Vol. 15, No. 24 Week of June 13, 2010
Providing coverage of Alaska and northern Canada's oil and gas industry

CIRI prepping RFP for Fire Island

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Plans to build new navigation system to resolve FAA concerns, new law paves the way for negotiating contracts with area utilities

Eric Lidji

For Petroleum News

Cook Inlet Region Inc. plans to start the formal search in the next few weeks for a firm to build the first commercial-scale wind farm in Alaska on an island in Cook Inlet.

CIRI, the Alaska Native corporation for Southcentral, plans to issue a request for proposals soon to erect 33 wind turbines on Fire Island, off the western coast of Anchorage.

The company can’t do much physical work on the island until August, the end of a nesting season that creates restrictions for tree clearing. However, the hope is to use the summer to finalize geotechnical information about the project now so that as soon as the ice clears next spring the construction firm can start “horizontal construction,” which includes buildings, roads and transmission lines, as well as all of the turbine pads.

CIRI originally planned to erect 36 turbines, each capable of generating 1.5 megawatts of power, but now expects to put up only 33 turbines, each capable of generating 1.6 MW.

While comparing the nameplate capacity of the two setups suggests a small drop in power output, to 52.8 MW from 54 MW, Jim Jager, director of corporation communications for CIRI, said the new turbines are more efficient, and thus produce the same amount of power.

“If you can do the same production with fewer turbines you’re going to have a more cost effective project,” Jager said.

CIRI still needs a contract

When proposals start coming in, CIRI will get a better sense of the price of the project, currently estimated at around $165 million. That price will also allow CIRI to get a better sense of the cost of power produced at Fire Island and sold to a regional electric utility.

CIRI got a boost on that front during the recently completely legislative session. Gov. Sean Parnell recently signed a law that excludes independent producers or renewable power producers from economic regulation. The move could keep renewable power from facing the turmoil over pricing that has plagued natural gas contracts over the past decade.

“This is knocking down a hurdle for independent power producers,” Jager said.

However, many independent power producers in Alaska are concerned about their status in proposed attempts to unify the major electric companies in the Railbelt.

Legislation tabled in the last regular session would have allowed the six utilities to pool their generation and transmission assets under a single corporation, but did not explicitly guarantee that independent power producers would be able to sell power into the grid.

CIRI has not commented on that proposal.

FAA navigation issue resolved

CIRI is also still trying to figure out the best way to integrate Fire Island into the existing Railbelt electricity grid. The project is the largest wind power source ever added to the grid, a change from the steady power provided by natural gas, hydropower and diesel.

Jager said the magnitude of that challenge depends on who you ask.

“The best solution is not obvious,” he said, adding that the rapid growth of domestic wind energy means that ideas for stabilizing and storing power are constantly being introduced.

Locally, CIRI is working on a solution with regional utilities.

CIRI appears, though, to have resolved another major sticking point in the project, the potential that the wind turbines would interfere with a navigation system on the island used for flights into Anchorage. CIRI now plans to build a new system at the Anchorage International Airport this summer. The Federal Aviation Administration would need time to test the new system before decommissioning the existing one on Fire Island, and giving the going ahead for “vertical construction,” or the actual erection of the turbines.

That timeline would allow CIRI to erect windmills in 2012, as originally planned.

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