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HomeMy WebLinkAboutKingcove Oldharbor Hydro 4 of 13 1982SECTION III OLD HARBOR SUMMARY INTRODUCTORY NOTE: Presented in this section is the Summary from Volume C-- Feasibility Study for Old Harbor Hydroelectric Project. Included for general background information are several items from that report: Exhibit VI-2, Photographs of the Project Area; Figure VII-3, Projected Monthly Generation, Demand, and Usage; and selected project drawings which include Plate I, the General Plan, Plate III, the Penstock Plan, Profile, and Details, and Plate V, the Powerhouse Plans and Sections. References to figures, exhibits, and plates in the summary presented here refer to items in Volume C, the full feasibility report for the Old Harbor Hydroelectric Project. NBI-432-9526-SOH III-1 OLD HARBOR SUMMARY A. GENERAL Several prior studies of alternative means of supplying Old Harbor with electrical energy recommended a hydroelectric project as the best alternative. As a direct result of these prior studies and recommendations, the Alaska Power Authority authorized a feasibility study to investigate in detail the hydropower potential in the vicinity of Old Harbor. This report summarizes the activities conducted for the feasibility study. These activities included projections of energy needs, formulation of a hydroelectric project plan and an alternative base case plan to meet the electrical energy needs of Old Harbor, detailed analyses of economic feasibility, and preparation of an environmental assessment of the effects of the proposed hydroelectric project. The results of the study indicate that a 340 kilowatt (kW) hydroelectric project can be constructed at Old Harbor, that the project is considerably more economical than the base case alternative, and that the environmental effects of the project are minor. The estimated total construction cost of the proposed Old Harbor hydroelectric project is $3,082,300 in January 1982 dollars. The project could be implemented and on-line by January 1, 19859 if a decision to proceed with the project is made by December 1982. During an average water year, the proposed project would be capable of supplying more than 85 percent of the electrical needs and about it percent of the space heating needs in the project area. The equivalent savings in diesel fuel in the year 2001 would be more than 83,000 gallons for direct electrical demand and more than 19,000 gallons for space heating. NBI-432-9526-SOH III-2 B. AREA DESCRIPTION Old Harbor is a small village located on the southeast coast of Kodiak Island, 50 miles southwest of the city of Kodiak. The selected hydroelectric development site for Old Harbor is located on Midway Creek across Midway Bay from the village. C. POWER PLANNING Power planning for the Old Harbor Project was conducted using standards set forth by the Alaska Power Authority. Previously recommended potential hydroelectric sites were investigated and the project area was surveyed to evaluate potential new sites. After detailed study, a project was selected and then compared with a base case plan. The base case plan consisted of a continuation of the present diesel generation system, enlarged as necessary to meet future growth. Wind generation was also considered as part of the base case. Wind generation was found to be a viable means supplemental generation. Present energy demands for Old Harbor for direct electrical uses and space heating were estimated and future uses in these categories were projected. The projections were based on forecasts of increases in the number of customers and increased usage rates. Population growth and employment, legislation and other political influences, life style changes, and other factors can influence future energy demands, but were not explicitly treated. The period of economic evaluation used was 53 years, beginning in January 1982 and extending for the 50-year life of the hydroelectric project beyond the estimated on-line date of January 1985. The energy demands for Old Harbor were increased NBI-432-9526-SOH III-3 for 20 years starting in January 1982 and extending through December 2001. The demands were then held level over the remainder of the economic evaluation period. For the proposed hydroelectric project, it was assumed that the first priority of use for the energy produced would be for the direct electrical needs of Old Harbor, and remaining energy would be used for space heating to as great an extent as possible. D. DESCRIPTION OF RECOMMENDED HYDROELECTRIC PROJECT Hydroelectric power plants transform the energy of falling water into electrical energy. Generally, a hydroelectric power project consists of a dam to produce the head or to divert stream flows so that they can be passed through a turbine - generator system to produce electric power. In the case of the recommended Old Harbor Hydroelectric Project, a low weir will act as a dam to divert water from Midway Creek through an inlet structure and into a penstock (conveyance pipe). The penstock will be 24 inches in diameter and will carry the water about 2200 feet to the powerhouse, where it will be passed through the turbine -generator system to produce electric energy. The powerhouse will have the capacity to produce 340 kw of electrical power. A transmission line will be constructed to transmit the power generated at the plant to Old Harbor. Access to the powerhouse facilities will be provided by building a new road from Midway Bay to the facilities and by building a dock at the bay. The dock will be reached by boat from Old Harbor. The transmission line will be constructed from the powerhouse across the upper end of Midway Bay to Old Harbor. The general plan and features of the proposed project are presented on Plates I through VI of Appendix A. Photo- graphs of the project area appear in Exhibits VI-1 through VI-4 at the end of Section VI and in the Environmental Report, AppPridix E. NBI-432-9526-SOH III-4 Under the recommended plan, energy generated by the hydro- electric plant will have to be supplemented by diesel genera- tion. The entire existing diesel capacity will be required as standby and backup power. The hydroelectric generation will be adequate to meet the direct electrical needs of Old Harbor during most of the year; however, during periods from the end of November to the first of April it will be necessary to supplement the hydroelectric generation with diesel power. In all, during an average water year the proposed hydro- electric project will be capable over the project life of supplying an average of more than 90 percent of the electrical needs of Old Harbor and approximately 15 percent of the space heating requirements. Average annual energy production from the hydroelectric plant will be 1.31 millioā¯‘ kilowatt-hours (kWh) and the average annual plant factor will be about 44 percent, which means that the plant is expected to generate about 44 percent of the energy that it could produce if the turbine -generator unit was operated continuously at full capacity. E. BASE CASE PLAN The base case plan formulated to meet the projected energy demands of Old Harbor assumed that the existing diesel system would continue to be used as the sole source of electric power. Because there are no significant heating loads near the plant, it was assumed that the system would not incorporate waste heat recovery that would be used for space heating, since it probably would not be economical to relocate the plant nearer a heating load. The existing diesel plant's capacity was judged to be adequate to meet peak demands on the Old Harbor system throughout the period of study. NBI-432-9526-SOH III-5 F. ECONOMIC ANALYSIS The economic analysis was based on the Alaska Power Authority criteria that compare the net present worth of the base case costs to the net present worth of the proposed hydro- electric project costs using specified real price escalation and discount rates. Net present worth is the present value of the costs that would be incurred over a comparable economic evaluation period of 53 years for both projects. All costs other than the cost of the hydroelectric project and diesel supplement were considered as adjustments to the base case cost. The present worth of the total costs of the base case plan is $8,182,800. If this cost is reduced by the wind energy credit of $330,400, the net present worth is $7,852,400. Adding the space heating credit at $1,234,600 results in a final net present worth of $9,087,000. For the proposed hydroelectric project, the present worth of the costs is $6,475,000. A comparison of this net present cost with the base case net present costs indicates that the recommended hydroelectric project is considerably more economical than the alternative base case. An additional measure of project feasibility is the bene- fit/cost (B/C) ratio. The B/C ratio is the present worth of the project benefits divided by the net present worth of the project costs. For this project, the calculated B/C ratio is 1.264 when the hydroelectric energy used only for the direct electrical needs of Old Harbor is compared to the base case only and 1.213 when the wind energy credit is included. Inclusion of the space heating credit results in a final B/C ratio of 1.403. These B/C ratios indicate that the proposed hydroelectricproject is highly feasible. NBI-432-9526-SOH III-6 The unit costs for each year of operation for both the base case and the hydroelectric alternative were calculated and compared in order to determine the optimum timing for project development. This analysis indicates that the project is viable for immediate development. G. ENVIRONMENTAL AND SOCIAL EFFECTS The study results indicate that the adverse environmental effects of the project will be minor due to the limited scope of project activities, the limited nature of the fishery resources in Midway Creek, and the availability of measures to mitigate the potential effects from the construction and operation of the facilities. Implementation of the project should bring some socioeconomic benefits to Old Harbor. The local payroll will be expanded during construction and some employment should be provided for local residents both for construction and maintenance of the facilities. The project should also bring a dependable and cheaper supply of electric power to the local residents. H. CONCLUSIONS AND RECOMMENDATIONS The studies conducted for this report indicate that the proposed 340 kW hydroelectric project is feasible and that the energy demands of Old Harbor are sufficient to utilize the hydroelectric plant's planned capacity. The proposed project is a more economic means of meeting the area's future electric needs than the base case diesel alternative. - Environmental effects of the proposed project are minor. In view of these findings, it is recommended that actions be initiated to implement the project. NBI-432-9526-SOH III-7