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HomeMy WebLinkAboutYakutat Power Wood Gasification Biomass Project AppALASKA Renewable Energy Fund ENERGY AUTHORITY Grant Application Application Forms and Instructions The following forms and instructions are provided for preparing your application for a Renewable Energy Fund Grant. An electronic version of the Request for Applications (RFA) and the forms are available online at http://www.akenergyauthority.org/RE Fund.html The following application forms are required to be submitted for a grant recommendation: Grant Application GrantApp.doc Application form in MS Word that includes an outline of Form information required to submit a complete application. Applicants should use the form to assure all information is provided and attach additional information as required. Application Cost Costworksheet.doc Summary of Cost information that should be addressed Worksheet applicants in preparing their application. Grant Budget GrantBudget.xls _by A detailed grant budget that includes a breakdown of Form costs by task and a summary of funds available and requested to complete the work for which funds are being requested. Grant Budget GrantBudgetlnstr.pdf Instructions for completing the above grant budget form. Form Instructions • If you are applying for grants for more than one project, provide separate application forms for each project. • Multiple phases for the same project may be submitted as one application. • If you are applying for grant funding for more than one phase of a project, provide a plan and grant budget for completion of each phase. • If some work has already been completed on your project and you are requesting funding for an advanced phase, submit information sufficient to demonstrate that the preceding phases are satisfied and funding for an advanced phase is warranted. • If you have additional information or reports you would like the Authority to consider in reviewing your application, either provide an electronic version of the document with your submission or reference a web link where it can be downloaded or reviewed. REMINDER: • Alaska Energy Authority is subject to the Public Records Act, AS 40.25 and materials submitted to the Authority may be subject to disclosure requirements under the act if no statutory exemptions apply. • All applications received will be posted on the Authority web site after final recommendations are made to the legislature. AEA 09-004 Grant Application Page 1 of 14 9/2/2008 /449FIE-1 ALASKA 4V_ ', ENERGY AUTHORITY Renewable Energy Fund Grant Application SECTION I —APPLICANT INFORMATION Name (Name of utility, IPP, or government entity submitting proposal) Yaku At Power Type of Entity: Certificated Electric utility Mailing Address Physical Address Yakutat Power PO Box 129 Same Yakutat, Alaska 99689 Telephone Fax Email 1.1 APPLICANT POINT OF CONTACT Name Title Scott Newlun General Manager Mailing Address Yakutat Power PO Box 129 Yakutat, Alaska 99689 Telephone Fax Email 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) X An electric utility holding a certificate of public convenience and necessity under AS 42.05, or An independent power producer, or A local government, or A governmental entity (which includes tribal councils and housing authorities); Fe--sl 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 or No collaborative grouping, a formal approval from each participant's governing _94- authority is necessary. (Indicate Yes or No in the box ) 11.1 As an applicant, we have administrative and financial management systems and follow procurement standards that comply with the standards set forth in the grant or No agreement. Eg- 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 or No application) SECTION I — APPLICANT INFORMATION Name (Name of utility, /PP, or government entity submitting proposal) AEA 0S-004Grant Application Page 2of14 9/3/2008 IA L A S K A Renewable Energy Fund "? ENERGY AUTHORITY Grant Application SECTION 2 —'PROJECT SUMMARY Provide a brief 1-2 page overview of your project. 2.1 'PROJECT TYPE Describe the type of project you are proposing, (Reconnaissance; Resource Assessrmentl' Feasibility Analysis/Conceptual Design; Final Designand Permitting; andlor Construction) as well as the kind of renewable energy you intend to use. Refer to Section' 1.5 of RFA. We are proposing for Final Design and Permitting (Phase III) and Construction (Phase IV) of a wood gasification biomass system to reduce diesel fuel consumption of the existing Yakutat Power plant. This project will use locally available biomass (wood) to offset the diesel fuel consumption of a diesel genset. The project will take place in phases to provide adequate time to test, and possibly troubleshoot the technology. Phase III will include a biomass resource selection for a small scale pilot project rated at 75 kW. The proposed technology will be a "pre -commercial" wood gasification and diesel engine generation package developed by Community Power Corp (CPC), called the "Biomax 75." While the Biomax package design has already been developed by CPC, this phase of the project will include: • design an effective wood storage and handling system in Yakutat • complete environmental permitting • integrate the Biomax 75 electrical output into the Yakutat Power grid • work with the local forestry service and native corporation to identify and select the wood biomass resource The next step will be to install the Biomax 75, interface it with the wood storage and handling system, and perform a series of load tests prior to connecting to the electric grid. Once connected to the grid, the system will run for an extended period of time (up to 8,000 hours) at a combination of steady state and variable loads. After this time, the diesel engine will be torn down and inspected. Subject to the test engine passing inspection, the next step in the project will be to integrate the wood gasification system into one of the existing power plant electronically controlled CAT gensets. This phase will also include doubling the wood gasification plant output to provide the equivalent fuel necessary to generate up to 150 kW. This genset will also operate for up to 8,000 hours using the wood gasification fuel, prior to undergoing a rigorous inspection. Subject to successful completion of inspection, the final step will be to increase the wood gasification capacity to 450 kW. The Yakutat power plant is an existing facility in operation prior to August 20, 2008. The proposed wood gasification project is a new project that is not in operation. 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. Yakutat Power is located in Yakutat, Alaska. The City and Borough of Yakutat has a population of 631, and is located at the mouth of Yakutat Bay along the Gulf of Alaska, 225 miles northwest of Juneau and 220 miles southeast of Cordova. Yakutat receives monthly barge service during the winter and more frequent service during summer. Yakutat is equipped with two jet -certified runways and receives jet service daily. The U.S. Forest Service and the National Park Service have offices in Yakutat. This project will convert readily available biomass to a producer gas (wood gasification) that will be used to reduce diesel fuel consumption at the Yakutat Power plant. The Biomax 75 is based on proven technology with recent additional improvements for use in cold weather climates. Direct beneficiaries of this project include all Yakutat Power electric service customers. Participants in the project include Yakutat Power, the City and Borough of Yakutat, the U.S. Forestry Service, National Park Service, and Community Power Corp — the Biomax 75 developer. Yakutat Power will be the Grantee under the Renewable Energy Fund grant. Yakutat Power has teamed AEA 09-004 Grant Application Page 3 of 14 9/3/2008 / 4V__ 4VLALASKA WL ENERGY AUTHORITY Renewable Energy Fund Grant Application up with the engineering firm of Alaska Energy and Engineering, Inc. (AE&E) to provide design, permitting, and system integration and construction management. AE&E has a long history of successful energy -related projects throughout Alaska, and has worked with Yakutat Power on several energy -related projects dating back to 1991. The estimated cost of construction for all four phases is $3,394,000. Of this amount, Yakutat Power will provide a project match as a contribution in aid of construction in the amount of $210,000. The balance requested for this project from the Renewable Energy Grant Fund is $3,184,000. There are a variety of sources of capital that may be available for this project, including Department of Agriculture, Rural Utilities Service grants and loans, Denali Commission funding, private financing and commercial loans. However, due to the excellent potential for this technology to have widespread application in many parts of Alaska, and the extended proof -of -concept test period required to document the validity of this technology, Yakutat Power is requesting full funding from the Renewable Energy Fund grant program so that we may proceed immediately with this project. Yakutat Power Wood Gasification Budget DESIGN / PERMITTING I TESTING $1,305,000 CAT INTEGRATION $850,000 COMMERCIALIZATION $705,000 CONSTRUCTION SUB -TOTAL $2,860,000 DESIGN AND CONSTRUCTION ADMIN. $108,000 CONSTRUCTION MANAGEMENT $100,000 PROJECT SUB -TOTAL $3,068,000 LOCAL MATCH FUNDS $-240,000 GRANT REQUEST SUB -TOTAL 2,828,000 CONTINGENCY @ 20% $565,600 TOTAL GRANT REQUEST $3,393,600 TOTAL LOCAL MATCH FUNDS note 1 $240,000 TOTAL PROJECT COST $3,633,600 Note 1: In addition to the cash match above, Yakutat Power is also providing a CAT 3508E genset for use in the 3rd step of the project 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. Financial/economic benefits The financial benefits to the community of Yakutat are a combination of a reduction in the cost of electricity and the creation of jobs to harvest and supply the wood fuel. Initial diesel fuel savings during the first three years of development and testing total only a modest I85,000-galIons. However, the infusion of cash into the community to harvest the wood during this timeframe is estimated at $599,000, based on an assumed cost of $200/cord. In year 4, once the plant is fully operational and operating at 450 M the fuel savings increase to 250,000-gallons/year and earned income for wood harvesting increases to $675,000/year. AEA 09-004 Grant Application Page 4 of 14 9/3/2008 WE ALASM ENERGY AUTHORITY Renewable Energy Fund Grant Application The economic benefit of a 250,000-gallon fuel reduction at today's fuel price of $4.71/gallon equates to over $1 million in fuel savings. Other benefits to Alaskan public ... The most significant benefit to the Alaska public will be the testing and development of a viable fuel substitution technology, which may substantially reduce the cost of power in other remote areas of Alaska, as well as provide productive employment for those who provide the wood fuel. 2.5 PROJECT COST AND BENEFIT SUMARY (Year'4, with 100% Grant Funds) Include a summary of your project's total costs and benefits below. 2.5.1 Total Project Cost (including" estimates through construction. $3,633,600 2.5.2 Grant Funds Requested in this application. $3,393,600 2.5.3 Other Funds to be provided (Project match) $ 240,000 2.5.4 Total Grant Costs (sum of 2.6.2 and 2.5.3) ' $3,633,600 2.5.5 Estimated Benefit (Savings) $ 584,000 2.SA 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.) Refer to above paragraph Yakutat Power will be the single point of contact and will execute all grant, contractual and administrative responsibilities. AE&E will provide all interface design, permitting, system integration, and construction management. Community Power Corp will provide the Biomax 75 wood gasifier plant. Scott Newlun, Yakutat General Manager, will be the Grant Manager. He will be the single point of contact with AEA and will execute all grant, contractual and administrative responsibilities. Mr. Newlin has 20 years of experience in the electric power generation field. He is skilled in tracking grants, communications, and in his ability to deal smoothly and professionally with executive officers, upper management, employees, vendors, and customers in day-to-day and occasionally adverse situations. Steven J. Stassel, P.E., AE&E president, will serve as the Project Manager. He will work with the Grant Manager to commit essential engineering disciplines to ensure a successful project. He will establish specific man hour and reimbursable budgets, and schedule the necessary technical staff. He will track specific contractual deliverables against the schedule to ensure adequate resources are available to meet critical milestones. He will analyze all relevant issues such as available shipping options, permitting and site control issues, and procurement requirements. Drawing on the expertise of our team, he will assign specific project tasks to responsible team members. Mr. Stassel will oversee all technical work and coordinate the efforts of our team to ensure the efficient and cost effective production of project designs. He will develop a realistic project schedule to address critical issues in proper sequence to minimize cost and maximize construction resources. Mr. Stassel will be directly responsible for the quality of all work produced by our team. He will oversee and review all critical tasks and provide input and support on all significant design issues. He will ensure that design review comments from the Authority and Yakutat Power are adequately addressed and AEA 09-004 Grant Application Page 5 of 14 9/3/2008 j ALASKA ENERGY AUTHORITY Renewable Energy Fund Grant Application incorporated into final design documents, and he will manage the logistics of construction support. His working relationship with Authority staff and Yakutat Power dates to the early 1990s. As president of AE&E, Mr. Stassel has the authority to assign the technical personnel and resources necessary to successfully complete this project. 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.) SELECTION ORDER BIOMAX 75 W1 GENSET PREP WOOD STORAGE BIOMAX 75 • • PROJECT ...�........- INSTALL 2"DBIOMAX AND INTO CAT INSPECTIONINTEGRATE TEARDOWN AND GO / NO GO DECISION MS-TALLI INTEGRATE/ STARTUP ■■■■■■■■■■■■■■®. FINAL TESTING .............MW® 3.3 Project Milestones Define key tasks and decision points in your project and a schedule for achieving them. Project milestones (see above table for details of components and dates) include: • Design, NEPA Permitting, Resource Selection o A reconnaissance level study has been completed and the CPC Biomax 75 technology selected. Design, NEPA project level permitting, and resource selection (Phase III) will occur during calendar year 2009. • Pilot Project Testing o Phase IV pilot testing of the Biomax 75 will take place during the 4 quarters of 2010. Upon completion of testing, engine tear down and inspection, a Go/No Go decision will be made. • CAT Integration o An additional 75 kW of capacity will be added and the Biomax system will be integrated AEA 09-004 Grant Application Page 6 of 14 9/3/2008 ALASKA WE-) ENERGY AUTHORITY Renewable Energy Fund Grant Application into the existing CAT 3508B and tested during the 4 quarters of 2011. Upon successful completion of testing 150 kW of Biomax capacity, engine tear down and inspection, a Go/No Go decision will be made regarding proceeding to the final phase. • Commercialization o An additional 300 kW of capacity will be integrated into the existing CAT 3508B. Final Commercialization Testing of the 450 kW Biomax will take place during the last 2 quarters of 2012. 3.4Project 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 you may use fo Yakutat Power has teamed with the engineering firm of Alaska Energy and Engineering, Inc. for system integration, design, permitting, and construction management of the project. As described above, CPC will provide the Biomax equipment and will be involved with the installation, startup, troubleshooting, and monitoring of the system. The project will be constructed using primarily utility and local force account labor. An experienced welder / foreman will perform all welding and piping work, and will oversee local labor. Locally available contractors will be used for the earthwork and installation of the Biomax modules. All major purchases and construction contracts will be in accordance with Yakutat Power procurement policies. Our proposed organization chart (below) for this project introduces and identifies key members of our team and shows the lines of authority. Each engineering discipline is led by a professional engineer registered in the State of Alaska. All engineering documents will be stamped by Alaska registered engineers. Refer to Appendix A for resumes of key personnel. ART ULLEY/CPC LEE BENSON/USE CONSTRUCTION MANAGEMENT AE&E AEA PROGRAM MANAGER YAKUTAT POWER GRANT MANAGER SCOTT NEWLUN a DESIGN / PERMITTING AE&E AEA CONTRACTS MANAGER TESTING / INSPECTION MARSH CREEK / NC POWER 3.5 Project Communications Discuss how you plan to monitor the project and keep the Authority informed of the status. Alaska Energy and Engineering is in communication with AEA staff on almost a daily basis. The Authority Project Manager will be kept up to date of the heat recovery project status by periodic email AEA 09-004 Grant Application Page 7 of 14 9/3/2008 f ALASKA ENERGYAUTNORITY Renewable Energy Fund Grant Application and/or verbal status reports, in addition to written quarterly reports that will be submitted by the Yakutat Power Grant Manager. Periodic reports will provide general information regarding project status and any unforeseen circumstances that need to be resolved. The quarterly Grant Manager reports will include specific information on project completion status vs. project schedule; project labor reports — including hours, rates and costs; and current project expenditures relative to budgeted project costs. AE&E has provided design and construction support services on over 80 energy infrastructure -related projects throughout Alaska over the past I S years. Our long-term working relationship with the Authority assures well -tested monitoring methods and seamless channels of communication. 3.6 Project Risk Discuss potential problems and how you would address them. There is an element of risk in any rural Alaska construction project; however, the risk associated with this project is well managed. A highly competent team of professionals has been assembled with the skills and motivation necessary to see this project through to successful completion. The project has been devised to proceed in distinct phases, with carefully planned go/no go decision intervals. In the unlikely event that the pilot project is unsuccessful, or Yakutat Power changes its direction or power production needs, the latter phases of the project may be postponed or cancelled with little additional risk. To minimize risk and maximize the outcome of this project, Yakutat Power is enlisting the services of Marsh Creek and NC Power Systems to perform the engine teardown and inspections. These two firms will also provide technical assistance on an as -needed basis for troubleshooting and system integration. Much of the vast land that surrounds Yakutat and in the outlying areas is managed by the U.S. Forest Service and Yak -Tat Kwaan corporation. Initial information indicates sufficient available biomass to ensure sustainability of the wood gasification project for many years. The available resource will be further evaluated and quantified during step I of this project. In addition to native wood biomass, the Biomax is capable of burning municipal waste. The existing Yakutat waste stream will also be evaluated to determine its applicability for this project Yakutat Power has evaluated several biomass options and determined the Biomax to be the most effective method of converting biomass to diesel fuel savings, refer to Appendix F for technical data. AEA 09-004 Grant Application Page 8 of 14 9/312008 AL.ASKA Renewable Energy Fund N) ENERGY AUTHORITY Grant Application 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 Yakutat Power plant generation equipment consists of four diesel generator sets (gensets) with a total generation capacity of 4,000 kW. The generation system is a 4160-volt Wye three-phase system. All generators operate at 1200 RPM. • Gen -set #1 anew CAT 3516B rated at 1322 kW • Gen -set #2 is a CAT 3512B rated at 880 kW. • Gen -set #3 is a CAT 3508B rated at 600 kW. • Gen -set #4 is a CAT 3516 rated at 1200 kW. The new 3516B is the primary genset. The 3512B and 3508B gensets operate on an as needed when the electric load exceeds the 3516B capacity, and when the 3516B is down for maintenance. The 3516 is nearing the end of its useful life and is used sparingly. The power plant has two separate cooling systems both with heat recovery capability. The 3516B and 3512B are on one common cooling loop, and the 3508B and the 3516 are on a separate cooling loop. Both cooling loops are 5-inch diameter welded steel piping with flanged butterfly valves, an AMOT valve, plate heat exchanger and a single radiator. 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. Fuel is delivered to Yakutat via barge year round and stored in bulk at the Delta Western tank farm. Fuel is delivered by truck to Yakutat Power, and local businesses and residents. A major investment was made in 2007 to replace an antiquated CAT 3412 with the new 351613, to increase the plants rated kW capacity A heat recovery system was installed in the early 1990s and provides heat to the Yakutat school complex nearby. Virtually all heating of the school complex is provided by the Yakutat power plant heat recovery system. The displacement of diesel fuel with biomass will reduce the total fuel throughput of the Delta Western fuel terminal. It is not anticipated that the reduction in Yakutat Power's diesel fuel use will have much of an impact on Delta Western. As indicated above, the wood biomass resource will be further evaluated at the first step of this project to ensure long term sustainability of the resource and the project. Yakutat Power uses approximately 400,000 gallons/year of diesel fuel to provide 6,600,000 kWh of electricity to customers in the city and borough of Yakutat. Starting in year 4 of the project, the Biomax system will provide up to 250,000 gallons of this diesel demand. The available jacket water heat from the existing heat recovery system is not expected to be affected by this project. When the biomass plant is fully operational, fuel savings would be about 250,000-gallons/year. At todays fuel price of $4.71/gallon that equates to over $1 million in fuel savings. In addition, earned income for wood harvesting would add $675,000/year into the community. AEA 09-004 Grant Application Page 9 of 14 9/3/2008 /4wFE:_ ALASKA ENERGY AUTHORITY Renewable Energy Fund Grant Application 4.3 Proposed System Include information necessary to describe the system you are intending to develop and address potential system design, land ownership, permits, and environmental issues. 4.3.1 System design Provide the following information for the proposed renewable energy system: • A description of renewable energy technology specific to project location • Optimum installed capacity • Anticipated capacity factor • Anticipated annual generation • Anticipated barriers • Basic integration concept • Delivery methods An evaluation was made of three different wood biomass technologies, two of the technologies were dismissed due to their poor efficiency, and the Biomax wood gasification selected for further analysis. Capital, operating and maintenance costs, and fuel efficiency of the Biomax system has been evaluated and compared against the existing diesel fueled generation system. The evaluation revealed that the Biomax system with a rated capacity of 450 kW provides substantial economic benefits compared to the existing status quo. Refer to Appendix F for technical data on the Biomax system The project site is located adjacent to the existing power plant on land owned by the City and Borough of Yakutat. The wood biomass is located on U.S. Forest Service and Native Corporation lands. Both the Forest Service and Yak -Tat Kwaan are in support of this project. The Forest Service has taken the lead on the previously mentioned reconnaissance level study, and is represented on our team by District Ranger Lee Benson. The permitting requirements for this project are not anticipated to be onerous. A NEPA project level environmental review will be performed to demonstrate and confirm the project will not have a negative impact to the human environment. There are no wetlands in the project area, the project will be located within a previously disturbed area adjacent to the existing power plant, an evaluation will be made to ensure there are no known archaeological or historic properties within the area of potential effect, and that no birds or mammals listed as endangered or threatened that will be impacted by the project. It is anticipated the NEPA environmental review will be completed during the third quarter of 2009. AEA 09-004 Grant Application Page 10 of 14 9/3/2008 ALASKA Renewable Energy Fund ENERGY AUTHORITY Grant Application AE&E has provided NEPA project level environmental permitting on over 40 energy related projects throughout Alaska during the past 10 years. Our understanding of the NEPA process and potential environmental impacts of our projects allows us to mitigate possible negative affects early in the design stage. The U.S. Forest Service brings to our team extensive knowledge with respect to permitting issues associated with the forest wood resources. As indicated in the above section, Environmental permitting is anticipated to be complete by the end 2009. 4.4 'Proposed New System Costs (TotalEstimated 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 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 cost information provided in this application is based on product cost information provided by CPC, the Biomax developer, and AE&E's 15-years of successfully designing and constructing energy related projects throughout Alaska. Our construction management experience helps keep us abreast of ever increasing construction costs. Total anticipated project cost: $3,633,600 Design / Permitting / Resource Selection: $ 249,600 Pilot Testing: $1,550,000 CAT Integration: $1,004,000 Commercialization: $ 830,000 Requested grant funding: $3,393,600 Applicant matching funds — loans, capital contributions, in -kind: $ 240,000 Identification of other funding sources: Operating Budget Projected capital cost of renewable energy system: $3,633,600 Projected development cost of renewable energy system: $1,550,000 AEA 09-004 Grant Application Page 11 of 14 9/3/2008 1�`-- ALASKA Renewable Energy Fund ENERGY AUTHORITY Grant Application 4.4.2 Project Operating and Maintenance Casts 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 • Reguested grant funding The operating and maintenance costs for the Biomax system is relatively minimal. Anticipated costs for O&M are $80,000/year The parasitic losses of the Biomax system are approximately 9 kW for 30-minutes on system startup, and reduces to 3 to 4 kW on steady state operation. The application includes funding for the teardown and inspection of the Biomax 75 test diesel engine, as well as ongoing systems improvements and troubleshooting. All other operating costs will be provided by Yakutat Power. 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 Since Yakutat Power is both the electric utility and project operator, there will be no power purchase agreement. The bus bar cost for electricity from this project in year 4 is estimated to be $.274/kWh, compared to a diesel fuel bus bar cost of $.385/kWh. Refer to cost benefit analysis in Appendix C for economic and financial information. 4.44 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. Refer to attached Cost Worksheet in Appendix B. 4.45 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. Yakutat Power will be owner of the biomass wood gasification system. Yakutat Power is a sustainable electric utility that is certificated by the Regulatory Commission of Alaska. Yakutat Power will use its utility staff and assets to maintain, operate, and sustain the wood gasification system. AEA 09-004 Grant Application Page 12 of 14 9/3/2008 1, ALASKA Renewable Energy Fund `<) ENERGY AUTHORITY Grant Application 4.46 Analysis and Recommendations Provide information about the economic analysis and the proposed project. Discuss your recommendation for additional project development work. The Alaska Mental Health Lands Trust, in cooperation with the City and Borough of Yakutat, prepared and issues August 22, 2008 a draft Wood Fuel Generation Plant Reconnaissance Level study. This report is not final, but a copy of the cover page and table of contents is included in Appendix F. It is the desire of Yakutat Power to furnish the final study to AEA as an addendum to the Application, upon publication of the final study. The study evaluated several types of wood biomass projects and determined that a wood gasification project in combination with a reciprocating internal combustion technology is the most appropriate technology for Yakutat. The study also addresses information on wood fuel requirements and resource availability. Yakutat Power, building on the information in the draft study, approached several technology vendors in search of an appropriate, near -commercially available wood gasifier product. Community Power Corp was selected as being the most applicable technology vendor for the Yakutat project. The Cost -Benefit analysis included in Appendix C provides detailed information on the estimated costs and benefits of the project. 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 noneconomic public benefits to Alaskans over the lifetime of the oroiect Refer to the Cost -Benefit analysis in Appendix C for fuel displacement, anticipated revenues, and estimated biomass and other resources needed to operate the facility. There are no known tax credits or other subsidies for a project of this type. Non -economic benefits to Alaskans include the reduction in diesel exhaust emissions realized by burning wood biomass, as well as the improved long term viability of Yakutat Power. SECTION6 — GRANT BUDGET Tell us how much your total project costs. Include any investments to date and funding sources, how much is requested in grant' funds, and additional investments you will make as an applicant. Include an estimate of budget costs by tasks using the form GrantBud et.xls Provide a narrative summary regarding funding sources and your financial commitment to the project. Total estimated project cost is $3,633,600. The grant request is for $3,393,600. Yakutat Power will provide a match in the amount of $240,000 in labor and $160,935 in capital equipment (3508B) for testing. Refer to Grant Budget worksheet in Appendix C AEA 09-004 Grant Application Page 13 of 14 9/3/2008 LK + Renewable Energy Fund FNERGYAUTHORFTY Grant 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 Signature Title Date AEA 09-004 Grant Application Page of 9/3/2008 4No0l_1 PROJECT RESUMES COST WORKSHEET /Z-7-) ALASKA Renewable EnergyFund 'ENERGY AUTHORITY 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. 5550 Tons of Wood / Year (wet) Unit depends on project type(e.g. windspeed, hydropower output, 'biomasss fuel) 2. Existing Energy Generation a) Basic configuration (if system is part of the railbelt;grid, leave this section blank) i. Number of generators/boilers/other 4 Gensets ii. Rated capacity of generators/boilers/other 4000 kW iii. Generator/boilers/other type Diesel iv. Age of generators/boilers/other 1990's to 2007 v. Efficiency of generators/boilers/other 14.6 kWh / Gallon b) ;Annual O&M cost i. Annual O&M cost for labor $655,148 ii. Annual O&M cost for non -labor $570,459 c) Annual electricity production and fuel usage' (fill in as applicable) i. Electricity [kWh] 6,600,000 kWh ii. Fuel usage (if system is part of the Railbelt grid, leave this section r blank Diesel [gal] 400,000 gallons Other - iii. Peak Load 1328 kW iv. Average Load 760 kW v. Minimum Load 550 kW +/- vi. Efficiency 14.6 kWh / Gallon vii. Future trends Up to 250,000 Gallons / Year Reduction in Diesel Fuel Use d) Annual heating fuel usage (fill in as applicable) 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 - RFA AEA 09-004 Application Cost Worksheet Page 1 ALASKA Renewable Energy Fund &`_1 � ENERGY AUTHORITY g 3. Proposed System Design a) installed capacity 450 kW b) 'Annual renewable electricity generation i. Diesel [gal or MMBtu] 19000 Gallon ii. Electricity [kWh] iii. Propane [gal or iv. Coal [tons or M v. Wood [cords, green tans, dry tons] vi. Other MMBtu] MBtu] 4. Project Cost a) ;Total capital cost of new system b) Development cost c) Annual O&M cost of news system d) Annual fuel cost 5. Project Benefits a) ..Amount of fuel displaced for i. Electricity` 250,000 Gallons. ii. Heat 19,000 Gallons iii. Transportation b) Price of displaced fuel c) Other economic benefits '.. d) Amount of Rlaska'public`benefts 6. Power PurchaselSales Price 3,745,000 kWh $80,000 $3,394,000 $1,72a,000 $857,000 (year 4) $4.71 /Gallon (Weighted Average) $857,000 /Year (year 4) local Payroll for Wood Harvesting Test Bed Facility for Statewide Applicability a) Price for power p�archaselsale .229 /kWh (at Bus Bar in Year 4) s 7. Project Analysi a) 'Basic Economic Analysis ratio 1.32 (Refer to CIB Analysis) .: Project benefit/cost 10.5 Years Simple Pay Back RFA AEA 09-004 Application Cost Worksheet Page 2 APPENDIX C O LL A OA N c LLI _N (6 3 C) c a) o: 0 Q On ao v c w m tn fa 0 O O O O O O O O 0-tn0vn0 0if)-0 O O LD O cD � r m N l0 N Ct lfl th N to t/? m N J Q i- O F- O O O O O O Cl O O O O cO O O O O l0 O O O 01 O I�t O d Ln O m N L!1 O 00 Jto c . �-I Q t!} to O c LL a� s 0 c s N u O v o c LL 0 o 0 0 00 0 0 O O O 0 -Cs o0o L0n m V) oao tn �o to U 00 it} Q t00 t00 Z w LL O O O O O O O 0 0 0 0 O O O ON Q O O O 000 O C3 LA 0) O Itt O V)- ih '6 fh N Ln m Q c N cP M r` N t!} th in LL qj)- I-- 4� 41 f O O O O O O cc Z 0 0 O a) It V). N N rH cc ~ p 0 r+ LL Z c O f- LL- c W O t7 V) 0 � O CO Li I- cr) r- t!} Apprendix C Wood Fuel Generation Alternatives Preliminary Cost Estimates ($ x 1000) Cumulative Wood Fuel Total Cost Total Cost Development Handling Alaska factor Including Including Hardware Costs Equipment Total at 20% Alaska factor Alaska factor Year Phase Note 1 2010 1,11 775 358 300 1433.3 287 1720 1720 2011 III 600 170 770 154 924 2644 2012 IV 550 75 625 125 750 3394 Total 1925 603.3 2528.3 506 3394 Note 1: Development Costs include $208 for design, permitting, construction management, and system integr; Appendix E Personnel Costs -Gasifier 2008 Wages and BenefitsNr Total Generation Assistants-Maint & Wood Fuel Handling 1 40000 40000 Total for 2010 1 80000 80000 Total for 2011 1.5 82800 124200 Total for 2012 2 85698 171396 Appendix F Finance Plan — Wood Fuel Steam Boiler/Turbine Interest Rate 0% Maturity-yrs 20 Grant-% of Cost of Plant 0% Cash Requirement 3394 R&R Fund @ 1 % of Plant 34 Financing Cost @ 2% of Total Loan 74 1 yr Debt Service 184 Total Loan 3686 Debt Service for $1 $0.050000 Beg Loan Principal End Loan Debt Year Balance Interest Payment Balance Service 2010 1720 0 1720 0 2011 2644 0 2644 0 2012 3686 0 184 3502 184 2013 3502 0 184 3317 184 2014 3317 0 184 3133 184 2015 3133 0 184 2949 184 2016 2949 0 184 2764 184 2017 2764 0 184 2580 184 2018 2580 0 184 2396 184 2019 2396 0 184 2212 184 2020 2212 0 184 2027 184 2021 2027 0 184 1843 184 2022 1843 0 184 1659 184 2023 1659 0 184 1474 184 2024 1474 0 184 1290 184 2025 1290 0 184 1106 184 2026 1106 0 184 921 184 2027 921 0 184 737 184 2028 737 0 184 553 184 2029 553 0 184 369 184 2030 369 0 184 184 184 2031 184 0 184 0 184 Bus Bar Cost of Energy - Nominal Cents/KWH 90.0 80.0 70.0 60.0 50.0 40.0 Gasifier 30.0 Diesel 20.0 10.0 0.0 O O O O O O O O O O O O O O O O O O O O O O N N N N N N N N N N N N N N N N N N Bus Bar Cost of Energy - Nominal Cents/KWH Year Gasifier Diesel 2010 50.2 34.2 2011 35.8 35.6 2012 43.1 37.0 2013 27.4 38.5 2014 28.2 40.0 2015 29.0 41.6 2016 29.9 43.3 2017 30.8 45.0 2018 31.7 46.8 2019 32.6 48.7 2020 33.6 50.6 2021 34.6 52.6 2022 35.7 54.7 2023 36.8 56.9 2024 37.9 59.2 2025 39.0 61.6 2026 40.2 64.0 2027 41.5 66.6 2028 42.8 69.3 2029 44.1 72.0 2030 45.5 74.9 2031 46.9 77.9 O N M V' tf') M ti m O O N m "t LO Co I-O O 0 N N N N (V N N N N N M M M Cl) co Cl) Cl) co Cl) co V' } O 0 0 0 0 0 00 0 r0 0 rO 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 00 0 00 N N N N N N N N N N N N N N N N N N" N N N N N N N N N N N N N N .� N N tO V M V' O t0 t0 t0 t0 t0 t0 t0 Ln to tO LO Lf') LC) LC) L0 U) O Ln L0 U') LO In LO O ONN LO L()N N V V �7' ctw V LO N(.00 000000000000000000000000000 Nj rl' V NN 0)C 00 00 OO OCO OE M LO LOO 000000000000000000000000 a 00 -2 > N r N LO O 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 jr r r r r r r r r r r r r r r r r r r r r r r r r r r 'O OOO MMMOMM V m p L:ON NU)NNNNN(V N N N N N N N N N N N N N N N N N N N N O CM M M M LO M CO m (O 0 CO 'ct LO t0 LO LO LO LO to LO UO LO LO O LO L0 LO L0 L0 M Un LO LLO LO LO LO LO LO LO j N N r r LO N fit' �t ct CO t� m M Co O LO LO LO LO LO LO LO LO LO LUO LO LO UO LO LO LO LO LO LO LO LO LO U') LO LO LO LO Cl)rn > r t0 t0 LO LO LO LO LO LO O LO U) U) LO tO LO LOL0 LO LO to LO LO O t0 t0 L0 LO LO C O � F- > mot''�t MMO'tO00000)M(0o N NNNNNNNNNNNNNNNNNNNNNNNNNNN O m O O N N'It O O O O M O O N N (fl O 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 .> U- US r h (0(O O tl- It It V'O ct 'IT mNM O 000000000000000000000000000 J N N t- t`N LO LO LO w LO tt) w CO LO g V rtg Tg rt g'Y 7 rr V V V gV V'r d'd g't V gg�I- V d' ' 6 ZS o M f h (O N N N M N N 0 0 1- r O O O O O O O O O O O O O O O O O O O O O O O O O O O O ?O W O y r1' N N O cf LO 0) O O) m 0) O— N (p r r r r r r r r r r r r r r r r r r r r r r r r r r r O > U0 LO LO LO LO LO 000 LO 00000 O 0000000000a 000000000000000a O t� N N NNt�tO LO LON L0 t0 lO tO00 a 00000000000000000000000000 O) �I CO CO CO O CO t--r- ti (0 f`t-t-- N LO O OOOOOOOOOOOOOOOOOo000000000 't N N N N N N N W LO M M_ M MMM M_ _M O V'N �!' 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Estimated Value of Units 2 & 3 Using straight line comparision of purchase cost multipled by run time hours/useful rated life hours Unit #2: 3512B Engine purchase cost ($1999): $ 196,375 Generator purchase cost ($1999): used gen total cost (genset): $ 196,375 current hours: 35182 useful life;: 100000 Remaining Value: $ 127,286 Replacement cost ($2006): $ 396,413 (escallation @ 5%/year) $ 40,632 Est'd Replacement cost ($2008): $ 437,045 Unit #3: 3508B Engine purchase cost ($1999): $ 126,855 Generator purchase cost ($1999): $ 48,944 total cost (genset): $ 175,799 current hours: 8455 useful life;: Remaining Value: Replacement cost ($2004): $ 226,855 (escallation @ 5%/year) $ 48,889 Est'd Replacement cost ($2008): $ 275,744 1 P^O"<1tA-� tA,1!6 �r 151 ?,6 L o rat /y' 6e cLA-Gt Nvl YAKU-unit 2&3-value EST.xls 10/8/2008 ELECTRONIC COPY OF APPLICATION (REFER TO ENCLOSED DISC) l:1»_:4zID] :V RESOLUTION & SUPPORTING LETTERS RESOLUTION 80-120 A RESOLUTION REGARDING THE FACT THAT YAKUTAT'S HIGH FUEL COSTS ARE CAUSING ELECTRICAL RATES TO BECOME UNBEARABLE AND ARE CAUSING HARDSHIPS IN THE LOCAL ECONOMY. AND IT IS OF UTMOST IMPORTANCE THAT AN ALTERNATIVE SOURCE OF ELECTRICAL ENERGY NEEDS TO BE DEVELOPED NOT ONLY FOR OUR COMMUNITY BUT FOR MANY RURAL COMMUNITIES THROUGHOUT THE STATE. WE AUTHORIZE YAKUTAT POWER, OUR POWER PLANT, AND IT'S STAFF TO PERSUE GRANTS FROM ANY FUNDING SOURCE TO DEVELOP ANY ALTERNATIVE POWER SOURCE, PERFERABLY RENEWABLE AND ECO-FRIENDLY. WITH THE GOAL THAT IT IS OPERATED AS EFFICIENTLY AS POSSIBLE, UTILIZING ANY TECHNOLOGY AVAILABLE TO ACCOMPLISH THIS GOAL. ALSO TO SET A STANDARD THAT CAN BE SHARED WITH OTHER COMMUNITIES AND UTILITIES WHO ARE ALSO IN NEED. WHEREAS, the City and Borough of Yakutat (CBY) is a municipal corporation incorporated and organized under the laws of the State of Alaska; and WHEREAS, Yakutat Power is operated by CBY as a wholly owned enterprise fund; and WHEREAS, Yakutat Power is authorized to provide electric power to the community of Yakutat under Certificate of Public Convenience and Necessity, CPC&N No.53, issued by the Regulatory Commission of Alaska; and WHEREAS, we find that diesel generated electricity is too expensive for our Citizens due to the high costs of fuel; and, WHEREAS, it is recognized that the other infrastructure in the community is dependent on the electrical utility to continue to function in a cost effective manner; and WHEREAS, the Alaska Energy Authority has issued a request for applications for the Renewable Energy Grant Program authorized under HB 152 for Renewable Energy Projects; and WHEREAS, the City and Borough of Yakutat and YP Has identified wood gasification as a viable technology to reduce the community's reliance on diesel fuel; and WHEREAS, on behalf of The City and Borough of Yakutat, we authorize Yakutat Power management and staff to pursue any grants that could lead to the improved efficiencies of our system, and or diesel generation in general from any available funding source, WHEREAS, The Community of Yakutat, and this body, rank this project as one of the highest priorities in the comprehensive development of the community; and YP/CBY are in good standing with respect to their existing credit and Federal Tax Obligations, NOW THEREFORE BE IT RESOLVED, that it is the determination of this body to pursue a Renewable Energy Grant for a wood gasification project in Yakutat to reduce dependency of diesel fuel, and to continue to upgrade our electrical system to a modern, safe, and more efficient standard as determined by the Alaska Energy Authority. And to authorize and empower the General Manager of Yakutat Power, (Scott Newlun) to submit to AEA on behalf of the community an application for funding under the Renewable Energy Grant Program AEA-09-004, and to Act as the lead contact in these projects. SPONSORED BY S. RYMAN, BOROUGH MANAGER RESOLUTION 08-120 Page 1 of 2 --7 1\(1— Passed on this Z- day of OtC- t')008, by the action of the members of the City and Borough of Yakutat Assembly. DAVID STONE, MAYOR ATTEST: 10 OtOU434 v 0 4A OP. Air Cat Bremner, Boroigy, Cle-rkljl�'t%� SPONSORED BY S- RYMAN, BOROUGH MANAGER RESOLUTION 08-120 Page 2 of 2 I TIK J'TAT POWER PO Box 129 Yakutat, AK 99689 Phone: (907) 784-3242 Fax: (907) 784-3922 Email: yakpower@ptialaska,net October 8, 2008 Renewable Energy Grant Fund Alaska Energy Authority 813 West Northern Lights Blvd. Anchorage, AK 99503 Re: Yakutat Power— Renewable Energy Fund Grant Application —Letter of Commitment Application Review Committee: Yakutat Power is pleased to submit the attached application for a Renewable Energy Fund Grant for a Wood Gasification Biomass Project, an eligible renewable energy project as defined under HB 152. Yakutat Power is authorized by the Regulatory Commission of Alaska to provide power to the community of Yakutat under Certificate of Public Convenience and Necessity, CPC&N No. 53. The attached Application documents and describes the proposed Wood Gasification project. The total estimated cost of design, permitting, construction, and development and testing is $3,634,000 The estimated fuel savings as a result of this project is 36,000-gallons in the first year of testing, and up to 250,000-gallons/year starting in year 4. Yakutat Power commits to this project a cash Match of up to $240,000 in direct labor costs (wages and benefits), and a Match of $210,000 in capital equipment and maintenance costs. Yakutat Power strives to keep electric costs as low a possible by maximizing operating efficiencies and reducing operating costs. This project will provide a significant improvement toward meeting this continued goal, and will greatly benefit the community of Yakutat. Yakutat Power welcomes and fully supports this opportunity to work with the Alaska Energy Authority to implement this innovative wood gasification project, and requests the Review Committee carefully review the merits of this application. We welcome your review and evaluation of our proposal, and look forward to working with you on this project. If you have any questions about this project, please feel free to contact me at (907784-3242 Sincerely, J�/6"e_ 4 Scott Newlun General Manager October 1, 2008 Dear Madam or Sir: The Yak -Tat Kwaan, Inc. is pleased to support Yakutat Power's wood fuelled power generation proposal for the Alaska Energy Authority Renewable Energy Grant Round #1 to meet the community's needs for affordable energy. As a business of this community I think the proposed project will lessen our dependence upon the high cost of generating electricity with diesel. Furthermore, the project would assist the State of Alaska in proving wood fuel electrical generation technology. Yak -Tat Kwaan, Inc. and others fully share priorities in exploring renewable energy resources, such as biomass, and lowering energy costs. Yakutat Power's proposed activities are critical to our community's economic development and well-being. Yak -Tat Kwaan, Inc. fully endorses the Yakutat Power proposal in its efforts to lower our electrical costs utilizing a plentiful renewable resource for electrical generation. Sincerely, ,ja7- n Cynthia Petersen Interim General Manager YAK -TAT KWAAN, INC. • R O. BOX 416 • YAKUTAT, ALASKA 99689 • 907-784-3335 or 784-3488 • FAX 907-784-3622 United States Forest Alaska Region P.O. Box 327 Department of Service Tongass National Forest Yakutat, AK 99689-0327 Agriculture Yakutat Ranger District Phone: (907) 784-3359 Fax: (907) 784-3457 October 4, 2008 Dear Madam or Sir: The US Forest Service Yakutat Ranger District is pleased to support Yakutat Power's wood - fueled power generation proposal for the Alaska Energy Authority Renewable Energy Grant Round #1 to meet the community's needs for affordable energy. Although biomass energy use has skyrocketed, small biomass electrical generation technology is not yet a commercial off -the - shelf product. However, this proposal will benefit many Alaska residents in proving small wood fuel electrical generation technology for use in other villages. As District Ranger, I have worked with the local alternative energy group, comprised of concerned and proactive Yakutat residents examining power generation alternatives, in support of this biomass project. Our district has about 24,000 acres available for harvest and pre - commercial thinning for sustainable biomass power generation. This project's proposed a____, a __. ,t acLivrire5 are CriLI�ai t0 file coTYiYllfinrty S e0t�i]viiiC ucvcYc�lillient ar2tx weir- erit. I he USFS Yakutat Ranger District fully endorses the Yakutat Power proposal in its efforts to 1.^. vv.".r C::'' electr:Cwl Costs �at:lr�r^R a r+le»tiFi�l re»�+czrahlo rP�nt�rrA fnr Alar;txiral cTr>str t'�tinn Sincerely, LEE A. BENSON District Ranger `S %0 Caring for the Land and Serving People Printed on Recycled Paper Y_,,`d,__UT,kT TLINGIT TRIBE H .NF 0', .'rt 5.,8 :i a (I C 7� 7E4 26 95 October 1, 2008 Dear Madam or Sir: The Yakutat Tlingit Tribe fully supports Yakutat Power's Alaska Energy Authority Renewable Grant Round #I proposal supporting wood -fueled power generation. This grant opportunity is ideal for addressing the community's needs for affordable energy. The Yakutat Tlingit Tribe has a continuing working relationship with the City & Borough of Yakutat (and many other local entities) in addressing community needs; affordable energy is one of the highest priorities. We firmly believe the proposed project will lessen our dependence on the high cost of oil to generate electricity, to boost and improve our local economy. Furthermore, the project will assist the State of Alaska in proving wood -fuel electrical generation technology. As the local tribal organization, we offer various general assistance programs to the community. A large amount of the department's budget is for heating assistance and general assistance programs which is distributed to clients to pay toward their electricity/fuel bills due to the high energy -cost of living in Yakutat. The Yakutat Tlingit Tribe commits to working with local partners in exploring renewable energy resources, such as biomass, to lower energy costs. Yakutat Power's proposed activities are critical to our community's economic development and well-being. The Yakutat Tlingit Tribe fully supports Yakutat Power's efforts to lower our electrical costs utilizing a plentiful renewable resource for electrical generation. Sincerely, Victoria L. Demmert YTT Tribal President TECHNICAL DATA ANALYSIS - YAKUTAT WOOD FUEL GENERATION PLANT DRAFT — JWTy kf F-/AIAL, Prepared for: Alaska Mental Health Lands Trust By: William A. Corbus August 22, 2008 Table of Contents Executive Summary Scope of Analysis Yakutat Power The Concept Conventional Steam Boiler/Turbine Gasifier/Boiler/Steam. Reciprocating Engine Gasifier/Gas Reciprocating Engine Plasma Technology Wood Fuel Issues Wood Fuel Requirements Capital Costs Diesel Generation Personnel Costs for Wood Fuel Generation Financing Economic Analysis Other Considerations Conclusion and Recommendation Bibliography Contacts Appendixes A - Wood Fuel Requirements B - Diesel Engine Replacement Schedule And Cost Estimate C - Wood Fuel Generation Preliminary Cost Estimates D - Diesel Depreciation Schedule E - Personnel Costs Wood Fuel Generation F - Financing Schedule Wood Fuel Steam Boiler/Turbine G - Economic Analysis Diesel vs. Wood Fuel Steam Boiler/Turbine H - Economic Analysis - Diesel vs. Wood Fuel Gasifier,/Boiler/Steam Reciprocating Engine I - Economic Analysis - Diesel vs. Wood Fuel Gasifier/Gas Reciprocating Engine J - History of Southeast Alaskan Wood Fuel Generation Plants Alaska RFI --- Comments from Community Power Corporation Requested Information: The following list of questions should be addressed in your response. 1) Renewable energy resources for the production of electricity (e.g., solar, wind, geothermal, hydro, and biomass) are available throughout various regions in Alaska. Many renewable energy technologies for electricity production are also commercially available and economically viable under the conditions in Alaska. Are there any technologies that would take priority and what is necessary to move this portfolio of electric technologies forward on a commercial basis in Alaska? Diesel generation accounts for 94% of power production in the 181 rural Alaskan communities that receive Power Cost Equalization assistancel. With diesel fuel prices near an all-time high, new technology solutions should be considered that can significantly reduce diesel fuel consumption. One new, renewable technology that directly addresses the requirement to reduce diesel fuel is small modular biopower, a technology that DOE was instrumental in bringing to fruition. Locally available biomass can be converted to a renewable fuel gas that will directly displace diesel fuel in a standard diesel genset. A unique aspect of this "diesel fuel displacement" option is that the system can be retrofitted to one, or more, existing diesel engines in Alaskan rural communities. Attachment 1 is a brief description of Community Power Corporation's proprietary BioMax modular biopower system. The BioMax is capable of combined heat and power by delivering 50 kWe utility grade electricity and about 250,000 Btu/hr of clean heat. The system shown in Attachment 1 is a stand-alone version with its own genset whereas the best configuration for rural Alaskan deployment would be in a 40' cold -weather ISO container and supplying renewable fuel gas to an existing diesel generator. It is important to realize that the problem in rural Alaska is with high diesel fuel costs, not with the diesel gen-sets that are already on site, well understood, and highly reliable. Since rural Alaskan communities depend on diesel generators, a loss of power during the winter would be extremely dangerous; therefore, it is not credible that a new technology will completely displace the diesel engine until the reliability of the new technology has been thoroughly proven. However, if a new technology could retrofit with the existing gensets in a way that enhances energy security while also saving 1 http://www.aidea.org/aea/programsaltemativediesel.html money, the barriers to incorporating this new technology will be significantly lowered. As shown in Attachment 1, CPC is currently developing a modular biopower system for the US Army that converts 1,200 lbs/day of dry waste paper/cardboard (— 85% - 90%) and plastic (10% - 15%; utensils, cups, etc) from a mobile kitchen into a renewable fuel gas which displaces diesel fuel in a 60 kW diesel engine. A diesel engine is a compression ignition system (no spark plugs) and needs a small amount of diesel fuel to act as a pilot fuel to ignite the diesel fuel and renewable fuel gas mixture. The following table is based on our Army system experience, and shows the potential for direct diesel fuel displacement. The first line shows the baseline with no biomass contribution. The second line shows that the system displaces about 64% of the diesel fuel and saves about 66 gallons of diesel fuel per day. Fuel Source for Electricity Diesel Fuel — Gal/Day Engine Load Diesel Fuel Biomass Diesel Used Diesel Saved 57kW* 100% 0% 103.7 0 57kW* 36% 64% 37.7 66.0 * Operating at 34.1 % electrical energy efficiency Due to the plastics in the above waste stream the renewable fuel gas had a Btu content that was about 20% higher than we normally see from forest residues. The reason we mention this paper and plastic waste stream is that many rural Alaskan villages may be able to use modular biopower as a partial solution to their waste disposal problem while simultaneously offsetting their energy bill. The following two tables summarize the biomass needs and annual diesel fuel savings in a rural community assuming: 1) Woodchips are used as the feedstock in table 1 and Cardboard and Plastic are used in table 2 2) Modular biopower systems of two different capacities (Renewable fuel gas volumes and biomass consumption per hour) are used to show the impact of size on fuel savings. a. 2,295 CuFt/hr (50 lbs/hr) b. 6,180 CuFt/hr (135 lbs/hr) 3) 75% availability 4) Diesel at $4.50 per gallon 5) Recovery of 60% of the engine heat, and; 6) Heat is valued at $34.62 per million Btu (Diesel Fuel as the source). 7) De -rating of fuel value of woodchips by 20% compared to paper/plastics-based feedstock. Table 1: Woodchips as feedstock (sustainable in most communities*) System Dry Tons Diesel Fuel Value of Diesel Value of Heat Total Size (Cuftthr) Per Year Saved (Gal/yr) @ $4.50/gal @ $34.62/MMBtu Value 2,295 164 18,068 $ 81,304 $ 50,587 $ 131,891 6,180 442 48,643 $ 218,895 $ 136,196 $ 355,091 *A large number of diesel -powered communities in Alaska have sustainable supplies of forest residues, because the surrounding forests are immense with many having have large amounts of standing dead wood from beetle kill, and others having standing dead wood from previous forest fires. In the case of the standing dead wood, it can be used with little, or no, additional drying needed (<15% moisture content required) Table 2: Paper/cardboard and plastics as feedstock (if not sustainable at the rates shown below, it could be mixed with forest residues which are sustainable) System Dry Tons Diesel Fuel Value of Diesel Value of Heat Total Size (Cuft/hr) Per Year Saved (Gal/yr) @ $4.50/gal @ $34.62/MMBtu Value 2,295 164 14,454 65,043 40,470 $ 105,513 6,180 442 38,915 175,116 108,957 $ 284,073 The following are some of the many benefits to the use of modular biopower in rural Alaska: 1. By clearing forests, and using the biomass for electricity and heat, communities can reduce the threat of wildfires, and can replant other desirable species to attract beneficial animals, such as moose, that have been greatly reduced in numbers due to spread of mono -culture forests. 2. Systems are containerized, easy to ship by barge, easy to install (and relocate if necessary). 3. The retrofit package is essentially a sustainable, renewable fuel supply system that integrates with one, or more, existing diesel engines. 4. Unlike wind and solar, biomass power generation can be dispatched any time of day or night. 5. No permanent modifications are required to the engines. A manifold is applied to the air intake of the diesel engine in order to feed the producer gas to the engine. The manifold can be easily removed if required. 6. Retrofitting with existing diesel engines reduces total capital costs of the new energy supply system, and builds around power generation hardware that is familiar, typically already paid for, and that has a support structure in place. 7. If something were to interrupt the supply of renewable fuel gas, the diesel would seamlessly revert back to 100% diesel fuel. 8. By displacing diesel fuel with local biomass, Communities in rural Alaska do not have to purchase as much diesel fuel in advance of the rivers freezing up. This can be a significant cash savings. 9. The producer gas is very clean, and has no detrimental impact on the diesel engine. 10. Greenhouse gas emissions are reduced by burning less fossil fuel. 11. Anyone skilled in the operation and maintenance of a diesel engine is qualified to operate and maintain the modular biopower system. 12. The waste heat from the gas cooling system can be used to dry biomass or to heat spaces where biomass is stored during the winter. As shown in Attachment 2 CPC is also developing a 2,295 Cu ftlhr, 50 kWe diesel system for demonstration by the Alberta Research Council in Alberta., Canada. This 40' containerized system is designed for cold climates with heavy insulation, and the genset installed inside. 2) As with renewable energy technologies for electricity production, renewable energy technologies for heating applications within the rural/remote villages in Alaska may be a viable alternative to current fossil fuel systems. Renewable energy technologies for heating applications include, but are not limited to, high efficiency wood stoves, boilers, furnaces, active and passive solar thermal systems for space or water heating, and direct heating using geothermal resources including ground source heat pumps. Many of these technologies could be deployed on an individual building -level, or district - heating level. What would be needed to deploy this portfolio of heating technologies across rural Alaska and are there any technologies that should take priority? The barriers to incorporating new technologies in rural Alaskan communities mainly deal with lack of familiarity with new technology, lack of financial expertise, complex approval processes, a well -deserved skepticism regarding new technologies, and lack of capital. The result has been a piecemeal approach and little large-scale replication. One business model that could overcome these barriers is the Energy Service Company (ESCO) where one, or more, ESCOs could own, operate and maintain the systems, and could share in the energy savings with the communities and State of Alaska. The ESCOs could hire and train from within the community for feedstock supply and processing, operation and maintenance. These salaries coupled with the avoidance in diesel fuel purchases would keep substantial funds in the community, and help the local economies. 3) What can be done to drive down the heating oil needs in community and residential buildings (e.g., weatherization, new construction, ground source rd heat pumps, wood stoves coupled with a wood delivery system, appliance replacement programs)? One of the greatest additions to heating needs would be to capture the waste heat from the engine gensets. Depending on engine efficiency, as much as 60 to 70% of the energy in the diesel fuel is currently dumped to the atmosphere in most communities. Some CHP has been implemented in rural Alaska, but with the higher cost of diesel fuel, research should be undertaken to explore new ways to transfer the heat over greater distances with even less temperature loss. A loads analysis of communities should be conducted to see if there are large potential customers located near generating stations, and what their load profile looks like seasonally. Also, it would be interesting to know: a) the volume of paper, cardboard, fiberboard, and certain plastics that is available in rural Alaskan communities, and b) if it is feasible to sort this waste for use to displace diesel fuel. 4) What are the viable pathways for private -sector energy investment and development in remote Alaska? What will be needed to bring private -sector investment into this endeavor? Under what circumstances might private - sector investment lead remote village energy transformation in Alaska? What are the appropriate roles for the Federal Government, and in particular, the Department of Energy? Innovation on the business model/delivery mechanism would potentially be greatly rewarded. We believe that one appropriate role for government would be to remove the barriers to ESCOs, and determine what incentives could be provided to encourage a competitive ESCO environment. 5) What types of incentives or policy changes are needed to spur an energy transformation in Alaska; at the local, regional, State, or National levels? And could the funds supplied through the PCE program be converted to a revenue stream needed to repay the capitalization of renewable energy hardware installations? Try to encourage a standard approach to energy supply. The current approach is fragmented, inefficient, long on talk, but short on action. Anything to reduce barriers would be beneficial. 6) Do you have any other suggestions or comments that could accelerate energy transformation in remote Alaska in an economic, environmentally, and sustainable manner? "Take a method and try it. If it, fails, admit it frankly, and try another. But by all means, try something." Franklin D. Roosevelt Attachment 1 - BioMax System Description Figure 1 is a picture of a standalone BioMax 50 modular power system. This portable, skid -mounted system is composed of six integrated modules. This totally automated system converts roughly 100 lb per hour of dry biomass into 50 kWh of electrical energy and about 100 kWh of thermal energy. . Figure 1 —50 kW Modular Distributed Energy Biomass Power System The BioMax above produces 50 kW of electrical power and 100 kW of thermal power from renewable fuel gas (also known as producer gas). The system is driven by the fuel demands of an internal -combustion -spark engine that establishes the producer -gas flow rate. Figure 2 shows a block diagram of the relationship between the six integrated modules in the BioMax. Figure 2 — Six Integrated Modules in BioMax Combined Heat and Power System 7 Table 1 briefly describes the function of each of the six major modules in the above figure. Table 1 - Function of Modules in BioMax Module Function 1. Sorter/Dryer/Feeder Sorts, dries (if required), and feeds the biomass into the (optional) gasifier. 2. Gas Production Converts the biomass to a low tar fuel gas, continuously removes char and ash. 3. Gas cooling Reduces fuel gas temperature from about 700C to 100C. Gas is kept above the dew point temperature to avoid moisture condensation. 4. Gas cleaning Filters the cooled fuel gas to remove tars and particulates. 5. Power generation Combusts clean fuel gas in the cylinder of an internal combustion engine. Spins the shaft of a generator to produce grid quality electricity for on -site use or for export to the grid. 6. Waste heat recovery Captures heat from the cooling of the fuel gas, engine (optional) cooling, and engine exhaust gases in the form of clean, heated air or water for use on -site. The BioMax continuously monitors 80 operating parameters and alarms, and has been automated to the extent that only a part-time operator attendant is required. The operator attendant starts the system by pressing a single "On" button and then can walk away. It is also possible to start up and monitor the system using an on -site, or remote computer via the internet. The computer startup and monitoring method has extensive graphical user interface capability. The "expert" computer control system activates the wood -chip feeding and drying systems, starts the gasifier, monitors the producer gas quality, and then starts the engine/generator using producer gas made from wood chips. The Programmable Logic Controller automatically alerts the attendant of potential problems, or in the event of a major failure, the control system automatically shuts down the system and informs the attendant on -site by audible alarms or remotely by dial -up messages. The fully automated control system for the BioMax system eliminates the need and expense for a full-time, on -site operator. Also, the operating algorithm in the control system that has been developed over thousands of hours of operation ensures that the system is always operating under optimal conditions in a manner that is greatly superior to the ability of a human operator. Safety is a major consideration in all of our system designs. Instrumentation is supplied to ensure efficient and safe operation, and is backed up by training in its proper use. In addition, our systems have a series of alarms that identify audibly and visually the need for attention. The alarms can even be transmitted via a pager. If operator action is not taken within a prescribed time period, the system is automatically shut down. Very low tar levels in the producer gas are a result of our precise control of gasifier dynamics and secondary -air addition to the gasifier. A small amount of byproduct char is purposely entrained with the gas from the gasifier and is removed from the producer gas stream by inertial separation and filtering. Unlike other biopower systems that use water scrubbers and other condensing methods to collect large quantities of environmentally harmful tars in water that must then be treated as a hazardous waste, the BioMax employs a combination of tar destruction in the gasifier coupled with a unique dry filtration system to produce a stable non -hazardous residue. Waste heat from the hot producer gas is recovered for drying the wood -chip feed to remove excessive moisture from the biomass that would significantly reduce the overall energy conversion efficiency of the process. At a certain level high moisture will shut down the gasification reaction. Raw woodchips having up to 50% moisture content have been successfully dried and converted to heat and power in the BioMax. Waste heat from the engine coolant and exhaust is also available for external combined heat and power (CHP) applications. Description of Integrated Module Operation Sorter/Dryer/Feeder The chip sorter allows only suitably sized chips to pass to the dryer for use in the gasifier. Conveyors operate intermittently to keep the gasifier full of feedstock. The dryer utilizes waste heat recovered by the producer gas heat exchanger for chip drying. Hot air from the heat exchanger mixes with room air to temper the dryer inlet air temperature to 200OF or lower. The feed can lose about 30 percentage points of moisture during this step. The partially dried feed is discharged to the surge bin. The filtered dryer exhaust air can be discharged to the room or vented outside. Gas Production Module Figure 3 is a picture of the downdraft gasifier with its protective enclosure removed. In the foreground is the gas -to -air heat exchanger that reduces the fuel gas temperature from about 700 C to 100 C. Figure 3 - BioMax Gas Production Module The gasification reaction in the BioMax is fully automated via a proprietary control algorithm that has been developed and refined through thousands of hours of operational testing in the lab and the field. The energy stored in the feedstock by the photosynthesis process is released for conversion to other forms of energy by means of computer controlled thermo chemical reactions in the downdraft gasifier. The raw feedstock moves down through the gasifier, as the gasification process consumes the feedstock and char below it. Figure 4 shows the four strata, or zones, in the above gasifier: feedstock drying, flaming pyrolysis, char oxidation, and char reduction. Also shown is the temperature profile in the various zones. 10 Figure 4 - Four Biomass Conversion Zones in Downdraft Gasifier Both feedstock and part of the air needed for gasification enter through the top of the downdraft gasifier. The motive force for the air supply is the engine vacuum located downstream or an inline blower. As shown in Figure 5 the control system will call for dry wood chips to be added on top of the flaming pyrolysis zone automatically when system temperatures reach required levels. As the feedstock particles approach the flaming pyrolysis zone, they are heated and dried, losing their moisture as steam. This steam and the gasification air that entered through the top of the gasifier travel quickly to the flaming pyrolysis zone below. The gasifier is started with the residual char from the previous operation. Only after the char bed is fully ignited, is the biomass feedstock started. The low thermal mass of the gasifier allows it to produce a combustible fuel gas from biomass after only a few minutes after ignition by a resistance heater. The gasifier produces roughly equal parts H2 (20%) and CO (20%) with a small amount of CH4 (2%). The largest non -fuel gas in the mixture is nitrogen, about 45%. The energy content of the renewable fuel gas is typically between 125 to 175 Btu per standard cubic foot depending on the feedstock and its initial moisture content. Dried feedstock is metered into the top of the gasifier automatically as needed to sustain the electrical load. For each 100 pounds of dry wood fed into the BioMax about 1 pound of ash is produced that can be used as an amendment for placing nutrients back into the 11 soil. Since carbon conversion is in excess of 99%, there is only a small amount of char left in the ash. As the feedstock particles travel further downward, they are heated to pyrolysis temperatures and begin to emit pyrolysis vapors. The combustion gases and residual tar vapors then travel down to the char oxidation zone, along with the char formed in the flaming pyrolysis zone. Figure 5 - Dried Wood Chips Metered Automatically Into Gasifier In the char oxidation zone, secondary air is added by computer control to oxidize the char at multiple locations on multiple levels, producing carbon dioxide and heat. In the steady-state condition of the gasifier, the temperatures of the char oxidation zone are moderated by the endothermic reactions of steam and char to form hydrogen and carbon monoxide, as well as carbon dioxide reacting with char to form carbon monoxide. These temperature -moderating reactions are significant above 800°C and are increasingly faster at the higher temperatures of this zone. The hot char and ash surfaces, along with free radicals present in this zone catalyze the destruction of the residual tar vapors. In the char reduction zone, there is no free oxygen to oxidize the char and release heat. Therefore, the reaction of the hot char is to reduce water to hydrogen and carbon monoxide, as well as, to reduce carbon dioxide to carbon monoxide. These endothermic reactions cool the char and the fuel gases at the grate. There is additional tar -vapor destruction in this zone. The ability of the gasifier to produce raw fuel gas having 12 extremely low levels of tars substantially reduces the cost and complexity of downstream gas cleanup operations. Near the bottom of the gasifier is a computer -controlled, hydraulically operated, self - clearing stainless steel grate that precisely controls the passage of char and ash through the gasifier to maintain high -quality gas. Periodically, the gasifier is vibrated to settle the char bed, collapsing channels and bridges of the feedstock and char. As the char becomes progressively oxidized, the char and ash is entrained in the fuel gas as the gas leaves the gasifier. If too much material (ash, clinkers, tramp materials) builds up on the grate to the point where the pressure drop is too high for acceptable performance, the grate opens automatically to clear the blockage. The material falls into the bottom of the gasifier where it is augured away. Gas Cooling The hot fuel gases and the entrained ash/char are cooled in a tube -and -shell heat exchanger. We use two types of heat exchangers, gas to air, and gas to liquid. For this description, we will assume the cooling medium is air. Hot gas enters the heat exchanger at about 7000C and is cooled to approximately 100°C. The fuel gas flows inside of the tubes and is cooling air on the shell side. There are clean out ports with sanitary fittings using special high temperature gaskets, to allow inspection and cleaning of the tubes. A blower supplies cooling air to the heat exchanger. The speed of the blower is computer controlled to produce the desired fuel gas exit temperature. A second blower adds tempering air to reduce the temperature of the hot air to that suitable for drying the feedstock in the feeder/dryer. Gas Cleaning A preheating step using an electric heater at startup precludes water condensation on the filters. After the required dew point temperature is reached in the filter system the computer energizes the resistance heater used to ignite the char bed. A proprietary impingement -type, gravity -powered filter system removes the entrained char fines from the fuel gases. During gasifier operation, the fabric filter is occasionally agitated to remove accumulated filter cake and to keep the pressure drop at an acceptable value. The ash and char fines are collected continuously in a drum as a dry powder for disposal as a non -hazardous by product or use as a soil amendment. A level of 100 ppm is generally considered to be the maximum acceptable level of tars for producer gas to be consumed in an internal combustion engine. Tar levels in the 13 BioMax are consistently less than 25 parts per million (ppm), an exceptionally clean fuel gas. Power Generation The BioMax uses standard, commercial, gaseous -fuel engine/gensets, in a skid -mounted enclosure measuring about 9.5 ft long, by 4 ft wide, by 5.5 ft high. CPC modifies the air - fuel management system of the engine to operate on producer gas fuel. If desired, the engine can provide the suction to move the producer gas through the Gas Production Module. Or this suction can be provided with a gas blower. During warm-up, the relatively inert producer gases are flared off until the gasifier achieves operating temperatures and begins to make combustible gases. The computer senses when the producer gases are combustible and it automatically reduces the flow rate to the flare. When the producer gas quality is high enough, the generator engine is automatically started. The engine operates very smoothly with producer gases. The computer uses a wide -band oxygen sensor as a basis to control the air/fuel ratio. The engine rpm and throttle setting determine the flow rate of producer gases. This system automatically responds to electrical load changes. Power generation is extremely flexible. We can use spark -ignited or compression - ignition engines, supplying either AC or DC, single or three phase, at any of the standard frequencies. Waste Heat Recovery The waste heat recovery module recovers heat from two sources -engine exhaust and engine coolant. Two heat exchangers in the waste heat recovery module collect this thermal energy: 1) a tube -and -shell heat exchanger accepts engine exhaust at about 550°C and 2) a flat -plate heat exchanger accepts engine coolant at about 96 °C. The waste heat recovery module also houses a catalytic converter system for reducing hydrocarbons, CO, and NOx emissions from the engine. 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