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Vol. 15, No. 30 Week of July 25, 2010
Providing coverage of Alaska and northern Canada's oil and gas industry

AEA starting hydropower investigation

Looking for a consultant to manage contract to evaluate options for power generation for the Alaska Railbelt electricity grid

Alan Bailey

Petroleum News

The Alaska Energy Authority is seeking a consultant to manage an investigation into potential hydropower projects that may qualify for state funding.

In December, AEA published a draft Alaska Railbelt integrated resource plan that proposed a major shift toward hydropower for future power generation in the Railbelt region, with a recommendation for a new major hydropower system, either at Lake Chakachamna, near Mount Spurr west of Anchorage, or on the Susitna River south of the Alaska Range. The plan also recommended investigating the possibility of a smaller-scale hydropower system at Glacier Fork, on the Knik River near Palmer.

At present the Railbelt power grid, stretching from the southern Kenai Peninsula north to the Fairbanks region in the Alaska Interior, is heavily dependent on natural gas-fired power stations, fueled by ever tightening gas supplies from the aging gas fields of the Cook Inlet basin.

During the 2010 state legislative session lawmakers passed a bill saying that 50 percent of power generation within the state should come from renewable energy sources by 2025 and setting an energy policy that, among other things, encourages the development of renewable and alternative energy sources, including hydropower.

And in the state budget for the current financial year legislators included an appropriation of $10 million to AEA to investigate the feasibility of new hydropower systems for the Railbelt and to carry out some initial planning, design and permit reviews for candidate systems, to facilitate decision making on any future state funding of hydropower.

Decision document

The consultant that AEA is now seeking will assist the agency in contracting with a firm to carry out the hydropower investigation envisaged in the budget, leading to a hydropower decision document for the state. The scope of the investigation may include the three potential hydropower systems discussed in the integrated resource plan, as well as other possible hydropower projects, AEA said in a July 14 request for proposals for the consultant.

“However, it is anticipated that not all projects will move forward with continued funding support from the state,” the request for proposals says. “Decisions on which projects the state would support will be based on energy needs and project costs. The projects need to be further evaluated and compared as to which project(s) have the greatest likelihood of success based on defined cost estimates, more detailed project scopes, potential schedules, permit requirements, energy use, power transmission and financing assumptions.”

Earlier evaluations

In the 1970s and 1980s several organizations, including the U.S. Army Corps of Engineers, prepared and evaluated preliminary designs for the Susitna River hydropower concept. And in the 1980s Bechtel prepared a preliminary evaluation of a Lake Chakachamna system. Interest in both projects subsequently waned for a variety of reasons, including a drop in the price of fossil fuels.

But the recent interest in diversifying Railbelt power supplies has caused people to brush the dust off these 30-year-old studies.

And the 2009 Railbelt integrated resource plan came out in favor of the Lake Chakachamna option, a system that would use an existing lake as a hydropower resource and that could potentially supply about one-third the Railbelt’s existing power needs. However, in the interests of enabling a fully informed decision on which project to pursue, the plan also recommended a new investigation of the alternative possibility of building a larger two-dam system on the Susitna.

TDX Power

Since 2007 TDX Power, a subsidiary of the Tanadgusix Native Corp. and operator of electric utilities at Sand Point and Prudhoe Bay, has been engaged in its own investigation of the Lake Chakachamna hydropower concept, under the terms of a Federal Energy Regulatory Commission permit. The company has asked for state funding assistance for fieldwork associated with the project.

TDX has estimated that the construction of the 350-megawatt Lake Chakachamna power plant would cost $1.6 billion in 2008 money with an additional $58 million in transmission costs and around $10 million in annual operating expenses.

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