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HomeMy WebLinkAboutUnalakleet Renewable Energy Fund Wind App Unalakleet Renewable Energy Fund Wind Project Grant Application Renewable Energy Fund Grant Application Page 1 of 49 10/8/2008 SECTION 1 – APPLICANT INFORMATION Name (Name of utility, IPP, or government entity submitting proposal) Unalakleet Valley Electric Cooperative, Inc. (UVEC) Type of Entity: Electric Utility Mailing Address P.O. Box 186, Unalakleet, Alaska 99684 Physical Address 186 Main Street, Unalakleet, Alaska 99684 Telephone 907-624-3474 Fax 907-624-3009 Email uvec@gci.net 1.1 APPLICANT POINT OF CONTACT Name Isaiah Towarak Title General Manager Mailing Address P.O. Box 186, Unalakleet, Alaska, 99684 Telephone 907-624-3474 Fax 907-624-3009 Email uvec@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) 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); 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.) SECTION 2 – PROJECT SUMMARY Renewable Energy Fund Grant Application Renewable Energy Fund Grant Application Page 2 of 49 10/8/2008 Direct Labor and  Benefits $                63,289  Travel, Meals, or Per Diem $                          ‐    Equipment $          4,900,709  Supplies $                          ‐    Contractual Services $              589,759  Construction Services $          3,341,075  Other Direct Costs $              102,000  TOTAL DIRECT CHARGES $          8,996,832  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. The Unalakleet Renewable Energy Fund Wind Project is a Final Design/Permitting and Construction project for a wind energy installation in Unalakleet, Alaska. At this point in time, extensive documentation and analysis have been conducted in the village of Unalakleet to evaluate the potential of utilizing wind energy technologies. These studies, including two separate wind resource analyses conducted by DNV Global Energy Concepts Inc., document strong wind resources across the Unalakleet area, including the project installation site. These studies, combined with conceptual designs, illustrate that reconnaissance (Phase I) and detailed project feasibility studies (Phase II) as described in this Request for Grant Applications (RFA# AEA-09-004) have been substantially completed. 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 Unalakleet Renewable Energy Fund Wind Project involves the installation of two 600 kW wind turbines on a project site located approximately one and a half miles northeast of Unalakleet. The completed project, with a total size of 1.2 MW, will be owned and operated by UVEC. The wind turbines will be connected into UVEC’s electrical distribution system through a constructed transmission line. The project will offer benefits to the village of Unalakleet and its electric customers through a system-wide reduction and stabilization of energy prices. UVEC has assembled a project team, headed by STG Incorporated, that is prepared to immediately begin work on an accelerated schedule. The project team includes members from Intelligent Energy Systems LLC, DNV Global Energy Concepts Inc., Electrical Power Systems, Duane Miller Associates LLC, Hattenburg Dilley & Linnell LLC, BBFM Engineers and Aurora Consulting. All aspects of the Final Design/Permitting and Construction project, which are detailed in the following pages of this application, can be completed by fall 2010. 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. Project production and cost estimates, generated from independent analysis and contractor estimates, are summarized below: Renewable Energy Fund Grant Application Renewable Energy Fund Grant Application Page 3 of 49 10/8/2008 The total project costs of the Unalakleet Renewable Energy Fund Wind Project is estimated to be $8,996,832, inclusive of Phases I to IV. This project has advanced through Phases I and II and is ready for Phases III and IV activities. Much of the cost of Phase I and II were borne by third-party researchers, however, project team members have contributed $28,412 in project conceptual design and initial feasibility study. The total grant request for the Unalakleet Renewable Energy Fund Wind Project is $8,774,080 based upon the following: Total Project Costs $ 8,996,832 Less: Phase I and II Contributed Costs ($ 28,412) Total Phase III and IV Costs $ 8,968,420 Less: Additional Investments ($ 194,340) Total Grant Request $ 8,774,080 The additional investment of $194,340 is inclusive of $100,000 of land contributed by the Unalakleet Native Corporation and $94,340 in labor and equipment contributed by the UVEC for line transmission construction. 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. Total energy production estimates for the Unalakleet Renewable Energy Fund Wind Project are 2,968,000 kWh annually with an estimated net displacement of approximately 171,500 gallons of diesel per year. Considering UVEC’s most recent delivery of diesel fuel, priced at $4.38 per gallon, the project is estimated to reduce fuel costs for the utility by $770,299 annually. Other benefits of the Unalakleet Renewable Energy Fund Wind Project include the reduction of atmospheric pollution, tourism development within the Unalakleet area (estimated value $2,600 annually) and a contribution towards decreased reliance on imported fossil fuels (national security). The projected benefit/cost ratio for this project is 2.33, payback is estimated to 13.11 years and the rate of return is estimated to be 4.9%. An explanation of our calculations is located in section 4.4.6. 2.5 PROJECT COST AND BENEFIT SUMARY Include a summary of your project’s total costs and benefits below. 2.5.1 Total Project Cost (Including estimates through construction.) $8,996,832 2.5.2 Grant Funds Requested in this application. $8,774,080 2.5.3 Other Funds to be provided (Project match) $ 222,752 2.5.4 Total Grant Costs (sum of 2.5.2 and 2.5.3) $8,996,832 2.5.5 Estimated Benefit (Savings) $770,299 – Annual $27,739,777 – Cumulative 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.) $32,280 Annual REC/Tourism Revenue $807,000 Cumulative REC/Tourism Revenue Renewable Energy Fund Grant Application Renewable Energy Fund Grant Application Page 4 of 49 10/8/2008 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. The project manager for the Unalakleet Renewable Energy Fund Wind Project will be James St. George, President of STG Incorporated (“STG”). STG is one of Alaska’s premier construction services and management companies. Dealing mainly in rural Alaska, the company has played a major role in high profile projects such as wind energy installations, communication tower installation and community bulk fuel and diesel generation upgrades. STG specializes in remote project logistics, pile foundation installations, tower erections and construction management. STG has managed and constructed many of the Alaska Energy Authority’s and the Alaska Village Electric Cooperative’s bulk fuel facility and rural power system upgrade projects. STG’s core competencies include bulk fuel systems, power plant construction (both modular and steel-framed), wind farms and pile foundations (driven piles, post tension rock anchors, helical anchor systems, freeze back, and active refrigerated piles). Additionally, STG has expanded to become United Utilities’ preferred contractor for its “Delta Net Project”, which involves the installation of communication towers and related equipment throughout the Yukon Kuskokwim Delta. STG has achieved this preferred status by demonstrating competitive rates and the ability to perform in remote locations with extreme logistical challenges. As project manager, James St. George and STG will be responsible for project labor and contractor management, equipment procurement and mobilization, review of plans and specifications, on-site inspections, review and approval of work and other project management duties. References for James St. George and STG include: Krag Johnsen, Chief Operating Officer, Denali Commission 510 L Street, Suite 410, Anchorage, AK 99501 Phone (907) 271-1413, Fax (907) 271-1415 kjohnsen@denali.gov Meera Kohler, President/CEO, Alaska Village Electric Cooperative 4831 Eagle Street, Anchorage, AK 99503 Phone (907) 565-5531, Fax (907) 562-4086 mkohler@avec.org Jim Lyons, Operations Manager, TDX Corporation 4300 B Street, Suite 402, Anchorage, AK 99503 Phone (907) 762-8450, Fax (907) 562-0387 JLyons@tdxpower.com Resumes for STG are included in Section 7: Additional Documentation and Certification. Renewable Energy Fund Grant Application Renewable Energy Fund Grant Application Page 5 of 49 10/8/2008 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.) Below is a project schedule for the Unalakleet Renewable Energy Fund Wind Project. Note that Phase 1 & 2 tasks are anticipated to be completed prior to receipt of grant funding. The Grant- funded portion of the project will begin with Phase III and continue through Phase IV. Thus, work will begin with grant funding as soon as it is made available and continue through the delivery and erection of wind turbines during the Summer of 2010. PROPOSED ENERGY RESOURCE ANALYSIS Generic Survey of Wind Energy Potential Selection of Potential Sites Site Specific Wind Assessment Computation of Potential/Probable Output EXISTING ENERGY SYSTEM ANALYSIS Survey Transmission Access/Existing Infrastructure Transmission Lines and System Layout and Capacity Switchgears and Existing Power Plant Equipment Generation Demands Load Information Peak Loads and Projections Wind Energy Contributions to Power Supply Determine Sizing Requirements Annual O&M and R&R Costs Annual Fuel Consumption and Fuel Price Prepare Initial Economic Analysis Average Cost of Installed Equipment Avoided Cost of Energy Service Rates Production Estimates Plans for System Upgrades PROPOSED SYSTEM DESIGN Collect Localized Wind Measurements Annual Survey (Min) Conduct Technology Review Analysis of System Alternatives Identify Technical  Barriers & Issues Conduct Layout and Design Review Begin Site Specific Design Review with Engineering Firm Conduct Site Assessment Conceptual Layout Conduct Public Review Develop Basic Integration Concept Conceptual Integration Design PROPOSED SYSTEM COSTS Identify Total Project Costs Projected Capital, O&M, and Fuel Costs PROPOSED BENEFITS Annual Fuel Displacement & Costs Analysis Annual Review Estimates Identify Non Monetary Benefits ENERGY SALE Identification of Market Sale Rates BEGIN PERMITTING PROCESS Identify List of Permits Required Develop Permit Timeline Identify Potential Regulatory Barriers ENVIRONMENTAL ISSUES Initial Environmental Screening Identify Potential Impacts Identify Potential Regulatory Barriers LAND OWNERSHIP Sign Site Agreements ANALYSIS AND RECOMMENDATIONS Basic Economic Analysis of Alternatives Recommendations of Additional Project Work PROJECT  TIMELINE STG UVEC AURORA CONSULTING /  STG STG UVEC UVEC IES/EPS STG UVEC STG AEA / GEC OCTOBER 8TH Partners STG / UVEC UVEC/AURORA  CONSULTING  AURORA CONSULTING /  STG AURORA CONSULTING /  STG DMA UVEC RENEWABLE ENERGY FUND WIND PROJECT SCHEDULE STG UVEC UVEC AURORA CONSULTING /  STG Responsibility UVEC STG / LEGAL IES/STG HDL/STG UVEC UVEC UVEC CITY HDL STG / UVEC Phase I ‐ Reconnaissance & Phase II ‐ Feasability Analysis, Conceptual Design Renewable Energy Fund Grant Application Renewable Energy Fund Grant Application Page 6 of 49 10/8/2008 FINALIZE ENGINEERING DESIGNS Foundation Designs Interconnection Diagrams Preliminary Site Layout BID KEY EQUIPTMENT Turbine Procurement Tower Procurement Switchgear Procurement Other Procurement BEGIN FINANCING DEVELOPMENT Define Contract Terms Sign Final Construction Agreement Access Necessary Capital Place Equipment Orders Tax Planning for Private Entities PROJECT COST Final Project Costing PERMITS & ENVIRONMENTAL Necessary Permits Obtained Environmental Issues Resolved ANALYSIS AND RECOMMENDATIONS Finalize Draft Busiiness Plan Periodic Reporting as Required by Grant RENEWABLE ENERGY RESOURCE Monitor to Update Resource PROPOSED SYSTEM DESIGN Formal Survey Work ‐‐ Final Site Design Take Off  And Mobilization Finalize Supply Delivery Schedules Finalize Heavy Equipment Delivery Schedules Organize Project Freight / Logistical Requirements Barge Deliveries Crew Housing Team Development Excavators, Operators, Electricians, Laborers Site Access Development Road Construction Road Repair Foundation Excavation Foundation Installation Pile Driving Concrete Pours & Backfill System Integration Connection to Transmission Lines Connection to Sub-Stations Connection to Metering Systems Connection to Power Distribution System Infrastructure Connection to Powerhouse Transmission Line Installation SCADA Installation System Calibration Tower Erection Tower Installation Nacelle Placement Blade Placement PROJECT COST Monitor to Update Resource PERMITTING & ENVIRONMENTAL Finalize Regulatory Requirements Finalize Permitting Reports ANALYSIS AND RECOMMENDATIONS Develop Safety And Maintenance Schedule As Built Diagrams Relevant to Construction Changes Relevant to Electrical/Distribution Changes Business Plans Update Business Plans Periodic Reporting as Required by Grant STG UVEC/STG/     EPS   EPS FALL 2010 UVEC/GEC UVEC AURORA CONSULTING STG EPS IES/SUPPLIER SPRING 2010 STG UVEC/   SUPPLIER EPS/IES HDL STG / UVEC SPRING 2009 STG/   SUPPLIER(S)UVEC STG UVEC STG BARGE TRANSPORTATION UVEC STG STG BBFM/DMA STG DMA STG UVEC AURORA CONSULTING STG STG IES STG UVEC / LEGAL HDL/STG UVEC STG SUBS STG Phase IV ‐ Construction, Commissioning, Operation, and Reporting Phase III ‐ Final Design & Permitting Renewable Energy Fund Grant Application Renewable Energy Fund Grant Application Page 7 of 49 10/8/2008 3.3 Project Milestones Define key tasks and decision points in your project and a schedule for achieving them. Following are the key project milestones, by project phase, and anticipated completion date: Phase I and II Tasks (Reconnaissance , Analysis & Design) 1. Initial Renewable Resource Review Completed 2. Existing Energy System Analysis Completed 3. Proposed System Design Completed 4. Proposed System Costs Estimations Completed 5. Proposed Benefits Completed 6. Energy Market/Sales Analysis Completed 7. Permitting Review Completed 8. Analysis of Potential Environmental Issues Completed 9. Land Ownership Preparations Completed 10. Legal Consultations Completed 11. Preliminary Analysis and Recommendations Completed Phase III Tasks (Final Design and Permitting) 12. Project Management Winter/Spring 2009 12. Perform Geotechnical Analysis Winter/Spring 2009 13. Finalize Energy Production Analysis Winter/Spring 2009 14. Finalize Foundation Designs Winter/Spring 2009 15. Finalize System Integration Designs Winter/Spring 2009 16.1 Finalize Land Agreements Winter/Spring 2009 16.2 Purchase Land Winter/Spring 2009 17. Turbine Procurement Winter/Spring 2009 18. Begin Financing Development Winter/Spring 2009 19. Apply for/Obtain Permits Winter/Spring 2009 20. Draft Final Operational Business Plan Winter/Spring 2009 Phase IV Tasks (Construction, Commissioning, Operation and Reporting) 22. Project Management Fall 2010 21.1 Foundation Material Procurement Spring 2010 21.2 Mobilization and Demobilization Costs Spring 2010 21.3 Site Access and Foundation Development Spring 2010 21.4 Foundation Installation Spring 2010 21.5 Tower/Turbine Erection Fall 2010 21.6 Transmission/Distribution Lines Fall 2010 21.7 Power Storage Foundation Pad Fall 2010 21.8 Construction Survey/As-Built Diagrams Fall 2010 21.9 Job Site Clean Up Fall 2010 22. System Integration Fall 2010 23. SCADA Installation Fall 2010 24. System Calibration Fall 2010 25. Final Business Plan Development Fall 2010 Renewable Energy Fund Grant Application Renewable Energy Fund Grant Application Page 8 of 49 10/8/2008 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. The Unalakleet Renewable Energy Fund Wind Project will be under the overall direction of Isaiah Towarak, general manager of the UVEC; while the project manager will be James St. George, president of STG Incorporated. Personnel: UVEC general manager, Isaiah Towarak, will have ultimate responsibility and authority over project decisions and will ensure that all grant requirements are fulfilled. Mr. Towarak will be assisted by UVEC office manager, Michelle Harvey, who will oversee all grant accounting functions; and, the UVEC chief plant operator, Henry Nielsen, who will coordinate new line extensions with the project manager, STG. (See Section 4.4.5 Business Plan for a more detailed discussion of UVEC – its business structure, management, operations, etc.) Contractors: James St. George (STG) will be the project manager of the Unalakleet Renewable Energy Fund Wind Project. As such, STG will manage all project labor, all consultants, procurement, construction contractors; review all plans and specifications and all project work; conduct on-site inspections; and, other management functions to ensure that the project objectives are attained. The UVEC and STG have established contractual relationships with a strong team of subcontractors to assist with this project; including Intelligent Energy Systems LLC, DNV Energy Concepts Inc., Electrical Power Systems, Duane Miller Associates LLC, Hattenburg Dilley & Linnell, BBFM Engineers and Aurora Consulting. The organizational chart below shows the key project partners and project roles: Chris Schimschat Sandy St. George VP, Field Operations Accounting Dave Myers Project Manager Brennan Walsh Project Engineer Mia Devine Dennis Meiners Dan Rogers, P.E. Richard Mitchells, P.E. Scott Hattenburg, P.E. Troy Feller, P.E. Ann Campbell, MB DNV Global Energy Concepts (GEC) INTELLIGENT ENERGY SYSTEMS (IES) ELECTRICAL POWER SYSTEMS (EPS) UNALAKLEET VALLEY ELECTRIC COOPERATIVE STG INCORPORATED DUANE MILLER ASSOCIATES (DMA) HATTENBURG DILLEY & LINNELL (HDL) Aurora Consulting A Engineer Principal Principal Project Engineer Principal Principal Principal Resource Wind/Integration Electrical Integration Geotechnical Project Permitting Analysis Consultant Services Engineering Sub-Contractors James St. George, President Project Manager, General Contractor Isaiah Towarak, General Manager Project Owner Business Plannin Structural Engineerin gg BBFM ENGINEERS (BBFM) Renewable Energy Fund Grant Application Renewable Energy Fund Grant Application Page 9 of 49 10/8/2008 DNV Global Energy Concepts Inc. will provide validation and analysis of wind resources. GEC is a multi-discipline engineering and technology consulting firm providing services to clients involved in the energy industry. Recognized as leaders in the wind energy industry, the firm specializes in the analysis, design, testing and management of wind energy systems and projects. GEC supported the Kotzebue Electric Association with wind resource assessment and power performance testing tasks; is siting met towers at several locations in southeast Alaska, worked with AEA on power performance testing at Toksook Bay and performed site assessments at U.S. Air Force Long Range Radar Stations along Alaska’s west coast. Intelligent Energy Systems (Principal: Dennis Meiners) will provide wind project development and coordination services. IES provides energy project development, management and coordination services to communities in rural Alaska with high energy costs. IES services include: feasibility, financing, regulatory compliance, project planning and implementation evaluation and support/maintenance programs. Recent projects include the Puvurnaq Power Company Model High Penetration Wind Diesel Project and three high penetration wind diesel systems, with smart grids, for the Chaninik Wind Group. Electrical Power Systems (Principal: Dan Rogers, P.E.) will provide electrical integration services. EPS has historically focused on providing substation, generation, control, protection, system planning and analysis and distribution engineering for utility, industrial and governmental clients. The majority of EPS’ clients are based in Alaska and the firm has extensive experience working within rural communities including the development of a wind/diesel SCADA system for Kotzebue Electric to control the city’s six diesel generators and its wind farm. Duane Miller Associates, LLC (Principal: Duane Miller, P.E.) will provide geotechnical engineering services. DMA engineers are peer reviewed and recognized experts in cold regions geotechnical engineering as well as unfrozen ground geotechnical engineering. DMA geotechnical engineering project experience ranges from small rural projects to large industrial and defense projects. Hattenburg, Dilley & Linnell (Principal: Scott Hattenburg, P.E.) will provide project permitting and environmental services. HDL specializes in civil, geotechnical and transportation engineering as well as providing permitting and environmental services. HDL has extensive experience with rural energy projects and working with rural communities including the recent completion of permitting and environmental review for the Hooper Bay and Chevak wind projects. BBFM Engineers (Principal: Troy Fellers, P.E.) will provide structural engineering services. BBFM has provided structural engineering design services to military and civilian clients throughout Alaska. BBFM has particular expertise in rural Alaska; completing more than 80 building and tower projects in western Alaska. Additionally, BBFM has designed tower foundations in 12 different villages in soil conditions ranging from marginal permafrost in deep silty soils to mountain-top bedrock. Aurora Consulting (Principal: Ann Campbell, M.B.A.) will provide project planning and business planning services. Aurora Consulting has over 30 years of experience providing business and management consulting services throughout Alaska to a wide variety of governmental and private entities. Additionally, Aurora Consulting has assisted with the development of business operating Renewable Energy Fund Grant Application Renewable Energy Fund Grant Application Page 10 of 49 10/8/2008 plans for over 75 rural utility projects, including water/sewer projects, bulk fuel projects, electric utilities, hydro-electric projects and wind generation projects. Suppliers: The Unalakleet Renewable Energy Fund Wind Project will follow competitive purchasing procedures that meet the standards defined in the sample AEA Grant Agreement. Through the conceptual design planning efforts completed during Phase I and II of this project, it has been determined that the two most critical equipment suppliers for the Unalakleet Renewable Energy Fund Wind Project will be the entities supplying wind turbines and energy storage equipment components. Independent wind resource analysis and production estimates generated by GEC indicates that two currently available turbines, the Fuhrländer 600 FL (600 kW) and Vestas PS-RRB (600 kW), would provide similar benefits and could be installed as proposed in this application. Conceptual planning along with the solicitation of bids from both turbine suppliers and independent energy production estimates also indicates that the delivery of a turn-key wind energy system, utilizing either model, would produce both comparable costs and benefits. Detailed evaluation of both models in regards to estimated installed cost, delivery schedules, available cold weather packages and expected performance has been performed. Other less tangible evaluation criteria including each supplier’s ability to provide parts for anticipated repairs over the life of the project, their ability to support local training efforts regarding the wind turbines themselves and the documented performance of previously installed units were also considered. Through the conceptual planning process, we have also determined that numerous supply options exist regarding available energy storage components. Our conceptual planning and design work to date has incorporated the anticipated utilization of the Vestas turbines to complete the project. Nonetheless, and due to both strong demand for this technology in the global marketplace, along with our inability to secure a fixed delivery schedule and fixed price of this key equipment without a secured down payment, it is possible that the costs and delivery schedules of these turbines may become less attractive by the time grant funds would be released to fund the proposed project (quotes remain valid for only a 30 day period). While we believe that we could obtain comparable delivery schedules and costs similar to those quoted, we believe that these purchasing decisions should be revisited once awards for this grant are announced. Equipment: All of the major construction equipment required for the Unalakleet Renewable Energy Fund Wind Project is available from the City of Unalakleet and/or STG. The heavy equipment available locally from the City of Unalakleet includes: Loaders (3), Skid Steer Loaders (2) Tracked Excavator Backhoe/Loader 10 Yard Dump Truck Dozers (4) Renewable Energy Fund Grant Application Renewable Energy Fund Grant Application Page 11 of 49 10/8/2008 Kobelco CK 1600, series 2, with luffing boom, 160 ton hydraulic cr Tadando 28 ton Rough terrain crane Caterpillar D9T, bulldozer w/ ripper Caterpillar D6R, bulldozer w/ ripper Caterpillar 980G loader, bucket forks Caterpillar 980G loader with masted fork lift Caterpillar 345B excavator Caterpillar 680E compactor Caterpillar 287B tracked loader 3 each, Terex Series 7, 30 ton articulated dump trucks Advanced Mixer Truck 12 yard Quick way Batch Plant Ingersoll -Rand ECM 370 Drill Chevy 1-1/2 ton 4x4, mechanic Truck 4 pickup trucks 4x4, crew cabs awler crane STG will provide the remainder of the major construction equipment, to include: Resumes and general information for key personnel, contractors and suppliers is included in Section 7: Additional Documentation and Certification. 3.5 Project Communications Discuss how you plan to monitor the project and keep the Authority informed of the status. As the grantee, UVEC general manager, Isaiah Towarak, will be the point of contact between UVEC and the Alaska Energy Authority. As such, Mr. Towarak will be responsible for submitting AEA monthly and quarterly progress and financial reports, which will summarize the progress made during the reporting period and identify any difficulties in completing tasks or meeting goals or deadlines as well as financial reports. UVEC will utilize the AEA format for these reports. In addition, the project manager, James St. George (STG), will be responsible to monitor the project activities and to coordinate with UVEC. STG will coordinate daily team meetings to outline daily objectives and issues and, weekly, will communicate with UVEC’s general manager to identify any outstanding issues and suggested resolutions. Additionally, STG will provide the UVEC general manager information for the AEA required monthly and quarterly reporting. STG will focus on variance analysis, comparing actual project results to planned or expected results; a summary of tasks completed during the reporting period; a summary of tasks scheduled for completion in the next reporting period; and, identification of project challenges and problems. STG will provide the information to UVEC in the approved AEA format for these reports. Change Process: The information contained within the project plan will likely change as the project progresses. While change is both certain and required, it is important to note that any changes to the project plan will impact at least one of three critical success factors: available time, available resources or project quality. The decision by which to make modifications to the project plan will be coordinated using the following process: Renewable Energy Fund Grant Application Renewable Energy Fund Grant Application Page 12 of 49 10/8/2008 Step 1: As soon as a change that impacts project scope, schedule, staffing or spending is identified, the project manager will document the issue. Step 2: The project manager will review the change and determine the associated impact to the project and will forward the issue, along with a recommendation, to UVEC and/or AEA for review and decision. Step 3: Upon receipt, the UVEC general manager, project manager and/or AEA should reach a consensus opinion on whether to approve, reject or modify the project plan based upon the project manager’s recommendation and their own judgment. ` Step 4: Following an approval or denial, the project manager will modify the project plan and notify all the affected project partners. 3.6 Project Risk Discuss potential problems and how you would address them. The Unalakleet Renewable Energy Fund Wind Project planning must incorporate an analysis of potential problems and strategies to address them. Outlined below are the key issues the project is anticipated to encounter: Issue #1: Integration of the wind system is dependant on the transfer of ownership of the Federal Aviation Agencies VOR electrical line (delta system) to UVEC. UVEC has an agreement that needs to be authorized by UVEC's Board. The transfer of the ownership of that line will take approximately a week or two after receipt in the FAA's Anchorage office. In the agreement, UVEC agrees to convert the line from a delta system to a Wye System meeting UVEC's current system. Strategy to address: UVEC Board authorized the agreement on 9/24/08 and the FAA has agreed in principal to the transfer. UVEC does not anticipate a long-term delay with the transfer. This agreement is included in Section 7: Additional Documents and Certification. Issue #2: Construction of a cost effective tower foundation. Strategy to address: Foundation design will be developed with the contractor and structural engineer working together as a team to determine appropriate materials and systems for the site. STG and BBFM have successfully worked together on many other communication tower and wind tower foundation designs in remote Alaskan locations. Getting contractors input up front at the concept stage of design allows an appropriate foundation system to be developed for a particular site. Issue #3: Developing a tower foundation design that can be adapted for unforeseen field and geotechnical conditions. Strategy to address: Design and select foundation systems that can be modified in the field to overcome unforeseen conditions. This also applies to the quantity of foundation materials that will be transported to the site. Issue #4: The proposed Unalakleet installation site is at an elevation that could be affected by icing conditions. The key design challenges will be verifying wind and ice conditions for the site elevation and determining if an all overhead powerline is feasible. Renewable Energy Fund Grant Application Renewable Energy Fund Grant Application Page 13 of 49 10/8/2008 Strategy to address: Rely on local knowledge and a winter 2008/2009 icing assessment at the tower site including installing a temporary overhead cable to measure icing. Issue #5: Refining site access and permafrost conditions. Strategy to address: Conduct a geotechnical assessment along the powerline route for frozen soils and permafrost conditions. Issue #6: MEA could express opposition to the project. Matanuska Electric Association (MEA) holds the Operating Certificate for Unalakleet. In 1963, the Federal government funding agency, Rural Electricification Administration (REA), asked Alaska's first electric cooperative, MEA, to assist Unalakleet in creating a utility. The State of Alaska's operating certificate was put in MEA's name and the REA loans needed for power plant construction, fuel tank construction and line distribution were recorded under MEA's name. UVEC still has an outstanding balance of $92,000 in REA loans recorded in MEA’s name. Therefore, MEA has a vested interested in the financial viability of UVEC. UVEC has been paying off those loans with a quarterly payment of $8,400. Strategy to address: (a) UVEC could request a similar management and operation agreement for a wind project. A draft agreement has been prepared for discussion purposes. (b) UVEC could become a qualified facility under MEA's tariff and provide power to the Unalakleet Customers. (c ) UVEC could assume a loan to pay off the remainder of the Long Term Debt with MEA and request that the facilities and operating certificates be turned over to UVEC per the original agreements. Issue #7: Cold weather operations/Turbine icing: Extremely low temperatures may cause materials to become brittle and less ductile, and lubricants to become less viscous, which could result in damage to parts. Such temperatures may also cause electronic and hydraulic systems to cease working. Strategy to address: It is anticipated that the turbines will experience icing conditions which will contribute towards the estimated total losses of energy production. While these losses have been included in the production estimates, and anticipated in the system design, reducing these losses represents a significant opportunity to improve project economics. And several approaches to increasing production have been proposed; including blade coating, careful selection of materials and the addition of special heaters and sensors. Issue #8: Operations and maintenance. Strategy to address: Proper operations and maintenance can only be carried out by qualified and trained personnel who are suitably equipped with tools, spare parts, training and other necessary resources. Because of the similarity of equipment proposed for Nome, a sufficient concentration of technical personnel that is capable of performing the majority of operations, repair and maintenance activity will be available regionally. The proposed design is technically simple, and has been proven to work reliably and effectively. The system can operate without any individual component, the only effect being low utilization of the wind system and decreased fuel savings. Renewable Energy Fund Grant Application Renewable Energy Fund Grant Application Page 14 of 49 10/8/2008 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. Over the past two years, UVEC has been collaborating with the Alaska Energy Authority on the redesign of their power plant. As part of this analysis, the Alaska Energy Authority has documented their interest in developing a wind power facility as part of the overall AEA project. This evaluation of redesign considerations, along with a proposed wind turbine installation, has been recorded in a recent 65% conceptual design report prepared by CRW Engineering Group (CRW) LLC and DNV Global Energy Concepts Inc. Our integration plans have been prepared with the consideration of the proposed overhaul of the UVEC system, as described in the 65% CDR prepared by CRW. It has been assumed that overgrades will be completed as proposed in this document. Moreover, UVEC wind project participants will collaborate closely with CRW and AEA, as they finalize powerhouse upgrades. CRW’s CDR is included in Section 7: Additional Documentation and Certification. To further document the viability of the proposed project, UVEC commissioned a second study, completed by DNV Global Energy Concepts Inc., which confirmed that wind power remains an attractive consideration in efforts to reduce the cost of energy for those who purchase electricity from the utility. While other potential sources of renewable energy supplies are believed to exist, such as river or tidal power, the relative immaturity of these technologies makes them a less attractive potential solution for reducing energy costs in comparison to wind.   Based upon information prepared by GEC, locally measured wind speed data indicates that there is good potential for wind power development in Unalakleet. GEC estimates that the proposed wind project site has a Class 3 wind resource resulting in an annual average wind speed of 6.7 m/s at a height of 50 m above ground level. For comparison, the Kotzebue wind site has a Class 4 wind resource and the Toksook Bay wind site has a Class 5 wind resource. The wind resource in Unalakleet varies seasonally with higher winds in the winter months. During the summer months, the wind resource varies throughout the day, with higher winds in the afternoon and lower winds in the evening and morning hours. In addition to the wind resource, a number of other factors impact the viability of a wind-diesel project, including the cost of diesel fuel displaced, the cost of installing and operating the wind power equipment and the ability to service the wind equipment after installation. Computer modeling was performed to compare the economic and technical potential of different wind power options in Unalakleet. A medium-penetration wind power project in Unalakleet could Renewable Energy Fund Grant Application Renewable Energy Fund Grant Application Page 15 of 49 10/8/2008 displace up to 47,000 gallons of diesel fuel per year (16% of current consumption). The life cycle cost analysis, conducted by GEC, shows that the different wind-diesel hybrid power options range from 97% to 107% of the net present cost of the diesel-only power system option, assuming the price of diesel fuel remains fixed at $2.73 per gallon over the 25-year life of the project. Since the preparation of GEC’s initial analysis, which was completed in 2007, the price of diesel in Unalakleet has risen to $4.38 per gallon. This factor has contributed to our interest in creating a higher penetration system, than what was originally proposed, to achieve great fuel savings in the future. See Section 7: Additional Documentation and Certification for detailed studies on the Unalakleet wind resource, including studies by the Alaska Energy Authority and DNV Global Energy Concepts Inc. 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 UVEC Power Plant consists of two pre-engineered metal buildings of differing ages erected side-by-side with a common wall. Both structures sit on concrete slab-on-grade foundations. Primary power is provided by two 620 Kilowatt (kW) CAT model 3512 generator sets; both engines have approximately 120,000 total hours and have been rebuilt approximately 10 times. A 500 kW CAT model D398 generator set provides backup power. The existing engines and generators have exceeded their intended service life (typically about 100,000 hours) and should be replaced. Many of the supporting mechanical systems, such as ventilation, fuel handling and cooling, are also due for replacement. Currently, the Alaska Energy Authority is working with CRW Engineering Group LLC and the UVEC to develop an upgrade to the UVEC powerhouse. A Conceptual Design (65%) was completed in October 2007 and the project is still in the planning and design phase; and is included in Section 7: Additional Documentation and Certification. Currently, the UVEC electrical power generation system consists of diesel powered generators, as outlined below: Brand/Model Size (kW) Age Avg. Efficiency (kWh/Gal. Diesel) Caterpillar #3512 620 kW 25 13.35 Caterpillar #3512 620 kW 25 14.23 Caterpillar #398 500 kW 24 11.83 Chicago Pneumatic 300 kW 40 Emergency only – not used Renewable Energy Fund Grant Application Renewable Energy Fund Grant Application Page 16 of 49 10/8/2008 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. UVEC utilizes diesel to generate its electricity. In 2007, UVEC consumed 293,360 gallons of diesel for power generation purposes; at an average cost of $2.72 per gallon. As with other rural Alaska locations, the price of diesel fuel is rising exponentially - since 2003, the price of diesel delivered to UVEC has increased by more than 245%. According to project planning estimates, UVEC should generate approximately 2,968 MWh utilizing the new wind turbines. Based upon existing diesel-generator efficiency of 13.67 kWh/Gal and anticipated energy losses with the installed turbines, UVEC would realize an annual savings of 171,500+ gallons of diesel fuel per year. At an estimated delivered price of $4.49 per gallon (the most recent cost of diesel delivered to UVEC), the utility would realize annual savings of $770,299. 4.2.3 Existing Energy Market Discuss existing energy use and its market. Discuss impacts your project may have on energy customers. The Unalakleet Valley Electric Cooperative serves the community of Unalakleet and the majority (80%) of UVEC customers are residential (single phase) customers, with commercial customers constituting the second largest (13%) number of customers. Customers – 2007 Residential 277 79% Commercial 45 13% City Facilities 16 4% Federal/State 14 4% Total 352 100% Currently, the largest class of kWh consumers of UVEC electricity is commercial customers (43%) and the second largest is residential (39%). kWh Sold – 2007 Residential 39% Commercial 43% City Facilities 11% Federal/State 7% Although Unalakleet is a sub-regional hub for the Norton Sound area, the community is not anticipating significant growth in the near-term. Over the past several years, the economy of Unalakleet has been stable – buoyed by a steady service industry. The commercial and sports fishing sectors continue to bring in a steady flow of revenue to the community – thanks in some measure to the efforts of the Norton Sound Economic Development Corporation (NSEDC). In fact, commercial sales were up in 2008, following a strong commercial fishing season. Conversely, growth in residential sales has been less than 1% over the past 10 years. The project has potential to provide cheaper energy for a long term and will assist the State of Alaska in helping reduce the need for Power Cost Equalization. The limits of the PCE program Renewable Energy Fund Grant Application Renewable Energy Fund Grant Application Page 17 of 49 10/8/2008 hinder how much energy a person can use and does not benefit commercial customers. A wind project would benefit all UVEC consumers with reduced operating costs, including important commercial customers such as the NSEDC processing facility. 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 System Overview Wind-diesel power systems are categorized based on their penetration levels and categorized as low penetration, medium penetration, high penetration and high penetration diesel off configurations. As the level of penetration increases, the average proportion of wind generated energy to the total amount of energy supplied to the system, the degree of communication between existing power generation facilities and the installed wind energy systems increases in complexity. It has been demonstrated that low penetration systems, ones in which the proportion of wind generated energy to total generated energy rarely does not exceed 30%, require few modifications to the existing diesel systems, but are generally less economical due to limited fuel savings in comparison to total installation costs. This is especially true for systems designed for rural Alaskan communities because of the fixed installation costs - primarily the cost of transporting the heavy construction equipment and foundation materials needed to complete village power systems. And, these costs are incurred regardless of the total size of the project. In efforts to construct a system that considers the realities of these cost issues, this application documents a high penetration system design that aims to maximize the absorption of available wind energy while keeping power quality high and reducing diesel generation costs as much as possible for the community of Unalakleet. Furthermore, and as a result of the estimated penetration levels of the proposed system, specific equipment and operating changes are proposed to be integrated into UVEC’s existing infrastructure. The Wind-diesel system proposed in this application is based on the following objectives: • Maximize fuel savings through the implementation of a system design that will deliver the highest cost to benefit ratio possible • Maintain high power quality and system stability • Utilize standardized, proven and scalable commercial components that will provide opportunities to utilize additional renewable energy supplies in the future • Implement a system that will be similar in design to others within the region to capitalize on economies of scale and an expanded knowledge base Renewable Energy Fund Grant Application Renewable Energy Fund Grant Application Page 18 of 49 10/8/2008 The system architecture proposed in this application consists of four primary elements: • Two 600 kW Vestas PS-RRB wind turbines • An energy storage system consisting of battery storage and/or flywheel components • A distributed integrated control system • A heat recovery boiler to capture any excess wind energy Similar wind-diesel systems, to the one proposed in this application, have been deployed successfully in markets across the world. Moreover, it is believed that the implementation of this proposed wind installation will provide significant opportunities to further develop Alaska’s knowledge base regarding wind energy systems and capitalize on economies of scale through the use of a system design that is similar to the wind energy project that has been proposed through the Nome Joint Utility System (NJUS). As previously indicated in this application, CRW Engineering Group LLC has recently created a 65% conceptual design for the redesign of Unalakleet’s power house. It is believed that the system proposed in the application can be successfully integrated with previously completed conceptual planning. It is the intent of project partners involved with this wind energy installation to collaborate closely with CRW and the Alaska Energy Authority as their planning work becomes finalized. Project Location Various installation locations for the project were considered based on the review of documented wind resource data, land availability and existing electrical distribution infrastructure. Project team members have concluded that the most suitable location for the wind farm would be the gravel pit located approximately 1.5 miles northeast of Unalakleet. This property is currently owned by the Unalakleet Native Corporation (UNC) and UVEC is currently engaged in negotiations with UNC regarding the lease of the project site should grant funds be awarded to implement this proposed wind energy project. Land appraisals have not been performed in the surrounding area of Unalakleet in more than 30 years and, as a result, the project team has experienced some delay in determining the exact value of the property. The landowner has verbally committed to making the land available for the project through a lease agreement, but a formal resolution has yet to be reached. UVEC believes that this step will be accomplished within the month. For the purpose of this application, the value of the project location has been estimated at $100,000 and has also been allocated as a certified project match. Below is a site diagram of the proposed wind farm: Renewable Energy Fu Grant Applicat nd ion Renewable Energy Fund Grant Application Page 19 of 49 10/8/2008 System Architecture Wind Turbines During the conceptual design phases of this project, two 600 kW turbines were evaluated based on a variety of criteria. These considerations included estimated delivered price of all wind turbine components (generator, blades, tower, controls, etc.), estimated delivery schedule, expected performance and total estimated savings. Our analysis indicates that both turbines would produce similar cost benefit ratios if selected as the primary component of the proposed system described in this application. Nonetheless, due to the high demand of wind turbines in the global market along with the limited supply of turbines of this particular size, we believe that it is possible that we will no longer have access to either of the turbines that have been evaluated at the prices that have been quoted to us or within the delivery times that have been promised by the time grant funds are allocated. We believe that the final decision as to what turbine will be utilized will need to be made at the time when funds are made available. Of the two turbines that have been considered, the Fuhrländer 600 FL (600 kW) and the Vestas PS-RRB (600 kW), we have based our conceptual planning on the installation of the Vestas model. We believe that this model is the best machine currently available to our team, but should it become more attractive for UVEC to consider the Fuhrländer unit at the time of an award, we believe that only minor modifications of previously completed conceptual designs and cost estimates would be necessary. Our project team is prepared to move forward on an accelerated construction schedule utilizing either model should an award be granted. Renewable Energy Fund Grant Application Renewable Energy Fund Grant Application Page 20 of 49 10/8/2008 This application proposes that two 600 kW Vestas PS-RRB wind turbines be erected at the current location of an installed Alaska Energy Authority met tower on top of 50-meter tubular towers. Summary specifications of the PS-RRB turbine are included below: The Vestas PS-RRB is a three bladed, horizontal axis wind turbine based on the Vestas V-47 design. The PS model is currently being manufactured new by RRB Energy in India through the oversight of Vestas corporate, the world’s leading wind turbine manufacturer. Approximately 3,000 of the previously discontinued V-47 turbines have been installed in the U.S. market and over 600 of the RRB design are currently in operation. With the exception of the Siemens generator that is included in the RRB model, all parts are interchangeable with standardized V-47 components. Due to the familiarity of the V-47 design to the majority of wind industry technicians and the ability to obtain replacement parts, it is believed that the RRB turbines could be readily serviced. Moreover, the further utilization of Vestas turbines would support the number of Vestas machines already in service across rural Alaska. By utilizing the same model turbine as what has been proposed through NJUS, UVEC also believes that additional benefits will be realized through the creation of joint training exercises, an expanded knowledge base and potential sharing of replacement parts during anticipated maintenance of the newly installed system. To further evaluate the attractiveness of utilizing the wind resource at the proposed installation site in general, and to compare the two particular turbine models under consideration specifically, DNV Global Energy Concepts was commissioned to perform a wind energy production analysis. The study was completed through the use of computer modeling software supported by documented wind resource data supplied by the Alaska Energy Authority and historical production information supplied by UVEC. The complete study is contained in Section 7: Additional Documentation and Certification and further supports the wind analysis that was preformed last year by DNV Global Energy Concepts as part of an ongoing conceptual design planning being prepared by CRW Engineering Group LLC to redesign the UVEC power system. A summary of the recently commissioned study completed by DNV Global Energy Concepts is below and the complete report is contained in the supporting documents section of this application. Renewable Energy Fund Grant Application Renewable Energy Fund Grant Application Page 21 of 49 10/8/2008 Energy System Modeling Results (Total project production based on 0% spinning reserve) Description VESTAS FUHRLÄNDER Gross wind energy production (MWh/yr) 2,968 3,460 Gross wind turbine capacity factor (%) 28.2% 32.0% Fuel consumption of diesel-only system (gal/yr) 311,000 311,000 Fuel consumption of wind-diesel system (gal/yr) 175,000 163,000 Gross diesel fuel savings (gal/yr) 136,000 148,000 Energy loss correction factor 0.79 0.79 Net diesel fuel savings (gal/yr) 107,000 117,000 Net diesel fuel savings (%) 34% 38% Source: DNV Global Energy Concepts In addition to cost and production considerations, the Vestas PS-RRB turbine was selected for its relationship with an industry standard and proven design, access to a service and support network, an estimated nine-month delivery time, and the willingness of the manufacturer to support and customize these turbines for extended cold weather operation. Project partners have also engaged the Alaska’s Department of Labor in discussions regarding the creation of a training program that would provide local residents with the skills necessary to perform routine maintenance and repairs on the installed turbines. Similar programs have already been developed through partnership between the Department of Labor, Alaska Village Electric Cooperative, STG and Northern Power Systems that have successfully trained individuals to perform these services within their communities. Initial discussions about the creation of similar programs designed around the specifications of the Vestas machines have been positive and further collaboration between all involved parties is expected to materialize into the development of a new training program should grant funds be awarded to implement this proposed project. Energy Storage System The UVEC diesel generator sets have capacities of 620 kW, 620 kW and 500 kW respectively. The existing plant control system senses the demand at any given point in time and automatically dispatches the most efficient generator set, or combination of sets, to meet that load. As a result of the intermittent supplies of energy that will be fed into UVEC’s distribution system through the completion of this proposed project, some modifications of the existing UVEC infrastructure will be necessary. Moreover, and due to the high penetration levels that are expected through the installation of the proposed wind generators, we believe that the installation of a flywheel at the UVEC plant would both add stability to the overall system and provide opportunities to more efficiently balance the intermittent energy supplies delivered from the newly installed turbines. Our proposed system design involves the installation of a flywheel that is electrically coupled to the existing power system along with the potential installation of additional battery based storage as deemed appropriate during the final stages of conceptual design. The flywheel and power electronics interface combination, by itself, is capable of basic stabilization of both the voltage and frequency of the power system, without any additional information from external sources. Inherently, flywheels are able to achieve this stabilization through frequency and voltage sensing of the grid along with the stepless absorption and exportation of real power for frequency variation and reactive power for voltage support. The energy stored in the flywheel reduces cyclic loading and smoothes out power fluctuations as the electric load and wind turbine outputs Renewable Energy Fund Grant Application Renewable Energy Fund Grant Application Page 22 of 49 10/8/2008 change. This level of stabilization also allows for greater diesel cost savings due to lower diesel set points on the generators, reduced spinning reserve on the flywheel itself and reduced maintenance costs with diesel generator sets. The fast acting flywheel energy storage system will also provide system stability on a sub cycle basis. The sub second response of flywheel systems is supplemented by the multi-second response of the diesel generators. This capability decreases the contribution of the diesel generators while riding through fluctuations of the wind. Finally, additional system stabilization is achieved by controlling the pitch and power-set points of wind turbines themselves. We believe that there are numerous suppliers of flywheel technology that could provide UVEC with necessary integration components once exact system specifications have been established. As indicated in the guidelines relayed in the sample grant agreement for this RFA, UVEC intends to follow a competitive bid process to secure this equipment when conceptual integration designs become finalized. Distributed Integrated Control Network To maximize the diesel savings generated through the installed wind energy system while maintaining system stability, all components must operate in a coordinated manner across the grid. This will be achieved through the installation of a network of distributed integrated controllers. These controllers, but more specifically the larger network, are designed to interface with existing power station controls. Controllers are typically mounted into existing control cabinets. Each device is driven by advanced software applications that allow each component within the system to recognize and coordinate its activities with the other units supplying or regulating energy flows on the system. The Distributed Integrated Control Network (DICN) also expands the capabilities of the existing plant supervisory control and data acquisitions system (SCADA) through the network of standard, commercially available component controllers, which run sophisticated software to integrate increasing levels of wind energy. In the wind-diesel configuration that has been proposed in this application, the power plant SCADA would trigger the various diesel generators to start and stop; while also issuing power set-points for each component in the power plant. The DICN would incorporate the setting and commands of the SCADA and configure the other components of the system, based on the load and available wind energy. In addition to the installed wind turbines and existing generator sets, a DICN controller would also be embedded in the flywheel module. Thus, the modular distributed control system controller could also be used as a complete, or supplementary, SCADA system, if called for during the development of finalized integration plans. Software will need to be either developed by partners or sourced by suppliers for this level of functionality - functionality designed to issue start, stop, step point commands and drive user interfaces, while providing opportunities for remote diagnosis. These features will be an essential component of the completed project that ultimately will be monitored by UVEC and electrical integration partners. Other components of the control network include: • Diesel Generator Monitors: Small DIN-rail monitoring modules will be added to the existing generator controllers. These modules communicate information between the Renewable Energy Fund Grant Application Renewable Energy Fund Grant Application Page 23 of 49 10/8/2008 generator sets and installed flywheel about the current state of the generator (running, stopped, on-line or off-line) as well as how much power the generator is delivering at any given point in time. • Wind Turbine Interface: The wind turbines are provided with a customer interface to the wind turbine controller (WTC) and monitoring modules will be added in order to communicate with the wind turbines. These modules send and receive data, such as the state of the machine (running, stopped, on-line and off-line, power generated, alarms, nacelle position, etc.), current energy production, system performance and system monitoring. Commands can be initiated from the wind turbine controller itself or from a centralized control station and typically include options that will allow system operators to start/stop turbines, control power outputs of the turbines through pitch regulation or power set point control and adjust other blade components. The WTC would communicate with UVEC via fiber optic cable. Heat Recovery System There will be times when the output of the wind farm proposed in this application will exceed the electric requirements of the community. Under these conditions two options are available to maintain system stability: 1. wind turbine output can be curtailed, or 2. loads can be managed to capture or control this excess energy. In efforts to capture all energy supplied from the installed wind turbines, our system design includes the installation of an electric boiler grid interface at the Unalakleet High School. While this boiler grid interface would be utilized as the primary system dump load designed to capture excess wind energy, additional dump load boiler systems will be considered as appropriate in other publically owned facilities within the community. Through communication with other system components and system wide energy monitoring, the dump load interface can be used to efficiently manage village power supplies while making maximum use of the wind energy generation. During times of increasing wind power generation, the dump load system funnels excess energy (energy that at any given point in time exceeds current system wide electricity needs) into a thermal heating unit. Thus, excess energy supplies are managed by increasing the total system load. During times of collapsing wind power generation, the dump load interface follows the total system load closely and reacts by decreasing its load. Thus, the dump load interface is able to lower the total power demand on the entire system. The installation of the dump load interface is also expected to improve the grid quality by providing reactive power and voltage level stabilization. The electric heat recovery boiler would be plumbed into the existing heating system located at the high school. Excess wind energy, when available, would be captured in this boiler and the heat used to offset fuel costs of running the high school. The heat recovery load at the high school would also require a separate metering and service panel, including cables and breakers. The system would be designed to utilize the existing temperature controls and act as demand managed devices controlled through the master control overlay. The method of communication proposed is Ethernet. Renewable Energy Fund Grant Application Renewable Energy Fund Grant Application Page 24 of 49 10/8/2008 Major community buildings with large heating requirements, such as the school, city offices Unalakleet’s health clinic and water/sewer treatment facilities also have been considered as potential installation sites for dump load components if deemed necessary or if the proposed wind farm is expanded at a later date. Energy Delivery and Integration Design Installed wind turbines will be placed approximately 900 feet apart as indicated in the site map referenced earlier this section. Conceptual project designs also indicate that approximately 13,000 linear feet of new transmission lines will be needed to connect the installed turbines to existing 12.47 kV transmission lines. Power lines connecting the turbines and substations to existing electrical distribution lines will also be above ground lines and ultimately be fed into a VOR line approximately two miles from the project location. UVEC will be responsible for performing necessary line upgrades from this connection point back to the power house. During conceptual planning for this project, UVEC has completed an agreement with the line owner (the Federal Aviation Administration). This power line renovation work on the newly acquired power line will be preformed by UVEC and contributed as a project match. Once connected to the existing system, energy supplies and system performance will be monitored as indicated earlier in this application. A one-line diagram of the proposed system is below: Renewable Energy Fund Grant Application Renewable Energy Fund Grant Application Page 25 of 49 10/8/2008 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 potential site for the UVEC wind farm is owned by the Unalakleet Native Corporation (UNC). UVEC is currently engaged in negotiations with UNC regarding the lease of the project site. Land appraisals have not been performed in the surrounding area of Unalakleet in more than 30 years and, as a result, the project team has experienced some delay in determining the exact value of the property. The landowner has verbally committed to making the land available to the project through a lease agreement, but a formal resolution has yet to be reached. UVEC believes that this step will be accomplished within the month. For the purpose of this application, the value of the project location has been estimated at $100,000. The land will be contributed toward the project as project match. 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 Based upon consultation with Hattenburg Dilley & Linnell LLC and information supplied in the “Nome Region Energy Assessment, DOE/NETL 2007/1284”, the following chart has been prepared to indicate applicable Federal and State permitting activities and their relevance to project components: Permit/Activity Applicability EPA National Pollutant Discharge Elimination System Applicable (if stormwater from construction disturbance) National Marine Fisheries Service Endangered Species Act Consultation Applicable F&W Coordination Act Consultation, Marine Mammal Act Applicable U.S. Fish & Wildlife ESA Consultant Applicable F&W Coordination Act Consultation Migratory Bird Protection Act Consultation Applicable Federal Aviation Administration Tower/lighting permit Applicable Alaska Department of Natural Resources Alaska Coastal Management Program (ACMP) Consistency Review Applicable (within coastal zone) Coastal Plan Questionnaire Applicable (within coastal zone) Cultural Resource Protection Applicable Alaska Department of Environmental Conservation Section 401 Certification Applicable Renewable Energy Fund Grant Application Renewable Energy Fund Grant Application Page 26 of 49 10/8/2008 HDL will lead project permitting efforts and anticipates that the permitting process will be completed within 120 days of the start of the project. This is based upon similar project experience and the following: • A field archaeological survey will not be needed for SHPO concurrence • There is no reason to assume there will be any significant environmental impacts • A Phase I Environmental Site Assessment should not be needed • Field delineation of wetlands should not be needed While there is no reason to believe that the project will encounter any insurmountable barriers, there is one potential challenge that could arise: 1. Potentially, there will be concerns by the U.S. Fish & Wildlife Service for the transmission line and migratory birds or the eiders, an endangered species potentially found in the area. Strategy to Address: Coordination will begin early in the project. At times mitigation can involve slight relocations to avoid potential concerns and this will be done early in Phase III. 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 Environmental analyses will be conducted to evaluate the potential effects of the proposed project. This analysis will not involve field work at this level outside of the site visit. Anticipated environmental issues to be addressed include: • Historical and Cultural Impacts. A search of the Alaska Historical Resource Survey will be conducted. After consulting with the native tribes and corporations, we will seek a State Historical Preservation Office (SHPO) concurrence of “No Historic Properties Affected.” • Wetlands. A review of the U.S. Fish & Wildlife Service’s National Wetlands Inventory will be conducted to identify wetlands in the project area. Where wetlands are encountered, a delineation report will be submitted to the U.S. Army Corps of Engineers for a jurisdictional determination. Wetlands impacts will be minimized to the greatest extent feasible. Renewable Energy Fund Grant Application Renewable Energy Fund Grant Application Page 27 of 49 10/8/2008 • Threatened & Endangered Species. An informal U.S. Fish & Wildlife Service (USF&W) Section 7 Consultation is anticipated due to the concern generated from wind towers and transmission lines with regards to migratory birds. • FAA Determination of No Hazard. HDL will apply for a determination from the FAA that the wind towers will not be a hazard to air traffic in the area due to its proximity to the airport. Issues that are not anticipated to be of major concern but will be fully addressed include land development constraints, telecommunications interference and visual impacts. 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 project costs of the Unalakleet Renewable Energy Fund Wind Project is estimated to be $8,996,832, inclusive of Phases I to IV. As discussed previously, this project has advanced through Phases I and II and is ready for Phases III and IV activities. Much of the cost of Phase I and II were borne by third-party researchers, however, project team members have contributed $28,412 in project conceptual design and initial feasibility study. The total grant request for the Unalakleet Renewable Energy Fund Wind Project is $8,774,080 based upon the following: Total Project Costs $ 8,996,832 Less: Phase I and II Contributed Costs ($ 28,412) Total Phase III and IV Costs $ 8,968,420 Less: Additional Investments ($ 194,340) Total Grant Request $ 8,774,080 The additional investment of $194,340 is inclusive of $100,000 of land contributed by the Unalakleet Native Corporation and $94,340 in labor and equipment contributed by the UVEC for line transmission upgrades. As indicated in the following budget summary, project costs have been developed utilizing contractor and vendor bids and cost quotes. The professional, contractual and construction cost estimates are expected to remain valid until the end of 2008; however, the turbine cost estimates Renewable Energy Fund Grant Application Renewable Energy Fund Grant Application Page 28 of 49 10/8/2008 BUDGET INFORMATION BUDGET SUMMARY:NJUS Renewable Energy Fund Wind Project Milestone Federal Funds State Funds Local Match  Funds (Cash) Local Match  Funds (In‐Kind) Other Funds TOTALS Phase I and II Tasks (Reconnaissance, Feasibility and Conceptual Design) 1. Initial Renewable Resource Review (GEC, AEA , CRW )$0.00 $0. 2. Existing Energy System Analysis (CRW CDR Report ‐ Partners)$4,301.75 $4,301. 3. Proposed System Design (All Project Partners)$6,864.25 $6,864. 4. Proposed System Costs Estimations (All Project Partners)$3,336.25 $3,336. 5. Proposed Benefits (GEC ‐ STG)$3,803.75 $3,803. 6. Energy Market/Sales Analysis (NJUS)$1,998.00 $1,998. 7. Permitting Review (HDL)$230.00 $230. 8. Analysis of Potential Environmental  Issues (HDL)$230.00 $230. 9. Land Ownership Preparations (NJUS)$1,998.00 $1,998. 10.  Legal  Consultations $400.00 $400. 11.  Preliminary Analysis and Recommendations (Aurora Consulting)$5,250.00 $5,250.  $                28,4 Phase III Tasks (Final Design and Permitting) 12. Project Management (STG Estimate)$75,000.00 $75,000. 13. Perform Geotechnical  Analysis (DMA Estimate)$44,000.00 $44,000. 14. Finalize Energy Production Analysis (GEC Estimate)$10,000.00 $10,000. 15. Finalize Foundation Designs (BBFM Estimate)$19,000.00 $19,000. 16. Finalize System Integration Designs (IES/EPS Estimate)$167,658.00 $167,658. 17.1 Finalize Land Agreements (Legal Estimate ‐ UVEC)$2,000.00 $2,000. 17.2 Purchase Land (Enter Estimated Value as a Cost ‐ UVEC)$100,000.00 $100,000. 18. Turbine  Procurement (Turbine Estimate  ‐ IES/STG)$2,685,480.00 $2,685,480. 19. Begin Financing Development (Legal Estimate ‐ UVEC)$2,000.00 $2,000. 20. Apply for/Obtain Permits (HDL Estimate)$20,000.00 $20,000. 21. Draft Final Operational Business Plan (Aurora Consulting Estimate)$10,000.00 $10,000.  $          3,135,1 Phase IV Tasks (Construction, Commissioning, Operation and Reporting) 22. Project Management (STG Estimate)$75,000.00 $75,000. 23.1 Foundation Material  Procurement (STG Estimate)$524,696.70 $524,696. 23.2 Mobilization and Demobilization Costs (STG Estimate)$898,126.80 $898,126. 23.3 Site Access and Foundation Development (STG Estimate)$265,643.03 $265,643. 23.4 Foundation Installation (STG Estimate)$385,875.87 $385,875. 23.5 Tower/Turbine Erection (STG Estimate)$182,304.04 $182,304. 23.6 Transmission/Distribution Lines (UVEC/STG/EPS Estimates)$510,868.68 $94,340.00 $605,208. 23.7 Power Storage Foundation Pad (STG Estimate)$52,086.87 $52,086. 23.8 Construction Survey/As‐Built Diagrams (STG Estimate)$26,220.00 $26,220. 23.9 Job Site Clean Up (STG Estimate)$18,230.40 $18,230. 24. System Integration (EPS Estimate)$1,635,000.00 $2,200,000. 25. SCADA Installation (IES Estimate)$493,023.00 $493,023. 26. System Calibration (IES/EPS Estimate)$101,867.00 $101,867. 27. Final Business Plan Development (Aurora Consulting)$5,000.00 $5,000.  $          5,833,2 Total Project Costs (Phase I, II, III and IV)$          8,209,080 $                          ‐   $              194,340  $                28,412  $          8,996,8 Total Phase I and Phase II Costs Total  Phase III Costs Total  Phase IV Costs 00 75 25 25 75 00 00 00 00 00 00 12  00 00 00 00 00 00 00 00 00 00 00 38  00 70 80 03 87 04 68 87 00 40 00 00 00 00 82  32  are only valid for 30 days. As discussed earlier, this is not anticipated to create insurmountable project delay or overruns. The capital costs for this project are estimated to be $8,712,329 and development costs are estimated to be $284,504. 4.4.2 Project Operating and Maintenance Costs Include anticipated O&M costs for new facilities constructed and how these would be funded by the applicant. • Total anticipated project cost for this phase • Requested grant funding The anticipated fixed operating and maintenance (O&M) costs for the Unalakleet Renewable Energy Fund Wind Project are 3% of the project costs annually and variable O&M costs are $.00975 per kWh. (Based upon industry standards presented in the U.S. Department of Energy report, “The Nome Region Energy Assessment, DOE/NETL 2—7-1284”) Therefore, based upon project costs of $8,996,832, the annual fixed O&M would be $263,222. And, based upon expected annual gross energy generation of 2,968 MWh, variable O&M costs would be $28,938. Renewable Energy Fund Grant Application Renewable Energy Fund Grant Application Page 29 of 49 10/8/2008 Total annual O&M costs would be $292,160. On-going O&M costs of the constructed wind project would be funded by energy sales by UVEC. 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 UVEC generates electricity for sale to the community of Unalakleet. Currently, UVEC sells electricity for an average price of $.4993 per kWh and upon completion of the wind project anticipates an average price of $.3430 per kWh. Based upon estimated project cashflows, as discussed throughout this proposal, the proposed rate of return from the grant-funded project is 4.90%. A detailed summary of cashflow assumptions and rate of return calculations is presented in Section 4.4.6. 4.4.4 Cost Worksheet Complete the cost worksheet form which provides summary information that will be considered in evaluating the project. A completed Cost Worksheet is attached in included in Section 7: Additional Documentation and Certification. Information included on the worksheet was derived from existing system data and the proposed project design information as well as from the “Unalakleet Renewable Energy Fund Wind Project Supporting Documents” also included in Section 7: Additional Documentation and Certification. Renewable Energy Fund Grant Application Renewable Energy Fund Grant Application Page 30 of 49 10/8/2008 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. The Unalakleet Renewable Energy Fund Wind Project will be owned and operated by UVEC, upon completion of the project, which is a sustainable, well-managed, electric utility. As such, it is anticipated that the on-going operations and maintenance – both short and long term – will be incorporated into the existing UVEC utility operations and management plans. Below are highlights of the UVEC management plan: Business Structure The Unalakleet Valley Electric Cooperative is a member cooperative that is managed by a seven- member Board of Directors and its General Manager. The Certificate of Public Convenience and Necessity is held by the Matanuska Electric Association, Inc. The elected Utility Board (“Board”) is charged with operation and management of UVEC, and hiring a utility manager. Unalakleet Valley Electric Cooperative Board of Directors – 9/30/2008 Dave Cunningham, President Jeffrey Ericson, Vice President Judy Kotongan, Secretary - Treasurer Harris Ivanoff, Sr. Douglas Katchatag Bob Foote Mary Brown Organizational Chart Unalakleet Valley Electric Cooperative, Inc. UVEC Members UVEC Board of Directors Matanuska Electric Association Certificate Holder General Manager Isaiah Towarak Office Manager Michelle Harvey Chief Plant Operator Henry Nielsen Backup Operator Renewable Energy Fund Grant Application Renewable Energy Fund Grant Application Page 31 of 49 10/8/2008 Management Team The utility manager is the chief operating and administrative officer whose areas of responsibility include: manage and operate electric utility; enforce the policies and procedures of the utility; manage utility employees, prepare and administer annual operating and capital improvement program budgets; prepare and submit reports on finances and administrative activities; strategic planning; grant writing and administration; operational reporting to elected Board; assume such other authority and perform such other duties as may be lawfully prescribed by the Board. Additionally, as outlined above, the general manager will be assisted by the office manager and the chief plant operator. The office manager, Michelle Harvey, is responsible for accounts receivable and payable, monthly and annual financial statements, monthly Power Cost Equalization reports, payroll and the audit work. The chief plant operator ensures the generators are maintained daily, schedules daily plant maintenance, schedules secondary distribution maintenance work, receives the annual supply of fuel and monitors the daily plant operation through a manual system. Utility Accounting & Finance The UVEC operates a generation plant and a distribution system within the Unalakleet area. Ninety Six (96%) percent of its revenues are derived from electricity sales; while the other four (4%) percent is derived from waste heat sales and other customer fees. In 2007, the cost of diesel fuel made up fifty eight (58%) percent of its operational costs; while payroll costs made up thirteen (13%) percent. Due to its long-standing relationship with the Matanuska Electric Association (MEA), UVEC is able to utilize their financial strength to fund its financing and capital needs. At the end of 2007, MEA held $108,917 in Long Term loans and as of September, 2008 they held approximately $92,000. UVEC has not requested any additional Long Term loans for UVEC capital improvements or other purposes. MEA also provides contract services for the annual fuel surcharge rate changes filing with the Regulatory Commission of Alaska. Any tariff changes are handled by MEA, as they hold the operating certificate for Unalakleet. Power Cost Equalization is paid by the State of Alaska to UVEC for non delinquent residential customers and community facilities owned by the City of Unalakleet. UVEC is in the process of hiring a new audit, its most recent auditor retired in 2007. The UVEC audits over the past ten years have resulted in “unqualified” opinions and UVEC has no outstanding audit issues. Over the past number of years, UVEC had been investing funds into the National Rural Utility Cooperative Financing Corporation’s commercial paper investments to pay for its annual supply of diesel fuel. However, the 2008 fuel price increased $1.5631 (or 55 %) over 2007, so UVEC had to use MEA’s line of credit to pay for $193,357 of fuel. UVEC also purchases fuel with the Western Alaska Fuel Group and utilizes its legal counsel for negotiations. UVEC carries property and liability insurance coverage through the non-profit ARECA Insurance Exchange, which consists of utilities throughout the State of Alaska. ARECA provides dividends Renewable Energy Fund Grant Application Renewable Energy Fund Grant Application Page 32 of 49 10/8/2008 on its investments and capital credits based on its net income. Operations Staffing It is anticipated that UVEC will require an additional power operator upon completion of the wind farm, which has been included in the anticipated cost information provided above. Additionally, primary line work is designed by a design engineer at MEA and contracted out to contractors when work is needed. Major maintenance for the 25-year-old diesel engines is provided through NC Machinery. The two plant operators do the minor repairs, oil/fluid changes and engine control repairs. Staff Training The State of Alaska, Division of Labor and Workforce Development has expressed interest in working with UVEC/STG, on the Unalakleet Renewable Energy Fund Wind Project, to fund OJT-type training for the UVEC operators on the wind turbines, system controls and other project components. Currently, the plan is to bring representatives from the turbine supplier to Nome to provide training for the Nome Joint Utility System and UVEC operators. Training plans will be finalized closer to the startup of the project. 4.4.6 Analysis and Recommendations Provide information about the economic analysis and the proposed project. Discuss your recommendation for additional project development work. As part of the Phase I and II activities of this project, an initial economic analysis and feasibility was conducted for the proposed project. Based upon this analysis, the project Benefit/Cost ratio was determined by evaluating the anticipated cash flows generated through the implementation of the proposed project to be 2.33 and the project payback is expected to be 13.11 years. Based on a discount rate of 4%, which corresponds to the effective interest rate for borrowing by municipal electric systems such as UVEC, the project has a NPV of $827,235. A detailed model of project cash flows can be provided upon request and a summary of this analysis is included below: Project Returns NPV Cumulative   Benefit Total Project  Costs Discount Rate 3% $1,905,694 20,983,048$     8,996,832$       4% $827,235 5%Benefit/Cost Ratio Total Grant Request 6%2.33 8,774,080$       7% 8%Payback (Years)Total  Match 13.11 194,340$           Project IRR 4.90% Cost/Installed KW 7,312$              Phase I & II Contributions 28,412$             ($88,068) ($866,961) ($1,531,425) ($2,099,582) The next step for the project is to proceed with Phase III activities upon receipt of grant funding, followed quickly by Phase IV activities. No additional development recommendations have been formulated at this time – additional recommendations will be formulated upon conclusion of Phase III and IV activities. Grant Application Renewable Energy Fund Renewable Energy Fund Grant Application Page 33 of 49 10/8/2008 The major economic assumptions include: % Total Costs Turbine Cost V 2,685,480$        30% Permitting  Costs ($)20,000$              0.2% Geotechnical Engineering Costs ($)74,000$              0.8% Structural Engineering Costs ($)19,000$              0.2% System Integration  Costs ($)2,988,456$        33% Construction Costs ($)2,844,052$        32% Professional Services/Project Management/Other ($)143,092$            1.6%    Total  Contractual Costs 8,774,080$        97.5% In ‐Kind (non‐cash) Contributions Conceptual Design Contributions (Phase  I & II  Costs)28,412$              0.3% Land Contribution (Estimated Value)100,000$            1.1% Labor/Equipment Contributions 94,340$              1.0%     Total In‐Kind 222,752$           2.5% Include In‐Kind Contributions in  Cash Flows Y Project Match Contribution (% of Total Project Costs)0% Project Match Contribution (In‐Kind Labor/Equipment ‐Line Work)94,340$               Include Project Match Labor Y Include Energy Sales in Cash Flows N Estimates Sale Price of Wind Energy ($/kWh)0.3430$               Estimated Project Life  (Years)25 Installed Turbines 2                           Fixed Annual Project O/M Costs (% of Total Project Cost ‐ DOE Estimate)3.00% Variable Annual Project  O/M Costs ($/Generated kWh ‐ DOE)0.00975$             Estimated Diesel Cost ($/gal  ‐ UVEC Data)4.38$                   Estimated Annual Diesel Cost Inflation (% ‐ DOE  Estimate)2.50% Estimated Value of Green Tag Sales ($/kWh ‐ BEF Estimate)0.01$                   Additional Annual "Ecotourists" (people)2 Average Value of Tourist ($)1,300$                 Estimated Annual Value  of Health Benefits ($)‐$                        Generated  through reduced diesel usage Expected Annual Gross Energy  Generation (Project  ‐MWH‐ GEC Estimate)2,968                   Estimated Wind Project Loss Factor (% ‐ GEC Estimate)21% Estimated Annual Net Generation   Project  ‐ MWH ‐ GEC Estimate)2,345                   Estimated Efficiency of Existing Diesel Gen‐Sets (kWh/Gal ‐ UVEC Data)13.67 Renewable Energy Fund Grant Application Renewable Energy Fund Grant Application Page 34 of 49 10/8/2008 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 Based upon estimates presented throughout this proposal, the potential annual displacement of diesel fuel is expected to 171,523 gallons per year over the lifetime of the project. At an assumed starting fuel price of $4.49 per gallon, the first year dollar savings is estimated to be $770,299. Based upon the anticipated RCA tariff of $.3430 per kWh, it is anticipated that the UVEC will generate $804,239 from wind generated electricity per year. Green tag sales are assumed to be project revenue streams. Based upon recent Alaskan green sales, the project economic analysis assumes an estimate value for green tag sales of $.01 per kWh. Therefore, anticipated green tag revenue has been estimated at $29,680 per year. An additional project benefits include potential community-wide tourism revenue - the project economic analysis assumes that two individuals will be motivated, at least partially, to travel to Unalakleet to learn more about the wind project and to visit the wind farm. Based upon economic research by the State of Alaska, Department of Commerce, Community and Economic Development (AVSP 2006), the average visitor to Northwest Alaska spends on average $1,300; therefore, additional community benefits would be $2,600 per year. The utilization of wind power technologies in Unalakleet is also expected to provide benefits that are less quantifiable or non-financial in nature. Through the implementation of this project and the resulting volume of displaced fuel, UVEC will significantly reduce the amount of greenhouse gasses emitted through the use of diesel electricity generation. While this environmental benefit can be quantified through the expected sale of green tags, the project’s complete contribution towards global climate change mitigation efforts is difficult to precisely determine. The completed project is also expected to reduce volatility in electric rates across the community of Unalakleet and provide more stabilized prices for those who purchase energy from UVEC. Additionally, it is also possible that Unalakleet could experience an increase in local employment due to a decrease in the amount of funds that previously have been leaving the community to cover rapidly increasing fuel prices expenditures. Finally, as a result of this decrease in fuel purchases, the State of Alaska’s PCE program will also be able to free up funds to spend elsewhere in the state due to the reduced need of PCE support of the Unalakleet community. Renewable Energy Fund Grant Application Renewable Energy Fund Grant Application Page 35 of 49 10/8/2008 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 total project costs of the Unalakleet Renewable Energy Fund Wind Project is estimated to be $8,996,832, inclusive of Phases I to IV. As discussed previously, this project has advanced through Phases I and II and is ready for Phases III and IV activities. Much of the cost of Phase I and II were borne by third-party researchers, however, project team members have contributed $28,412 in project conceptual design and initial feasibility study. The total grant request for the Unalakleet Renewable Energy Fund Wind Project is $8,774,080 based upon the following: Total Project Costs $ 8,996,832 Less: Phase I and II Contributed Costs ($ 28,412) Total Phase III and IV Costs $ 8,968,420 Less: Additional Investments ($ 194,340) Total Grant Request $ 8,774,080 The additional investment of $194,340 is inclusive of $100,000 of land contributed by the Unalakleet Native Corporation and $94,340 in labor and equipment contributed by the UVEC for line transmission construction. A completed Grant Budget is attached in included in Section 7: Additional Documentation and Certification. Renewable Energy Fund Grant Application Grant Application Page 36 of 49 10/8/2008 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 Renewable Energy Fund Renewable Energy Fund Grant Application Renewable Energy Fund Grant Application Page 37 of 49 10/8/2008 LIST OF ADDITIONAL DOCUMENTATION AND CERTIFICATION: A. Resumes of Applicant’s Project Manager, key staff, partners, consultants and suppliers 1. UVEC Key Staff Resumes 2. Project Manager – STG Inc. – Resumes 3. Contractor/Consultant Resumes i. Intelligent Energy Systems LLC ii. DNV Global Energy Concepts Inc. iii. Electrical Power Systems iv. Duane Miller Associates LLC v. Hattenburg, Dilley & Linnell LLC vi. BBFM Engineers vii. Aurora Consulting B. Cost Worksheet C. Grant Budget Form D. Electric Version of Application (Attached on CD Rom) E. Governing Body Resolution 1. UVEC Resolution 2. UVEC Match Documentation 3. Partners’ Match Documentation 4. Line Ownership Transfer Agreement F. “Unalakleet Renewable Energy Fund Wind Project Supporting Documents” 1. GEC Report: “Preliminary Assessment for Unalakleet Wind Energy Project” 2. “The Nome Region Energy Assessment, DOE/NETL 2—7-1284” 3. CRW Engineering Group Conceptual Design Report: “Unalakleet Rural Power Upgrade Project”. G. Project Correspondence and Letters of Support 1. City of Unalakleet 2. Norton Sound Economic Development Corporation 3. Bering Strait School District 4. Native Village of Unalakleet Renewable Energy Fund Grant Application UVEC Renewable Energy Fund Grant Application Page 38 of 48 10/8/2008 Resumes of Applicant’s Project Manager, Key Staff, Partners, Consultants and Suppliers Renewable Energy Fund Grant Application UVEC Renewable Energy Fund Grant Application Page 39 of 49 10/8/2008 UVEC Key Staff Resumes                                                                                                                                                                                                                                                                                                                                                                                                                                                                   Project Manager – STG Inc. Resumes STATEMENT OF QUALIFICATIONS                 11820 S. Gambell Street • Anchorage, Alaska 99515 • Phone: (907) 644‐4664 • Fax: (907) 644‐4666  info.stginc@gci.net • www.stginc.cc  Over the past fifteen years, STG, In remier construction services and management company. Dealing mainly in rural Alaska, the company has played a major role in high profile projects such as wind energy installations, communication tower installations, and community bulk fuel and diesel generation upgrades, to name a few. STG specializes in remote project logistics, pile foundation installations, tower erections, and construction management. STG takes pride in its wealth of experience, gained from years of work throughout “bush” Alaska, and through its ability to deal with the diverse and challenging logistics and conditions which it encounters on nearly every project it undertakes in remote locations.  Company Overview In 1996, St. George Construction was incorporated as STG, Inc. Since incorporation, STG has become the preferred construction management company for both the Alaska Energy Authority (AEA) and the Alaska Village Electric Cooperative (AVEC). Many of the projects executed by these two entities are managed and constructed by STG. STG’s core competencies include bulk fuel systems, power plant construction (both modular and steel-framed), wind farms, and pile foundations (driven piles, post tension rock anchors, helical anchor systems, freeze back, and active refrigerated piles). STG is the prevalent pile foundation contractor for Interior and Western Alaska. Additionally, STG has expanded to become United Utilities’ preferred contractor for its “Delta Net Project”, which involves the installation of communication towers and related equipment throughout the Yukon Kuskokwim Delta. STG has achieved this preferred status by demonstrating competitive rates and the ability to perform in remote locations with extreme logistical challenges. Qualifications The STG team has developed and maintained the capacity to manage projects through a set of key deliverables to ensure appropriate management of jobs across the complete project cycle including: • Provision of a quality project at a fair and reasonable price • Timely delivery within budget • Safe and professional performance on all work • Positive relationships with clients to ensure that project deliverables are met • New modern equipment that results in high productivity • State of Alaska Professional Land Surveyor (Reg. 10192) on staff with modern Topcon GPS Control through Detailed Project Planning STG focuses pre-construction efforts on planning and preparation. A project team is identified which includes management, administrative, and field supervision personnel. The team establishes budgets, c. has grown and developed into a p production targets, a master construction schedule, and detailed work plan for each project. The planning process involves key supervisory personnel as all aspects of the project are analyzed with particular attention to logistics, labor and equipment resource needs, along with specific material requirements. This results in a clear understanding of the goals of the client, the ontractual requirements, scope of work, and entification of potential obstacles that may impact ion of the job. ough to the administrative level , accurate documentation and reporting, and on to the field level where clear goals of roduction and quality are reinforced through the superintendent’s and foremen’s daily huddles and ost Containment anagement decisions. The project manager and field ork together through this reporting y potential problems and direct resources rform “crisis management” while providing clients with TG employees ’s civic responsibility to local c id the successful complet The project-planning phase also establishes key systems which help assure quality throughout the project. This begins at the management level with a commitment to providing a quality project to the client and carries thr with timely p schedule reviews. C STG maintains budgets for all labor, material, and equipment for each project allowing managers to effectively manage project costs. Expense categories are tracked and updated weekly by the project managers and this information is then communicated to the field pervision level for use in making timely, proactive su m superintendent w system to identif as required to address issues before they impact the work. This proactive approach prevents STG from having to pe on-budget, on-time, turnkey deliveries of completed projects built to engineered specifications. STG maintains a philosophy to deliver the highest level of quality within the industry. S also realize the company’s commitment to its clients along with STG communities. The work that STG performs is a reflection of this commitment. Construction Management and Project Supervision Experience STG has built a reputation of professionalism an products within a set schedule and defined budget. construction services and management contracts wit • Alaska Village Electric Cooperative (A • Alaska Energy Authority (AEA) • United Utilities Inc. (Recently acquire STG has built a wealth of knowledge d thoroughness by delivering the highest quality As a result, STG has been awarded and maintains h the following clients: VEC) d by GCI, Inc.) and experience for lanning, execution, and completion of projects across ral Alaska. Over the years, STG has also enjoyed the ay of he company prides itself in its ability to professionally eal with all the different entities that are related to a roject. In this regard, STG maintains a close working relationship with AVEC’s engineering presentatives, a so id relationship with the AVEC management staff, along with strong connections to rs and vendors across the state of Alaska. e-of-the-art dump trucks, loaders, excavators, pile ural construction projects. During the efficiently supported logistically from two cation shop located in Anchorage, AK and its ons, company construction crews are fully needs that may arise during the course of the p ru opportunity to successfully implement a large arr projects specifically for AVEC including bulk fuel upgrades, diesel power, wind generation, and energy distribution systems. STG can also coordinate all project logistics from procurement, to transportation, to the final project demobilization. T d p re l various sub-contracto STG operates a modern fleet of fourteen cranes, stat drivers, and other equipment needed to support full scale r construction phase of STG projects, remote field crews are STG offices: the company’s headquarters and fabri staging yard located in Bethel, AK. From these locati supported in the field for parts, groceries, and any other project. STG Projects Selawik Power Plant, Tank Farm, and Wind Turbine Installation Client: AVEC Year Completed: 2004 The Selawik Bulk Fuel Upgrade Project exemplifies STG’s diverse capabilities. STG was highly he tank farm and power plant. The company executed the pile site, erected four 65kW wind turbines, of pipelines. n Kasigluk, STG once again demonstrated its abilities to execute omplex, multi-faceted projects. This project entailed transferring primary power generation from Nunapitchuk to Akula Heights while maintaining power generation to these two villages and also m intaining power to Old Kasigluk. As part of this project, STG constructed a new bulk fuel retail facility for the communities of Akula Heights and Old Kasigluk along with a new bulk fuel storage facility, totaling over 600,000 gallons of storage capacity in all. This project also included the construction of a power distribution system to the three aforem villages, the installation of a new diesel generation plant, the erection of three 100 kW wind turbines, the installation of a heat recovery system, upgrades to the school districts bulk fuel facilities, and the installation of a standby generator in Nunapitchuk. involved with the planning and design of t foundation work, fabricated ten 50,000 gallon storage tanks on- and tied the completed system together with a complex network Nunapitchuk-Kasigluk Bulk Fuel Upgrade, Power Plant, and Wind Turbine Installation Client: AVEC Year Completed: 2006 I c a entioned Toksook Bay Power Plant, Wind Generation, and Interties and Nightmute are located in Western Alaska on Nelson Island, an ideal installation of 23 miles of ower lines. STG orchestrated schedules, equipment, materials, field work and logistics to successfully bring this project to completion. Due to the impassible summer tundra conditions, all the intertie work took place in the winter season during sub-zero temperatures. many different levels of scope. iversity in rural construction and e Alaska Energy Authority the set-up, installation, and ties along the middle g the winter Client: AVEC d: 2008 Year Complete oksook Bay, Tununak,T location for wind generation. STG helped deliver a wind/diesel integrated power project for these communities. With three Northwind 100kW wind turbines and a new power plant complete with switch gear and heat recovery module in Toksook Bay, power can now be produced from either diesel fuel, or the natural powers of the wind. In order to capture the greatest value for all island residents, an intertie etwork was established, which connected the three communities through the n p Additional STG Projects STG has completed numerous projects for AVEC throughout the state on The company would also like to highlight a few other examples of its d management for other clients. STG has managed and constructed over a dozen bulk fuel upgrades for th across the western half of Alaska. The most notable of these projects was commissioning of eight modular power plants in eight unique communi Kuskokwim River. The units were built and prepared in STG’s Anchorage yard durin months, then delivered and installed on each site during the short summer season. The company has also gained valuable experience dealing with tower erection and foundation design. ontract with UUI, STG has built foundations for, and has erected, over thirty hroughout western Alaska. This project, known as the Delta-Net Project, has nked dozens of communities for tele-medicine and broadband communication. Two of the most hich unity of St. Paul. Under its term c communication towers t li notable towers are the 305-foot tower in Eek, and the 60-foot tower on top of Marshall Mountain w also required construction of a five-mile access road from the village of Marshall. STG has grown into one of the most experienced integrators of alternative energy systems within the state of Alaska. In addition to the previously referenced projects, this experience is documented through STG’s work to erect and install two Vestas 225 kW wind turbines for TDX Power on the remote Bering Sea island comm Contractor/Consultant Resumes Company Overview Global Energy Concepts, LLC (GEC) is a multi-discipline engineering and technology consulting firm providing services to clients involved in the energy industry. Recognized as leaders in the wind energy industry, the firm specializes in the analysis, design, testing, and management of wind energy systems and projects. Our experience includes both utility- scale and small-scale applications of wind energy technologies. GEC combines technical expertise, managerial capabilities, and common- sense financial and business knowledge to provide comprehensive consulting services to assist our clients in meeting their objectives. The services offered by GEC encompass a wide range of assignments including independent engineer and due diligence services; project feasibility and economic assessments; wind resource monitoring; power curve, noise, power quality, and loads measurement and documentation; wind flow and wake modeling; energy projections, site optimization, and visualization; component and turbine specification, design, analysis, test and certification; education and outreach materials; international training and development support; litigation support and dispute resolution; project performance evaluation and reporting; and database management and data analysis software. Projects are managed by experienced personnel who ensure all work products are of Page 1 of 3GEC - Company Overview 9/30/2008http://www.globalenergyconcepts.com/overview.htm the highest quality and are produced on time and within budget. CLIENTS GEC provides consulting services to a broad spectrum of clients including all sectors of the domestic and international energy industry. Our clients include electric utilities, investors, banks, wind turbine owners, insurance companies, equipment manufacturers, developers, law firms, the U.S. Department of Energy, the World Bank, the Electric Power Research Institute, the National Renewable Energy Laboratory, the U.S. Agency for International Development, and other public institutions both in the United States and abroad. STAFF AND COMPANY RESOURCES GEC personnel have been providing services to the wind industry for over 20 years. Staff members are internationally recognized for their work, are on industry advisory committees, have written numerous reports and papers, and frequently testify and lecture before industry audiences. The staff is supported by extensive library and computer facilities including current software and specialized wind energy analysis tools. We maintain extensive files on equipment suppliers, specifications, and turbine performance. Our inventory of test equipment, which includes data loggers, sensors, and towers, is available for lease to our clients. We also maintain affiliations with technical, regulatory, economic, and environmental experts from leading industry and academic positions. The frequent use of this expertise to support project implementation and enhance staff qualifications provides for additional flexibility Page 2 of 3GEC - Company Overview 9/30/2008http://www.globalenergyconcepts.com/overview.htm Electric Power Systems, Inc. Statement of Qualifications for Engineering, Design, Testing, Maintenance & Construction Statement of Qualifications Electric Power Systems, Inc. (EPS) was incorporated in 1996 and was founded by David Burlingame and Daniel Rogers. Their prior experience included working as engineers and managers for a variety of utility and manufacturing interests focusing on power transmission, distribution, generation, and control. EPS has historically focused on providing substation, generation, controls, protection, system planning and analysis and distribution engineering for utility, industrial, and governmental clients. EPS holds a number of long term and alliance type contracts and relationships. Most of EPS’ clients are based in Alaska, and are long-term, mature clients, which require little or no proposal effort to obtain work. For the past five years, EPS has been successfully expanding into the Pacific Northwest and South Pacific markets. KEY PERSONNEL The following are brief overviews of ESG’s key personnel’s qualifications and experience: DAVID BURLINGAME, PE, PRINCIPAL David Burlingame has over 25 years of experience in power system operation, engineering and administration. His experience includes a full range of services, from planning studies, design, construction, and start-up/commissioning to periodic testing and maintenance. His specific experience includes the following: ƒ Bradley Lake Governor Project for Homer Electric Association, Homer, Alaska ƒ Tyee Lake Governor Project, Four Dam Power Pool, Anchorage, Alaska ƒ Unalaska Power Plant, City of Unalaska, Unalaska, Alaska ƒ System Reliability Review, Guam Power Authority, Agana, Guam ƒ System Stability and Reliability Studies, Kauai Island Utility Cooperative, Lihue, Hawaii ƒ Marathon Substation Final Design, Startup and Commissioning, Homer Electric Association, Inc., Kenai, Alaska ƒ Seldovia and Port Graham Generation Plants, Homer Electric Association, Homer, Alaska ƒ Nikiski Co-Gen Corrective Action, Alaska Electric Generation and Transmission Cooperative, Homer, Alaska ƒ RW Retherford Substation, Chugach Electric Association, Inc., Anchorage, Alaska ƒ Postmark Substation, Chugach Electric Association, Anchorage, Alaska ƒ Diamond Ridge Substation, Homer Electric Association, Homer, Alaska ƒ Heidenview Station Design, Copper Valley Electric Association, Inc., Valdez, Alaska ƒ Kukuulia Substation Design, Kauai Island Utility Cooperative, Kauai, Hawaii ƒ ITSS switchgear design, Chugach Electric Association, Anchorage, Alaska ƒ Heidenview Substation Design, Copper Valley Electric Association, Valdez, Alaska ƒ BP Substation Design, Homer Electric Association, Kenai, Alaska DANIEL C. ROGERS, JR., PE, PRINCIPAL Daniel Rogers has over 20 years of experience in electrical power system engineering. He holds a Masters and Bachelors degree in Electrical Engineering and a Bachelors degree in Physics. His experience includes electrical design, project management and construction management of electrical system projects throughout Alaska. His specific experience includes the following: ƒ Snake River Power Plant, Nome Joint Utilities, Nome, Alaska ƒ SCADA System, City of Soldotna, Soldotna, Alaska ƒ Kodiak Power Plant Generator Replacement, Kodiak Electric Association, Kodiak, Alaska Statement of Qualifications ƒ Facilities relocation in support of Water/Wastewater Upgrades, Nome Joint Utility Systems, Nome Alaska ƒ Power Creek Hydro Plant Design, Startup, and Commissioning, Cordova Electric Cooperative, Cordova, Alaska ƒ Pump Installation – Nome storage tank, Nome Joint Utility System, Nome, Alaska ƒ PRV Design, Various Contractors/Developers for AWWU, Anchorage, Alaska ƒ Orca Diesel Plant SCADA/Controls Upgrades, Cordova Electric Cooperative, Cordova, Alaska ƒ Elfin Cove Diesel Plant Control Systems Upgrade, Elfin Cove, Elfin Cove, Alaska ƒ Humpback Creek Hydro Plant Design, Startup, and Commissioning, Cordova Electric Cooperative, Cordova, Alaska DR. JAMES W. COTE, P.E. PRINCIPAL Dr. Cote has been involved in the planning and studies of electric power systems for over 25 years. His special area of expertise is analyzing the performance and planning requirements of islanded power systems. In addition to studies involving the electrical grid of the continental US, Dr. Cote has participated in the analysis, review and planning of islanded power systems from 5 MW up to the 1000 MW. This experience allows Dr. Cote to foresee many problems in isolted power systems that are not prevalent in larger networks. His specific experience includes the following: ƒ Railbelt Operating Studies – Alaska Intertie Operating Committee ƒ Wind Turbine Impact Study - Hawaiian Electric Light Company ƒ Aero-derivative turbine modeling – Kauai Island Utility Cooperative ƒ Bradley Lake Transient Stability Investigation – Chugach Electric Association ƒ Reliability Assessment – Guam Power Authority ƒ Static Var Compensation Study – Alaska Intertie Operating Committee ƒ Loadshedding Study – Homer Electric Association ƒ Bradley Governor Design & Operating Studies – Homer Electric Association ƒ LM-2500 Impact Studies – Kauai Island Utility Cooperative ƒ Transmission Long Range Plan – Chugach Electric Association PROJECT EXPERIENCE The following is an overview of EPS’s recent project experience: PROTECTIVE RELAYING AND AUTOMATION UPGRADES, CHUGACH ELECTRIC ASSOCIATION, INC., ANCHORAGE, ALASKA The Chugach Electric Association’s protective relaying and automation upgrades consisted of both the design and the subsequent project construction located at Chugach’s Beluga and Douglas Substations. The projects included the design and installation of protective relaying and automation on Chugach’s critical generation station and transmission system. All projects were completed in energized facilities without an outage. The projects included relaying upgrades on two 28 MW gas-fired turbines and station relaying on a 415 MW generation plant. The design was performed by Electric Power Systems (EPS) and the installation was performed by Electric Power Constructors (EPC). Statement of Qualifications WOODINVILLE SUBSTATION, BP OLYMPIC PIPELINE, WOODINVILLE, WASHINGTON EPS completed the design and construction inspection for the new Portage Substation along the Turnagain Arm south of Anchorage. The substation consisted of four 4.16 kV feeders in metal-clad switchgear. EPS was responsible for the design of the substation civil work, bus layout, grounding and lighting. EPS was responsible for the switchgear design and specifications, station layout and protective relaying settings, and implementation. EPS completed the quality control inspection, testing and commission for the substation construction. Project cost: $0.500 million. KUKUULIA SUBSTATION, KAUAI ISLAND UTILITY COOPERATIVE, KAUAI, HAWAII EPS completed the civil, structural and electrical design for the 69 kV/ 12.47 kV Kukuuulia Substation. Project included four 69 kV breakers, two 20 MVA transformers and provisions for twelve 12.47 kV feeder breakers, control building, communication and relaying control panels. EPS provided the structure design, electrical service, grounding, protective relaying and controls design. Project cost: $2.500 million. AIRAI SUBSTATION, PALAU PUBLIC UTILITIES CORPORATION, KOROR, PALAU EPS completed the civil, structural and electrical design for the 34.5 kV / 12.47 kV Airai Substation. Project included concrete block control building, relaying and control panels, four 12.47 kV breakers, installation of controls and modifications for one 34.5 kV breaker and three 34.5 kV motor-operated switches and SCADA control and monitoring for the station. EPS provided the structure design, electrical service, grounding, protective relaying and controls design. EPS completed the installation and commissioning. Project cost: $1.200 million. HEIDENVIEW STATION DESIGN, COPPER VALLEY ELECTRIC ASSOCIATION, INC., VALDEZ, AK This project consisted of the complete design of a new 138/24.9 kV station, including one line development, DC system design, controls and protection specification, equipment specification, bid evaluation and award, commissioning and startup assistance. In addition, EPS constructed the installed the controls into the station control house at our Anchorage facility, and shipped the completed control structure to Valdez for installation on the pad. INTERNATIONAL 35 KV METALCLAD SWITCHGEAR DESIGN, CHUGACH ELECTRIC ASSOCIATION, INC., ANCHORAGE, AK The project included development of design criteria, one lines, three lines, DC schematics and physical drawings for a common aisle 35 kV metalclad switchgear for Chugach’s main bulk substation. Implicit in the design of the switchgear was the limited space at the existing facility, and the need to minimize outage times during constru ction. The design included SEL-351, 287, 311C and 321 relays. The design included an evaluation of alternatives and recommendations for service and replacement of the existing station. HUMPBACK CREEK POWER PLANT FIRE REBUILD, CORDOVA ELECTRIC COOPERATIVE, CORDOVA, ALASKA Humpback Creek is a remote plant connected electrically to the Cordova Electric Cooperative system. The plant has over 100’ of head, and three units, with a plant capacity of over 1 MW. The plant had a fire in late 2005, with significant damage resulting from the heat, flames, and smoke. Engineered Solutions Group, Inc. (ESG) was hired by the owner to design, procure, and reconstruct the plant. The project scope included electrical design and construction, Statement of Qualifications general building construction, hydraulic system design and construction, and control/communications design and construction. ESG personnel performed all of the work on the project. The design was completed and a conformed set of drawings provided to the owner. The construction was bid and performed under a separate construction contract based on the conformed set of drawings. The project will be completed on time and on budget. The owner is pleased with the work, and ESG is in negotiations for additional work at the forebay with the owner following the completion of the power plant rebuild. Project cost: $1.5 million. MAIN GENERATOR RELAY UPGRADES, ALYESKA PIPELINE SERVICE COMPANY, VALDEZ, ALASKA In order to more reliably operate the power production facility at the Valdez Marine Facility, Alyeska Pipeline Service Company (APSC) decided to upgrade and install new microprocessor- based protective relays in the three main turbine generators at the Valdez Marine Terminal power plant. Electric Power Systems (EPS) acted as the design resource and Electric Power Constructors (EPC) as the contractor to perform the installation. EPS performed the overall project and construction management, as well as all of the electrical design. EPC personnel performed the installation tasks working with Alyeska personnel. The relays have been in operation since 2003 without any outages associated with the installation. The work was completed on time and on budget. Project cost: $120,000. NIKISKI POWER PLANT, ALASKA ELECTRIC GENERATION AND TRANSMISSION COOPERATIVE, NIKISKI, ALASKA The Nikiski Power Plant project consisted of feasibility studies, conceptual design, final design, construction and testing services and final acceptance testing associated with a 48 MW gas-turbine facility located on Alaska’s Kenai Peninsula. The project included the design and installation of protective relaying and SCADA systems, the design and installation of auxiliary power systems and the design and installation of low and medium voltage power systems. Electric Power Systems (EPS) designed and installed medium voltage switchgear in the project substation, designed and installed substation transformer electrical and fire protection systems. EPS was responsible for final commissioning tests and procedures on the SCADA, protection and station control systems and the protection improvements on six 3.5 MW gas-fired turbines and substations within the Agrium Nitrogen facility. LIFELINE SWITCHGEAR RELAY/CT UPGRADES, ALYESKA PIPELINE SERVICE COMPANY, VALDEZ, ALASKA In order to more reliably operate the power distribution facility at the Valdez Marine Facility, Alyeska Pipeline Service Company (APSC) decided to upgrade and install new microprocessor- based protective relays in the lifeline generator switchgear at the Valdez Marine Terminal. In addition, CT’s were installed to replace outdated linear couplers on the switchgear. Electric Power Systems (EPS) acted as the design resource and Electric Power Constructors (EPC) performed the installation as the contractor. EPS performed the overall project management, as well as all of the electrical design. EPC personnel performed the installation tasks. Some coordination issues were addressed onsite by the crew and Alyeska personnel, allowing for flexible operation of the terminal and no change orders to the project. The relays have been in Statement of Qualifications operation since 2005 without any outages associated with the installation. The work was completed on time and on budget. Project cost: $100,000. SNAKE RIVER POWER PLANT, NOME JOINT UTILITY SYSTEM, NOME, ALASKA The Snake River Power Plant project consisted of feasibility studies, site selection, conceptual design, final design, construction, construction management and testing services and final acceptance testing for the 30 MW diesel power plant located in Nome, Alaska. The project consists of the design and installation of a 30 MW plant (12 MW installed) to serve the community of Nome, Alaska. The project includes site design, building design (25,000 sq. ft. facility), utility interconnections, SCADA/automation design, protective relaying design, switchgear design, construction and installation, coordination studies, fuel tank and fuel delivery systems design and installation and project commissioning and testing. The project is located at a remote site on the Seward Peninsula, in Nome Alaska. Nome has no road connection to the rest of Alaska, and is served only during the summer by barge. The plant, when commissioned, will serve as the primary power source for the communities, and the surrounding area. During the course of the project, where the Board did not receive bids that were responsive, either from a cost or capabilities perspective, they have turned to the ESG Companies to assist in the construction. Subcontract portions that have been preformed by ESG Companies, include the electrical rough in (subgrade conduit), medium voltage switchgear installation, power transformer installation, all medium voltage plant work (480V through 15kV class equipment), PLC control/ SCADA installation and electrical system startup and commissioning. Final startup will be completed in 2007. Project cost: $28 million. SCADA SYSTEM ENGINEERING, PROCUREMENT AND CONSTRUCTION, CITY OF SOLDOTNA, SOLDOTNA, ALASKA The City of Soldotna desired to upgrade their existing control system, which was limited due to age, technology employed, and the number of sites at which it was deployed. EPS teamed with the prime contractor AirTek of Soldotna to provide the City a new SCADA system. EPS performed all of the design engineering for the electrical installation and the UL 508A control panels. In addition, EPS provided the materials for the control system, including a Wonderware HMI (human-machine interface), four GE 90-30 PLC’s for the well sites and reservoir, and the 920 MHz radio system to allow the remote sites to communicate with the HMI at the treatment plant. EPS programmed the PLC’s and HMI, assisted AirTek with construction-related engineering, and provided final startup, commissioning, and training for the Owner. EPS staff worked with the electrical contractor as a subcontractor, while keeping the goals of the owner in mind. The project was completed on time and budget, with only minor changes required from the original design. EPS has maintained a working relationship with both the owner and the contractor in the ensuing years. In fact, EPS continues to work for the City upgrading and adding facilities to their SCADA system. Since the completion of this project, EPS has added Statement of Qualifications two additional wells and one reservoir, and has discussed the costs and requirements for adding the waster water facilities into the system. Project cost: $70,000. SELDOVIA AND PORT GRAHAM POWER PLANTS, HOMER ELECTRIC ASSOCIATION, ALASKA The Seldovia and Port Graham Power Plant project consisted of feasibility studies, conceptual design, final design, construction and testing services and final acceptance testing for two power plants located on Alaska’s Kenai Peninsula. The plants consisted of the design and installation of a 600 kW plant installed in an existing power plant in Port Graham and the removal of an existing plant and design and construction of a new 3,000 kW plant in the town of Port Graham. Both projects included system automation design and installation, SCADA design and installation, protective relaying design and installation, switchgear design, construction and installation, coordination studies, fuel tank and fuel delivery systems design and installation and project commissioning and testing. The projects were located in remote sites on the Kenai Peninsula and served as back-up and emergency power sources for the two communities. The EPS contract was $1,207,500. Electric Power Constructors performed the construction. UNALASKA POWER PLANT, CITY OF UN ALASKA, UNALASKA, ALASKA The Unlaska Power Plant project consisted of feasibility studies, site selection, conceptual design, final design, construction, construction management and testing services and final acceptance testing for the 22 MW diesel power plant located in Unalaska, Alaska. The project consists of the design and installation of a 22 MW plant to serve the city and processors located in Unalaska, Alaska. The project includes site design, building design, utility interconnections, SCADA/automation design, protective relaying design, switchgear design, coordination studies, fuel tank and fuel delivery systems design and project commissioning and testing. The project is located at a remote site on the Aleutian Islands, in Unalaska, Alaska. Final startup will be completed in 2009. Project cost: $28 million. HUMPBACK CREEK POWER PLANT FLOOD DAMAGE, CORDOVA ELECTRIC COOPERATIVE, CORDOVA, ALASKA Humpback Creek is a remote plant connected electrically to the Cordova Electric Cooperative system. The plant has over 100’ of head, and three units, with a plant capacity of over 1 MW. The plant and associated facilities had major flood damage in late 2006. Power Builders, Inc. (PBI) was hired by the owner to reconstruct the facilities damaged by the flood. The project scope included replacing damaged outside electrical equipment, the access bridge, gravel and fill material, replacement of stream bank riprap, and the replacement of the plants tailrace. ESG Statement of Qualifications personnel performed all of the work on the project. The work was predominantly replacement in kind, and funded largely with FEMA monies. Project cost: $800,000. KOTZEBUE SWITCHGEAR AND SCADA SYSTEM UPGRADES, KOTZEBUE ELECTRIC ASSOCIATION, KOTZEBUE, ALASKA Kotzebue is a remote hub-community that is electrically isolated from any other system. The community runs predominantly on diesel and windpower. The windpower installation consists of 14 turbines, located on the edge of town. The project consisted of completing a design for the switchgear, SCADA, and mechanical/electrical instrumentation systems. Following completion of the design and acceptance by the Owner, the construction phase of the project commenced, installing all of the switchgear and controls in a phased manner to allow continuing plant operation. EPS continues to work with the Owner to implement additional upgrades to the plant and wind system to further enhance operation. A performance bond was required for the project, due to funding agency rules. EPS met this requirement with a letter of credit. Project cost: $1.1 million. MEDIUM POWER TRANSFORMER MAINTENANCE/REPAIR, ALYESKA PIPELINE SERVICE COMPANY, VALDEZ, ALASKA To better assess the condition of medium power transformers at the Alyeska Valdez Marine Terminal, Alyeska requested Electric Power Constructors (EPC) personnel to assist in the testing, assessment, and repair of several medium power transformers on the terminal. EPC personnel work with and under the direction of Alyeska personnel providing assistance and technical expertise in assessing the condition of the VMT power transformers. EPC worked cooperatively with Alyeska personnel performing DGA, power factor, and other testing to assess the condition of the terminals medium power transformers. Some coordination issues were addressed onsite by the crew and Alyeska personnel, allowing for flexible operation of the terminal. The work was performed in 2005, with additional technical assistance on an as- needed basis. KODIAK GENERATOR REPLACEMENT, KODIAK ELECTRIC ASSOCIATION, KODIAK, ALASKA Kodiak is an island community that is electrically isolated from any other system. The community runs predominantly on diesel and hydropower. The diesel plant, which provides the majority of the peaking and emergency energy for the community, consists of four large diesel machines. During a four month period, two of the engines experienced catastrophic failure. The project consisted of completing a design for the selection and installation of two new units, including mechanical, electrical, and civil. Following completion of the design and acceptance by the Owner, the construction phase of the project commenced with Power Builders personnel Statement of Qualifications performing the civil/structural portions, the mechanical portions being contracted to CRL Services, and EPC doing the majority of the electrical installation, in conjunction with KEA personnel. Project cost: $850,000. SUBSTATION MAINTENANCE & TESTING, CHUGACH ELECTRIC ASSOCIATION, ANCHORAGE ALASKA EPC has completed substation testing and maintenance for Chugach for the past 5 years on a task order basis under our alliance contract. Testing and maintenance services have included 34.5 kV – 230 kV oil circuit breaker testing and maintenance, including bushing power factor, ductor, time travel, speed adjustments and other tests associated with maintenance activities. Power transformer testing and maintenance for transformers up to 80 MVA and 230 kV. LTC testing and maintenance and metal-clad breaker testing and maintenance. KING SALMON SWITCHGEAR UPGRADE, CHEVRON , COOK INLET, ALASKA EPC completed the design and rebuild of the existing main 600 V switchgear bus work for the King Salmon Platform. The work included upgrading the bus for increased short circuit capacity, installing bus bracing and fabrication of bus work. The project also included the installation of protective relays for the switchgear, protective relay settings, testing and commissioning. The project was completed in a scheduled shutdown of the platform on time and on budget. The platform’s shutdown was a critical component and needed to be completed in the time allowed to avoid well shutdowns on the platform. PHILLIPS BELUGA RIVER , CHEVRON , COOK INLET, ALASKA EPC completed the testing and maintenance of the facilities’ contactors, transformers, breakers, RTDs and protective relays for the Beluga River gas field. The work was completed during a scheduled shutdown of the facility and was completed on time and budget. Tacoma Power Lincoln Avenue Line Relocation, TACOMA POWER EPS is providing complete engineering services for the line relocations, including structure and foundation design, coordination with the road designers, line design, plans and specifications for material procurement and construction, and construction inspection. CLIENT REFERENCES MR. MIKE LEWIS Alyeska Pipeline Service Company (907) 834-7356 MR. ROD RHOADES Alyeska Pipeline Service Company (907) 834-7076 MR. BRAD REEVE Kotzebue Electric Association, Inc. (907) 442-4391 MR. DARRON SCOTT Kodiak Electric Association, Inc. (907) 486-7739 DMA Resume Page 1 of 4 Duane Miller Associates LLC (DMA) 5821 Arctic Boulevard, Suite A Anchorage, AK 99518-1654 (907) 644-3200 Duane Miller Associates LLC (DMA) was established as Duane Miller & Associates in 1982 to provide geotechnical engineering and consultation in the problems unique to Alaska. The firm has evolved to a consultancy of engineers and geologists, all of whom have many years of Alaskan experience. The two senior consultants, Principal Engineer Duane Miller, P.E., and Principal Geologist Walt Phillips, C.P.G., each have more than 30 years experience with Alaskan projects. With a total of 17 Alaskan geotechnical engineers, geologists, laboratory technicians and administrative/IT support staff, DMA can address any geotechnical issue throughout Alaska in a timely basis. Professional staff at DMA consists of four Alaska licensed geotechnical engineers and one Alaska licensed geologist. We have five geologists and four EIT-level engineers. We have a full time geotechnical laboratory manager and one lab technician. Administrative and IT personnel support the professional staff. We are located at 5821 Arctic Blvd. in Anchorage, Alaska with our laboratory facilities, including our walk-in testing freezer, in the same building. DMA project experience ranges from small rural projects to large industrial and defense projects. Experience with remote site work has led to the development of specialized exploration and sampling tools for permafrost investigations. Field work is most often preceded by collection of available data from previous projects and examination of existing aerial photographs. DMA maintains an extensive library of past geotechnical reports prepared by us and other geotechnical service providers. These reports include data from most of the communities in the state. Our laboratory is equipped to perform nearly every primary soil test along with secondary strength and consolidation tests for undisturbed or remolded soil. The laboratory has a walk-in freezer for the storage and testing of frozen soils. DMA’s client base primarily includes major oil companies and other consulting engineers. Typical rural projects include improvements to sanitation systems through contracts administered by Village Safe Water (VSW) and ANTHC, hospital projects through the Indian Health Service (IHS), improvements to bulk fuel, wind farm, and diesel power plant facilities through AVEC and ADC&RA Division of Energy, rural housing through regional and local housing authorities, rural airfields and roads through DOT&PF and BIA, and school projects through regional school districts. DMA Resume Page 2 of 4 We pride ourselves on bringing custom geologic and geotechnical engineering solutions to many of Alaska’s most demanding foundation engineering problems, particularly in arctic and subartic conditions, from remote village projects necessary to improve local well-being to major industrial oil and gas projects important to our nation’s energy and security needs. Every geotechnical project undertaken by DMA has a principal or senior staff geotechnical engineer AND geologist assigned to properly scope our customer’s needs and expectations. As an important first step, our senior staff works closely with each customer to properly balance Scope, Schedule, Quality and Cost prior to finalizing a Notice to Proceed for three key reasons. First, this dialog defines our field, laboratory, and engineering objectives for all parties. A clear and concise definition of a project’s objectives is fundamental to our management philosophy. Second, this dialog provides the basis for project management decision making as field findings and project needs evolve. Third, this dialog establishes our role in the project’s scheme in terms of Chain of Command, site safety, and compliance with environmental documentation/requirements. The planning effort does not stop at the completion of the field effort. Upon completion of each field phase, field logs, geotechnical samples, field notes, geotechnical instrumentation data (ground temperatures, CPT data, piezometer, etc), photographs and GPS/GIS data are summarized. Laboratory effort is prioritized and managed through our Laboratory Manager with weekly updates on laboratory status to the Project Team. This permits refinement on laboratory schedules and scheduling engineering team effort to coincide with laboratory effort. Geology and engineering efforts are developed in tandem at the project level. We strongly believe that our success is based on treating geology and engineering as equally important elements of a project deliverable. This is the key reason a senior or principal level geologist and engineer are assigned at the very earliest stages of a project scoping effort. DMA maintains an extensive in-house library of both DMA and third-party geotechnical studies from nearly every area of Alaska. In-house studies are DMA efforts that start with the initial work effort by Duane Miller when he started DMA. This system spans over 1,000 separate reports retrieved by Lat/Long, site, work type, region, permafrost conditions and other search terms. This in-house database permits immediate retrieval of boring log and laboratory data, Alaskan ground temperature data dating back to the late 1970s, and geologic interpretation and engineering recommendations. Our system provides a notification of proprietary data that cannot be used without the customer’s DMA Resume Page 3 of 4 authorization. This database was developed internally and is unique is its ability to capture and retrieve key project information as part of the scope refinement process. In additional to our internal database system, we maintain a hardcopy file of many obscure and hard to locate third-party geotechnical reports. These reports often provide site specific geotechnical and ground temperature data from the late 1960s through today. These data are very useful in establishing a site history as part of a new scoping process. We maintain these hard copy reports by village location or by North Slope oil and gas project area. We also maintain a large collection of US, Canadian, and Russia (Federation and Soviet era) geotechnical research papers, some the founding work efforts in permafrost engineering. While most recent permafrost research efforts are available digitally through the Internet, many of our internal research papers are not commercially digitized and are very valuable in constructing design analysis spreadsheets or understanding the technical basis – and limitations – developed as part of the original research. DMA has seven experienced engineers/geologists able to supervise large, complex geotechnical field investigation projects. Two, Duane Miller and Walt Phillips bring a combined 75+ years of Alaskan experience to schedule, budget and resource assignment to any geotechnical effort regardless of size, locations or logistical complexity. Duane and Walt have successfully conducted concurrent large, complex geotechnical investigations for major oil and gas projects on the North Slope where remote camps, fuel logistics and Rolligon/helicopter support elements were necessary in areas of extreme environmental sensitivity. In additional to Duane and Walt, four senior personnel at DMA: Richard Mitchells, Susan Wilson, Jeremiah Drage, and Daniel Willman bring strong field geotechnical supervision capabilities. All four have experience with helicopter sling drilling operations, coring projects, remote camp and Alaskan ‘Bush’ experience. DMA field geologists/engineers including Nathan Luzney, Jeff Kenzie and Heather Brooks each bring field experience managing day-to-day drilling operations and logistical support for field projects. DMA maintains a complete in-house field sampling program for nearly any geotechnical investigation need. Unique to cold regions field investigations, we have developed a continuous sampling system that eliminates the need for refrigerated coring. Of particular importance for arctic and subarctic geotechnical field efforts is the need to collect reliable ground temperatures. We have adopted digital temperature measurement systems to accurately capture ground temperature data. DMA Resume Page 4 of 4 DMA engineers are peer recognized experts in cold regions geotechnical engineering as well as unfrozen ground geotechnical engineering. We have four geotechnical engineers licensed in Alaska and one Alaska licensed geologist. In unfrozen soil conditions, we adhere to geotechnical engineering designs using NAVFAC DM-7 and USACE EM-1110-1 and EM-1001-2 series design manuals. In addition, we rely on computer aided engineering support for many projects using Apile, Lpile, GRL-WEAP, PYWall, Reame, and a variety of other limit equilibrium slope analysis software tools. Our engineering staff also has expertise in seismic analysis capabilities, augmented with ProShake and Newmark displacement analysis software analysis tools. We are able to conduct liquefaction analysis using methodologies developed by Youd, et. al. as part of the NCEER Workshop Evaluation on Liquefaction. Since virtually no commercial engineering design software has been developed for cold region foundation engineering, DMA has developed and maintains an in-house library for cold regions foundation design, ranging form codified US Air Force/Army TM 5-852-4 (Arctic and Subarctic Design Manual) to salinity based primary and secondary creep in ice poor and ice rich permafrost as developed by Nixon, Sego and Bigger, CRREL, and Sayles. We also use Temp/W for finite element thermal analyses on our cold regions projects. We maintain a comprehensive internal climate database using six key climate centers (Barrow, Bethel, Nome, Kotzebue, Fairbanks and Gulkana) of daily climatic and temperature records from at least 1940 through present. In addition, we maintain a comprehensive temperature database for Prudhoe Bay with daily temperatures from the mid 1960’s. These data are used to forecast warming trends for air temperature and freezing or thawing indices throughout arctic and subarctic Alaska. DMA conducts groundwater analysis as part of our routine geotechnical assessments for foundation design and embankment seepage analysis. We rely on specialized third-party providers for more detailed groundwater analysis, if necessary. 3333 Arctic Boulevard, Suite 100 Anchorage, Alaska 99503 Phone: (907) 564-2120 Fax: (907) 564-2122 Our Firm. Hattenburg Dilley & Linnell LLC (HDL), is an engineering firm specializing in “client-focused” planning, civil engineering, transportation engineering, project management, earth science, geotechnical services, construction administration, and material testing. Scott Hattenburg and Lorie Dilley started Hattenburg & Dilley in July 2000. Dennis Linnell joined the firm in March of 2002, creating HDL. Our principals are actively involved with projects and are hands-on managers. We have structured our firm to produce a quality-centered, client focused atmosphere to provide you with superior services. Our main office and U.S. Corps of Engineer and AASHTO certified soils laboratory is located in Anchorage and we maintain a branch office in Palmer. HDL maintains a seasoned full-time staff of thirty-six (36), including seven licensed professional engineers, one professional surveyor, two geologists, three construction inspectors, two roadway designers, five engineers-in-training, three civil designers, four engineering technicians, one environmental specialist, and four administrative support personnel. We use state-of-the-art, field-to-finish civil software and computer hardware. Our workstations are equipped with a variety of the latest software including AutoCAD Release 2008, Land Development Desktop and Civil Design Software, Rockware Rockworks and Logger, Microsoft Office, MS Project, Adobe Photoshop and Illustrator, geotechnical software, and Topo Maps 3D. Our computer design personnel are high production graphic oriented technicians experienced with generating presentation graphics, drawings, engineering plans, and 3-dimensional graphic products. COMPANY OVERVIEW 3 ; Site Development ; Water and Sewer System Design ; Community and Regional Planning ; Project Programming ; Airport Planning and Design ; Bulk Fuel, POL and Pipelines ; Geotechnical Engineering ; Geothermal Resources ; Wind Power ; Geochemistry ; Soil, Aggregate, Concrete Testing ; Construction Administration ; Environmental Services and Permitting ; Surveying ; Road and Transportation Engineering CIVIL ENGINEERING HDL provides civil engineering services to a wide variety of clients throughout Alaska. These projects include civil site design, grading plans, and designs for utility improvements. AIRPORT PLANNING, DESIGN HDL offers airport master planning services as well as design of taxiways, runways, access roads, and related facilities. We also have conducted wind studies using our instrumentation expertise. Scott Hattenburg, our principal airport engineer has completed over 35 airport-related projects and has a 16 year working history with the FAA. We specialize in rural and city-owned airports. ƒ City of Wasilla Airport Master Plan ƒ Palmer Southwest Utility Extension to the Matanuska Valley Medical Center ƒ Valley Pathway School Site Design ƒ Alaska Zoo Entrance Site Design ƒ Chugach Alaska Office Building Site Design ƒ City of Palmer Sherrod Building ƒ ACS Parking Lot Design ƒ Palmer Airport Forestry Parking Lot ƒ Southcentral Foundation Primary Care Facility, Iliamna ƒ Wasilla Sewer Master Plan ƒ City of Palmer Headworks Building ƒ Chugach Street Water Replacement ƒ Helen Drive Utility Improvements ƒ South Anchorage Substation ƒ Nome Power Plant ƒ Elmendorf Fuel CEU Maintenance Hangar OUR SERVICES 4 ƒ Red Dog Mine Airport Planning ƒ Kaktovik Airport Master Plan ƒ Seldovia Airport Master Plan ƒ Merrill Field Access Road Reconstruct ƒ City of Palmer Airport Improvements ƒ City of Wasilla Airport Apron Improvements ƒ Nondalton Wind Study ƒ Rural Airport Embankment Evaluation: Chevak, Chefornak, Tuntutuliak & Kipnuk RURAL ENERGY We manage all phases of rural energy projects from the concept phase through final completion of construction. We provide in-house civil, geotechnical, and environmental phase services for these projects. HDL currently has two term agreements for design of rural energy projects: one with Alaska Energy Authority and the other with Alaska Village Electric Cooperative. In addition to the rural energy projects we have two certified tank inspectors on staff and have produced a number of Spill Prevention Control and Countermeasure (SPCC) Plans for the State and private companies throughout Alaska. ƒ Middle Kuskokwim Regional Energy Project (Sleetmute, Stony River, Crooked Creek, Chuathbaluk, Red Devil, Aniak & Takotna) Concept Design, Design, and CA ƒ White Mountain Bulk Fuel CA ƒ Koyukuk Power Plant and Bulk Fuel Facility Design and CA ƒ Chevak Power Plant & Bulk Fuel Facility Concept Design ƒ Noatak Bulk Fuel Concept Design ƒ Hooper Bay Bulk Fuel Concept Design ƒ Mountain Village Bulk Fuel Concept Design ƒ Koyuk Bulk Fuel Facility Concept Design, Design and CA ƒ Nunapitchuk/Kasigluk Amalgamated Energy Concept Design and Design ƒ Golovin Bulk Fuel Facility Construction 5 GEOTECHNICAL ENGINEERING HDL’s geotechnical division provides foundation design recommendations for a wide variety of structures including power plants, transmission lines, bulk fuel facilities, substations, roads, bridges, and buildings. We have developed pile recommendations for warm permafrost, cold permafrost, and organic rich soils. We have specialties in thermal analysis, instrumentation, and geochemical assessments. Given the nature of soils in Alaska we offer creative solutions to the more common foundation problems. ƒ Nome Power Plant Foundation – Dynamic Compaction of Loose Soils ƒ Merrill Field Access Road – Dynamic Compaction of Landfill ƒ Unalaska Power Plant Foundation and Site Selection ƒ Chugach Electric Transmission Line for South Anchorage ƒ Nunapitchuk/Kasigluk Helical Pier Foundation for Wind Towers ƒ Helical Anchor Design for Multiple Subdivisions ƒ Thermal Analysis of Four Rural Airport Embankments ƒ Parks Highway Geotechnical Study MP 72-83 ƒ Foundation Design for F-22 Fuel Maintenance Hangar ƒ Quarry Source Assessment for Village of Elim GEOTHERMAL RESOURCES HDL’s geotechnical group has been actively involved in the development of geothermal resources. We offer a wide range of geological and geochemical services for the exploration and development of geothermal power in Alaska. We are developing a new method, Fluid Inclusion Stratigraphy (FIS), based on measuring the gas concentrations trapped within minerals for evaluating the hydrological regime in geothermal reservoirs. This low cost, rapid, logging method can be used as the well is being drilled to determine if hot reservoir fluids have been encountered and if permeable zones exist in the well. We are also working under a grant from the US Department of Energy on using this technique for determining fracture locations in Enhanced Geothermal Systems. We work closely in collaboration with the Department of Earth Sciences of New Mexico Tech and the Energy and Geoscience Institute at the University of Utah. ƒ Preliminary Feasibility Study – Pilgrim Hot Springs – Alaska Energy Authority ƒ Preliminary Geological Evaluation – Naknek Geothermal Sources ƒ Fluid Inclusion Stratigraphy – New Tool for Geothermal Reservoir Assessment: Coso Geothermal Field, California – California Energy Commission ƒ Identifying Fractures using FIS in Enhanced Geothermal Systems – Department of Energy ƒ 2D and 3D Fluid Model of Coso Geothermal Field, California – US Navy Geothermal Program Office 6 WIND POWER HDL provides civil engineering solutions for the development of wind power in Alaska. We have provided foundation design recommendations, permitting and civil engineering services. AVEC has been instrumental in developing wind power in rural Alaska and the firm has worked closely with AVEC on these technically challenging projects. We have teamed with an Alaskan construction company and a wind turbine manufacturer to create the Alaska Wind Resource Group (AWRG). ƒ Prototype Designs for the AOC Wind Turbine Foundations, Various Villages - AVEC ƒ Nunapitchuck/Kasigluk geotechnical and civil design for Northwood 100 turbines - AVEC ƒ Hooper Bay geotechnical and permitting for three Northwind 100 turbines - AVEC ƒ Chevak geotechnical, permitting and civil design for four Northwind 100 turbines - AVEC ƒ Nome/Bering Straits Native Corp wind turbines permitting for 18 Entegrity 60kW turbines CONSTRUCTION ADMINISTRATION AND MATERIAL TESTING Our construction quality control programs typically include our strong daily presence on the jobsite. Our field technicians maintain contact with project managers and the client representative through daily reports and weekly status reports. We are typically responsible for certifying compliance with shop drawings; measuring quantities of pay items; auditing survey data (line, grade, and quantities); computing quantities; monitoring yields and overseeing field adjustments; performing and managing materials inspection; inspecting workmanship; preparing directives, change orders, and supplemental agreements; preparing periodic/final payment estimates and reports; confirming materials/equipment tests; coordinating off-site inspection services by others; analyzing construction contractor claims if any, and maintaining photo record of construction. Our laboratory technicians provide testing in accordance with ASTM, AASHTO, ATM, and WQTEC testing standards for soil and concrete. Our laboratory is certified by US Army Corps of Engineers, AASHTO, and concrete to conduct a wide variety of soil, concrete, aggregate, and grout testing. We can provide both ACI certified concrete and NRC certified nuclear equipment field technicians. The laboratory maintains nuclear densometers, concrete field sampling equipment and laboratory concrete strength testing equipment. In addition, we maintain triaxial strength testing equipment, permeability testing equipment, and consolidation testing equipment for non-routine soil testing. 7 ƒ Glenn-Bragaw Interchange, DOT, Anchorage ƒ Taxiway Alpha Construction, Palmer ƒ Division of Forestry Fire Retardant Loading Facility, Palmer ƒ Highland Subdivision Road Reconstruction, Palmer ƒ Nome Power Plant Pad Construction, Nome ƒ Fuel Maintenance Hangar and Taxiway, Elmendorf AFB ƒ Eagle-Gulkana Street, Palmer ƒ Wasilla Airport Apron Construction, Wasilla ƒ Nome Power Plant Concrete Testing, Nome ƒ Wasilla Airport Apron Construction, Wasilla ENVIRONMENTAL AND PERMITTING Our environmental and permitting team provides all phases of environmental documents and permitting for a wide range of engineering projects. We are skilled in the NEPA process having completed many Environmental Reviews, Environmental Checklists, and Environmental Assessments. Our services include Phase 1’s; Wetland Delineation; Wetland Functional Assessment; Hydrology Assessments; Section 7 Consultation; and Government to Government Consultation. We have permitted airports, roads, bulk fuel facilities, power plants, water and sewer improvements, site layouts, and wind generators. ƒ Palmer Airport Apron Categorical Exclusion ƒ Barter Island Airport Phase I Environmental Site Assessment ƒ Palmer Airport Phase I Environmental Site Assessment ƒ Nunapitchuk/Kasigluk Amalgamated Energy Improvements ƒ Middle Kuskokwim Regional Energy Project ƒ Chugach Electric South Anchorage Substation Storm Water Pollution Prevention Plan ƒ Hatcher Pass Scenic Outlook Storm Water Pollution Prevention Plan ƒ Seldovia Airport Master Plan Permits ƒ Hooper Bay Wind Turbine Environmental Assessment ƒ Savoonga Wind Turbine FAA Permits ƒ Chevak Energy Upgrades Permitting ƒ Government to Government Consultation with Native Village of Kaktovik ƒ City of Palmer Water and Sewer Extension Permits ƒ Kipnuk New Airport Stream Gauging SURVEYING At HDL we understand that land surveying is often the starting point for the design of a project. As such, we realize how important precise, quality field data can be in starting your project in the right direction. Our field crews and office technicians are equipped with the latest survey equipment and software. We have recently acquired a new conventional and GPS survey equipment system that easily integrates traditional survey techniques with Static and Real-Time Kinematic GPS surveying. This new system utilizes GPS and Russian Glonass Satellites enabling us to gather data in areas previously unsuitable for GPS surveying. As part of this system we have developed an innovative data collection process which uses comprehensive field coding and data reduction software to quickly 8 transfer field data into final processed information ready for design. This new way of thinking towards surveying providing our clients with precise, quality controlled data for even the most aggressive schedules and budgets. Our experienced survey staff has provided survey services across Alaska for a variety of projects and clients. This experience along with HDL’s commitment to a client focused atmosphere provides our clients with the best possible survey and mapping products. ƒ ALTA/ACSM Land Title & Boundary Surveys ƒ Engineering Design Surveys ƒ Right of Way and Boundary Surveys ƒ Platting for Commercial and Residential Subdivisions ƒ Control for Photogrammetric and LIDAR Mapping ƒ Construction Surveying ROAD AND TRANSPORTATION ENGINEERING Our road and highway design team provides planning, preliminary and final engineering, and peer/quality control review for a wide range of road and highway projects. We manage the right-of-way acquisitions, traffic studies, public meetings and all aspects of providing a complete road design package. ƒ Palmer Dogwood Avenue Extension & Signalization ƒ Anchorage 3rd Avenue Rehabilitation ƒ Seldon Road—Matanuska-Susitna Borough ƒ Parks Highway MP 72-83 Rehabilitation ƒ Palmer Evergreen & Gulkana Street ƒ Wasilla Church Road Analysis ƒ Parks Highway MP 44-52.3 Upgrade ƒ Wasilla Crusey Street Improvements ƒ Wasilla Lucas Road Improvements ƒ Palmer Chugach Street ƒ Wasilla Transportation Plan Update BBFM Engineers, Inc. 510 L Street, Ste 200 Anchorage, AK 99501 Phone: 907-274-2236 Fax: 907-274-2520 Company Overview Alaska Business License 218579 MBE status – N/A BBFM Engineers Inc. is an Alaskan company specializing in structural engineering design. The principals of BBFM Engineers are: Dennis L. Berry PE, Forrest T. Braun PE, Troy J. Feller PE and Colin Maynard PE. All four principals were either raised or born in Alaska. The company was established in 1996; however, the principals have been working together for over 18 years (in fact, two have been working together for over 30 years). The ten structural engineers and four drafters make BBFM Engineers one of the larger structural engineering staffs in the state. BBFM Engineers has been fortunate to average over 150 projects per year, on a variety of different project types using several different delivery systems. Over 80% of our work comes from repeat clients. Over the years, BBFM Engineers has received numerous awards for a variety of facilities—for public and private clients. The engineers have worked with all of the various structural materials in designs for structures in over 150 different communities around the state: from Ketchikan to Shemya, from Kodiak to Barrow. BBFM Engineers prides itself on working within the constraints set by nature, and the owner, and finding a solution that is not only structurally sound, but also cost effective and, when exposed, aesthetically pleasing. BBFM Engineers has a proven record of successful work on small, large and medium projects. This experience has been gained over the last 11 years (up to 34 years for the principals) on projects all over Alaska for military and civilian clients. We are aware of the level of production effort and coordination that is necessary for the development of high quality construction documents. In addition, we understand the level of management required to ensure that a quality product is produced. Our firm has a depth and breadth of experience with Alaskan Arctic projects to its credit and we are skilled in providing cost-effective, creative design solutions to meet the needs of our clients. Our engineers are experienced team players who are flexible and responsive to client needs. Project Experience BBFM Engineers has completed more than 80 building and tower projects in the Yukon Kuskokwim Delta and Northwest Alaska. We have experience designing tower foundations in many of the different geotechnical conditions that exist throughout Northwest Alaska. We have designed tower foundations in 12 different villages in soil conditions ranging from marginal permafrost in deep silty soils, to mountain top bedrock. Page 2 of 4 Resources BBFM Engineers has a staff of ten structural engineers (nine licensed), four CAD drafters, an office manager and an administrative assistant. This makes us one of the largest structural engineering staffs in the state of Alaska and, as such, we have the ability to work on projects with aggressive schedules. The engineers work as a team to complete established work schedules and we are able to re-assign staff as needed to meet accelerated schedules. Our staff meets weekly to review the workload and upcoming deadlines. We are capable of adding new design projects soon and having them blend readily into our workload. BBFM Engineers is committed to providing timely services and meeting all project schedules; we know we can bring the Wind Turbine projects to a successful completion. Equipment: BBFM Engineers uses a variety of automated systems to produce quality designs and quality construction documents. For contract documents, the latest version of AutoCAD is used. For specifications, the staff has used a variety of programs including MasterSpec. The office has its own computer network for sharing of databases, communication programs, the Internet, direct modem connections and, of course, complete backup records. In addition, the staff at BBFM Engineers is proficient in the use of computers for structural analysis and design, and uses the following analysis software: • ETABS – Static and Dynamic wind and seismic lateral load analysis software for multi-story buildings • STAAD III – General 3D Finite Element Analysis for both large and small projects including vertical, and wind and seismic lateral loadings. • ENERCALC – Miscellaneous element design for individual beam column wall and footing design in concrete, masonry, steel, and wood and well as general seismic and wind design. • PCAMats – Concrete Mat Analysis Program used for the design of large mat foundations supporting multiple columns. • WoodWorks – A software package for the design of various wood components including plywood sheathed shear walls. • ADAPT – A post-tensioned concrete software package used to assist in the design of post-tensioned concrete slabs. • RAM Structural Systems – A computer program that analyzes and designs concrete and steel buildings, considering dead, live, snow, snow drift, wind, and seismic loads. RAM also converts the output into Autocad drawings, creates a list of all structural steel members in the building, and totals the structural steel weights. • SAFE – This program assists with the design of flat slabs, foundation mats, spread and combined footings based upon the finite element method and also includes 3D modeling. These programs allow us to work very efficiently and coordinate the design with the drafting effort. AURORA CONSULTING PAGE 1 1999- 2007 Communities in Blue 1983 – 1999 Black Dots Denali Anchorage Glacier Bay Nikolski Nome Egegik Juneau Dillingham Saxman Chenega Bay Port Graham Nanwalek Bettles Togiak Quinhagak Chignik Kodiak Mat-Su Naknek Fairbanks Cordova Nenana Dutch Harbor/Unalaska Galena Aniak Venetie Arctic Village Eagle Mountain Village Circle St Mary’s Unalakleet IliamnaNewhalen Allakaket Huslia Kaltag Stevens Village Wales Perryville Scammon Bay Ahkiok Chalkyitsik Diomede Igiugig Kokhanok Nikolai Port Heiden Takotna Tuluksak Akutan Atka False Pass Ft Yukon Kalskag Nondalton Solomon Koyukuk Stony River Sleetmute White Mountain AkiachakAtmauthluk Beaver Buckland Chefornak Deering Golovin Kongiganak Kwigillingok Larsen BayManokotak Nelson Lagoon Newtok Hoonah Kenai King Salmon Barrow Pedro Bay 1999-2007 1983-1999 z z z zz z z z z z z z z z z z zz z z z z z zz z z z z zz zzWhittier zz z z z z z z zz zz zzz z z z z z z z z z zz Denali Anchorage Glacier Bay Nikolski Nome Egegik Juneau Dillingham Saxman Chenega Bay Port Graham Nanwalek Bettles Togiak Quinhagak Chignik Kodiak Mat-Su Naknek Fairbanks Cordova Nenana Dutch Harbor/Unalaska Galena Aniak Venetie Arctic Village Eagle Mountain Village Circle St Mary’s Unalakleet IliamnaNewhalen Allakaket Huslia Kaltag Stevens Village Wales Perryville Scammon Bay Ahkiok Chalkyitsik Diomede Igiugig Kokhanok Nikolai Port Heiden Takotna Tuluksak Akutan Atka False Pass Ft Yukon Kalskag Nondalton Solomon Koyukuk Stony River Sleetmute White Mountain AkiachakAtmauthluk Beaver Buckland Chefornak Deering Golovin Kongiganak Kwigillingok Larsen BayManokotak Nelson Lagoon Newtok Hoonah Kenai King Salmon Barrow Pedro Bay 1999-2007 1983-1999 z z z zz z z z z z z z z z z z zz z z z z z zz z z z z zz zzWhittier zz z z z z z z zz zz zzz z z z z z z z z z zz Aurora Consulting 880 H St, Ste 105 Anchorage, Alaska 99501 Phone: (907) 245-9245 Fax: (907) 245-9244 Email: us@auroraconsulting.org A. GENERAL OVERVIEW Aurora Consulting and its business consulting staff have many years of experience in developing economic development projects, preparing business feasibility studies and business plans, submitting funding proposals and implementing economic development projects throughout the state. Although our offices are located in Anchorage, the professional consulting staff of Aurora Consulting has many years of experience in providing business development and management consulting services throughout the state. We have provided both private entrepreneurs and communities throughout the state with feasibility studies, business planning, market research, market strategies, development plans and project implementation assistance essential to successful business growth. B. EXPERIENCE WORKING WITH RURAL ALASKA Aurora Consulting’s staff has over thirty years of experience working with rural Alaska communities and organizations. We have worked with literally hundreds of rural communities, as illustrated by the map below and have traveled frequently to communities in every region of the state. C. SAMPLE CLIENTS AURORA CONSULTING PAGE 2 1. Anchorage Water & Wastewater Utility - Transition & Implementation Planning Aurora Consulting provides business planning and management services to the Anchorage Water and Wastewater Utility (AWWU) in conjuction with its transition from a department of the Municipality of Anchorage to an Authority. Aurora Consulting has assisted with an analysis of MOA provided services; IGC methodologies, historical charges and budgets; preliminary identification of problems areas, potential areas for cost savings and other issues by functional work area. Aurora Consulting assisted the AWWU to develop “Transition Plan” documents and materials, including Phase I and Phase II Transition Plans. The level of assistance provided required excellent communication skills and a broad understanding, interpretation and application of the MOA Charter, Code, Policies and Procedures and MOA/AWWU IGC’s and budgets. Project Schedule: October, 2005 – Current Contact: Mark Premo, General Manager and/or Brett Jokela, Assistant General Manager Anchorage Water & Wastewater Utility 3300 Arctic Blvd Anchorage, AK 99503 (907) 564-2700 2. Alaska Energy Authority (AEA) – Energy Project Business Planning Services Aurora Consulting provides professional consulting services to the Alaska Energy Authority under a Term Services Contract to assist the Alaska Energy Authority with the development of a Denali Commission approved business operating plan template and associated documents for rural energy projects. Aurora Consulting assists the Rural Energy Group with preparing templates for business plans, operation and maintenance schedules, repair and replacement schedules, regulatory agency coordination and other business related tasks for both the Bulk Fuel Upgrade program and the Rural Power System Upgrade program. Additionally, Aurora Consulting provides follow-up monitoring and evaluation of completed rural energy projects, as well as on-going business training and development. Additionally, working with the Alaska Energy Authority’s design/engineering term contractors, Aurora Consulting has provided a variety of business planning services for rural bulk fuel and electric utility operations, including the development of business operating plans for over 60 communities including Akiachak, Akhiok, Akutan, Atka, Buckland, Chalkyitsik, Chefornak, Chenega Bay, Chuathbaluk, Crooked Creek, Deering, Diomede, Egegik, False Pass, Fort Yukon, Golovin, Hoonah, Iguigig, Kokhanok, Kongiganak, Koyukuk, Kwigillingok, Karluk, Larsen Bay, Manokotak, Nanwalek, Nikolai, Nelson Lagoon, Newhalen, Newtok, Nikolski, Pedro Bay, Pilot Point, Port Heiden, Stony River, Sleetmute,Takotna, Tuluksak, Unalakleet, Venetie, White Mountain, Whitestone and many others. Through the process of developing these services to the Alaska Energy Authority, Aurora Consulting has worked closely with the rural communities, the Alaska Energy Authority and its contractors and the Denali Commission; performed a variety of research and analysis tasks; conducted interviews of project participants and engineering firms; and, communicated findings back in well organized and understandable oral, written and electronic formats. The level of assistance provided requires excellent communication skills and a broad understanding, interpretation and application of the local, state and federal utility codes and regulations, operating policies and procedures and application and governance of these at the local level. AURORA CONSULTING PAGE 3 During the eight plus years that Aurora Consulting has worked with the Alaska Energy Authority, we have always completed projects on-budget and on-time and have experience no significant customer complaints. The work that we have done under this contract is relevant in many ways – we have developed business plan outlines and templates, have worked on multiple business plans simultaneously, have worked closely with project engineers on project scope and design/costing and other factors, have worked closely with rural communities and residents in the development of the plans, and, have been asked to provide our assessment of financial viability and other key strategic decisions. Key Individuals: Ann Campbell, Sandy Williams, Carolyn Bettes Project Dates: October 2001 – Present Project Managers: Chris Mello Alaska Energy Authority 813 West Northern Lights Blvd. Anchorage, AK 99503 (907) 771-3000 Additional references include: Steve Stassel, Alaska Energy & Engineering Inc 349-0100 Jeff Stanley, CRW Engineering Group, 562-3252 Wiley Wilheim, LCMF Inc., 273-1851 Project Budget: Over $750,000 3. Organizational Board of Director/Management Planning and Training – 2004 - 2008 Aurora Consulting principal, Ann Campbell, has facilitated numerous community/strategic planning sessions and provided a wide variety of business management and planning trainings and workshops for rural and statewide organizations. Ann Campbell provided over 35 trainings and workshops on “How to Read Financial Statements”, “How to Structure New Investments”, “How to Track Financial Indicators and Business Activities”, “How to Set Product Pricing”, “How to Manage Effectively”, “Marketing Planning”, “How to Plan for CEO Succession”, “Strategic Planning” and other general financial and business topics. Clients have included native village corporations (Becharof Corporation, Chenega Corporation, Kijik Corporation, Toghotthele Corporation), regional non-profits (Kawerak Corporation, SEARHC Foundation), CDQ organizations (Norton Sound Economic Development Corporation, Aleutian Pribilofs Island Community Development Association), and statewide organizations (Sea Otter Sea Lion Commission, AWRTA, University of Alaska, Anchorage). Key Individuals: Ann Campbell Project Dates: 1999-2008 Sample Project Managers: Hazel Nelson, CEO Becharof Corporation 1225 E International Airport Rd, Ste 135 Anchorage, Alaska 99581 (907) 561-4777 Fax: 561-4778 Email: becharof@gci.net AURORA CONSULTING PAGE 4 Sample Consulting Clients Client Project Ahtna Heritage Foundation Feasibility Study Alaska Aggregate Products Business Planning Alaska Energy Authority Community Infrastructure Business Planning Alaska Lodging Management Hotel Business Planning Alaska Native Heritage Center Market Demand/Financial Projections Alaska Native Tourism Council Strategic Marketing Alaska SeaLife Center Business Planning/Market Demand Aleutian Pribilof Islands Community Development Assoc Business Planning/Feasibility Study Anchorage Water & Wastewater Utility Management Planning Becharof Corporation Strategic Planning, Marketing Planning Bering Straits Native Corporation Business Acquisition/Financial Consulting Bermello, Ajamil & Partners (City & Borough of Juneau) Juneau Waterfront Master Planning BP Exploration Marketing Consulting Bradley Reid Communications Tourism Marketing Planning Cape Fox Corporation Tourism Marketing Assistance Central Council Tlingit & Haida Indian Tribes of Alaska Board Training, Project Development Chenega Corporation Feasibility Analysis Chenega Corporation Acquisition Analysis Chenega IRA Council Community Planning – CEDS; Market Feasibility Study Chogguing, Ltd Board Training/Strategic Planning CIRI Market Analysis CIRI Tourism Acquisition Analysis City of Akutan Community Planning City of Aleknagik Feasibility Study Circle Tribal Council Market Demand Analysis/Marketing Planning City of Bettles Destination Marketing Planning, Community Planning City of Shaktoolik Fish Processing Plant Feasibility Study City of Togiak Community Planning – CEDS City of Wrangell Marine Feasibility Study, Business Planning Dillingham Chamber of Commerce Destination Marketing Planning, Eagle Tribal Council Feasibility Analysis Eyak Corporation Strategic Planning Glacier Bay Tours & Cruises Marketing Analysis Goldbelt Business Acquisition, 8(a) Planning Hawaiian Vacations Market Demand Analysis/Strategic Planning Kake Tribal Council Fishing Lodge Business Plan Ketchikan Indian Corporation Marketing & Development The Kijik Corporation Strategic Planning Kodiak Tribal Council Business Planning Kuskokwim Corporation Business Planning/Feasibility Study Mat-Su Convention & Visitors Bureau Visitor Research & Analysis / Economic Impact Analysis McDowell Group Community Planning – Yakatat Naknek Native Village Council Fish Processing Plant Feasibility Study North Pacific Volcano Learning Center Business Plan/Economic Impact Analysis Northern Air Cargo Strategic Planning Norton Sound Economic Development Council Feasibility Analysis/Management Services Quvaq, Inc Management Planning, Business Planning State of Alaska, Village Safe Water Community Infrastructure Business Planning Renewable Energy Fund Grant Application UVEC Renewable Energy Fund Grant Application Page 39 of 48 10/8/2008 Cost Worksheet  Renewable Energy Fund   Application Cost Worksheet– UVEC Wind Project 1. Renewable Energy Source The Applicant should demonstrate that the renewable energy resource is available on a sustainable basis. Annual average resource availability. Average Windspeed = 6.7 m/s Unit depends on project type (e.g. windspeed, hydropower output, biomasss fuel) 2. Existing Energy Generation a) Basic configuration (if system is part of the Railbelt 1 grid, leave this section blank) i. Number of generators/boilers/other 4 generators ii. Rated capacity of generators/boilers/other See below iii. Generator/boilers/other type See below iv. Age of generators/boilers/other See below v. Efficiency of generators/boilers/other 13.67 average Brand/Model Size (kW) Age Avg. Efficiency (kWh/Gal. Diesel) Caterpillar #3512 620 kW 25 13.35 Caterpillar #3512 620 kW 25 14.23 Caterpillar #398 500 kW 24 11.83 Chicago Pneumatic 300 kW 40 Emergency only – not used b) Annual O&M cost (if system is part of the Railbelt grid, leave this section blank) i. Annual O&M cost for labor $182,353 ii. Annual O&M cost for non-labor $1,198,415 c) Annual electricity production and fuel usage (fill in as applicable) (if system is part of the Railbelt grid, leave this section blank) i. Electricity [kWh] 4,0111,724 kWh ii. Fuel usage Diesel [gal] 293,360 gal. Other iii. Peak Load 756 MW/kWh iv. Average Load 675 MW/kWh v. Minimum Load 582 MW/kWh vi. Efficiency 13.67 kWh/gal. of diesel vii. Future trends                                                              1 The Railbelt grid connects all customers of Chugach Electric Association, Homer Electric Association, Golden  Valley Electric Association, the City of Seward Electric Department, Matanuska Electric Association and Anchorage  Municipal Light and Power.  RFA AEA 09-004 Application Cost Worksheet revised 9/26/08 Page 1  Renewable Energy Fund   d) Annual heating fuel usage (fill in as applicable) NA 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   3. Proposed System Design a) Installed capacity 1.2 MW b) Annual renewable electricity generation i. Diesel [gal or MMBtu] ii. Electricity [kWh] 2,968 MWh/year iii. Propane [gal or MMBtu] iv. Coal [tons or MMBtu] v. Wood [cords, green tons, dry tons] vi. Other 4. Project Cost a) Total capital cost of new system $8,712,329 b) Development cost $ 284,504 c) Annual O&M cost of new system $ 292,160 d) Annual fuel cost $ 0 5. Project Benefits a) Amount of fuel displaced for i. Electricity 171,500 gallons per year ii. Heat iii. Transportation b) Price of displaced fuel $4.49 per gallon x 171,500 gallons = $770,299/year c) Other economic benefits $ 32,280/year d) Amount of Alaska public benefits $ 32,280/year RFA AEA 09-004 Application Cost Worksheet revised 9/26/08 Page 2  Renewable Energy Fund   RFA AEA 09-004 Application Cost Worksheet revised 9/26/08 Page 3 6. Power Purchase/Sales Price a) Price for power purchase/sale $.3430/kWh 7. Project Analysis a) Basic Economic Analysis Project benefit/cost ratio 2.33 Payback 13.11 years Renewable Energy Fund Grant Application UVEC Renewable Energy Fund Grant Application Page 40 of 48 10/8/2008 Grant Budget Form Alaska Energy Authority ‐ Renewable Energy FundBUDGET INFORMATIONBUDGET SUMMARY: NJUS Renewable Energy Fund Wind ProjectMilestone Federal Funds State FundsLocal Match Funds (Cash)Local Match Funds (In‐Kind)Other FundsTOTALSPhase I and II Tasks (Reconnaissance, Feasibility and Conceptual Design)1. Initial Renewable Resource Review (GEC, AEA , CRW )$0.00 $0.002. Existing Energy System Analysis (CRW CDR Report ‐ Partners)$4,301.75 $4,301.753. Proposed System Design (All Project Partners)$6,864.25 $6,864.254. Proposed System Costs Estimations (All Project Partners)$3,336.25 $3,336.255. Proposed Benefits (GEC ‐ STG)$3,803.75 $3,803.756. Energy Market/Sales Analysis (NJUS)$1,998.00 $1,998.007. Permitting Review (HDL)$230.00 $230.008. Analysis of Potential Environmental Issues (HDL)$230.00 $230.009. Land Ownership Preparations (NJUS)$1,998.00 $1,998.0010.  Legal Consultations$400.00 $400.0011.  Preliminary Analysis and Recommendations (Aurora Consulting)$5,250.00 $5,250.00$               28,412 Phase III Tasks (Final Design and Permitting)12. Project Management (STG Estimate) $75,000.00 $75,000.0013. Perform Geotechnical Analysis (DMA Estimate) $44,000.00 $44,000.0014. Finalize Energy Production Analysis (GEC Estimate) $10,000.00 $10,000.0015. Finalize Foundation Designs (BBFM Estimate) $19,000.00 $19,000.0016. Finalize System Integration Designs (IES/EPS Estimate) $167,658.00 $167,658.0017.1 Finalize Land Agreements (Legal Estimate ‐ UVEC) $2,000.00 $2,000.0017.2 Purchase Land (Enter Estimated Value as a Cost ‐ UVEC)$100,000.00 $100,000.0018. Turbine Procurement (Turbine Estimate ‐ IES/STG) $2,685,480.00 $2,685,480.0019. Begin Financing Development (Legal Estimate ‐ UVEC) $2,000.00 $2,000.0020. Apply for/Obtain Permits (HDL Estimate) $20,000.00 $20,000.0021. Draft Final Operational Business Plan (Aurora Consulting Estimate) $10,000.00 $10,000.00$          3,135,138 Phase IV Tasks (Construction, Commissioning, Operation and Reporting)22. Project Management (STG Estimate) $75,000.00 $75,000.0023.1 Foundation Material Procurement (STG Estimate) $524,696.70 $524,696.7023.2 Mobilization and Demobilization Costs (STG Estimate) $898,126.80 $898,126.8023.3 Site Access and Foundation Development (STG Estimate) $265,643.03 $265,643.0323.4 Foundation Installation (STG Estimate) $385,875.87 $385,875.8723.5 Tower/Turbine Erection (STG Estimate) $182,304.04 $182,304.0423.6 Transmission/Distribution Lines (UVEC/STG/EPS Estimates) $510,868.68 $94,340.00 $605,208.6823.7 Power Storage Foundation Pad (STG Estimate) $52,086.87 $52,086.8723.8 Construction Survey/As‐Built Diagrams (STG Estimate) $26,220.00 $26,220.0023.9 Job Site Clean Up (STG Estimate) $18,230.40 $18,230.4024. System Integration (EPS Estimate) $1,635,000.00 $2,200,000.0025. SCADA Installation (IES Estimate) $493,023.00 $493,023.0026. System Calibration (IES/EPS Estimate) $101,867.00 $101,867.0027. Final Business Plan Development (Aurora Consulting) $5,000.00 $5,000.00$          5,833,282 Total Project Costs (Phase I, II, III and IV)$          8,209,080 $                        ‐   $             194,340 $               28,412 $          8,996,832 Total Phase I and Phase II CostsTotal Phase III CostsTotal Phase IV CostsRFA AEA09-004 Budget Form Alaska Energy Authority ‐ Renewable Energy FundMilestone # BUDGET CATEGORIES:123456Direct Labor and BenefitsTravel, Meals, or Per DiemEquipmentSuppliesContractual Services4,302$           6,864$            3,336$           3,804$           1,998$           Construction ServicesOther Direct CostsTOTAL DIRECT CHARGES$                        ‐   $                  4,302 $                  6,864 $                  3,336 $                  3,804 $                  1,998 7 8 9 10 11 12Direct Labor and BenefitsTravel, Meals, or Per DiemEquipmentSuppliesContractual Services 230$              230$              1,998$            400$              5,250$           75,000$         Construction ServicesOther Direct CostsTOTAL DIRECT CHARGES$                     230 $                     230 $                  1,998 $                     400 $                  5,250 $               75,000 13 14 15 16 17.1 17.2Direct Labor and BenefitsTravel, Meals, or Per DiemEquipmentSuppliesContractual Services 30,000$         10,000$         19,000$          167,658$       2,000$           Construction Services 14,000$         Other Direct Costs100,000$       TOTAL DIRECT CHARGES$               44,000 $               10,000 $               19,000 $             167,658 $                  2,000 $             100,000 18 19 20 21 22 23.1Direct Labor and BenefitsTravel, Meals, or Per DiemEquipment 2,685,480$   SuppliesContractual Services2,000$           18,000$          10,000$         75,000$         Construction Services524,697$       Other Direct Costs2,000$            TOTAL DIRECT CHARGES$          2,685,480 $                  2,000 $               20,000 $               10,000 $               75,000 $             524,697 RFA AEA09-004 Budget Form Alaska Energy Authority ‐ Renewable Energy Fund23.2 23.3 23.4 23.5 23.6 23.7Direct Labor and Benefits63,289$         Travel, Meals, or Per DiemEquipment15,229$         SuppliesContractual Services30,000$          15,822$         Construction Services 898,127$       265,643$       355,876$        182,304$       510,869$       52,087$         Other Direct CostsTOTAL DIRECT CHARGES$             898,127 $             265,643 $             385,876 $             182,304 $             605,209 $               52,087 23.8 23.9 24 25 26 27Direct Labor and BenefitsTravel, Meals, or Per DiemEquipment2,200,000$    SuppliesContractual Services101,867$       5,000$           Construction Services 26,220$         18,230$         493,023$       Other Direct CostsTOTAL DIRECT CHARGES$               26,220 $               18,230 $          2,200,000 $             493,023 $             101,867 $                  5,000 TOTALS Direct Labor and Benefits$               63,289 Travel, Meals, or Per Diem$                        ‐   Equipment$          4,900,709 Supplies$                        ‐   Contractual Services$             589,759 Construction Services$          3,341,075 Other Direct Costs$             102,000 TOTAL DIRECT CHARGES$          8,996,832 RFA AEA09-004 Budget Form Renewable Energy Fund Grant Application UVEC Renewable Energy Fund Grant Application Page 41 of 48 10/8/2008 Electronic Version of Application (See attached CD Rom) Renewable Energy Fund Grant Application UVEC Renewable Energy Fund Grant Application Page 42 of 48 10/8/2008 Governing Body Resolution Renewable Energy Fund Grant Application UVEC Renewable Energy Fund Grant Application Page 43 of 48 10/8/2008 UVEC Board Resolution Unalakleet Valley Electric Cooperative, Inc. P.O. Box 186 Unalakleet, AK 99684 Resolution: #10-08-001 Resolution Authorizing and Supporting the UVEC Renewable Energy Fund Grant Application to the Alaska Energy Authority WHEREAS, the Unalakleet Valley Electric Cooperative, Inc., hereinafter called UVEC, operates the electric utility for the community of Unalakleet, Alaska; and, WHEREAS, the Alaska Energy Authority is soliciting proposals for funding of renewable energy projects on behalf of the State of Alaska; and, WHEREAS, the cost of diesel fuel in rural Alaska is extraordinarily expensive; and, WHEREAS, the UVEC wants to utilize Unalakleet's renewable resource in reducing its dependence on diesel fuel. NOW, THEREFORE BE IT RESOLVED, that the Unalakleet Valley Electric Cooperative, Inc. authorizes submittal of the UVEC Renewable Energy Fund Wind Project; and, BE IT FURTHER RESOLVED, that UVEC authorizes submittal of the UVEC Renewable Energy Fund Wind Project application at the match levels indicated in the application; and, BE IT FURTHER RESOLVED, that UVEC authorizes Isaiah Towarak to be the point of contact to represent UVEC for purposes of the application; and, BE IT FURTHER RESOLVED, that UVEC attests that it is in compliance with all federal, state, and local laws, including existing credit and federal tax obligations. CERTIFICATE OF SECRETARY I, Judie Kotongan. certify that I am Secretary of the Unalakleet Valley Electric Cooperative, Inc. Board of Directors and that the above and foregoing is a true excerpt from the minutes of a meeting of the Board of Directors on the 3rd day of October. 2008. at which a quorum was present and that the above portion of the minutes have not been modified or rescinded. Judie Kotongan, Secrets) Unalakleet Valley Electric Cooperative, Inc. Renewable Energy Fund Grant Application UVEC Renewable Energy Fund Grant Application Page 44 of 48 10/8/2008 UVEC Match Documentation Renewable Energy Fund Grant Application UVEC Renewable Energy Fund Grant Application Page 45 of 48 10/8/2008 Partners’ Match Documentation October 4, 2008 To Whom It May Concern: As the Project Manger of the UVEC Renewable Energy Fund Wind Project, this letter is to serve as documentation of the contributions made by project partners during the conceptual design phases of this project. To date, the following firms have either offered their services as in-kind contributions or directly billed STG Incorporated for their time completing work regarding this wind energy installation: Firm Total Contribution STG Incorporated $9,215.00 Duane Miller Associates $825.00 BBFM Engineers $1,240.00 Electric Power Systems $1,028.00 Intelligent Energy Systems $2,500.00 HDL Engineers $460.00 Unalakleet Valley Electric Cooperative $6,000.00 Legal Counsel $400.00 Aurora Consulting $5,250.00 DNV Global Energy Concepts $1,500.00 Total: $28,418.00 More detailed cost accounting for this work is available upon request. Signed, James St. George President, STG Incorporated 11820 S. Gambell Street • Anchorage, Alaska 99515 • Phone: (907) 644-4664 • Fax: (907) 644-4666 info.stginc@gci.net • www.stgincorporated.com Renewable Energy Fund Grant Application UVEC Renewable Energy Fund Grant Application Page 46 of 48 10/8/2008 Line Ownership Transfer Agreement Renewable Energy Fund Grant Application Renewable Energy Fund Grant Application Page 47 of 48 10/8/2008 Unalakleet Renewable Energy Fund Wind Project Supporting Documents DNV Global Energy Concepts Inc. 1809 7th Avenue, Suite 900 Seattle, Washington 98101 Phone: (206) 387-4200 Fax: (206) 387-4201 www.globalenergyconcepts.com www.dnv.com Preliminary Energy Assessment for Unalakleet Wind Energy Project October 6, 2008 Prepared for: STG Inc 11820 South Gambell Street Anchorage, AK 99515 Preliminary Energy Assessment, Unalakleet, Alaska EARP0047-A DNV Global Energy Concepts Inc. i October 6, 2008 Approvals October 6, 2008 Prepared by Mia Devine Date October 6, 2008 Reviewed by Kevin J. Smith Date Version Block Version Release Date Summary of Changes A October 6, 2008 Original Preliminary Energy Assessment, Unalakleet, Alaska EARP0047-A DNV Global Energy Concepts Inc. ii October 6, 2008 Table of Contents BACKGROUND AND SITE DESCRIPTION........................................................................... 1 WIND RESOURCE MEASUREMENTS................................................................................... 3 Wind Rose............................................................................................................................... 3 Air Density.............................................................................................................................. 4 Long-Term Wind Speeds at the Project Site........................................................................... 4 Wind Shear and Hub-Height Wind Speeds ............................................................................ 4 ENERGY ANALYSIS.................................................................................................................. 7 Wind Turbine Power Curves .................................................................................................. 7 Energy Losses......................................................................................................................... 8 Electric Load......................................................................................................................... 10 Diesel Generators and Controls............................................................................................ 11 Balance of System Equipment.............................................................................................. 11 Energy System Modeling Results......................................................................................... 13 Preliminary Energy Assessment, Unalakleet, Alaska EARP0047-A DNV Global Energy Concepts Inc. iii October 6, 2008 List of Figures Figure 1. Proposed Wind Project Site, Unalakleet ......................................................................... 2 Figure 2. Wind Rose at Unalakleet (February 15, 2007, to September 22, 2008)..........................3 Figure 3. Estimated Monthly Diurnal Wind Speeds at Wind Project Site...................................... 6 Figure 4. Estimated Electric Load Requirements in Unalakleet................................................... 11 Figure 5. Example Modeling Results of Hourly Electric Load and Wind Energy Production .... 14 List of Tables Table 1. Monthly Long-Term Correction Factors .......................................................................... 4 Table 2. Monthly Average Wind Speeds at Met Tower Site (m/s) ................................................ 5 Table 3. Turbine Power Curves, 1.28 kg/m3 Air Density............................................................... 7 Table 4. Estimated System Energy Losses..................................................................................... 8 Table 5. Estimated Power Generation Requirements in Unalakleet............................................. 10 Table 6. Specifications for Diesel Generators in Unalakleet........................................................ 11 Table 7. Energy System Modeling Results, Two Fuhrländer FL600 Wind Turbines.................. 13 Table 8. Energy System Modeling Results, Two Vestas RRB PS600 Wind Turbines................ 13 Preliminary Energy Assessment, Unalakleet, Alaska EARP0047-A DNV Global Energy Concepts Inc. 1 October 6, 2008 Background and Site Description DNV Global Energy Concepts Inc. (DNV-GEC) has been retained by STG Inc to evaluate the wind resource in Unalakleet, Alaska, and complete a preliminary estimate of the potential energy production and diesel fuel displacement of a proposed wind power project in the community. This report describes the methodology and assumptions used in the analysis. This report is not intended as a detailed technical or economic feasibility study of the proposed wind power system. DNV-GEC has previously completed a wind resource and energy assessment for the community of Unalakleet, which is documented in the Unalakleet Rural Power System Upgrade Project Conceptual Design Report (CDR) dated October 12, 2007. During the previous work DNV-GEC visited the proposed wind project site and considered it acceptable for wind energy development. The CDR is publicly available from the Alaska Energy Authority and data from the CDR is used in the current analysis when appropriate. STG intends to install two 600 kW wind turbines on a hill located about 3 km north of the town of Unalakleet. The hybrid wind-diesel power plant is intended to be a high-penetration system that would include a flywheel for energy storage and power factor support. The location of the proposed project site and the turbine layout provided by STG are shown in Figure 1. Also shown is the location of the wind monitoring station discussed in this report. Preliminary Energy Assessment, Unalakleet, Alaska EARP0047-A DNV Global Energy Concepts Inc. 2 October 6, 2008 Figure 1. Proposed Wind Project Site, Unalakleet Preliminary Energy Assessment, Unalakleet, Alaska EARP0047-A DNV Global Energy Concepts Inc. 3 October 6, 2008 Wind Resource Measurements Data are available from a 30-m meteorological (met) tower, located at the proposed wind project site at an elevation of 130 m. Wind speed and direction measurements were recorded at heights of 19.5 m and 29 m above ground level. Standard, uncalibrated NRG#40 anemometers and NRG #200P wind vanes were used at the site and data were recorded as 10-minute averages from February 15, 2007, to September 22, 2008. DNV-GEC compiled, validated, and incorporated this data into the analysis. DNV-GEC followed a standard validation process to identify and remove erroneous data (e.g., due to icing and tower shadow). Invalid wind data were removed from the data set and a secondary anemometer was used to fill the gaps when available. The site experienced some data loss due to icing as well as data that is missing from March 30, 2008, to June 5, 2008, due to data collection failure. The average data recovery rate was 86%. Wind Rose A wind rose depicts the frequency and energy content of wind by direction and influences the layout of a wind farm with multiple wind turbines. As shown in Figure 2, the prevailing wind direction is from the east. The wind rose from the airport weather station in Unalakleet also indicates primary winds from the east. The turbine layout developed by STG is oriented to capture the prevailing easterly winds. 0 5 10 15 20 25 30 35 40 0 10 20 30 40 50 60 70 80 90 100 110 120 130 140 150 160170 180 190200 210 220 230 240 250 260 270 280 290 300 310 320 330 340 350 % of Energy % of Time Figure 2. Wind Rose at Unalakleet (February 15, 2007, to September 22, 2008) Preliminary Energy Assessment, Unalakleet, Alaska EARP0047-A DNV Global Energy Concepts Inc. 4 October 6, 2008 Air Density The density of the air affects power production from a wind turbine, with denser air leading to greater power production potential. The density of air depends on the air temperature and the elevation of the site. An annual average air density value of 1.28 kg/m3 was calculated for Unalakleet based on the long-term average air temperature of -2.7°C measured at the Unalakleet airport weather station and an elevation of 180 m (site elevation of 130 m plus hub-height elevation of 50 m). The wind turbine power curves are adjusted to the site air density. Long-Term Wind Speeds at the Project Site DNV-GEC investigated the availability of long-term reference meteorological data to adjust the measured met tower wind speeds to represent long-term conditions. The Automated Surface Observation Station (ASOS) at the Unalakleet airport was identified as a valid source of long- term data based on its strong correlation to the met tower site (R-squared value of 0.97 using monthly averages). Data from the Unalakleet ASOS indicate that the period from March 2007 to February 2008 was approximately 1% lower than the long-term average. Consequently, DNV-GEC increased the measured met tower wind speeds during this time by 1%, in accordance with the trends observed in the airport data. The adjustments were applied on a monthly basis, with long-term correction factors produced from the airport data. These adjustment factors, presented in Table 1, represent the ratio between the reference site’s long-term average wind speed for each month, and the reference site’s monthly average wind speed during the period of record. For example, the January 2008 adjustment factor (1.02) indicates that the long-term average wind speed over all Januaries is 2% higher than the average wind speed in January 2008. Table 1 shows the monthly long-term correction factors that were used in the analysis. The hourly wind data for the met tower were adjusted on a month-by-month basis using the correction factors. Table 1. Monthly Long-Term Correction Factors Month Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2007 - - 1.66 1.23 1.09 1.04 1.09 0.99 0.94 1.02 0.96 0.87 2008 1.02 1.34 - - - - - - - - - - The long-term annual average wind speed at the met tower site is 6.4 m/s at a height of 30 m above ground level, which is consistent with the 6.5 m/s estimate provided in the CDR. Wind Shear and Hub-Height Wind Speeds Typically, wind speed increases with height above ground level. The wind speed values in Unalakleet were adjusted from the 29-m measurement height to the 50-m hub height of the proposed wind turbines to be installed in Unalakleet. DNV-GEC calculated the wind shear exponent1 between the lower and the upper anemometers at the met tower site. Only wind speeds 1 The wind shear exponent (alpha or α) is one method of describing the extent to which wind speeds vary with increasing height above ground level. The equation that represents the relationship between wind speed and height is Preliminary Energy Assessment, Unalakleet, Alaska EARP0047-A DNV Global Energy Concepts Inc. 5 October 6, 2008 greater than 4 m/s were included in the calculation. The average shear exponent for the site is 0.11. The resulting long-term annual average hub-height wind speed in Unalakleet is 6.7 m/s. The 50-m wind map of the project site is provided in Figure 1. As shown, the estimated 50-m wind speed at the met tower site is Class 3 (6.4 to 7.0 m/s), which is consistent with the average 6.7 m/s wind speed estimated with on-site met tower data. However, the wind map also shows areas of Class 2 and Class 4 in close proximity to the proposed wind turbine locations. Although each individual wind turbine location may experience a higher or lower wind speed than at the met tower site, DNV-GEC considers the met tower location to be representative of the average of the two turbine locations and a reasonable representation of the P502 wind speed for the project. Figure 3 and Table 2 summarize the final wind speed data set used in the energy analysis for Unalakleet. Table 2. Monthly Average Wind Speeds at Met Tower Site (m/s) Month Met Tower Measured (29 m) Long-Term Estimate (29 m) Long-Term Estimate (50 m) January 8.4 8.6 9.2 February 6.2 8.4 8.9 March 4.3 7.0 7.5 April 4.6 5.7 6.1 May 4.0 4.3 4.6 June 3.9 4.1 4.3 July 4.3 4.7 5.0 August 5.1 5.0 5.3 September 6.1 5.7 6.0 October 7.0 7.1 7.5 November 8.6 8.3 8.8 December 8.5 7.4 7.9 Annual Average 5.9 6.4 6.7 (V1 / V2) = (H1 / H2)α , where V1 and V2 are wind speeds at heights H1 and H2, respectively (above ground level), and α is the dimensionless wind shear exponent. 2 The P50 value is the average expected value, or the value below which 50% of the outcomes are expected to be found. Preliminary Energy Assessment, Unalakleet, Alaska EARP0047-A DNV Global Energy Concepts Inc. 6 October 6, 2008 Figure 3. Estimated Monthly Diurnal Wind Speeds at Wind Project Site Preliminary Energy Assessment, Unalakleet, Alaska EARP0047-A DNV Global Energy Concepts Inc. 7 October 6, 2008 Energy Analysis DNV-GEC used the software program HOMER, developed by the National Renewable Energy Laboratory, to estimate energy production (www.nrel.gov/homer). The HOMER modeling software compares the hourly output of the wind turbines with the hourly electric load of the community and dispatches the appropriate diesel generator to make up any difference in power needs. The operating reserve, minimum loading of the diesel engines, and the diesel-fuel efficiency curves are also taken into consideration to calculate the fuel consumption of the system. Inputs into the model include the local wind resource, the wind turbine power curve, the community’s hourly electric load, diesel dispatch strategy, and diesel generator fuel curves. Assumptions used for each of these inputs and results of the analysis are described below. Wind Turbine Power Curves STG is considering either the Fuhrländer FL600 or the Vestas RRB PS600 wind turbine for the project site. The suitability and long-term reliability of either turbine model for operation in cold climates has not been specifically evaluated by DNV-GEC for this preliminary assessment. The energy analysis was completed for both turbine models. The manufacturer-provided power curves were adjusted to the site air density of 1.28 kg/m3 and are provided in Table 3. The turbine power curves are used to calculate energy production for each hourly average wind speed value. The hourly energy production is summed over a year to determine gross annual energy production for each wind turbine. Table 3. Turbine Power Curves, 1.28 kg/m3 Air Density Wind Speed (m/s) Fuhrländer Power (kW) Vestas RRB Power (kW) 0 0 0 1 0 0 2 0 0 3 0 0 4 28 22 5 64 45 6 122 86 7 200 150 8 303 228 9 426 316 10 532 412 11 596 483 12 611 538 13 615 567 14 615 585 15 615 598 Preliminary Energy Assessment, Unalakleet, Alaska EARP0047-A DNV Global Energy Concepts Inc. 8 October 6, 2008 Wind Speed (m/s) Fuhrländer Power (kW) Vestas RRB Power (kW) 16 615 600 17 615 601 18 615 600 19 0 600 20 0 600 21 0 600 22 0 600 23 0 600 24 0 600 25 0 600 Annual Average Wind Speed, 50-m Height 6.7 m/s 6.7 m/s Gross Energy Production per Turbine 1,677 MWh/yr 1,482 MWh/yr Gross Capacity Factor 31.9% 28.2% Energy Losses The gross annual energy represents the energy delivered at the base of the wind turbine towers under ideal conditions. Net energy production takes into account typical losses and represents the energy delivered to the grid interconnection point for a typical (average) year. Exact losses can vary significantly from project to project and are strongly influenced by factors such as equipment reliability, owner/operator’s approach to maintenance and repairs, turbine and subcomponent supplier responsiveness, and site conditions. DNV-GEC evaluated each potential area of energy loss in the Unalakleet wind power system and estimated a correction factor to be applied to the projected diesel-fuel savings calculated by the HOMER model, which otherwise assumes 100% turbine availability and zero system losses. Aggregate energy losses are estimated to be 21% for the site, as listed in Table 4. Estimated values are long-term averages over an expected 20-year project life and may be lower in initial years of operation. Table 4. Estimated System Energy Losses Description Losses (% of Energy) Correction Factor Availability 11% 0.89 Electrical 3% 0.97 Turbine Performance 2% 0.98 Environmental 5% 0.95 Wake Effects 1% 0.99 Curtailment 1% 0.99 Total 21% 0.79 Preliminary Energy Assessment, Unalakleet, Alaska EARP0047-A DNV Global Energy Concepts Inc. 9 October 6, 2008 Turbine availability is the primary cause of energy losses for the wind system. Availability is the percent of time during the year that the wind turbines are online and available to produce power. Factors affecting turbine availability include downtime due to routine maintenance, faults, minor or major component failures, and balance-of-plant downtime (substation transformer failures, electrical collection system or communication system problems, or transmission outages). While a “typical” year may have relatively limited downtime associated with component failures, the infrequent events of long duration can result in significant lost energy. As the equipment ages, failure of minor components with design lives less than 20 years is expected to increase; however, the increasing failure rate will be offset somewhat by increased efficiency as experience is gained in replacing these components. DNV-GEC estimated a long-term turbine availability of 89% which corresponds to an average of 960 turbine-hours per year of project downtime due to planned or unplanned maintenance. This estimate is based on the assumption that the wind power system will have remote monitoring capability that would allow both the turbine supplier and the power system operator to monitor production, troubleshoot faults and take corrective action on some tasks without sending a technician to the site. It is also assumed that local technicians experienced with electrical and mechanical systems employed by the power system operator would be capable of completing routine maintenance and minor component repairs with some basic training from the turbine manufacturers. Electrical losses represent the difference between energy measured at each wind turbine and the point of revenue metering, including transformers, collection wiring, conversion to and from energy storage devices, and parasitic consumption within the power plant. The proposed flywheel is expected to a have higher energy conversion efficiency than other types of energy storage, such as batteries; however, it is expected that a significant amount of electricity will be consumed in providing reactive power support. DNV-GEC estimates electrical losses to be 3%. Turbine performance losses include a variety of issues related to the normal control of the wind turbine that prevent performance in accordance with the reference power curve. These issues include high-wind hysteresis (production lost during the time it takes to recover from automatic high-wind shutdowns), low-wind hysteresis (startup and cut-in), off-yaw operations, and turbulence. DNV-GEC estimates turbine performance losses to be 2%. Environmental losses include weather-related shutdowns to avoid hail, lightning, or other storm damage, reduced site access due to inclement weather conditions, and shut downs due to ambient temperatures outside the turbine’s operating range. Also included in this category is blade soiling and degradation, which occurs with the accumulation of dirt, insects, or ice, and impacts the aerodynamics of the blades, thus lowering production. The cold weather specifications of the Fuhrländer and Vestas RRB were not available for this analysis; however, wind turbines are typically designed to operate in temperatures as low as -20°C without special modifications. Based on the temperature data measured at the Unalakleet met tower, temperatures drop below - 20°C during approximately 250 hours per year. Some of these hours are likely to coincide with periods of energy loss due to icing and reduced access to the site during poor weather. DNV- GEC estimates an average 5% energy loss per year due to environmental related issues. Wake effects refer to lost energy production caused by turbines located downwind of other turbines. Based on the current turbine layout with both turbines oriented perpendicular to the Preliminary Energy Assessment, Unalakleet, Alaska EARP0047-A DNV Global Energy Concepts Inc. 10 October 6, 2008 prevailing wind direction and turbine-to-turbine spacing of 5.5 rotor diameters, DNV-GEC estimates a minimal 1% energy loss due to wake losses; however, a wake loss simulation has not been completed. Curtailment includes commanded turbine shutdowns related to wind sector management, losses due to the power purchaser electing to not take power generated by the facility, and altered operations to reduce noise, shadow flicker impacts, or for bird or bat mitigation. Some curtailment of wind power output is expected due to the size of the wind facility relative to the electric load. DNV-GEC estimates 1% energy loss to account for curtailment when wind power generation far exceeds the community demand. Since each loss category is independent of the other categories, total losses are calculated by multiplying each system loss correction factor to result in a total correction factor of 0.79. HOMER does not incorporate the above-discussed energy losses into the power system model. Therefore, the loss correction factor is applied to the gross fuel savings results from HOMER. Wind-generated electricity not immediately used by the community or stored in the flywheel may be diverted into an electric dump load and used for space heat. Since this electricity is not sold at retail electric rates, it is considered an energy loss from the power plant operator’s point of view. This electrical energy loss is included in the HOMER model and is therefore not repeated in the energy loss calculation above. Electric Load According to the CDR prepared in 2007, the annual electric generation requirements in Unalakleet average 4,000 MWh per year with a peak demand of 831 kW. Based on the monthly and diurnal load profiles presented in the CDR, DNV-GEC synthesized a year of hourly electric load data as summarized in Table 5 and Figure 4. Table 5. Estimated Power Generation Requirements in Unalakleet Month Average Load (kW) Gross Energy Production (MWh) January 514 383 February 558 375 March 461 343 April 468 337 May 421 314 June 402 289 July 373 277 August 411 306 September 445 321 October 430 320 November 488 351 December 493 367 Total 455 3,982 Preliminary Energy Assessment, Unalakleet, Alaska EARP0047-A DNV Global Energy Concepts Inc. 11 October 6, 2008 Figure 4. Estimated Electric Load Requirements in Unalakleet Diesel Generators and Controls The sizes and fuel efficiency of the diesel generators at the Unalakleet power plant as described in the CDR are summarized in Table 6. In the HOMER model it is assumed that the minimum load to be placed on these diesels is 20% of rated power. Table 6. Specifications for Diesel Generators in Unalakleet Fuel Efficiency Data Make Rating Minimum Load 100% Load 20% Load Caterpillar 1135 kW 227 kW 82 gal/hr 21 gal/hr Caterpillar 455 kW 91 kW 35 gal/hr 11 gal/hr Caterpillar 455 kW 91 kW 35 gal/hr 11 gal/hr Balance of System Equipment Balance of system equipment could include electric dump loads, energy storage systems, flywheels, or other equipment necessary to ensure high quality and reliable power. The evaluation and specification of various balance of system equipment is beyond the scope of this analysis. For the purpose of estimating diesel fuel displacement, DNV-GEC assumes that Preliminary Energy Assessment, Unalakleet, Alaska EARP0047-A DNV Global Energy Concepts Inc. 12 October 6, 2008 adequate balance of system equipment and/or control systems are in place to absorb and/or curtail any excess wind-generated electricity that is not instantaneously consumed by the community. More analysis is necessary during the final design stage of the project to determine the proper sizing of energy storage and dump loads. The primary advantage of energy storage equipment in high-penetration systems is to allow the diesel generators to shut down when the wind turbines supply more power than is needed by the load. During lulls in wind power generation, the energy storage device supplies any needed power. If the lulls are prolonged and the storage becomes discharged, a diesel generator is started and takes over supplying the load. For this type of system to operate with minimal power loss to the community, the energy storage system must be appropriately sized to cover the electric load long enough for a diesel generator to come online if the wind turbines were to fault and suddenly drop off-line. According to STG, the primary energy storage device being considered for Unalakleet is a flywheel. In addition, an electric boiler will be installed to convert excess wind- generated electricity into heat. The sizing and specification of an energy storage system is beyond the scope of this report; however, the diesel fuel savings associated with an energy storage system is included in the analysis. In order to estimate fuel savings without specifying the particular energy storage equipment, a range of diesel dispatch strategies were modeled to simulate varying levels of storage capacity. In HOMER, the dispatch of diesel generators is modeled by utilizing the most efficient diesel generator capable of supplying the net electric load while maintaining the required spinning reserve to cover any fluctuations in the net load. The diesel generators are allowed to shut down if the wind turbines and energy storage equipment are capable of supplying both the net electric load and the required spinning reserve. The required spinning reserve is calculated as a percentage of the electric load during each time step. Different sizes and types of energy storage devices will be able to supply different amounts of spinning reserve and will have different costs associated with each option. To account for the range of capacities of the energy storage options, DNV-GEC varied the spinning reserve value in the HOMER model from a range of 0% to 100% of the electric load. A spinning reserve value of 0% represents a power system where the diesel generators are allowed to turn off when the wind power output equals or exceeds the community load. Any short-term fluctuations in the wind output or electric demand would be covered by the energy storage system. A spinning reserve value of 100% represents a power system where the diesel generators are allowed to turn off only when the wind power output exceeds the community load by 100% or more. Any short-term fluctuations in the net electric demand would be covered by the excess wind electricity and/or the energy storage system. The power system options with a higher spinning reserve value will result in lower diesel fuel savings due to the additional operating hours of the diesel generators. However, these systems may include a smaller, less costly energy storage system or no energy storage system at all as with the high-penetration wind-diesel system on St. Paul Island. The method of system modeling described above, although sufficient for the preliminary energy system analysis included in this report, is not adequate for final system design. DNV-GEC recommends the completion of a more specific economic and risk analysis of the various energy Preliminary Energy Assessment, Unalakleet, Alaska EARP0047-A DNV Global Energy Concepts Inc. 13 October 6, 2008 storage options to evaluate the magnitude of cost savings versus operation risks of the different storage technologies available. Energy System Modeling Results The HOMER modeling software compares the hourly output of the wind turbines with the hourly electric load of the community and dispatches the appropriate diesel generator to make up any difference in power needs. System energy production and fuel savings are summarized in Table 7 and Table 8 for the estimated range of possible diesel dispatch options, with the higher spinning reserve percentage resulting in a more conservative approach in allowing the diesel generators to turn off. The gross wind energy output is the amount of electricity available to meet the community demand prior to energy losses. The turbine capacity factor is calculated by dividing the gross energy output by the maximum possible energy production throughout the year. The gross diesel-fuel savings of the wind-diesel system represents the results of the HOMER modeling. The correction factor for energy losses described previously was applied to the gross diesel-fuel savings to arrive at the net fuel savings listed. Estimated fuel consumption of the diesel-only system is provided for comparison. Table 7. Energy System Modeling Results, Two Fuhrländer FL600 Wind Turbines Spinning Reserve (% of Electric Load) Description 0% 50% 100% Gross wind energy production (MWh/yr) 3,460 3,460 3,460 Gross wind turbine capacity factor (%) 32.9% 32.9% 32.9% Fuel consumption of diesel-only system (gal/yr) 311,000 311,000 311,000 Fuel consumption of wind-diesel system (gal/yr) 163,000 174,000 193,000 Gross diesel fuel savings (gal/yr) 148,000 137,000 118,000 Energy loss correction factor 0.79 0.79 0.79 Net diesel fuel savings (gal/yr) 117,000 108,000 93,000 Net diesel fuel savings (%) 38% 35% 30% Table 8. Energy System Modeling Results, Two Vestas RRB PS600 Wind Turbines Spinning Reserve (% of Wind Output) Description 0% 50% 100% Gross wind energy production (MWh/yr) 2,968 2,968 2,968 Gross wind turbine capacity factor (%) 28.2% 28.2% 28.2% Fuel consumption of diesel-only system (gal/yr) 311,000 311,000 311,000 Fuel consumption of wind-diesel system (gal/yr) 175,000 187,000 206,000 Gross diesel fuel savings (gal/yr) 136,000 124,000 105,000 Energy loss correction factor 0.79 0.79 0.79 Net diesel fuel savings (gal/yr) 107,000 98,000 83,000 Net diesel fuel savings (%) 34% 31% 27% Preliminary Energy Assessment, Unalakleet, Alaska EARP0047-A DNV Global Energy Concepts Inc. 14 October 6, 2008 Figure 5 illustrates the estimated hourly energy production from a wind-diesel system consisting of two 600 kW Fuhrländer turbines and an energy storage system sufficient to allow the diesel generators to provide 0% spinning reserve. The difference between the hourly electric load and the hourly wind power output is supplied by the diesel generators. The energy storage system covers any intra-hour fluctuations in the net load long enough for a diesel generator to warm up and come on line if necessary. Figure 5. Example Modeling Results of Hourly Electric Load and Wind Energy Production Based on the analysis presented in this report, it is expected that a high-penetration wind power system will reduce diesel fuel consumption in Unalakleet by 27% to 38%, or an average of 83,000 to 117,000 gallons per year. Nome Region Energy Assessment DOE/NETL-2007/1284 Final Draft Report March 2008 FINAL DRAFT iii Nome Region Energy Assessment DOE/NETL-2007/1284 Final Draft Report March 2008 NETL Contact: Brent Sheets Manager Arctic Energy Office Prepared by: Charles P. Thomas–Research & Development Solutions, LLC(RDS)/SAIC Lawrence Van Bibber–RDS/SAIC Kevin Bloomfield–RDS/SAIC Tom Lovas–Energy & Resource Economics Mike Nagy–ENTRIX Jeanette Brena–ENTRIX Harvey Goldstein–WorleyParsons Dave Hoecke–ENERCON Peter Crimp–Alaska Energy Authority (AEA) David Lockard–AEA Martina Dabo–AEA National Energy Technology Laboratory www.netl.doe.gov FINAL DRAFT v NOME REGION ENERGY ASSESSMENT EXECUTIVE SUMMARY The purpose of this assessment is to present an analysis of technologies available to the City of Nome for electric power production. Nome is a city of 3,500 people located on the Bering Sea coast of the Seward Peninsula 539 air miles northwest of Anchorage, 102 miles south of the Arctic Circle and 161 miles east of the Russian coast. Typical of most of Alaska’s rural communities, Nome is totally dependent upon diesel generators for electricity. The current load range for the city is 1.8 MWe to 5.2 MWe (yearly average of 3.35 MWe). All power is supplied by diesel generation. Diesel fuel is also required by the residents for residential and commercial space and water heating. The addition of industrial activity, the Rock Creek Mine, increased the load by about 9 MWe for an average load of 12.35 MWe. The mine, which began initial operations in late 2007, is estimated to be in operation for 7 to10 years. Recovered heat is currently used for heating the plant site and the potable water system for the City. The diesel generators require 1.8 to 2.0 million gallons of fuel each year. The consumer power rate has held steady in Nome since 2001. It ranges from $0.165 to 0.185/kWh depending upon usage. However, the fuel surcharge has risen to $0.075/kWh in 2006, making the current effective rate from $0.24 to 0.26/kWh. The continuing increase in diesel fuel costs has caused the City to look at alternative power sources to offset the total reliance on diesel. Scope and Approach Alternatives to the city’s dependence on diesel generators analyzed in this assessment are: • A barge-mounted coal-fired power plant using coal from: (1) the Usibelli mine near Healy, AK and transported by rail to Seward, AK and then by barge to Nome; or (2) British Columbia coal transported by barge to Nome. • Wind power with the wind turbines located on Anvil Mountain approximately 1 mile north of Nome. • Geothermal power plant at Pilgrim Hot Springs located 60 miles north of Nome with a power transmission network to Nome. • Natural gas from the Norton Sound delivered to Nome from a sub-sea development with a pipeline to shore and conversion of one of the new diesel engines to burn natural gas. Tidal/wave energy, hydroelectric dams, and coalbed natural gas were also considered, but these options did not appear viable and were not included in the final analysis. Tidal/wave energy technology is less mature than the other technologies considered and its applicability at Nome could not be assessed under current budget restrictions. The hydroelectric power option was not considered feasible and was not analyzed. Coalbed natural gas is not expected to be present in the vicinity of Nome and was not evaluated beyond some initial inquiries. Coal resources are known to exist on the Seward Peninsula, specifically at Chicago Creek on the north side of the Seward Peninsula and other coal resources are known to exist on the Seward Peninsula and in the Northwest. However, none of the Northwest Alaska resources are being actively mined and would require significant capital investment to start operations. This start-up cost would not be justified to supply coal for a small power plant. Hence, the coal plant design and economics contained within this report are based on coal available from within Alaska and from British Columbia. FINAL DRAFT vi Infrastructure requirements, environmental regulations and the status of technology development for the coal plant, wind, geothermal, and natural gas options were assessed and compared with the existing diesel generation system on an equivalent economic basis. Economic Results The economic analysis model calculates the total cost of providing electric power to the Nome Joint Utility electrical distribution system (the “busbar cost”). Total cost is the cost of all capital and operating costs, including distribution and administrative costs, and the cost of providing heat energy on a Btu basis to residential and commercial residents. The analysis runs for thirty years, from 2015 to 2044. All existing electrical and thermal loads currently served by the system are treated as firm; that is, fully and continuously supplied throughout the period. A reasonable expectation of electrical load growth over the 30-year period is included to account for increases in population and economic activity of the city. For each alternative case, the model estimates the electrical load requirement for each day of the year and computes how much energy is supplied by the primary generation source (e.g., diesel, coal, wind/diesel, geothermal, or natural gas). It also estimates how much must be delivered from diesel units as a backup resource. The model calculates the net present value of all annual costs, including current system fixed costs and the carrying cost of investments in new resources, to determine the total system life-cycle cost of power to the utility. The present values for each energy option are shown in Table 1. Table 1. Present Value of Busbar Electricity, $Millions Present Value of Busbar Electricity, $Millions Scenario Diesel Cost Escalation Diesel System Wind & Diesel Geothermal Coal @ $63/ton Coal @ $78/ton Natural Gas Mid 116 111 90 134 117 107 High 140 128 92 137 120 107 Present Value Savings Residential/Commercial Heat, $ Millions Mid 5 High 13 The model also computes the approximate average electric rate necessary to cover each year’s annual cost of providing electrical service, which includes estimated distribution and administration costs, based on recent financial statistics. The savings to residential and commercial consumers from an alternative source of heating fuel is estimated on a per Btu basis for the natural gas option. The average electricity rates for each energy option are shown in Table 2. FINAL DRAFT vii Table 2. Average Electric Rates and Space Heating Rates Year 2015 2020 2025 2030 2035 2044 Avg. 2015 to 2044 Diesel System $/kWh Mid-range diesel escalation 0.30 0.31 0.31 0.31 0.31 0.32 0.31 High-range diesel escalation 0.30 0.32 0.34 0.36 0.38 0.43 0.36 Coal Scenarios Coal $63/ton, Mid-Range Diesel 0.35 0.34 0.33 0.32 0.32 0.31 0.33 Coal $63/ton, High-Range Diesel 0.35 0.34 0.33 0.32 0.32 0.33 0.33 Coal $78/ton, Mid-Range Diesel 0.32 0.31 0.30 0.29 0.29 0.28 0.30 Coal $78/ton, High-Range Diesel 0.32 0.31 0.30 0.29 0.29 0.30 0.30 Wind/Diesel Mid-Range Diesel escalation 0.30 0.30 0.30 0.30 0.30 0.30 0.30 High-Range Diesel escalation 0.30 0.31 0.32 0.33 0.35 0.39 0.34 Geothermal Mid-Range Diesel escalation 0.29 0.28 0.26 0.25 0.24 0.24 0.26 High-Range Diesel escalation 0.29 0.28 0.27 0.26 0.25 0.25 0.26 Natural Gas Mid-Range Diesel Escalation 0.32 0.31 0.29 0.28 0.27 0.27 0.29 High-Range Diesel Escalation 0.32 0.31 0.29 0.28 0.27 0.28 0.29 Natural Gas Water and Space Heating—Relative Costs ($/MMBtu) Mid-Range Diesel Escalation 24 24 25 26 26 27 25 High-Range Diesel Escalation 24 26 28 31 33 39 31 Natural Gas 25 24 23 22 21 19 22 All costs are expressed in real dollars that have purchasing power at a constant reference point, in this case 2007. Diesel fuel cost increases in real terms (i.e., price increases over and above general inflation rates) are the same in all scenarios. For the purposes of estimating future costs of diesel fuel, the Alaska Energy Authority (AEA) prepares projections of delivered fuel prices for a number of locations in Alaska, including the city of Nome. These projections are used for analysis of a variety of energy issues throughout the state, including evaluation of wind-diesel hybrid systems and other alternative generation options. For consistency with statewide energy planning, the diesel fuel rate of change over time (other than general inflation) for the city of Nome was drawn from the Alaska Energy Authority estimates and applied to the price of diesel delivered to Nome in 2007. FINAL DRAFT viii • Diesel Fuel Initial Price: $2.54/gal • Diesel Fuel Escalation (real) ƒ Mid-Range case 0.58%/yr ƒ High-Range case 2.12%/yr These diesel fuel escalation rates result in estimates of diesel costs of $3.00/gal by 2044 for the mid-range case, and to as much as $4.67/gal in the high-range case. A low-range case, which assumes an average decline in diesel prices of over 1%/yr over the AEA analysis period, was not examined for the purposes of this screening analysis. The net present values are derived with a real discount rate of 4%, corresponding to the effective interest rate for borrowing by municipal electric systems such as Nome. For each case, the life-cycle cost of providing electricity is the discounted present value of all annual costs for the 30-year period of analysis. In the natural gas case, where natural gas is made available for utility requirements, a net present value is estimated for the electric utility that compares directly with other electric production options, and a separate estimate is provided for the savings from the availability of natural gas for space and water heating, Diesel System The generating efficiency of the two new units recently installed by the Nome Joint Utility System will average 16 kWh/gallon of diesel fuel, an efficiency that is expected to remain unchanged year-to-year, so diesel consumption will vary directly with changes in electric load requirements. For the Nome system in 2006, with fuel costs at an average of $1.99/gallon, diesel fuel constituted 50% of the average cost of electricity in Nome. The cost of fuel used for generation reached $2.54/gallon (Nov. 2007), significantly increasing the share of electricity costs attributable to generation. The fixed costs of the generation facilities are “sunk costs” that will not be diminished by the addition of alternative generation facilities. Those fixed costs, along with administrative expenses are assumed not to vary with load changes and are held at a constant level throughout the analysis. Distribution system costs, however, will likely vary as system loads increase, due to the need to add and maintain new services. Distribution system costs are estimated on a per kWh basis. The total cost of distribution system ownership, operation and maintenance will increase as the distribution load increases. The results of the economic analysis for the operation between 2015 and 2044 of the diesel generation system installed at Nome indicate system operating costs of between $116 million in present value under the expectations of a mid-range diesel fuel cost escalation to $140 million present value under conditions of a high-range escalation of diesel fuel costs. The results indicate that the existing diesel system is fully available to meet energy requirements for the electric system at a stable cost, net of fuel cost increases. The greatest risk to the system is the potential variability in the cost of diesel delivered to Nome, or the additional or extended load requirements associated with local mining activities. Wind-Diesel System As part of this analysis, the Alaska Energy Authority (AEA) performed an analysis of the availability of wind energy to supplement the existing diesel generation. .A wind generation system of 3 MW, consisting of two 1.5 MW units installed on Anvil Mountain near Nome appeared to provide annual electric energy at a cost slightly less than the current cost of diesel generation. The wind source, however, is intermittent and provides energy as a function of wind FINAL DRAFT ix velocity rather than electricity requirements, and cannot be relied upon for energy at any particular point in time. Integrating wind units with diesel generation systems requires specialized control systems that respond to the variation in wind energy production and electric load requirements to ensure that maximum efficiency is made of the combination of wind and diesel units. The wind turbine installation is expected to provide about 8,988 MWh/year or about 30% of the initial year load of the Nome electric system. For the purposes of the economic analysis, it was assumed that the energy provided by the wind turbines will be contributed throughout the year, displacing that amount of diesel generation each and every year of the analysis period. Nome’s new power plant controls were designed to integrate alternative and intermittent sources so no additional costs for integration hardware and software are expected to be required for the two wind turbines of 1.5 MW each. Adding wind turbine capacity adds cost to the system. Thus, the installed cost of $4,000/kW is recovered in electric rates over the analysis period, as well as the expected fixed operating costs of 3% of the installed costs and variable operating costs of slightly less than 1 cent/kWh. Initially, the installation of new wind turbines is expected to require 1 additional staff member to adequately maintain the wind system. The installation of two 1.5 MW wind turbines near Nome, producing at a 34% capacity factor that offset diesel generation, results in system operating costs for the 30-year period of $111 million in present value under conditions of a mid-range escalation in diesel fuel costs. In the case of high-range escalation in diesel fuel costs, the total present value would increase to $128 million. In both cases, the total cost of providing electricity under these assumptions is several million dollars less than the cost of continuing to operate the system with only diesel generation. If green tag sales are available and successful at the time of installation and throughout the life of the wind system approximately $4.7 million in credits may contribute to a further reduction in the cost of electricity to the residents With proper siting and mitigation measures, most impacts from wind energy development would be negligible. Obtaining required permits in accordance with federal and state regulations is anticipated to be routine. Geothermal System A geothermal installation located at Pilgrim Hot Springs, approximately 60 miles north of Nome, was evaluated as an option with the potential to displace a very large portion of the diesel generation in the initial years of operation. The analysis, described in Section 6, suggests the possibility of a 5 MWe geothermal installation providing about 41,600 MWh/yr, 33% more than required in 2015. The generating capability of the geothermal facility is just slightly less than the 41,633 MWh/year expected to be required in 2044. If successfully developed, the geothermal facility can provide nearly all of the electric load requirements, and with the load shape of the electric system, maintenance activities can be scheduled during low load periods without significantly impacting system operating costs. The existing diesel system will be available for backup service in the event of unscheduled outages or transmission failures. Further, the existing diesels will be available to meet short-term and intermittent peaking requirements (although a diesel generating unit may be selected to operate during high load periods for reliability, but not necessarily economic, purposes). The installed cost of the geothermal system, including all exploratory activities, construction costs and the transmission system to interconnect with Nome, is assumed to be $12,800/kW for a system with a lifetime of at least 30 years. A geothermal installation, while generally robust, will require specialized staff to operate and maintain the installation, increasing personnel costs, FINAL DRAFT x particularly in the initial years of operation (and perhaps toward the later years), while the increase in miles of transmission lines may increase line worker requirements. For the screening analysis, two additional staff members are estimated to be required over the analysis period, but it may be possible that generation facility staff currently operating the diesel system could be redeployed. The diesel system must be maintained for backup (or high load reliability service), and some personnel will remain assigned to the power house. The geothermal operating costs would consist primarily of manpower and supplies. Very little is currently known about the cost of operating and maintaining a geothermal facility of that magnitude in the Nome region, but information from other geothermal investigations suggests that annual supplies, such as chemicals, lube oil, etc. will amount to about 1.5% of the installed cost of the facility. That cost is considered a fixed annual cost recovered in power rates in similar fashion to the acquisition cost. The displacement of the diesel generation with a geothermal power source eliminates, for the most part, the availability of water-jacket heating for the Nome city water supply. Consequently, in the early years of the geothermal scenario, the city water heat is assumed to be supplied by the direct-fired boilers. In later years, as more supplemental diesel generation will be required, the diesel engines will contribute to the city water heating load. Installation of a geothermal power generation facility at Pilgrim Hot Springs would significantly reduce the cost of electricity for the Nome Joint Utility System. The cost for 30 years of energy supply to Nome would drop to $90 million in present value with a mid-range diesel fuel cost escalation and to $92 million for the high-range diesel cost escalation. Generation costs increase in the latter years as a result of the increasing component of diesel generation as loads increase, and the contribution of geothermal energy declines as a proportion of generation. The low cost associated with the geothermal option must be weighed against the risk that the geothermal resource will not prove to be adequate to support the generation capability of scenario described. The lack of a steam phase in binary geothermal power systems prevents the airborne release of CO2 and other gases, which remain in solution and are reinjected back into the reservoir to help sustain resources. The permitting process should only involve standard permits related to land use. Coal Plant A conceptual design was completed for a barge-mounted coal plant that would provide 4.655 MW of coal-fired electrical power to the city upon installation in 2015. A barge-mounted coal plant has the advantage that it could be constructed in an existing ship yard in the Lower 48, tested, and then towed to Nome reducing on-site construction time and costs. In addition to the coal plant capability, the design of barge mounted system includes a 1 MW diesel generation unit for startup power and auxiliary loads in order to accomplish a self-contained system. For the purposes of the Nome system evaluation with the addition of a barge-mounted coal plant, the diesel unit will provide only a backup power source for black-start conditions or other system emergencies and not be routinely operated or included in the net capability. Other than the estimated capital cost ($14,100/kWe based on the 4.655 MWe output only), the most significant cost element for the evaluation of a coal plant in Nome is the fuel cost. The fuel cost of the coal system is a function of the delivered cost and quality (i.e., heat content) of the coal and the efficiency of the coal boilers. The coal units were designed to accommodate a variety of coal, but with emphasis on the character of the coal available within Alaska. The Usibelli coal source in central Alaska provides an available source of coal at a somewhat lower cost than coal obtained elsewhere, but it has a heat, or energy, content lower than some other FINAL DRAFT xi coals. Coal obtained in British Columbia that is readily transportable to Nome will have a higher cost and heat content than the coal currently available in Alaska. Usibelli coal is estimated to cost $63/ton delivered to Nome, whereas British Columbia coal is estimated to cost $78/ton. Considering the Btu content of the coal, the British Columbia coal will provide for the needs of the plant at $2.82/MMBtu. Usibelli coal on an equivalent basis will cost about $4.06/MMBtu. Coal unit net efficiency (electric output/coal input) is a function of a variety of factors, most notably the size of the units relative to the auxiliary loads. The operation of boiler feed water pumps, fans and other ancillary equipment will have a significant impact on the net efficiency in converting the energy of coal into electric power. The barge-mounted coal system designed for the Nome installation has a net efficiency of 16%, which is relatively low compared to larger coal-fired power plants in operation or planned for construction. Regardless of the source of coal, the delivered cost is estimated to remain constant in real terms, including transportation. Coal price projections available for review have indicated a trend of stable prices for both the commodity and transportation for the foreseeable future as a result of supply and demand characteristics worldwide. Consequently, no real increase is expected above general inflation for coal delivered to Nome. The barge-mounted coal fired generation alternative introduces a cost of production that will vary dramatically as a function of the assumptions regarding the coal fuel purchased and delivered to the Nome location. Assuming Usibelli coal at $63/ton delivered, the cost of operating the system for 30 years will be $134 million in present value under conditions of mid- range diesel fuel escalation. With the same coal fuel, but a presumed high-range escalation of diesel costs, the present value cost of operating the system rises to $137 million. If British Columbia coal at $78/ton is assumed to be used to fuel the coal generation facility the present value for the midrange case will be about $117 million and high-range case will be about $120 million. The displacement of the diesel generation with a coal plant eliminates, for the most part, the availability of diesel unit water-jacket heating for the Nome city water supply. The coal plant, however, would be capable of providing a source of heat to replace that provided by the diesel units if a steam or hot water interconnection is constructed between the coal plant and the existing power house. In the absence of an interconnection, the city water heating requirement would need to be supplied by the direct-fired boilers. In later years as more supplemental diesel generation is required, the diesel engines could contribute to the water heating load. The diesel fuel required by the direct-fired boilers to provide the heat required for the city water system is estimated to cost $6 million in present value for the mid-range escalation case and $7 million for the high-range case. A steam line that could be installed and operated at a lower cost over the 30-year period for installation and ownership would provide additional benefits to the coal scenario. A withdrawal of steam from the coal plant at the rate required would, however, introduce a loss of about 2% of the coal plant’s electric capability and result in more supplemental diesel generation. As long as the project can avoid triggering Hazardous Air Pollutants (HAP) major status (10 tons per year (tpy) of a single HAP or 25 tpy of multiple HAPs), then the permitting process and applicable limits associated with operation of a coal-fired boiler would be relatively straightforward with no red flags. In this instance, the boiler would not be subject to the boiler maximum achievable control technology (MACT) because it was not HAP major, and it would not be subject to the Clean Air Mercury Rules since it would be rated at only 4.655 MWe. Because coal will be stockpiled from one delivery per year, the Alaska Department of Environmental Conservation will most likely require reasonable precautions to prevent FINAL DRAFT xii emissions of particulate matter (e.g., fugitive dust). Coal slag and fly ash from the boiler and elemental sulfur could be disposed of at an approved landfill or monofill. Mercury content of slag and fly ash could become a regulatory issue for reuse or disposal in the future. Permitting as described in Section 7 will be required for siting, water use, etc. but is expected to be straight forward. Natural Gas An entirely new fuel source for Nome is potentially possible from a Norton Sound natural gas drilling and production investment, described in Section 6. Successful exploration and development of a Norton Sound resource would provide for both the electric energy needs and the space and water heating requirements of the community. The economic analysis of the natural gas scenario requires consideration of the investment costs of the natural gas system, both to deliver fuel to the utility, and to the commercial and residential business sectors. In addition to the investment in the system of production and delivery, costs will be incurred to convert generation units to operate on natural gas, as will space and water heating equipment. The assessment includes an evaluation of the shared costs of the investment in the off-shore production facilities and pipeline costs for delivery to the city gate. Of the total investment of $62.7 million overall required to provide the fuel supply, $56.2 million will be committed to the installation of the production and primary delivery systems. Annual fixed costs estimated at $4 million/year associated with the operation of the system and variable operating costs will add significantly to the costs, such that initial-year total costs of the production and primary transmission of gas are estimated at $7.3 million. These costs are assumed to be shared between the electric utility and the gas distribution system customers on the basis of the relative shares of natural gas volumes consumed for each purpose. A distribution system to provide access to gas, along with the conversion of heating equipment from fuel oil to natural gas, is estimated to cost about $4.2 million and require about 1.0% of that amount in annual variable operating costs for maintenance and repairs. All of the annual costs of the distribution system are assumed to be paid by the users of the commercial and residential service. For the electric utility to operate on natural gas, it is assumed that one of the newest installed units will be changed out for a unit that will operate on natural gas. Each of the two recently installed diesel units will provide 5.2 MW of electrical energy, individually meeting nearly all of the energy requirements of Nome. For the purposes of screening, the analysis assumes that all of the annual electrical energy is provided from natural gas, while some diesel fuel will undoubtedly continue to be required for emergency purposes and during short periods of natural gas unit outages. An investment in a second unit to operate on natural gas would add a modest cost to the analysis, or about $2 million. A $2 million investment represents about 787,000 gallons of diesel fuel, enough to produce over 400,000 kWh of electricity each year, providing for several outage days a year during low load periods. If the natural gas system proves feasible, the change out of an additional unit may be appropriate, since other units will remain in place to operate on diesel fuel for emergency purposes. A significant economic factor associated with the investment in a natural gas system is that the sole cost of the natural gas for the utility and other users will be embodied in the capital and operating costs of the production and delivery systems. There are no taxes or commodity costs assumed for the volumes of gas delivered by the system by which to compare directly with the cost of diesel fuel that is sold on a gallon-by-gallon basis. Consequently, unlike the electric FINAL DRAFT xiii utility for which average power costs may be compared, the economic evaluation of the space and heating requirement is a comparison of the relative cost of thermal energy on a Btu basis. The installation of a natural gas system allows the displacement of nearly all diesel fuel used by the Nome electric utility system. The present value of system operating costs includes full recovery of all investment costs necessary to both obtain and deliver natural gas. For the electric system, the present value of the busbar cost of electricity using natural gas fuel is estimated at between $107 million. This is about $10 million less than operating the diesel system at mid-range fuel escalation, and about $33 million less under a high-range escalation assumption. Different assumptions of diesel cost escalation for the system operating on natural gas has very little effect on the economics, because so little diesel generation is likely to occur until late in the analysis period. (Only emergency and maintenance requirements will be met with diesel.) Thus, electric rates between the mid-range and high-range cases will be nearly identical until the last few years. The permitting process and applicable limits of a gas-fired engine or turbine would be relatively straightforward with no red flags. However, caution should be used when selecting a turbine to ensure compliance with the federal limit. Natural Gas Space Heating The installation of a natural gas system for Nome would provide a source of fuel as an alternative to diesel fuel for the provision of commercial and residential space and water heating. The economic evaluation of the impact of the installation of the gas system indicates a present value savings for the thermal requirements for space and water heating, in the instance of a mid-range fuel price escalation, of about $5 million. Under a high-range cost escalation, the economic benefit to the community will reach slightly more than $13 million. The impact on heating consumers is described in terms of the cost per Btu for energy providing space and water heat and is shown in Table 2. Conclusions The energy technologies analyzed for Nome fall into two categories, (a) technologies that rely upon known energy resources—diesel, wind, and coal; and (b) technologies that would rely upon hypothetical (or untested) resources—geothermal and natural gas. Geothermal and natural gas resources are known to exist based on limited evaluation, but will require expensive exploration to prove the resources exist in sufficient quantity and deliverability to meet the requirements. The exploration and development costs for geothermal and natural gas are not well established and will require additional analysis to confirm the estimates. The natural gas options assumed that a drill ship would be available at day rates only and that the costs to obtain and move a ship to and from Norton Sound would not have to be borne by the project. The present value comparisons indicate that for the assumptions incorporated in the analysis regarding each of the alternatives, the wind/diesel, geothermal plant, barge-mounted coal plant using high BTU coal, and natural gas exploration and development are all economically equal or better than continued reliance on diesel for both mid-range and high-range diesel price escalation. The lower Btu coal option is slightly better in the instance of a high-range diesel price escalation. The development of a natural gas resource, in addition to showing a strong potential for savings in the operation of the electric utility, would provide an economical option by providing natural gas for water and space heating throughout the community. Of the alternatives investigated, the most likely prospect of immediate savings gain is the installation of wind turbines to offset diesel generation for the electric utility. Wind units are FINAL DRAFT xiv commercially available, and the Nome utility system has already anticipated the advent of wind by including integration capability in the construction of the new power house. The geothermal and natural gas prospects both indicate potential savings greater than the wind resource, but will require additional investment in exploration and development to verify the resource potential. Nevertheless, the potential gain from each is significant, with the natural gas prospect in particular providing the additional benefit of displacing fuel oil for space and water heating. The coal plant prospect with high-Btu coal provides savings to the electric system, but to a lesser extent than the other alternatives. With low-Btu coal, savings would only be available under a high rate of diesel price escalation, and under conditions of coal prices remaining constant in real terms. In either case, the savings associated with the prospect of a coal power plant are based on an engineering estimate of costs to construct an initial unit. Economies of scale from construction of multiple units of a similar design could reduce the capital cost of the system and improve the economics of a coal-based alternative. FINAL DRAFT 5-1 5 WIND RESOURCES 5.1 INTRODUCTION Excellent wind resources are known to exist very near Nome at Anvil Mountain and the potential for offsetting a major portion of the diesel fuel used for power generation in a cost effective manner by developing this resource is described in this section. 5.2 ELECTRICAL LOAD PROFILE The electric load profile was generated by importing hourly load data provided by the Nome Energy Assessment Group into the economic optimization software HOMER, developed by the National Renewable Energy Laboratory.1 A graphic overview of year 2007 is show in Figure 5.1. Figure 5.1. Hourly load profile for year 2007 1 https://analysis.nrel.gov/homer/includes/downloads/HOMERBrochure_English.pdf FINAL DRAFT 5-2 The monthly scaled averages for 2007 are shown in Figure 5.2. Figure 5.2. Nome scaled averages for year 2007 A scaled daily profile for year 2007 is shown in Figure 5.3. Figure 5.3. Nome scaled daily load data for year 2007 FINAL DRAFT 5-3 5.3 WIND RESOURCE In September 2005, wind monitoring equipment was installed in Nome on Anvil Mountain. The purpose of this monitoring effort is to evaluate the feasibility of utilizing utility-scale wind energy in the community (Dolchok 2006). The site is described in Figure 5.4. Figure 5.4. Nome Anvil Mountain Site summary. A one-year synthesized wind-data set was developed by filling the data gaps due to icing by using probability methods that calculate the most likely scenario for this time period. The site has the following beneficial factors: ƒ The potential wind site is in slightly mountainous terrain, which enhances terrain induced wind acceleration from certain wind directions. ƒ Existing roads and transmission lines are in the proximity of the site. ƒ No living quarters or other housing within a safe ice-throw distance (≥250m) (Bossani and Morgan 1996). ƒ Visible intrusion is assumed to be minimal from main developments. Viewshed analysis has to be performed to confirm. FINAL DRAFT 5-4 A topographic map indicating the Met-tower location is shown in Figure 5.5. Figure 5.5. Nome–Met Tower location, Anvil Mountain FINAL DRAFT 5-5 A map that combines high-resolution wind modeling results with topographic information is shown in Figure 5.6. The red marks indicate potential turbine locations. Figure 5.6. Nome—High Resolution wind map, Anvil Mountain FINAL DRAFT 5-6 Color coding for the high resolution wind map is shown in Figure 5.7 Figure 5.7. High Resolution wind map color coding Wind Speed 70m Wind Class 1 - Poor ( < 5.8 m/s) Wind Class 2 - Marginal ( 5.8 - 6.7 m/s) Wind Class 3 - Fair ( 6.7 - 7.4 m/s) Wind Class 4 - Good ( 7.4 - 7.9 m/s) Wind Class 5 - Excellent ( 7.9 - 8.5 m/s) Wind Class 6 - Outstanding ( 8.5 - 9.2 m/s) Wind Class 7 - Superb ( >9.2 m/s) The collected data were evaluated with the Windographer software.2 An unfiltered wind probability profile is shown in Figure 5.8. Icing events appear as calm periods. Figure 5.8. Nome Anvil Mountain wind probability profile. 2 Mistaya Engineering Inc. http://www.mistaya.ca/products/windographer.htm FINAL DRAFT 5-7 A wind frequency rose is shown in Figure 5.9. Figure 5.9. Nome Anvil Mountain wind frequency rose. FINAL DRAFT 5-8 During the monitoring period, time periods with severe icing occurred. The collected data showed time gaps with no events recorded, attributable to ice coated sensors. In Figure 5.10 the ice built-up on the Met-Tower is shown. Figure 5.10. Nome Anvil Mountain, Met-Tower after icing event. In order to obtain a more complete picture of the wind resource, it is recommended that a 60 to 80 meter ice-rated Met-tower be installed to measure wind speed at the hub height of large size wind turbines. The data collection period is recommended to be at least twelve continuous months. The current data collection at 30 meters will most likely not satisfy the needs for an industry standard wind feasibility study for large size wind turbine development. FINAL DRAFT 5-9 5.4 WIND MODELING 5.4.1 GENERAL INFORMATION The wind modeling was performed using a Clean Energy Project Analysis Software from RetScreen 3 and provided data which was then used to develop the comparative economics described in Section 8. For the purpose of this screening report, no optimization between different wind-diesel system designs was performed due to different integration design possibilities such as available equipment and its costs, controls, switchgear, and interconnection. A detailed engineering study is necessary to evaluate the feasibility, costs, and performance of an integrated wind-diesel system. This is outside the scope of this study. For maximum utilization of investment only the high penetration scenario is described. This increases the complexity and integration cost compared to a medium or low penetration system. However, it is assumed that the increased wind absorption rate and resulting diesel fuel savings will justify the higher cost for integration. The cost estimation for the different integration controls (low, medium, high penetration) are outside the scope of this study. For preparation of a final design study the different scenarios should be taken into consideration and a cost comparison should be made. 5.4.2 WIND RESOURCE An annual average wind speed of 6.0 m/s at 10 meter (class 5) was used to conservatively compensate for uncertainty in the high-resolution wind map and the monitoring data gaps. The wind speed distribution is calculated as the Weibull probability density function. A wind shear component of 0.16 was estimated to take moderate rough terrain features like hills or cliffs into account. The model calculated the average wind speed at hub height to be 8 m/s with a wind density of 580 W/m2. 5.4.3 ATMOSPHERIC CONDITIONS The standard atmosphere of 101.3 kPA was used for modeling, although local average pressure data are likely to be more favorable for wind density. The annual average temperature of 27.1°F or -3°C was used. 4 5.4.4 SYSTEM CHARACTERISTICS Several models runs were performed by AEA. The recommended wind generation system was a 3 MW central-grid system using two 1.5 MW or similar-sized turbines. A project life of 20 years for the wind turbines was used. The model calculates the wind plant capacity factor (%), which represents the ratio of the average power produced by the plant over a year to its rated power capacity. It is calculated as the ratio of the renewable energy delivered over the wind plant capacity multiplied by the total hours in a year. The wind plant capacity factor will typically range from 20 to 40%. The lower end of the range is representative of older technologies installed in average wind regimes while the higher end of the range represents the latest wind turbines installed in good wind regimes. A wind farm capacity of 34% is used in the economic assessment. 3 http://www.retscreen.net/ang/d_o_view.php 4 http://climate.gi.alaska.edu/climate/Temperature/mean_season.html FINAL DRAFT 5-10 5.4.4.1 WIND TURBINES The power curve for the wind turbine was modeled after the specifications of the GE 1.5se turbine with a hub height of 65 meters, a swept area of 3,904 m2, and a rotor diameter of 70 meters. The electricity output is 1,500 kW at a rated wind speed of 13 m/s. The cut-in wind speed for this model is set at 4m/s and the cut-out wind speed is 25 m/s. The rotor speed is 12 to 22.2 rpm. 5.4.4.2 TURBINE LOSS FACTORS Following turbine loss factors were taken into account: ƒ Array losses: 5% ƒ Icing losses: 10% ƒ Other downtime losses: 5% ƒ Miscellaneous losses: 10% ƒ Total Losses: 30% ƒ The current industry estimate for turbine loss factor is in the range of 15 to 33%. 5.4.5 COST DATA The turbine costs are estimated to be $4000/kW installed. A recent study undertaken by the Berkeley National Laboratory (Harper et al. 2007) states the installed cost for utility scale, grid connected wind turbines in the U.S. market (lower 48) are $1,725 to $1,829 per installed kW. The higher installed cost used in this evaluation is warranted due to Alaska’s high transportation and construction cost according to wind developers in Alaska, and verified by AEA experience with past wind projects. This assumption results in an initial capital cost for the 3 MW system of $12 million. The amount of displaced diesel was calculated by dividing the 8,992,503 kWh/year produced by the wind generators by the diesel system efficiency number of 16 kWh/gal. This results in displacement of 562,031gal/year. The cost for operation and maintenance is a combination of fixed and variable cost. The fixed cost used is 3% of installed cost and the variable cost is 0.975¢/kWh per year. These annual costs are applied throughout the estimated project life of the wind turbines and include repair and replacement costs. The variable cost was determined by applying a 5% annual increase of 1996 industry data of 0.65¢/kWh.5 Planners consider adding variable cost to take wear and tear that increases with project life into account. The resulting annual operation and maintenance cost is $447,677. A price for environmental attributes, renewable energy credits or green tags, may be available. The price for the green tag calculation is $0.03/kWh for 20 years. This price is based on price information from Bonneville Environmental Foundation’s Denali Green Tag Program. 6 The actual price depends on project parameters and can be negotiated in individual contracts. The typical range is between $0.03 to $0.05/kWh. 5 http://www.awea.org/faq/cost.html 6 www.greentagsusa.org/greentags/denali.cfm. FINAL DRAFT 5-11 5.4.6 TIME FRAME ƒ Met-data collection: at least one year from starting point. ƒ Site development: 1.5 years from starting point. ƒ Turbine Selection/Procurement: 2 years from starting point. ƒ Construction: 6 to 12 months from point app. 1.8 years after starting point ƒ Final commissioning: 2 to 6 months after construction start. ƒ Full commercial operation: App. 1 year after final commissioning. 5.4.7 GREENHOUSE GAS ANALYSIS Green House Gas (GHG) emissions were calculated based on 100% energy mix of diesel #2 generation using the following default values: ƒ CO2 74.1kg/GJ; ƒ CH4 0.0020 kg/GJ; ƒ NO2 0.0020 kg/GJ; ƒ Fuel conversion efficiency 30% ƒ To obtain a more accurate emission analysis, actual energy mix data have to be applied. 5.5 CONCLUSION AND RECOMMENDATION Current turbine development in the wind industry is targeted to multi-megawatt wind generators. For smaller applications the equipment choice is limited. Two emerging trends for the Alaska market are visible. One market sector supply caters towards used, refurbished wind turbines. These machines are decommissioned at existing wind projects (‘Lower 48’ or Europe) and are remanufactured, rebuilt, and often upgraded to meet modern standards. However, the lifetime of these re- manufactured turbines is uncertain, since not enough performance data have been collected to make a valid statement. The overall industry consensus is that the lifetime of a re-manufactured wind turbine is about 15 years. Another uncertainty is the spare part supply and service support. Vendors or re-manufactured turbines, in general, do not offer warranty contracts over one year and service, technical support, and maintenance contracts are unusual. However exceptions exist, warranty and service contracts are a negotiation point that should be considered when re-manufactured turbines are the project choice. The second market sector is the small to medium size wind turbine sector. Manufacturers offer new turbines with warranty contracts between 1 to 2 years, and extended warranty periods of 5 years are negotiable. The spare part supply is usually guaranteed by the manufacturer throughout the lifetime of the turbine, which ranges from 20 to 25 years. Service contracts and technical support are available. The capital costs for these turbines are generally higher. However, the levelized maintenance, replacement and repair costs are believed to be equal to or lower than those of the re-manufactured turbines. Due to limited data a firm statement in regard to the operation costs cannot be made. Operation and maintenance costs are in general an uncertainty, especially with the limited data for Alaska installations. Recently a commitment from a large turbine manufacturer was made to install 2 megawatt size turbines in Alaska, on Kodiak Island. It is uncertain if this presence will guarantee the deployment of additional large size turbines into the Alaska market and the necessary technical, FINAL DRAFT 5-12 spare part, and service support for further machines. The application for these machines in Alaska is limited due to electrical load demand requirements, construction equipment requirements, and maintenance requirements. However, the selected large size wind turbines for this screening report are believed to be an appropriate choice for Nome due to the relatively large current and projected load demand as well as the local skilled workforce, a well run and organized utility, and the ability to support large construction projects. However, special attention should be given to the fact that Nome’s met data collection showed moderate to severe icing conditions. This might limit the ability to obtain a large size wind turbine without modifying the manufacturer’s standard model. Usually the offered cold climate packages are not suited to withstand the climatic conditions of Nome. It will be dependent on the manufacturer’s willingness to modify the standard turbine model and the structural limitations thereof. The number of installed turbines per project in rural Alaska applications can differ due to a number of reasons. The intended installed capacity can usually be met with the choice of a number of smaller turbines or one or two larger turbines. The benefit of fewer turbines is the reduced cost of foundation, transmission line and construction time, to a limited extend. The disadvantage is the risk of losing a higher percentage of electricity output if a turbine fails or downtime occurs, than with a higher number of smaller turbines. The repair skill, spare part availability, remoteness of location, complexity of system (medium or high penetration system), and responsiveness of technical support are factors that have to be taken into consideration in the decision making process. A good general rule of thumb is that the less certain the above stated factors are, the recommendation is to install more, smaller turbines in order to avoid a large percentage reduction of production capability. Another important factor for wind-diesel installations in Alaska is the integration design and integration controls. Low, medium, and high penetration systems are currently installed in Alaska. Low penetration systems require only a minimum of control function on the diesel generation side, but displace only a minimal amount of diesel. Medium penetration designs require a more advanced level of integration and switchgear design and are capable of displacing up to ~25% of the annual diesel consumption. High penetration systems are highly complex designs that require experienced engineers and operators to develop a successful wind-diesel system. It also displaces the largest amount of diesel. High penetration wind-diesel systems are still in the pilot project phase and experience data for Alaska installations is minimal. When trying to determine the desired level of wind penetration in a specific village application one must balance the potentially greater diesel savings of higher penetration systems against the higher costs and risks associated with the greater complexity of the system. Local conditions such as availability of skilled technicians and remoteness of location should help to determine where along the risk/reward continuum a project should be selected. The owner and operator of the system as well as the utility have to be aware of the risk involved in installing a high penetration system in a remote location in Alaska and have to evaluate the benefits and disadvantages in terms of reliability and quality of energy supply, diesel savings, and environmental attributes. 5.5.1 FURTHER STUDY NEEDS If the comparison with other energy scenarios should be favorable for wind development in Nome, the following studies are suggested before a final decision is made for implementing the proposed wind generation system, or variations thereof: ƒ Met-data collection with 60 to 80 meter ice rated tower FINAL DRAFT 5-13 ƒ Detailed system integration design ƒ Turbine availability for Nome including O&M options ƒ Environmental assessment ƒ Potential funding sources and/or business structure ƒ Detailed economic and financial analysis 5.5.2 RECOMMENDATION Based on the modeling results the preferred wind generation system would be comprised of two 1.5 MW or similar sized turbines. We think that wind development could potentially be considered as a viable option for the citizens of Nome to displace a significant amount of diesel fuel and thus have the potential to reduce the price of energy as well as the dependency on diesel as a fuel source. FINAL DRAFT 8-1 8 ECONOMIC EVALUATON OF POWER GENERATING OPTONS Evaluating various energy alternatives involves technology, environmental factors and economics. Previous sections of this report addressed the status of the various technologies and the environment impacts of the alternatives. Central to the evaluation of competing technologies is the economic value of generating useful energy from the various resources available. The economic analysis presented here examines the economic value of the alternatives by comparing the impact on energy costs of the various power generating options identified for Nome. The comparison is made by estimating the cost of providing energy from the alternatives against the cost of using the existing generation, transmission and distribution system for serving electric loads and providing thermal energy over the period 2015 through 2044. 8.1 OVERVIEW OF METHODOLOGY The economic analysis model calculates the total cost of providing electric power to the Nome Joint Utility electrical distribution system (the “busbar cost”). Total cost is the cost of all capital and operating costs, including distribution and administrative costs, and the cost of providing heat energy on a Btu basis to residential and commercial residents. The analysis runs for thirty years, from 2015 to 2044. All existing electrical and thermal loads currently served by the system are treated as firm; that is, fully and continuously supplied throughout the period. A reasonable expectation of electrical load growth over the 30-year period is included to account for increases in population and economic activity of the city. For each alternative case, the model estimates the electrical load requirement for each day of the year and computes how much energy is supplied by the primary alternative generation source (diesel, coal, wind/diesel, geothermal, and natural gas). It also estimates how much must be delivered from diesel units as a backup resource. The model calculates the net present value of all annual costs, including current system fixed costs and the carrying cost of investments in new resources, to determine the total system life-cycle cost of power to the utility. The model also computes the approximate average electric rate necessary to cover each year’s annual cost of providing electrical service, which includes estimated distribution and administration costs, based on recent financial statistics. The savings to residential and commercial consumers from an alternative source of heating fuel is estimated on a per Btu basis. The uncertainty associated with different expectations of the changes in the cost of diesel fuel over time is treated by testing one or more expected annual increases in the price of diesel fuel delivered to Nome. Other variations in assumptions may be tested, as well, to derive the sensitivity of the results to changes in the fundamental variables. All costs are expressed in real dollars that have purchasing power at a constant reference point, in this case 2007. Diesel fuel cost increases in real terms—i.e., price increases over and above general inflation rates - are the same in all scenarios. The net present values are derived with a real discount rate of 4%, corresponding to the effective interest rate for borrowing by municipal electric systems such as Nome. For each case, the life-cycle cost of providing electricity is the discounted present value of all annual costs for the thirty year period of analysis. In the natural gas case, where natural gas is made available for utility requirements, a net present value is estimated for the electric utility that compares directly with other electric production options, and a separate estimate is provided for the savings from the availability of natural gas for space and water heating. FINAL DRAFT 8-2 8.1.1 EXAMPLES OF THE MODEL CALCULATIONS The economic model includes a number of basic steps. These steps are illustrated by the following example for estimating the cost of providing electric power. Assume the total firm load to be served on January 1, 2015, is four megawatts (4 MW) of electricity measured at the bus bar–the point of interconnection with the transmission and distribution system–and that the primary generation resource is diesel. • The busbar energy requirement for that day is: o 4 MW x 24 hours = 96 megawatt-hours (MWh), or 96,000 kilowatt-hours (kWh) • The amount of diesel required is: o 96,000 kWh / (16 kWh/gallon) = 6,000 gallons/day • The cost of the fuel is: o 6,000 gallons times $2.54/gallon = $15,240/day • Additional variable operating costs (such as lube oil and overhauls) are: o 96,000 kWh times $0.02 = $1,920/day • The total variable cost of generation for this one day is: o $15,240 + $1,920 = $17,160/day The total variable cost for other days differs because more or less electricity is produced. The model adds all of these daily variable costs together; the total variable cost for one year may then be on the order of $5.5 million. • The annual fixed generation cost is: o $1,200,000 (for labor) + $500,000 (for generation equipment) = $1,700,000. • Therefore, the total annual cost of generation for the year 2015 is $7.2 million. If the annual cost of ownership and operation of the distribution system is $0.8 million, and the annual cost of the administration of the system is $0.6 million, then the total cost of electric service for the year is approximately $8.6 million. • The total electric sales for the year are based on an annual energy load of 32,000 MWh: o 32,000 MWh x 0.9 = 28,800 MWh where the factor 0.9 accounts for the 10% losses between the point of generation and the customers’ meters. To cover the total cost of generation, the average electric rate for the system must be: • $8,600,000 / 28,800,000 kWh = $0.30/kWh Of this, $0.19/kWh is for the variable costs of generation (fuel, lube and overhaul) and the remaining $0.11/kWh covers the fixed ownership costs of the generation, transmission and distribution system, the distribution system operating costs, and all of the administrative expenses attributable to providing electric service. In subsequent years, as the load grows and costs increase, the electric rate may go up or down over time. In the instance of an alternative fuel source for generation that will displace the current primary use of diesel for electric generation, the model also considers the impact of sales of the fuel for FINAL DRAFT 8-3 other purposes. Another simple example illustrates the steps in the model to evaluate an impact of a natural gas alternative for generation that also may be used to displace diesel fuel for commercial and home heating applications. As before, a 4 MW load corresponds to 96,000 kWh of electricity to be generated daily. The amount of natural gas required to provide generation for the kWh load is: • 96,000 kWh x (7,653 Btu/kWh) (See Table 4.3) = 735 MMBtu per day. Over the course of a year, the electric system natural gas requirement may reach as much as 238 Billion Btu just to meet the electric load requirements. However, if the natural gas fuel is available, a portion of the gas may be available to displace the fuel oil normally used for space and water heating. The residential and commercial fuel oil used throughout the year must be estimated on an equivalent energy content basis. The amount of natural gas that is required annually to displace the fuel oil needed for residential and commercial space and water heating is: • (683,000 gal/yr) x (138,000 Btu/gal) = 94 Billion Btu/yr; Other potential heating loads may add a billion Btu or so a year, for a total natural gas energy requirement of about 333 Billion Btu. Delivery from a natural gas source to Nome, however, will require an investment in the infrastructure to extract the gas from underground sources and deliver the natural gas to the initial point of use. The annual carrying cost of the investment in the infrastructure, and the variable cost of operating the natural gas system could reach $7.3 million, shared on the basis of volume of gas required. The annual cost for the availability of a natural gas supply source by user would be: • Utility: $7.3 million x (238 B Btu / 333 B Btu) = $5.2 million, • Res/Comm: $7.3 million x (95 B Btu / 333 B Btu) = $2.1 million. In addition, the electric system would incur the capital cost of converting the generation equipment to operate on natural gas, adding about $116,000/year of amortization expenses to the cost of generating power. The variable generation cost for lube and overhaul of $0.7 million would remain as in the earlier example, as would the $1.7 million for labor and other fixed costs, for a total annual generation cost of $7.7 million. The electric distribution system costs and administrative costs would add an additional $1.4 million for a total system cost of $9.1 million. The average electric rate for the system to cover the total generation cost would be: • $9.1 million / 28,800,000 kWh = $0.32/kWh. For the commercial and residential natural gas users, the difference in cost between operating on diesel fuel and natural gas can be expressed as the difference in dollars per Btu of energy provided for space and water heating. Heating fuel must be distributed to the end user, however, resulting in a higher cost than diesel supplied in bulk to the utility. And, since a distribution system is required to deliver the natural gas to the end user, an investment in distribution pipe and meters, and the equipment to convert existing water and space heaters will result in an annual distribution system cost of about $285,000. The average annual cost per Btu for fuel oil for the commercial and residential users is: • (683,000 gal/yr) x ($2.50/gal + $0.75/gal) x 138,000 Btu/gal = $24/MMBtu. FINAL DRAFT 8-4 The average annual cost per Btu for natural gas for space and water heating would be: • $2.1 million + $0.3 million / 95 B Btu = $25/MMBtu The actual year-by-year costs will vary with the relative change in costs of operating the system, the growth in electric and natural gas requirements, and the expected increase in costs of fuels supplied to meet the electrical and thermal loads. 8.1.2 ECONOMIC MODEL LIMITATIONS The methodology of the economic analysis is a comparison of scenarios. The scenarios are structured to identify the costs of operating the electric utility system and meet the electric requirements of the Nome system over a period of time 30 years into the future. The annual production and operations costs of the system are estimated for each year to obtain the present value of the life-cycle costs for providing electricity and, in one case, fuel for commercial and residential space and water heating. The scenarios compare current system operations projected into the future with alternative generation or fuel opportunities. A benefit of scenario analysis using the economic model is that the assumptions are clearly defined and a clear comparison may be made of the benefits and costs between scenarios. However, there are limitations. Some of those limitations are: • The validity of each scenario depends on the validity of the assumptions. • No probabilities are assigned to the outcomes of the scenarios, nor are a range of probabilities provided for the assumptions (such as, for example, the success of a natural gas drilling program). • Feedback loops are not included, so there are no estimates of changes in electric or thermal load forecasts as a consequence of changes in the cost of electricity or the price of fuel for space and water heating. • Other impacts to Nome, such as higher costs for delivery of smaller volumes of fuel, and the resultant economic impact on users of diesel other than for electric power production, are not considered. • There is no explicit estimation of the risk associated with any of the scenarios, either financial or economic. The results obtained from the scenario analysis therefore provides an indication (“screening”) of the relative economic value of the generation alternatives and alternative fuel source for the Nome electric system and for space and water heating. The model is very effective as a system for developing a ranking of alternatives. The limitations of the methodology, however, suggest that further and more detailed investigation of any one scenario may be required prior to investing in the development of any particular alternative. 8.2 ECONOMIC INTEGRATION The basic assumptions for each of the energy options (diesel system, wind-diesel, geothermal, coal plant, and natural gas) are described in this section. 8.2.1 NOME DIESEL SYSTEM ASSUMPTIONS The electric generation system of Nome has recently been upgraded with two new generating units and improved interconnection and auxiliary systems. With the advent of the new generation facilities, the diesel-based system is expected to provide adequate capacity and FINAL DRAFT 8-5 energy for the foreseeable future. With appropriate routine maintenance and periodic overhauls, the existing units are likely to be available for operation throughout the entire period of the analysis. The generating efficiency of the new units will average 16 kWh/gallon of diesel fuel, an efficiency that is expected to remain unchanged year-to-year, so diesel consumption will vary directly with changes in electric load requirements. For the Nome system in 2006, with fuel costs at an average of $1.99/gallon, diesel fuel constituted 50% of the average cost of electricity in Nome. The cost of fuel used for generation reached $2.54/gallon (Nov. 2007), significantly increasing the share of electricity costs attributable to generation For the purposes of estimating future costs of diesel fuel, the Alaska Energy Authority (AEA) prepares projections of delivered fuel prices for a number of locations in Alaska, including the city of Nome. These projections are used for analysis of a variety of energy issues throughout the state, including evaluation of wind-diesel hybrid systems and other alternative generation options. For consistency with statewide energy planning, the diesel fuel rate of change over time (other than general inflation) for Nome was drawn from the Energy Authority estimates and applied to the price of diesel delivered to Nome in 2007. • Diesel Fuel Initial Price: $2.54/gal • Diesel Fuel Escalation (real) ƒ Mid-Range case 0.58%/yr ƒ High-Range case 2.12%/yr These diesel fuel escalation rates will result in estimates of diesel costs of $3.00/gal by 2044 for the mid-range case, and to as much as $4.67/gal in the high-range case. A low-range case, which assumes an average decline in diesel prices of over 1%/yr over the AEA analysis period, was not examined for the purposes of this screening analysis. Other assumptions regarding the current electric system costs include the estimates of the new unit maintenance on a “per/kWh” basis. The maintenance includes all routine lubrication and component replacements over a 20-year maintenance cycle recommended by the manufacturer. Effectively, the costs of operating the units in addition to fuel costs are recovered on the basis of the energy produced rather than availability. The fixed costs of the generation facilities are “sunk costs” that will not be diminished by the addition of alternative generation facilities. Those fixed costs, along with administrative expenses are assumed not to vary with load changes and are held at a constant level throughout the analysis. Distribution system costs, however, will likely vary as system loads increase, due to the need to add and maintain new services. Distribution system costs are estimated on a per kWh basis. The total cost of distribution system ownership, operation and maintenance will increase as the distribution load increases. 8.2.2 DIESEL SYSTEM ECONOMIC ANALYSIS RESULTS The results of the economic analysis for the operation between 2015 and 2044 of the diesel generation system indicate system operating costs of between $116 million in present value under the expectations of a mid-range diesel fuel cost escalation to $140 million present value under conditions of a high-range escalation of diesel fuel costs. The average electric rates (2007$) are shown in Figure 8.1. The rates reflect the expected increase in diesel prices. For the mid-range escalation of 0.58%, the increase in electric rates FINAL DRAFT 8-6 from 2015 to 2044 is small, from $0.30 to $0.32/kWh as compared to the increase to $0.43/kWh for the high-range escalation in diesel prices. The results indicate that the existing diesel system is fully available to meet energy requirements for the electric system at a stable cost, net of fuel cost increases. The greatest risk to the system is the potential variability in the cost of diesel delivered to Nome, or the additional or extended load requirements associated with local mining activities. Figure 8.1. Diesel System–Electric Rates. 8.2.3 WIND-DIESEL SYSTEM ASSUMPTIONS As a part of this study the AEA completed an initial screening analysis of the availability of wind energy to supplement the current generating sources of the Nome utility. The results of the screening analysis, described in Section 5, included an assessment of possible wind turbine configurations available for the wind energy regime of Anvil Mountain, located just north of Nome. The results indicate that a wind system of 3 MW, consisting of two 1.5 MW units, could provide electricity at a cost slightly less than the current cost of diesel based generation. The wind source, however, is intermittent and provides energy as a function of wind velocity rather than electricity requirements, and cannot be relied upon for energy at any particular point in time. Integrating wind units with diesel generation systems requires specialized control systems that respond to the variation in wind energy production and electric load requirements to ensure that maximum efficiency is made of the combination of wind and diesel units. The load requirements will have an effect on the operation and the choice of diesel units that may be dispatched to meet the load unmet by the wind generators. The wind turbine installation is expected to provide about 8,988 MWh/year or about 30% of the initial year load of the Nome electric system. For the purposes of the economic analysis, it was Diesel System: Average Electric Rates 0.20 0.25 0.30 0.35 0.40 0.45 201520172019202120232025202720292031203320352037203920412043real year 2007 $ per kWhDiesel $2.54, Mid-range escalation Diesel $2.54, High-range escalation FINAL DRAFT 8-7 assumed that the energy provided by the wind turbines will be contributed throughout the year, displacing that amount of diesel generation each and every year of the analysis period. Nome’s new power plant controls were designed to integrate alternative and intermittent sources so no additional costs for integration hardware and software are expected to be required for the two wind turbines of 1.5 MW each. However, adding wind turbine capacity adds cost to the system. Thus, the installed cost of $4,000/kW is recovered in electric rates over the analysis period, as well as the expected fixed operating costs of 3% of the installed costs and variable operating costs of slightly less than 1 cent/kWh. Initially, the installation of new wind turbines is expected to require 1 additional staff member to adequately maintain the wind system. A simplifying assumption is that the units installed in 2015 will operate over the analysis period with routine maintenance. The actual availability of the turbines suggested for installation, with a forecasted effective lifetime of 20 years, is not certain. It is also possible that more robust units with greater operating efficiency and longer lifetimes may become available over the analysis period as a result of the rapid advances that are being routinely achieved in wind turbine technology. Replacing units after 20 years with more efficient turbines would likely increase the economic benefits of a wind-diesel system, as would adding more turbine capacity over time as electric load requirements increase. (See Section 5 for more on this.) 8.2.4 WIND/DIESEL SYSTEM ECONOMIC ANALYSIS RESULTS The installation of two 1.5 MW wind turbines producing at a 34% capacity factor that offsets diesel generation results in system operating costs for the 30-year period of $111 million in present value under conditions of a mid-range escalation in diesel fuel costs. In the alternative case of high-range escalation in diesel fuel costs, the total present value would increase to $128 million. In both cases, the total cost of providing electricity under these assumptions is several million dollars less than the cost of continuing to generate electricity with only diesel generators. If green tag sales are available and successful at the time of installation of the wind system, approximately $4.7 million in credits may contribute to a further reduction in the cost of electricity (See Section 5.4.5). The rate of change of the average electric rates is shown in Figure 8.2. For this case, the rates remain almost constant for the mid-range escalation case and increase about 30% to $0.39/kWh for the high-range escalation. Figure 8.2. Wind/Diesel system: Average Electric Rates Wind/Diesel System: Average Electric Rates 0.20 0.25 0.30 0.35 0.40 0.45 201520172019202120232025202720292031203320352037203920412043real year 2007 $ per kWhMid-Range Diesel escalation High-Range Diesel escalation Existing UVEC Power Plant Prepared for: State of Alaska Alaska Energy Authority / Rural Energy Group Prepared By: CRW Engineering Group 3940 Arctic Boulevard, Suite 300 Anchorage, Alaska 99503 (907) 562-3252 October 12, 2007 UNALAKLEET RURAL POWER SYSTEM UPGRADE PROJECT CONCEPTUAL DESIGN REPORT FINAL REPORT AEA Meteorological Tower ES-1 EXECUTIVE SUMMARY This Conceptual Design Report was prepared by CRW Engineering Group, LLC. (CRW) for the Alaska Energy Authority / Rural Energy Group (AEA). The purpose of this study is to provide a conceptual design and construction cost estimate for upgrading electrical power generation and distribution systems in the community of Unalakleet, Alaska. The Unalakleet Valley Electric Cooperative (UVEC), the local utility that is owned by Matanuska Electric Association (MEA), will be the sole participant in this project. Existing Conditions A site visit occurred on October 24-25, 2006, and included AEA project managers Bryan Carey and Fintan Lyons, Global Energy Concepts engineer Kevin Smith, and CRW engineers Bill McDonald and Karl Hulse. During the site visit, the community’s existing power plant and electrical distribution systems were documented, potential wind turbine sites were evaluated, and meetings were held with UVEC managers to discuss project objectives and Denali Commission policies. Bryan Carey visited the community a second time in February 2007 to present a progress report to UVEC. The UVEC Power Plant consists of two pre-engineered metal buildings of differing ages erected side-by-side with a common wall. Both structures sit on concrete slab-on-grade foundations. The newer East Building was constructed in 1982 and appears to be in relatively good condition. The West Building was reportedly erected in the 1950’s and is in poor condition. Major structural deficiencies noted in the West Building include tears and patches in the exterior metal skin and insulation system, corroded and ice-damaged roof panels, and multiple building code and electrical clearance violations. Primary power is provide by two 530 Kilowatt (kW) CAT model 3512 generator sets; both engines have approximately 120,000 total hours and have been rebuilt approximately 10 times. A 500 kW CAT model D395 generator set provides backup power. The existing engines and generators have exceeded their intended service life (typically about 100,000 hours) and should be replaced. Many of the supporting mechanical systems, such as ventilation, fuel handling, and cooling, are also due for replacement. The Power Plant includes a jacket water heat recovery system. Heat is recovered from the coolant via two heat exchangers (one plate and frame and one shell and tube type). Recovered heat is distributed to multiple facilities via buried, insulated, arctic piping loops. A 6-inch diameter loop serves the elementary and high schools, the Bering Straits School District administration building, and the teacher housing 6-plex. Two 2- inch diameter loops serve the City-owned Bailer Building, Water Treatment Plant, Courthouse, and bulk fuel storage tanks. ES-2 The entire community is served via a 4160Y2400-volt (V) overhead distribution system that is operated and maintained by UVEC with assistance from MEA (owner of the distribution system). The distribution system consists of a main feeder serving three separate circuits: north, south, and west. The distribution system consists of #4 Aluminum Coated Steel Reinforced conductors for the feeders and utilizes 15 Kilovolt (kV) class components. Recommended Upgrades Power Plant Proposed Power Plant Upgrades include: x Remove the existing Power Plant exterior metal skin and install new, insulated siding and roof panels on the existing building frame. x Upgrade the Power Plant interior with new partition walls, doors, and windows as necessary. x Replace the existing power generation equipment with four new generator sets (three 550 kW Caterpillar C-18s and one 250 kW Caterpillar C-9), including all required mounting hardware, fuel supply, exhaust and cooling systems, etc. x Install new heat recovery equipment. x Upgrade the building ventilation and combustion air-intake systems. x Install new 480Y277V automatic switchgear and station service. x Install new plant interior and exterior lighting. x Complete miscellaneous control and wiring upgrades to meet National Electric Code (NEC) and National Electric Safety Code (NESC) requirements. Electrical Distribution System Proposed distribution system upgrades include: x Install a new 1.5 Millivolt-Ampere pad-mounted step-up transformer to convert 480V generator output to 4160Y/2400V line voltage. x Install a new pad-mounted, remotely operated fused switch cabinet (S&C PM-12) to allow automatic, simultaneous disconnection of all three phases should any one fuse in a specific circuit trip. x Modify existing pole cross arm componentry and configurations on three existing poles and install two new utility poles in the vicinity of the Power Plant. The remainder of the overhead distribution system will remain unchanged. ES-3 Wind Turbine System Proposed wind system components include: x Install three 100 to 300kW wind turbines, complete with tubular-type steel towers. x Install three turbine tower foundation systems. x Install approximately 13,000 linear feet of overhead, 3-phase, high voltage power transmission line between the existing grid and the proposed wind turbine site. x Install wind system controls, including software and a wireless communication system between the Power Plant and wind turbine site. x Install an excess energy utilization system at the Power Plant (electric boiler and controls). x Install an energy storage system (battery banks). Based upon AEA’s modeling results, the proposed wind system will be capable of displacing 50,000-75,000 gallons of fuel per year, which would otherwise be consumed in UVEC’s diesel power plant. At today’s prices, this equates to an annual reduction in fuel costs of $150,000 to $225,000. At this rate, the capital expenditure to install the wind turbines should be recovered in avoided diesel costs within 20 years of project startup. The expected life of a new wind turbine system is over 25 years. There are other less quantifiable benefits of installing wind power. There should be less volatility in electrical rates since rates will not be tied as tightly to rapidly fluctuating fuel prices. Also, Unalakleet could see increased local employment due to a decrease in the amount of money flowing out of the community for diesel fuel. Additionally, wind power opens up the possibility for an additional revenue stream from the sale of green credits. Finally, the State of Alaska’s PCE program will have more money to distribute elsewhere as Unalakleet will likely see a reduced level of PCE payment. Schedule and Cost The proposed project schedule, subject to availability of funding, calls for design and permitting during 2008, procurement of long lead items during 2009, and construction beginning in spring of 2010. The total cost to complete the proposed diesel power plant upgrades including design, supervision, construction, inspection, permitting, and insurance is estimated to be $3,500,000. The total cost of the proposed medium penetration wind system is estimated to be an additional $3,100,000. Unalakleet, Alaska i Conceptual Design Report Rural Power System Upgrade Project October 2007 TABLE OF CONTENTS 1.0 Program Overview ...................................................................................................................1 2.0 Introduction..............................................................................................................................3 2.1 Purpose................................................................................................................................3 2.2 Community Overview...........................................................................................................3 3.0 Site Visits and Community Involvement ...................................................................................4 3.1 Site Visit...............................................................................................................................4 3.2 Community Contacts............................................................................................................4 4.0 Existing Power Generation and Distribution facilities................................................................5 4.1 Description of Existing Facilities...........................................................................................5 4.1.1 Power Plant..................................................................................................................5 4.1.2 Heat Recovery System.................................................................................................6 4.1.3 Distribution System.......................................................................................................6 4.1.4 Equipment Suitable for Reuse......................................................................................7 4.2 Existing System Deficiencies................................................................................................7 4.2.1 Structural Deficiencies..................................................................................................7 4.2.2 Electrical Deficiencies...................................................................................................7 4.2.3 Mechanical Deficiencies...............................................................................................8 5.0 Power System Upgrades..........................................................................................................9 5.1 Electrical Capacity Considerations.......................................................................................9 5.1.1 Historical Electrical Demand.........................................................................................9 5.1.2 Planned Infrastructure Improvements...........................................................................9 5.1.3 Projected Community Growth.....................................................................................10 5.1.4 Projected Electrical Demands at Design.....................................................................10 5.2 System Design Considerations ..........................................................................................11 5.2.1 Climate.......................................................................................................................11 5.2.2 Natural Hazards..........................................................................................................12 5.2.3 Borrow Sources, Ownership, Material Costs...............................................................12 5.2.4 Site Control.................................................................................................................12 5.2.5 Alternative Energy Sources........................................................................................12 5.2.6 Diesel Generator Selection.........................................................................................15 5.3 Proposed Improvements....................................................................................................16 5.3.1 Scope of work.............................................................................................................16 6.0 Permitting...............................................................................................................................21 6.1 Permitting for Power Plant Upgrades .................................................................................21 6.1.1 Coastal Zone Management ........................................................................................21 6.1.2 Fire Marshall Review..................................................................................................21 6.1.3 U.S. Army Corps of Engineers....................................................................................21 6.1.4 National Environmental Policy Act..............................................................................21 6.1.5 ADEC Review.............................................................................................................21 6.1.6 Regulatory Commission of Alaska Certification...........................................................22 6.2 Permitting for Wind Turbines..............................................................................................22 6.2.1 Federal Aviation Administration Review......................................................................22 6.2.2 U.S. Fish and Wildlife Service.....................................................................................22 7.0 Construction Plan...................................................................................................................23 7.1 Administration ....................................................................................................................23 7.2 Use of Local Labor.............................................................................................................23 7.3 Use of Local Equipment.....................................................................................................23 7.4 Access and Logistical Challenges......................................................................................24 7.5 Construction Schedule.......................................................................................................24 7.6 Conceptual Construction Cost Estimate.............................................................................26 Unalakleet, Alaska ii Conceptual Design Report Rural Power System Upgrade Project October 2007 TABLES Table 1  Contact Information..............................................................................................................4 Table 2 – Unalakleet Historical Demand Data....................................................................................11 Table 3 – Projected Electrical Demands............................................................................................11 Table 4  Locally Available Heavy Equipment ...................................................................................24 Table 5  Construction Schedule.......................................................................................................25 FIGURES Figure 1 Vicinity Map Figure 2 Community Site Plan Figure 3 Existing Power Plant Site Plan and Distribution Tie In Figure 4 Existing Power Plant Floor Plan Figure 5 Proposed Power Plant Site Plan and Distribution Tie In Figure 6 Proposed Power Plant Floor Plan Figure 7 Fuel Efficiency of Engine-Generator Options PHOTOGRAPHS Photograph 1 – Power Plant Exterior North Wall (Newer Building) Photograph 2 – Power Plant Exterior North Wall (Older Building) Photograph 3 – Power Plant Exterior West Wall Photograph 4 – Power Plant Exterior West Wall Photograph 5 – Power Plant Exterior South Wall Photograph 6 – Power Plant Exterior South Wall Photograph 7 – Power Plant Exterior East Wall Photograph 8 – Generator #3, Cat 3512 530 kW (South Interior Wall Beyond) Photograph 9 – Power Plant Interior East Wall (Heat Recovery Equipment) Photograph 10 – Plate Heat Exchanger Photograph 11 – Circulation Pumps for School and Bailer Building Heat Loops Photograph 12 – Shell and Tube Heat Exchanger Photograph 13 – Heat Loop Branch to Bulk Fuel Tanks Photograph 14 – Typical Interior Construction for West Building Photograph 15 – Typical Interior Construction for East Building Unalakleet, Alaska iii Conceptual Design Report Rural Power System Upgrade Project October 2007 APPENDICES Appendix A Site Visit Report Appendix B Building Code Analysis Appendix C Historical Electrical Demand Data Appendix D Site Control Documents Appendix E AEA Wind Modeling Reports Appendix F Wind Feasibility Study Appendix G Construction Cost Estimate ACCRONYMS AND ABBREVIATIONS ACSR Aluminum Coated Steel Reinforced AEA Alaska Energy Authority ADEC Alaska Department of Environmental Conservation BOP Business Operating Plan CDR Conceptual Design Report CRW CRW Engineering Group, LLC. UVEC Unalakleet Valley Electric Cooperative MEA Matanuska Electric Association kW Kilowatt kWH Kilowatt-Hour kVAR Kilovolt-Ampere Reactive (Reactive Power) BSSD Bering Straits School District PCE Power Cost Equalization ADOT&PF Alaska Department of Transportation and Public Facilities oF Degree Fahrenheit COE Corps of Engineers MSL Mean Sea Level V Volt HDPE High Density Polyethylene FONSI Finding of No Significant Impact CPCN Certification of Public Convenience and Necessity RCA Regulatory Commission of Alaska FAA Federal Aviation Administration USFWS United States Fish and Wildlife Service Unalakleet, Alaska 1 Conceptual Design Report Rural Power System Upgrade Project October 2007 1.0 PROGRAM OVERVIEW The Alaska Energy Authority / Rural Energy Group (AEA) is pursuing grant funds to upgrade rural power generation and distribution facilities. The following bulleted items provide a brief outline of the program: x Most of the funds for the program are federal in origin, and are provided through the Denali Commission. Other federal funding sources may include Community Development Block Grants from the U.S. Department of Housing and Urban Development and/or grants from the Environmental Protection Agency. Additional funds may be available from the State of Alaska, through the Department of Environmental Conservation (ADEC) and the Department of Education. x In order to receive grant funds, each community must demonstrate that the proposed facility will be sustainable by accepting a Business Operating Plan (BOP). The function of the BOP is to establish ownership of the facility’s components, and describe how each component will be operated, maintained and, eventually, replaced. x New Power Plants are funded, designed, and constructed in three phases: Phase 1- Conceptual Design; Phase 2-Final Design; and Phase 3-Construction. x During Phase 1, staff from the AEA will visit the community to discuss the program and work with residents and the local government to select a site for the new facilities. All planning and decisions concerning the conceptual design will be summarized in a Conceptual Design Report (CDR) and draft BOP. x At the completion of Phase 1, the community will be requested to review and approve the CDR. x During Phase 2, the design and permitting tasks for the new facilities will be completed. Other Phase 2 tasks will include preparing an environmental assessment, gathering site control documents, and finalizing the BOP for signing. x Each community will be asked to provide “in kind” contributions to the project, such as lodging and free use of local heavy equipment. If local equipment is utilized, the project grant funds will pay for fuel, maintenance, and any repairs during construction. x Projects may include local hire and construction trade training programs, subject to funding. x If construction funding is awarded, then the project will advance to Phase 3, the final BOP will be sent to the community for signature, and a Construction Manager or Contractor will be selected to construct the project. x Ineligible Project Components: Funding is not available through AEA for propane facilities, fuel tank trucks or trailers, underground storage tanks, fuel to fill the tank Unalakleet, Alaska 2 Conceptual Design Report Rural Power System Upgrade Project October 2007 farm and/or consume in the Power Plant, environmental remediation, operation and maintenance costs, or residential upgrades. x Training is Available: AEA has several training programs available for facility operators and managers. Contact AEA at 907-269-3000 for further information. Unalakleet, Alaska 3 Conceptual Design Report Rural Power System Upgrade Project October 2007 2.0 INTRODUCTION 2.1 Purpose This CDR was prepared by CRW Engineering Group, LLC. (CRW) for AEA. The purpose of this CDR is to provide a conceptual design and construction cost estimate for upgrading electrical power generation and distribution systems in the community of Unalakleet, Alaska. Unalakleet Valley Electric Cooperative (UVEC), the local utility owned by Matanuska Electric Association (MEA), will be the sole participant in this project. 2.2 Community Overview Unalakleet is located on Norton Sound, at the outlet of the Unalakleet River. The community is approximately 395 air miles northwest of Anchorage and 148 air miles southeast of Nome (Figure 1). Local community organizations include the City, the Native Village of Unalakleet (Bureau of Indian Affairs recognized Indian Reorganization Act council), UVEC, and the Unalakleet Native Corporation. Regional organizations include the Bering Strait School District (BSSD) and Bering Straits Native Corporation. A state-owned, 6,000-foot long gravel runway provides air access to the community; ocean barge service is typically available from June through September. A community site plan is shown on Figure 2. The current population of Unalakleet is approximately 727 (estimate by State Demographer). Based upon the U.S. 2000 Census, there are 242 total housing units in the community, including 18 vacant residential structures. Other facilities in the community with significant electrical demands include the Bailer Building, Water Treatment Plant, Elementary and High Schools, teacher housing complexes, Community Building, and the local fish processing plant. Unalakleet, Alaska 4 Conceptual Design Report Rural Power System Upgrade Project October 2007 3.0 SITE VISITS AND COMMUNITY INVOLVEMENT 3.1 Site Visit A site visit occurred on October 24-25, 2006, and included AEA project managers Bryan Carey and Fintan Lyons, Global Energy Concepts engineer Kevin Smith, and CRW engineers Bill McDonald and Karl Hulse. During the site visit, the community’s existing Power Plant and electrical distribution systems were documented, potential wind turbine sites were evaluated, and meetings were held with UVEC managers to discuss project objectives and Denali Commission policies. A site visit report is provided in Appendix A. 3.2 Community Contacts Critical project information was provided by the entities and contacts listed in Table 1. Table 1  Contact Information Entity Contact Title Address Phone Number Unalakleet Valley Electric Cooperative Ike Towarak Manager P.O. Box 186 Unalakleet, AK 99684 907-624-3474 (Ph) 907-624-3009 (Fx) William Johnson Mayor City of Unalakleet Jay Freytag Public Works Director P.O. Box 28 Unalakleet, AK 99684 907-624-3531 (Ph) 907-624-3130 (Fx) Bob Dickens Facilities DirectorBering Straits School District Rick Reid Maintenance Director P.O. Box 225 Unalakleet, AK 99684 907-624-3611 (Ph) 907-624-3099 (Fx) Unalakleet, Alaska 5 Conceptual Design Report Rural Power System Upgrade Project October 2007 4.0 EXISTING POWER GENERATION AND DISTRIBUTION FACILITIES 4.1 Description of Existing Facilities 4.1.1 Power Plant The UVEC Power Plant consists of two pre-engineered metal buildings of differing ages erected side-by-side with a common wall. Both structures sit on concrete slab-on-grade foundations. Site and floor plans of the existing Power Plant are shown on Figure 3 and Figure 4, respectively. The original plant was reportedly constructed by the U.S. military in the 1950s and consists of a single 60- by 40-foot pre-engineered metal building. In 1982 a 45-foot long by 40-foot wide addition was constructed on the east end of the building. The original (west) structure houses two backup generator sets (one 500 Kilowatt [kW] Cat D395 and one 300 kW Chicago Pneumatic) and the power distribution switchgear. In addition, the West Building contains a restroom, several storage rooms, the sprinkler riser, and provides warm storage for UVEC’s line truck. There are no windows on this side of the building. Ventilation is provided by louvered panels on the south wall and in the ceiling. Translucent panels cut in at various locations along the north wall provide additional, ambient lighting. See photos 1 to 7 for exterior views of the existing plant. The East Building (addition) houses UVEC’s two primary generator sets (including two 530 kW Cat 3512 units, see Photo 8), two upflow-type radiators for engine cooling, multiple 300-gallon fuel oil day tanks and related controls, a heat recovery system (see Photos 9-13), and an office with computer work station and phone service. Each generator is installed on a thickened concrete pad; a spare thickened pad is provided at the east end of the building for installation of a future generator. Floor trenches with diamond plate covers run along the north and west sides of each of the pads. A 2.5-ton electric gantry hoist is installed over the generators, supported by two steel beams that run the full length of the East Building. The primary power CAT 3512 generator sets were installed around 1983. These air-start generators were reportedly up-rated to 620 kW by the manufacturer. According to the plant operators, both generators have approximately 120,000 total hours and have been rebuilt approximately 10 times. One generator has approximately 4,000 hours since the last rebuild, while the other has about 8,500 hours since the last rebuild. The Caterpillar D395 generator set housed in the West Building has about 12,000 total run hours, and is utilized as a backup power source during emergencies only. The remaining Chicago Pneumatic generator is considered obsolete and is no longer utilized. All generators at the Power Plant operate at 4160Y2400 volts, which is conveyed to the distribution system via a Lloyd’s Controls brand switchgear array located in the West Building. Each generator set has a dedicated section in the switchgear lineup consisting of: an air break switch; protective relays for over current; reverse current and ground- fault detection; and meters for voltage, frequency, amperes, kW, Kilowatt-Hours [kWH], Unalakleet, Alaska 6 Conceptual Design Report Rural Power System Upgrade Project October 2007 Reactive Power [kVAR], and run time. The switchgear also allows for generator voltage adjustment. Outgoing power is monitored for volts, kW, kWH, kVAR, and power factor, and the feeder is protected at the switchgear main section. 4.1.2 Heat Recovery System The jacket water from the existing CAT 3512 generator set is connected through common piping to the upflow radiators. Primary heat recovery from the coolant is through a large plate and frame heat exchanger. Recovered heat from this heat exchanger is distributed to multiple facilities via buried, insulated, arctic piping loops. A 6-inch diameter loop serves the elementary and high schools, the BSSD administration building, and the teacher housing 6-plex. A 2-inch diameter loop serves the City-owned Bailer Building. A second, smaller shell and tube heat exchanger is also connected to the coolant piping. Recovered heat from this heat exchanger is distributed through a 2-inch diameter piping loop to the Water Treatment Plant, Courthouse, and the bulk fuel storage tank. The heat recovery system is relatively old and has been added on to in multiple phases, but appears to be working relatively well. 4.1.3 Distribution System The entire community is served via a 4160Y2400-volt (V) overhead distribution system that is operated and maintained by UVEC with assistance from MEA (owner of the distribution system). The distribution system consists of a main feeder serving three separate circuits: north, south, and west. The distribution system consists of #4 Aluminum Coated Steel Reinforced (ACSR) conductors for the feeders and utilizes 15 Kilovolt (kV) class components. Each of the three circuits includes remotely operated, oil-filled contactors located on poles near the Power Plant. The remote contactors on each circuit are independent from each other, but are connected so that a contactor in each phase operates simultaneously upon receipt of a signal from the switchgear. A main feeder cable extends from the Power Plant to a riser pole on the north side of the building, where it terminates at fused cutouts and transitions to overhead. The main feeder extends to the east and west. The eastern leg of the main feeder terminates at a dead end pole at the Bailer Building, approximately 450 feet from the Power Plant. At the first pole west of the main feeder riser pole, near the northwest corner of the Power Plant, the main feeder is tapped and serves the remotely operated contactors controlling the north, south, and west circuits. The contactors for the west circuit are situated on this pole. The contactors and fused cutouts for the south circuit are located on a pole near the southwest corner of the Power Plant. The contactors and fused cutouts for the north circuit are situated on a pole located about 200 feet north of the Power Plant. Unalakleet, Alaska 7 Conceptual Design Report Rural Power System Upgrade Project October 2007 The north and south circuits have fused cutouts, but the west circuit and the main feeder running to the east are not individually protected. A site plan and one-line of the existing distribution system are shown on Figure 3. 4.1.4 Equipment Suitable for Reuse The existing generator sets are too old and inefficient for re-use in the new Power Plant. However, the units retain considerable value and could be sold or parted out by UVEC or MEA. The existing overhead distribution system is suitable for reuse with the exception of the oil filled remote contactors discussed above. Some portions of the distribution system will be retired to make way for the proposed new configuration (see Figure 5). The heat recovery distribution piping outside of the Power Plant should be suitable for re-use. Some portions of the existing heat recovery equipment at the end user buildings should also be suitable for continued service. Additional investigation will need to be performed during the early stages of the design to determine the extent of replacement required. The new 89,000-gallon fuel storage tank and secondary containment system (to be installed as part of the AEA Bulk Fuel Upgrade Project in summer 2007) will be adequate for serving the new Power Plant, with relatively minor modifications to the piping. 4.2 Existing System Deficiencies 4.2.1 Structural Deficiencies Deficiencies and code violations observed during the site visit include: x The eastern wall of the Power Plant is less than 1-foot from the property line. Table 602 in the 2006 International Building Code requires exterior walls within 5 feet of property lines to have a 2-hour fire rating. The existing Power Plant wall does not appear to meet this requirement. x The Power Plant building’s exterior skin has multiple tears and patches, especially the older West Building. x The West Building is insulated via foil-backed fiberglass batts. Many of the bats are damaged and /or detached from the walls. x The West Building’s roof sheathing is severely corroded, and the roof eaves have ice damage. A detailed building code analysis is provided in Appendix B. 4.2.2 Electrical Deficiencies The most significant electrical deficiencies observed within the Power Plant include an exposed 208V bus at the mezzanine above the office, and many clear space violations. Lighting levels in the original structure are low, and some areas have no lighting at all. Unalakleet, Alaska 8 Conceptual Design Report Rural Power System Upgrade Project October 2007 The switchgear and panel boards do not have placards defining protective gear requirements and flash protection distances. Sections of the medium voltage switchgear have been abandoned in place, but continue to be energized. The majority of distribution system components reportedly function adequately. However, the operator indicated that the pole-mounted, remote contactors outside the Power Plant are not reliable. Occasionally, when the disconnect signal is transmitted from the switchgear, the contactor on an individual circuit does not open. This malfunction could result in a single phase of a 3-phase primary line remaining energized, and poses a significant worker safety hazard. 4.2.3 Mechanical Deficiencies The existing engine-generator sets are old and have exceeded their intended service life (typically about 100,000 hours). While it may be possible to extend their life for a few more years with rebuilds, all existing generation units need to be replaced. Many of the supporting mechanical systems such as ventilation, fuel handling, and cooling are also aging and due for replacement. The existing upflow radiators are located on the eastern wall and the air louvers penetrate the required 2-hour fire wall, as noted in Section 4.2.1 above. Penetrations in the fire wall are undesirable. Unalakleet, Alaska 9 Conceptual Design Report Rural Power System Upgrade Project October 2007 5.0 POWER SYSTEM UPGRADES 5.1 Electrical Capacity Considerations Electrical demands in rural Alaskan villages, while relatively small in overall magnitude, tend to be significantly more variable than those for larger communities. This is due to dynamic fluctuations in seasonal populations, temperatures, local industrial activities, and other factors. Properly sizing power generation systems for these communities requires the integration of hard data, such as historical consumption records, with socio- economic and other factors, such as projected housing and population growth, planned infrastructure improvements, and the applicability of alternative energy sources and emerging system control technologies. The following sections summarize the historical electrical usage in the community, and identify factors such as planned infrastructure improvements, alternative energy sources, and shifts in population that were considered in sizing the system. 5.1.1 Historical Electrical Demand Unalakleet participates in the State’s Power Cost Equalization (PCE) Program, and is required to submit monthly reports to the AEA itemizing a myriad of power system related items - most notably the quantity of electric power generated and sold, as well as peak monthly electrical demands. Historical PCE report data was analyzed to determine trends in the community’s energy consumption (see Appendix C). Strip charts from the switchgear were obtained and analyzed to confirm the PCE data. The data indicates that peak demands in Unalakleet have remained relatively constant over the past 5 years, with a maximum instantaneous peak of 850 kW occurring in 2004. Average demand over the same period was approximately 455 kW. The highest demands occur in December and January, which is typical of rural Alaskan communities. In Unalakleet, high demand also occurs in August, when seafood processing is at its peak. 5.1.2 Planned Infrastructure Improvements Future infrastructure improvement projects can affect community electrical demands and must be considered when sizing the proposed Power Plant. The scope and anticipated impact of planned infrastructure improvements are discussed in the following sections. Airport Improvements The Alaska Department of Transportation and Public Facilities (ADOT&PF) was contacted regarding planned airport improvements in Unalakleet. ADOT&PF is currently scheduled to begin construction of a runway upgrade project during the summer of 2007. The project will include paving all runways and taxiways, constructing and paving a general aviation apron, rehabilitating the safety areas, and removing and replacing the existing lighting and signage. Based upon a review of the construction plans, it is estimated that the proposed lighting and illuminated signage components will increase Unalakleet, Alaska 10 Conceptual Design Report Rural Power System Upgrade Project October 2007 the airport’s average demand by approximately 5 kW, consuming an additional 44,000 kWH per year. Water and Sewer Improvements Over 90 percent of the residences in Unalakleet are currently connected to the City’s municipal piped water and sewer system. Major expansions of the existing water treatment / distribution and sewer collection systems are not planned within the next 10 years. The City, in conjunction with the State of Alaska Village Safe Water Program, is exploring options for improving their existing raw water supply system. Proposed upgrades include re-routing the existing raw water transmission line from Powers Creek to avoid coastal erosion. Although the proposed pipeline route will likely be longer than the current line, the proposed pipe diameter will be larger and, therefore, friction losses and electrical demands for pumping are not likely to change significantly. School Improvements BSSD has submitted a funding application for a complete remodel of the Unalakleet High School and gymnasium. Project elements would include raising the gym ceiling, heating systems upgrades, and miscellaneous building code upgrades. Construction is expected to start in 2009 or 2010, subject to funding. BSSD has also submitted a grant application to the Alaska Housing Finance Corporation to construct three 4-plexes for additional teacher housing. For the purposes of this CDR it is estimated that school improvements over the next 10 years will result in an additional 15 kW average demand and consume approximately 132,000 kWH per year. 5.1.3 Projected Community Growth Historical census data shows that the population of Unalakleet has risen steadily over the past six decades at approximately 1.2 percent annually (from 329 in 1940 to 727 in 2007). For the purposes of this CDR, a conservative growth rate of 1.5 percent was assumed, resulting in a design population of 824 in 2016. Assuming that the average household size remains at 3.33 residents per house, approximately 35 new homes will be constructed by the design year. The resulting increases in electrical demand will be approximately 40 kW (350,000 kWH) per year. 5.1.4 Projected Electrical Demands at Design A summary of the community’s electrical demands and peak loads during recent years is shown in Table 2. Peaking Factors based upon the ratio between historic annual average and peak loads are also shown. Unalakleet, Alaska 11 Conceptual Design Report Rural Power System Upgrade Project October 2007 Table 2 – Unalakleet Historical Demand Data Year Annual Consumption (kWH) Annual Average (kWH) Annual Peak Load (kWH) Peaking Factor 2003 3,915,000 447 744 1.7 2004 3,936,000 449 850 1.9 2005 3,992,000 456 756 1.7 Source – Historic PCE Data The annual kWH consumption in 2005 was used as a baseline value for estimating future demands. Anticipated future loads from Section 5.1.2 were added to this baseline to estimate the average demand at design (see Table 3). Peak demand in the design year was calculated by applying a peaking factor of 1.9. Table 3 – Projected Electrical Demands TYPE DEMAND Baseline Consumption (Unalakleet 2005 PCE Data)3,992,000 kWH Estimated Increase (10-year outlook)526,000 kWH Estimated Annual Consumption (2016)4,518,000 kWH Projected Average Demand 516 kW Projected Peak Demand (Peaking Factor = 1.9) 980 kW 5.2 System Design Considerations 5.2.1 Climate Unalakleet receives approximately 14-inches of precipitation annually, including 41- inches of snow. Temperatures range from 62 to 47 degrees Fahrenheit (0F) in summer and 110F to -40F in winter. Extremes have been recorded from 870F to -500F. Norton Sound is typically ice-free from June through October. Unalakleet, Alaska 12 Conceptual Design Report Rural Power System Upgrade Project October 2007 5.2.2 Natural Hazards Unalakleet is located in an area of relatively low seismicity. However, due to the community’s coastal location, the potential threat of tsunamis remains moderate to high. The potential for flooding at the proposed new Power Plant site due to non-tsunami related events is low. According to the U.S. Army Corps of Engineers (COE) flood management database, the record flood event occurred in 1965 and reached an elevation of approximately 18 feet Mean Sea Level (MSL). Based upon the most recent Alaska Department of Community and Economic Development (DCED) community mapping, the existing ground elevation at the Power Plant is approximately 25 ft MSL. 5.2.3 Borrow Sources, Ownership, Material Costs There are several material sources near Unalakleet. The nearest pit is located on Landfill Road, approximately 2 miles northeast of town. Blasting and/or ripping with large equipment are typically required for material extraction at the pits. Bering Straits Native Corporation owns the subsurface rights in and around the community. Royalty fees typically range from $2 to $3 per cubic yard. 5.2.4 Site Control A site control opinion was prepared by Rick Elliot, Land Consultant, and is provided in Appendix D. The Power Plant site is within Lot 27, Block 18, Plat No. 87-11, Plat of Unalakleet Townsite, located within Section 3, Township 19 South, Range 11 West, Kateel River Meridian. Prior to the subdivision, the area was conveyed to the Unalakleet Native Corporation by Interim Conveyance No. 493. The Unalakleet Native Corporation signed the plat as the land owner. Based on the information available, legal title to the Power Plant site appears to remain vested in the Unalakleet Native Corporation. In order to obtain site control for the project, UVEC needs to obtain either a long-term lease or a deed from the Unalakleet Native Corporation. It is likely that this transaction would require approval by the Corporation Board of Directors. 5.2.5 Alternative Energy Sources Diesel generators are typically considered the simplest and most reliable method of power production in rural communities. However, rising fuel costs and mounting regulatory concern over fuel spills and Power Plant emissions warrant a close evaluation of potential alternative energy sources. With proper planning, design, and management, today’s alternative energy technologies could reduce the region’s dependence upon fossil fuels in the future. Brief discussions of applicable fuel-saving technologies are provided below. Heat Recovery Heat recovery technology provides a means of reclaiming energy lost to heat during the burning of fossil fuels. Heat recovery systems in rural Alaska typically consist of a heat exchanger connected to the liquid cooling system of Power Plant diesel generators. The exchanger draws heat from the engine cooling system to supplement heat-reliant Unalakleet, Alaska 13 Conceptual Design Report Rural Power System Upgrade Project October 2007 processes in the Power Plant and adjacent buildings. Common implementations include pre-heating hydronic system return fluid to reduce boiler firing frequency, and heating raw water to enhance water treatment. Recovered heat from the existing UVEC Power Plant is currently used to provide heat to multiple community facilities. Replacement of UVEC’s existing diesel generators with modern low-emission units, along with implementation of the proposed wind-diesel hybrid system, will likely reduce the quantity of heat available for recovery from the diesel generator sets. This may increase heating fuel consumption at BSSD and City owned facilities currently utilizing recovered heat. This can partially be offset through use of marine configuration diesel engines. See the discussion of diesel engine options under Section 5.2.6 below. To ensure optimum energy efficiency, the new plant will need to be designed to maximize the use of heat recovery. This should include a low temperature circuit from the aftercoolers to serve specific loads, such as fuel tank heating, plant heating, and potable water heating. Wind Turbine Power Generation For several years the Alaska Energy Authority has been using Meteorological (MET) Towers to monitor the wind resource at various areas across the state. Unalakleet has two of the State’s MET Towers installed just outside the community. One has been installed since October of 2005 and the other was installed in February of 2007. The data collected from these towers indicate that there is potential for utility scale wind development in the community. The latest wind resource assessment indicates a good to excellent (wind class 4-5) wind regime with highest average wind speeds occurring during the winter months when electric load is highest. In light of Unalakleet’s high quality wind resource, AEA decided to use the HOMER model, developed at the National Renewable Energy Laboratory, to further analyze the economic potential of wind energy development in Unalakleet. Data inputs for the HOMER model include electric load data, thermal load data, and wind speed data. The wind speed dataset used in HOMER was produced by Global Energy Concepts and has a 30 m average annual wind speed of 6.5 m/s, with a wind power density of 417 W/m2. A description of how the dataset was derived can be found in GEC’s report,Feasibility Study for Unalakleet Wind Energy Project, located in Appendix F. The wind data along with fuel efficiency curves and power curves from proposed diesel generators and wind turbines were input into HOMER to determine the most economical combination to generate the electricity and heat required. AEA has written two reports,Unalakleet HOMER Modeling Results and Diesel Price Scenarios for Unalakleet Wind Diesel Hybrid System. These two reports detail the results and assumptions of this modeling effort. These reports can be found in Appendix E. The economics of a wind-diesel hybrid system is primarily a comparison between the cost savings from avoided diesel usage and the high initial capital costs of obtaining and installing wind turbines. This means that the future price of diesel in Unalakleet has a large impact on the ability of wind power to pay for itself. AEA considered six hypothetical scenarios for the price of diesel in Unalakleet over the project life. The wind- diesel systems modeled in Diesel Price Scenarios for Unalakleet Wind Diesel Hybrid Unalakleet, Alaska 14 Conceptual Design Report Rural Power System Upgrade Project October 2007 System are higher penetration than the system that is likely to be installed in Unalakleet. However, the results are still useful in showing the powerful impact that future diesel prices have on the economic justification for wind-diesel projects. Overall, the analysis shows that over the project life, both high and medium penetration wind-diesel systems are likely to provide cost savings over a diesel only system. A high penetration system shows the largest savings but also has the highest level of uncertainty. Current turbine development in the wind industry is targeted to multi-megawatt wind generators. For smaller applications, such in Unalakleet, the equipment choice is limited. The following two emerging trends are visible in the Alaska market. One market sector supply caters towards used, refurbished wind turbines. These decommissioned machines from wind projects in the lower 48 or Europe are remanufactured, rebuilt, and often upgraded to meet modern standards. However, the useful life of these re-manufactured turbines is uncertain, due to the limited amount of operational data available. The overall industry consensus is that the useful life of a re- manufactured wind turbine is about 15 years. Another uncertainty is the availability of spare parts and service support. Vendors of re-manufactured turbines, in general, do not offer warranty contracts over one year and service, technical support, and maintenance contracts are unusual. However exceptions exist, warranty and service contracts are a negotiation point that should be considered when re-manufactured turbines are the project choice. The second market sector is the small to medium size wind turbine sector. Manufacturers offer new turbines with warranty contracts between 1-2 years, and extended warranty periods of 5 years are negotiable. The spare part supply is usually guaranteed by the manufacturer throughout the lifetime of the turbine, which ranges from 20-25 years. Service contracts and technical support are available. The capital costs for these turbines are generally higher. However, the normalized maintenance, replacement and repair costs are believed to be equal to or lower than those of the re-manufactured turbines. Operation and maintenance costs are in general an uncertainty, especially with the limited data for Alaska installations. The number of installed turbines per project in rural Alaska applications can differ due to a number of reasons. The intended installed capacity can usually be met with the choice of a number of smaller turbines or one or two larger turbines. The benefit of fewer turbines is the reduced cost of foundation, transmission line and construction time. The disadvantage is the risk of losing a higher percentage of electricity output if a turbine fails. One advantage of some smaller turbine models is the greater availability of replacement parts (this is especially true for turbine manufactures based in the United States). This will allow repairs to occur more rapidly on small turbines than on one large turbine. The repair skill, spare part availability, remoteness of location, system complexity (medium or high penetration), and responsiveness of technical support are factors that have to be taken into consideration in the decision making process. Due to the difficulties in performing repairs during a long rural Alaska winter, AEA believes that Unalakleet, Alaska 15 Conceptual Design Report Rural Power System Upgrade Project October 2007 installing one large turbine is a strong negative because of the risk of losing all of the winter wind production due to a single problem with one large turbine. Another important factor for wind-diesel installations in Alaska is the integration of design and control systems. Low penetration systems require only a minimum of control function on the diesel generation side, but displace only a minimal amount of diesel. Medium penetration designs require a more advanced level of integration and switchgear design and are capable of displacing up to ~25% of the annual diesel consumption. High penetration systems are highly complex designs that require experienced engineers and operators to develop a successful wind-diesel system, but they also have the potential to displace the largest amount of diesel. When trying to determine the desired level of wind penetration in a specific village application one must balance the potentially greater diesel savings of a higher penetration system against the higher costs and risks associated with the greater complexity of the system. Local conditions such as availability of skilled technicians and remoteness of location should help to determine where along the risk/reward continuum a project should be placed. Overall, the analysis shows that both medium and high penetration wind-diesel systems should provide cost savings over a diesel only system. The results also show that turbines between 100kW and 300kW in size would be a good fit for the wind and load conditions in Unalakleet. The recommended system would consist of multiple turbines with a combined capacity of at least 400 kW. Based upon AEA’s modeling results, the proposed wind system will be capable of displacing 50,000-75,000 gallons of fuel per year, which would otherwise be consumed in UVEC’s diesel power plant. At today’s prices, this equates to an annual reduction in fuel costs of $150,000 to $225,000. At this rate, the capital expenditure to install the wind turbines should be recovered in avoided diesel costs within 20 years of project startup. The expected life of a new wind turbine system is over 25 years. There are other less quantifiable benefits of installing wind power. There should be less volatility in electrical rates since rates will not be tied as tightly to rapidly fluctuating fuel prices. Also, Unalakleet could see increased local employment due to a decrease in the amount of money flowing out of the community for diesel fuel. Additionally, wind power opens up the possibility for an additional revenue stream from the sale of green credits. Finally, the State of Alaska’s PCE program will have more money to distribute elsewhere as Unalakleet will likely see a reduced level of PCE payment. 5.2.6 Diesel Generator Selection Implementation of new air pollution regulations for stationary diesel engines has affected both the performance and installation of all engines. Typically the fuel economy is lower for new Tier 2 and Tier 3 certified engines than for prior non-certified engines. In addition, virtually all new Tier 2 and Tier 3 engines require a separate low temperature (120°F) cooling system for the turbocharger aftercooler. This results in the need for additional mechanical equipment and it also significantly reduces the amount of heat Unalakleet, Alaska 16 Conceptual Design Report Rural Power System Upgrade Project October 2007 available for recovery from the jacket water. The following factors have been taken into account for selection of engine-generators for the proposed upgrade: x Availability of Tier compliant models in the timeframe proposed. x Generation fuel efficiency over a wide range of loads. x Jacket water heat available for recovery. x Installation and maintenance cost. Due to UVEC’s long history of using Caterpillar equipment, research was limited to only Caterpillar engines. In order to ensure that the diesel plant would be capable of meeting future peak demands, as well as operating efficiently in conjunction with wind turbines, a wide range of capacities from 250kW to 1,000kW was used. A total of five different models were considered: x C15 Tier 3 í 450 kW prime capacity, air-to-air aftercooler. x C9 Marine Tier 2 í 250 kW prime capacity, wet manifold exhaust and separate circuit water aftercooler. x C18 Marine Tier 2 í 550 kW prime capacity, wet manifold exhaust and separate circuit water aftercooler. x 3508C Tier 2 í 600 kW prime capacity, separate circuit water aftercooler. x 3512C Tier 2 í 1050 kW prime capacity, separate circuit water aftercooler. The fuel efficiency in kWH/gallon for each unit is shown on Figure 7. At the present average load of 455kW, the 550kW C18 provides by far the highest fuel efficiency. At the projected future average load of 516kW, the 550kW C18 still provides the highest fuel efficiency. In addition, the marine C18 provides significantly more heat to the jacket water than any of the non-marine units. For meeting peak demands in excess of 550kW and for operating in parallel with wind turbines, the 250kW marine C9 provides the highest fuel efficiency. It appears that a pair of C18 generator sets and one C9 unit, operating in parallel, would provide the best fuel efficiency over a wide load range from 200kW to 1,100kW. Adding a third C18 would provide a high level of redundancy. The purchase and rebuild costs of the C18 are significantly lower than the 3508 or 3512; therefore even with higher levels of engine run time due to parallel operation, the overall maintenance costs would be lower. It is proposed that three identical C18 marine gensets and one C9 marine genset be installed. 5.3 Proposed Improvements 5.3.1 Scope of work The proposed Scope of Work includes the major tasks discussed below. Unalakleet, Alaska 17 Conceptual Design Report Rural Power System Upgrade Project October 2007 Task 1– Demolition The project will include removal and disposal of the items listed below. All demolition items will remain the property of UVEC. The project may pay for transportation of the demolition items to the community landfill for final disposal. The project will not cover disposal of fluids drained from equipment and/or hazardous wastes encountered during the course of the project. Structural demolition items: x Building metal siding, roof panels, and associated insulation. x Partition walls and interior / exterior doors and windows, as required. Electrical demolition items: x Existing switchgear including all feeders and generator controls. x 120VDC battery banks, chargers, and distribution wiring. x Day tank control panel. x Station service panels. x Interior and exterior lighting x Radiator fan, day tank, and heat recovery system controls. x All associated conduit, conductors, and wiring devices. x Pole top contactors and controls, including conduits and conductors to the switchgear. x Overhead taps on the poles adjacent to the Power Plant. x Station service drop. Mechanical demolition items: x Four diesel generator sets including exhaust stacks and other integral components. x 10kW Standby generator and transfer switch. x Radiators. x Fuel oil day tanks. x Waste oil blending apparatus (currently not used). x Air-start compressor and related equipment. x All related piping, valves, and fittings. Task 2 – Temporary Power This task includes installation of a temporary power generation system to carry the community electrical load during construction of the new systems. The temporary Unalakleet, Alaska 18 Conceptual Design Report Rural Power System Upgrade Project October 2007 system will likely consist of multiple, trailer-mounted generator sets which will be mobilized with the project and removed upon start-up of the new Power Plant. Task 3 – Power Plant Upgrades Proposed Power Plant upgrades are described below. The proposed Power Plant floor plan is shown on Figure 6. Power Plant structural upgrades: x New insulated metal siding and roof panels on the existing Power Plant building frame. x A 2-hour rated fire wall on the east end of the Power Plant to meet current building codes. x Partition walls and interior / exterior doors and windows, as required. x Trenching of the existing floor slab to facilitate conduit routing. x Foundations for proposed exterior radiators and exhaust risers. Power Plant Mechanical Upgrades: x Four new generator sets (including three 550 kW CAT C-18s and one 250 kW CAT C-9) with all required mounting hardware. x Exhaust piping and risers for the proposed generator sets. x A cooling system including four radiators (two high temperature [water jacket] and two low temperature [aftercooler] types) and associated piping and controls. x Fuel storage and supply equipment including a single 600-gallon day tank and associated pumps, piping, filters, and related components. x Heat recovery equipment for low and high temperature radiators. x Ventilation and combustion air intake systems. Power Plant Electrical Upgrades: x New automatic switchgear based on a 480Y277V bus rated at 2,400 amps. x A 480Y277V station service to serve the following components: - Motors and backup heating systems operated at 480V. - Lighting operated at 277V. - Receptacles, misc. controls etc. operated at 208Y120. x Plant lighting consisting of multi-level switch and motion controls, high bay fixtures using T5 high output lamps, and high efficiency electronic ballasts. x Office light fixtures using T8 lamps and electronic ballasts. Compact fluorescent for storage closets and other small areas. Unalakleet, Alaska 19 Conceptual Design Report Rural Power System Upgrade Project October 2007 x Manually controlled, exterior photoelectric lights to provide light to the transformer and switchgear areas, as well as exit and security lights. x Upgraded wiring in accordance with the 2005 National Electrical Code and, where applicable, the National Electrical Safety Code. x Miscellaneous controls as required for radiator fans, day tanks, etc. Task 4 – Electrical Distribution System Upgrades Proposed distribution system upgrades are described below and shown on Figure 5. x A 1.5 Millivolt-Ampere pad-mounted step-up transformer to convert 480V generator output to 4160Y/2400V line voltage. x A pad-mounted, remotely operated, fused switch cabinet (S&C PM-12) to allow automatic simultaneous disconnection of all three phases should any one fuse in a specific circuit trip. The pad mounted switches will also be operable from the control room. The transformer and switch cabinets will be installed on concrete foundation pedestals within the existing utility easement on the northwest corner of the Power Plant. x A new dead-end terminal pole to serve the south circuit. The pole will be situated near the northwest corner and outside of the fenced staging area behind the Water Treatment Plant (located west of the Power Plant, across River Road). The new pole will be supplied via an underground feeder from the switch cabinet, consisting of three jacketed #2AL URD cables. The cables will be run in a continuous section of 4-inch High Density Polyethylene (HDPE) conduit. A spare 4-inch HDPE conduit will be installed in the same trench and will be capped at both ends. x A new underground feeder from the switch cabinet to re-serve the existing tangent terminal pole located north of the Power Plant, across Beach Road East. The line will be constructed similar to the south circuit explained above. x Surge protection and disconnect switches on each phase of the new risers. Once these upgrades are complete, the existing pole located at the northwest corner of the Power Plant will no longer serve as a crossing pole, and no longer carry all three circuits with taps from the main feeder. Instead, this pole will serve only as a double- deadend with taps combining the east and west circuits into a single circuit. The remainder of the overhead distribution system will remain unchanged. Reportedly, MEA is considering upgrading the south circuit with 1/0 ACSR conductors in an attempt to alleviate the voltage drop experienced when the fish processing plant is in operation. This upgrade is in the early stages of planning and is not considered here. Task 5 – Wind Turbines System The proposed wind system will include the following components: x Three 100 to 300kW wind turbines complete with tubular type steel towers. Unalakleet, Alaska 20 Conceptual Design Report Rural Power System Upgrade Project October 2007 x Three turbine tower foundation systems. x Approximately 13,000 linear feet of overhead, 3-phase, high voltage power transmission line between the existing grid and the proposed wind turbine site. x Wind system controls, including software and a wireless communication system between the Power Plant and wind turbine site. x An excess energy utilization system at the Power Plant (electric boiler and controls). x An energy storage system (battery banks). Unalakleet, Alaska 21 Conceptual Design Report Rural Power System Upgrade Project October 2007 6.0 PERMITTING 6.1 Permitting for Power Plant Upgrades 6.1.1 Coastal Zone Management Projects for communities in coastal regions, such as Unalakleet, must complete a Coastal Project Questionnaire in accordance with the Alaska Coastal Management Program. The questionnaire is submitted to the State of Alaska Department of Natural Resources, Office of Project Management and Permitting. 6.1.2 Fire Marshall Review Before construction of the new Power Plant begins, a set of stamped construction drawings must be submitted, along with the appropriate fee, to the State of Alaska, Department of Public Safety, Division of Fire Prevention (Fire Marshal) for plan review and approval. After review and approval, the Fire Marshal issues a Plan Review Permit to verify compliance with applicable building, fire, and life safety codes. Review times depend upon the agency’s work load; a typical review will take up to a month to complete. 6.1.3 U.S. Army Corps of Engineers Projects that result in the placement of fill in wetlands require a COE permit. The Power Plant upgrades will not disturb wetland areas and therefore a COE permit should not be required. However, a jurisdictional determination may be required by the COE for the proposed wind turbine site. 6.1.4 National Environmental Policy Act In accordance with the National Environmental Policy Act, an Environmental Assessment (EA) must be completed prior to construction of the project. The EA format should be based on the guidance documents provided in the AEA Project Reference Manual. The EA process will include the development and distribution of a project- scoping letter to all interested state and federal agencies, including the U.S. Fish and Wildlife Service (USFWS), State Historic Preservation Officer, and State Flood Plain Manager among others. Responses from the agencies will identify necessary permits and mitigation measures, if required. Agency approval letters should be attached to the EA checklist as justification for a Finding of No Significant Impact (FONSI) for the project. AEA will act as the lead agency for FONSI determination. Depending upon construction timing for the proposed wind system, a second EA may be required specifically for the installation of turbines. 6.1.5 ADEC Review UVEC currently operates under an ADEC Title 5 General Permit (Permit Number AQ0217GPA02), which restricts fuel consumption at UVEC’s Power Plant to less than Unalakleet, Alaska 22 Conceptual Design Report Rural Power System Upgrade Project October 2007 825,000 gallons per year in order to limit potential air emissions. Construction of the proposed upgrades will likely require acquisition of a separate, Title 1 Minor Source Specific permit. The Minor Source Specific permit requires a public comment period; a typical review may take up to 130 days to complete. 6.1.6 Regulatory Commission of Alaska Certification Public utilities must obtain a Certificate of Public Convenience and Necessity (CPCN) from the Regulatory Commission of Alaska (RCA) before commencement of service to the public. The CPCN describes the authorized service area and scope of operations of the utility. According to UVEC manager Ike Towerak, UVEC is included under MEA’s certificate (CPCN #18). The RCA requires that a utility update their CPNC after any major facility upgrades or operational changes. To update the CPNC, the utility must complete and submit the RCA form entitled “Application for a New or Amended Certificate of Public Convenience and Necessity.” 6.2 Permitting for Wind Turbines Installation of wind turbines will require the additional permitting efforts described below. 6.2.1 Federal Aviation Administration Review The AEA has submitted two Notices of Proposed Construction or Operation (Form 7460- 1) to the Federal Aviation Administration (FAA) Alaska regional office requesting approval to construct wind turbines with blade tip heights up to 250 feet above the ground surface at the proposed site. The FAA has determined that the turbines may pose a hazard to air navigation, and that additional study, including a mandatory public comment period, will be required prior to construction. The AEA has 60 days from the date of FAA’s response letter to request further study, otherwise a new 7460-1 application will need to be submitted. 6.2.2 U.S. Fish and Wildlife Service In a letter to AEA’s Bryan Carey, dated 11/18/04, the USFWS indicated that migratory spectacled eiders are present in Unalakleet at certain times of the year. The letter further indicates that projects involving construction of wind turbines, power line extensions, or meteorological towers at Unalakleet will require further consultation with the USFWS to determine whether the actions are likely to affect threatened or endangered species. Based upon requirements imposed by the USFWS in nearby coastal communities considering wind farms, it is likely that a biological study will be required to determine migratory bird flight paths prior to USFWS approval. Studies such as this typically require 6 months to 1 year to complete. Further, the USFWS will likely require all new overhead power lines to include bird diversion devices on the conductors and raptor-friendly pole configurations. Unalakleet, Alaska 23 Conceptual Design Report Rural Power System Upgrade Project October 2007 7.0 CONSTRUCTION PLAN 7.1 Administration AEA anticipates that this project will be constructed using conventional contracting methods. The Design Engineer, in coordination with AEA’s internal electrical design team, will prepare construction drawings, specifications, and bid documents. The project will be advertised for a minimum of two consecutive weeks, and sealed bids will be accepted from qualified Contractors. At the appointed date and time, the sealed bids will be opened, evaluated, and scored by a team composed of representatives from UVEC and AEA. Points will be awarded based upon set scoring criteria. The firm with the highest scoring proposal will be asked to enter into contract negotiations for the work. At a minimum, the scoring criteria should address the Contractor’s previous experience, their anticipated construction cost and schedule, and the Contractor’s plan for local hire. Once a contract is in place, the Contractor will coordinate procurement and construction activities, as well as recruitment and training of local workers. The Design Engineer will provide AEA with quality assurance and control services through communication with the Contractor, on-site inspections of the work, and review of submittals and shop drawings. 7.2 Use of Local Labor The Contractor will be encouraged to practice local hire to the greatest practical extent. It is assumed that skilled craftsmen, with appropriate certifications, will be imported to perform specialty work (such as welding and electrical installation). A request was sent to the community for information regarding the availability of local labor to assist with construction of the proposed project. To date, no response has been received. 7.3 Use of Local Equipment The Contractor will be encouraged to contact the community with regard to the rental of local heavy equipment for the project. Equipment owned by the City of Unalakleet is listed in Table 4; additional equipment may be available from locally owned West Coast Construction Company. All supplemental equipment will be supplied by the Contractor. Unalakleet, Alaska 24 Conceptual Design Report Rural Power System Upgrade Project October 2007 Table 4  Locally Available Heavy Equipment Equipment Type Owner Make Model Year Loaders (3)City of Unalakleet JD, CAT Cat 28-ITG, JD- 844 -- Skid Steer Loaders (2)City of Unalakleet Bobcat --1992 1999 Tracked Excavator (1)City of Unalakleet Hitachi ---- Rubber Tire Backhoe/Loader (1)City of Unalakleet JD JD-310 -- Vibrating Drum Compactor (1)City of Unalakleet Raygo ---- 10-yard Dump Truck (1)City of Unalakleet West Star --1989 Flat Bed Truck (1)City of Unalakleet Ford F700 1992 Dozers(4)City of Unalakleet JD, Terrex, CAT JD-850 JD-450C Terex 8220B CAT 935 -- 7.4 Access and Logistical Challenges Unalakleet has a State-owned, 6,000-foot long by 150-foot wide gravel runway with lights. Daily flights are available to the community out of Anchorage. Barge service is provided by Crowley Marine, Delta Western, Northland Services, and several smaller companies. The local fish processor owns a dock, but barges are commonly moored near the mouth of the Unalakleet River and offloaded onto the beach. Reportedly, the Unalakleet Native Corporation levies a $0.01 per pound surcharge on all freight that crosses their land. 7.5 Construction Schedule The proposed project schedule, subject to availability of funding, calls for design and permitting during 2008, procurement of long lead items during 2009, and construction beginning in spring of 2010. A preliminary project schedule is shown in Table 5 on the next page. TABLE 5 - PROJECT SCHEDULE UNALAKLEET RURAL POWER SYSTEM UPGRADE PROJECT Task Time November (2007)December (2007)January (2008)February (2008)March (2008)April (2008)TIME LAPSE April (2009)May (2009)TIME LAPSE May (2010)June (2010)July (2010)September (2010)October (2010) Notice to Proceed Ƈ PHASE II TASKS Additional Information Collection / Participant Input 2w Site Control 10w Design / Contract Document Preparation (65%-95%)16w AEA / AG Review 2w Finalize Bid Package 2w Draft Business Plan 6w Participant Review and Comment 4w Finalize and Sign Business Plan / Obtain Signatures 4w Permitting Environmental Assessment Preparation 14w Fire Marshall Review 4w PHASE III TASKS Solicit Bids 4w Negotiat and Award Contract 4w Procurement of Long Lead Items 44w 6/09 thru 4/10 Mobilization / Shipment of Materials and Equipment 6w Demolition Work Remove Interior Partition Walls 1w Interior Electrical / Mechanical System Demolition 2w Remove Existing Building Skin 2w Temporary Power Setup Portable Gen Sets 1w Tie Into Existing Distribution System 1w Power Plant Structural Upgrades Install New Insulated Siding and Roof 4w Construct Fire Wall 1w Install New Windows and Doors 1w Concrete Slab Cutting and Patching 1w Install New Interior Partition Walls 1w Exterior Equipment Conc Pads 3w Power Plant Mechanical and Electrical Upgrades Install New Gensets 2w Install Radiators and Heat Recovery Equipment 2w install Exhaust, Ventilation and Day Tank Systems 3w Install Switchgear 4w Install Feeder and Control Wiring 2w Install Interior and Exterior Lighting 3w Distribution System Upgrades Install Padmount Transformer and Switch Cabinet 3w Install Utility Poles and String Overhead Line 4w Install Buried Feeders 3w WIND TURBINES Planning / Field Investigations Site Selection - Site Control 6w Geotechnical Investigation 3d 6/08 Permitting Environmental Assessment / Review 16w Permits / Clearances (USFWS, FAA)16w Design Tasks Turbine Manufacturer Selection 12w Foundation Design 12w 6/08 thru 8/08 System Integration 28w 3/08 thru 9/08 Construction Procurement of Turbines 8w Shipment of Turbines and Controls 6w Construct Turbine Foundations 10w Install Turbines and Connect to Power Grid 10w August (2010)TIME FOR FUNDING ACQUISITIONLONG LEAD PROCUREMENT 25 Unalakleet, Alaska 26 Conceptual Design Report Rural Power System Upgrade Project October 2007 7.6 Conceptual Construction Cost Estimate A conceptual cost estimate for construction of the proposed upgrades is provided in Appendix G. The estimate includes labor, materials, and shipping costs for all project components, and identifies unit costs for analysis of the project in regards to the Denali Commission’s cost containment policies. The cost estimate was developed based on the conceptual Power Plant layout shown on Figures 5 and 6, and the assumption that the project will be constructed using conventional contracting methods. Labor rates are based on Title 36 equivalent wages for general and certified specialty labor. The total project cost, including all design, supervision, construction, inspection, permitting, insurance, and a 10 percent contingency, is estimated as $3,500,000, or $1,842 per installed kW, based upon a Power Plant capacity of 1.9 megawatts. The total cost of the proposed wind system is estimated to be an additional $3,100,000. FIGURES AND PHOTOGRAPHS KOTZEBUE BERINGSEAOCEAN ANCHORAGE KODIAK HOMER BETHEL SEWARD PACIFI C JUNEAU BARROW NOME ARCTI C FAIRBANKS COLD BAY OCEAN CHIGNIK BAY UNALAKLEET PROJECT LOCATION Unalakleet RPSU Fuel Efficiency of Engine-Generator Options10.010.511.011.512.012.513.013.514.014.515.00.0 100.0 200.0 300.0 400.0 500.0 600.0 700.0 800.0 900.0Load (kW)Efficiency (kWh/gal)C9 Marine, 250 eKW Prime, Tier 2C18 Marine, 550 eKW Prime, Tier 2(preliminary data)3508C, 600eKW Prime, Tier 23512C, 1050 eKW Prime, Tier 2C15, 455 eKW Prime, Tier 3FIGURE 7 - FUEL EFFICIENCY AND ENGINE-GENERATOR OPTIONS Photograph #1 – Power Plant Exterior East Wall (Newer Building) Photograph #2 – Power Plant Exterior East Wall (Older Building) School Heat Loop Bailer Building Heat Loop Engine Radiator Intake and exhaust (typical) West (Old) Section of Power Plant Building Photograph 3 – Power Plant Exterior West Wall Photograph 4 – Power Plant Exterior West Wall Overhead Door (Entrance to Line Truck Storage Area) Storage Shed For Distribution System Components Sprinkler System Riser Entrance Photograph 5 – Power Plant Exterior South Wall Generator Exhaust Stack Photograph 6 – Power Plant Exterior South Wall Photograph 7 – Power Plant Exterior East Wall Photograph 8 – Generator #3, Cat 3512, 530 kW (South Interior Wall Beyond) Photograph 9 – Power Plant Interior East Wall (Heat Recovery Equipment) Mezzanine Area Heat Exchanger (HX-1) Glycol Expansion Tank Photograph 10 – Plate Heat Exchanger Photograph 11 – Circulation Pumps for School and Bailer Building Heat Loops Photograph 12 – Shell and Tube Heat Exchanger Heat Exchanger (Shell and Tube) Photograph 13 – Heat Loop Branch to Bulk Fuel Tanks Photograph 14 – Typical Interior Construction for West Building Washeteria Heat Loop Supply and Return lines Bulk Fuel Tank Heat Loop Supply and Return lines Power Plant Interior South Wall, to Bulk Tanks Photograph 15 – Typical Interior Construction for East Building APPENDIX C HISTORICAL ELECTRICAL DEMAND DATA UNALAKLEET HISTORICAL ELECTRICAL LOAD DATA Cal KWH Gen Diesel Fuel Used Diesel Peak Sold Residential Sold Comm. Sold Community Facility Sold Government Total kWh Sold Jul-00 300,280 24,224 684 115,616 130,635 18,781 14,382 279,414 Aug-00 329,480 25,045 744 121,812 152,573 19,167 16,399 309,951 Sep-00 344,320 24,350 708 124,093 167,973 21,265 21,939 335,270 Oct-00 331,760 26,802 696 123,988 145,143 24,918 25,389 319,438 Nov-00 388,040 29,766 792 134,204 167,295 40,931 32,579 375,009 Dec-00 411,480 31,965 816 142,223 170,246 42,684 32,739 387,892 Jan-01 434,080 32,009 828 167,986 174,345 40,476 44,247 427,054 Annual Summary - 2000 Feb-01 402,040 26,483 732 145,953 180,571 35,117 26,593 388,234 Gen (KWh)4,243,200 Mar-01 352,720 27,086 684 123,789 155,645 30,143 29,370 338,947 Sold Res (kW)179 Apr-01 333,240 23,604 660 122,977 139,847 29,257 27,443 319,524 Average Load (kW)484 May-01 325,360 23,517 654 126,409 131,290 29,128 27,241 314,068 Peak (kW)828 Jun-01 290,400 20,392 576 119,765 110,952 25,609 22,309 278,635 Peak Factor 1.7 Jul-01 285,920 23,689 744 115,769 127,954 15,228 18,040 276,991 Aug-01 351,160 28,928 732 114,632 179,313 18,789 21,095 333,829 Sep-01 336,240 23,239 702 116,885 168,313 19,481 19,905 324,584 Oct-01 315,080 24,071 660 119,079 135,719 22,378 22,733 299,909 Nov-01 335,080 25,762 744 124,892 140,347 30,177 24,481 319,897 Dec-01 353,920 26,701 720 136,590 136,272 33,248 27,369 333,479 Jan-02 361,640 27,817 720 146,366 135,751 34,883 28,939 345,939 Annual Summary - 2001 Feb-02 346,480 24,674 696 130,217 150,841 33,813 25,727 340,598 Gen (KWh)3,996,880 Mar-02 354,080 26,773 708 129,101 154,217 36,349 27,674 347,341 Sold Res (kW)171 Apr-02 335,600 24,685 672 123,179 138,108 34,308 26,988 322,583 Average Load (kW)456 May-02 333,680 23,365 636 124,498 139,619 32,764 26,329 323,210 Peak (kW)744 Jun-02 288,000 19,772 552 117,926 115,528 19,947 22,469 275,870 Peak Factor 1.6 Jul-02 288,560 24,127 684 114,836 127,101 17,833 18,207 277,977 Aug-02 350,793 29,456 732 114,282 175,976 19,245 19,234 328,737 Sep-02 350,241 24,394 672 116,376 165,648 24,730 21,617 328,371 Oct-02 335,821 25,662 672 120,016 144,254 26,154 26,540 316,964 Nov-02 394,757 26,244 742 134,819 145,125 34,916 31,803 346,663 Dec-02 370,720 29,412 792 144,130 142,436 39,564 33,576 359,706 Jan-03 386,200 28,547 744 161,583 124,798 38,429 31,628 356,438 Annual Summary - 2002 Feb-03 382,800 28,547 744 145,340 145,889 37,708 32,864 361,801 Gen (KWh)4,085,972 Mar-03 324,640 24,949 660 120,255 134,155 33,810 23,756 311,976 Sold Res (kW)174 Apr-03 330,000 22,871 636 125,719 132,177 34,648 24,412 316,956 Average Load (kW)466 May-03 314,040 21,685 648 120,031 127,708 28,951 22,873 299,563 Peak (kW)792 Jun-03 257,400 18,377 621 110,306 99,300 19,908 16,836 246,350 Peak Factor 1.7 Jul-03 259,000 20,464 582 114,358 94,208 20,913 17,725 247,204 Aug-03 294,120 23,694 660 116,960 122,757 24,916 17,003 281,636 Sep-03 309,720 21,482 636 122,915 128,661 23,571 20,115 295,262 Oct-03 309,040 25,215 720 122,941 125,894 23,526 23,718 296,079 Nov-03 358,520 25,915 696 136,535 134,294 38,880 28,264 337,973 Dec-03 365,600 28,031 744 150,366 130,022 38,710 27,168 346,266 Jan-04 376,920 28,664 744 163,885 125,090 39,115 31,339 359,429 Annual Summary - 2003 Feb-04 363,280 24,774 708 140,156 136,324 43,062 28,618 348,160 Gen (KWh)3,914,920 Mar-04 358,520 26,652 720 141,159 134,221 41,549 27,428 344,357 Sold Res (kW)180 Apr-04 325,360 23,812 660 125,587 120,325 39,063 24,837 309,812 Average Load (kW)447 May-04 306,080 22,225 636 120,311 122,767 28,157 24,061 295,296 Peak (kW)744 Jun-04 288,760 19,913 564 120,233 111,753 24,396 23,319 279,701 Peak Factor 1.7 Jul-04 243,600 20,176 564 105,577 91,044 20,458 16,705 233,784 Aug-04 292,320 25,251 744 115,256 124,606 22,379 18,131 280,372 Sep-04 319,040 28,685 636 121,347 141,715 22,271 19,084 304,417 Oct-04 308,320 24,094 636 117,941 127,532 25,889 21,634 292,996 Nov-04 330,760 26,116 708 126,877 132,116 31,540 24,041 314,574 Dec-04 375,000 28,723 744 152,320 136,458 40,463 27,938 357,179 Jan-05 375,000 28,658 780 163,070 137,664 43,346 25,209 369,289 Annual Summary - 2004 Feb-05 370,280 27,304 732 143,075 146,816 42,652 24,499 357,042 Gen (KWh)3,936,000 Mar-05 364,640 26,756 850 137,203 143,427 41,897 25,230 347,757 Sold Res (kW)176 Apr-05 349,680 25,417 660 129,477 140,484 39,008 26,571 335,540 Average Load (kW)449 May-05 303,680 22,963 624 110,955 129,331 33,380 19,200 292,866 Peak (kW)850 Jun-05 303,680 20,991 528 115,973 120,159 24,909 20,456 281,497 Peak Factor 1.9 Jul-05 259,760 19,584 600 106,610 106,095 18,668 17,759 249,132 Aug-05 305,960 22,954 708 117,020 139,841 21,847 16,725 295,433 Unalakleet Power System Upgrades Project Conceptual Design Report Unalakleet PCE Data with Calcs.xls C-1 CRW Engineering Group, LLC 9/11/2007 UNALAKLEET HISTORICAL ELECTRICAL LOAD DATA Cal KWH Gen Diesel Fuel Used Diesel Peak Sold Residential Sold Comm. Sold Community Facility Sold Government Total kWh Sold Sep-05 304,040 22,954 636 112,779 137,247 24,731 17,107 291,864 Oct-05 317,520 23,214 654 119,327 135,483 31,370 20,682 306,862 Nov-05 356,880 26,101 720 131,811 144,585 41,140 19,250 336,786 Dec-05 367,760 27,220 744 138,020 141,902 43,212 31,083 354,217 Jan-06 383,200 27,220 756 155,437 139,623 44,558 26,392 366,010 Annual Summary - 2005 Feb-06 409,840 29,031 151,265 151,757 52,482 27,847 383,351 Gen (KWh)3,992,400 Mar-06 332,680 23,780 660 124,802 130,745 37,776 27,051 320,374 Sold Res (kW)174 Apr-06 349,920 24,778 624 133,110 141,758 45,676 25,567 346,111 Average Load (kW)456 May-06 323,280 22,412 600 123,050 125,770 32,512 22,293 303,625 Peak (kW)756 Jun-06 281,560 21,553 528 111,232 112,071 24,185 19,787 267,275 Peak Factor 1.7 Jul-06 259,240 19,150 576 107,453 98,237 27,353 18,145 251,188 Aug-06 308,400 23,926 720 114,637 137,394 23,534 16,858 292,423 Sep-06 341,720 24,108 636 121,107 164,525 26,665 16,745 329,042 Oct-06 305,480 22,209 624 120,604 124,055 32,189 18,374 295,222 Nov-06 347,560 25,408 708 134,168 131,405 36,907 22,868 325,348 Dec-06 371,200 26,512 720 144,360 134,739 44,141 22,997 346,237 Jan-07 370,520 27,361 756 151,664 136,694 46,418 23,214 357,990 Annual Summary - 2006 Feb-07 385,760 29,229 732 150,760 134,458 49,997 24,957 360,172 Gen (KWh)3,984,960 Mar-07 346,320 25,050 684 129,930 137,345 45,136 22,150 334,561 Sold Res (kW)176 Apr-07 339,800 25,548 600 128,718 129,317 41,208 21,497 320,740 Average Load (kW)455 May-07 325,280 22,939 636 123,186 127,875 42,269 19,584 312,914 Peak (kW)756 Jun-07 283,680 21,145 540 114,400 107,891 29,495 18,047 269,833 Peak Factor 1.7 Jul-07 263,800 18,915 624 114,640 96,238 21,355 17,392 249,625 Aug-07 315,640 23,565 ** 117,863 136,444 26,417 16,551 297,275 Min 243,600 18,377 528 105,577 91,044 15,228 14,382 233,784 Mean 334,114 24,893 682 128,001 135,747 31,745 23,592 319,084 Max 434,080 32,009 850 167,986 180,571 52,482 44,247 427,054 Percentiles 5%260,770 19,807 564 111,024 100,999 18,884 16,730 250,016 95%393,078 29,366 790 154,658 169,763 44,992 32,385 373,579 - 50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000 450,000 Jan- 06 Feb- 06 Mar- 06 Apr- 06 May- 06 Jun- 06 Jul- 06 Aug- 06 Sep- 06 Oct- 06 Nov- 06 Dec- 06 Series1 Unalakleet Power System Upgrades Project Conceptual Design Report Unalakleet PCE Data with Calcs.xls C-2 CRW Engineering Group, LLC 9/11/2007 APPENDIX E AEA WIND MODELING REPORTS Alaska Energy Authority Page 1 of 7 Unalakleet UNALAKLEET HOMER MODELING RESULTS Date last modified: 10/01/2007 Compiled by: James Jensen, Alaska Energy Authority Purpose This report provides a preliminary economic analysis of the potential to install wind turbines in Unalakleet. It is meant to help compare the possible wind-diesel hybrid configurations from an economic standpoint. Methodology The software program HOMER, developed by the National Renewable Energy Laboratory, is used to complete this analysis (www.nrel.gov/homer). The HOMER modeling software compares the hourly output of a wind turbine with the hourly electric load of the community and dispatches the appropriate diesel generator to make up any difference in power needs and operating reserve. A lifecycle cost analysis is performed for each system option based on annual diesel fuel savings, operation and maintenance costs, and the installed cost. Inputs into the model include the local wind resource, the community’s electric load, the community’s thermal load, diesel generator fuel curves, and economic parameters. Assumptions used for each of these inputs are described below, followed by the results of the analysis. Wind Resource A 100-foot tall meteorological tower provided by AEA has been measuring the wind speed, direction, and temperature in Unalakleet since October 28, 2005. This data has been used by Global Energy Concepts to create the year-long hourly wind data file that was used in the HOMER model. GEC filtered the data set for periods of icing, made adjustments based on long-term data from the UNK airport ASOS, and adjusted for the proposed new location based on the Alaska High Resolution Wind Map and wind flow modeling software. Based on the wind shear measured at the meteorological tower (power law exponent of 0.11), HOMER scales the wind resource data to hub heights appropriate for each turbine. A second meteorological tower was installed at the new location in February of 2007. Data from this tower will provide the necessary onsite wind resource monitoring necessary for final design. Electric Load Figure 1 shows the average and peak electrical load according to PCE reports. As shown, the electric load has not increased or decreased significantly in the past ten years. An hourly electric load data set was produced using the Alaska Village Electric Load Calculator (http://www.akenergyauthority.org/programwindreports.html) and the PCE load data. The resulting hourly data set is shown in Figure 2. It is this hourly data set that has been used in the HOMER modeling. The annual average load for the data set is 10,910 kWh/d with an annual peak hourly load of 831kW. Electric load data for one “typical” day from each month was obtained from the powerhouse strip charts. The data set used in the HOMER modeling was shown to be quite representative when compared to the strip chart data. Electric load monitoring devices may be installed to determine the load for the final design process. Alaska Energy Authority Page 2 of 7 Unalakleet 0 100 200 300 400 500 600 700 800 900 Jul-94Jan-95Jul-95Jan-96Jul-96Jan-97Jul-97Jan-98Jul-98Jan-99Jul-99Jan-00Jul-00Jan-01Jul-01Jan-02Jul-02Jan-03Jul-03Jan-04Power (kW)Ave kW Peak kW Figure 1. Monthly Electric Load in Unalakleet, PCE reports 0 100 200 300 400 500 600 700 800 Jan Feb Mar Apr May Jun July Aug Sept Oct Nov DecAverage Load (kW)Figure 2. Hourly Electric Load in Unalakleet, estimated Thermal Load There currently is a waste heat system operating in Unalakleet however little is known about how much heat the system is providing to the community buildings. The thermal load data used in the HOMER model is a scaled up version of estimated heat load data developed for the King Cove School. This data set was used because it has diurnal and monthly variation. The average heat load for the current waste heat system in Unalakleet was estimated to be 200kW with a peak load of 375kW. Every day of each month is identical and the daily range for each month can be seen in Figure 3 below. Alaska Energy Authority Page 3 of 7 Unalakleet Figure 3. Monthly Thermal Load in Unalakleet, estimated Diesel Gensets The diesel gensets have been tentatively selected as three Caterpillar C-18s (550kW) and one Caterpillar C- 9 (250kW). HOMER can only model 3 generators so two C-18s and one C-9 was used in the model. This should have no effect on the modeling results since the load is small enough that all three C-18s would never run at the same time. The fuel curve for the C-18s was estimated by Alaska Energy and Engineering since the new Tier-2 fuel curve had not yet been released. It is assumed that the minimum load placed on these diesels is 30% of rated capacity. It is also assumed that 35% of the waste heat can be recovered for space heating. Wind Turbines Several different turbines were modeled in HOMER. An attempt was made to model turbines of all possible sizes. The turbines are listed in Table 1 along with estimated costs associated with their procurement, installation and operation and maintenance (O&M). The Entegrity eW15, Distributed Energy Systems NW 100, and Vestas V27 all have operational experience in Alaska. However the NW100 has gone through a recent redesign giving it an unverified power curve. The Fuhrlander FL 250 and FL 600 were picked because we have recent pricing information and both have cold weather packages. It is unknown if any manufactures of large (1MW+) turbines will sell one of their turbines for instillation in Unalakleet. That being said the AAER 1500 was selected as a generic large turbine. There are other turbine options and the turbine selected at final design may or may not be one of the turbines used in this report. Table 1. Wind Turbine Information and Cost eW15 NW 100 V27 FL250 FL600 AAER 1500 Rated Output (kW)65 100 225 250 600 1500 Hub Height 25m 32m 42m 42m 50m 59m Assumed Lifespan (yr)25 25 15 25 25 25 Turbine(tower, insert and blades)$120,000 $265,000 $400,000 $525,000 $1,200,000 $3,000,000 Shipping $40,000 $100,000 $100,000 $130,000 $300,000 $500,000 Foundation $20,000 $75,000 $100,000 $100,000 $150,000 $400,000 Installation Labor $20,000 $30,000 $35,000 $35,000 $50,000 $75,000 Crane $50,000 $75,000 $100,000 $100,000 $200,000 $400,000 Total Installed Cost $250,000 $545,000 $735,000 $890,000 $1,900,000 $4,375,000 Alaska Energy Authority Page 4 of 7 Unalakleet Operation & Maintenance ($/yr)$15,000 $12,500 $25,000 $25,000 $40,000 $70,000 Replacement Cost (if necessary)$170,000 $349,000 $475,000 $591,250 $1,325,000 $3,025,000 The costs listed in Table 1 are all estimates based on vendor quotes, reported costs of past projects, and estimated costs of other proposed projects. The O&M costs are rough estimates and assume UVEC will have at least 10 hours a week that current staff can dedicate towards regularly occurring fixed O&M tasks. Most of the annual O&M costs are actually the annualized costs of unscheduled major repairs that are often necessary over the life of a turbine. Each of these events will likely require the manufacturer’s technicians to come in with expensive replacement parts and a crane to complete the repair. In the HOMER modeling, conservative lifespans were chosen for the turbines. While the design life for most of the turbines is 30 years; 25 years was used in the modeling since the turbines will be in a harsh climate. The one exception is the V27 which was only given a 15 year lifespan since it is a remanufactured turbine. Batteries/Converter Batteries and a converter are only used in the high penetration scenario where their primary role is to provide operating reserve, not to provide large amounts of excess wind energy storage. In this role, 125 4kWh batteries and an 800kW converter will support an 800kW load for approximately 2.5 minutes. Since 2.5 minutes should give a diesel generator enough time to come online; this amount of battery storage will allow the diesels to be turned off during periods when wind penetration is over 100%. The battery selected is the 2V, 4.00kWh, Hoppecke 16 OPzS 2000. It is a vented lead-acid battery with an estimated cost of $2,000 per battery including delivery and disposal. Battery maintenance is assumed to be $10/battery. The assumed cost/replacement cost of the converter is $60,000 for every 100kW. There is no O&M cost and the lifetime is expected to be 15 years. HOMER automatically includes these costs depending on the number of batteries and size of the converter modeled. Economic Parameters The rough estimate for the installed cost of the diesel power house is about $3,000,000. The annual real interest rate is assumed to be 3%. For this analysis the project life is 25 years. The delivered cost of diesel fuel for all cases is assumed to be $0.72/liter or $2.73/gal. This is the price UVEC paid for their most recent bulk diesel fuel purchase. HOMER uses a fixed price of diesel for the project life. HOMER also assumes 100% availability of the turbines and no system loses. After narrowing down the proposed configurations a sensitivity analysis on the price of diesel can be performed using HOMER and Excel spreadsheets (Global Energy Concepts has developed a spreadsheet allowing fuel prices to change throughout the project life; the spreadsheet can also account for turbine availability of less than 100% and other loses within the system). The estimate diesel O&M cost (excluding fuel) for the C-18s is $4.50 per hour of operation and $1.50 per hour for the C-9. The lifespan for each diesel is assumed to be 60,000 hours with replacement costs for the C-18s and C-9 at $200,000 and $150,000 respectively. The hourly O&M estimates and diesel lifespan are derived from estimates for similar diesel engines provided by Brian Grey and Steve Stassel of Alaska Energy and Engineering. In this effort low, medium, and high penetration wind-diesel hybrid systems were modeled. For each level of penetration different Balance of System (BOS) costs were assumed. All options modeled included an estimated $300,000 to run power lines up to the wind site. At higher levels of penetration more sophisticated power conditioning equipment and controls were considered necessary to maintain power quality. Additionally, during periods of strong winds, higher penetration systems have more excess energy to send to the dump load, to match this increase in excess energy the dump load must be scaled up. The dump load is assumed by HOMER to be an electric boiler that will supply heat to help satisfy the community’s thermal load. The table below breaks down the assumed BOS costs for each penetration level. Alaska Energy Authority Page 5 of 7 Unalakleet Table 2. Balance of System Costs Level of Penetration Low Medium High Line Extension $300,000 $300,000 $300,000 Design & Engineering $75,000 $100,000 $150,000 Controls $5,000 $30,000 $100,000 Dump Load $0 $20,000 $100,000 Total Balance of System Cost $380,000 $450,000 $650,000 Results A diesel only system was modeled for the purpose of comparison. In the scenarios that follow, the wind- diesel hybrid options are ranked in order of lowest Net Present Cost (NPC). Diesel Only The system below is a model of the powerhouse without wind and serves as a base case by which all of the wind-diesel hybrid systems must be compared. The column labeled “School’s Diesel” is a measure of thermal load that was not met by waste heat from the gensets. HOMER automatically models a diesel boiler that fills the unmet thermal demand. In instances where there is excess wind energy HOMER will use excess wind energy to meet the unmet thermal load. Low Penetration The low penetration case of HOMER has no energy storage. The column labeled “Initial Capital” includes the $3,000,000 for the powerhouse plus additional costs for the specific turbine as well as $380,000 for the balance of system costs listed in Table 2. The optimal low penetration system has one NW 100 wind turbine. The Total Net Present Cost (Total NPC) for this system is $18,694,970; this exceeds the $18,367,714 Total NPC of the diesel only system. This indicates that the diesel fuel savings from these turbines is not enough to overcome the additional costs associated with installing and maintaining the wind turbine. Diesel prices must continue to rise before a low penetration system will be cost effective. Medium Penetration Moving up to medium penetration allows the use of more or larger turbines. But there are also increases in BOS costs. At medium penetration a dump load is included to provide heat during periods when excess electricity is being produced. There are increases in design and engineering costs and more costly controls such as a secondary load controller. The optimum medium penetration system has one FL250 wind turbine. This system results in an annual reduction of diesel fuel usage by nearly 40,000 gallons. The optimum medium penetration system also Alaska Energy Authority Page 6 of 7 Unalakleet results in a somewhat lower Total NPC than the diesel only system. This implies that a medium penetration wind-diesel hybrid system with one turbine of approximately 250kW makes economic sense under the assumptions used in this report. High Penetration The high penetration scenario opens up the possibility of using turbines larger than any installed in Alaska to date. To make efficient use of the large amounts of excess electricity produced by high penetration systems battery storage was included in the high penetration HOMER runs. The batteries will also provide operating reserve to prevent outages and maintain power quality. This will allow diesel generators to be turned off when the wind is blowing hard enough for the wind turbines to cover the load. The batteries and inverter were sized to provide 800kW of power for about 2.5 minutes. An important difference in this run is that HOMER was allowed to drop the operating reserve covering the wind all the way to zero (HOMER still maintains an operating reserve of 10% over the hourly electric load). Dropping the operating reserve covering the wind to zero was permitted because it is assumed that the batteries will be able to temporarily cover any sudden drop in wind power until a generator can be brought online. HOMER does consider battery storage as operating reserve but the one-hour time steps require the batteries to cover load for an entire hour rather than a couple of minutes. The high penetration system will also include a dump load and likely a synchronous condenser to maintain system stability and power quality. The high penetration case gives a significant drop in Total NPC when compared to all other cases. The Total NPC for the optimum high penetration case is over $1,372,000 lower than the Total NPC for the diesel only case. However the high penetration case has the most uncertainty in modeling accuracy, reliability, and cost estimation. Of the possible turbine configurations for the high penetration scenario the FL600 turbine appears to be the turbine of choice based on the various estimated costs. While one FL600 provides the lowest Total NPC, two FL600s is a very close second and well within the uncertainty of this modeling effort. The use of two FL600s beats out the AAER 1500 due to substantially lower crane and foundation costs on a per kW basis. There are many different potential configurations for a high penetration wind diesel-hybrid system. Other options could include low load diesels and/or flywheels. In the modeling for this report, flywheels were considered for energy storage in place of the batteries. But, with an uninstalled cost of $500,000 for 5kWh of storage, they failed to be cost effective. Flywheels would be best used for helping to maintain power quality. But specific system design is beyond the scope of this report and HOMER is not a useful tool in modeling the technical feasibility of a system. Alaska Energy Authority Page 7 of 7 Unalakleet Conclusions Based on the assumptions made in this report medium and high penetration wind-diesel hybrid systems result in a lower total net present cost when compared against straight diesel generated power. The high penetration case provides significant savings over the medium penetration case. However, the increase in savings comes with increases in uncertainty and risk. Diesel fuel prices over the life of the project will have a strong influence on whether any wind-diesel system is economic. It is important to do sensitivity on this variable. A second report looks in greater detail at the economics of the high penetration scenario with one FL600. This will take into account the uncertainty in future diesel prices as well as system loses not considered in the HOMER modeling. Alaska Energy Authority Page 1 of 4 Unalakleet DIESEL PRICE SCENARIOS FOR UNALAKLEET WIND-DIESEL HYBRID SYSTEM Date last modified: 6/10/2007 Compiled by: James Jensen, Alaska Energy Authority Purpose This report is intended to supplement the report titled,HOMER MODELING RESULTS, UNALAKLEET ALASKA. That report describes how HOMER was used to analyze potential wind-diesel hybrid systems in Unalakleet to come up with the optimum wind-diesel hybrid configuration. In this report the goal is to take a closer look at the “winning” wind-diesel hybrid system from the first report. The winning system was a high penetration wind-diesel system with one 600kW Fuhrlander turbine and a small amount of battery storage. The analysis in this report will include considerations such as electrical load growth, wind-diesel hybrid system losses, and diesel price variability. All of these considerations could not be included in the initial HOMER analysis. Methodology This analysis uses two primary tools, HOMER and Microsoft Excel. Output from the HOMER model is inserted into an Excel spreadsheet developed by Global Energy Concepts. The spreadsheet allows for additional inputs such as estimated system losses and annual changes in diesel price and electric load. The spreadsheet has two outputs for economic comparison; the time required to achieve simple payback for the wind components of the system, and the Total Net Present Cost (Total NPC) for both the diesel only case and the wind-diesel hybrid case. Assumptions All of the assumptions detailed in the first report follow through to this report with the exception of electric load, system losses and diesel prices. The assumptions made for these parameters are described below. Electric Load In the first report, HOMER uses the same electric load for each year over the 25 year project life. In the analysis for this report the electric load used in the first report is scaled up over the first 10 years of the project. This load growth was based on CRW’s estimated Unalakleet electrical load for the year 2016. The annualized rate necessary to achieve this load was calculated and then carried through the first 10 years of the project life. After the first ten years, the electric load is assumed to plateau and remain stable. Figure 1. Unalakleet Electric Load Growth Alaska Energy Authority Page 2 of 4 Unalakleet System Losses HOMER does not consider several potential sources of electricity losses within a wind-diesel hybrid system. The spreadsheet portion of this analysis considers these losses. The specific assumptions are as follows: x 15% for turbine down time x 2% for performance below the power curve x 2% for blade soiling and icing x 1% for transformer/line losses x 1% for losses within the control system As a result of these losses, only 80% of the electricity produced by the wind turbines (in HOMER) will actually be available to meet the community’s demand for electricity. The actual values for these losses are dependent on turbine maintenance, system design, weather specific to the site, and other factors. These assumptions are similar to those of other projects within the State and are considered to be good approximations. Table 2, in the results section, shows how Total NPC is affected if this assumption were either dropped to 60% or raised to 90%. Diesel Price AEA developed six different projections for the diesel price in Unalakleet over the 25 year project life. Three projections were based on Energy Information Administration (EIA) projections for imported crude oil. A correlation was drawn between imported crude oil prices and Unalakleet diesel prices. This was done by comparing EIA’s record of crude prices over the last 12 years to the Power Cost Equalization Program’s record of diesel fuel prices for Unalakleet over that same time period. This correlation along with EIA’s three different price of crude projections was then used to come up with three projections for the price of Diesel in Unalakleet. Three additional price scenarios were developed for comparison purposes. The first scenario is a fixed diesel price of $2.22/gallon. This is the “breakeven price” or the price at which the wind-diesel hybrid system will have the same Total NPC as the diesel only system. Another scenario was a fixed diesel price based on the latest quoted price for diesel delivered to Unalakleet in the spring of 2007. This price was $3.25/gallon when converted to 2006 dollars. The last scenario started with the current price quote and then grows at a 2% annual rate. These projections are depicted in Figure 2 below. Figure 2. Unalakleet Diesel Fuel Price Scenarios Alaska Energy Authority Page 3 of 4 Unalakleet Results The six different diesel price scenarios were applied in the spreadsheet. Figure 3 displays the results. The EIA High Case, Current Price Case, and Current Price with 2% annual growth resulted in the wind-diesel hybrid having a lower Total NPC than the diesel only case. Figure 3. Wind-Diesel Hybrids Effect on Total NPC Under Various Diesel Price Scenarios The six different diesel price secenarios also have an impact on the time necessary to achieve simple payback. In every scenario, but the Low Case scenario, the number of years required for simple payback were less than the 25 year project life. Table 1. Time to Achieve Simple Payback EIA Low Case EIA High Case EIA Base Case Breakeven Current Price Current Price w/ 2% Growth >25 yrs 14 yrs 19 yrs 16 yrs 12 yrs 10 yrs All of the results above are based on the assumption that turbine availability will be 85% and that as the result of other system losses there will be an additional 5% reduction in wind turbine output, resulting in total system losses of 20%. Since there is the potential for these assumptions to vary significantly, two other correction factors were used to determine their effect on Total NPC. Table 2 shows that significant changes from the assumed correction factor of 80% has a relatively minimal effect (<10%) on the Total NPC of the project. The table also show the relatively minor increase in Total NPC associated with using three V27s rather than one FL600. Table 2. Correction Factor’s Effect on the Total NPC of Two Wind-Diesel Hybrid Systems Total Net Present Cost (Millions of 2006$) Correction Factor (One FL600\Three V27s)60%80%90% Diesel Only EIA Low Case $12.3M\$12.6M $11.6M\$12.0M $11.3M\$11.7M $10.6M Eia Base Case $14.1M\$14.5M $13.2M\$13.7M $12.8M\$13.4M $12.8M EIA High Case $17.4M\$18.0M $16.2M\$17.0M $15.7M\$16.5M $16.9M Current Prices $20.1M\$20.7M $18.7M\$19.6M $18.0M\$19.0M $20.3M Current w/2% Growth $23.9M\$24.8M $22.2M\$23.3M $21.3M\$22.6M $25.0M Alaska Energy Authority Page 4 of 4 Unalakleet In addition to the potential economic benefit already evident in the table and charts, there are additional benefits to installing a wind-diesel hybrid system. These include greater stability in the electric rates, possible additional revenue from sale of green tags, and less money leaving the community by way of fuel purchases. While these benefits are harder to quantify they are not necessarily less significant and should be considered as part of the justification for selecting a wind diesel hybrid system over a diesel only system. Beyond the economic benefit there are also environmental benefits from reduced diesel emissions. APPENDIX F WIND FEASIBILITY STUDY 1809 7th Avenue, Suite 900, Seattle, Washington 98101 Phone: (206) 387-4200 Fax: (206) 387-4201 www.globalenergyconcepts.com Feasibility Study for Unalakleet Wind Energy Project Report # CRW.00.001-A June 18, 2007 Prepared for: CRW Engineering Group, LLC 3940 Arctic Blvd., Suite 300 Anchorage, AK 99503 Wind Energy Feasibility Study – Unalakleet, Alaska CRW.00.001-A Global Energy Concepts, LLC i June 18, 2007 Approvals June 18, 2007 Prepared by Mia Devine Date June 18, 2007 Reviewed by Kevin Smith Date Revision Block Revision Release Date Summary of Changes A June 18, 2007 Wind Energy Feasibility Study – Unalakleet, Alaska CRW.00.001-A Global Energy Concepts, LLC ii June 18, 2007 Table of Contents EXECUTIVE SUMMARY .......................................................................................................... 1 BACKGROUND........................................................................................................................... 2 SITE DESCRIPTION................................................................................................................... 3 PROPOSED WIND PROJECT LOCATION.......................................................................................... 3 WIND RESOURCE ......................................................................................................................... 4 PRELIMINARY TURBINE LAYOUT ................................................................................................. 5 WIND-DIESEL TECHNOLOGY............................................................................................... 7 WIND TURBINE OPTIONS ............................................................................................................. 7 WIND TURBINE OPERATION AND MAINTENANCE ........................................................................ 8 COLD WEATHER PACKAGES ........................................................................................................ 9 WIND PENETRATION LEVELS ..................................................................................................... 10 ENERGY ESTIMATES............................................................................................................. 12 GROSS WIND ENERGY OUTPUT ................................................................................................. 12 ENERGY LOSSES ........................................................................................................................ 12 NET WIND ENERGY OUTPUT...................................................................................................... 14 POWER SYSTEM DESIGN AND MODELING.................................................................... 15 ELECTRIC LOAD ......................................................................................................................... 15 DIESEL GENERATORS AND CONTROLS ....................................................................................... 16 HEAT RECOVERY AND ENERGY STORAGE OPTIONS................................................................... 17 LOW-PENETRATION SYSTEM OPTIONS ....................................................................................... 17 MEDIUM-PENETRATION SYSTEM OPTIONS ................................................................................ 20 HIGH-PENETRATION SYSTEM OPTIONS ...................................................................................... 22 CAPITAL, OPERATIONS AND MAINTENANCE, AND LIFE CYCLE COST ESTIMATES............................................................................................................................... 25 WIND TURBINE NET ENERGY ADJUSTMENT .............................................................................. 27 FUEL PRICE ESCALATION SENSITIVITY ...................................................................................... 28 BATTERY LIFE SENSITIVITY ....................................................................................................... 28 OBSERVATIONS .......................................................................................................................... 29 CONCLUSIONS AND RECOMMENDATIONS.................................................................... 30 RECOMMENDED SYSTEM DESIGN .............................................................................................. 30 PERMITTING ...............................................................................................................................31 GEOTECHNICAL INVESTIGATION ................................................................................................ 31 DATA COLLECTION .................................................................................................................... 31 APPENDIX A – MET TOWER DATA ANALYSIS APPENDIX B – WIND TURBINE MANUFACTURER INFORMATION APPENDIX C – WIND-DIESEL BALANCE-OF-SYSTEM TECHNOLOGY Wind Energy Feasibility Study – Unalakleet, Alaska CRW.00.001-A Global Energy Concepts, LLC iii June 18, 2007 List of Figures Figure 1. Location of Unalakleet, Alaska.......................................................................................2 Figure 2. Meteorological Tower and Wind Energy Project Locations........................................... 3 Figure 3. Proposed Location of Wind Turbines in Unalakleet....................................................... 4 Figure 4. Flagging of Vegetation Indicating a Predominant Northeast Wind Direction................ 5 Figure 5. Preliminary Turbine Layout for Proposed Unalakleet Wind Project.............................. 6 Figure 6. Electric Load Data in Unalakleet .................................................................................. 16 Figure 7. Daily Net Electric Load by Month for Low-Penetration Example in Unalakleet (Two Entegrity eW15 Turbines)........................................................................................... 19 Figure 8. Daily Net Electric Load by Month for Medium-Penetration Example in Unalakleet (Two Distributed Energy Systems NW100 Turbines).......................................................... 21 Figure 9. Daily Net Electric Load by Month for High-Penetration Example in Unalakleet (Two Fuhrländer FL250 Turbines)....................................................................................... 23 List of Tables Table 1. Approximate Coordinates of Proposed Wind Turbine Locations .................................... 6 Table 2. Wind Turbine Options...................................................................................................... 7 Table 3. Estimated Gross Wind Energy Output (kWh)................................................................ 12 Table 4. Estimated System Losses................................................................................................ 13 Table 5. Estimated Net Wind Energy Output Per Turbine (kWh)................................................ 14 Table 6. Low-Penetration System Options for Unalakleet........................................................... 18 Table 7. Summary of Wind Penetration Values, Low-Penetration Example............................... 20 Table 8. Medium-Penetration System Options for Unalakleet..................................................... 20 Table 9. Summary of Wind Penetration Values ........................................................................... 22 Table 10. High-Penetration System Options for Unalakleet ........................................................ 22 Table 11. Summary of Wind Penetration Values ......................................................................... 24 Table 12. Estimated Wind Turbine Unit Costs............................................................................. 25 Table 13. Estimated Project Balance-of-System Costs................................................................. 26 Table 14. Summary of GEC’s Life Cycle Cost Analysis Results................................................. 27 Table 15. Fuel Escalation Rate Break Points................................................................................ 28 Wind Energy Feasibility Study – Unalakleet, Alaska CRW.00.001-A Global Energy Concepts, LLC 1 June 18, 2007 Executive Summary The purpose of this report is to provide information about the wind resource and the technology options for a wind-diesel hybrid power system in Unalakleet, Alaska, and to provide recommendations for moving forward with the project. Locally measured wind speed data indicate a Class 5 wind resource in Unalakleet, providing good potential for wind power development. During a site visit, Global Energy Concepts (GEC) identified a potential wind project site that would be suitable for the placement of multiple wind turbines exposed to the prevailing wind direction. In addition to the wind resource, a number of other factors impact the viability of a wind-diesel project, including the cost of diesel fuel displaced, the cost of installing and operating the wind power equipment, and the ability to service the wind equipment after installation. Computer modeling was performed to compare the economic and technical potential of different wind power options in Unalakleet. A medium-penetration wind power project in Unalakleet could displace up to 47,000 gallons of diesel fuel per year (16% of current consumption). The life cycle cost analysis shows that the different wind-diesel hybrid power options range from 97% to 107% of the net present cost of the diesel-only power system option, assuming the price of diesel fuel remains fixed at $2.73 per gallon over the 25-year life of the project. As the cost of diesel fuel increases, the community will realize increased economic benefit of a wind-diesel system. In addition, other non-financial benefits of wind energy, such as reducing carbon emissions, providing a hedge against fluctuating diesel fuel prices, and a reducing the amount of fuel handling, may make a marginally economic wind-diesel system more attractive and worth the investment. The wind turbine models currently available for a remote Alaska installation are very limited. Due to the risks associated with the harsh operating conditions, remote location, and lack of service personnel, few manufacturers are willing to support the Alaska market. Of the wind turbines evaluated in this report, GEC recommends the installation of two to three Distributed Energy Systems (formerly Northern Power Systems) NW100/20 wind turbines. Although this turbine has a high installed cost relative to its power output potential, it was specifically designed for operation in cold climates, high reliability, and high power quality in an isolated electric grid. Improvements in this machine, including a 21-m rotor are expected from Distributed Energy Systems along with possible price reductions, which could improve the expected economic viability of this turbine model. Analysis of these improvements is recommended during the detailed design process since Distributed Energy Systems is currently finalizing price adjustments. Among the next steps, GEC recommends that the Alaska Energy Authority pursue final system design, permitting, geotechnical investigation, and continued data collection. Wind Energy Feasibility Study – Unalakleet, Alaska CRW.00.001-A Global Energy Concepts, LLC 2 June 18, 2007 Background Global Energy Concepts, LLC (GEC) has been retained by CRW Engineering Group, LLC to support feasibility-level analysis for the proposed Unalakleet wind project as part the Alaska Energy Authority’s (AEA) Rural Power System Upgrade program. The community of Unalakleet is located along the western coast of Alaska, as indicated in Figure 1. The power system in Unalakleet consists of a diesel power plant owned and operated by the Matanuska Electric Association through the local Unalakleet Valley Electric Cooperative (UVEC). Support that was provided by GEC is summarized in this report and included a detailed site inspection, validation and analysis of on-site wind resource data, and preliminary wind farm siting and layout. In addition, technical support was provided to AEA in modeling various power system options with the HOMER software tool. Conclusions and recommendations based on the joint modeling efforts of GEC and AEA are provided in this report. Figure 1. Location of Unalakleet, Alaska Unalakleet Wind Energy Feasibility Study – Unalakleet, Alaska CRW.00.001-A Global Energy Concepts, LLC 3 June 18, 2007 Site Description GEC conducted a detailed site evaluation of Unalakleet to identify locations potentially suitable for wind turbine installation. The site evaluation process is dynamic, factoring a number of site- selection criteria including, but not limited to, exposure to the prevailing wind resource, terrain features and orientation, compatibility with existing or future land uses, proximity to electrical infrastructure, proximity to property boundaries, environmental and community acceptance factors, aviation and communication factors, and appropriate turbine size and setback requirements. As part of the inspection, discussions were held with power plant staff, AEA project managers, and engineering contractors, in which key concerns and turbine location ideas were discussed and evaluated. Proposed Wind Project Location The proposed wind project site is located on a hill to the north of Unalakleet. This location was selected as the preferred turbine location because year-round road access is maintained in the immediate vicinity, distance required for new electrical power transmission lines was shorter than required to reach the met tower area, and a VOR flight navigation unit is located adjacent to the met tower location, which would likely prevent turbine installation. The majority of the land that will be affected by the wind turbines and transmission line is owned by the local native corporation. A topographic map of the proposed wind project location is shown in Figure 2. An image of the site is shown in Figure 3. Figure 2. Meteorological Tower and Wind Energy Project Locations Wind Energy Feasibility Study – Unalakleet, Alaska CRW.00.001-A Global Energy Concepts, LLC 4 June 18, 2007 Figure 3. Proposed Location of Wind Turbines in Unalakleet Wind Resource In October 2005 AEA installed a 30-m meteorological (met) tower on a hill east of Unalakleet to measure the local wind resource. The approximate location of the met tower is shown in Figure 2. GEC checked the data for erroneous measurements and adjusted the data set for long- term trends, local air density, turbine hub height, and the revised wind project location. A detailed assessment of the met tower data is included in Appendix A. The resulting data set represents the long-term wind resource at the wind project location and was provided to AEA for use in system modeling. GEC estimates that the proposed wind project site has a Class 5 wind resource resulting in an annual average wind speed of 6.5 m/s at a height of 30 m above ground level. For comparison, the Kotzebue wind site has a Class 4 wind resource and the Toksook Bay wind site has a Class 5 wind resource. The wind resource in Unalakleet varies seasonally, with higher winds in the winter months than the summer months. During the summer months, the wind resource varies throughout the day, with higher winds in the afternoon and lower winds in the evening and morning hours. Vegetation at the wind project site suggests a primary northeastern wind direction (see Figure 4). During the site visit, GEC determined that the terrain between the existing met tower and the proposed wind project site was different enough to warrant the installation of a second met tower at the wind project site. AEA installed a met tower at the proposed wind project site in January 2007. The data from that second tower will be used to verify the analysis included in this report and further refine the energy production estimates if necessary. Also, the site conditions from the new met tower will be used to determine wind turbine suitability during the final design process. Wind Energy Feasibility Study – Unalakleet, Alaska CRW.00.001-A Global Energy Concepts, LLC 5 June 18, 2007 Figure 4. Flagging of Vegetation Indicating a Predominant Northeast Wind Direction Preliminary Turbine Layout A preliminary layout for up to four wind turbines is presented in Figure 5. Approximate coordinates for each turbine location are listed in Table 1. The layout assumes a primary wind direction from the northeast. Although wind data from the airport weather station indicates a primarily easterly wind direction, vegetation at the proposed project site suggests a northeastern wind at the site (see Figure 4). A turbine spacing of 260 ft is used (equivalent to four rotor diameters for the NW100/20 turbine or 2.7 rotor diameters for the Fuhrländer FL250). This preliminary layout should be refined after the turbine size has been determined and after wind data is collected at the project site. Wind Energy Feasibility Study – Unalakleet, Alaska CRW.00.001-A Global Energy Concepts, LLC 6 June 18, 2007 Figure 5. Preliminary Turbine Layout for Proposed Unalakleet Wind Project Table 1. Approximate Coordinates of Proposed Wind Turbine Locations UTM Zone 4, NAD 83 Wind Turbine Easting Northing #1 413339 7087877 #2 413281 7087932 #3 413229 7087994 #4 413174 7088052 Wind Energy Feasibility Study – Unalakleet, Alaska CRW.00.001-A Global Energy Concepts, LLC 7 June 18, 2007 Wind-Diesel Technology Wind Turbine Options GEC is presenting three turbine suppliers for consideration in Unalakleet: Entegrity Wind Systems (EWS), Fuhrländer, and Distributed Energy Systems (DES). Contact information and a company description for each manufacturer are provided in Appendix B. Each manufacturer provides small-scale, arctic-climate wind turbines and has expressed some degree of interest in serving the Alaska market. There are currently eighteen Entegrity eW15 and six Distributed Energy Systems NW100 wind turbines operating in Alaska. Although there are no Fuhrländer wind turbines in Alaska, at least two are in operation in Canada. Table 2. Wind Turbine Options Manufacturer Model Rating Hub Height (m) Rotor Diameter (m) Features1 Entegrity Wind Systems eW15 66 kW 24.5 15 FP, DW, CS Distributed Energy Systems2 NW100 100 kW 32 20 FP, DD, VS Fuhrländer3 FL250 250 kW 42 29.5 VP, CS Fuhrländer FL600 600 kW 50 50 VP, CS [1] FP = fixed pitch blades, VP = variable pitch blades, DW = down wind, DD = direct drive, VS = variable speed, CS = constant speed [2] Formerly Northern Power Systems [3] The smaller Fuhrländer FL30 and FL100 wind turbines are no longer available for North America. The FL250 is only available in a large quantity order. Turbines with capacities greater than 600 kW were not included because of their limited availability and inappropriate size for this type of application and electrical load. The rotor diameters and generator rated capacities of wind turbines worldwide have continually increased in the past 10 years, driven by technology improvements, refined design tools, and the need to improve energy capture and reduce the cost of energy. The worldwide market trend for wind turbines is toward the installation of multi-megawatt sized wind turbines. However the manufacturing capacity of the major manufacturers over the next few years is currently assigned to existing orders. Remote isolated communities such as Unalakleet represent a niche market that few wind turbine manufacturers have entered. Many manufacturers have now phased out production of the sub-megawatt turbines that are ideal for village applications where the installation of larger machines is restricted by either physical constraints or by a weak grid. Even the lower-tier manufacturers are reluctant to serve a single turbine installation, particularly in Alaska due to the risks associated with the harsh operating conditions, remote location, and lack of service operators. Of the turbines listed in Table 2, the eW15 is the only downwind model. Although the downwind design eliminates the need for active yaw control, the turbine can be less responsive to changes Wind Energy Feasibility Study – Unalakleet, Alaska CRW.00.001-A Global Energy Concepts, LLC 8 June 18, 2007 in wind direction and can create a thumping noise as the blades pass behind the tower. The NW100 is the only direct drive model, which utilizes a variable speed synchronous generator. The synchronous generator and integrated power electronics allow the turbine to export high quality AC power and to supply reactive power to the grid if desired. The Entegrity and Fuhrländer turbines consume reactive power, which must be supplied by the diesel generators or other external equipment. The NW100 and Fuhrländer machines are typically installed on tubular towers while the eW15 is installed on a lattice tower. Custom-designed tilt-up towers could be developed for either tubular or lattice towers; however, this approach is not considered viable due to costs. A number of remanufactured wind turbine models are also available for the Alaska market; however, GEC does not recommend them for installation in Unalakleet at this time. Remanufactured turbines generally have operated in a wind farm for roughly 15 years (typically in California) before being dismantled and remanufactured, which means they are approaching the end of their design life. Although some components are replaced during the remanufacturing process, there is no experience with operating these or any turbines 20 years beyond their design life. Remanufactured turbines have a lower capital cost than new turbines; however, GEC believes additional due diligence and testing should be performed prior to purchase to enable all parties to feel confident that the remanufactured turbines are capable of achieving a 20-year intended operating life in an arctic environment. Performing this type of due diligence on turbine suitability and the remanufacturing process, assuming the vendor is willing to participate, will likely add to the cost of the wind turbines. Finally, the availability of spare parts for these remanufactured turbines is highly uncertain over the next 20 years. Until AEA and UVEC gain more experience with wind turbines, GEC believes that the risks and potentially greater repair and replacement costs associated with remanufactured wind turbines are greater than the potential initial cost savings. Americas Wind Energy (AWE), a Canadian company that recently purchased rights to sell the Lagerwey wind turbine design in North America, may become an additional turbine supplier option in the future. According to a company representative, AWE is currently developing a model for arctic conditions but would not provide the current model for installation in a northern Alaska community. Wind Turbine Operation and Maintenance Modern wind turbines are typically designed for a 20-year lifetime; however, the longevity of a wind turbine system is directly related to the operating environment and frequency and quality of routine maintenance. Typically, manufacturers provide a one- to five-year warranty covering the cost of any material, assembly, or design-related defects. The frequency of scheduled maintenance activities is determined by the manufacturer and may depend on site wind and environmental conditions. Scheduled maintenance typically includes inspection of the general turbine condition, inspection for oil leaks, replacement of oil filters, greasing or replacement of bearings, brake adjustment and pad replacement, inspection of emergency equipment, periodic testing for unusual vibration, inspection of cable terminations, tightening of blade and tower bolts, and replacement of wind sensors and batteries. Blades will occasionally need to be inspected and cosmetic repairs made when required. For direct drive Wind Energy Feasibility Study – Unalakleet, Alaska CRW.00.001-A Global Energy Concepts, LLC 9 June 18, 2007 machines, such as the NW100, all gearbox-related maintenance is eliminated. Industry experience to date with utility-class wind turbines indicates gearbox related repair costs can account for roughly 30% of the total lifetime turbine operating expenses and is the leading repair expense category of all turbine systems. Given the logistical complexities of performing gearbox related repair work in remote Alaska communities, it is expected that the industry’s experience to date will be applicable to the Unalakleet project. Unscheduled maintenance and repairs occur due to component wear and tear, control system faults, component failure, human error, or adverse environmental conditions. The frequency of unscheduled events is dependent on turbine reliability, quality of scheduled maintenance, site and environmental conditions, and the reliability of the turbine’s design. Particular preventative maintenance care should target major components that are subject to wear including blades, generators, and gearboxes. The tubular tower and enclosed nacelle utilized by the NW100 and Fuhrländer turbines protect service personnel from the elements and allow tasks to be performed in harsh weather conditions. The eW15, on the other hand, has an exposed nacelle and is typically installed on a lattice tower, therefore restricting the ability to perform repairs during the winter months. A tilt- down tower and temporary shelter may increase serviceability of these machines. The existing UVEC staff should be qualified to perform most scheduled maintenance activities. Basic competence in electrical and mechanical systems is sufficient to manage day-to-day operation of a small wind project. Specialized training from the turbine manufacturer could be provided during turbine installation and periodic site visits. Distributed Energy Systems and Entegrity offer service contracts and have worked with the power plant operators in Alaska to build up a local skill set necessary to perform basic maintenance and repair procedures. Cold Weather Packages Most utility-scale wind turbines are designed and certified to operate in “normal” climatic conditions, which include temperatures ranging from -15°C to +40°C and wind speeds up to 25 m/s. The turbines will automatically shut down if the ambient conditions exceed this range and will return to operation when conditions return to “normal.” A larger range of air temperatures (-20°C to +50°C) and wind speeds (up to 60 m/s) is usually used for evaluating materials and structural members from a survival (non-operational) perspective. Most manufacturers offer a cold-weather package as an option that typically includes alternative materials, lubricants, modifications to the turbine cooling system, cabinet heaters, and heated anemometers and wind vanes. The modifications usually lower the operating temperature range to -30°C and the non-operating range to -40°C, although some manufacturers claim operation in lower temperatures. Icing conditions impact production, usually because the wind sensors are not functional, preventing critical input information to the turbine controller. Heated wind sensors significantly help to minimize the amount of downtime associated with icing conditions; however the heated sensors consume power. Even if the turbines stay on-line during icing events they may operate at reduced levels due to ice formation on the blades. Heated blades are not offered. Without active heating, ice formation on the blades cannot be prevented; however, some manufacturers employ black blades and specialty coating to facilitate melting and shedding of Wind Energy Feasibility Study – Unalakleet, Alaska CRW.00.001-A Global Energy Concepts, LLC 10 June 18, 2007 ice. The effectiveness of this approach is currently under study. The Fuhrländer and Vestas wind turbines utilize active blade pitch control systems, which are expected to experience additional downtime in cold or icy conditions, causing the wind turbine to shut down. (Also, hub access is required for maintenance and, if conditions are not appropriate, repairs can not be made and the turbine incurs downtime). The NW100/20 has fixed pitched blades, which will still operate in very cold conditions. In icy conditions, the fixed pitched blades can remain operations, although less efficiently than normal since ice buildup reduces the lift characteristics of the blade. Daily average temperatures in Unalakleet typically reach a low of -20ºC (-5ºF) with record lows of -50ºC (-59ºF) during the winter months (www.weather.com). GEC recommends that any wind turbine installed in Unalakleet be equipped with a cold weather package that allows operation at -20ºC to -30ºC and black blades, if available. Wind Penetration Levels When incorporating wind energy into an isolated diesel-powered mini grid, attention must be paid to sizing of the various components to ensure system stability and reliable power. In particular, the higher the percentage of the electric demand that is supplied by wind power, the more complex and sophisticated (and expensive) the balance-of-system components will be. Below is a summary of the different categories of wind penetration levels and the primary benefits and challenges of each. Low-Penetration Systems: In low-penetration systems the wind turbines supply up to approximately 20% of the electric load on an average basis and/or up to 50% on an instantaneous peak basis. The wind turbines supply such a small portion of the electric load that they are treated like a negative load on the diesel power plant. The diesel generators operate as they normally would, following the fluctuations in the net community electric load. All of the power output from the wind turbines serves the primary electric load and simply reduces the net load on the diesels. The control technology required at this level of generation is minimal. Each wind turbine operates under its own control system for starting, yawing into the wind, and shutting down in high winds or fault situations. Each diesel genset also contains controls for automatic starting, synchronization, and load following. A master system controller then coordinates diesel dispatch and load sharing depending on the difference between the electric load and the wind system output. Many modern diesel power plants, such as that currently being designed for Unalakleet, are equipped with automated master controls and little to no modifications would be required for the integration of wind turbines at low penetration levels. Medium-Penetration Systems: In medium-penetration systems the wind turbines supply approximately 20% to 50% of the community electric load on an average basis and/or up to 100% of the load on an instantaneous peak basis. In these systems the wind turbines have a greater impact on the diesel power system. At least one diesel generator will remain in operation at all times; however, there may be times when the wind system output causes the loading on the diesel generator to drop below minimum recommended levels. In addition, with a large portion of energy being produced by a fluctuating source, the ability of the diesel units to regulate system voltage and frequency and maintain an adequate power balance is impacted. A number of balance-of-system technology options are available to support medium-penetration systems including low-load diesels, dispatchable load banks, capacitor banks, flywheels, and batteries. Wind Energy Feasibility Study – Unalakleet, Alaska CRW.00.001-A Global Energy Concepts, LLC 11 June 18, 2007 High-Penetration Systems: In high-penetration systems, the wind turbines supply over 50% of the community electric load on an average basis and/or over 100% of the load on an instantaneous peak basis. The principal theoretical advantage of these systems is that the diesel gensets may be shut down during periods of high wind output, leading to significant fuel savings and reduced maintenance on the diesel generators. To ensure power quality and system reliability when the diesels are not in operation, extra equipment such as synchronous condensers, load banks, power converters, advanced system controls, and energy storage in the form of batteries or flywheel systems are used. A supervisory controller is needed to manage power flows between these various components. A more detailed discussion of balance-of-system equipment designed to support the different wind-diesel penetration levels is included in Appendix B. Low- and medium-penetration wind- diesel systems offer the lowest risk and GEC recommends that AEA and UVEC pursue this option. A low- or medium-penetration system will allow for an immediate reduction in fuel consumption while providing an opportunity for UVEC and the community to gain first hand operating experience. The system could be designed and have the capacity for expansion to high- penetration in the future. Wind Energy Feasibility Study – Unalakleet, Alaska CRW.00.001-A Global Energy Concepts, LLC 12 June 18, 2007 Energy Estimates Gross Wind Energy Output GEC estimated the average air density for the site to be 1.280 kg/m3 based on historical temperature data (an average of approximately -2ºC) and the average site elevation (125 m) plus the turbine hub height of 30 m. No on-site air pressure measurements were available to determine the air density more accurately. The power output for each wind turbine was adjusted based on the ratio between the standard air density of 1.225 kg/m3 and the average monthly site air density. The resulting gross energy output for each turbine model based on the site wind resource described earlier is summarized in Table 3. The gross capacity factor (percent of estimated wind energy production out of the maximum possible energy production) is also listed in Table 3. Table 3. Estimated Gross Wind Energy Output (kWh) eW15 NW100/20 FL250 FL600 January 26,900 41,500 118,400 266,700 February 21,000 32,500 91,300 212,400 March 18,000 27,700 78,900 182,800 April 6,200 9,700 31,100 65,600 May 5,100 8,200 27,800 54,900 June 2,900 4,900 17,500 33,300 July 5,800 9,100 29,600 61,500 August 3,600 5,900 21,100 40,400 September 5,800 9,400 31,000 63,400 October 8,700 13,700 42,200 91,400 November 16,400 25,500 73,500 166,500 December 22,000 34,100 96,300 222,600 Annual 142,400 222,200 658,700 1,461,500 Gross Capacity Factor 25% 25% 30% 28% Note: Includes adjustment for average annual site air density of 1.280 kg/m3 Energy Losses The gross wind turbine output will be reduced by a number of factors. The system losses estimated for the Unalakleet wind project are summarized in Table 4 and described below. GEC evaluated each potential area of energy loss in the Unalakleet wind power system and estimated a correction factor to be applied to the projected diesel-fuel savings calculated by AEA’s HOMER model, which assumed 100% turbine availability and zero system losses. Wind Energy Feasibility Study – Unalakleet, Alaska CRW.00.001-A Global Energy Concepts, LLC 13 June 18, 2007 Table 4. Estimated System Losses Description Northwind Loss Correction Factors Fuhrländer and Entegrity Loss Correction Factors Turbine Availability 94% 89% Transformer/ Line Losses 98% Control System 99% Blade Soiling 98% Power Curve 98% Wake 99% Total Correction Factor 87% 82% Turbine availability is estimated to be the primary cause of energy losses for the wind system. Availability is the percent of time during the year that the wind turbines are online and available to produce power. Factors affecting turbine availability include overall system complexity, downtime due to routine maintenance, faults, minor or major component failures, and balance- of-plant downtime (substation transformer failures, electrical collection system or communication system problems, or transmission outages). Some unscheduled downtime will be incurred associated with failures of smaller components such as motors, relays, valves, power electronics, sensors, controllers, and bushings; and other small malfunctions normally experienced by modern wind turbines. Unscheduled downtime will also be associated with major systems in the turbines, such as generator replacements, blade replacements, yaw system failures, or similar problems. While a “typical” year may have relatively limited downtime associated with component failures, the infrequent events of long duration can result in significant lost energy. As the equipment ages, failure of minor components with design lives less than 20 years is expected to increase; however, the increasing failure rate will be offset somewhat by increased efficiency as experience is gained in replacing these components. Separate turbine availability estimates are presented to account for differences in turbine complexity between the NW100 and other turbine models. Lack of a gearbox and blade pitch system combined with purpose-built considerations for the arctic climate within the NW100 turbine is expected to result in higher mechanical availability than the other models under consideration. Therefore, GEC estimated a long-term turbine availability for the NW100 of 94%, which corresponds to an average of 525 turbine-hours per year of project downtime while the turbine availability for the other models of 89% corresponds to an average downtime of 960 turbine-hours per year. Transformer or electrical line losses represent the difference between energy measured at each wind turbine and energy that enters the electric grid. GEC estimates these losses to be 2%. Control system losses include potential reduction in turbine performance due to variable winds creating significant off-yaw operations or high-wind hysteresis. GEC estimates control system losses to be 1%. Surface degradation or build-up of dust, ice, or insects on the blades may cause a reduction in turbine performance. The accumulation of dust and insects is expected to be minimal in Unalakleet; however, GEC estimates an average 2% energy loss per year due to blade icing. Wind Energy Feasibility Study – Unalakleet, Alaska CRW.00.001-A Global Energy Concepts, LLC 14 June 18, 2007 There is a probability that the turbines will perform at a level different from the reference power curve due to conditions such as high turbulence. GEC estimates a 2% energy loss due to power curve losses. An additional source of energy losses if more than one turbine is installed is the wake effects from turbine to turbine. The wind turbine layout in Unalakleet is based on a primary wind direction of northeast; however, the wind rose from the airport weather station shows that power- producing winds occasionally come from the southeast. During those times, some of the wind turbines will be located downwind, or in the wake, of other turbines, leading to energy losses for those wind turbines. Since southwest winds are expected to be rare, GEC estimates a modest 1% energy loss due to wake effects. Since each loss category is independent of the other categories, total losses are calculated by multiplying each system loss correction factor to result in total correction factors of 87% and 82% (as shown in Table 4). Net Wind Energy Output The net wind turbine energy output based on the long-term site wind resource and accounting for estimated system losses described previously is shown in Table 5. The net wind energy output is the amount of electricity available to meet the community demand. Table 5. Estimated Net Wind Energy Output Per Turbine (kWh) eW15 NW100/20 FL250 FL600 January 22,058 36,105 97,088 218,694 February 17,220 28,275 74,866 174,168 March 14,760 24,099 64,698 149,896 April 5,084 8,439 25,502 53,792 May 4,182 7,134 22,796 45,018 June 2,378 4,263 14,350 27,306 July 4,756 7,917 24,272 50,430 August 2,952 5,133 17,302 33,128 September 4,756 8,178 25,420 51,988 October 7,134 11,919 34,604 74,948 November 13,448 22,185 60,270 136,530 December 18,040 29,667 78,966 182,532 Annual 116,768 193,314 540,134 1,198,430 Net Capacity Factor 20% 22% 25% 23% Wind Energy Feasibility Study – Unalakleet, Alaska CRW.00.001-A Global Energy Concepts, LLC 15 June 18, 2007 Power System Design and Modeling GEC assisted AEA in modeling different power system configurations including different numbers and types of wind turbines, diesel generators, and energy storage options. AEA used the HOMER software program developed by the National Renewable Energy Laboratory and an economic spreadsheet model developed by GEC. The assumptions and results are described in detail in the report HOMER Modeling Results: Unalakleet, Alaska dated May 2007. The purpose of this section is not to repeat information provided in the AEA report but to highlight some of the results of the modeling and to comment on their implications on the design process for Unalakleet. Electric Load High-resolution electric load measurements have not been recorded at the Unalakleet powerhouse. For modeling purposes AEA synthesized an hourly electric load data set based on monthly averages and an assumed daily profile. Assumptions were based upon electric load data obtained from other remote Alaskan communities. AEA also obtained instantaneous readings from the Unalakleet powerhouse strip charts for a representative day in each month. GEC compared the synthesized data set with the measured data, and results are shown in Figure 6. As shown, the AEA estimate is a sufficiently close approximation to actual measurements. Wind Energy Feasibility Study – Unalakleet, Alaska CRW.00.001-A Global Energy Concepts, LLC 16 June 18, 2007 January 0 100 200 300 400 500 600 700 800 0 5 10 15 20 25 Time of Day (hour)Electric Load (kW)February 0 100 200 300 400 500 600 700 800 0 5 10 15 20 25 Time of DayElectric Load (kW)March 0 100 200 300 400 500 600 700 800 0 5 10 15 20 25 Time of DayElectric Load (kW)April 0 100 200 300 400 500 600 700 800 0 5 10 15 20 25 Time of DayElectric Load (kW)May 0 100 200 300 400 500 600 700 800 0 5 10 15 20 25 Time of DayElectric Load (kW)June 0 100 200 300 400 500 600 700 800 0 5 10 15 20 25 Time of DayElectric Load (kW)July 0 100 200 300 400 500 600 700 800 0 5 10 15 20 25 Time of DayElectric Load (kW)August 0 100 200 300 400 500 600 700 800 0 5 10 15 20 25 Time of DayElectric Load (kW)September 0 100 200 300 400 500 600 700 800 0 5 10 15 20 25 Time of DayElectric Load (kW)October 0 100 200 300 400 500 600 700 800 0 5 10 15 20 25 Time of DayElectric Load (kW)November 0 100 200 300 400 500 600 700 800 0 5 10 15 20 25 Time of DayElectric Load (kW)December 0 100 200 300 400 500 600 700 800 0 5 10 15 20 25 Time of Day (Hour)Electric Load (kW)Powerhouse Strip Chart Measurement AEA Estimate Figure 6. Electric Load Data in Unalakleet The average electric load in Unalakleet is 450 kW with a peak of 830 kW. Annual diesel fuel consumption is about 295,000 gallons. Diesel Generators and Controls According to AEA personnel, at least one diesel generator will remain online at all times to provide adequate spinning reserve if the wind power output were to suddenly decrease or drop off line at any given time. This conservative operational approach would allow the UVEC power plant operator to gain experience with wind turbines and their intermittent power output while ensuring high power quality and system reliability for their customers. However, this approach limits the potential diesel fuel savings of the system since the diesel that is online must remain Wind Energy Feasibility Study – Unalakleet, Alaska CRW.00.001-A Global Energy Concepts, LLC 17 June 18, 2007 minimally loaded. The diesel generators currently specified for the Unalakleet power plant include three 550 kW units and one 250 kW unit. The minimum recommended load of the smallest generator is 75 kW. The principal advantage of high-penetration systems is that the diesel gensets may be shut down during periods of high wind output, leading to significant fuel savings and reduced maintenance on the diesel generators. However, if the power plant operator is not comfortable allowing the diesel generators to turn off, the full benefit of a high-penetration system will not be realized. Heat Recovery and Energy Storage Options The variations in the wind resource often do not match variations in the electric load. In medium- and high-penetration systems, the wind turbines will generate more power than needed at times and will generate less power than needed at other times. In order to maximize use of the renewable resource, electric resistive heaters or energy storage devices may be beneficial, but at an added system cost. In northern climates, it is common to install an electric boiler consisting of fast-acting electric resistive heaters to absorb excess wind electricity. The thermal energy that is generated can be used for space heating for a school or community building, pre-heating water in a water treatment plant, or keeping fuel oil and the powerhouse warm. The heat generated by the excess wind electricity can be incorporated into the existing diesel generator heat recovery loop, which supplements the heat system of the school, community buildings, and water treatment plant. Typically, energy storage systems only prove economically beneficial in high-penetration systems where the storage device can reduce the operating hours and number of starts of the diesel generators. In these systems, the diesel generators can be shut down when the wind turbines supply more power than is needed by the load (usually above 125%). During lulls in the wind power generation, the energy storage device supplies any needed power. If the lulls are prolonged and the storage becomes discharged, a diesel generator is started and takes over supplying the load. A study by the National Renewable Energy Laboratory indicated that the optimal amount of storage in a high-penetration wind-diesel system is one that is rated to cover peaks in the net load for up to 18 minutes. Beyond that, the rate of increased energy savings diminishes relative to the increased cost of the energy storage equipment. The primary energy storage devices commercially available include flywheels and batteries. This equipment is discussed in more detail in Appendix C. Low-Penetration System Options Table 6 summarizes the number and type of wind turbine options that would make up a low- penetration system in Unalakleet. Wind Energy Feasibility Study – Unalakleet, Alaska CRW.00.001-A Global Energy Concepts, LLC 18 June 18, 2007 Table 6. Low-Penetration System Options for Unalakleet Wind Turbine Type Number of Turbines Potential Energy Production1 (kWh/year) Diesel Fuel Savings1 (gallons/year) Average Annual Penetration Maximum Hourly Penetration2 eW15 1 116,800 8,000 3% 23% eW15 2 233,500 16,200 7% 46% NW100 1 193,300 15,200 5% 35% [1] Includes estimated system energy losses. [2] Calculated by dividing the hourly average wind power output by the average electric load during that hour To illustrate the impact of a low-penetration system on the electric demand of the power plant, the installation of two Entegrity eW15 wind turbines is used as an example. Figure 7 shows the resulting net electric load that would need to be met by the diesel generators. The net electric load is defined as the difference between the total community electric demand and the power output from the wind project. The net load is the amount of electricity that must be provided by the diesel generators or other source of energy. As shown, the net load drops as low as 100 kW during the summer morning hours. During these times the smallest diesel generator in Unalakleet would be able to meet the net load and still operate above its minimum loading criteria. Wind Energy Feasibility Study – Unalakleet, Alaska CRW.00.001-A Global Energy Concepts, LLC 19 June 18, 2007 February 0 100 200 300 400 500 600 700 800 0 2 4 6 8 10 12 14 16 18 20 22 Hour of DayPower (kW)January 0 100 200 300 400 500 600 700 800 0 2 4 6 8 10 12 14 16 18 20 22 Hour of DayPower (kW)March 0 100 200 300 400 500 600 700 800 0246810121416182022 Hour of DayPower (kW)April 0 100 200 300 400 500 600 700 800 0246810121416182022 Hour of DayPower (kW)May 0 100 200 300 400 500 600 700 800 0246810121416182022 Hour of DayPower (kW)June 0 100 200 300 400 500 600 700 800 0 2 4 6 8 10 12 14 16 18 20 22 Hour of DayPower (kW)July 0 100 200 300 400 500 600 700 800 0 2 4 6 8 10 12 14 16 18 20 22 Hour of DayPower (kW)August 0 100 200 300 400 500 600 700 800 0 2 4 6 8 10 12 14 16 18 20 22 Hour of DayPower (kW)September 0 100 200 300 400 500 600 700 800 0 2 4 6 8 10121416182022 Hour of DayPower (kW)October 0 100 200 300 400 500 600 700 800 0246810121416182022 Hour of DayPower (kW)November 0 100 200 300 400 500 600 700 800 0246810121416182022 Hour of DayPower (kW)December 0 100 200 300 400 500 600 700 800 0246810121416182022 Hour of DayPower (kW)Max Net Load Ave Net Load Min Net Load Minimum Diesel Loading Figure 7. Daily Net Electric Load by Month for Low-Penetration Example in Unalakleet (Two Entegrity eW15 Turbines) A summary of other observed penetration values is presented in Table 7. As shown, in this low- penetration example the wind turbines provide a small percentage of the community electric load, never exceeding 46% penetration on an hourly basis. The highest penetration levels occur in the morning hours between 5 a.m. and 10 a.m. when the electric load is low. These low penetration levels should not cause significant grid stability or diesel control issues. Wind Energy Feasibility Study – Unalakleet, Alaska CRW.00.001-A Global Energy Concepts, LLC 20 June 18, 2007 Table 7. Summary of Wind Penetration Values, Low-Penetration Example Parameter Overall Early Morning (12 a.m. – 8 a.m.) Day (8 a.m. – 5 p.m.) Evening (5 p.m. – 12 a.m.) Maximum penetration 46% 46% 44% 30% Average penetration 7% 9% 6% 6% Time with less than 10% penetration 72% 67% 74% 76% Time with less than 20% penetration 89% 81% 92% 93% Time with less than 50% penetration 100% 100% 100% 100% Medium-Penetration System Options Table 8 summarizes the number and type of wind turbine options that would make up a medium- penetration system in Unalakleet. Although the system option consisting of three NW100 turbines could be considered high-penetration it is classified as medium-penetration in this case since the system would rarely reach high-penetration levels. During those times wind power output could be curtailed to maintain medium-penetration levels. To account for energy losses due to wind power curtailment, the availability for this system option is reduced from 94% to 89%. Table 8. Medium-Penetration System Options for Unalakleet Wind Turbine Type Number of Turbines Potential Energy Production1 (kWh/year) Diesel Fuel Savings1 (gallons/year) Average Annual Penetration Maximum Hourly Penetration eW15 3 350,300 24,300 10% 69% eW15 4 467,000 32,000 13% 92% NW100 2 386,600 30,300 10% 69% NW100 3 579,900 47,400 15% 104% FL250 1 540,100 36,500 14% 95% [1] Includes estimated system energy losses. To illustrate the impact of a medium-penetration system on the electric demand of the power plant, the installation of two Distributed Energy Systems NW100 wind turbines is used as an example. Figure 8 shows the resulting net electric load that would need to be met by the diesel generators. The net electric load is defined as the difference between the total community electric demand and the power output from the wind project. The net load is the amount of electricity that must be provided by the diesel generators or other source of energy. As shown, the net load rarely drops below the minimum loading criteria of the 250 kW diesel generator. The highest penetration levels occur in the morning between 3 a.m. and 8 a.m. when the electric load is low. Wind Energy Feasibility Study – Unalakleet, Alaska CRW.00.001-A Global Energy Concepts, LLC 21 June 18, 2007 February 0 100 200 300 400 500 600 700 800 0 2 4 6 8 10 12 14 16 18 20 22 Hour of DayPower (kW)January 0 100 200 300 400 500 600 700 800 0 2 4 6 8 10 12 14 16 18 20 22 Hour of DayPower (kW)March 0 100 200 300 400 500 600 700 800 0 2 4 6 8 10 12 14 16 18 20 22 Hour of DayPower (kW)April 0 100 200 300 400 500 600 700 800 0 2 4 6 8 10 12 14 16 18 20 22 Hour of DayPower (kW)May 0 100 200 300 400 500 600 700 800 0 2 4 6 8 10121416182022 Hour of DayPower (kW)June 0 100 200 300 400 500 600 700 800 0 2 4 6 8 10 12 14 16 18 20 22 Hour of DayPower (kW)July 0 100 200 300 400 500 600 700 800 0 2 4 6 8 10 12 14 16 18 20 22 Hour of DayPower (kW)August 0 100 200 300 400 500 600 700 800 0 2 4 6 8 10 12 14 16 18 20 22 Hour of DayPower (kW)September 0 100 200 300 400 500 600 700 800 0 2 4 6 8 10121416182022 Hour of DayPower (kW)October 0 100 200 300 400 500 600 700 800 0 2 4 6 8 10 12 14 16 18 20 22 Hour of DayPower (kW)November 0 100 200 300 400 500 600 700 800 0 2 4 6 8 10 12 14 16 18 20 22 Hour of DayPower (kW)December 0 100 200 300 400 500 600 700 800 0 2 4 6 8 10 12 14 16 18 20 22 Hour of DayPower (kW)Max Net Load Ave Net Load Min Net Load Minimum Diesel Loading Figure 8. Daily Net Electric Load by Month for Medium-Penetration Example in Unalakleet (Two Distributed Energy Systems NW100 Turbines) A summary of other observed penetration values is presented in Table 9. As shown, in this medium-penetration example the wind turbines provide a small percentage of the community electric load, never exceeding 69% penetration on an hourly basis. Wind Energy Feasibility Study – Unalakleet, Alaska CRW.00.001-A Global Energy Concepts, LLC 22 June 18, 2007 Table 9. Summary of Wind Penetration Values Parameter Overall Early Morning (12 a.m. – 8 a.m.) Day (8 a.m. – 5 p.m.) Evening (5 p.m. – 12 a.m.) Maximum penetration 69% 69% 65% 47% Average penetration 10% 13% 9% 9% Time with less than 10% penetration 65% 61% 67% 68% Time with less than 20% penetration 79% 73% 82% 82% Time with less than 50% penetration 98% 95% 99% 100% High-Penetration System Options Table 10 summarizes the number and type of wind turbine options that would make up a high- penetration system in Unalakleet. Table 10. High-Penetration System Options for Unalakleet Wind Turbine Type Number of Turbines Estimated Gross Energy Production1 (kWh/year) Diesel Fuel Savings1 (gallons/year) Average Annual Penetration Maximum Hourly Penetration NW100 4 773,300 63,000 20% 138% FL250 2 1,080,300 74,900 29% 190% FL250 3 1,620,400 104,900 43% 286% FL600 1 1,198,400 100,100 42% 277% [1] Includes estimated system energy losses. To illustrate the impact of a high-penetration system on the electric demand of the power plant, the installation of two Fuhrländer FL250 wind turbines is used as an example. Figure 9 shows the resulting net electric load that would need to be met by the diesel generators. The net electric load is defined as the difference between the total community electric demand and the power output from the wind project. The net load is the amount of electricity that must be provided by the diesel generators or other source of energy. As shown, the net load drops below the minimum recommended loading of the diesel generator (75 kW) during 850 hours of the year. During these times there is excess wind power output as well as excess diesel output if the diesel generators are not allowed to turn off. Possible strategies that could be employed during this time include curtailing the wind power output from one or more turbines, adding dispatchable load banks to the system, or using energy storage devices. Each of these strategies, as well as balance-of- system equipment required, is described in more detail in Appendix C. Wind Energy Feasibility Study – Unalakleet, Alaska CRW.00.001-A Global Energy Concepts, LLC 23 June 18, 2007 February -300 -100 100 300 500 700 900 0 2 4 6 8 10 12 14 16 18 20 22 Hour of DayPower (kW)January -300 -100 100 300 500 700 900 0 2 4 6 8 10 12 14 16 18 20 22 Hour of DayPower (kW)March -300 -100 100 300 500 700 900 0 2 4 6 8 10121416182022 Hour of DayPower (kW)April -300 -100 100 300 500 700 900 0 2 4 6 8 10121416182022 Hour of DayPower (kW)May -300 -100 100 300 500 700 900 0 2 4 6 8 10 12 14 16 18 20 22 Hour of DayPower (kW)June -300 -100 100 300 500 700 900 0 2 4 6 8 10121416182022 Hour of DayPower (kW)July -300 -100 100 300 500 700 900 0 2 4 6 8 10121416182022 Hour of DayPower (kW)August -300 -100 100 300 500 700 900 0 2 4 6 8 10121416182022 Hour of DayPower (kW)September -300 -100 100 300 500 700 900 0 2 4 6 8 10121416182022 Hour of DayPower (kW)October -300 -100 100 300 500 700 900 0 2 4 6 8 10121416182022 Hour of DayPower (kW)November -300 -100 100 300 500 700 900 0 2 4 6 8 10121416182022 Hour of DayPower (kW)December -300 -100 100 300 500 700 900 0 2 4 6 8 10121416182022 Hour of DayPower (kW)Max Net Load Ave Net Load Min Net Load Minimum Diesel Loading Figure 9. Daily Net Electric Load by Month for High-Penetration Example in Unalakleet (Two Fuhrländer FL250 Turbines) A summary of other observed wind penetration values is presented in Table 11. In this high- penetration example the system operates at less than 50% penetration most of the time. The maximum penetration levels occur in the morning hours between 12 a.m. and 8 a.m. when the community electric demand is lower than the potential wind power output. Wind Energy Feasibility Study – Unalakleet, Alaska CRW.00.001-A Global Energy Concepts, LLC 24 June 18, 2007 Table 11. Summary of Wind Penetration Values Parameter Overall Early Morning (12 a.m. – 8 a.m.) Day (8 a.m. – 5 p.m.) Evening (5 p.m. – 12 a.m.) Maximum penetration 190% 190% 177% 117% Average penetration 29% 36% 25% 24% Time with less than 10% penetration 55% 52% 56% 56% Time with less than 20% penetration 65% 61% 67% 68% Time with less than 50% penetration 84% 79% 87% 87% Wind Energy Feasibility Study – Unalakleet, Alaska CRW.00.001-A Global Energy Concepts, LLC 25 June 18, 2007 Capital, Operations and Maintenance, and Life Cycle Cost Estimates The installed cost of various wind turbine options and balance-of-system equipment are described in detail in the AEA report entitled HOMER Modeling Results for Unalakleet, Alaska May 2007. AEA shared the intermediate results of the HOMER model with GEC at different stages of the project and GEC provided review, comments, and input into model assumptions and calculations. GEC has utilized the results of AEA’s model combined with additional analysis that HOMER is not capable of performing to evaluate sensitivities and additional perspectives on the project configurations analyzed and possible future project costs. Although GEC does not believe the FL600 turbine is appropriate for consideration at Unalakleet (for reasons explained below), it has been included in AEA’s analysis and is therefore discussed below. All calculations of net present costs have been performed with a 3% discount rate per AEA. Aside from turbine costs and energy production, the most influential variable in the life cycle cost analysis is the future price of diesel fuel. AEA’s HOMER model has assumed fuel costs to be fixed at $2.73 per gallon during the life of the project with no escalation. Therefore, GEC has performed a sensitivity analysis to determine the impact of fuel price increases on net present cost calculations. Finally, the HOMER model assumes 100% wind turbine availability and has no capacity to include other losses that impact actual turbine production. GEC has taken intermediate results from the HOMER model and performed additional analysis outside the model using the net energy calculations previously documented in this report to assess sensitivities of the NPC calculations. The key wind turbine cost assumptions utilized in AEA’s model are summarized in Table 12. The estimated range of installed cost is $3,167 to $6,800 per kW of installed wind capacity, which GEC believes is within the range of other wind projects previously installed in Alaska. The Kotzebue wind project cost about $2,500 per kW in 1997 and the Toksook Bay wind project cost about $7,000 per kW in 2006. Given the uncertainty in estimating costs at this stage and volatility of wind turbine and project pricing given current wind industry market conditions, GEC is of the opinion that AEA’s costs are reasonable. Although not specifically defined for this project, funding available from the Denali Commission is estimated to range between $2 to 4 million. Given the range of installed project costs in Table 12, approximately 300 kW to 1000 kW of wind capacity could theoretically be installed for these funds. Table 12. Estimated Wind Turbine Unit Costs Model eW15 NW100 FL250 FL600 Installed Project Cost $257,400 $680,000 $890,000 $1,900,000 Cost per kW Capacity $3,900 $6,800 $3,560 $3,167 Annual O&M Cost $15,000 $12,500 $25,000 $40,000 Source: AEA report, HOMER Modeling Results for Unalakleet, Alaska, May 2007 Wind Energy Feasibility Study – Unalakleet, Alaska CRW.00.001-A Global Energy Concepts, LLC 26 June 18, 2007 The costs in Table 12 are based on installation of a single unit. Some economies of scale will apply if multiple units are installed. For example, the cost of mobilizing and demobilizing a crane and construction crew would be spread over the cost of all turbines. Combining the wind project installation with a power plant upgrade or other construction project in the community will further reduce costs. For this analysis no discounts for economies of scale were applied. The cost of the balance-of-system equipment depends on the number and type of wind turbine that is installed. The eW15 and Fuhrländer wind turbines will require more balance-of-system equipment than the same capacity of NW100 wind turbines since they are asynchronous machines that require a source of reactive power. The NW100, on the other hand, produces grid- quality AC power at near unity power factor that can support rather than burden a weak grid. The balance-of-system equipment required to ensure high power quality and grid stability is described in more detail in Appendix C. For the high-penetration systems, AEA included battery storage in the HOMER model with a nominal capacity of 500 kWh. Assuming a 50% depth of discharge and energy conversion efficiency of 85%, the 212 kWh of available energy in the battery bank would be capable of supplying the peak village electrical load of 830 kW for approximately 15 minutes. Balance-of-system costs utilized in AEA’s model are listed in Table 13 and include the synchronous condenser necessary to maintain grid stability for the eW15 and Fuhrländer turbines, which is not necessary for the NW100 turbine. There may be additional balance-of- system cost differences between the NW100 and other turbines; however, no additional cost changes were made in AEA’s HOMER model to account for the different wind turbine models. Table 13. Estimated Project Balance-of-System Costs Component Low-penetration Medium-penetration High-penetration Line extension $300,000 $300,000 $300,000 Design & engineering $75,000 $100,000 $150,000 Controls $5,000 $30,000 $100,000 Dump Load - $20,000 $100,000 Battery Bank - - $250,000 Converter - - $480,000 Synchronous Condenser1 - $150,000 $175,000 Total $380,000 $600,000 $1,555,000 Source: AEA report, HOMER Modeling Results for Unalakleet, Alaska May 2007 [1] The cost of the synchronous condenser and related controls is not included in the system options consisting of NW100 wind turbines Results of the life cycle cost analysis based on the AEA report are described in the attached report. AEA’s HOMER model indicates net present cost (NPC) of all of the low-penetration system options is essentially equal to the net present cost of the diesel-only system. The NPC for medium-penetration options are up to 2% greater than the diesel-only option, with the exception of the single FL250 turbine option, which has a NPC 3% less than the diesel-only system. Finally, the high-penetration options consisting of Fuhrländer wind turbines are indicated as having the lowest NPC, ranging from 3% to 10% below the diesel-only system. High-penetration cases consisting of NW100 turbines were not considered in AEA’s report. Wind Energy Feasibility Study – Unalakleet, Alaska CRW.00.001-A Global Energy Concepts, LLC 27 June 18, 2007 Based on NPC alone, AEA’s report concludes that a high-penetration system consisting of a single FL600 turbine is the lowest cost option for Unalakleet. However, GEC has conducted additional analysis in which various sensitivities were evaluated as discussed below. Results are summarized in Table 14. Table 14. Summary of GEC’s Life Cycle Cost Analysis Results System Description Net Present Cost (NPC) [1][2] Percent of Diesel-Only System NPC Diesel Fuel Savings (gal/yr) Annual Fuel Cost Savings [1] NPV of Total Savings [2][3] Diesel-only $18,500,000 - - - - Low-Penetration Systems 1 x eW15 $18,970,000 103% 8,068 $ 22,025 $ 134,700 2 x eW15 $19,130,000 103% 16,193 $ 44,206 $ 223,700 1 x NW100 $19,040,000 103% 15,243 $ 41,613 $ 476,200 Medium-Penetration Systems 3 x eW15 $19,510,000 105% 24,234 $ 66,159 $ 308,000 4 x eW14 $20,000,000 108% 31,943 $ 87,205 $ 65,000 2 x NW100 $19,340,000 105% 30,395 $ 82,979 $ 908,800 3 x NW100 $19,390,000 105% 47,542 $ 129,789 $1,517,500 1 x FL250 $18,700,000 101% 36,441 $ 99,485 $1,190,100 High-Penetration Systems (25-year battery life) 4 x NW100 $20,750,000 112% 63,243 $ 172,655 $1,724,200 2 x FL250 $19,430,000 105% 74,799 $ 204,202 $2,295,400 3 x FL250 $19,340,000 105% 99,177 $ 270,752 $3,242,300 1 x FL600 $18,050,000 98% 100,035 $ 273,095 $3,792,700 High-Penetration Systems (5-year battery life) 4 x NW100 $21,430,000 116% 63,243 $ 172,655 $1,044,100 2 x FL250 $20,110,000 109% 74,799 $ 204,202 $1,615,300 1 x FL600 $18,970,000 103% 100,035 $ 273,095 $2,872,600 High-Penetration Systems (3-year battery life) 2 x FL250 $20,640,000 112% 74,799 $ 204,202 $1,085,000 1 x FL600 $19,500,000 106% 100,035 $ 273,095 $2,342,000 [1] Assumes fixed price of diesel fuel at the current price of $2.73 per gallon. [2] Assumes 3% discount rate [3] Net Present Value (NPV) of Total Savings includes the cost of heating fuel at the school, community building, and water treatment plant and accounts for wind turbine maintenance costs. Wind Turbine Net Energy Adjustment GEC adjusted diesel fuel savings based on the combined wind turbine system losses previously described in this report and calculated the subsequent NPC for each system option. All other AEA model assumptions remained unchanged. As expected, NPCs increased due to a reduction in annual diesel fuel savings. When accounting for turbine losses, all wind-diesel systems result in NPCs ranging from 1% to 12% greater than the diesel only system, with the exception of the Wind Energy Feasibility Study – Unalakleet, Alaska CRW.00.001-A Global Energy Concepts, LLC 28 June 18, 2007 one FL600 turbine, which is 2% below the diesel only system costs. The elevated installed project costs and less efficient energy capture associated with the wind turbines in this size range are key factors explaining why the majority of the wind-diesel options are slightly greater in terms of NPC than the diesel-only system. However, from the community’s perspective, significant annual and life cycle cost savings associated with reduced fuel consumption are realized for each wind-diesel option. The subsequent sensitivities discussed below were preformed using the net energy results. Fuel Price Escalation Sensitivity Given the baseline assumption of constant fuel costs in AEA’s model, GEC ran sensitivities for each system option to determine the fuel escalation rate break point at which the respective wind-diesel systems would be equal to the diesel only system in terms of NPC. The results are presented in Table 15. Table 15. Fuel Escalation Rate Break Points Turbine Type Fuel Escalation Rates Fuhrländer Options -1.5% to 1.5% NW100 Options 3% to 5% eW15 Options 5.5% to 7% Note that the negative rate is associated with the FL600 option which has a NPC starting point 5% lower than the diesel-only system; therefore this option can accommodate some fuel price decrease. There is nothing fundamentally incorrect regarding the assumed flat fuel cost assumption in the AEA model. Fuel costs tend to be volatile and history shows there are extended periods of decreasing, flat, and increasing fuel costs. However, Table 15 indicates the value of wind as a hedge against future fuel cost increases. For the Fuhrländer and NW100 options, relatively modest fuel price increases will result in these options being more economically competitive. Battery Life Sensitivity Based on GEC’s assessment of AEA’s HOMER model, it appears no battery replacement occurs over the project life. Battery cycling only occurs in the model due to mismatches between wind and electrical load on an average hourly basis. In reality, the battery bank will cycle on and off within the hour due to short-term increases in the net electric load, unplanned turbine faults and part failures. GEC firmly believes battery cycling will be greater than predicted in the model and that the battery life will be shorter than 25 years. To assess the impact of greater battery usage, GEC modeled two scenarios where batteries are replaced on 3 year and 5 year intervals for the high-penetration options. This results in the high-penetration systems being essentially equivalent to the medium-penetration systems in terms of Net Present Cost, as shown in Table 14. The additional cost of battery bank replacement diminishes the additional diesel fuel savings that would be realized. Wind Energy Feasibility Study – Unalakleet, Alaska CRW.00.001-A Global Energy Concepts, LLC 29 June 18, 2007 Observations There are other benefits of a wind-diesel project that are not reflected in the NPC analysis that may be of value to AEA and UVEC. The portion of UVEC’s electricity supply derived from wind power can provide a hedge against fluctuating diesel fuel prices. Wind-generated electricity will reduce the amount of diesel fuel that needs to be transported, stored, and burned, thus reducing emissions and risks of fuel spills. Instead of money leaving the community for fuel payments, more money can stay in the community, which could be used to support a local wind technician. These intangible benefits may make marginally economic wind-diesel systems more attractive and worthy of the investment. In GEC’s opinion, there are a number of advantages of installing multiple small wind turbines rather than a single large wind turbine. If wind penetration levels reach too high of a level that exceeds the dump load capacity or makes the power plant operator uncomfortable, one of the wind turbines could be turned off (this can also be programmed into the power plant SCADA for the control system to perform automatically under predetermined conditions). This wind curtailment strategy would allow the power plant operators to regulate the wind power output within their comfort level while still receiving some benefit from the wind. Similarly, if one wind turbine is down for repairs, the community would still receive benefit from wind energy with the remaining turbines. As a last resort, spare parts could be taken from this turbine to ensure that the others remain in operation until replacement parts arrive. Also, the power system will experience softer fluctuations in the wind power output due to faults if multiple units are installed. It is unlikely that all units would fault and trip off-line at the same time. On the other hand, if a single 600 kW wind turbine is installed, there will be significant power fluctuations due to turbine faults (particularly because these units lack arctic design considerations). Under the single 600 kW turbine scenario, battery storage will be necessary due to the high penetration levels. Battery cycling due to turbine faults will significantly erode battery life and has been shown to increase future costs and battery disposal issues. Finally, smaller wind turbine models allow for incremental system expansion in the future (similar to Kotzebue Electric Association’s strategy of gradually expanding the wind farm as the electric demand and system capacity increase and as funding is available). Wind Energy Feasibility Study – Unalakleet, Alaska CRW.00.001-A Global Energy Concepts, LLC 30 June 18, 2007 Conclusions and Recommendations Wind speed measurements in Unalakleet indicate a Class 5 wind resource offering good potential for a wind power project. The viability of utilizing this wind resource depends on a number of factors including the installed cost of the wind project, the cost of diesel fuel displaced, and the operation and maintenance costs of the system. Modeling of these variables for different equipment configurations indicates that the life cycle cost of a wind-diesel system is slightly greater than the cost of a diesel-only system if the price of diesel fuel is assumed to remain fixed at the current price over the life of the project ($2.73/gallon). From the community’s perspective, a reduction in fuel of roughly 47,000 gallons per year for a medium-penetration system results in savings of $128,300 per year. Other non-financial benefits of a wind power system include a reduced amount of diesel fuel that must be transported and stored in the community, a hedge against fuel price volatility, reduced emissions, and an increase in the experience and knowledge base of wind energy technology in Alaska. Overall, GEC believes that an investment in wind power in Unalakleet will have a positive financial and societal impact on the community. Recommended System Design GEC recommends that AEA pursue final design funding for a medium-penetration wind-diesel system in Unalakleet. From a risk management perspective, medium-penetration systems offer fuel savings on the order of 16% and are a more manageable risk than high-penetration wind systems. This system will allow for an immediate reduction in fuel consumption while providing an opportunity for UVEC and the community to gain first hand operating experience. The system could be designed and have the capacity for expansion to high penetration in the future after demonstrated project success with a medium-penetration system. From an operational perspective, a medium-penetration system is much less complex to operate and maintain than a high-penetration system. Until a wind turbine service network is established in Alaska, a complex high-penetration system may be too burdensome for the local power plant operators. GEC recommends that the final design include the installation of two or three Distributed Energy Systems Northwind100 wind turbines. Seven of these wind turbines are currently installed and operating successfully in Alaska and the company has broad experience in the design of remote power systems and employs a team of trained maintenance personnel with experience responding to service needs in remote locations. The arctic design, lack of a gearbox, and lack of blade pitch system reduce the overall system complexity and potential maintenance needs of this turbine compared to others. The integrated power electronics will simplify integration into a medium- penetration wind-diesel system. Due to AEA and UVEC’s limited experience with wind turbines, GEC believes that a turbine manufacturer with previous arctic experience and a support network in Alaska is essential to the success of this project. The Fuhrländer wind turbines are unproven in Alaska and Fuhrländer has no experience or support presence in Alaska and limited support in North America. These limitations result in the increased chance that extended delays may occur awaiting skilled technicians for troubleshooting, delivery of replacement parts, or access to technical information required to conduct repairs. Considering the global wind industry is experience massive growth, it is possible a manufacturer will prioritize warranty repairs for large volume customers while small, remote projects receive less attention. GEC has seen evidence of Wind Energy Feasibility Study – Unalakleet, Alaska CRW.00.001-A Global Energy Concepts, LLC 31 June 18, 2007 this at certain community scale projects in the lower 48 states. Although a number of Entegrity eW15 wind turbines are installed in Alaska, GEC believes that some of the operating challenges of the eW15 (such as inadvertent tip brake deployment and poor start-up in low wind speeds) have not yet been fully resolved. There are risks associated with the installation of any type of wind turbine technology in Alaska; however, GEC believes that AEA can minimize risks and increase the likelihood of a successful project with the utilization of the Northwind100 wind turbine in a medium-penetration system. A medium-penetration system would not require an energy storage system; however, if AEA is interested in this option GEC recommends a re-evaluation of the lifecycle cost of a battery bank versus a flywheel system. GEC believes that the frequent cycling of the battery bank will result in a shorter lifetime and increased maintenance than originally assumed in the economic analysis, which may make a flywheel system more economically attractive. The following next steps are necessary for the development of a wind project in Unalakleet. Permitting It is important to identify any potential airspace or radar conflicts early in the design process to avoid spending time and resources on a site that is prohibited from development. Notifying the Federal Aviation Administration (FAA) of a proposed wind project as soon as possible allows time for any potential conflicts to be resolved. For example, the FAA may require measures such as decreasing the height of the proposed wind turbine, reducing the numbers of turbines, or modifying the project location. In many cases the FAA permitting process may include an extended study or a public comment and appeals period. GEC recommends that AEA submit a Notice of Proposed Construction with the FAA for all proposed wind turbine sites in Unalakleet. The US Fish & Wildlife Services (USFWS) should also be notified early in the project development process, particularly at coastal sites such as Unalakleet. USFWS may require an avian risk assessment be performed for the potential collision and habitat impacts of local species. The assessment process typically includes a literature review, interviews with local representatives, and a site visit by a trained biologist. The assessment may also require that avian flight paths be observed during the different migratory periods of any known endangered species in the area. GEC recommends that AEA continue to work with USFWS to conduct these studies, if necessary, and resolve any potential conflicts. Geotechnical Investigation The cost of wind turbine foundations in Alaska varies widely from project to project and depends to a great extent on the local soil conditions. GEC recommends that a geotechnical investigation be performed to gather the necessary information for detailed cost estimates and final design. Data Collection AEA should continue collecting wind data from both met towers in Unalakleet for use in the final design process. The data from these towers will be used to verify the analysis included in this report and further refine the energy production estimates and turbine layout if necessary. In addition, the site conditions from the new met tower will be used to determine wind turbine suitability during the final design process. Wind Energy Feasibility Study – Unalakleet, Alaska CRW.00.001-A Global Energy Concepts, LLC 32 June 18, 2007 To assist in the final design of the heat recovery system, GEC recommends monitoring or a detailed estimation of the thermal energy demands in Unalakleet. The heat recovery system will capture heat from the diesel generators as well as heat from excess wind electricity. A thorough understanding of the heating needs in the community will aid in sizing of the dump load. GEC recommends collecting high-resolution electric load data from the existing Unalakleet power plant. This data will be useful in the final system design to ensure that balance-of-system components have been sized correctly to respond to the short-term fluctuations in the net electric load. To the extent possible, GEC recommends that the timestamp of the electric power data logger be synchronized with the met tower data logger. Wind Energy Feasibility Study – Unalakleet, Alaska CRW.00.001-A Global Energy Concepts, LLC A-1 June 18, 2007 Appendix A – Met Tower Data Analysis The Alaska Energy Authority installed at 30-m meteorological (met) tower in Unalakleet on October 28, 2005 to measure the local wind resource. A map of the area depicting the location of the met tower in relation to the proposed wind project site is shown in Figure A-1. The met tower was installed on a hill east of Unalakleet at an elevation of 120 m. The hill is also equipped with radio towers and an FAA VOR unit, but these are located downwind from the met tower and are not expected to impact the data. The surrounding terrain is mostly open with few scattered trees up to 4 m in height. Figure A-1. Meteorological Tower and Wind Energy Project Locations Wind speed measurements were recorded at heights of 21 m and 29 m above ground level. Standard, uncalibrated NRG#40 anemometers were used at the site. The anemometers were mounted on booms oriented to true north. Standard NRG#200P wind vanes were installed at the same heights as the anemometers, on booms oriented 180° from true north. Subsequent review of the data noted that both wind vanes malfunctioned or were improperly installed and were never repaired. Therefore, valid wind direction data is not available from the met tower site; instead, wind direction data from the Unalakleet airport weather station three miles to the west was used. Wind speed and temperature data were recorded as 10-minute averages. GEC compiled, validated, and incorporated into this analysis a full year of on-site tower data between November 1, 2005, and October 31, 2006. Quality Control GEC followed a standard validation process to identify and remove erroneous data (e.g., due to icing or tower shadow). Typically, data are considered invalid due to icing if the temperature is Wind Energy Feasibility Study – Unalakleet, Alaska CRW.00.001-A Global Energy Concepts, LLC A-2 June 18, 2007 below 35°F and the standard deviation of the wind direction equals zero (the wind vane is not moving). Even though the direction readings from the wind vanes were invalid, the standard deviation from the 20 m vane did appear to be valid and was therefore used as a guide in determining when sensors might be frozen. The data were also visually inspected to confirm icing behavior before being removed from the data set. The month with the greatest data loss due to icing was January, with only a 49% data recovery rate. The Windographer software program was used to fill all gaps in the data set based on the statistical properties of the measured data surrounding the gap. Data are also typically considered invalid when the sensors are shadowed by the tower (waked data). This occurs when the wind comes from directions that place the tower between the wind and a sensor. Wind speeds collected from an anemometer directly downwind of the tower are shadowed by the tower and consequently invalid. These invalid winds are typically removed from the data set; however, in this case direction data is not available and therefore it could not be determined when a sensor was being waked or not. Also, the met tower was not equipped with a redundant wind speed sensor at the top level that would have captured unwaked data. Although the data could not be checked for tower shadow effects, GEC expects that the impact of tower shadow in this case is minimal. Due to the orientation of the booms with the anemometers placed to the north of the tower and the predominant easterly wind direction (as determined from the airport Automated Surface Observation Station (ASOS) weather readings and resident experience), it is likely that little data were affected by tower shadow. Therefore, no filtering of the data could be done with respect to tower shadow. A summary of the sensors and data recovery rates for each are presented in Table A-1. Table A-1. Sensor Description and Data Recovery Sensor Type Boom Orientation (from true north) Sensor Height Data Recovery Rate #40 NRG anemometer 0º 29 m 94% #40 NRG anemometer 0º 21 m 94% #200P NRG vane 180º 29 m 0% #200P NRG vane 180º 21 m 0% #110S NRG temperature N/A 2 m 100% Wind Shear GEC calculated the wind shear exponent1 between the lower and the upper anemometers. Only wind speeds greater than 4 m/s were included in the calculation. The average shear exponent for the site is 0.11. This value should be used when scaling the wind resource to a height other than the 30 m measurement height of the met tower. 1 Wind shear describes the typical increase in wind speed at greater heights above the ground. The wind shear exponent (alpha or α) is one method of describing the extent to which wind speeds vary with increasing height above ground level. The equation that uses the exponent is (V1/V2) = (H1/H2)α , where V1 and V2 are wind speeds at heights H1 and H2, respectively (above ground level), and α is the dimensionless wind shear exponent. Wind Energy Feasibility Study – Unalakleet, Alaska CRW.00.001-A Global Energy Concepts, LLC A-3 June 18, 2007 Wind Rose A wind rose depicts the frequency and energy content of wind by direction. Since the wind vanes on the met tower were not working properly, direction data were obtained from the Unalakleet airport ASOS meteorological station. As shown in Figure A-2, most energy-producing winds come from the east. S N W E 15 30 45 60 75 Figure A-2. Met 1135 Wind Rose at 80 m (October 1, 2003, through October 31, 2006) Based on local topography, it is assumed that the direction of energy-producing winds at the met tower would be similar to the airport station. However, the topography and wind-stressed vegetation at the proposed wind project site suggest that the primary wind direction is from the northeast. The wind farm layout included in this report is based on the assumption that the energy-producing winds come from the northeast; however, it is recommended that on-site measurements be taken to verify this assumption prior to final wind project design. Long-Term Wind Speeds The Unalakleet met tower contained approximately one year of data. To adjust the measured wind speeds to represent long-term conditions GEC investigated meteorological data from other sources. The ASOS at the Unalakleet airport was identified as a valid source of long-term data with a high correlation to the met tower data. Figure A-3 summarizes the long-term data set available from the Unalakleet ASOS. Wind Energy Feasibility Study – Unalakleet, Alaska CRW.00.001-A Global Energy Concepts, LLC A-4 June 18, 2007 The correlation between the met tower and ASOS sites was determined by applying a linear regression to the monthly wind data at both sites. The results of the regression are shown in Figure A-4. As shown, there is a good correlation between the met tower and ASOS site with an R-squared value of 0.93. 0 1 2 3 4 5 6 7 8 9 123456789101112 MonthWind Speed (m/s)1997 1998 2002 2003 2004 2005 2006 Average Figure A-3. Unalakleet Airport ASOS Monthly Average Wind Speeds (10 m) y = 0.8536x + 0.0199 R2 = 0.9319 0 1 2 3 4 5 6 7 8 9 10 024681012 Met tower at 30 m (m/s)Airport ASOS at 10 m (m/s) Figure A-4. Comparison of ASOS and Met Tower Average Monthly Wind Speeds Data from the Unalakleet airport ASOS indicate that the November 2005 to October 2006 wind speeds measured about 3% higher than the long-term average. Consequently, GEC decreased the measured met tower wind speeds by 3%, in accordance with the trends observed in the airport data. The adjustments were applied on a monthly basis, with long-term correction factors produced from the airport data over the on-site monitoring period so that unusually high or low Wind Energy Feasibility Study – Unalakleet, Alaska CRW.00.001-A Global Energy Concepts, LLC A-5 June 18, 2007 months could be adjusted to long-term conditions. Table A-2 shows the monthly long-term correction factors that were used in the analysis. The 10-minute wind data for the met tower were adjusted on a month-by-month basis using correction factors. Table A-2. Monthly Long-Term Correction Factors Month Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2005 - - - - - - - - - - 1.19 1.00 2006 1.52 0.85 0.78 0.86 1.01 0.91 0.97 0.93 0.96 0.84 - - The proposed wind project has been sited in a location different from the met tower site. The wind resource is highly variable from one location to the next, particularly in complex terrain such as the hills and valleys around Unalakleet. Therefore, GEC made adjustments to the measured wind resource to account for variations of wind flow over the terrain between the sites. The primary tool used to extrapolate from one site to the next is the High Resolution Wind Map of Alaska. The wind map allows the user to zoom in and obtain the wind power density of a particular 10 acre plot of land. According to the wind map, the met tower is located in a high Class 4 or low Class 5 resource with a wind power density of 406 W/m2 at a height of 30 m above ground level. The measurements from the met tower, after being adjusted to long-term averages, resulted in a wind power density of 355 W/m2, approximately 14% lower than predicted by the wind map. At the proposed wind project site, the wind map shows regions from a Class 4 to a Class 6 wind resource. Averaging seven points around the wind project site results in a wind power density of 477 W/m2. It is assumed that the Wind Map over-estimated the wind resource at the wind project location to the same magnitude as the met tower site, so that the wind power density at the wind project site is expected to be 417 W/m2 at a height of 30 m. Therefore, the long-term met tower data were adjusted to result in a wind power density of 417 W/m2, taking into account the local elevation and air temperature. This corresponds to an annual average wind speed of 6.5 m/s at a height of 30 m above ground level. To verify the extrapolation of the wind resource from the met tower site to the wind project site, GEC performed a wind flow analysis using the WindFarm software (ReSoft Ltd version 4.0.2.3). The wind flow model is based on the long-term met tower data, the wind rose from the airport, and a digital elevation model of the area (one degree resolution obtained from the Alaska Geospatial Data Clearinghouse). The model estimated that the wind project location would receive an annual average wind speed of 6.4 m/s at a height of 30 m above ground level. In summary, the original met tower data were validated to remove any iced data and the gaps were filled by statistical means. The data were then adjusted to long-term conditions based on the airport weather station. Finally, extrapolations were made to adjust the data set to the new wind project location based on the Alaska wind map. The final hourly data set was provided to AEA for use in HOMER modeling. Figure A-5 and Table A-3 summarize the monthly average wind speeds from each step of the adjustment process. Wind Energy Feasibility Study – Unalakleet, Alaska CRW.00.001-A Global Energy Concepts, LLC A-6 June 18, 2007 0.0 2.0 4.0 6.0 8.0 10.0 12.0 123456789101112 MonthWind Speed (m/s)Long-term Airport Data (10 m) Measured Met Tower Data (30 m) Estimated Long-Term Met Tower Data (30 m) Estimated Long-Term Wind Project Site Data (30 m) Figure A-5. Monthly Average Wind Speeds in Unalakleet Table A-3. Monthly Average Wind Speeds in Unalakleet (m/s) Airport ASOS, Long-Term (10 m) Met Tower, Measured (30 m) Met Tower, Long-Term Estimate (30 m) Wind Project Site, Long-Term Estimate (30 m) January 7.7 6.4 9.7 10.3 February 7.3 9.9 8.4 8.8 March 6.3 8.9 6.9 7.3 April 4.5 5.5 4.7 5.0 May 3.8 4.8 4.9 5.1 June 3.5 4.6 4.2 4.5 July 4.2 4.9 4.8 5.0 August 4.0 4.6 4.3 4.6 September 4.5 5.3 5.1 5.4 October 5.1 6.7 5.6 5.9 November 6.0 6.1 7.2 7.6 December 6.3 8.2 8.2 8.7 Annual Average 5.3 6.3 6.2 6.5 Wind Power Density (W/m2) 242 361 355 417 Wind Power Class 4 4 4 5 Renewable Energy Fund Grant Application UVEC Renewable Energy Fund Grant Application Page 48 of 48 10/8/2008 Project Correspondence and Letters of Support