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The alternative options for Cook Inlet Developers report to the Legislature on the status of projects to bring new energy sources into the Southcentral energy mix Alan Bailey Petroleum News
Driven by potential energy shortages in Southcentral Alaska and encouraged by various state incentives, the energy scene in the Cook Inlet region has sparked into a newly invigorated life. And, although new exploration for natural gas has grabbed many of the headlines in this evolving situation, several alternative energy initiatives are also in progress.
On Jan. 27 the Alaska House Resources Committee heard presentations on the status of some of these alternative energy projects, each of which offers some new way of bolstering the region’s power supplies.
Fire Island Ethan Schutt, senior vice president, land and energy development, for Cook Inlet Region Inc., brought the committee up to date on the status of CIRI’s Fire Island wind farm project, offshore Anchorage.
After pursuing this project for about a decade and having in October obtained Regulatory Commission of Alaska approval for a power purchase agreement with power utility Chugach Electric Association, the wind farm is now progressing towards final construction.
“First commercial power is anticipated in late September,” Schutt told the committee, commenting that the purchase agreement with Chugach involves a commitment to provide power for 25 years at a fixed price.
The wind farm, when it goes into operation, will have 11 General Electric 1.6-megawatt wind turbines, occupying some of the 33 permitted turbine sites on Fire Island. That will result in a nameplate capacity of 17.6 megawatts for the wind farm, a capacity that will equate to a power output of about 51,000 megawatt-hours per year. This will avoid the burning of about 500 million cubic feet per year of natural gas in gas-fired power stations, Schutt said.
Transmission line CIRI closed the financing of the project with its lender on Nov. 30 and started building the transmission line that will connect the wind farm with the Southcentral electricity grid, Schutt said. Construction of the transmission line, supported by a $25 million state appropriation, is continuing, with local Alaska contractors building both the on-land and under-sea components of the line.
Delaney Construction Group, a company with significant wind farm construction experience, will complete the construction of the farm itself, with several local contractors subcontracting various parts of the work. Major components of the wind turbines should arrive in March, ready for moving to Fire Island once the sea ice moves out of the Cook Inlet at the end of the winter. Turbine construction should be completed in August or September, Schutt said.
Coal gasification Schutt also provided an update on CIRI’s initiative to pursue an underground coal gasification project at Stone Horn Ridge, north of the Beluga River, on the west side of Cook Inlet about 40 miles west of Anchorage.
Underground coal gasification, or UCG, involves the controlled burning of coal in seams, deep underground, to generate synthetic gas for delivery to the surface through production wells. The synthetic gas could be used to fuel steam turbines for power generation, or it could be converted into methane, the main component of natural gas. The synthetic gas from UCG would also make a good feedstock for the production of liquid fuels, fertilizer and other petrochemical products, Schutt explained.
CIRI is funding the UCG project without state assistance and has partnered with UCG technology company Laurus Energy for the project, Schutt said.
To date, the project has completed the drilling of 13 core holes and the collection of wireline data, to create a geologic model of the Stone Horn Ridge area.
Resource confirmed “We’ve done a core drilling program that has confirmed significant volumes (of coal) at commercial scale for this project,” Schutt said. “We validated favorable geology. We are at a tidewater location and there is a local market need for some (energy) diversification.”
A shallow, high-resolution 2-D seismic program, scheduled for completion at around the time that Schutt was making his presentation to the Resources Committee, will feed further data into the geologic model, to enable the planning of a site-characterization drilling program, Schutt said. That next drilling program will involve closer spaced holes than the previous program, and will involve the placement of instrumentation in the wells, he said. The project team will also initiate baseline environmental data collection and will begin the permitting process for a commercial facility, he said.
CIRI has already commissioned and obtained a conceptual level engineering costing study, Schutt said.
Mount Spurr Paul Thomsen, director of policy and business development for geothermal company Ormat Technologies, reported on the status of his company’s exploration for geothermal resources on the flanks of Mount Spurr, an active volcano about 75 miles west of Anchorage. In 2008 Ormat acquired state geothermal leases on the southern side of Mount Spurr, in hopes of being able to establish a geothermal power station for feeding power into the Alaska Railbelt electricity grid at Beluga, about 40 miles from the exploration area.
After some initial exploration surveying, the company drilled two shallow, 1,000-foot core holes in September 2010 and was sufficiently encouraged by what it found to drill a deeper core hole to a depth of 4,000 feet in the summer of 2011. However, the results from that deep well proved disappointing, causing the company to rethink its plans.
The deep well tested the subsurface next to a geologic fault in the eastern part of Ormat’s leased acreage, in an area outside the volcano’s hazardous zone, Thomsen explained. And, having now discounted the possibility of finding a viable geothermal resource at that site, the company is shifting its attention to a site adjacent another fault, in the more central part of the exploration area.
However, before drilling at this new site Ormat needs to assess the nature of the volcanic hazard at the site, and determine whether hazard mitigation is possible, Thomsen said. The company must also further analyze the geothermal potential at the site, and evaluate site access, assessing whether a road and transmission line can eventually be built to the site at reasonable cost.
Ormat plans to carry out its various assessments of the central site during the coming summer, with the changes to the project plan pushing the project schedule back by two years. Ormat had received a state appropriation of $14.5 million for work originally planned to start in 2012 — the company is still looking for financial support for its Mount Spurr project and wants to see if it can now use the state funding in 2013, following the changes in the plan, Thomsen said.
Tidal power In another renewable energy project, Maine-based Ocean Renewable Power Co., or ORPC, is planning a demonstration tidal power project in the Cook Inlet, at East Foreland on the Kenai Peninsula. Doug Johnson, the company’s director of business development, told the committee that the company came to Alaska in 2006, attracted by the energy potential of the huge Cook Inlet tides.
ORPC specializes in the development of in-current power generation, a system in which turbine power generators placed underwater are powered by a moving natural water current, such as a tidal flow, rather like a wind turbine is powered by wind. In-current generation is an emerging technology, in the process of moving from technical research into commercial operation.
Johnson said that in late spring ORPC’s first commercial project in Maine will be connected to the electricity grid and will start delivering power.
He also said that on Jan. 26 the company had signed a joint development agreement with Homer Electric Association for the planned East Foreland system.
“We’re very happy to have that partnership,” Johnson said.
Demonstration project Mark Worthington, ORPC’s director of project development, said that ORPC wants to build a 600-kilowatt demonstration project at East Foreland, using four of the company’s in-current turbine units. The company had earlier considered potential projects in Knik Arm and off Fire Island, locations relatively close to Anchorage. However, following discussions with the National Marine Fisheries Service about potential impacts on Cook Inlet beluga whales, animals that are listed under the Endangered Species Act, ORPC settled on East Foreland as a suitable project site. The waters off East Foreland are classified as type two beluga whale critical habitat, rather than the more sensitive type one habitat farther north, Worthington said.
And the U.S. Department of Energy has provided some funding for research into ways of monitoring beluga whales in the turbid water of the inlet, he said.
In fact, East Foreland is an ideal site for the project, having some of the highest tidal energy in the inlet while also being close to the existing electrical infrastructure, Worthington said.
ORPC carried out extensive fieldwork at the East Foreland site last summer, and will continue with that work in the spring, to enable full specification of the project and the completion of the Federal Energy Regulatory Commission licensing work, Worthington said. The company had planned to implement the demonstration project in 2013 but has decided to delay the project by a year, to focus on achieving success with the company’s project in Maine.
The Maine project will enable the company to demonstrate the overall viability of its technology, before seeking the next round of funding for the Alaska project, Johnson explained. The Alaska demonstration project will then provide an understanding of Alaska operating costs for the company’s technology. That in turn will enable a decision on whether to proceed to the next stage of the East Foreland venture: a nearly five-megawatt pilot system slated for completion in 2016, Johnson said.
Johnson said that ORPC is seeking a state appropriation of $9.25 million to enable completion of the initial demonstration project at East Foreland. The state has already invested $2 million in the project, while ORPC has committed $1.8 million, he said.
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