Vol. 15, No. 46 Week of November 14, 2010
Providing coverage of Alaska and northern Canada's oil and gas industry

RDC told it’s time to move on hydro

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More Southcentral hydroelectric power required to meet 50 percent renewable energy standard — and it will take at least a decade

Kristen Nelson

Petroleum News

The Alaska Legislature has set a goal of producing 50 percent of the state’s power from renewable energy by 2025. To meet that goal in Southcentral Alaska will require at least one large hydroelectric project, the Resource Development Council for Alaska was told at a Nov. 4 breakfast.

Presenters from Alaska Ratepayers Inc., MWH and the Alaska Energy Authority talked about the need for a large hydroelectric project in Southcentral Alaska and about some potential projects.

Rich Wilson, president of Alaska Ratepayers Inc., described the group’s goals for electric power as affordable, predictable and long term. He said the group was founded in 2008 and “is composed of a small number of experienced Alaskans in business and government” who believe there is a need for grassroots support for policies supporting sustainable electric power.

“Electric energy is like roads: you can’t get along without it,” Wilson said.

Energy prices have risen in Southcentral as low-priced natural gas contracts end, he said.

“We have to do something about this — do something different,” and Alaska Ratepayers believes hydroelectric power is a way to avoid rates rising further and possible power interruptions.

Wilson said Alaska Ratepayers’ members have done an informal survey, talking to a lot of Southcentral stakeholders, and found “strong support” for hydropower in the utilities, among political leaders and among the general public.

He said the general reaction when people are asked about hydro is: “We should have done that a long time ago.”

What is needed now?

Wilson said there needs to be an appropriation in the upcoming legislative session toward licensing a project and the Legislature needs to create “a state entity that has the authority and the resources to do the job,” because putting a major hydro project in place will be a multiyear project that will continue through many legislative sessions and many governors.

He said $100 million would be needed to get Alaska down the road toward licensing, and a $2 billion to $2.5 billion investment by the state would be needed for a permanent levelizing of electric rates.

Wilson said that as with “just about every other hydro facility in the nation, either the state or the federal government needs to take the lead because it’s a big chunk of funds.”

Successful projects

Ed Carter, senior vice president with MWH, a global firm which engineers and constructs large hydro projects, said a decision to make a major investment in a project such as hydroelectric is done for several reasons: it’s a renewable resource; hydropower “has a very long service life” and once in operation has low maintenance and operations costs; and a project can be set up to “accommodate changes over time that allow a project to be matched with future growth in the power systems that that hydro project is in.”

Carter reviewed four existing large hydropower projects, including Bradley Lake in Alaska.

Bradley Lake, a state-owned and financed project, has been online for 20 years, he said.

The average cost of power generation for the project over 20 years has averaged 4 cents per kilowatt hour, Carter said.

He said BC Hydro, the British Columbia provincial utility, provides 95 percent of the energy used in British Columbia. Two of BC Hydro’s big projects, Mica and Revelstoke, were both designed to accommodate changes over time by building the power stations to accommodate new units: 500 additional megawatts go online at Revelstoke by the end of the year, Carter said, and a new 500-megawatt unit has been ordered for Mica which will go online in 2012.

“So the big point here is the flexibility,” he said of the BC Hydro projects, “the foresight to look into the design and construction techniques that can be used so that a project can accommodate growth over time in the electric system.”

Susitna River Watana site

There are three potential major hydro projects under consideration for Southcentral Alaska, said Bryan Carey, a technical engineer at the Alaska Energy Authority: Watana on the Susitna River, Chakachamna on the west side of Cook Inlet and Glacier Fork east of Palmer.

The Watana dam site on the Susitna River would have an installed capacity of 600 megawatts and could supply about 50 percent of Railbelt electricity.

The Watana site is some 30 miles above Devil’s Canyon and Carey said few salmon go past Devil’s Canyon.

“Some of the fisheries impacts would be positive,” he said. Most fish don’t spawn in the Susitna, but go up side rivers. The dam would reduce annual flooding and would also reduce silt. In that respect the Watana dam would provide a function similar to Kenai Lake, Carey said: The silt drops out in the lake and the Kenai River is clear downstream of the lake.

The flow downstream of the dam would have the same annual volume with modified seasonal timing.

He said old Federal Energy Regulatory Commission documents note that at Watana there would probably be “an improvement to salmon habitat on the Susitna River” because between Watana and where the Chulitna comes in would probably turn into “more of a clear-water type river similar to … the Kenai River.”

Comparing Watana to the existing Bradley Lake project, Carey said Bradley Lake had no fish, but there were salmon downriver of the lake, closer to Kachemak Bay. He said fish biologists believe that the dam has improved the habitat for salmon downstream, with more salmon than before the dam was built and more species of salmon.

Glacier Fork, Chakachamna

The Glacier Fork dam would be north of Knik Glacier where there is a little canyon or valley. Carey said that is where the dam would be built, filling up the little valley.

The downside at Glacier Fork is that it’s very narrow and doesn’t have much storage capacity during the winter. Because the canyon is narrow you would be able to generate a lot of power from Glacier Fork, he said, “it’s just that you’d tend to generate it during the summertime.”

Chakachamna is currently listed with an installed capacity of 300 megawatts, Carey said, but it may be more or less because resource agencies have to approve environmental flows down the main river, and that could reduce energy from the project.

Possible energy from Chakachamna wouldn’t be known until a couple of years of studies are completed, he said.

He said the environmental flows are a critical part of the project.

“To get a project licensed through FERC is extremely hard to do. The only thing that’s harder to get licensed these days is a nuclear power plant,” he said.

And resource agencies “have what’s called mandatory conditioning” for hydropower, “and so they can put whatever conditions they want in the license and FERC cannot overrule.” Whatever environmental flow the resource agencies want to go down the river, “then that’s given; that will be in your license.”

Right now salmon go up to Chakachamna Lake and travel through the lake to Lake Clark National Park, he said.

The Chakachamna project would use the existing lake and put in a power tunnel which would cut through about 11 miles to the McArthur River drainage. In addition to Lake Clark National Park to the west, downriver of both drainages is the Trading Bay Stage Game Refuge.

At best a decade

Benefits of hydropower include long life, “greater than 100 years”; the ability to design for expandability in the future; “clean, low-cost energy” with a predictable price into the future because the energy is produced in-state and isn’t “subject to worldwide fluctuations in the price of fuel”; the ability to dispatch more energy in the winter when it’s needed; and jobs and investment staying in Alaska, Carey said.

One of the two large projects, either Chakachamna or Watana, “are necessary if you want to achieve the state’s 50 percent renewable energy policy — you’re not going to get to 50 percent without one of these two large project,” he said.

As to how long it would take, Carey said: “On an aggressive licensing and construction schedule — probably 10 to 12 years.”

Why BC has hydro

Why does British Columbia have so much hydro and Alaska so relatively little?

Carter said it’s because pioneers there pushed decisions a long time ago; great engineering feats were performed; and flexibility for expansion was designed into the structure.

Wilson said Alaska has not had to move to hydropower, but with declining natural gas in Southcentral, “it’s time to shift our gears and get moving.” He said some of what happened in the last legislative session was evidence that interest in hydro is growing.

Asked about overcoming opposition to dams, Carey said: “You’ll never overcome opposition if you never start.”

In the case of Watana on the Susitna, there are fewer fish issues because salmon don’t return as far up the river as Watana.

Carter noted that even in the Lower 48 dams are still being built and the height of existing dams increased. While most of that is for water supply, there are hydropower components.

Wilson called opposition to dams “the big elephant in the room.”

But no people would be displaced in these projects, he said, and the state’s regulatory regime and environmental regulations “are second to none in the world” and impose a lot of restraints.

Wilson said the big issues are fish, siltation and downstream effects, “all of which can be mitigated and addressed.”

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