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HomeMy WebLinkAboutKotzebue Geothermal & District Heating Proposals 1981KTZ 008 Alaska Energy Authority LIBRARY COPY KOTZEBUE GEOTHERMAL AND DISTRICT HEATING PROPOSALS JANUARY 19, 1981 7 fon 249. G4 5% K\rz 00% ALASKA POWER AUTHORITY 1) Pl °° KOTZEBUE GEOTHERMAL for Jaw ld, (98 | AND DISTRICT HEATING ~~ PROPOSALS APA Book Mhy Based on information that wildcat wells near Cape Espenburg ‘and Nimiuk Point had encountered above average geothermal gradients, the 1980 Alaska Legislature appropriated $600,000 to the Alaska Power Authority to assess the possible utiliza- tion of geothermal resources by Kotzebue. A total of $37,500 was transferred to the Division of Energy and Power Development in late summer 1980 to hire the con- sulting firm of Energy Systems, Inc. to perform a preliminary feasibility study and coordinate input of in-state and out-of-state experts. As the result of these efforts, which included the examination of exploratory oi] well logs and geophysical information at Chevron offices in San Francisco, the consulting firm reached a number of conclusions regarding geothermal wells at Kotzebue: 1. The wells would be relatively shallow at about 2000 feet. 2. Water volumes would be adequate for production and pumping. w The wells could be drilled by a large water well drilling rig rather than an oi] well drilling rig. However, the study also concluded: 1. One exploratory 4 inch diameter water well with necessary instrumentation would probably cost $330,000-$350,000. 2. Precipitation of dissolved solids and resultant scaliness would be a problem, since the aquifier is approximately three times as Salty as sea water. 3. Reinjection of produced waters would be necessary. 4. Subsidience of Kotzebue, which has an elevation of nine feet above sea level, could be a problem. 5. Large amounts of diesel generated electricity would be required to pump the water from at least a 1000 feet depth. 6. The water temperatures would be low (105°F to 135°F). Based on these conclusions and an October 1980 report by Energy Systems which ; projected costs of $7,590,000 for a district heat system and $4,000,000 to $12,500,000 for the wells it appears that geothermal wells alone are not an economical energy source for Kotzebue. However during the course of this effort, the City of Kotzebue has become more interested in the district heating concept. The staff of the Divi- sion of Energy and Power Development and Energy Systems, Inc. have assisted Kotzebue in drafting a solicitation to the U. S. Department of Housing and Urban Development for partial funding ($50,000) of a district heat feasibility study which would exa- ~ x ALASKA POWER AUTHOREPY mine heat sources other than geothermal for the district heat system. DEPU has indicated that support from the Power Authority appropriation in the aniount of $125,000 would be necessary to pursue the first phase of the feasibility study. Participation by HUD may be desirable, since block grant funds might be made avail- able for the construction phase if a district heat system proved -feasible. We feel that a district heat and cogeneration proposal using coal or other fuel may have merit for Kotzebue. On January 7, 1981, the Kotzebue City Council autho- rized the Kotzebue City Manager, Gene Moore, to pursue such an effort on behalf of the City. Although we have not received a formal letter fron the City as of this date, we do expect to receive it shortly. Therefore, we recommend that the Board authorize the Executive Director to Pursue necessary approvals from the Governor's Division of Budget and Management to redirect funds from the geothermal R&D to district heat and cogeneration feasi- bility studies. Upon receiving such approval, it is recommended to authorize the Executive Director to enter into agreements as necessary to advertise for consultants to perform the first phase of the feasibility study, using partial support from Hous- ing and Urban Development if necessary.