HomeMy WebLinkAboutAnchorage Geothermal District Heating Project Iceland America Energy App
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 1 of 25 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 25 9/3/2008
SECTION 1 – APPLICANT INFORMATION
Name (Name of utility, IPP, or government entity submitting proposal)
Iceland America Energy, Inc.
Type of Entity:
Independent Power Producer
Mailing Address
707 Wilshire Blvd. Suite 4500, Los Angeles, CA,
90017
Physical Address
707 Wilshire Blvd. Suite 4500, Los Angeles, CA,
90017
Telephone
213-683-1700
Fax
213-943-6170
Email
hiddat@icelandamericaenergy.com
1.1 APPLICANT POINT OF CONTACT
Name
Hildigunnur Thorsteinsson
Title
Project Manager
Mailing Address
707 Wilshire Blvd. Suite 4500, Los Angeles, CA, 90017
Telephone
213-683-1700
Fax
213-943-6170
Email
hiddat@icelandamericaenergy.com
1.2 APPLICANT MINIMUM REQUIREMENTS
Please check as appropriate. If you do not to meet the minimum applicant requirements, your
application will be rejected.
1.2.1 As an Applicant, we are: (put an X in the appropriate box)
An electric utility holding a certificate of public convenience and necessity under AS
42.05, or
X An independent power producer, or
A local government, or
A governmental entity (which includes tribal councils and housing authorities);
Yes
1.2.2. Attached to this application is formal approval and endorsement for its project by
its board of directors, executive management, or other governing authority. If a
collaborative grouping, a formal approval from each participant’s governing
authority is necessary. (Indicate Yes or No in the box )
Yes
1.2.3. As an applicant, we have administrative and financial management systems and
follow procurement standards that comply with the standards set forth in the grant
agreement.
Yes
1.2.4. If awarded the grant, we can comply with all terms and conditions of the attached
grant form. (Any exceptions should be clearly noted and submitted with the
application.)
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 3 of 25 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.
Iceland America Energy (IAE) intends to do a reconnaissance study followed by a resource
assessment and feasibility study on the use of geothermal energy as an energy source for heating
and hot water for the town of Anchorage. Alaska’s geothermal reservoirs are some of the largest
in the country and have great potential as a renewable energy source. Testing and research needs
to be done to determine if Anchorage and vicinity, have adequate geothermal resources to
provide Anchorage with direct-use hot water.
2.2 PROJECT DESCRIPTION
Provide a one paragraph description of your project. At a minimum include the project location,
communities to be served, and who will be involved in the grant project.
The reconnaissance study, followed by a more detailed feasibility study will analyze the
feasibility of supplying the town of Anchorage, Alaska with heat from geothermal energy
sources. IAE has signed a memorandum of understanding (MOU) with the Municipality of
Anchorage to facilitate such a study. The Municipality of Anchorage has agreed to support the
feasibility study efforts by providing information about the potential for geothermal energy use
in Anchorage as well as right of way information. If the results of the feasibility study prove to
be positive for development, IAE will work towards developing the project.
2.3 PROJECT BUDGET OVERVIEW
Briefly discuss the amount of funds needed, the anticipated sources of funds, and the nature and source
of other contributions to the project. Include a project cost summary that includes an estimated total cost
through construction.
IAE estimates that the following funds will be needed to complete Phases I and II of the
Anchorage Geothermal District Heating Project:
Phase I – Reconnaissance Study: $235,200
Phase II – Feasibility Study: $8,107,610
In total Phases I and II are estimated to cost $8,342,810. This amount includes geoscientific,
market and economic studies needed to determine whether a geothermal district heating system
is feasible in Anchorage.
IAE would supply 51% of the funding with the remaining 49% coming from the State of Alaska.
The total cost through construction for the system is estimated at $1,070,000,000.
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 4 of 25 9/3/2008
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.
A geothermal development project in Anchorage would provide multiple economic benefits to
the Anchorage community and in so doing the State of Alaska.
By developing a geothermal district heating system in Anchorage the cost of future thermal
power will no longer be dependent on the in-stability of future fossil fuel prices, but instead will
be based on an environmentally sound, reliable, long-term renewable source of thermal energy.
With the rising costs of fossil fuels the stable geothermal prices will be an important benefit to
the people of Anchorage. The system will reduce current natural gas emissions and promote and
enhance development of renewable energy projects in Alaska. It will furthermore foster a
partnership of private industry and local governments and provide new business opportunities in
the community such greenhouse farming and spa tourism.
The reconnaissance study will further assess and estimate the potential economic benefits to
consumers in Anchorage.
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.)
$1,070,000,000
2.5.2 Grant Funds Requested in this application. $4,047,230
2.5.3 Other Funds to be provided (Project match) $4,295,580
2.5.4 Total Grant Costs (sum of 2.5.2 and 2.5.3) $8,342,810
2.5.5 Estimated Benefit (Savings) TBD
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.)
TBD
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 5 of 25 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.
The project manager for the Anchorage Geothermal Project will be Mr. Roberto Agustin. Mr.
Agustin is a Professional Mechanical Engineer (PME) with 25 years of engineering experience
in the development, engineering, construction, commissioning as well as operation and
maintenance of power plants. He has a B.Sc. in Mechanical Engineering from the National
University, Philippines, a M.Sc. in Public Administration and a Certificate in Governmental
Management from the University of the Philippines, and continuing education in Thermal Power
Engineering, JICA, Japan and Wind Power Development conducted by COWI and RISO of
Denmark.
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.)
Renewable Energy Fund Grant Application IDTask NameDuration1Anchorage Geothermal District Heating System Phase I &II41 mons2Reconnaissance Study8 mons3Literature review2 mons4Evaluation of existing geoscientific data1 mon5Collection of market data1 mon6Evaluation of market data1 mon7Land rights analysis3 mons8Preliminary system design1.5 mons9Permit identification and scheduling2 wks10Environmental screening1 mon11Cost benefit analysis1.5 mons12Final evaluation and report1 mon13Recommendations0 days14Feasibility Study32.5 mons15Detailed geoscientific study6 mons16Field surveys4 mons17Data integration and survey evaluation2 mons18Detailed land rights study3 mons19Land acquisition6 mons20Availability of land0 days21Environmental Analysis6 mons22Exploration well15.5 mons23Drilling site selection1 mon24Well design1 mon25Permitting6 mons26Drilling RFP1 mon27Drilling3 mons28Temp. & press. measurements & flow test1 mon29Decision to move forward0 days30Market study6.5 mons31Collection and evaluation of load data1 mon32Conceptual system design2 mons33Preliminary PPA1.5 mons34Distribution system study2 mons35Cost benefit analysis2 mons36Final evaluation and business plan2 monsSepNovJanMarMayJulSepNovJanMarMayJulSepNovJanMarMayJulSepNovJan2009201020112012 Figure 1 Timeline for Anchorage Geothermal District Heating System Phase I & II AEA 09-004 Grant Application Page 6 of 25 9/2/2008
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 7 of 25 9/2/2008
3.3 Project Milestones
Define key tasks and decision points in your project and a schedule for achieving them.
Phase I - Reconnaissance Study: November 3, 2008 to June 12, 2009.
• Collection and evaluation of existing geoscientific data: November 3, 2008 – January 9,
2009
• Collection and evaluation of market data: November 3, 2008 – December 26, 2008
• Final evaluation and report: May 18, 2009 – June 12, 2009
Phase II - Feasibility Study: June 29, 2009 to December 23, 2011
• Detailed geoscientific study: June 29, 2009 to December 11, 2009
• Environmental analysis: January 1, 2010 to June 25, 2010
• Availability of land confirmed: June 25, 2010
• Market study: June 28, 2010 to December 24, 2010
• Drilling of exploration well: May 16, 2011 to August 5, 2011
• Flow testing completed and decision to move forward: September 2, 2011
• Final evaluation and business plan completed: December 23, 2011
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.
Project management will have a typical project structure. Overseeing the project is a steering
committee. On it will reside a member of IAE management, geothermal experts and the project
manager. The project manager will be in charge of all day to day activity in the project. The
project manager will avail himself of the support of IAE’s CFO and CTO and their respective
departments.
It is expected that the design and procurement activities will largely be in the hands of technical
consultants in Iceland and Alaska. Once the project is underway a site engineer will be hired to
handle all operations on site.
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 8 of 25 9/3/2008
IAE has signed an MOU with the Municipality of Anchorage to assess the feasibility of using
geothermal energy in the city. This partnership will facilitate data collecting and provide IAE
with essential local knowledge of the current infrastructure in place. IAE will also work with the
Alaska Center for Energy and Power (ACEP) at the University of Alaska to develop this project.
ACEP is dedicated to applied energy research focused on lowering the cost of energy throughout
Alaska and developing economic opportunities for the State, its residents, and its industries.
Their services will be very valuable in assessing the feasibility of a geothermal district heating
system in Anchorage (see Appendix E).
Along with its Alaska partners IAE intends to use its current group of consultants which include
but is not limited to Geothermex, EMA, Icelandic Geosurvey, Fjarhitun, Thermasource and
Dongell, Lawrence, Finney.
3.5 Project Communications
Discuss how you plan to monitor the project and keep the Authority informed of the status.
IAE will designate the Project Manager of the IAE Anchorage Project as the IAE point of
contact between IAE and the Authority in to establish a clear path of communication between the
two entities. A clearly defined path of communication will facilitate a common understanding of
the project and its status between IAE and the Authority.
On February 27, 2009 IAE will provide a progress report for the reconnaissance study work to
the Authority. At the end of phase I a final Reconnaissance Report will be submitted to the
Authority no later than two months after it is completed on August 12, 2009.
Depending on the recommendations of the Reconnaissance Final Report, work on Phase II of the
project, The Anchorage Geothermal Feasibility Report, will begin in late June 2009. Progress
Project Steering
Committee
Project Manager
Geoscience,
Drilling &
Reservoir
Engineering
Heat Balance
Calc,
Engineering &
Procurement
HV, Control & IT
Engineering &
Procurement
Architectural
Design
Site Engineer
Civil Design
CFO
CTO
Figure 2 Project Management Structure
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 9 of 25 9/3/2008
reports to the Authority will be provided at every significant milestone including:
• No later than two months after completion of the detailed geologic study – February 11,
2010
• No later than two months after land availability is determined – August 25, 2010
• No later than two months after the market study is completed – February 24, 2011
• No later than two months after the flow testing of exploration well is completed -
November 2, 2011
At the end of phase II a Final Evaluation Report will be submitted to the Authority no later than
two months after it is completed or on February 2, 2012. Please see Figure 3 for an outline of
IAE’s progress deliverables to the Authority.
ID Task Name
1 Phase I - Reconnaissance Study
2 Phase I
3 Progress Report I
4 Phase I Final Report
5 Phase II - Feasibility Study
6 Phase II
7 Progress Report I
8 Progress Report II
9 Progress Report III
10 Progress Report IV
11 Final Feasibility Report
2/27
8/12
2/11
8/25
2/24
11/2
2/23
Qtr 3 Qtr 1 Qtr 3 Qtr 1 Qtr 3 Qtr 1 Qtr 3 Qtr 1
2009 2010 2011 2012
Figure 3 - Communication Plan
3.6 Project Risk
Discuss potential problems and how you would address them.
The typical risk involved in a geothermal project includes exploration, development, market and
regulatory risk. The rewards on the other hand include financial, environmental, marketing and
total community well being.
Geothermal resource risks that pose serious constraints on geothermal projects are normally
limited to:
• Low temperature
• Poor permeability
• Adverse chemical composition of geothermal fluid and effects due to pervasive acid
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AEA 09-004 Grant Application Page 10 of 25 9/3/2008
magmatic fluids 1
• Fluid extraction in excess of resource capacity.
To minimize the risk and at the same time maximize the sustainable use of the geothermal
reservoir a wealth of geological information for that reservoir is needed. IAE will bring
experienced and highly qualified scientists such as geologists, geochemists, geophysicists and
reservoir engineers to analyze the potential resource and pin point drilling sites. The techniques
that may be used to minimize the exploration risk include geological mapping, fracture or fault
mapping, lithological mapping, tectonics, mineral alterations mapping, chemical sampling,
geothermometry calculations, resistivity and seismic soundings and magnetic and thermal flux
surveys.
Technical risk in geothermal projects is the same as for other surface facilities. The main risk lies
in false or underestimated design conditions and assumptions as well as unforeseen events. If the
reconnaissance and feasibility study results are positive, IAE will minimize the technology risk
by using qualified and experienced designers such as electrical, civil, mechanical engineers and
architects, responsible for designing the facilities according to current US standards and ensuring
that the project meets expectations and qualifications. Known and proven technologies will be
used at all levels. To minimize the regulatory risk lawyers and business developers familiar with
geothermal development in the United States and Alaska regulations will be responsible for all
regulatory and legal issues. After full design is finalized the project will be contracted out to a
qualified and experienced main contractor familiar with Alaska for plant construction. To
mitigate the market risk IAE will enter into long term Power Purchase Agreements with major
thermal users in the planned heating area.
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.
IAE will target the Lower Susitna Basin and its vicinity as a potential geothermal energy source
for a district heating project in Anchorage, Alaska. In the early 80s four wildcat wells drilled in
the Basin encountered anomalously high temperature gradients of 41 °C to 123 °C/km suggesting
that a low temperature geothermal resource might be present suitable for direct use utilization
1 General risks from: Barnett et al, Risk and risk management in geothermal exploration and development,
http://www.unep.org/gef/content/pdf/32-Barnett%20et%20al.pdf April 12 2005.
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AEA 09-004 Grant Application Page 11 of 25 9/3/2008
(State of Alaska, Department of Natural Resources, 1989). Initial studies done by the Geophysical
Institute in cooperation with the Alaska Division of Geological and Geophysical Surveys in 1982
concluded that “a substantial geothermal resource may be present in the Willow-Big Lake area”.
It is however hard to estimate the possible size of the reservoir due to lack of geological,
geophysical and geochemical data on the area. Large data gaps exist in the preliminary data
collected in the early 80s and as a result the reservoir depths and thicknesses are presently
unknown.
The IAE Anchorage reconnaissance study will analyze the available geological data in detail to
identify and estimate the reservoir potential as well as the survey efforts needed to confirm the
existence, location and size of the geothermal resource. If the reconnaissance study results are
positive IAE will research the area more thoroughly by conducting geothermal surveys including
but not limited to resistivity analysis, thermal gradient holes and an exploration well.
Currently 84% of Anchorage´s heating is provided by natural gas and 13% by electricity
produced by natural gas and hydro resources. Unlike natural gas heating, geothermal heating does
not produce any greenhouse gas emissions. Also, geothermal energy is isolated from price hikes
in fuel unlike natural gas which is subject to natural gas availability and market prices. However,
geothermal is dependent on the existence of a nearby geothermal reservoir. Consequently,
detailed reservoir exploration has to be undertaken before developing a geothermal district
heating system.
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.
As mentioned above 84% of Anchorage heating is supplied by natural gas which is supplied by
the natural gas company ENSTAR. Another 13% of households in the area use electricity
supplied by Municipal Light and Power (MLP) and Chugach Electric Association to heat their
homes. Finally 3% of households use other sources like wood to heat their homes (Institute of
Social and Economic Research).
The reconnaissance study will research the current energy environment in Anchorage in more
detail. Questions that the study seeks to answer include but are not limited to: What is the current
capacity of ENSTAR’s natural gas pipeline system and the availability of future natural gas
reserves? What is the age and condition of facilities providing electricity for home heating in
Anchorage?
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.
Most of Anchorage’s energy for space heating comes from natural gas, either in the form of
natural gas boilers for individual structures or to produce electricity for use on the electrical grid.
Additionally hydro supplies some of the electricity used for heating. Geothermal will be a
renewable addition to the area’s energy mix and will provide a new, sustainable source of heating
and hot water for the community. It is to be expected that if a geothermal district heating system
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AEA 09-004 Grant Application Page 12 of 25 9/3/2008
comes online in Anchorage some of that natural gas and electricity use will be displaced by
geothermal energy.
The reconnaissance study will analyze the current energy infrastructure in Anchorage and identify
what effects a geothermal district heating system would have on that infrastructure. It will analyze
what would need to be added or retrofitted if geothermal energy were to be used, how old the
current infrastructure is and if there are replacement or upgrading plans on the table? The
reconnaissance study will also estimate the costs of infrastructure changes, upgrades and
construction needed to accommodate a geothermal district heating system and incorporate those
estimates into the final economic analysis of the Reconnaissance Report.
4.2.3 Existing Energy Market
Discuss existing energy use and its market. Discuss impacts your project may have on energy
customers.
Energy for home heating and electric use in the Anchorage area is supplied by three main
utilities: Municipal Light and Power (MLP), Chugach Electric Association (CEA), and ENSTAR.
MLP and CEA utilize both natural gas fired facilities and purchase electricity off the railbelt
electrical grid to supply their customers with power while ENSTAR is a natural gas company.
Currently, 84% of home heating in Anchorage comes from natural gas while 13% comes from
electricity and 3% from other sources like wood (Institute of Social and Economic Research).
Anchorage’s population reached 283,823 in 2007 a 0.2% increase from 2006. The Alaska
Department of Labor and Workforce predicts that Anchorage’s population will rise to about
322,000 in 2020. With the support of the Municipality of Anchorage, IAE will analyze the space
heating and hot water market in Anchorage. The study will seek answers to questions like what is
the current Anchorage energy load for both heating and other hot water uses and what do the load
curves for the community look like?
It is anticipated that if a geothermal district heating project is found to be feasible for the town of
Anchorage then at least some of the electric and natural gas heating markets in the city will be
displaced by geothermal energy. Customers that before used natural gas or electricity to heat their
homes and water will use geothermal instead. Geothermal energy will supply them with a
sustainable, stable energy source that is not subject to market fuel prices. It will provide business
opportunities by supplying a new, clean energy source that can be used for greenhouse
operations, spas and aqua culture to name a few. The renewable and stable energy source also has
the potential to raise property values for those who utilize the system as the property becomes
isolated from fossil fuel market price fluctuations for space and hot water heating.
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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
Reinjection Pumps
110 l/s
23 MW16 MW
77°C
40°C
2 Projection Wells
2 Reinjection Wells
100 l/s
100 l/s40°C
77°C
95°C
Circulation Pumps
7 MW
[130°C]
70°C
85°C
Energy meter
Flow meter
(2 GWh)
(68 GWh)
(70 GWh)
35°C
[90°C]
TC
TC
85°C (Outdoor temperature compensation)
73°C
Flow meter
PC
110 l/s@ 50 mWg
Peak load boiler
90 kW
Circulation Pumps
110 l/s@ 5 mWg
30 kW
85°C70°C
Central+pumps
110 l/s
Heat Central: Estimated flow and temperature values shown at maximum power. Annual energy (GWh).
1585 gpm170°F 170°F
104°F1585 gpm104°F 95°F
158°F
158°F
185°F
35°C
185°F
[266°F]
[90°C]
185°F
163°F
1744 gpm
1744 gpm
54 BTU/h
(232,000 BTU)77 MW
(70 GWh)
23 BTU/h
(6,824 BTU)
Figure 4 One line diagram of system (temperatures to be confirmed)
The reconnaissance and feasibility reports will explore the viability of a geothermal district heating
in Anchorage. The technology used for geothermal district heating systems is mature and widely
used. For example, in Iceland, about 90% of the space heating is provided by geothermal energy.
Geothermal direct use systems do not need as high resource temperature as geothermal electricity
production projects. The average temperature of US geothermal district heating systems is around
160 °F or about 70 °C.
If found to be feasible the Anchorage Geothermal District Heating System will be comprised of a
well field, a primary and secondary pipeline, a heat exchanger between geothermal fluid and
distribution system, a natural gas boiler house to handle peak loading, pump houses and a pressure
boasting and / or pressure separation station as seen in the one-line diagram in Figure 4.
The energy produced from a geothermal system depends on the temperature and amount of flow of
the geothermal fluid being utilized and the temperature drop of the geothermal fluid within the
system. As the resource has not been explored in detail yet it is unfeasible at this time to predict
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what the optimum installed capacity or annual generation will be. However, Icelandic district
heating technology maximizes the temperature drop in the system which allows for maximization
of resource utility as well as higher efficiency and less strain on the resource. The anticipated
capacity factor of the resource is 98%.
For any district heating project to reach fruition, several basic criteria must be met. A serious
deficiency in any one of these items will very likely result in failure of the project. These items
include but are not limited to;
1. A quality resource.
2. Long term, secure, low cost land leasing and right of way.
3. A strong local support.
4. No legal or regulatory hindrances.
The reconnaissance and feasibility studies will address whether a quality resource is available by
doing a thorough analysis of the viability and capacity of potential geothermal resources in the
area. It will also analyze the Anchorage market and determine the economic feasibility of the
system. The studies will also address the important factor of integration into the current energy
system in Anchorage to establish the economic viability of the system.
4.3.2 Land Ownership
Identify potential land ownership issues, including whether site owners have agreed to the project
or how you intend to approach land ownership and access issues.
The reconnaissance study will analyze land rights in the area of interest and identify owners and
potential barriers to geothermal development in the area. IAE will utilize Right of Way information
from the Municipality of Anchorage as a basis for that land rights analysis.
If the results of the reconnaissance study are favorable a more detailed land rights study will be
performed and land owners in the area of interest will be approached for mineral and land rights
acquisition.
4.3.3 Permits
Provide the following information as it may relate to permitting and how you intend to address
outstanding permit issues.
• List of applicable permits
• Anticipated permitting timeline
• Identify and discussion of potential barriers
The reconnaissance study will identify the necessary permits needed to develop the project. It will
also research the estimated timeframe and requirements to obtain those permits.
If the reconnaissance study results are positive IAE will seek to obtain the necessary permits for
geothermal exploration and drilling in the area as part of the feasibility study.
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
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• Archaeological and historical resources
• Land development constraints
• Telecommunications interference
• Aviation considerations
• Visual, aesthetics impacts
• Identify and discuss other potential barriers
In the case of geothermal power plants as is the case for every other power and/or energy
production facility; associated environmental impact may be divided into the following main
categories:
1. Surface disturbances; such as those caused during the plant construction (access roads, pipe
and power lines, plant and associated land use)
2. Physical effects, e.g. the effect of fluid withdrawal on natural manifestations, land
subsidence, visual effects (buildings, cooling towers, surface pipelines, power transmission
lines) etc.
3. Noise, such as equipment noise during drilling, construction and operation
4. Thermal pollution, e.g. due to hot liquid and steam release on the surface
5. Chemical pollution due to disposal of liquid and solid waste, gaseous emission to the
atmosphere etc.
6. Protection, such as ecological protection (fauna and flora)
The impact level is very much development and locality specific, i.e. it depends upon the type of
power conversion cycle, the implementation stage reached, geological conditions, topography and
the characteristics of the resource being developed.
The reconnaissance study will include an environmental screening for the area of interest. The
screening will include research on indigenous species in the area, wetlands and protected areas,
cultural issues, land development constraints, aesthetics and visual impacts and other potential
environmental barriers that need to be addressed.
If the reconnaissance study is positive IAE will perform a more detailed environmental analysis
addressing the environmental mitigation efforts needed to minimize the environmental impact of
the project.
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
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 16 of 25 9/3/2008
The cost for Phase I is estimated at $235,200 and the cost of Phase II at $8,107,610.
IAE is requesting $4,049,230 in grant funding or 49% of the estimated cost of Phases I and II. IAE
will contribute $4,295,580 in match funding in capital and in kind contributions.
The total estimated project cost is $1,070,000,000 but that number will be further defined in the
reconnaissance and feasibility studies.
4.4.2 Project Operating and Maintenance Costs
Include anticipated O&M costs for new facilities constructed and how these would be funded by
the applicant.
• Total anticipated project cost for this phase
• Requested grant funding
The anticipated O&M costs of the project once the system is up and running are expected to be
$21,400,000. The O&M costs will be funded by revenue in the form of sale of hot water for
heating and domestic use in Anchorage.
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 Muncipality of Anchorage, its businesses and residents are the potential customers of a district
heating system in Anchorage. The reconnaissance and feasibility studies will identify in more
detail what potential PPA’s could be negotiated and with whom.
The potential energy price will be determined by the reconnaissance and feasibility reports.
However, it is clear that the aim of the project is to supply the town of Anchorage with a reliable
and affordable source of heat. IAE expects the price of heat will be in the range of $8 - $16 per
mmBtu.
4.4.4 Cost Worksheet
Complete the cost worksheet form which provides summary information that will be considered in
evaluating the project.
The following assumptions were used when preparing the project’s budget:
Billing Rate Assumptions: Travel Assumptions:
IAE Project/Technical Personnel $225 Round trip air to Anchorage $1,800
IAE Financial Support $125 Consultant per diem $325
IAE Marketing Department $185 IAE per diem $275
IAE CFO $375
IAE CEO $475
IAE Clerical Support $55
Technical Consultants $325
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 17 of 25 9/3/2008
Financial Analyst $125
Landman $125
Legal $375
Cost estimates in the budget are based on in house experience, prior work and consultant price
quotations.
Estimates for geoscientific work are based on in house experience and price quotes from IAE’s
consultants.
Estimates for drilling and well testing are based on prior cost experience in other IAE projects.
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.
IAE will use the extensive Icelandic geothermal district heating experience to develop the
Anchorage project. Rigorous exploration of the area will establish the geothermal potential of the
Lower Susitna Basin and its vicinity. A detailed market analysis will identify current energy
prices in Anchorage along with possible market share. An economic analysis encompassing both
the development of the resource and the construction of a distribution system will determine the
viability of the project. If the feasibility study results are positive IAE will seek to use local
expertise and workforce to develop the project in cooperation with IAE staff and consultants. It is
important to include and cooperate with the Anchorage community to ensure a successful project.
IAE has begun this process by signing a MOU with the Municipality of Anchorage to analyze the
feasibility of supplying Anchorage with geothermal energy.
IAE will develop a comprehensive business plan as a final deliverable of the Anchorage
Geothermal District Heating Feasibility Study in Phase II of the project.
4.4.6 Analysis and Recommendations
Provide information about the economic analysis and the proposed project. Discuss your
recommendation for additional project development work.
It is critical that a systematic and comprehensive geothermal resource evaluation is conducted in
the vicinity of Anchorage to establish a basis for a geothermal district heating system in the city.
Alongside the resource evaluation, an economic analysis and market study are essential to
confirm the economic viability of the project. The IAE reconnaissance and feasibility reports will
perform the necessary analysis to assess the feasibility of the project.
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 18 of 25 9/3/2008
SECTION 5– PROJECT BENEFIT
Explain the economic and public benefits of your project. Include direct cost savings,
and how the people of Alaska will benefit from the project.
The benefits information should include the following:
• Potential annual fuel displacement (gal and $) over the lifetime of the evaluated
renewable energy project
• Anticipated annual revenue (based on i.e. a Proposed Power Purchase Agreement price,
RCA tariff, or avoided cost of ownership)
• Potential additional annual incentives (i.e. tax credits)
• Potential additional annual revenue streams (i.e. green tag sales or other renewable
energy subsidies or programs that might be available)
• Discuss the non-economic public benefits to Alaskans over the lifetime of the project
Although it is impossible to estimate the potential annual fuel displacement or revenue of the
potential Anchorage Geothermal District Heating System until after the completion of the
reconnaissance and feasibility reports it is clear that the system has the potential to displace a
significant amount of natural gas use in the community. Furthermore, the system would have
numerous non-economic public benefits to Alaskans over its lifetime. Some of these benefits
would be gained soon after a system becomes operational, while others will require a longer time
period before a benefit is earned.
A geothermal district heating system serving the largest population center in Alaska would
promote a positive image of the town of Anchorage and the State of Alaska as a practitioner of a
clean, sustainable energy planning and use. It would also isolate the town of Anchorage from fuel
cost increases and ensure stable energy cost and energy supply. The primary reason for the
district heating project is to provide an economic supply of energy suitable for space heating. The
project will produce a long term stable source of energy not dramatically affected by events
which produce changes in petroleum prices. Established geothermal heating districts, some with
decades of operation, have proven this can be an economically competitive and reliable method of
space heating, utilizing simple, proven technology at a low operational cost.
Furthermore, by displacing natural gas, electric and wood space heating, a geothermal system
would reduce gaseous and particulate emissions in the community.
The development of the system would provide local employment during construction and
permanent employment during operations. The system would also create and open up different
upstream and downstream business opportunities such as greenhouses and aqua culture using
geothermal energy. This could also make available locally grown vegetables and flowers year.
A geothermal district heating system would make snow melting in streets, parking areas and
sidewalks a very feasible option. The waste heat, remaining in the district heating system after
space heating use, still has practical applications. One of these is snow melting on streets, parking
areas, and sidewalks. A pipe coil with circulating geothermal fluid placed beneath these areas will
melt the overlying snow. The benefits lie in reduction in collision hazards, improved walking
conditions and reduction in the Town’s snow removal cost.
Real estate values are another Town asset. Any real estate serviced by a reliable supply of heating
energy at a stable cost, such as geothermal heating, will command a higher price than the same
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 19 of 25 9/3/2008
property without this feature. This value is judged not only in relation to surrounding property,
but also to property in other competing areas. New construction and retrofitted older buildings
will carry a higher value with the installed geothermal heating system.
An inexpensive and abundant supply of thermal water will allow the year round heating of
swimming pools and spas. If water quality permits, the natural thermal water can be used directly
to fill pools and spas (after first extracting higher temperature heat for space heating), otherwise a
heat exchanger can extract necessary heat. Hotel resorts can install thermal spas and bathing
facilities. This translates into further economic benefits for the community and community. The
Hot Spring Resort attraction will also create additional jobs and generate additional revenue. This
entire benefit will be ancillary to the project’s main purpose which is district heating.
An increase in tourism due to spas and other aspects of geothermal and additional light industry
will expand the tax revenue realized by the community. Savings from space heating of public
buildings and snow removal will further increase the revenue available to Anchorage.
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
IAE has signed an MOU with the Municipality of Anchorage to perform a feasibility study on
the use of geothermal energy in Anchorage. In total a geothermal district heating system in
Anchorage is estimated to cost $1,070,000,000.
Work on the project is due to start at the beginning of November, 2008.
To assess the feasibility of constructing such a system IAE intends to do a reconnaissance study
followed by a feasibility study. The reconnaissance study is estimated to cost $235,200 while the
more detailed feasibility study is budgeted at $8,107,610.
IAE is seeking a grant in the amount of $4,047,230 from the State of Alaska to complete this
work. The grant represents 49% of the total costs of phases I and II of the project. IAE will
supply $4,295,580 or 51% of the needed funds.
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application 9/2/2008
Appendix A
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application 9/3/2008
Appendix B
Renewable Energy Fund
RFA AEA 09-004 Application Cost Worksheet revised 9/26/08 Page 1
Application Cost Worksheet
Please note that some fields might not be applicable for all technologies or all project
phases. Level of information detail varies according to phase requirements.
1. Renewable Energy Source
The Applicant should demonstrate that the renewable energy resource is available on a
sustainable basis.
Annual average resource availability. 98% or 8,585 hours a year
Unit depends on project type (e.g. windspeed, hydropower output, biomasss fuel)
2. Existing Energy Generation
a) Basic configuration (if system is part of the Railbelt1 grid, leave this section blank)
i. Number of generators/boilers/other
ii. Rated capacity of generators/boilers/other
iii. Generator/boilers/other type
iv. Age of generators/boilers/other
v. Efficiency of generators/boilers/other
b) Annual O&M cost (if system is part of the Railbelt grid, leave this section blank)
i. Annual O&M cost for labor
ii. Annual O&M cost for non-labor
c) Annual electricity production and fuel usage (fill in as applicable) (if system is part of the
Railbelt grid, leave this section blank)
i. Electricity [kWh]
ii. Fuel usage
Diesel [gal]
Other
iii. Peak Load
iv. Average Load
v. Minimum Load
vi. Efficiency
vii. Future trends
d) Annual heating fuel usage (fill in as applicable)
i. Diesel [gal or MMBtu]
ii. Electricity [kWh] TBD as part of study
1 The Railbelt grid connects all customers of Chugach Electric Association, Homer Electric Association, Golden
Valley Electric Association, the City of Seward Electric Department, Matanuska Electric Association and Anchorage
Municipal Light and Power.
Renewable Energy Fund
RFA AEA 09-004 Application Cost Worksheet revised 9/26/08 Page 2
iii. Propane [gal or MMBtu]
iv. Coal [tons or MMBtu]
v. Wood [cords, green tons, dry tons]
vi. Other Natural gas: 27,700,000 million cubic feet
3. Proposed System Design
a) Installed capacity 1,470 MWt
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]
vi. Other Geothermal: 1470 MWt
4. Project Cost
a) Total capital cost of new system $1,070,000,000
b) Development cost $8,342,810 (assumed to be cost of assessing
feasibility of project)
c) Annual O&M cost of new system $21,400,000
d) Annual fuel cost $0
5. Project Benefits
a) Amount of fuel displaced for
i. Electricity Not applicable
ii. Heat Up to 27,700,000 million cubic feet of natural gas in addition to electricity
used for heating in Anchorage
iii. Transportation Not applicable
b) Price of displaced fuel $8.57 per mmBTU and 9.476¢/kWh
c) Other economic benefits Stable pricing independent of fossil fuel prices and new
business opportunities
d) Amount of Alaska public benefits Significant, exact amount to be determined in studies
Renewable Energy Fund
RFA AEA 09-004 Application Cost Worksheet revised 9/26/08 Page 3
6. Power Purchase/Sales Price
a) Price for power purchase/sale $8.00 - $16.00 per mmBtu
7. Project Analysis
a) Basic Economic Analysis
Project benefit/cost ratio To be determined in reconnaissance and feasibility studies
Payback To be determined in reconnaissance and feasibility studies
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application 9/3/2008
Appendix C
Alaska Energy Authority ‐ Renewable Energy FundBUDGET INFORMATIONBUDGET SUMMARY: Phase I ‐ Reconnaissance StudyMilestone or Task Federal Funds State FundsLocal Match Funds (Cash)Local Match Funds (In‐Kind)Other FundsTOTALS1 Literature review $11,250.00 $11,250.00 $22,500.002 Evaluation of existing geoscientific data $11,250.00 $11,250.00 $22,500.003 Collection of market data $7,400.00 $7,400.00 $14,800.004 Evaluation of market data $6,075.00 $6,075.00 $12,150.005 Land rights analysis $7,500.00 $7,200.00 $14,700.006 Preliminary system design $21,125.00 $1,125.00 $20,000.00 $42,250.007 Permit identification and scheduling $5,187.50 $4,062.50 $1,125.00 $10,375.008 Environmental screening $12,812.50 $10,562.50 $2,250.00 $25,625.009 Cost benefit analysis $9,200.00 $9,200.00 $18,400.0010 Final evaluation and report $25,950.00 $2,350.00 $23,600.00 $51,900.00RFA AEA09‐004 Budget FormpMilestone # or Task #BUDGET CATAGORIES:12345TOTALSDirect Labor and Benefits $22,500.00 $22,500.00 $14,800.00 $12,150.00 $7,200.00 $79,150.00Travel, Meals, or Per Diem$0.00Equipment$0.00Supplies$0.00Contractual Services$7,500.00 $7,500.00Construction Services$0.00Other Direct Costs$0.00TOTAL DIRECT CHARGES $22,500.00 $22,500.00 $14,800.00 $12,150.00 $14,700.00 $86,650.00Page 1RFA AEA09‐004 Budget Form
Alaska Energy Authority ‐ Renewable Energy FundBUDGET INFORMATIONBUDGET SUMMARY: Phase I ‐ Reconnaissance Study continuedMilestone # or Task #BUDGET CATAGORIES:678910TOTALSDirect Labor and Benefits $2,250.00 $2,250.00 $4,500.00 $18,400.00 $47,200.00 $74,600.00Travel, Meals, or Per Diem$4,700.00 $4,700.00Equipment$0.00Supplies$0.00Contractual Services $40,000.00 $8,125.00 $21,125.00 $69,250.00Construction Services$0.00Other Direct Costs$0.00TOTAL DIRECT CHARGES $42,250.00 $10,375.00 $25,625.00 $18,400.00 $51,900.00 $148,550.00Summary Phase IRFA AEA09‐004 Budget FormyDirect Labor and Benefits $153,750.00Travel, Meals, or Per Diem $4,700.00Equipment $0.00Supplies $0.00Contractual Services $76,750.00Construction Services $0.00Other Direct Costs $0.00TOTAL DIRECT CHARGES $235,200.00Page 2RFA AEA09‐004 Budget Form
Alaska Energy Authority ‐ Renewable Energy FundBUDGET INFORMATIONBUDGET SUMMARY: Phase II ‐ Feasibility StudyMilestone or Task Federal Funds State FundsLocal Match Funds (Cash)Local Match Funds (In‐Kind)Other FundsTOTALS1 Field Surveys $1,327,512.50 $1,290,012.50 $37,500.00 $2,655,025.002 Data integration and survey evaluation $27,000.00 $18,000.00 $9,000.00 $54,000.003 Detailed land rights study $21,350.00 $36,000.00 $57,350.004 Land acquisition ‐ documentation etc $14,900.00 $61,400.00 $76,300.005 Lease cost$100,000.00 $100,000.00Exploration well6 Drilling site selection $35,587.50 $26,587.50 $9,000.00 $71,175.007 Well design $26,000.00 $26,000.00 $52,000.008 Permitting $50,775.00 $41,775.00 $9,000.00 $101,550.00RFA AEA09‐004 Budget Formg9 Drilling RFP $9,000.00 $9,000.00 $18,000.0010 Drilling $1,750,000.00 $1,750,000.00 $3,500,000.0011 Flow Test $137,500.00 $137,500.00 $275,000.00Market study12 Collection and evaluation of load data $11,312.50 $1,312.50 $10,000.00 $22,625.0013 Conceptional system design $400,000.00 $400,000.00 $800,000.0014 Preliminary PPA $16,500.00 $7,500.00 $9,000.00 $33,000.0015 Distribution system study $21,062.50 $18,812.50 $2,250.00 $42,125.0016 Environmental Analysis $71,875.00 $65,125.00 $6,750.00 $143,750.0017 Cost benefit analysis $18,250.00 $18,250.00 $36,500.0018 Final evaluation and business plan $34,605.00 $2,625.00 $31,980.00 $69,210.00Page 3RFA AEA09‐004 Budget Form
Alaska Energy Authority ‐ Renewable Energy FundBUDGET SUMMARY: Phase II ‐ Feasibility Study ‐ continuedMilestone # or Task #BUDGET CATAGORIES:12345TOTALSDirect Labor and Benefits $75,000.00 $18,000.00 $36,000.00 $61,400.00 $190,400.00Travel, Meals, or Per Diem $10,025.00 $6,350.00 $14,900.00 $31,275.00Equipment$0.00Supplies$0.00Contractual Services $2,570,000.00 $36,000.00 $15,000.00 $2,621,000.00Construction Services$0.00Other Direct Costs$100,000.00 $100,000.00TOTAL DIRECT CHARGES $2,655,025.00 $54,000.00 $57,350.00 $76,300.00 $100,000.00 $2,942,675.00Milestone # or Task #BUDGET CATAGORIES:678910TOTALSDirect Labor and Benefits $18,000.00 $18,000.00 $18,000.00 $54,000.00Travel, Meals, or Per Diem $8,175.00 $5,550.00 $13,725.00RFA AEA09‐004 Budget FormEquipment$0.00Supplies$0.00Contractual Services $45,000.00 $52,000.00 $78,000.00 $3,500,000.00 $3,675,000.00Construction Services$0.00Other Direct Costs$0.00TOTAL DIRECT CHARGES $71,175.00 $52,000.00 $101,550.00 $18,000.00 $3,500,000.00 $3,742,725.00Milestone # or Task #BUDGET CATAGORIES:11 12 13 14 15 TOTALSDirect Labor and Benefits $20,000.00 $18,000.00 $4,500.00 $42,500.00Travel, Meals, or Per Diem $2,625.00 $2,625.00 $5,250.00Equipment$0.00Supplies$0.00Contractual Services $275,000.00 $800,000.00 $15,000.00 $35,000.00 $1,125,000.00Construction Services$0.00Other Direct Costs$0.00TOTAL DIRECT CHARGES $275,000.00 $22,625.00 $800,000.00 $33,000.00 $42,125.00 $1,172,750.00Page 4RFA AEA09‐004 Budget Form
Alaska Energy Authority ‐ Renewable Energy FundBUDGET SUMMARY: Phase II ‐ Feasibility Study ‐ continuedMilestone # or Task #BUDGET CATAGORIES:16 17 18 TOTALSDirect Labor and Benefits $13,500.00 $36,500.00 $63,960.00 $113,960.00Travel, Meals, or Per Diem $5,250.00 $5,250.00 $10,500.00Equipment$0.00Supplies$0.00Contractual Services $125,000.00 $125,000.00Construction Services$0.00Other Direct Costs$0.00TOTAL DIRECT CHARGES $143,750.00 $36,500.00 $69,210.00 $249,460.00Summary Phase IIDirect Labor and Benefits $400,860.00Travel, Meals, or Per Diem $60,750.00Equipment $0.00RFA AEA09‐004 Budget FormqpSupplies $0.00Contractual Services $7,546,000.00Construction Services $0.00Other Direct Costs $100,000.00TOTAL DIRECT CHARGES $8,107,610.00Summary Phase I & II Total State of Alaska IAEPhase I$235,200$110,250$124,950Phase II $8,107,610 $3,936,980 $4,170,630Total Cost of Phase I & II$8,342,810$4,047,230$4,295,580Percentage Share in Total Cost 49% 51%Page 5RFA AEA09‐004 Budget Form
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application 9/3/2008
Appendix D
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application 9/3/2008
Appendix E
Alaska Center for Energy and Power • University of Alaska Fairbanks • 814 Alumni Drive
P.O. Box 755910 • Fairbanks, Alaska 99775-5910 • Tel: (907) 474-5402 • Fax: (907) 474-5475
October 6, 2008
Hidda Thorsteinsson
(213) 683-1700
Iceland America
707 Wilshire Blvd Ste 4500
Los Angeles, CA 90017
Dear Ms. Thorsteinsson;
The Alaska Center for Energy and Power is pleased to participate in your proposal to the
Alaska Energy Authority to conduct a reconnaissance and feasibility assessment of
geothermal district heating options for Anchorage. We believe the geothermal resource
potential in the Mat-Su centered near Willow is worth further investigation. Through
simple bottom-hole temperature measurements of existing wells and other basic
investigation techniques, a better picture of both the spatial extent and potential available
heat can be constructed. In the time since the last fieldwork was conducted in the region,
a large number of new constructions have been built, and there is a tremendous amount of
data available from water wells throughout the area. By conducting a low-cost initial
reconnaissance study as we have proposed, we believe Iceland America will be in a better
position to determine cost effective next steps in the overall program you have outlined.
Sincerely,
Gwen Holdmann
Organizational Director
Alaska Center for Energy and Power
University of Alaska Fairbanks
Gwen.Holdmann@uaf.edu
(907) 590-4577