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HomeMy WebLinkAboutMakushin Geothermal Project Overview 1995bile Waduata KF MAKUSHIN GEOTHERMAL PROJECT OVERVIEW PREPARED BY MAKUSHIN GEOTHERMAL COMPANY 4000 KRUSE WAY PLACE BUILDING 1, SUITE 255 LAKE OSWEGO, OR 97035 APRIL 1995 MAKUSHIN GEOTHERMAL PROJECT OVERVIEW PREPARED BY MAKUSHIN GEOTHERMAL COMPANY 4000 KRUSE WAY PLACE BUILDING 1, SUITE 255 LAKE OSWEGO, OR 97035 APRIL 1995 PROJECT STRUCTURE MAKUSHIN GEOTHERMAL PROJECT SUMMARY OF MAKUSHIN GEOTHERMAL PROJECT STRUCTURE: POWER MARKET: TECHNICAL: ECONOMICS: DEVELOPMENT: OES! POWER CORPORATION PROJECT PROJECT PARTIES POWER REQUIREMENTS POWER PURCHASE AGREEMENTS GEOTHERMAL RESOURCE POWER PLANT TECHNOLOGY PROJECT REQUIREMENTS PERMITS PROJECT CONSTRUCTION COSTS PLAN OF FINANCE REVENUE SOURCES DEVELOPMENT ACTIVITIES ON-GOING DEVELOPMENT COSTS Page 2 PROJECT STRUCTURE MAKUSHIN GEOTHERMAL PROJECT PROJECT PARTIES ° ALASKA INDUSTRIAL DEVELOPMENT AND EXPORT AUTHORITY (AIDEA) WILL BE THE PROJECT OWNER, RESPONSIBLE FOR FINANCING, CONSTRUCTION, AND OPERATION. ° CITY OF UNALASKA - WILL PURCHASE ALL OF THE USABLE PROJECT ENERGY OUTPUT FROM AIDEA AND RESELL IT TO ITS RETAIL AND INDUSTRIAL CUSTOMERS. ° SELF-GENERATORS - INDUSTRIAL POWER USERS ON THE ISLAND WHICH CURRENTLY GENERATE POWER AND WOULD PURCHASE GEOTHERMAL POWER FROM THE CITY. ° MAKUSHIN GEOTHERMAL COMPANY, A WHOLLY OWNED SUBSIDIARY OF OESI POWER CORPORATION, WILL BE THE EPC CONTRACTOR AND GEOTHERMAL RESOURCE DEVELOPER UNDER A FIXED-PRICE EPC CONTRACT WITH AIDEA. ° OPERATOR - MAKUSHIN GEOTHERMAL COMPANY WILL COMPETE FOR O&M CONTRACT. OES! POWER CORPORATION Page 3 PROJECT STRUCTURE MAKUSHIN GEOTHERMAL PROJECT MAKUSHIN GEOTHERMAL PROJECT. 'MAKUSHIN GEOTHERMAL COMPANY (Developer) Construction, Construction Management, Drilling Services : AIDEA 'MAKUSHIN ,| (Project Owner) GEOTHERMAL (Land Leaseholder) O&M Services? COMPANY Royalties Electricity Sales BATTLE CITY OF MOUNTAIN UNALASKA GOLD COMPANY (Municipal (Land Fee Interest) Utility) Electricity Sales RETAIL/INDUSTRIAL (Customers) NOTES: ' Subsidiary of OES! Power Corp. 7 Subject to final negotiations with AIDEA OES! POWER CORPORATION Page 4 POWER MARKET MAKUSHIN GEOTHERMAL PROJECT POWER REQUIREMENTS ° LOADS AND RESOURCES FOR UNALASKA REPORTED IN 1995 BY R.W. BECK ° TOTAL LOADS FROM PRESENT TO 1998 UNALASKA PEAK DEMAND (kW) 1994 (ESTIMATED) 6,560 1998 (PROJECTED) 6,910 14,340 21,250 SELF-GENERATORS TOTAL UNALASKA ENERGY REQUIREMENTS (MWh) 1994 1998 (ESTIMATED) (PROJECTED) CITY 28,000 29,402 SELF-GENERATORS 61,150 64,518 TOTAL 89,150 93,920 OESI POWER CORPORATION Page 5 POWER MARKET MAKUSHIN GEOTHERMAL PROJECT FUTURE POWER REQUIREMENTS FUTURE POWER REQUIREMENTS WERE BASED ON THREE POTENTIAL ASSUMPTIONS WITH REGARD TO LOAD GROWTH: e NO NET LOAD GROWTH - REMAIN STABLE THROUGHOUT THE 30-YEAR STUDY PERIOD. e THREE PERCENT LOAD GROWTH - GROWTH AT AN ANNUAL RATE OF 3% FOR THE 30-YEAR STUDY PERIOD. e LOSS OF LOAD - DECREASE BY 15% IN 1998 AND GROW AT 1.5% PER YEAR THEREAFTER FOR THE REMAINDER OF THE 30-YEAR STUDY PERIOD. OESI POWER CORPORATION Page 6 20,000 + 48,000 | 16,000 4 14,000 + 10,000 Maximum Daily Load (kW) a So So So 6,000 4,000 ¥ 2,000 Jan Unalaska Loads 1993 12,000 } 26- 24- 23- 21- May Jun Jul Aug 1 Olnd. Ld #1 M Ind. Ld #2 “Wind. Ld #4 Hind. Ld #5 ElInd. Ld #6 19- 18- Sep Oct 16- 15- Nov Dec Typical Hourly Loads (kW) 10,000 Unalaska Loads Off Season Daily Load Shape 9,000 8,000 7,000 6,000 5,000 4,000 3,000 7 0 wo Nn 5 5 5 3 3 } x= x= x= 2,000 1,000 Olnd. Ld #1 M Ind. Ld #2 Hind. Ld #5 EiInd. Ld #6 Hour 9 Hour 11 Hour 13 Hour 15 Hour 17 Hour 19 Hour 21 Hour 23 Unalaska Loads POWER MARKET MAKUSHIN GEOTHERMAL PROJECT POWER PURCHASE AGREEMENTS ° ALASKA INDUSTRIAL DEVELOPMENT AND EXPORT AUTHORITY AND CITY OF UNALASKA WILL ENTER INTO A POWER SALES AGREEMENT. ° AIDEA WILL SELL POWER TO CITY ATA WHOLESALE CONTRACTED RATE. ° AIDEA TAKING LOAD RISK. WILL PROVIDE THE RATE OF STABILIZATION FUND REQUIRED IN INITIAL YEARS. ° RATE TO BE ADJUSTED ANNUALLY. ° INITIAL TERM OF AGREEMENT EXPECTED TO BE 20 YEARS. ° FEDERAL RENEWABLE ENERGY PRODUCTION INCENTIVE (REPI) FUNDS MAY BE AVAILABLE | (i TO PROJECT - (1.5 CENTS/KWH). ral Commi 7 OESI POWER CORPORATION Page 10 POWER MARKET MAKUSHIN GEOTHERMAL PROJECT POWER PURCHASE AGREEMENTS (CONTINUED) ° CITY OF UNALASKA AND FISH PROCESSORS WILL ENTER INTO NET REQUIREMENTS CONTRACTS. ° CITY OF UNALASKA SHALL DISPATCH ALL PROJECT ENERGY, ENERGY GENERATED BY THE UNALASKA SYSTEM, AND ALL PEAKING ENERGY. e INITIAL TERM OF AGREEMENT EXPECTED TO BE 20 YEARS. e INTERCONNECT AGREEMENT BETWEEN CITY AND NET REQUIREMENTS PURCHASERS PROVIDES FOR RESERVE ENERGY AND CAPACITY. OES! POWER CORPORATION Page 11 TECHNICAL MAKUSHIN GEOTHERMAL PROJECT GEOTHERMAL RESOURCE e FROM 1982 TO 1987 THE STATE OF ALASKA CONDUCTED AN EXPLORATION AND FEASIBILITY PROGRAM AT MAKUSHIN ON UNALASKA ISLAND AT A COST OF APPROXIMATELY $6,000,000. e EXPLORATORY WELLS PROVED THE EXISTENCE OF A HIGHLY PRODUCTIVE 380°F LIQUID DOMINATED - HYDROTHERMAL - RESOURCE AT LESS THAN 2000 FOOT DEPTHS IN THE UPPER MAKUSHIN VALLEY 13.5 MILES FROM THE CITY OF UNALASKA. e ARTESIAN WELLS ARE ANTICIPATED TO PRODUCE THE REQUIRED 1,560,000 LBS. PER HOUR OF GEOTHERMAL STEAM AND BRINE AT 290°F AT THE SEPARATORS. e LEADING GEOTHERMAL CONSULTANT'S CONCLUSION: “...GEOTHERMAL PROJECT CAN BE SUPPORTED BY THIS RESOURCE.” OES! POWER CORPORATION Page 12 TECHNICAL MAKUSHIN GEOTHERMAL PROJECT POWER PLANT TECHNOLOGY e RESOURCE TEMPERATURE 380°F CAN USE FLASH sK TECHNOLOGY, BINARY TECHNOLOGY OR COMBINATION. e IN U.S.A. THERE ARE 42 OPERATING HYDROTHERMAL PROJECTS GENERATING 975 MW - REPRESENTING A TOTAL CAPITAL INVESTMENT OF $2.6 BILLION. e EXISTING POWER PLANT TECHNOLOGY IS MATURE AND PROVEN. e MAKUSHIN PROJECT WILL USE COMBINED FLASH AND BRINE MODULES FOR A TOTAL NAMEPLATE RATING OF 18 MW. e PLANT MAY BE EXPANDED BY ADDING MORE MODULES. OESI POWER CORPORATION Page 13 INTERMITTENT NONCONDENSIBLE GASES RELEASE VENT 1,560,000 M = = > — — 4500 KW NAMEPLATE == TO RESOURCE BASIN nN VAPORIZER INTERMITTENT OCCASIONAL ISOPENTANE NONCONDENSIBLE RELEASE VENT RELEASE I 4 i, 1,390,000 M O O | 290°F VAPOR > to THREE aN O O >| RECOVERY [> ADDITIONAL UNIT MODULAR UNITS O O —— 380 DEG F a CYCLE PUMP 354 BTU/Ib K ( \-< LY AIR COOLED CONDENSER CONDITIONS 41°F ANNUAL AVERAGE SYMBOLS 2,780 GPM 340 GPM M = tbs/hr @ 180°F @ 235 P P - psig T - deg F Ww - GPM V Q - BTU/h h- BIUAD TO INJECTION BINARY FLUID te, ISOPENTANE GEOTHERMAL FLUID Cy =a MAK-12 TECHNICAL MAKUSHIN GEOTHERMAL PROJECT PROJECT REQUIREMENTS e POWER PLANT AND AUXILIARY SYSTEMS ° 13.5 MILE ROAD, INCLUDING BRIDGES, TO SOUTH CANYON PLATEAU IN UPPER MAKUSHIN VALLEY ° PIER FOR PLANT ACCESS e TWO OR THREE PRODUCTION WELLS PRODUCING UP TO 1,560,000 LBS. PER HOUR OF GEOTHERMAL FLUID AT 290°F ° ONE OR TWO INJECTION WELLS TO PROVIDE 100% REINJECTION e CENTRALIZED DISPATCH SYSTEM ° MESSING AND BERTHING FACILITIES FOR O&M PERSONNEL ° CITY TO EXPAND 34.5 KV GRID TO INTERCONNECT ALL INDUSTRIAL POWER USERS OESI POWER CORPORATION Page 15 TECHNICAL MAKUSHIN GEOTHERMAL PROJECT PERMITS e ALL FEDERAL PERMIT APPLICATIONS WITH THE U.S. COAST GUARD AND U.S. ARMY CORPS OF ENGINEERS (USCOE) HAVE BEEN FILED (EXCEPT U.S. COAST GUARD NAVIGABILITY) ° NATIONAL ENVIRONMENTAL POLICY ACT (NEPA) HAS BEEN TRIGGERED AND USCOE IS PERFORMING AN ENVIRONMENTAL ASSESSMENT e APPLICATIONS FOR ALL STATE PERMITS ADMINISTERED BY THE ALASKA DEPARTMENT OF GOVERNMENTAL COORDINATION (DGC) HAVE BEEN FILED ¢ = OTHER ACTIVITIES REMAINING: - CITY OF UNALASKA TIDELANDS LEASE - PLAN REVIEW OF SEWAGE TREATMENT AND INJECTION PLANS (APPLICATIONS HAVE BEEN SUBMITTED) - SPILL PREVENTION CONTROL AND COUNTERMEASURE PLAN (SPCC) - STORM WATER POLLUTION PREVENTION PLAN - BUILDING PERMITS OESI POWER CORPORATION Page 16 ECONOMICS MAKUSHIN GEOTHERMAL PROJECT PROJECT CONSTRUCTION COSTS BUDGET ESTIMATES BY MAKUSHIN GEOTHERMAL COMPANY BUDGET ESTIMATES ASSUMES START OF CONSTRUCTION IN MARCH 1996 AND PROJECT COMPLETION IN JULY 1998 CONSTRUCTION COSTS, INCLUDING CITY OF UNALASKA’S DISTRIBUTION SYSTEM: BUDGET ESTIMATE ($000) 1. PLANT 89,832 2. GEOTHERMAL FIELD 20,068 TOTAL $ 109,900 NOTE: GRAND TOTAL INCLUDES ALL DEVELOPER COSTS, 1.E., CONTINGENCIES, FEES AND G&A. OESI POWER CORPORATION Page 17 ECONOMICS MAKUSHIN GEOTHERMAL PROJECT PLAN OF FINANCE e IDB - INDUSTRIAL DEVELOPMENT BONDS e FEDERAL GRANTS - $30-35 MILLION e STATE GRANTS - $10-15 MILLION OESI POWER CORPORATION Page 18 ECONOMICS MAKUSHIN GEOTHERMAL PROJECT REVENUE SOURCES e EPC CONTRACT - POWER PLANT CONSTRUCTION AND GEOTHERMAL RESOURCE DEVELOPMENT e GEOTHERMAL FLUID FEE - LEASEHOLDER e O&M CONTRACT - OPERATOR OESI POWER CORPORATION Page 19 DEVELOPMENT MAKUSHIN GEOTHERMAL PROJECT ALASKA INDUSTRIAL DEVELOPMENT AND EXPORT AUTHORITY’S SHORT TERM DEVELOPMENT ACTIVITIES * OBTAIN A POWER SALES AGREEMENT WITH THE CITY, \ AND THE PROCESSORS (SPRING 1995) ( BeveQaein ou Boo e EVALUATE OESI’S FINANCIAL STRENGTH AND QUALIFICATIONS, AND ABILITY TO PROVIDE A TURNKEY CONSTRUCTION CONTRACT AND ASSURE THE GEOTHERMAL LEASE. W\o Well! ‘ ype” e OBTAIN AIDEA BOARD AND CITY APPROVAL FOR CONTINUING WITH THE PROJECT DEVELOPMENT. (SPRING 1995) um, e EXAMINE THE POSSIBILITY OF OBTAINING INITIAL 2 “SEED” GRANT FROM FEDERAL SOURCES TO FUND PARTICULAR PRELIMINARY ACTIVITIES SUCH AS FINANCIAL DEVELOPMENT PLAN, TURNKEY CONSTRUCTION AGREEMENTS, AND COMPLETION OF ENVIRONMENTAL PERMITTING. (SUMMER 1995) Week ¢ PREPARE DRAFT STATE LEGISLATION TO SUPPORT © (0 THE MAKUSHIN PROJECT WITH STATE GRANT FUNDS CONDITIONAL UPON FEDERAL FUNDING. (FALL 1995) e OBTAIN FEDERAL AND STATE FUNDS FOR THE BALANCE OF THE REQUIRED GRANT. (1996) OESI POWER CORPORATION Page 20 DEVELOPMENT MAKUSHIN GEOTHERMAL PROJECT ESTIMATED ON-GOING DEVELOPMENT COSTS - THROUGH MAY 1996 @ COMMUNITY MEETING, PERMITTING, AND SITE WORK $ 50,000 e AIDEA CONTRACT NEGOTIATIONS $ 10,000 e CONSULTANTS $115,000 TOTAL $175,000 OESI POWER CORPORATION Page 21