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Providing coverage of Alaska and northern Canada's oil and gas industry
February 2019

Vol. 24, No.8 Week of February 24, 2019

FERC filing for Delta Junction project

Companies seek certification for cogeneration project involving new wind farm balanced by battery and propane fueled power generators

Alan Bailey

Petroleum News

Eco Green Generation LLC has applied to the Federal Regulatory Commission for certification as a qualifying facility for a proposed new power system involving a new wind farm at Delta Junction and a series of propane fueled generators in the Fairbanks region. The company is working with Alaska Environmental Power on the concept. The idea is that the system, also supported by a battery, will be able to supply power at a constant rate to the electricity grid in the region, with the propane generators and battery able to counterbalance the varying output from the wind farm, as the wind strength fluctuates. In a cogeneration arrangement, surplus heat from the propane generators would be available for the heating of nearby buildings - up to 20 separate heat and power plants would be distributed across the region, positioned at locations where the excess heat could be used.

Need for certification

If FERC certifies the planned system under the terms of the federal Public Utilities Regulatory Policies Act, or PURPA, local electricity utilities, including Golden Valley Electric Association, will be required to respond to requests for a tariff for connecting the system to their electrical networks, to become a part of the regional power supply arrangements. Purchase of power from the new system would then be required if a tariff results in acceptable electricity pricing.

Bill Rhodes, manager of Eco Green Generation, told Petroleum News that his company had already filed a certification application with FERC in December. However, that application had run aground, in part because of the federal government shutdown, but mainly because the FERC application procedures are designed to handle a single power source and not a combined wind farm and cogeneration system of the type proposed. The company has now found a work around for the application glitches, Rhodes said.

The proposed system would involve a total of 100 megawatts of power capacity, including up to just under 40 megawatts from the wind farm, he said.

Mike Craft, manager of Alaska Environmental Power, already operates a small wind farm at Delta Junction, a location that he has said offers particularly advantageous wind conditions for wind power generation. For a number of years Craft has been hoping to build a larger wind farm at the Delta Junction site and has, in the past, obtained a tariff specification for a new farm from GVEA. However, the wind farm proposal has proven uneconomic because of the cost to GVEA of regulating or counterbalancing the fluctuating wind output.

Microgrid technology

So, instead, Eco Green and Alaska Environmental are planning a system that would provide power at a constant rate while making maximum use of the relatively cheap and clean wind energy. Rhodes said that the system would use the same technology as is employed by small localized electricity grids called microgrids, to automatically adjust the power output from the propane plants to match the wind farm output. And the propane-fueled reciprocating engines would be able to respond rapidly to fluctuating power needs, while also retaining high energy efficiency, at whatever power settings they would need to operate.

In Fairbanks the companies envisage appropriately located propane generators supplying heat to up to 14 schools, a multi-purpose arena, swimming pools and various retail centers.

Propane from Canada

The bulk propane needed for the system would come from Canada, shipped to Fairbanks on rail cars by barge and railroad. Rhodes said that, with western Canada having an excess of propane from its gas industry and an insufficient market for that propane off its west coast, the propane is particularly cheap, thus rendering the propane for Fairbanks economically viable. In fact, in addition to shipping propane for the power system, the companies anticipate the possibility of supplying bulk propane to the Alaska Interior as a financially advantageous fuel for the heating of buildings, cooking, heating water and the operation of driers - propane is a clean burning fuel that creates minimal amounts of harmful emissions, they say.

“We’re trying to make propane to be the cheapest fuel for interior Alaska by having a large initial customer for the propane,” Rhodes said.

The companies also argue that the proposed arrangement can help address air pollution problems in the Fairbanks region with no financial risk to the public and at lower cost than upgrading existing power generation facilities.





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