, North Pole, Fairbanks, Fox, College, Nenana,
and Healy, as well as two major gold mines, Fort Knox and Pogo.
The grant participants will include Alaska Wind Power LLC (the project owner) and an environmental
contactor, yet to be selected, to conduct the field work and report the results. The federal Bureau of Land
Management has not identified any threatened or endangered species of wildlife in the project area.
However, the area does include “potential” habitat for at least four species of birds currently listed on BLM-
Alaska’s Sensitive Status Species List. Pre-development surveys should be conducted within the project area
to locate any sensitive species of concern. The avian surveys that are the subject of this grant application are
described below.
Task 1—Raptor Survey
To locate eagle nests in the vicinity of the wind farm, we would conduct a fixed-wing aerial survey to
search for active Bald or Golden eagle nests within 10 miles of all proposed wind farm facilities. A raptor
biologist will accompany a pilot (Piper Supercub) for 1 day of surveys.
Task 2—Spring Migration Surveys (Diurnal)
Spring migration occurs in the area from about early April to mid May, with peak periods for species
varying during that time span, thus prolonged sampling would be cost-prohibitive. Instead, we suggest a
targeted approach to sample periods when the most birds and species would be moving through the area. A
biological technician will collect daily observations during two 10-day windows (20 days total) to help
characterize the species, relative abundance, and distributional use (geographic and altitudinal) of birds using
the proposed wind farm.
Task 3—Summer Bird Use at the Wind farm Site
Summer bird use of the wind farm area is primarily associated with the local breeding populations, and
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Grant Application
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the objective of this task is to characterize use of the area by breeding birds. A biological technician will
collect bird observations during six 1-day visits to the wind farm site in summer. Two visits will occur in
each month during June, July, and August.
Task 4—Fall Migration Surveys (Diurnal)
Fall migration in the area is more prolonged than spring migration, but most larger migratory birds
(waterfowl and cranes) move through the area in late August to early October. To characterize fall migration,
a biological technician will collect daily observations during three 9-day periods and record species, relative
abundance, and distribution (geographic and altitudinal) of birds using the proposed wind farm site.
Task 5—Fall Migration Surveys (Nocturnal)
Because many species groups (e.g., waterfowl, passerines) migrate during the night, nocturnal
techniques (such as radar) are required to assess migration. We propose to measure nocturnal migration rates
and characteristics (e.g., altitude and direction) with a mobile radar lab, concurrent with diurnal investiga tions
for three 9-day periods. We are recommending radar monitoring only for fall migration because 1) the
nocturnal period then is longer than during spring, 2) more birds, including young-of-the-year (i.e., less
experienced flyers) travel through the Tanana Valley in fall, and 3) we believe some nocturnal studies will
occur in spring 2009 close to Delta Junction .
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.
We are applying for a grant of $105,000 for these avian studies, and we will contribute $26,250 for a project
total of $131,250. This provides for a 21% match by our company.
The budget for the proposed avian study is shown below.
Assuming that we will be able to access good locations to conduct ground-based surveys during the spring,
summer, and fall of 2009 (e.g., end of Coal Mine Road), the budget estimate for each task follows.
Task 1—Raptor survey ~$8,550
Task 2—Spring Migration Surveys ~$32,900
Task 3—Summer Site Assessments ~$11,900
Task 4—Fall Migration Surveys (Diurnal) ~$39,900
Task 5—Fall Migration Surveys (Nocturnal/radar) ~$38,000
Total: ~$131,250
The budget for the entire Delta Wind Project is shown below.
Permits, Met, Envir, Design Studies, Legal $3.0
Road Construction 6.0 (12 miles in ideal construction conditions)
Control & Maintenance Building .6
Foundations for Turbines 8.0 (20 x $400k each)
Crane for Turbine Construction 4.0 (rental and mob/demob)
Turbines, Towers & Commissioning 60.0 (40 MW at $1.5 mill/MW)
Transmission to Delta Junction 6.0 (20 miles X $300k per mile)
Transformer Station to 138KV 5.0
Underground Power Collection 3.0
Hookup 0.4
Total: $96.0 million
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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.
This Study:
Alaska Wind Power LLC is proposing to build a wind farm east of the Richardson Highway in the Jarvis
Creek area, near Delta Junction, Alaska. Avian issues are often a concern at wind farm facilities because of
the potential for disturbance, habitat avoidance, and mortalities or injuries from collisions. Although the
proposed site is some distance from the Tanana Valley, which is well known for its crane and waterbird
migration, some migratory movements of birds are likely to occur over the site. All migratory birds using the
area are protected by the Migratory Bird Treaty Act. Bald and Golden eagles are also protected further by the
Eagle Protection Act. The proposed avian studies would characterize avian populations using the wind farm
area. Specifically, this study will collect information on species use, relative abundance, flight characteristics,
and assess the risks that these species might have within the wind farm area.
The Delta Wind Project Generally:
GVEA is currently producing about one-third of their power from liquid hydrocarbons, one-third from coal,
and purchasing another third from Southcentral Alaska utilities through the Northern Intertie. The Delta Wind
Project will likely displace GVEA’s most expensive power, which is peaking power made from liquid
hydrocarbons. Delta Wind Project generation at the far end of GVEA’s transmission system will diversify
their sources of supply geographically so they are not so heavily dependent on the integrity of the Northern
Intertie. With dynamic VAR support associated with the wind farm, GVEA’s grid could be strengthened by
regulating and stabilizing voltage levels. Our generation will provide an additional source of local power for
consumers in Delta Junction, reducing line losses a few percent from North Pole to Delta Junction. Several
large loads exist in the Delta Junction area: The Pogo Gold Mine, the Fort Greely Missile Defense site, and
the Alyeska Pipeline Pump Station 9. Just the missile site and pump station electrification have increased the
electric load by 30 MW within the last few years. All GVEA consumers could benefit from our project if oil
prices continue to rise, since our power price will be largely fixed and not fluctuate with Alaska’s oil and gas
prices. Environmentally, air pollution in North Pole will be reduced by the amount of fuel burn we displace
from GVEA’s liquid hydrocarbon generation there. This project is located on state land and will also serve
the state’s goals for responsibly developing, conserving, and enhancing Alaska’s natural resources for the use
by present and future Alaska.
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.)
$96 million
2.5.2 Grant Funds Requested in this application. $105,000
2.5.3 Other Funds to be provided (Project match) $ 26,250
2.5.4 Total Grant Costs (sum of 2.5.2 and 2.5.3) $131,250
2.5.5 Estimated Benefit (Savings) $??
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.)
$ 27.56 million
over 20 years (see below)
Our power purchase agreement is not yet negotiated with GVEA. If we save GVEA and
consumers just one cent per kWh over the price of generating electricity using liquid
hydrocarbons:
40 MW Wind Farm X 30 percent Capacity Factor X 8,760 hours per year =
about 105 million kW hours per year or more than
$1 million per year in savings, or more than $20 million over 20 years.
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If GVEA line losses from North Pole to Delta are 3 %, then our 105 million kW hours per year
saves consumers (our power will be consumed in Delta Junction, replacing power imported from
North Pole):
105 million kWh X $0.12/ kWh (average cost) X 0.03 =
$378,000 per year in savings, or $7.56 million over 20 years.
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.
Alaska Wind Power LLC is the manager. It is managed by its members, Alaska Power & Telephone
Company (AP&T), a certificated Alaska utility specializing in renewable energy (mainly hydropower),
and LAPP Resources, Inc.(LRI), an Alaska-owned private resource development company. AP&T’s CEO
is Mr. Bob Grimm and LRI’s CEO is Mr. David Lappi. Both have significant project management
experience.
AP&T’s web site (see http://www.aptalaska.com/index.php) describes the company as follows:
Recognized as one of the most progressive utilities in Alaska, the keys to AP&T's continued
success lay primarily in its willingness to promote and develop long-term reliable energy and
communication solutions while capitalizing on the innovation and technical expertise of its
skilled and dedicated employees.
AP&T currently provides service to communities located above the Arctic Circle, deep in the
Wrangell Mountains ,and throughout the islands of Southeast Alaska. We travel by boat,
floatplane, snow machine, riverboat, helicopter, and all terrain vehicles.
We maintain systems on windswept mountaintops and storm-battered islands. Our power and
telecommunications lines cross rainforest, taiga, and tundra. We operate facilities in places that
are among the wettest, driest, windiest, coldest, and most remote regions on earth. We live and
work in Alaska. [The low temperature in Tok last winter was -72.5° F, and the lights stayed on.]
Alaska Power & Telephone Company proudly marks 2007 as its 50th year of growth, innovation,
and leadership in the utility industry. AP&T serves over 30 communities stretching from the
Arctic Circle to the southernmost tip of Southeast Alaska. In five decades, AP&T moved from
humble beginnings to take a leadership role in the development of renewable resource energy in
Alaska. Through a combination of low impact hydro, wind, and experimental underwater river
turbine projects, AP&T’s 134 employee-owners work to further minimize our environmental
footprint while ensuring the availability of energy resources necessary for future years.
LAPP Resources, Inc. has been involved in the Alaska energy business since 1991. During the last 17
years, LRI has been instrumental in exploring new energy sources for both the rail belt and rural Alaska,
from wind energy, to remote sensing for geothermal exploration on the Alaska Peninsula, to shallow gas
and coalbed methane exploration in the Cook Inlet basin (see http://home.gci.net/~lapres/index.html).
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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.)
Spring 2009 – Two to three weeks of fieldwork involving one or two biologists in the field studying bird
use and spring migration patterns for the wind farm region. Radars may be used for night-time bird
tracking.
Fall 2009 – Three to four weeks of fieldwork involving one or two biologists in the field studying bird use
and fall migration patterns for the wind farm region. Radars may be used for night-time bird tracking.
3.3 Project Milestones
Define key tasks and decision points in your project and a schedule for achieving them.
Task Time Period
Identify Contractors Fall 08
Request Proposals Fall 08
Evaluate Proposals Fall 08
Award Contract Winter 08/09
Conduct Spring Fieldwork Spring 09
Evaluate Results Summer 09
Conduct Fall Fieldwork Fall 09
Evaluate Overall Results Fall 09
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.
This project will be managed by Mr. David W. Lappi for Alaska Wind Power LLC.
Contractors for this project have not yet been selected. I have had discussions with ABR Environmental
in Fairbanks (see http://www.abrinc.com/), regarding the likely work requirements and budgets.
The State of Alaska Department of Natural Resources and the US Fish and Wildlife Service will also be
involved in designing this study The contractor selected for the study will ideally have experience with
local bird populations and have radar units available to use at that time.
3.5 Project Communications
Discuss how you plan to monitor the project and keep the Authority informed of the status.
Alaska Wind Power will work closely with the selected contractor and keep the AEA informed of
progress by regular e-mail updates as components of the project are completed. The contractor’s Interim
and Final reports will be submitted promptly when completed. Further details may be specified in the
final Grant Agreement.
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3.6 Project Risk
Discuss potential problems and how you would address them.
The avian studies have a low completion risk associated with them. The bird studies could uncover a
conflict between our wind farm proposal and the area’s avian resources. In that case, various mitigation
measures could be evaluated, for instance turbine sites could be moved.
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 wind energy resource of the Delta Wind Project has been evaluated with two met towers, one
for 21 months, and the other for nine months . This monitoring has demonstrated the economic
viability of a 40-50 MW wind farm. The limiting factor for wind energy capture in this region is
the amount of wind power that can be integrated into the GVEA grid, not the wind resource. Our
wind resource is unusual in that useful winds blow only from the south, the area has a high
percentage of calm days, but when the winds blow, they are generally strong, providing enough
power to maximize wind turbine efficiency.
Pros: Our project will allow more of our fossil fuels to be exported to regions where wind
generation is not an option, and improve our air quality in the Fairbanks region. Our wind resource
is a known resource that can be developed using thoroughly tested and proven wind turbine
technology within the short term to help meet the energy needs of a growing region of the State.
Other options as sources of power for Fairbanks include continued reliance on fossil fuels, which
currently supplies more than 90% of the market. Locally-used fossil fuels include oil refinery
byproducts from the North Pole Refinery (supplies 1/3rd of GVEA’s demand), and coal from the
Usibelli Coal Mine near Healy (1/3rd). Purchased electricity from Southcentral Alaska is generated
about 90% from Cook Inlet natural gas and 10% from hydro (1/3rd). GVEA also receives about 20
MW from the hydroelectric facility at Bradley Lake on the Kenai Peninsula near Homer. The
Healy Clean Coal Plant could be re-started to generate more coal-fired electricity if the contractual,
technical, and regulatory hurdles could be overcome, but GVEA may not be the beneficiary of this
electricity.
In the intermediate future, a gas pipeline may be built from the North Slope to Fairbanks, but
neither the schedule for construction and completion, nor the price of natural gas from this source
is currently known.
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All fossil fuel sources of electricity could be subject to future “cap and trade” or “carbon tax”
regimes designed to reduce CO2 emissions growth or output. The makeup of our future Congress
and Presidential administration may make these measures quite likely to pass. Wind power will not
be subject to these added costs.
Other renewable sources include solar and in-stream hydro (Tanana River), both of which are not
available during high-demand winter months. Neither option is likely to be economic within the
near future. Geothermal energy could be available in the region (e.g., Manley and Chena Hot
Springs), but new and expensive exploration of the potential sources would be needed.
Cons: Arguments against building our proposed project include the largely unfounded perception
that wind farms “kill too many birds”, and fears that visual resources of the area will be altered.
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.
Golden Valley Electric Association currently gets about one third of its power from each of the
following sources: Healy coal, power purchased from Southcentral Alaska utilities, and refinery
byproducts from the North Pole Oil Refinery. GVEA’s peak system load was 223 MW at 5:00 pm
on December 19, 2007. It was -33 degrees F at the time.
Coal: Healy coal is transported to six Interior Alaska electrical power plants - including three
military sites: Fort Wainwright (U.S. Army), Eielson Air Force Base and Clear Air Force Station;
Golden Valley Electric Association (Fairbanks' electric cooperative); Aurora Energy (a wholesale
supplier of electricity and provider of district heat in Fairbanks); and the University of Alaska
Fairbanks power plant.
Purchased Power: Power purchased from Southcentral utilities is imported through the Northern
Intertie. About 80 percent of it is generated using simple cycle natural gas turbines in several
locations, generally at efficiencies of about 35 to 40 percent. Southcentral is running short of
natural gas and this scarce resource could be used more efficiently for space heating of homes and
businesses (more than 90% efficiency in modern furnaces).
Liquid Hydrocarbon Generation: The GVEA generation plant at North Pole burns refinery
byproducts; HAGO (heavy atmospheric gas oil) for 120 MW and naphtha for an additional 60 MW
(built 2007).
Alaska Wind Power is currently undertaking an interconnection study administered by GVEA
through their system stability consultants, Power Engineers. This study should be complete by the
end of the year and will identify the design, equipment, and operating procedures required to
ensure GVEA’s system stability when accepting power from our wind farm in the Delta region.
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.
See above. We have begun an interconnection study through GVEA to identify necessary measures
to minimize the impact of wind power integration on their grid. This study will likely be competed
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by the end of 2008. Our project will benefit air quality in North Pole, since less fuel will need to be
burned there to follow GVEA’s load.
4.2.3 Existing Energy Market
Discuss existing energy use and its market. Discuss impacts your project may have on
energy customers.
Fairbanks is a modern city of about 80,000 people in central Alaska. This city and a few outlying
connected communities will consume the electricity generated by this project. In addition to
Fairbanks, those cities are Delta Junction, Big Delta, Salcha, North Pole, Fox, Ester, Nenana, and
Healy. In addition, several large industrial users will benefit, e.g., Fort Knox Gold Mine, Pogo
Gold Mine, Fort Greely Missile Defense, and Alyeska Pump Station 9. We believe that our project
will help shelter GVEA’s customers from the effects of carbon taxes or emissions trading schemes
that we believe are about to be implemented. GVEA’s customers are now about 90% exposed to
the full brunt of those taxes since 90% of their generation is coming from fossil fuels.
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 Delta Wind Project will generate renewable electricity from wind resources in the
Jarvis Creek region near Delta Junction.
The optimum installed capacity will be dependent on our power purchase contract with
GVEA, the local utility, and is not limited by the wind resource available.
We anticipate a minimum capacity factor of 30 percent.
The project will generate about 105 million kW hours per year from 40 MW of nameplate
installed capacity, more capacity will be installed if power sales agreements allow.
Barriers include an adequate power purchase agreement with the utility being negotiated,
or unanticipated wildlife or bird issues arising from our specific site.
Step-up transformers and a 20 mile long 138 KV transmission line will be built to get our
power to the GVEA grid. An integration study is underway now to identify grid integration
issues.
The power will be sold wholesale to GVEA and delivered to consumers by GVEA as it is
now.
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.
The access route and site are vacant State land that is currently held under a 36 square mile State
Land Use Permit. The University of Alaska has selected (but has not yet received) most of this area
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for ownership as part of its land grant from the 2005 State Legislature. We have held a “pre-
application meeting” with University and government stakeholders (US COE, F&WS, ADF&G,
DNR, DEC, BLM) and we expect few impediments to project completion. Completion of our
avian and design studies is required to proceed to a State land lease for the wind farm site.
We also hold another six square miles of adjacent Federal land as a three-year BLM Wind Right of
Way, allowing us to study the wind resource and propose a final development plan. At this time,
the State lands look like a better wind resource, so no development of BLM lands is now proposed.
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
Wetlands Permit (if applicable) - Fall and Winter 2008
SHPO Review - Fall and Winter 2008
Interconnection and Power Purchase Agreement – Summer 2009
ADF&G habitat permit - Fall 2009
State land lease - Fall 2009
Various construction permits – 2010.
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
For the wind farm proposal generally:
No threatened or endangered species are known in the local area. The avian studies that are
the subject of this grant application are a key element of our environmental study.
The area is used by moose and caribou (Macomb Herd). Few wind farms have been built
in caribou habitat.
Small wetlands exist near kettle lakes along the proposed road ROW. The road will avoid
wetlands.
Few archaeological and historical resources are known in the area. The area was glaciated
a few thousand years ago, so old resources are probably absent. Coal Mine Road goes to an
old coal prospect and some relict mining equipment remains.
There are no known land development constraints, aside from winter winds that at times
exceed 100 mph and develop large snowdrifts in sheltered areas.
Telecommunication interference is unlikely. There are no businesses and few residences
within 20 miles of the site.
Aviation use of the area is frequent, since it is near the Trans Alaska Pipeline, and between
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the military Donnelly Training Area/Fort Greely and Black Rapids Training Camp.
Military airspace overlies the site, and civilian airmen often fly along the Delta River
Valley that contains the Richardson Highway. Notices to Airmen and obstruction lights on
met towers and turbines will alert the aviation community of the potential hazard.
Aesthetic and visual impacts will be reduced by locating the wind farm several miles from
the Richardson Highway where the majority of travelers will not see it from close quarters.
Some find wind turbines graceful additions to the countryside, a reminder that we can live
well while reducing our use of fossil fuels. About half of the transmission line is adjacent
to the Richardson Highway, and the southern half is along our proposed access road. Most
travelers will not see the southern half of the line, since it will be some distance away from
the Richardson Highway.
GVEA has a wind farm proposal at Eva Creek, near Healy, that could potentially compete
for market share with our proposed wind farm. Ideally, both farms could be
accommodated, since geographic diversification for this form of distributed generation will
make wind power more reliable and subject to fewer output swings. A suitable power
purchase agreement with GVEA is a key element of our project. Environmental studies
could uncover unknown animal or bird issues that could impact our proposal.
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 total estimated project cost for a 40 MW project is $96 million.
This phase of the project is for avian studies, at $131,250 ($105,000 this grant application).
Company capital contribution matching funds and labor, $26,250.
Other funding sources could include project loan funds and/or joint venture with others.
Alaska’s Power Project Loan Fund could be used to fund this and other railbelt energy
developments using tax-free bond financing for reduced loan costs.
The total estimated project capital cost for a 40 MW project is $96 million.
The total estimated project development cost (for studies) for the project is $3.0 million.
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
For this grant application, there is no O&M cost associated with the avian studies.
For the Delta Wind Project, direct O&M costs are estimated at about one cent per kWh.
More definitive numbers will be available as the final design is settled.
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 13 of 17 9/3/2008
This grant application has requested $105,000 for avian studies worth $131,250.
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
No wholesale power purchase agreement has been negotiated at this time with Golden
Valley Electric Association (GVEA).
We expect that the sale of our power will be at rates close to GVEA’s actual avoided cost.
We expect that the majority of our project will be funded using project loans, not grants.
When commissioned, our project will help GVEA meet its increasing energy requirements,
stabilize its power costs, and avoid a portion of future taxes on carbon fuels or CO2
emissions.
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.
GVEA’s 2007 Annual Report states that their original turbine at North Pole burns 4,300 gallons of
fuel each hour to make 60 megawatts of electricity. We assume that our wind generation would
replace the most inefficient turbine on the system, saving this amount of fuel each hour.
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 14 of 17 9/3/2008
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.
We expect that the wind resource will continue to be available in the area for the foreseeable
future.
Alaska Wind Power LLC will operate this project as an independent power producer on the GVEA
system, selling wholesale power to GVEA for distribution to its customers. Our power purchase
agreement will allow for adjustments to prices based on inflation and other market conditions,
allowing us to continue operations for the long term.
4.4.6 Analysis and Recommendations
Provide information about the economic analysis and the proposed project. Discuss your
recommendation for additional project development work.
We have visited wind energy sites and visited with wind energy companies in many areas of the
USA. In some of those areas, operating conditions are just as difficult as the Delta area. Wind
energy companies, with rare exceptions, are able to make sustainable operations in areas with
much lower power costs than Delta. Our wind resource studies over the last two years, and our
economic analyses indicate that the Delta region has a viable wind energy resource that can be
harnessed and sold on a sustainable basis for local consumption.
Further project development work includes refining turbine location selections based on the latest
wind resource, geotechnical, avian, and wildlife studies, and completing the GVEA grid integration
and interconnection studies. A key development effort will be the negotiation of the Power
Purchase Agreement with GVEA in a form that allows for long-term project construction debt
financing.
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 15 of 17 9/3/2008
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 annual fuel displacement is over 7 million gallons, based on published efficiencies of
turbines at GVEA’s North Pole facility. If we save the consumer just one cent on the cost
of power produced from liquid fuels, we will save GVEA customers more than $1 million
per year, or more than $20 million over the 20 year life of the wind turbines (they would
be replaced by newer more efficient models at that time).
Our power purchase agreement will specify the price for our power so we can’t tell what
the annual revenue is at this time, but it will be sufficient to operate the wind farm over the
long term, or we will not build it. We are a Qualifying Facility as defined by the Federal
Energy Regulatory Commission, and thus are able to sell our power to GVEA at their RCA
published avoided cost, less the cost of wind integration (if any).
Federal Tax Credits for wind include the two cent per kWh Production Tax Credit (PTC)
that was recently renewed by Congress for a further year. Our project will proceed even if
this tax credit fails to be extended next year, although it helps the project economics to
have it.
Renewable attributes for our project will be sold, hopefully to the highest and best bidder,
to further assist with project economics.
Non-economic public benefits:
We believe the Delta Wind Project will be an asset to the community of Delta
Junction and the Interior generally, and we expect that tourists, locals, and school
children will want to tour the wind farm and understand its operation
Another public benefit are the jobs created by the construction and operation of the
wind farm. This stable, long-term project will create local employment for a few
people and many temporary jobs during the construction phase. This employment
will be good for the town of Delta Junction.
The Delta Wind Project will displace about seven million gallons of hydrocarbons
per year that are currently being burned in combustion turbines in North Pole to
generate power. This will allow the liquids to be exported through the Trans
Alaska Pipeline system to the Lower-48 to reduce their need to import oil from
foreign countries in distant, unstable parts of the world. Some would say that this
is a step toward environmental, social, and economic justice. We think that
American energy self-sufficiency is a worthy goal, and the Delta Wind Project is
another step toward attainment of that goal.
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 16 of 17 9/3/2008
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
The Delta Wind Project will consist of a 40 to 50 MW wind farm and a 20 mile long transmission
line to the end of the GVEA transmission system near Delta Junction. The project budget is $96
million, comprising $93 million for capital construction, and $3.0 million for development studies
and permitting. We have pursued this project for nearly two years using our own funds and labor,
with two meteorological towers on the site collecting 10-minute average wind resource data daily.
We have completed preliminary design of the new proposed access road and have a turbine layout
plan in place.
Earlier this year on February 12 we applied for and were granted an AEA grant for $100,000 in
“pre-construction funding”, but the grant agreement is not in place and those funds are not yet
available. We will work with AEA to decide which portions of the project to apply those funds to.
This application applies for $105,000 for funds to conduct an Avian Study of the Delta Wind
Project area. The Study will cost $131,250 and we will supply the extra matching $26,250 from
our company funds and in-kind contributions.
We expect the project and other good railbelt projects will qualify for long-term project debt
financing and thus preserve the State Renewable Energy Fund grant monies for smaller -scale
projects in rural areas where long-term debt may be more difficult or impossible to get.
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 17 of 17 9/3/2008
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
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 David W. Lappi
Signature
Title Member
Date October 8, 2008