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HomeMy WebLinkAboutREFAC PPT IIJanuary 18, 2018 Renewable Energy Fund Advisory Committee (REFAC) 2 Welcome and Introductions Kodiak nearly 100% renewable 3Kodiak, AK Integrated system •Terror Lake hydro •Pillar Mt. wind •Battery •Diesel 2016 generation •19.0% wind •80.7% hydro •0.3% diesel 1.Refreshers A.Energy in Alaska B.REF evaluation C.REFAC advisory role 2.REF impact to date 3.Governor’s budget A.Recommended projects 4.Project financing 5.PCE earnings as a funding source 4 1.REFAC support for recommended projects 2.Input moving forward with new funding mechanism Agenda Objectives St. Paul, AK (photo courtesy TDX Power) 5 Energy in Alaska 740,000 People 660,000 Sq. Miles 200 Islanded power systems 6 Railbelt 72% of Pop 76% of Energy Southeast 10% of Pop 13% of Energy Rest of AK 18% of Pop 11% of Energy REF Statutory Guidance Eligible projects must: 1.Be a new project not in operation in 2008, and 2.Be a hydro, direct use of renewable energy, a facility that generates electricity from fuel cells that use hydrogen from RE or natural gas (certain conditions for natural gas), or be a facility that generates electricity using renewable energy. “…develop a methodology for determining the order of projects that may receive assistance, including separate requirements for grant eligibility, and adopt regulations identifying criteria to evaluate the benefit and feasibility of projects for which an applicant applies for support from the legislature, with the most weight being given to projects that serve any area in which the average cost of energy to each resident of the area exceeds the average cost to each resident of other areas of the state, and significant weight being given to a statewide balance of grant funds and to the amount of matching funds an applicant is able to make available…” 7 Four Stage REF Evaluation Process 1.Completeness/eligibility (AEA staff) 2.Feasibility and public benefit (AEA, DNR, Contractors) A.Technical and economic evaluation B.Qualifications and experience of team C.Project management/dev/operation 3.Ranking projects (AEA/REFAC) A.Cost of energy single biggest criterion (35%) B.Levelized feasibility score from stage 2 (20%) C.Other criteria include public benefits, readiness, local support and match 4.Regional spreading (AEA/REFAC) 8 REFAC Advisory Committee Consists Of: •5 members shall be appointed by the governor to staggered -one representative to be appointed from each of the following •small Alaska rural electric utilities; •large Alaska urban electric utilities; •Alaska Native organizations; •businesses or organizations engaged in the renewable energy sector; and •the Denali Commission established under P.L. 105-277, 42 •2 members of the house of representatives appointed by the speaker of the house of representatives; and •2 members of the senate appointed by the president of the senate 9 REFAC input since inception has included: •Increased focus on high cost energy communities •Encourage heat projects •Encourage energy efficiency points in scoring for heat projects •Regional spreading of grant funds •Support recommendations to the legislature 10 REF spending to date by region 11 12 REF spending to date by resource 13 Renewable Energy Fund Projects Completed/Under Development End of Year 201670 Projects operational 63 projects underway 42 funded through construction 14 design/ permitting 7 recon/feasibility 14 •$257 million granted in Rounds I to VIII •851 total applications received •287 applications funded •No new appropriations Rounds IX and X REF in the Governor’s FY19 Budget: $11 million in REF grants $3 million to administer 15 Where the $ came from July 1 DOR calculates: 1.The monthly average market value of the PCE endowment fund for previous three fiscal years, AND 2.The earnings of the fund for the previous closed fiscal year. •5% of the amount calculated using #1 above is available to appropriate for PCE program/admin •If the amount calculated using #2 above is greater than the amount appropriated to the program, then 70% of the difference is available to appropriate to: •First $30 million to Community Revenue Sharing or Community Assistance •Up to $25 million to REF, Bulk Fuel Revolving Loan Fund, Rural Power System Upgrades Projects in Governor’s budget Project name Location Resource type Phase Request Fivemile Creek Chitina Hydro Construction $3,400,000 Wales heat recovery Wales Heat Recovery Design/Construct $650,047 Adak Hydro Adak Hydro Feasibility $19,600 Water system heat recovery Koyuk Heat Recovery Design $90,922 Shishmaref wind Shishmaref Wind Feasibility/ concept. design $152,000 City Heat Pump Seward Seawater heat pump Design/Construct $725,000 Gunnuk Creek Kake Hydro Construction $3,920,000 Mt. Village –St. Mary’s Intertie Mountain Village Transmission, Wind Design/Construct $2,506,731 16 Fivemile Creek Project: 300 kW run of river hydro Displace estimated 500 MWhs diesel generation Estimated total project cost: $6.6 million Grant request: $3.4 million Project phase: Construction Calculated B/C: 1.71 Impacted population: 116 Applicant: Chitina Electric Inc. Region: Copper River/Chugach 17 Wales Heat Recovery Project: Send recovered heat water treatment plant and washeteria Estimated fuel savings more than 9,700 gallons/year Estimated total project cost: $656,613 Grant request: $650,047 Project phase: Design/Construction Calculated B/C: 1.44 Impacted population: 146 Applicant: City of Wales Region: Bering Straits 18 Adak Hydro Project: 75-90 kW power recovery turbine on water supply line Displace 330-760 MWh of diesel energy Estimated total project cost: $28,000 (feasibility only) Grant request: Recommended for partial funding $19,600 Project phase: Feasibility Calculated B/C: 1.75 Impacted population: 247 Applicant: TDX Adak Generating Region: Aleutians 19 Koyuk Heat Recovery Project: Send recovered heat to city water treatment plant and washeteria Estimated fuel savings nearly 12,000 gallons/year Estimated total project cost: $98,022 Grant request: Recommended for partial funding $90,922 Project phase: Feasibility/Design Calculated B/C: 1.06 Impacted population: 321 Applicant: City of Koyuk Region: Bering Straits 20 Shishmaref Wind Project: Wind feasibility and conceptual design Preliminary estimates displace just under 1,500 gallons/year Estimated total project cost: $160,000 (feasibility only) Grant request: $152,000 Project phase: Feasibility Calculated B/C: 0.93 Impacted population: 607 Applicant: Alaska Village Electric Cooperative (AVEC) Region: Bering Straits 21 Seward Seawater Heat Pump Project: Seawater heat pump serving four existing and one future city building Estimated displacement more than 20,000 gallons/year Estimated total project cost: $955,458 Grant request: $725,000 Project phase: Design/Construction Calculated B/C: 1.97 Impacted population: 2,768 Applicant: City of Seward Region: Railbelt 22 Gunnuk Creek Hydro Project 500 kW hydro addition to water supply dam serving Kake Displace estimated 1,620 MWh of diesel generation Estimated total project cost: $5.7 million Grant request: $3.92 million Project phase: Construction Calculated B/C: 2.23 Impacted population: 1,913 (563 in Kake) Applicant: Inside Passage Electric Cooperative Region: Southeast 23 Mt. Village –St. Mary’s Intertie Project: Intertie connecting Mt. Village to St. Mary’s renewable power Displace estimated 60,000 gallons/year Estimated total project cost: $6.2 million Grant request: $3.196 million Project phase: Design/Construction Calculated B/C: 1.0 Impacted population: 1,524 (857 Mt. Village) Applicant: Alaska Village Electric Cooperative Region: Lower Yukon-Kuskokwim 24 Previously recommended projects removed from list 1.Sand Point high penetration wind system could not progress b/c of equipment regulations 2.Grayling secured federal funds for heat recovery design 3.City of Chignik hydro design –design complete, pursuing construction 4.Kodiak Electric Upper Hidden Basin feasibility -moving forward w/o grant 5.Eek Heat Recovery design –design complete w/ other funding 6.Neck Lake hydro no longer being pursued 7.Chugach Electric solar feasibility –moving forward w/o grant 8.King Cove completed their hydro financing package with AEA loan 25 Recommended but did not fit in the Governor’s budget 26 Project Financing -working with fewer State grants •Helping communities make the grants-to-loans transition •Providing technical assistance and ongoing community support •Maintaining collaborative partnerships & fostering innovation •Boots on the ground building safe, stable, reliable, and affordable community energy systems •Researching and coordinating development of new state energy policy 27 Allison Creek Hydro Project in Valdez 28 Need remains constant Yet availability of public funding to help meet that need is decreasing 2017 the future The future points to more dynamic funding Project Financing Tech Assist –Accessing Funding 29 Internal to Utility Funds •Reporting to optimize PCE •Rate setting to cover all costs •Evaluation of project financial impacts •Utility business practice to improve financial health External to Utility Funds •Research grant opportunities •Assist with grant application development •Research loan opportunities •Assist with loan application development •Administer PPF program The Power Project Fund Loan Program •Flexible loan program •Covers all aspects of supply side system •Available for all project dev. phases •Technical, economic and finance viability •Increased interest and activity recently •Anticipate activity will continue to grow 2 Waterfall Creek Construction Healy, AK PCE earnings as a funding source If/when this happens, how should the REFAC recommend projects to forward to the legislature? 31 PCE earnings as a funding source •SB 196 –how it works •July 1 DOR calculates: 1.The monthly average market value of fund for previous three fiscal years, AND 2.The earnings of the fund for the previous closed fiscal year. •5% of the amount calculated using #1 above is available to appropriate for PCE program/admin •If the amount calculated using #2 above is greater than the amount appropriated to the program, then 70% of the difference is available to appropriate to: •First $30 million to Community Revenue Sharing or Community Assistance •Up to $25 million to REF, Bulk Fuel Revolving Loan Fund, Rural Power System Upgrades •Calendar considerations –July DOR calculates PCE earnings, January legislature in session (inadequate time for new solicitation/evaluation) 32 PCE earnings as a funding source •Some possible changes to consider (AEA is not advocating for any of the ideas below) •Request $ amount rather than line item appropriation (requires statutory change) •Request $ to be held for a year to allow time for a solicitation -allowing for line item appropriation (requires statutory change) •Use some earnings to capitalize an RE specific loan fund/recapitalize the PPF (requires statutory change) •Other ideas/funding sources? •Identify a path forward, REFAC guidance needed 33 Scheduling next REFAC meeting 34 35 Closing comments 36 ALASKA ENERGY AUTHORITY 813 West Northern Lights Blvd. Anchorage, Alaska 99503 Phone: (907) 771-3000 Fax: (907) 771-3044 Toll Free (Alaska Only) 888-300-8534 AEA’s mission: Reduce the cost of energy in Alaska.