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HomeMy WebLinkAboutNome joint utility system scale solar farm 3428-1681 AEA ConceptPaper 2025 3428-1681_Alaska Energy Authority_Concept Paper 1 Project Title: Nome Joint Utility System – Utility-Scale Solar Farm OCED eXCHANGE Control Number: 3428- 1681 Applicant Name: Alaska Energy Authority Applicant Entity Type: State Government Topic Area of Application: Topic Area 3 Project Location(s) by City, State, and Zip Code+4: Nome; Anchorage Alaska 99762; 99503 Population and Census Verification of Project Location and/or Directly Benefitting Community or Communities: https://data.census.gov/profile/Nome_city,_ Alaska?g=160XX00US0254920 Census Tract(s) Directly Impacted by Project: (Please separate tracts with commas) Census Tract 2 Nome AK Other Census Tracts: Census Tract 2 Nome AK Project Technologies (Select up to 5 from this list: solar, battery energy storage system, wind, water power, geothermal, biomass/biofuels, microgrids, transmission or distribution, energy efficiency, converting fossil fuel–powered equipment to electric, repowering existing renewable energy systems, dual-use, other): (Please separate technologies by commas) Solar One-Sentence Project Description: This project will redesign and construct a 1- MW solar farm to reduce reliance on diesel fuel, save ratepayers money and reduce greenhouse gas emissions. Team Member Organizations: Alaska Energy Authority, Nome Joint Utility System Do the proposed recipient and all subrecipients qualify as domestic entities*? ☐ Yes ☐ No: Yes Points of Contact Name Email Phone Number Demonstration Project Manager: Ken Morton OCR@njus.org 907-360- 6433 Business Point of Contact: Curtis Thayer CThayer@akener gyauthority.org 907-771- 3000 Confidentiality Statement (if applicable): Total DOE Funding Request ($M USD): $4,000,000 Total Non-Federal Cost Share ($M USD): $211,000 Total Project Costs ($M USD): $4,211,000 Total Period of Performance (yrs): 2 3428-1681_Alaska Energy Authority_Concept Paper 2 Technical Solution The Alaska Energy Authority (AEA) in partnership with Nome Joint Utility System (NJUS) will design and construct a 1 MW solar farm to serve the City of Nome and its surrounding areas. The community currently relies on expensive and greenhouse gas emitting diesel engines to provide 92% of its electrical needs, with the remaining 8% provided by wind turbines. Energy is expensive in Rural Alaska. NJUS’s residential electric rate currently is $0.4115/kWh (base rate of $0.1975 + fuel surcharge rate of $0.214) as compared to the national average $0.12/kWh 1, per US Energy Information Administration data. The cost of electricity, and the year-to-year volatility of the cost of energy, adds considerable challenge to both current ratepayers and those considering new business opportunities in the area. NJUS estimates that the proposed solar farm will reduce diesel fuel consumption by 84,064 gallons per year with an annual savings of $263,271 – for at least 30 years. The project vision consists of: • Designing the solar farm, which will be sited adjacent to the existing wind farm located along Banner Ridge northwest of Nome. Leveraging the windfarm’s electric transmission and communication systems to serve the solar farm provides a significant project advantage. • Installing a 1-MW solar farm along the south face of Banner Ridge. • Integrating the solar farm’s function into the utility’s SCADA system. • Using smaller, more fuel-efficient, diesel generators during summer months when the solar farm production is higher, and community electric power needs are lower. Business Case The solar farm project will reduce NJUS’ operational and maintenance (O&M) costs through the direct displacement of costly, diesel-fired generation – and by enabling the use of smaller, more-fuel-efficient, gensets during summer months, which will extend the useful life of the existing diesel generators, yielding additional cost savings via reduction in O&M and asset- replacement costs for diesel-fired generation. With the pass-through of such project cost savings, net the required O&M to maintain the solar project, to the community ratepayers, these savings will seek to reduce the overall cost-of-energy burden for all Nome residents, including the continued mitigation of potential future cost increases for the Nome community. AEA utilized the economic model from its Renewable Energy Grant Fund program to assess this project’s Benefit-Cost Ratio (BCR). The analysis yielded an expected net present value (NPV) of $5,178,911 over the 30-year life cycle of the project, and overall BCR of 1.23, indicating a financially viable project. 1 https://www.eia.gov/electricity/state/ 3428-1681_Alaska Energy Authority_Concept Paper 3 NJUS will provide the 5% cost share requirement. NJUS will maintain the system with in- house staff out of their operational budget and savings from reduced fuel purchases. NJUS’s base electric rates last increased in 2015. Subsequent increases to address inflation-related rate pressures have largely been offset by NJUS’ continued pursuit and implementation of incremental system efficiencies such as the opportunity the proposed project provides. Team Ken Morton, PE Utility Engineer, NJUS: Ken has bachelors and masters of science degrees from the Universities of Alaska at Fairbanks and Anchorage, respectively. With 30 years of experience as a licensed civil engineer, and more than 27 years as a project / program manager, Ken is well suited to manage this project for NJUS. Formerly as the Alaska DOT&PF Central Region Preconstruction Engineer he supervised subordinate managers of the pre-design, environmental, design, traffic, right-of-way, surveying and materials sections. Later as the Dillingham Public Works Director, he managed day-to-day operations of seven work units (roads, landfill, water, wastewater, buildings, landfill & administration). Currently as the NJUS Utility Engineer Ken oversees all capital projects, and until recently, also managed the operations of the power generation, line crew and water/sewer departments. John Handeland, General Manager, NJUS: As the GM for NJUS for over 25 years, and Mayor of Nome for over 19 years, John is a key community leader of this generation. During his tenure he found funding for and oversaw construction of the community’s new powerplant as well as more than a dozen water / sewer projects. As Mayor he has been at the forefront of all community matters over a range too long to list. As GM, John will provide executive oversight. Christine Coffman, CFO, NJUS: With extensive experience operating and managing her own financial services firm and several years as the utility’s Chief Financial Officer, Chris will manage project costing and reimbursement requests. Jacob Pomeranz, PE Senior Electrical Engineer, Electric Power Systems: As the leader of the Power System Engineering Team in Anchorage, he specializes in the design, integration, commissioning, and testing of power plants, substations, turbines, and generators. He brings extensive expertise in the technical aspects of power systems, with a proven track record in overseeing and managing significant projects across Alaska and beyond. His experience encompasses design, project management, and technical leadership, ensuring the successful delivery of complex engineering solutions. In his role, Jacob will lead the project design and construction engineering phases. Sean Arcilla, Project Manager - Program Manager, Alaska Energy Authority: Sean serves as the co-lead of the Alaska Wood Energy Development Task Group (AWEDTG) and the co-lead of the Alaska Biofuels Advisory Group. Sean has provided technical assistance to communities and implemented operator and maintenance training for communities across the state. AEA and the 3428-1681_Alaska Energy Authority_Concept Paper 4 AWEDTG have completed 10 preliminary feasibility studies that lay the foundation for engineering design and construction. He holds a BS in Systems Engineering from the United States Military Academy and is an MBA candidate at the University of Washington's Foster School of Business. Josephine Hartley, Renewable Energy and Energy Efficiency (REEE) Program Manager, Alaska Energy Authority: Josi has over eight years of project management experience. As the REEE Program Manager, she oversees the biomass, wind, electric vehicle, and energy efficiency programs. She has a BS in Petroleum Engineering from the University of Alaska - Fairbanks. Most recently, she was responsible for the development of the Alaska National Electric Vehicle Infrastructure program that has $52,000,000 in funding. Audrey Alstrom, Renewable Energy and Energy Efficiency Director, Alaska Energy Authority: Audrey has over 14 years of project management experience. As the REEE Director, Audrey oversees all renewable energy and energy efficiency development and acts as agency representative during outreach. Most recently, Audrey drafted the Alaska State Energy Security Plan. She has a BS in Civil Engineering from the University of Alaska - Anchorage and MPA from the University of Washington's Evans School of Public Policy and Governance. Additionally, she holds her Professional Engineer certification in civil engineering. Quinlan Harris, Project Manager, Alaska Energy Authority: Quinlan holds a BS in Mechanical Engineering from the University of Alaska - Anchorage. In his capacity at AEA he contributes to project management activities across the wind, electric vehicle, and biomass programs. He manages projects within the Renewable Energy Fund with a total value of over $8,400,000 Project Plan Project Work Activities and Tasks • Project Management – AEA will manage the overall project effort • RFP Development & Letting – AEA, NJUS and EPS will collaborate to develop the budget, scope of work, and timeline for the RFP • Design – the selected contractor will design solar farm consistent with the negotiated scope • Construction – AEA, NJUS to provide project management for the construction phase using EPS for construction engineering assistance • NJUS System Integration – NJUS (operations crew and project manager) will work with EPS (electricians, SCADA engineers and manager) to integrate the solar farm’s operation into the utility’s Supervisory Control and Data Acquisition (SCADA) operations The project has a two-year timeline (following funding availability) planned to occur over three phases: Phase 1, Summer 2025 to August 28, 2025 3428-1681_Alaska Energy Authority_Concept Paper 5 Finalize solar array layout design, inverters, transformers, rack foundations, access spur design & power distribution connection to support the full-application Submittal. Phase 2, Spring 2026 thru end of 2026 Construction Season When funding becomes available, develop RFP’s and solicit bids for 1 MW solar panels and related components; solicit bids for project construction. Following bid openings, adjust project scope to match available funds. Complete vendor selection and order solar panels and associated components. Construct spur for site access & install power / comm raceway. Phase 3 – 2027 Construction Season Following delivery of materials with the first barge of the season (generally the first week of June), the contractor installs PV foundations, panels, inverters and transformers. NJUS line crew with the assistance of EPS electricians to pull & terminate power and communication cabling. EPS SCADA engineers complete integration of the solar farm into NJUS’s control system. Project Risk Management Plan Risk Risk Level Mitigation Residual Risk Labor Shortages Medium The management team will contract with the selected technical contractor (PV install portion) in 2026 for the majority of the construction in the 2027 season, which will provide the contractor additional time to secure laborers. Medium Project Delays Due to Weather Medium Constructing the access spur and installing raceway in 2026 with PV system construction to follow in 2027 will provide sufficient time, even considering adverse weather, for the work to be performed. Low Community Commitment Low The management team will engage with the community through public meetings and social media to communicate the value of the project. Low Supply Chain Delays High Ordering the PV system materials during the summer of 2026 for 2027 delivery and construction. Medium Community and Workers 3428-1681_Alaska Energy Authority_Concept Paper 6 The majority of the City of Nome’s population, and those current employees comprising Nome Joint Utility System, are Alaska Native. The percentage of construction jobs, and later NJUS maintenance positions, held by Alaska Natives is expected to mirror that of the community’s population. NJUS leases the Banner Ridge Wind Farm site from Sitnasauk Native Corporation (owners of the surface estate) and Bering Straits Native Corporation (owners of the sub-surface estate) and both corporations provide annual dividends to their shareholders. The solar farm project will benefit Alaska Natives through these dividend payments, as well as Nome community residents at large, through power cost savings. The portion of Banner Ridge planned for solar farm use is isolated and has no subsistence use. The project team does not anticipate any opposition to the project from land-owners community stakeholders, or other groups, as will be evidenced in the letters of support that will accompany the full-application.