HomeMy WebLinkAboutFort Yukon Gwitchyaa Zhee Biomass for Energy App
Fort Yukon
Gwitchyaa Zhee
Biomass for Energy
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 1 of 20 9/2/2008
Application Forms and Instructions
The following forms and instructions are provided for preparing your application for a
Renewable Energy Fund Grant. An electronic version of the Request for Applications (RFA)
and the forms are available online at http://www.akenergyauthority.org/RE_Fund.html
The following application forms are required to be submitted for a grant recommendation:
Grant Application
Form
GrantApp.doc Application form in MS Word that includes an outline of
information required to submit a complete application.
Applicants should use the form to assure all information is
provided and attach additional information as required.
Application Cost
Worksheet
Costworksheet.doc Summary of Cost information that should be addressed
by applicants in preparing their application.
Grant Budget
Form
GrantBudget.xls A detailed grant budget that includes a breakdown of
costs by task and a summary of funds available and
requested to complete the work for which funds are being
requested.
Grant Budget
Form Instructions
GrantBudgetInstr.pdf Instructions for completing the above grant budget form.
• If you are applying for grants for more than one project, provide separate application
forms for each project.
• Multiple phases for the same project may be submitted as one application.
• If you are applying for grant funding for more than one phase of a project, provide a plan
and grant budget for completion of each phase.
• If some work has already been completed on your project and you are requesting
funding for an advanced phase, submit information sufficient to demonstrate that the
preceding phases are satisfied and funding for an advanced phase is warranted.
• If you have additional information or reports you would like the Authority to consider in
reviewing your application, either provide an electronic version of the document with
your submission or reference a web link where it can be downloaded or reviewed.
REMINDER:
• Alaska Energy Authority is subject to the Public Records Act, AS 40.25 and materials
submitted to the Authority may be subject to disclosure requirements under the act if no
statutory exemptions apply.
• All applications received will be posted on the Authority web site after final
recommendations are made to the legislature.
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 2 of 20 9/3/2008
SECTION 1 – APPLICANT INFORMATION
Name (Name of utility, IPP, or government entity submitting proposal)
Gwitchyaa Zhee Utility Company
Type of Entity:
Electric Utility
Mailing Address
PO Box 9
Fort Yukon, AK 99740
Physical Address
5th and Spruce, ST Fort Yukon, AK 99740
Telephone
(907) 662-2322
(907) 662-2933
Fax
(907) 662-2983
Email
gerald carroll" <gerald_carroll@msn.com>
1.1 APPLICANT POINT OF CONTACT
Name
William A. Wall, PhD
Title
Consultant – Project Manager
Mailing Address
PO Box 988 Seeley Lake, MT 59868
Telephone
406-210-9984
Fax
Email
williamwall11@gmail.com
1.2 APPLICANT MINIMUM REQUIREMENTS
Please check as appropriate. If you do not to meet the minimum applicant requirements, your
application will be rejected.
1.2.1 As an Applicant, we are: (put an X in the appropriate box)
X An electric utility holding a certificate of public convenience and necessity under AS
42.05, or
X An independent power producer, or
A local government, or
A governmental entity (which includes tribal councils and housing authorities);
Yes
1.2.2. Attached to this application is formal approval and endorsement for its project by
its board of directors, executive management, or other governing authority. If a
collaborative grouping, a formal approval from each participant’s governing
authority is necessary. (Indicate Yes or No in the box )
Yes
1.2.3. As an applicant, we have administrative and financial management systems and
follow procurement standards that comply with the standards set forth in the grant
agreement.
Yes
1.2.4. If awarded the grant, we can comply with all terms and conditions of the attached
grant form. (Any exceptions should be clearly noted and submitted with the
application.)
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 3 of 20 9/3/2008
SECTION 2 – PROJECT SUMMARY
Provide a brief 1-2 page overview of your project.
2.1 PROJECT TYPE
Describe the type of project you are proposing, (Reconnaissance; Resource Assessment/
Feasibility Analysis/Conceptual Design; Final Design and Permitting; and/or Construction) as
well as the kind of renewable energy you intend to use. Refer to Section 1.5 of RFA.
Wood Energy:
Phase 3: Schematic & Final Design, Final Business Plan, Permitting,
Phase 4: Construction, Installation, and Commissioning of 3 wood boiler systems
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.
Gwitchyaa Zhee Corporation Board is the authorizing Board for Gwitchyaa Zhee Utility the
Applicant. This application supports a wood heating project in Fort Yukon, Alaska. Local
partners include the Council of Athabascan Tribal Governments (DOE recipient of biomass grant
support $1.2 million), Gwitchyaa Zhee Native Corporation & Utility Company and Gwitchyaa
Gwichin Tribal Government, Yukon Flats School District and City of Fort Yukon. A wood
energy supply analysis, and a feasibility and conceptual design analysis has been completed for a
district heating loop for downtown Fort Yukon to include the School, Gym, AC Store, School
District Office, Water Plant, Post Office and two stand alone boilers; one at the new CATG
Clinic and the other heating the Voc Ed Complex. A side by side analysis of both chip boilers
(Köb) and stick fired boilers (Garn) with estimated cost analysis and net simple payback for
individual buildings was conducted in the feasibility assessment. In each case the chip boilers
made more economic sense in an integrated model with forest management and harvest
operations. The three chip fired boilers will require approximately 2000-2500 tons of chips
depending on moisture content to displace up to 135,347 gallons of fuel or 90% of oil used in
these commercial buildings at a cost of approximately $20/MMBTU ($200/ton) for chips
compared to $46.93/MMBTU for fuel oil ($6.50/gal). This project is being conducted in concert
but as a separate project with a project funded by Denali Commission, US DOE through an
Alaska Village Initiatives earmark, and GZ Corporation to develop a wood harvesting system,
wood yard and a wood energy utility to supply and maintain the boilers. Both projects have been
developed through technical support from Alaska Village Initiatives, and CATG Resource
Department and e-Four Engineering. Principle personnel to date include Bill Wall, PhD, Peter
Olsen, Bruce Thomas, and Greg Koontz, ME.
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.
A total project cost for Phase III is $471,500 with $136,000 in federal funds, $118,500 in in-kind
match from GZ, CATG, and City support. This application requests $210,000 for Phase III from
the Alternative Energy Fund which is 43% of the total for Phase III. A total project cost for
Phase IV construction for 3 boilers is $3,683,661 with $947,670.00 coming from federal and
$2,735,991 from the Alternative Energy Fund. CATG has received an award of $1.2 million
from DOE Tribal Energy program for installing boilers in Fort Yukon pending a minimum of a
50% match from non-federal funds. Phase III will support the development of the final business
plan, project management, schematic level design and final design, permitting, and project
management, communication and reporting. Phase IV will purchase and install three boilers to
include Downtown District Heat, CATG Clinic and Vocational Education Complex. To keep
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Grant Application
AEA 09-004 Grant Application Page 4 of 20 9/3/2008
ownership issues of boilers clear and simple, federal funds will be used to purchase and install
the boilers at the CATG Clinic and Vocational Education complex and state funds will purchase
and install the Downtown district heating system.
The boiler project (Phase 3 and Phase 4-current application) will be implemented in tandem with
development of a wood energy utility and harvest group as part of the GZ Utility. Funding for
this separate project includes $805,804 from Denali, $475,000 as an earmark from DOE Tribal
Energy through AVI and $300,000 in cash from GZ Corporation as well as an additional
$200,000 of in kind. The Energy Utility Project has the following objectives that linked with the
boiler installation project create a complete integrated village wood energy program:
1. Purchase harvest equipment
2. Create 5 year harvest and regeneration plan
3. Develop and install wood storage/wood yard in the village
4. Equipment storage
5. Training and technical support
a. Business training for GZ and CATG Boards
b. Forest Technician training
c. Harvest training and technical support
d. Development of a harvest methods manual
e. 2 years of technical support to make sure chip harvest system is well established
2.4 PROJECT BENEFIT
Briefly discuss the financial benefits that will result from this project, including an estimate of economic
benefits (such as reduced fuel costs) and a description of other benefits to the Alaskan public.
The key benefit is energy cost reduction and stabilization which supports village sustainability.
Without this project more people will leave the village and move to town. A wood energy
project in the Fort Yukon will affect energy costs at 2 scales in the village. The first are local
households and the second, which is the key economic driver, are major commercial buildings.
A reliable source of firewood at a cost of approximately $250 per cord split and delivered to
households will help displace an unknown amount of fuel oil in the village and reduce heating
costs to households. A full cord of seasoned spruce burned at 80% efficiency will displace
approximately 100 gallons of heating fuel at $6.50/gallon. This benefit is not reflected in the
savings and cost analysis of the project in section 2.5 as it would be only an approximation. The
key to this household benefit is that wood delivery is reliable and split ready for use. A
household that burns 500 gallons of fuel will spend $3250 on fuel. If that is displaced by 80%
with wood, then there is a savings of $2000 per household. Reliable sources of wood in
combination with house heating education (a planned village workshop) will encourage
investment in cleaner wood burning appliances, thus yielding an environmental benefit as well.
A feasibility and side by side comparison of chip fired boilers and stick fired boilers was
conducted. (see attachment) Optimum initial installation would be a district heating loop in
downtown and two stand alone boilers at the Voc Ed School and the CATG Clinic. The
following are the potential savings.
Savings: displace 135,347 gallons with 3 boilers @ $6.50/gallon = $879,755 annual
displacement of fuel oil importation
Wood cost: 2500 tons @ $175/ ton = $437,500 for wood
Total net savings: $442,255 per year or $6,633,825 net savings over 15 year life of project
A wood energy program can also reduce wildfire risk through forest thinning, enhance wildlife
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Grant Application
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habitat and most importantly create local jobs and economy through import substitution. Schools
are one of the most expensive buildings to heat in the village and a client that will help with
economies of scale for supporting development of a wood energy business model. Reducing
energy costs for schools and clinic reduces public support costs for education and health care.
Wood energy business fits with subsistence lifestyles and creates a greater level of self
sufficiency within the village. The process of developing and creating business, management
and planning capacity enhances opportunities for increasing long term opportunities for youth to
stay in the village with well paying resource based jobs. An integrated wood energy system is
one of the best energy and community economic develop projects available to villages with good
wood resources and high cost of heating fuels.
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.)
$4,285,161
2.5.2 Grant Funds Requested in this application. $2,945,991
2.5.3 Other Funds to be provided (Project match) $1,200,000
2.5.4 Total Grant Costs (sum of 2.5.2 and 2.5.3) $4,145,991
2.5.5 Estimated Benefit (Savings) $879,755 annual gross
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.)
$13,196,325 15 year gross
Savings: displace 135,347 gallons for 3 boilers @ $6.50/gallon = $879,755 annual displacement of fuel
importation. $13,196,325 over 15 year life of project
Wood cost: 2500 tons @ $175/ ton = $437,500for wood
Total net savings: $442,255 per year or $6,633,825 net savings over 15 year life of project
Community public benefit based on multiplier of new infusion of funds into the community is just
slightly over 1.0 in the potential creation of new jobs. Primarily because of the many resources which are
imported into rural Alaskan Villages. A wood energy is a new sustainable business that is created out of
local resources and acts as an energy import substitution. The largest leakage of funds out of the village
is for energy costs paid to outside vendors. The specific multiplier on creation of direct jobs has not been
calculated. The wood energy utility will create 4-6 1/2 jobs and one full time at a rate of $15-25 per hour.
Public benefit was noted in two ways. First direct fuel cost savings to public commercial buildings such
as the school and clinic over a 15 year life of the project based on current fuel prices and a stable cost of
wood. Second, these savings are paid locally as salaries and profit to the local wood energy utility, which
then pays dividends to local share holders.
The importance of a wood energy utility and the jobs that it creates is demonstrated by the below quotes
form a report on rural community economic benefit multipliers. In the case of commercial or public
buildings such as the school, money being now being spent outside the community for energy is being
redirected into the community for wood energy and local jobs.
Report Quotes: “A community can add new wage paying jobs in three ways:
∙ Goods or services produced locally, sold to non‐residents, bring money into the
community to pay wages
∙ Money from outside the region can directly pay the wages of local jobs
∙ Money already in the region can be re‐spent there, supporting local jobs”
“The economic multiplier in these small places has a value little more than 1.0. For a
larger market like Anchorage, the multiplier would be in the range from 1.3 to 1.6. An
important consequence of a small multiplier is that the only way to create jobs in a small
community is to bring more money into the economy from outside the community.
Almost none of the jobs in areas with low multipliers result from re‐circulation of
purchasing power already within the community.”
Quotes from an interim report produced by UAA at website:
http://www.iser.uaa.alaska.edu/publications/client/afnjobs/ecmulti.pdf
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 6 of 20 9/3/2008
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.
Two projects will be run concurrently in Fort Yukon: Boiler design and installation project
(current application) and the wood harvest project (previously described). The project manager
for both projects will be Bill Wall, PhD who will manage both concurrently. Dr. Wall will work
cooperatively with Bruce Thomas, CATG Natural Resource Manager, David Thomas, Manager
of the GZ Power Plant, and Jerry Carroll, President of GZ Corp as the primary local liaisons to
manage the projects. Key responsibilities will be divided among a technical support team which
will support key components of both projects. The engineer is Greg Koontz of eFour
Engineering, who is doing a completing a Level-2 feasibility and conceptual design and will do a
schematic design prior to supporting contracting or working with AEA for a final design. A
construction manager will be hired or secured through AEA to oversee specific aspects of boiler
and piping installation/construction. GZ Corporation provides labor for piping, boiler and
building remodel as needed. Peter Olsen will work with Bill Wall to implement key aspects of
the forest management, wood harvesting and delivery systems and training. Professional Growth
Systems will be used for GZ and CATG Board Business Management Training.
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.)
A Table of Milestones, Decisions and Activities is attached. The project will be initiated
immediately after notification of a positive response to this application. The intent is to complete
this project over a two year period (2009-2010) with installation of 2 individual boilers in 2009
and the major district heating loop installed in 2010. A final business plan and a detailed project
implementation and construction plan will be developed first quarter of 2009 in collaboration
with GZ staff and Board. This will serve as a business capacity training exercise as well. A
schematic and final design for boilers. Permits, BTU sales agreements, environmental analysis
and landowner ownership agreements will all be completed by June 2009. A decision on number
and location of boilers to be installed in summer of 2009 and 2010 will be made by March 2009.
Permission to proceed to Phase IV will be requested in April 2009 with completion of all AEA
requirements. Order for boilers with specifications, design and materials will be made in April.
The boilers will be delivered ready to hook up in containers with expected delivery to occur July
to August. Delivery can be scheduled as there is a local power barge owned by a Fort Yukon
Resident with deliveries made from Circle essentially on demand, thus scheduling will not be as
complicated as timing on a major freight barge. Construction of boiler pads and wood storage
capacity will begin in June with expected completion of installation occurring in August to
September and Commissioning occurring prior to the end of September.
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Grant Application
AEA 09-004 Grant Application Page 7 of 20 9/3/2008
3.3 Project Milestones
Define key tasks and decision points in your project and a schedule for achieving them.
A Table of Milestones, Decisions and Activities is attached.
Decisions:
• Analysis of stick fired and chip fired boilers has been made. However, a final decision on
specific boiler configurations is yet to be made pending the final feasibility report (in progress)
and development of final business plan. Feasibility study numbers suggest that optimum
configuration is three boilers: 2 stand alone installations at the new clinic and Vocational
Education building and a district heating system in Downtown connecting nine commercial
buildings. Additional tradeoff analysis will be conducted to finalize the configuration in first
quarter of 2009.
• A decision of which boilers to install in 2009 construction season and which to install in 2010
season will also occur in first quarter of 2009.
• Current analysis has been conducted using Köb Boilers (chip) versus Garn (stick fed). Additional
review of chip boilers will occur prior to making a final decision on brand of chip boiler.
Tasks: See Milestone Table – below are specific tasks in Phase III to be completed prior to Phase IV
• Completion of schematic and final design for each of the boiler installations
• Completion of business plan
• Development of the business structure
• Completion of BTU sales agreements to specific customers
• Completion of permitting
• Completion of landownership agreements
• Completion of environmental analysis
These tasks will be completed prior to seeking permission to continue to construction phase and by the
end of the first quarter. Responsibilities are listed in table.
Tasks: See Milestone Table – Phase IV 2009
• Initiate construction on boiler sites for pads and storage
• Order boilers through selection process based on specs of design
• Deliver boilers to village via local barge
• Install boilers
• Commission boilers
• Train boiler operators
• Report operations and maintenance
These tasks will be completed in 2009 with repeat in 2010 with additional installation of
downtown district heating system.
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.
Key personnel: (resumes attached)
Jerry Carroll – President of GZ Corporation is a certified heavy equipment operator and has
worked the last several construction seasons installing sewer pipe in Fort Yukon. This
experience will support the installation of boiler infrastructure including district heating piping.
David Thomas – Manager of GZ power house has over twenty years experience in operating the
utility in Fort Yukon including all construction and maintenance operations. David is the likely
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Grant Application
AEA 09-004 Grant Application Page 8 of 20 9/3/2008
primary boiler operator and will have additional support as GZ recognizes the need to develop
depth in management of both the power house and future boiler operations.
Bruce Thomas – Manager CATG Resource Department is a certified welder and has worked on
all of the resource issue in development of the wood energy program. Bruce will continue to
supply support through GIS and land management activities for forest management to support
GZ harvest activities.
Ben Stevens: Executive Director of CATG has a background in Business Administration and
has been a leader in support of wood energy program in Fort Yukon. CATG is a partner in the
project as they have secured $1.2 million in matching funds from DOE Tribal Energy Program.
Ben will support the program through CATG.
Bill Wall, PhD: Contractor and Project Manager coauthored the Forest Stewardship Plan for GZ
and has worked to develop a sustainable wood energy model for interior villages. He has
coordinated a Rural Business Enterprise Grant to develop a business model and for a local
harvest company and transportation plan for delivery of wood into Fort Yukon both summer and
winter. He has coordinated the development of a Level 2 feasibility study to determine optimum
boiler installation in Fort Yukon to maximize fuel oil displacement for heat.
Peter Olsen: Contractor and Forester coauthored the Forest Stewardship Plan for GZ and has
developed a cost model for wood harvest. Peter will support the Forest Harvesting and
Management portion of the program.
Greg Koontz, ME: Engineer contractor conducting the feasibility analysis and side by side
comparison of stick and chip fired boilers. Has experience in biomass operations and energy
savings analysis. Greg will develop the optimal schematic design for the boiler installations.
Doug Johnson: Professional Growth Systems will support the business develop, business plan
and board/employee training to increase business capacity for GZ and CATG.
The GZ corporation, Gwitchyaa Gwichin Tribe and CATG have all signed an MOU in support of
the development and funding of the wood energy program in Fort Yukon. Alaska Village
Initiatives helped initiate the process with funding to support the initial model. Funding has
come through AVI, CATG, DOE, Rural Development to support development of the project to
date.
The GZ corporation has equipment to support building of boiler pads, installation of pipe and
delivery of wood chips to boilers. The corporation will develop a wood harvesting system with
equipment for support of boiler wood supply.
3.5 Project Communications
Discuss how you plan to monitor the project and keep the Authority informed of the status.
Project communications will focus on three areas:
1. Support team and local implementation partners
2. Fort Yukon Community
3. Funding Partners
A detailed implementation matrix of activities, responsibilities and due dates will be developed
using a dynamic planning process once full funding is secured. This will be developed as part of
a planned training and planning exercise with the GZ Board, CATG, and Tribal Council. The
matrix will be kept current by the project manager and shared monthly with key members of the
team. Another community meeting will be scheduled in Spring of 2009 at the implementation
kick off to share final issues with the community. The schedule matrix will be used as the basis
to for a quarterly report to inform all granting agencies of implementation progress and any key
issues. Thus AEA will receive a quarterly report and informal discussions and calls to the
AEA project manager.
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3.6 Project Risk
Discuss potential problems and how you would address them.
There are two key types of risks associated with making this a sustainable project in rural
Alaska: Technical and Management Capacity.
Technical: technical risks for a chip fired boiler installation are making sure that reliable chip
storage and feed systems are developed for the climatic conditions in rural Interior Alaska. This
is being developed with close attention in the design phase and will design for the worst case
scenario wet chips at -50F. The project will utilize European boiler manufacturers with high
quality and proven reliability. Systems will be designed so that oil fired systems serve as a
redundant back up.
Management Capacity:
The most critical risk associated with installation of wood burning appliances in rural Alaska is
whether there is a sustainable and reliable supply of fuel being delivered to the boiler. Simply
stated someone has to get the fuel to the village and into the boiler. Chip fired systems create
more complexity than stick fired boilers for harvest and delivery of chips. Creating a system that
displaces a significant amount of fuel also creates a much greater need for harvest planning and
actual harvesting in both summer and winter. This key risk is being effectively dealt with by a
complimentary project to set up a wood harvest and delivery company owned by the GZ
Corporation. A team has been formed for technical support and training. A harvest planning
system will be created within the CATG Resource Department with additional training for
current GIS capacity and a forestry technician to layout harvest boundary areas. A five year
harvest plan will be developed cooperatively to develop local capacity. Employees will spend
time outside of the village working on a harvesting crew prior to full scale harvesting within the
village. Board and business training will be conducted for the GZ Board, the CATG and the
tribal Council. A final business plan will be developed and used as a planning and training
exercise as part of the implementation of the harvest project as well as boiler operations. GZ has
experience effectively operating the power plant as a utility which will have parallels in the
operation of a wood energy utility.
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.
A forest stewardship plan was developed for GZ Corporation lands in 2006 by Peter Olsen and Bill Wall,
PhD. An extensive forest resource review was conducted at that time. An average of 18 tons/acre of
harvestable woody biomass is available on fully stocked stands of mixed hardwoods and white spruce. It
was determined that GZ lands could easily sustain a harvest of up to 15-20,000 tons of wood per year in
chips and round fire wood. This is 4-5 times the projected needs for the proposed project. A 5-year
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harvest plan will be developed in association with this project.
Wood is the only alternative source of energy readily available to displace fuel oil on a village scale in fort
Yukon. The positive attributes of a wood energy program are that the program is both an alternative
energy program and an economic development program. Harvest and conversion of wood for energy is
import substitution and creates local jobs. The greatest local economic benefit occurs when ownership and
operations are kept local. A key limiting factor which must be addressed with implementation is to
develop the local capacity business, planning and forest management capacity for harvesting operations
and feeding boilers.
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.
All commercial buildings in Fort Yukon are heated with oil boilers at an efficiency of approximately 85%.
Age varies significantly form new to about 15 years old. Each building has a dual installation of Weil
McClain or Burnham Boilers. Sizes by BTU/ hour were inventoried and used for feasibility analysis.
These are in the AEA sponsored reconnaissance study conducted by the Alaska Wood Energy
Development Task Force. It is the intent of this project to continue to use the current oil boilers as a back
up system to wood boilers and as a turn down support if there is not enough of a load for the chip boiler to
operate. Large chip boilers turn down at a 3:1 ratio. The feasibility study is exploring options of installing
on large one small boiler in the downtown district heat system to displace a larger percentage of fuel oil
during shoulder months.
4.2.2 Existing Energy Resources Used
Briefly discuss your understanding of the existing energy resources. Include a brief discussion of
any impact the project may have on existing energy infrastructure and resources.
The existing heat energy resources are locally harvested wood and fuel oil purchased at rack prices for
houses and bulk fuel for most of the major commercial buildings. At the household level a wood energy
program as described in this project will create a consistent supply of fire wood for house holds and may
positively affect the willingness of households to invest in efficient and clean burning appliances. At the
commercial scale displacing approximately 135,000 gallons of fuel will reduce but not eliminate the need
for bulk deliveries of fuel into the village. This reduction in the amount of fuel may increase the costs or
at least reduce the frequency of deliveries into the village. Fort Yukon typically may get 2 deliveries by
barge per year. This community has not had to have fuel flown in due to not getting a barge.
4.2.3 Existing Energy Market
Discuss existing energy use and its market. Discuss impacts your project may have on energy
customers.
There are two levels of market for each village, households and commercial buildings. The commercial
buildings will drive the actual economies of scale for a feasible project to include a harvesting group.
Current prices are over $6.50/ gallon bulk price. This project will reduce the cost of heat and stabilize the
continuous increases being experienced to date. This project is proposing to create a consistent
inexpensive supply of fire wood for residences and to displace up to 90% of the heating fuel used by up to
11 major building with three boilers.
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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
• A description of renewable energy technology specific to project location
A Level 1 feasibility analysis has been conducted but not written in report form as yet. A tradeoff
analysis between Garn 3200 boilers and various models of Köb chip fired boilers has been
conducted. A side by side analysis is attached. The analysis identifies three chip fired boilers as a
primary design projected to be installed. One at the Voc Ed complex, another at the CATG clinic
and a third as a district heat system in downtown connecting up to 9 buildings. However optimum
installation configuration is still being determined in the final boiler feasibility analysis. A final
schematic design with costs will be conducted prior to going to a full design for each installation.
• Optimum installed capacity
Optimum capacity is based on two factors. Creating an economy of scale for profitable
sustainable wood harvest which is 2000 tons or more annually and displacing a significant amount
of fuel oil in commercial buildings. This will create an economically viable program of harvest
and sales of BTUs to buildings based on cost savings for each building participating. Projected
fuel to be displaced is approximately 135,000 gallons using up to 2500 tons of wood chips (actual
amount depends on moisture). Optimum installed capacity has still to decide upon regarding the
downtown District heat system. Initial conservative (meaning high) costs estimates have been
determined for each building for both a stand alone chip system and stick boiler as well as 6
scenarios for district heat. A final optimum design is yet to be decided upon. This proposal will
address the maximum District Heat system and two stand alone chip fired boilers one at the clinic
and one at the Voc Ed.
• Anticipated capacity factor
The anticipated capacity factor displacement of current fuel consumption for the Voc Ed and
Clinic will be 85% and 87% respectively using a chip fired system. The downtown loop will be
between 86% and 99% depending on selection of final design.
• Anticipated annual generation
This includes approximately 17,500 gallons or 2423.75MM BTUs at the CATG clinic with a Köb
Perot 150 chip boiler, 14,000 gallons or 1939.0MM BTUs at the Voc Ed Building with a Köb
Perot 150 chip boiler and 103,500 gallons or 14,334.75 MM BTUs on the down town district
heating system with a Köb Pyrtec 720 chip boiler.
• Anticipated barriers
There are two key barriers:
o a reliable supply of good quality reasonable low moisture chips delivered to the boiler
installation;
o a reliable automated storage and feeding system to the boiler;
Both of these issues can be dealt with in the design. The first on quality chips is a design of the
harvest, delivery and wood yard storage of the chips. This is being dealt with in the wood harvest
system project. The second will be dealt with in the final boiler design process which will include
on site chip storage and delivery systems.
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 12 of 20 9/3/2008
• Basic integration concept
Heat integration in each of the installation will be designed where the wood boiler is the primary
and the currently installed oil boilers are back up. Integration is key between the wood harvest
and delivery systems and the types of boilers and feeding mechanisms installed.
• Delivery methods
Two methods of wood chipping will be employed. Chipping in the woods with delivery to a
storage facility in the village or chipping of round material brought into the village. A front end
loader will be used to scoop chips into a dump truck. The chips will then be delivered to each of
the boilers. Specifics of chip bin design are still in design phase.
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.
There are three issues regarding land ownership for the two concurrent projects: a. biomass
ownership; b. wood yard; c. boiler installation sites. The only one concerned with this specific
proposal is boiler installation sites, but as the biomass harvest project is interconnected each will
be discussed here. GZ corporation owns the forest land base surrounding Fort Yukon where the
all of the biomass will be harvested. As they will be a vertically integrated harvesting and wood
energy utility, they are in full support of the sustainable utilization of forest biomass from their
lands. Model contracts have been developed to support a legal basis for harvest. The second
issue is location of the wood yard for storage and conversion of biomass into usable forms. Two
locations have been identified. One is owned by the tribe the other is owned by GZ Corporation.
Each has agreed to donate the land to the project. The third ownership issue is the location of
boilers. Three chip fired boilers plants have been identified for installation. One at the new
clinic; the second on a district loop for downtown and the third at the Vocational Education
complex. Specific locations have been proposed for each. General agreement has been reached
with the school district and CATG clinic, but specific agreements are awaiting final design of the
boiler installations.
4.3.3 Permits
Provide the following information is it may relate to permitting and how you intend to address
outstanding permit issues.
• List of applicable permits
• Anticipated permitting timeline
• Identify and discussion of potential barriers
List of permits –
• Permits for wood boilers are not required by the State of Alaska for the expected boiler size.
However, once a final design and boiler size is determined, the state will be consulted to determine
what, if any, regulations apply.
• Forest harvesting – The provisions of the Alaska State Forest Practices Act will be incorporated
into harvest and delivery of biomass plans. Development of stream crossings, ice roads and
summer and winter harvest operations may require special permits. These permits are granted
annually based on harvest and transportation plans. The permitting request process will begin at
least one month prior to seasonal operations allowing for 30 days in which the plan can be
adjusted based on State suggests.
• A clearance from the Alaska State DEC Division of Air Quality will be sought as soon as a final
design is developed and prior to construction on boilers.
• No major barriers are expected on permitting issues.
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 13 of 20 9/3/2008
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
This section will address both the current application for boilers and the project for biomass
harvesting:
• Threatened and Endangered Species – no listed species in the project area
• Habitat issues – a Forest Stewardship Plan has been completed for the GZ ownership and
a five year forest management and harvest plan will be completed as part of the biomass
harvesting project. Opportunities for enhancing moose habitat will be sought and
developed. No significant negative habitat impacts out side the natural range of variation
in this fire driven ecosystem are expected. Harvesting of over mature spruce and
hardwood stands are not expected to be a major portion of the target for biomass
production, but their use could have some small scale local impacts on Neotropical
migratory bird species.
• Wetlands and other protected areas – The Alaska State Forest Practices Act will be
followed in all harvest operations. Accessing or crossing wetlands will only be done
during winter when frozen. CATG Resource Department has an excellent GIS system and
has done mapping on key sensitive areas for each of the villages in Yukon Flats region.
These will be noted during forest harvest transportation planning.
• Land Development Constraints – none are anticipated at this time.
• Telecommunications Interference – none are anticipated at this time.
• Aviation Considerations – none are anticipated at this time,
• Visual and aesthetic impacts – Harvesting of biomass can create unaesthetic impacts on
the forest. FPA required buffers keep harvesting from banks and visibility corridors.
Forest planning can deal effectively with these issues. The wood yard will be fenced and
located on the edge of the village (both current sites). Wood chip deliveries to sites such
where noise maybe an issue will be scheduled such that minimum impact will occur.
• Potential Project Barriers – The approach that the project developers have taken in the
development of the Fort Yukon program to date is that this will be a model project of
converting a village to substantial wood use for heating. We have tried to anticipate many
of the barriers and provide ways to bridge these barriers. However, some additional
barriers will emerge as the project moves forward. Key barriers identified:
Organization cooperation: developing cooperation among the various key
organizations that are now acting as partners was critical. An MOU among the
Tribe, CATG, and GZ Corporation was developed early in the process. As a final
business plan is developed even more specific roles will be spelled out and agreed.
This is an ongoing process with good cooperation thus far.
For Profit Model Simultaneous Development of Supply and Delivery/Demand
Creating a local structure for a for-profit model for harvesting and converting
biomass and a wood energy utility was key to being confidence that both the
biomass supply side and BTU demand side were installed in sync. Thus we have 2
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 14 of 20 9/3/2008
projects: biomass harvest – supply; and boiler installation and operations –
demand. Appropriate economic incentives are being put in the correct places for
economic sustainability. A final business plan will be developed which develops
within GZ Corporation a vertically integrated biomass harvest conversion and
delivery and boiler Operations Company. Although this model fits in Fort Yukon
the same components must be developed in other villages but may not be vertically
integrated. The more local ownership in the overall process the more benefits
accrue to the community.
Business Management Capacity: GZ Corporation owns the GZ electrical utility in Fort Yukon.
They also own and operate the gas station. Operations of wood fired boilers fits within their
current management capacity of operating the power plant and billing. New personnel will be
hired and trained for boiler operations. However, development of a commercial level biomass
harvest company is a new enterprise which will require new expertise and management of a labor
intensive and planning intensive field operation. A 5 year forest harvest plan will be developed
with an annual implementation plan. Annual plans will have to be managed based on summer
and winter operations and variation in annual weather patterns. Operation timing will vary
depending on ice thickness, temperature in winter and dry ground patterns and river levels in
summer. Management of transportation of equipment and supplies back to the village are critical
to final costs of the supply. These capacities must be developed locally. Training is planned in
business management and structure, forest planning, and harvest management. Fort Yukon has a
good labor pool of equipment operators and labor experienced from work on the North Slope.
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
Total Cost Phase III: $481,500
Total Cost Phase IV: $3,683,661
Total grant funding requested: $2,945,991
Matching Funds: $1,200,000 DOE Tribal Energy Program $1.2 million granted to CATG in partnership
with GZ. After indirect of 10% $1,080,000 is available for direct costs.
In-Kind Funds: GZ has established an account with $300,000 in support of the wood energy program.
These funds are targeted in support of the wood harvest project – separate project from this application but
concurrent with the boiler installation project. These funds are being used to match Denali Commission
funds for purchase of harvest equipment to support securing fuel for the boilers. GZ has the capacity and
equipment to install boiler pads and install pipe. These are not currently in the proposed as they will be
spending an additional $200,000 in-kind work in establishing a wood yard and wood storage capacity in
the village in 2009. Additional in-kind could be offered in installing piping for the District Heating
System in 2010.
Capital Costs: $3,443,661
Development Costs: $588,500
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 15 of 20 9/3/2008
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 primary cost of operation of chip boilers is fuel at $175 to $200 per ton and daily inspection of boiler
to check operations. Fuel delivery and bin loading occurs probably on a weekly basis and is part of the
cost of the fuel. Boilers will have an automatic de-asher which will need to be serviced approximately
weekly. Tubes need to be brushed once a month. Boilers will operate with automated computerized
controls and can be set to be read remotely. Both staff of the powerhouse will be trained as boiler
operators. The boiler will operate from mid-September through mid-April. Current staff operating the
powerhouse will be able to operate the boiler as well. However, a new position at $45,000 per year will be
added for support and replacement of current operators. The boiler will need to be cleaned and inspected
annually at shut down. Primary area for potential issues is the feed delivery system. GZ utility will
develop a maintenance, service, and equipment replacement fund for boiler operations which be derived
from BTU sales revenues. As this project is operated as a for profit business the size of the fund will be
determined in the final business plan and based on final design and maintenance history.
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
The primary largest customer in town is the school district which includes the following buildings on the
down town loop: the school, gym, school shop, and school district office and the Voc Ed building as a
stand alone installation. The next two largest customers are the water plant operated by the city and the
clinic operated by CATG. Additional customers are the AC Store, Post Office, Radio Station and State
Building. Letters of support from CATG and the School Superintendent are attached. An RBEG from
DOE has allowed the development of a draft template BTU purchase agreement which is culturally
relevant to rural Alaska as well as a stumpage sale agreement. These templates will be used as the starting
point for development of final agreements.
The GZ Wood Utility operators of the boilers will develop a five year BTU agreement with the
commercial buildings to stabilize the heat equivalent price at from $4.00 – $5.00 per gallon of fuel or a
commercial price of a million BTUs will range from $28.88 - $36.10. At $6.50 per gallon of oil a million
BTUs is approximately $46.93
4.4.4 Cost Worksheet
Complete the cost worksheet form which provides summary information that will be considered
in evaluating the project.
Cost work sheet attached.
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 16 of 20 9/3/2008
4.4.5 Business Plan
Discuss your plan for operating the completed project so that it will be sustainable. Include at a
minimum proposed business structure(s) and concepts that may be considered.
A final business plan will be completed at the initiation of phase 3 of the project. The basic
business model with financial modeling for all phases has been conducted (see attached Tables).
The model will be for GZ Utility to be a for-profit vertically integrated wood heat utility
company. It will be composed of a harvest group that harvests and delivers both round wood and
chips into a wood yard in the village. Firewood will be for sale to residences and chips will be
delivered to boilers. Boilers will be maintained and operated by the wood utility company which
will sell BTUs to targeted commercial buildings. Income is generated through firewood sales and
BTU sales to buildings. Savings over fuel oil costs are shared with commercial end users, but at a
rate that keeps the wood utility profitable, Each business group (harvest and wood yard and
boiler operations) within the vertically integrated wood energy utility will be set up and run on a
for profit basis. Economic modeling has demonstrated that the wood harvest group can be
profitable at selling split round wood for $250/cord delivered and wood chips at $175-$200/ton.
Boiler operations can be profitable by stabilizing the heat equivalent price at from $4.00 – $5.00
per gallon of fuel or a commercial price of a million BTUs will range from $28.88 - $36.10. At
$6.50 per gallon of oil a million BTUs is approximately $46.93. Thus savings and stable prices
are achieved by commercial buildings at a price that maintains an economically viable wood
energy utility. Equipment configurations for the harvest, wood yard and boiler operations must
be integrated, thus linking the needed end product with forest harvest operations. The projected
typed of equipment planned for Fort Yukon will require a heat load serviced with approximately
2000 tons of annual production. The equipment will easily produce twice-three that much for
future growth if electrical production with wood energy is ever reached.
Financial modeling to date includes an initial harvest cost analysis which includes cost of forest
harvesting equipment, labor, maintenance, insurance, and fuel costs. The models for wood
harvest and boiler performance are attached. A final business plan will be developed in
collaboration with the GZ Board as a business training exercise with the following major topics:
• Executive summary
• Community information
• Management infrastructure
• Financial data
• Key assumptions
• Capital replacement schedule
• Funding legal authority and issues
• Inter-agency and organization relationships.
4.4.6 Analysis and Recommendations
Provide information about the economic analysis and the proposed project. Discuss your
recommendation for additional project development work.
A tremendous amount of effort and learning has gone into the development of this project on the
part of the project developers and GZ Corporation. Principles in GZ have been to the Oregon
Logging Congress to review potential harvest equipment and have been drilled in what it will take
to secure a reliable supply of wood for commercial boilers. The purpose of the Wood Energy
Program in Fort Yukon is not only to establish a local wood energy utility and displace a
significant amount of fuel oil, but to develop, demonstrate, and perfect by doing an
integrated sustainable approach to converting a village from primarily fuel oil for heat to
primarily wood. Energy sustainability is critical to the survival of interior villages.
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 17 of 20 9/3/2008
There are two primary economic models that have been developed: A wood harvest and delivery
model and a side by side comparison of chip versus stick fired boilers for individual buildings and
six scenarios for a district heating plant in downtown Fort Yukon. These models were developed
using very conservation numbers such as 30-50% moisture for wood chips actual production goal
is 15-30%, $200/ton for a delivered chip cost actual production goal is $150. These models in
combination demonstrate that installations of boilers and development of an integrated wood
harvest company are absolutely economically feasible. Potential Net Simple Payback analysis for
both stick fired boilers, stand alone chip fired boilers and district heating range from as short as
3.3 to 10 years with nothing over 10 years considered. A final business plan developed in
conjunction with GZ Corporation staff and board will finalize business structure and economic
projections. An implementation tracking system will be devised to determine actual costs versus
projected to help streamline and improve the overall village based model.
Boiler cost projections are a level 2 analysis. In Phase 3 a schematic design and a final design
with final cost projections will be developed.
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
Project Benefit:
• Fuel Displacement: Annual fuel displacement is 135,348 gallons @ current price of
$6.50 per gallon is $879,742. At a project life of 15 years total gallons displaced are
2,030,220 with a total gross savings of $13,196,430.
• Anticipate Revenues: At a delivered wood fuel price of $200/ton for 30% moisture
wood chips and total demand of 2500 tons the wood harvest and delivery company will
derive an annuls gross income of $500,000 which is equal to $21.76 per million BTUs.
At $6.50 per gallon for fuel oil, a million BTUs of heat costs $46.93. The wood utility
operators of the boilers will develop a long term BTU agreement with the commercial
buildings to stabilize the heat equivalent price at a range of $4.00-$5.00 per gallon of fuel
or thus the commercial price of a million BTUs will be $28.88 - $36.10. An annual gross
savings of $379,742 will be divided by the Wood Energy Utility and major commercial
customers. Final determination of how displacement savings will be derived and
dispersed as savings to customers will be developed in the final business plan. The intent
of the program is to both an economically viable wood utility and a service to the
community and primary commercial customers.
• Annual Incentives: Tax credits or other annual incentives have not been explored as yet.
• Green Credits: CATG has been contacted by several organizations regarding the
potential sale of green credits. Until the scope of the project and the need for additional
incentives has been fully understood within the context of the partners, Green Credits
have not been explored as yet.
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 18 of 20 9/3/2008
• Non-economic benefits: These two projects, woody biomass harvest and boiler
installations, in combination create the significant non-economic benefits. In multiple
discussions and presentations, community members have commented on how wood
energy will create local jobs that are consistent with their subsistence lifestyles.
Community leaders have commented on how utilizing local resources helps create a
culture of sustainability and self sufficiency, and reduce dependence on outside energy
sources. A wood energy program can also reduce wildfire risk through forest thinning,
enhance wildlife habitat and most importantly create local jobs and economy through
import substitution. Schools are one of the most expensive buildings to heat in the village
and a client that will help with economies of scale for supporting development of a wood
energy business model. Reducing energy costs for schools and clinic reduces public
support costs for education and health care. Wood energy business fits with subsistence
lifestyles and creates a greater level of self sufficiency within the village. The process of
developing and creating business, management and planning capacity enhances
opportunities for increasing long term opportunities for youth to stay in the village with
well paying resource based jobs. An integrated wood energy system is one of the best
energy and community economic develop projects available to villages with a sustainable
source of wood.
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
Below is a narrative summary regarding funding sources and our financial commitment to the project.
Phase III: Project Development
Task One: Project Initiation and Dynamic Planning – A major facilitated planning meeting will be held at
the outset of the project to develop a specific dynamic planning outline among all the major partners to
coordinate work, responsibilities, and timing of activities.
• Total costs = $25,500
Requested Funds = $5,000
Federal Funds = $8,000 includes $3000 for travel for project manager
Cash Match = $7,500 GZ corporation
In-Kind = $5,000 from CATG
Task Two: Schematic Design & oversight – Use of biomass energy engineer to detail conceptual design
expectations, refine cost estimation for a final design engineer and oversight of engineering process and
commissioning.
• Total Costs = $88,000
• Requested funds = $50,000
• Federal Funds = $28,000 includes $3000 for travel for engineer
• In-kind support = $10,000
Task Three: Final Design – Based on schematics produce a final design, drawings, and cost estimates for
three boiler installations. Two stand alone plants and a downtown District Heating Plant.
Total Cost = $163,000
Requested Funds = $100,000
Federal Funds = $53,000 includes $3000 for travel for engineer
In-kind = $10,000 GZ and CATG
Task Four: Permitting Process – Secure all permits for installation of boilers and develop a template for
securing permits for wood harvesting.
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 19 of 20 9/3/2008
Total Cost $18,000
Requested funds = $5000
Federal funds = $8000 includes $3000 for travel for project manager
In-kind support = $5000 from GZ and CATG
Task Five: Land ownership agreements and land donation –
Total costs = $73,000
Requested funds = $5000
Federal funds = $8000 includes $3000 for Travel
In-kind Donation = $60,000 land donated by GZ Corporation for wood yard establishment
Task six: Environmental analysis finalizes determinations of any environmental issues regarding
installation of 3 boiler plants.
Total cost $18,000
Requested funds = $5000
Federal Funds = $8000 includes $3000 for travel
In-kind = $5000
Task seven: Power sales agreements – develops final agreements for BTU sales from each of the plants.
This will be up to 11 different agreements with commercial buildings. Includes negotiations and
development of a final template.
Total costs: $23,000
Requested funds: $10,000
Federal Funds: $8,000 includes $3000 for travel
In-kind: $5,000 use of GZ attorney for review and approval
Task eight: Final Business Plan, project management, reporting, communications and facilitation
Total cost $63,000
Requested funds: $30,000
Federal Funds: $23,000 includes $3000 for travel
In-kind funds: $10,000 GZ support for business plan development and project management
Phase IV Purchase and Installation of Boilers 2009-2010
Task one: Project Management, Communications, Reporting and Facilitation
Total cost: $130,000
Requested funds: $65,000 includes $5,000 for travel
Federal Funds: $65,000 includes $5,000 for travel
Task two: Construction management and oversight – two construction seasons 2009-2010
Total cost: $110,000
Requested funds: $60,000
Federal funds: $50,000 includes $10,000 for travel
Task Three: Purchase and install two chip fed boiler systems – summer 2009
Total cost: $832,670
Requested funds: $0
Federal Funds: $832,670
Task Four: Purchase and install a chip fed district heating system for Downtown Fort Yukon 2010 for
nine buildings
Total cost: $2,610,991
Requested funds: $2,610,991
Federal funds: $0
CATG will support this program through their Resource department and GIS capacity. They will also
provide housing for the project manager and coordination among organizations. A project implementation
committee made up of CATG, GZ and Tribe staff will meet monthly to discuss project issues and serve as
a support structure for the Project Manager during all phases and task of the project.
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 20 of 20 9/3/2008
SECTION 7 – ADDITIONAL DOCUMENTATION AND CERTIFICATION
SUBMIT THE FOLLOWING DOCUMENTS WITH YOUR APPLICATION:
A. Resumes of Applicant’s Project Manager, key staff, partners, consultants, and
suppliers per application form Section 3.1 and 3.4
B. Cost Worksheet per application form Section 4.4.4
C. Grant Budget Form per application form Section 6.
D. An electronic version of the entire application per RFA Section 1.6
E. Governing Body Resolution per RFA Section 1.4
Enclose a copy of the resolution or other formal action taken by the applicant’s
governing body or management that:
- authorizes this application for project funding at the match amounts indicated in
the application
- authorizes the individual named as point of contact to represent the applicant for
purposes of this application
- states the applicant is in compliance with all federal state, and local, laws
including existing credit and federal tax obligations.
F. CERTIFICATION
The undersigned certifies that this application for a renewable energy grant is truthful
and correct, and that the applicant is in compliance with, and will continue to comply
with, all federal and state laws including existing credit and federal tax obligations.
Print Name William A. Wall, PhD
Signature
Title Consultant/Project Manager
Date 10/07/08
Renewable Energy Fund
RFA AEA 09-004 Application Cost Worksheet Page 1
Application Cost Worksheet
Please note that some fields might not be applicable for all technologies or all project
phases. Level of information detail varies according to phase requirements.
1. Renewable Energy Source – Wood for Heat
The Applicant should demonstrate that the renewable energy resource is available on a
sustainable basis.
Annual average resource availability. 15-20,000 tons Chips and cord wood annually
Unit depends on project type (e.g. windspeed, hydropower output, biomasss fuel)
2. Existing Energy Generation
a) Basic configuration (if system is part of the railbelt grid, leave this section blank)
i. Number of generators/boilers/other 2/ building x 9 = 18 boilers
ii. Rated capacity of generators/boilers/other Range from 135KBTU/hr – 805KBTU/hr
iii. Generator/boilers/other type Oil fired
iv. Age of generators/boilers/other 1 year to 15 years
v. Efficiency of generators/boilers/other Oil boilers range between 80-85%
b) Annual O&M cost
i. Annual O&M cost for labor 9 different ownerships of boilers – not known
ii. Annual O&M cost for non-labor 9 different ownerships of boilers – not known
c) Annual electricity production and fuel usage (fill in as applicable)
i. Electricity [kWh] $.55/kwh commercial
ii. Fuel usage (if system is part of the Railbelt grid, leave this section blank
Diesel [gal] 260,000 gallons for power plant
Other
iii. Peak Load 700 Kwh
iv. Average Load 400 Kwh
v. Minimum Load 350 Kwh
vi. Efficiency Unknown
vii. Future trends Electrical is going up as new sewer system is installed
d) Annual heating fuel usage (fill in as applicable)
i. Diesel [gal or MMBtu] 135,000 gallons targeted for displacement
ii. Electricity [kWh]
iii. Propane [gal or MMBtu]
iv. Coal [tons or MMBtu]
v. Wood [cords, green tons, dry tons] current usage not known local use for firewood only
vi. Other
Renewable Energy Fund
RFA AEA 09-004 Application Cost Worksheet Page 2
3. Proposed System Design
a) Installed capacity Displace 135,000 gallons of fuel oil for heat
b) Annual renewable electricity generation
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] 2500 tons @ 40% moisture projected for displacement
of oil
vi. Other
4. Project Cost
a) Total capital cost of new system $3,443,661
b) Development cost $588,500
c) Annual O&M cost of new system 3 boilers = $50,000
d) Annual fuel cost $437,500 = 2500 tons x $175/ton delivered
5. Project Benefits
a) Amount of fuel displaced for
i. Electricity
ii. Heat 135,000 gallons fuel oil
iii. Transportation
b) Price of displaced fuel $877,500 @ $6.50/gallon annually
c) Other economic benefits
d) Amount of Alaska public benefits
6. Power Purchase/Sales Price
a) Price for power purchase/sale Sell heat BTUs @ between $28.88 – $36.10/MMBTUs
7. Project Analysis
a) Basic Economic Analysis
Project benefit/cost ratio 2:1 over 15 year project life
Payback District Heat Plant = 6.96yrs Clinic = 6.3yrs Vocational Ed = 8.1
Alaska Energy Authority ‐ Renewable Energy FundBUDGET INFORMATION Phase III 2009 Gwithyaa Zhee Elctric UtillityBUDGET SUMMARY:Milestone or Task Federal Funds State FundsLocal Match Funds (Cash)Local Match Funds (In‐Kind)Other FundsTOTALS1 Project Initiation & Dynamic Planning $8,000.00 $5,000.00 $7,500.00 $5,000.00 $25,500.002 Schematic Design & Oversight $28,000.00 $50,000.00 $10,000.00 $88,000.003 Final Design $53,000.00 $100,000.00 $10,000.00 $163,000.004 Permitting Process $8,000.00 $5,000.00 $5,000.00 $18,000.005 Land ownership agreements and donations $8,000.00 $5,000.00 $60,000.00 $73,000.006 Environmental Analsysis $8,000.00 $5,000.00 $5,000.00 $18,000.007 Power Sales Agreements $8,000.00 $10,000.00 $5,000.00 $23,000.008 Project management, reporting & communication$23,000 $30,000.00 $10,000.00 $63,000.00Totals $144,000.00 $210,000.00 $7,500.00 $110,000.00 $471,500.00Milestone # or Task #BUDGET CATAGORIES:1 2 3 4 5 6 7 8 TOTALSDirect Labor and Benefits $5,000.00 $10,000.00 $10,000.00 $5,000.00 $5,000.00 $5,000.00 $10,000.00 $50,000.00Travel, Meals, or Per Diem $3,000.00 $3,000.00 $3,000.00 $3,000.00 $3,000.00 $3,000.00 $3,000.00 $8,000.00 $29,000.00Equipment$0.00Supplies$0.00Contractual Services $17,500.00 $75,000.00 $150,000.00 $10,000.00 $10,000.00 $10,000.00 $15,000.00 $55,000.00 $342,500.00Construction Services$0.00Other Direct Costs$60,000.00$60,000.00TOTAL DIRECT CHARGES $25,500.00 $88,000.00 $163,000.00 $18,000.00 $73,000.00 $18,000.00 $23,000.00 $73,000.00 $481,500.00RFA AEA09-004 Budget Form
Alaska Energy Authority ‐ Renewable Energy FundBUDGET INFORMATIONBUDGET SUMMARY: 2009‐2010 Phase IV Fort Yukon ConstructionMilestone or Task Federal Funds State Funds*Funds (Cash)*Funds (In‐Kind)Other FundsTOTALS1 Project management, Communications reporting $65,000.00 $65,000.00 $130,000.002 Construction management $50,000.00 $60,000.00 $110,000.003 2 boilers 2009 installed $832,670.00 $832,670.004 1 DH boiler system 2010 installed $2,610,991.00 $2,610,991.005$0.006$0.00$947,670.00 $2,735,991.00 $3,683,661.00Milestone # or Task #BUDGET CATAGORIES:1 2 3 4 5 6 TOTALSDirect Labor and Benefits$0.00Travel, Meals, or Per Diem $10,000.00 $10,000.00 $20,000.00Equipment$0.00Supplies$0.00Contractual Services $105,000.00 $115,000.00 $220,000.00Construction Services $832,670.00 $2,610,991.00 $3,443,661.00Other Direct Costs /Shipping$0.00TOTAL DIRECT CHARGES $115,000.00 $125,000.00 $832,670.00 $2,610,991.00 $0.00 $0.00 $3,683,661.00* GZ has put up $300,000 cash match and $200,000 in‐kind currently slated to go to the wood supply project as a sister project to boiler installation. Additional in‐kind match for boiler installation could be discussed in installing pads for boilers and installing piping for the District heating system. A final optimum boiler installation strategy, Business Plan, construction design will allow for a final budget and addtional in‐kind match if needed and possible.RFA AEA09-004 Budget Form
Fort Yukon Wood Energy Program Milestone & Activity Table MILESTONES, DESCISIONS & ACTIVITIES WHO* START Month END Month EXPECTED OUTCOMES 1st Quarter (January – March 2009 ) Phase III Complete contract with AEA & GZ Decision-Optimize boiler capacity installation design Finalize project implementation plan – Dynamic planning Complete Schematic Design for boilers Final Engineer Design Final Business Plan Permitting process Land ownership agreements Environmental Analyses Power Sales Agreement Quarterly report due WW, GZ WW, GZ, GK WW, GZ, PO, BT,DJ WW, GK WW,GK, Cont WW, GZ, DJ,PO WW, GZ WW, GZ WW, GZ, GK WW, GZ, BT WW,GZ 1 1 1 1 1 1 1 1 1 2 3 1 1 1 2 4 3 5 5 5 5 3 Initialize work on Alternative Energy Grant Finalize tradeoff analysis for optimum boiler installations Establish work completion timelines Schematic Design delivered to contract Engineers Select contractor - Final Design and Cost Analysis Facilitated collaborative development of final business plan All necessary applications made for permits as required All necessary land agreements are made with cooperators Final checks on any key environmental issues completed Power sales agreements negotiated and completed Quarterly Report due to AEA 2nd Quarter (April – June 2009) Phase IV Permission to proceed to Construction Decision – Which boiler installations & when Implement Wood Energy Utility Business Structure Order boilers and installation equipment Site prep and building re-fabrication initiated Quarterly report due WW, GZ, AEA WW, GZ, GK WW, GZ, DJ WW, GZ,GK,Cont WW, GZ, Cont WW,GZ 4 4 4 4 5 6 4 4 4 7 9 6 Provide enough info to AEA to move to construction phase 3 Boilers installed potentially over 2 constructions seasons Legal Development for wood energy utility Order and receive boilers and equipment for installation Boiler pad or wood storage construction Quarterly Report due to AEA 3rd Quarter (July- September 2009) Phase IV Boilers installation Boilers commissioned Boiler operation training Quarterly report due WW, GZ, Cont WW, Cont. GZ, boiler manufacturer WW,GZ 7 9 8 9 9 10 8 9 1st tier of boiler installed and commissioned Installed boilers ready for operation Training for boiler operator completed Quarterly Report due to AEA 4th Quarter (October – December 2009) Phase IV Track Project Costs Environmental Monitoring Permitting Final Annual Report WW, GZ WW, GZ WW,GZ WW,GZ 1 1 1 12 12 12 12 12 Actively track project costs and report any issues quarterly Monitor and report as needed Monitor and report as needed Final project report including as built specifications, final drawings, and drawings, final budget, schedule and recommendations
Decision on boiler installation timing will be made in forth month in second quarter. It is fully expected that 2 of the three projected boiler installation will be made in summer of 2009 and the major district heating installation will occur in summer 2010. This will allow for lessons to be learned on smaller portable installation and time for the harvest business to ramp up to full capacity. Milestones for 2010 will follow the same outline as above. * WW William Wall – Project manager GZ GZ Staff PO Peter Olsen – Forester GK Greg Koontz – Engineer BT Bruce Thomas -- CATG Staff Cont. Contractor – to be selected – Final Design Engineer and Construction Supervisor DJ Doug Johnson – Training and facilitation – Professional Growth Systems 5th-8th Quarters (January-December 2010) Phase IV
C OUNCIL OF A THABASCAN T RIBAL
G OVERNMENTS
P .O .BOX 33 - FORT YUKON, ALASKA 99740 - (907)662-2587
FACSIMILE (907)662-3333
R ESOLUTION 08-02
Title: Authorizing the CATG Natural Resourses Director, Bruce Thomas and Dr. Bill Wall and Peter Olsen with
Private Lands and Resource Consulting (PLARC) to negotiate a final agreement and structure of the grant award of
the Department of Energy’s (DOE) Tribal Energy Program grant.
WHEREAS: The Council of Athabascan Tribal Governments (CATG) is a Tribal consortium authorized by the
Athabascan tribes of the Yukon Flats; and,
WHEREAS: The purpose of the Council of Athabascan Tribal Governments is to conserve and protect tribal
land and other resources; to encourage and support the exercise of tribal powers of self-
governance; to aid and support economic development; to promote the general welfare of each
member tribe and it’s respective individual members; and to preserve and maintain the cultural
and spiritual values of the Tribe and its Tribal members; and,
WHEREAS: CATG, along with Denali Commision and Alaska Energy Authority, hosted a Yukon Flats
Regional Economic Development Summit in 2004 and directed staff to develop a long-range
energy plan incorporating appropriate energy technologies including biomass, hydro fuel cells,
solar, nuclear and wood boiler studies.
WHEREAS: NRCS helped AVI and PLARC develop conceptual design of a biomass program; Alaska DNR
Forestry supported development of a Forest Stewardship Plan and Rural Business Enterprise
Grant supported development of the business model and development of harvest equipment and
transportation components.
WHEREAS: GZ Corporation has been approved for a grant through the Denali Commission to purchase harvest
equipment for the biomass program. The total of the grant is $808,805. The grant is administered
through AEA and requires a 50% match which is an additional $808,805.
WHEREAS: CATG has been approved to negotiate with DOE Tribal Energy Program for up to $1.2 million
dollars for technical support, travel and wood boilers.
NOW, THEREFORE BE IT RESOLVED THAT: CATG Council authoizes Bruce Thomas and Dr. Bill Wall
and Peter Olsen to negotiate a final agreement and structure of the grant process with DOE Tribal
Energy Program.
CERTIFICATION: This resolution was adopted and approved by the Council of Athabascan Tribal Governments
at a meeting held by Teleconference on August 20, 2008.
.
FT YUKON, AKSummariesC:\Documents and Settings\Bill Wall VWCS\My Documents\Alaska Documents\Funding\Alaska Energy Authority Grant Applications\Fort Yukon\Application\side by side analysis$250.00 $175.00 $7.00Table 1. Side by side feasibility analysis of Kob chip boilers and Garn stick fired boilers. Water Facility100Stand-alone Plant Water Facility3,200Stand-alone Plant 1 Boiler(s) Pyrot 100current oil: 6,257 gal/yr $43,7971 Boiler(s) WHS 3200current oil: 6,257 gal/yr $43,797est plant cost: $268,868 proj oil: 2,399 gal/yr $16,790est plant cost: $178,031 proj oil: 0 gal/yr $0est piping cost: $0 proj chips: 72.9 tons/yr $12,755est piping cost: $0 proj cords: 51.1 cords/yr $12,784Total: $268,868 total: $29,544Total: $178,031 total: $12,784savings: $14,253 oil displaced: 3,858 gal/yr 61.7%savings: $31,013 oil displaced: 6,257 gal/yr 100.0%NSP: 18.9 yr NSP: 5.7 yr max burns/day (coldest day): 2.43 Pumphouse150Stand-alone Plant Pumphouse3,200Stand-alone Plant 1 Boiler(s) Pyrot 150current oil: 24,089 gal/yr $168,6252 Boiler(s) WHS 3200current oil: 24,089 gal/yr $168,625est plant cost: $286,984 proj oil: 883 gal/yr $6,179est plant cost: $356,063 proj oil: 0 gal/yr $0est piping cost: $0 proj chips: 438.4 tons/yr $76,718est piping cost: $0 proj cords: 196.9 cords/yr $49,221Total: $286,984 total: $82,897Total: $356,063 total: $49,221savings: $85,728 oil displaced: 23,207 gal/yr 96.3%savings: $119,404 oil displaced: 24,089 gal/yr 100.0%NSP: 3.3 yr NSP: 3.0 yr max burns/day (coldest day): 3.46 New CATG Clinic150Stand-alone Plant New CATG Clinic3,200Stand-alone Plant 1 Boiler(s) Pyrot 150current oil: 20,002 gal/yr $140,0162 Boiler(s) WHS 3200current oil: 20,002 gal/yr $140,016est plant cost: $286,984 proj oil: 2,461 gal/yr $17,226est plant cost: $356,063 proj oil: 0 gal/yr $0est piping cost: $0 proj chips: 342.5 tons/yr $59,937est piping cost: $0 proj cords: 169.0 cords/yr $42,243Total: $286,984 total: $77,163Total: $356,063 total: $42,243savings: $62,853 oil displaced: 17,541 gal/yr 87.7%savings: $97,773 oil displaced: 20,002 gal/yr 100.0%NSP: 4.6 yr NSP: 3.6 yr max burns/day (coldest day): 3.99 Vocational Ed150Stand-alone Plant Vocational Ed3,200Stand-alone Plant 1 Boiler(s) Pyrot 150current oil: 16,001 gal/yr $112,0072 Boiler(s) WHS 3200current oil: 16,001 gal/yr $112,007est plant cost: $286,984 proj oil: 2,312 gal/yr $16,185est plant cost: $356,063 proj oil: 0 gal/yr $0est piping cost: $0 proj chips: 267.3 tons/yr $46,773est piping cost: $0 proj cords: 135.2 cords/yr $33,792Total: $286,984 total: $62,958Total: $356,063 total: $33,792savings: $49,049 oil displaced: 13,689 gal/yr 85.6%savings: $78,214 oil displaced: 16,001 gal/yr 100.0%NSP: 5.9 yr NSP: 4.6 yr max burns/day (coldest day): 3.251 of 3
FT YUKON, AKSummariesC:\Documents and Settings\Bill Wall VWCS\My Documents\Alaska Documents\Funding\Alaska Energy Authority Grant Applications\Fort Yukon\Application\side by side analysis School/Gym220Stand-alone Plant School/Gym3,200Stand-alone Plant 1 Boiler(s) Pyrot 220current oil: 30,002 gal/yr $210,0133 Boiler(s) WHS 3200current oil: 30,002 gal/yr $210,013est plant cost: $303,862 proj oil: 3,265 gal/yr $22,857est plant cost: $534,094 proj oil: 0 gal/yr $0est piping cost: $38,550 proj chips: 505.1 tons/yr $88,388est piping cost: $38,550 proj cords: 245.2 cords/yr $61,302Total: $342,412 total: $111,244Total: $572,644 total: $61,302savings: $98,769 oil displaced: 26,737 gal/yr 89.1%savings: $148,711 oil displaced: 30,002 gal/yr 100.0%NSP: 3.5 yr NSP: 3.9 yr max burns/day (coldest day): 3.93 Yukon Flats Center100Stand-alone Plant Yukon Flats Center3,200Stand-alone Plant 1 Boiler(s) Pyrot 100current oil: 8,501 gal/yr $59,5041 Boiler(s) WHS 3200current oil: 8,501 gal/yr $59,504est plant cost: $268,868 proj oil: 1,772 gal/yr $12,405est plant cost: $178,031 proj oil: 0 gal/yr $0est piping cost: $0 proj chips: 131.4 tons/yr $22,990est piping cost: $0 proj cords: 71.8 cords/yr $17,952Total: $268,868 total: $35,395Total: $178,031 total: $17,952savings: $24,108 oil displaced: 6,728 gal/yr 79.2%savings: $41,551 oil displaced: 8,501 gal/yr 100.0%NSP: 11.2 yr NSP: 4.3 yr max burns/day (coldest day): 3.45 Neighborhood DH100Stand-alone Plant Neighborhood DH3,200Stand-alone Plant 1 Boiler(s) Pyrot 100current oil: 10,801 gal/yr $75,6092 Boiler(s) WHS 3200current oil: 10,801 gal/yr $75,609est plant cost: $268,868 proj oil: 1,490 gal/yr $10,433 est plant cost: $356,063 proj oil: 0 gal/yr $0est piping cost: $431,438 proj chips: 181.8 tons/yr $31,814 est piping cost: $431,438 proj cords: 91.2 cords/yr $22,811Total: $700,306 total: $42,247 Total: $787,500 total: $22,811savings: $33,362 oil displaced: 9,311 gal/yr 86.2% savings: $52,798 oil displaced: 10,801 gal/yr 100.0%NSP: 21.0 yr NSP: 14.9 yr max burns/day (coldest day): 2.17 CATG Main Office150Stand-alone Plant CATG Main Office3,200Stand-alone Plant 1 Boiler(s) Pyrot 150current oil: 16,001 gal/yr $112,0042 Boiler(s) WHS 3200current oil: 16,001 gal/yr $112,004est plant cost: $286,984 proj oil: 2,306 gal/yr $16,144est plant cost: $356,063 proj oil: 0 gal/yr $0est piping cost: $0 proj chips: 258.7 tons/yr $45,271est piping cost: $0 proj cords: 130.8 cords/yr $32,694Total: $286,984 total: $61,416Total: $356,063 total: $32,694savings: $50,588 oil displaced: 13,694 gal/yr 85.6%savings: $79,310 oil displaced: 16,001 gal/yr 100.0%NSP: 5.7 yr NSP: 4.5 yr max burns/day (coldest day): 3.152 of 3
FT YUKON, AKSummariesC:\Documents and Settings\Bill Wall VWCS\My Documents\Alaska Documents\Funding\Alaska Energy Authority Grant Applications\Fort Yukon\Application\side by side analysis Commercial Store100Stand-alone Plant Commercial Store3,200Stand-alone Plant 1 Boiler(s) Pyrot 100current oil: 9,601 gal/yr $67,2041 Boiler(s) WHS 3200current oil: 9,601 gal/yr $67,204est plant cost: $268,868 proj oil: 1,665 gal/yr $11,656est plant cost: $178,031 proj oil: 0 gal/yr $0est piping cost: $0 proj chips: 149.9 tons/yr $26,234est piping cost: $0 proj cords: 78.5 cords/yr $19,617Total: $268,868 total: $37,889Total: $178,031 total: $19,617savings: $29,315 oil displaced: 7,935 gal/yr 82.7%savings: $47,587 oil displaced: 9,601 gal/yr 100.0%NSP: 9.2 yr NSP: 3.7 yr max burns/day (coldest day): 3.77 School District Office100Stand-alone Plant School District Office3,200Stand-alone Plant 1 Boiler(s) Pyrot 100current oil: 3,968 gal/yr $27,7781 Boiler(s) WHS 3200current oil: 3,968 gal/yr $27,778est plant cost: $268,868 proj oil: 3,508 gal/yr $24,559est plant cost: $178,031 proj oil: 0 gal/yr $0est piping cost: $0 proj chips: 8.7 tons/yr $1,520est piping cost: $0 proj cords: 32.4 cords/yr $8,108Total: $268,868 total: $26,079Total: $178,031 total: $8,108savings: $1,699 oil displaced: 460 gal/yr 11.6%savings: $19,669 oil displaced: 3,968 gal/yr 100.0%NSP: 158.3 yr NSP: 9.1 yr max burns/day (coldest day): 1.56 Post Office100Stand-alone Plant Post Office3,200Stand-alone Plant 1 Boiler(s) Pyrot 100current oil: 6,400 gal/yr $44,8021 Boiler(s) WHS 3200current oil: 6,400 gal/yr $44,802est plant cost: $268,868 proj oil: 2,289 gal/yr $16,025est plant cost: $178,031 proj oil: 0 gal/yr $0est piping cost: $0 proj chips: 77.7 tons/yr $13,590est piping cost: $0 proj cords: 52.3 cords/yr $13,077Total: $268,868 total: $29,615Total: $178,031 total: $13,077savings: $15,186 oil displaced: 4,111 gal/yr 64.2%savings: $31,724 oil displaced: 6,400 gal/yr 100.0%NSP: 17.7 yr NSP: 5.6 yr max burns/day (coldest day): 2.523 of 3
Ft YUKON, ALASKA
Level 2 Study, Biomass Heat
FY Summary
C:\Documents and Settings\Bill Wall VWCS\My Documents\Alaska Documents\Funding\Alaska Energy Authority Grant Applications\Fort Yukon\Application\FY_L2_study_v2a(1)
Summary Fort Yukon
Table 2. Comparison cost analysis for six District Heat Scenarios for Fort Yukon
>Three different size plants were modeled, and each plant had two configurations, for a total of six options. In all cases,
the "B" option for a given plant size was the addition of a second (smaller) boiler to pick up the low summer loads,
and to add capacity at the top end. The primary boiler was chosen to displace as much oil as possible. Since the
turndown on the boilers is about 3:1, this means that no single boiler can be both large enough to handle the winter peak
and at the same time turn down far enough handle the light summer loads. In all cases, the pricing assumes that
the "A" plant was piped and sized to allow for second boiler, so the marginal cost of adding the second boiler is
generally just the cost of the boiler itself, as well as its material handling and shipping costs. Each "A" option is
therefore a true stand-alone plant; the "B" boiler could added at construction, 1 year later, or 10 years later.
>Even in the Base (smallest) plant, the pipe sizing assumes that there may be future additions to the plant, and thus
there is some oversizing of direct-buried mains.
>The three Plants are: Base Plant, Intermediate Plant, and Maximum Plant (max for this study). The six possible
boiler configurations are referred to as: Base P A and B, Int P A and B, and Max P A and B.
>See the TAB "Inputs" for base assumptions for the model, including the cost of oil and wood chips.
>Estimated project costs include construction, as well as design, construction admin, commissioning, and contingency
>See the TABs "XXX Plant" for buildings included, piping layouts and lengths, cost est, etc.
Summary of Results Base P A Base P B Int P A Int P B Max P A Max P B
Financial
estimated project cost :$1,618,607 $1,944,894 $2,102,386 $2,428,674 $2,774,973 $3,143,727
estimated annual savings :$264,641 $304,979 $306,675 $357,639 $442,226 $511,578
net simple payback, yrs :6.12 6.38 6.86 6.79 6.28 6.15
:
Performance :
No. buildings connected :668899
peak load heating, kBTU/h :2,295.0 2,295.0 2,645.6 2,645.6 3,450.3 3,450.3
peak losses heating fuel, kBTU/h :40.0 40.0 40.0 40.0 40.0 40.0
fraction :0.017 0.017 0.015 0.015 0.012 0.012
:
peak piping losses, KBTU/h :72.1 72.1 115.9 115.9 198.4 198.4
fraction :0.031 0.031 0.044 0.044 0.057 0.057
total losses, as a fraction of load :0.049 0.049 0.059 0.059 0.069 0.069
:
current oil consumption, gal/yr :71,764 71,764 84,734 84,734 119,988 119,988
proposed consumption, gal/yr :9,644 343 12,514 756 15,870 105
estimated savings, gal/yr :62,120 71,421 72,219 83,978 104,118 119,883
fraction displaced :0.866 0.995 0.852 0.991 0.868 0.999
:
estimated wood chips, tons/yr :923 1,062 1,073 1,248 1,548 1,782
:
Fuel Properties and Cost :
heat content of No. 1 oil :134,000 BTU/gal
cost of oil used in study :$7.00 per gal
:
moisture content of wood chips :40.0%
heat content of wet chips :4,252 BTU/lb
cost of chips used in study :$175.00 per geen ton
efour, PLLC 1 of 1
Fort Yukon Biomass Harvest Economics
The following spreadsheet Table 2 is a model based on production estimates using the above
equipment configuration. It is believed to be a reasonable estimate but it must be recognized that it
is untested. The yellow cells represent data input assumptions, and the blue cells represent the
resultant calculations of high interest. Maintenance and Operation costs are listed and built into the
production model.
For demonstration purposes, an assumed volume of 2,000 tons of seasoned wood is to be produced
annually for firewood and stick or chip boilers. This would take approximately 89 fully productive
working days. Additional labor will be required to move equipment from one community to
another, as well as transportation expenses if done by barge. A local contractor with a river freight
boat will be use to move equipment and wood chips during summer. The boat will handle a load of
20,000 pounds in it current configuration and has been in business for three years.
Theoretically, the entire annual production could be done within 120 days (4 months) at this
production level. Under these and the other set of assumptions displayed in the spreadsheet,
approximately 2,000 tons or 1,657 cords of Spruce is produced. When burned in wood boilers with
an equal efficiency as the heating oil boilers, approximately $500,000 of diesel at $3.50 per gallon
can be displaced with a total savings of $244, 370. These numbers are based on a calculated
delivered wood cost of $155 per cord that has been marked up 25% above actual production costs.
The model displays production cost estimates and includes an annual capital equipment cost of
$132,000.
Table 2. Calculated Harvest Costs and Revenue Data in Tons and Cords
Gwitchyaa Zhee Corporation
Biomass for Energy Program Page 2
Wood Yard
The implementation project addresses the development of a wood yard in the village. The wood
yard will have a heated shop for maintenance of equipment, a wood storage area, an equipment
storage area, an automated firewood processor, and perhaps a small sawmill for producing house
logs and dimension lumber. A chipper for chip production will be used in the wood yard. There are
two potential sites located for the wood yard and marked on the map (Figure 4)
Fire wood production in the village is currently by various individuals with a “village cord” selling
for approximately $150. This of course is far less than an actual cord. By adding another $25-50
per cord for processing firewood could be sold for $200-250 per full cord.
Economies of Scale
Generally speaking, the more volume that is produced using the same equipment, the less expensive
the wood per unit is to produce. See Figures 1 and 2 below. The inflection point for reasonably
priced wood produced with an automated system is around 2000 tons per year. Expected annual
wood utilization for firewood and boilers at all major buildings will be approximately 15-1800 cords
or 1815-2178 tons per year. Installation of a biomass diesel hybrid power plant will increase the
tonnage to 8-10,000 tons of wood chips. Thus, there is considerable opportunity to capture the
harvest capacity of the proposed type of system as wood volume demand increases. When
Gwitchyaa Zhee Corporation
Biomass for Energy Program Page 3
electrical generation is considered the economies of scale become fully economically viable in a
village the size of Fort Yukon.
Figures 1 and 2. Economies of scale for chips and cord wood production.
Annual Chip Production Effect on Cost $715.29 $392.79 $285.29 $231.54 $199.29 $177.79 $162.43 $150.91 $141.95 $134.79 $128.92 $124.04 $-
$100.00
$200.00
$300.00
$400.00
$500.00
$600.00
$700.00
$800.00
250 500 750 1000 1250 1500 1750 2000 2250 2500 2750 3000
Tons Produced Annually@23 Tons Daily Production
Cost/ton
Annual Cordwood Production Effect on Cost $863 $474 $344 $279 $241 $215 $196 $182 $171 $163 $150 $156 $-
$100.00
$200.00
$300.00
$400.00
$500.00
$600.00
$700.00
$800.00
$900.00
$1,000.00
250 500 750 1000 1250 1500 1750 2000 2250 2500 2750 3000
Tons Produced Annually @ 23 Tons Daily Production
Cost Per Cord
Gwitchyaa Zhee Corporation
Biomass for Energy Program Page 4
Species mix will shift with the need to produce large quantities of chips from Spruce to various
deciduous species. A 20-25 year willow rotation is quite possible for chips producing approximately
15 tons per acre See page 40 in GZ FS Plan. Willow harvest and other deciduous species such as
cotton wood, and aspen have the potential to reduce the overall harvest of spruce.
Figure 3. Break Even Analysis for Cord Wood Production.
Total Cost/Revenue Breakeven Analysis $239,957 $256,784 $273,611 $290,438 $307,265 $324,092 $340,919 $357,746 $391,401 $408,228 $425,055 $41,425
$82,850
$124,275
$165,700
$207,125
$248,550
$289,975
$331,400
$372,825
$414,250
$455,675
$497,100 $374,574 $-
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
207 414 621 829 1036 1243 1450 1657 1864 2071 2278 2486Annual Cordwood ProductionTotal DollarsTotal Production Costs
Revenue At $200/Cord
Break even analysis Figure 3 above, also demonstrates that with the proposed harvest equipment
configuration, 2000 tons need to be sold annually at a price of $200 per ton. There are two scenarios
which make this level of production feasible. The first is to move the harvest equipment to
additional villages in the region as they convert to more wood usage and the second which is the
intent of this program is to build a biomass diesel hybrid power plant. Displacing 50-70,000 gallons
of fuel oil for heat in wood boilers is a mid size economy of scale and could be achieved with some
smaller equipment and less capital costs but production is slower and operations costs remain very
similar. However, displacing an additional 200,000 gallons of diesel in a power plant with a
vertically integrated business model is the end target of this project.
Gwitchyaa Zhee Corporation
Biomass for Energy Program Page 5
Table 3. Village Heating Analysis
Village heating analysis:
The school and gym use 30,000 gallons of fuel annually for heat at a fuel cost of $106,000 at $3.55
per gallon. Gasification boilers either stick fed or automated chip fed with similar efficiencies as
fuel oil boilers can be fed for $200-250 per cord of wood and would require approximately 270
cords per year to displace 90% of the fuel oil currently consumed. Total wood costs at $200/cord
are $54,000. There are four fuel oil boilers (data from AWEDTG field survey) with the capacity to
produce a total of 2.36MMBTU per hour at the school and gym. It would take up to three Garn
boilers to supply that much heat capacity or one 2.7MMBTU per hour chip fed boiler. Comparative
analysis of costs and benefits of each system are being explored. Key to this analysis is to consider
all aspects of the entire process from the harvest to end product delivery and linking these systems.
So the issue becomes which is the most efficient and effective system. Payback on an installation is
expected to be 4-6 years.
District heating for neighborhoods is also being explored. See the Fort Yukon map for a new HUD
neighbor hood that has fuel oil boilers as well as wood stoves in each house. This analysis has not
progressed, but feasibility will be explored. Heating an individual house using high efficiency wood
stoves has by far the quickest payback. Bulk fuel oil when this analysis was done was at $3.55, but
delivered to the house was $4.10. It is currently $5.00. The above analysis assumes installation of a
new low end, high efficiency wood stove at a cost of $1200 and higher end at a cost of $2000. At a
use of 800 gallons per year and displacing 70% of the fuel with wood back the first year and a
higher end stove pays back in 2 years. Annual fuel saving is almost $1500 per household.
Although plenty of fire wood is consumed annually by most homes, a conversion to primarily wood
heat will take about 4.5-6 cords of split firewood per season. This much wood is not readily
available in the community especially to folks who cannot do the work to gather and split wood.
Commercial production is the only way that a major shift from fuel oil to wood heating of homes
will occur. At the same time, firewood use annually will only consume 500-800 cords. Home use
of firewood will be the smallest production portion of the company and as a stand alone business
does not create the economy of scale needed to produce firewood at $200 per cord.
Fort Yukon Site Map
A map of Fort Yukon (below) has the location of key boiler installations and two sites for the wood
yard. One of the locations is closest to the planned abutment for easy in wood deliver during
Gwitchyaa Zhee Corporation
Biomass for Energy Program Page 7
summer. However, a wood yard associated with the hybrid power plant will be most
efficient for chip production and storage. A neighbor hood that has high potential for
district heating is labeled. District heating of downtown is being explored as is capturing
the most heat possible from the biomass diesel hybrid power plant. A real issue is type
and cost of piping hot water. Investigations are under way to learn more of CHP and
District heating methods in Europe. Currently, they are piping water longer than 30 km
with a heat loss of .6C every 10 km.
Yukon Flats School District
P. O. Box 350
Fort Yukon, AK 99740
P: (907) 662-2515 or 1.800.322.2515
F: (907) 662-3094 or 2519
www.yukonflats.net
Arctic Village
Beaver
Central
Chalkyitsik
Circle
Fort Yukon
Stevens Village
Venetie
February 8, 2008
William R. Walz, Superintendent
Yukon Flats School District
RE: Letter of Intent to Use Wood Heat for School and Gym in Fort Yukon
To Whom It May Concern:
The Yukon Flats School District is fully supportive of the woody biomass energy
program being developed in Fort Yukon and Yukon Flats Region. I personally am aware
of the community benefits of a woody biomass program as an economic development
project as well as the potential cost savings on fuel to heat our school and gym. I have
experience with the ‘fuels for schools’ programs in the lower 48 and have an
understanding of what is involved in a project such as this.
Through a Statement of Interest, the district applied to the Alaska Wood Energy
Development Task Group last summer. A pre-feasibility study demonstrated that the Fort
Yukon School and Gym use over 30,000 gallons of fuel oil annually for heat at $4.00 per
gallon and an annual cost of $120,000 dollars. We are working with AVI to conduct
feasibility and payback analysis on installing either a Garn boiler or an automated chip
fed boiler. We expect that this installation and purchase of wood fuel offer significant
savings over the life of the project.
Pending Yukon Flats School Board approval of final design and securing funding, it is
our intent to utilize woody biomass for heat and to purchase this fuel from GZ
Corporation. I fully support this application for funds to help “jump start” the integrated
woody biomass program in Fort Yukon and the Yukon Flats Region.
Sincerely;
William R. Walz
Superintendent