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Geothermal Potential in the Aleutians ADAK 1981
ADA wer LIZRARY COPY GEOTHERMAL POTENTIAL IN THE ALEUTIANS 334 W. 5th Ave. Anchorage, Alaska 99501 GEOTHERMAL POTENTIAL IN THE ALEUTIANS: ADAK Submitted to the Alaska Division of Energy & Power Development by Morrison-Knudsen Company, Inc. 1981 2. TABLE OF CONTENTS INTRODUCTION SITE DESCRIPTION 2.1 Location 2.2 Climate 2.3 Adak Development History 2.4 Energy Use GEOTHERMAL RESOURCE EVALUATION 3.1 Geology 3.2 Hot Springs 3.3 Geothermal Reservoir Estimates GEOTHERMAL DEVELOPMENT POTENTIAL 4.1 Power Generation 4.2 Space Heating System (Cascaded) 4.3 Space Heating without Power Generation ECONOMIC ANALYSIS 5.1 Assumptions 5.2 Results of Analysis CONCLUSIONS REFERENCES Page No. 1-1 2-1 2-1 2-1 2-5 3-1 3-1 3-2 4-1 4-3 5-1 5-1 6-1 7-1 LIST OF FIGURES Cross-section of Subduction Zone - Adak Island Typical Temperatures for Geothermal Resource Utilization Adak Location Map Adak Island Average Monthly Temperatures - Adak, Alaska Geologic Map of Northern Adak Island Location of Heat Flow Holes Schematic of Binary Power Cycle Typical Schedule for Geothermal Power Development Assumed Power Plant Location LIST OF TABLES Statement of Investment, 10 MW Power Plant with Space Heating Systen Statement of Expenses, 10 MW Power Plant with Space Heating System Statement of Investment, Space Heating System Statement of Expenses, Space Heating System Page No. 1-2 1-3 2-2 2-4 3-2 4-2 4-4 4-6 Page No. 5-6 5-7 5-11 5-12 GEOTHERMAL POTENTIAL IN THE ALEUTIANS: ADAK 1. INTRODUCTION The Aleutian island arc, which extends 1,800 kilometers from the Alaska Peninsula to the Russian Kamchatka Peninsula, is perhaps the remotest area in the United States. General concerns about rising energy costs and uncertain fuel supplies are magnified on these islands, where difficult transportation and logistics contribute to an expensive and vulnerable energy picture. Communities are faced with outdated energy production and transmission facilities, energy demands which strain system capacities, and few, if any, alternative energy resources. In many locations, improvements in living and economic conditions are severely constrained by insufficient energy supplies. Geothermal energy is one of the most promising energy alternatives available on the Aleutians. The islands are part of the Pacific "ring of fire," a region of high volcanic and seismic activity resulting from the subduction of oceanic plates under continental plates (Figure 1). In these areas, the natural heat flow is high, and there is the potential for economic recovery of this geothermal heat. There are three primary types of geothermal resources: hydrothermal, hot dry rock, and geopressured. Nearly all of the currently developed geothermal resources are hydrothermal systems, in which ground water is heated at depth. These systems can be either vapor-dominated (steam) or hot water-dominated, depending on temperature and pressure conditions. The essential ingredients for a hydrothermal system are a heat source near the earth's surface, a sufficient supply of ground water, and a_ transport medium (porous rock or natural fractures) to bring the heated ground water to relatively shallow depths where it can be developed as an energy resource. The developed geothermal resources in the world are hydrothermal resources, and the technology to develop and utilize these resources has been demonstrated to be economic. The worldwide hydrothermal electric power capacity in 1979 was ie MWe, with a direct-use total of approximately 7,000 MWt (Anderson & Lund, 1979). Geothermal resources have been developed for applications ranging from space heating to electric power production. The optimum use of a geothermal resource depends not only on its temperature, chemistry, and supply, but also on the nature of the energy demand in its vicinity. Conventional methods of economic geothermal power _ production require resource temperatures of at least 180 degrees C, although research is being conducted at temperatures as low as 140 degrees C. Lower temperature resources can be utilized directly in such applications as aquaculture, balneological baths, food processing, and hybrid energy systems (Figure 2). 1-1 ADAK BERING SEA PACIFIC OCEAN ALEUTIAN BASIN ALEUTIAN PLATE PACIFIC PLATE ALEUTIAN TRENCH i 50 Kin VERT. EXAGGERATIONS ‘x12 FIGURE | CROSS-SECTION OF SUBDUCTION ZONE ADAK ISLAND (After Morgan, 1980) KNUDSEN CONVENTIONAL POWER PRODUCTION 180° 350° and UP 340° 160° 320° ALUMINA PROCESSING 300° DRYING FARM PRODUCTS |! 140° 280° EXTRACTION OF SALTS | 260° REFRIGERATION (mod.temp.) ;2¢° 240° CONCRETE BLOCK CURING | 220° CRAB PROCESSING 100° 200° DRYING FISH SPACE HEATING | bee 180° REFRIGERATION (low temp.) 160° GREENHOUSES 60° 140° 120° BALNEOLOGICAL BATHS : SOIL_ WARMING 40 1002 FERMENTATION, DE-ICING 80° FISH FARMING 20° 60° °C oF FIGURE 2 360° TYPICAL TEMPERATURE FOR GEOTHERMAL RESOURCE UTILIZATION @ wes An area with significant geothermal resource potential has been identified near the Adak Naval Station on Adak Island. This report presents a summary of the resource potential on the island, as well as an economic assessment of poten- tial applications of this energy resource. 2. SITE DESCRIPTION 2.1 Location Adak Island is one of the Andreanof Group located near the center of the Aleutian chain (Figure 3). It is approximately 2,000 kilometers southwest of Anchorage and 1,400 kilometers southeast of the Kamchatka Peninsula. The island is mountainous, with a rugged shoreline indented by numerous fjords and bays. The topography of the northern part of the island is dominated by two volcanoes: Mount Moffett, elevation 1,200 m, and Mount Adagdak, elevation 650 m (Figure 4). The U.S. Navy controls the northern half of the island for its Adak Naval Station and the Naval Communication Station Clam Lagoon. The remainder of the island is included in the Aleutian Islands National Wildlife Refuge and the U.S. Fish and Wildlife Service maintains its Refuge headquarters on the island. 2.2 Climate The climate of the Aleutian Islands is a maritime climate characterized by cool summers and mild winters. The average monthly temperatures on Adak range from 0 degrees C in February to 11 degrees C in August (Figure 5). The estimated annual heating degree day total for the island is 9,000 (70 degrees F base). The lowest recorded temperature in 31 years of record is -14 degrees C. The average annual precipitation totals 170 cm and snow accumulations at the Base rarely exceed one meter. Adak Island is located within the North Pacific storm track, and intense cyclonic storms and high winds are frequent occurrences. In the fall of 1977, the remains of tropical storm Harriet hit the Aleutians, and the barometric pressure on Adak dropped to 920 mb, the lowest ever recorded. The storm caused $3 million damage on the island, including the loss of two boats in protected anchorages (Morgan, 1980). 2.3 Adak Development History Adak Island is reported to have been discovered in 1741 by Alexei Chirikof, who commanded one of the Russian ships included in Vitus Berings's Kamchatka Expedition. The ship reportedly anchored off Adak in the fog and encountered Aleut warriors in baidarkas. Little additional mention of Adak was made until the height of sealing in the late 1800's. Historical accounts indicate that over one million dollars in gold robbed from a fleet supply ship was buried on Adak. Rumors of this treasure persist, and cans of gold coin were said to have been discovered by military personnel stationed there (Morgan, 1980). The island was selected as a military base during WWII, and at the height of the war had a population of 96,000. Since the war, Adak has been the only military facility in continuous existence in the Aleutians. The base was turned over to the Navy in 1950 after the Army and Air Force had pulled out, and the base population subsequently decreased to 1,500. Remnants of the war include mine fields; dumps; quonset huts; and the "Adak National Forest," the six remaining trees of a stand of 2,000 spruce set out on the treeless island by soldiers stationed on the island during WWII (Morgan, 1980). 2-1 EXPEDITION we ADAK ASPLIT TOP VOLCANO FIGURE 3 ADAK LOCATION ANDREW MAP HOT SPRINGS MOUNT ADAGDAK KAGALASKA\ _ Cape Adagdak Kuluk Shoal Zeto Pt s! ADAK NAVAL STATION Kuluk Oglala Pt ‘ co apit Rock \ po) ee & » v Cliff Pt } Wovabbard KC is Bay of ‘ Bay \: ‘ ® Xe Eddy lawes Islands ay & Careful Pt South | a = Nob ~~“ : ‘Galas Pt Argonne Pte * - el & %,, \ Sgroorer2': (Le toy ech : | j Crater y hy nor { eo i Grae The Three YC » - fy Ragged Pt ‘ Kaga Pt ‘As eS Sharp Cape SS Hook Pt | 10 Km c ‘Ano Lake Pt r sso! 4 > Cape A! roads > false Bay Cape Kagigikak ‘ ! 8 \. PS 2a Turret Pt i FIGURE 4 4 Light Cape Yakak ~® ADAK ISLAND CENTIGRADE DEGREES i2-| 4 lo“ JAN | FEB T MART APR IMAY!yUN !JUL [AUG |SEP loct TNov DEC FIGURE 5 AVERAGE MONTHLY TEMPERATURES - ADAK, ALASKA @ wes In 1971 the Fleet Air Alaska Command was transferred from Kodiak to Adak because of its strategic position, and the facilities now constitute Alaska's largest naval base. With an average population of approximately 5,000, Adak is the most populous settlement in the Aleutians. Transport to the island is limited to boat or air service provided by Reeve Aleutian Airways or the military. Although weather conditions frequently prohibit flights, transports to Adak generate nearly half of Reeve's annual revenues. Access to the island requires prior clearance from the Navy. 2.4 Energy Use Electrical and space heating requirements at the Adak Naval Station are supplied by aviation fuel. Use of this fuel is based on convenience rather than economics. Electrical generation capacity consists of four 600-kilowatt generators and six 3,000-kilowatt generators. The FY-1980 fuel consumption for electrical generation was 13,650,000 liters (R. E. Brown, 1981). Space heating is provided by two central steam plants which supply the larger facilities and by a combination of individual boilers and a central system for outlying facilities and residences. The total fuel used in FY-1980 for space heating was 12,980,000 liters. Fuel is supplied to the base under defense logistics procurement at a current price of $0.34 per liter. This is up froma 1978 defense fuel supply cost of $0.12 per liter (Bruce, 1979). At the current price, the total cost of fuel consumed for electricity and space heating at Adak last year was $8,903,000. 2-5 3. GEOTHERMAL RESOURCE EVALUATION The Aleutian Islands are crests of a chain of submarine volcanoes which rise to a maximum height of 9,900 meters above the ocean floor. At least 26 of the 46 active volcanoes in the chain appear to have erupted since 1760. There are three volcanic centers on Adak Island: Mount Moffett, Mount Adagdak, and Andrew Bay. Mount Moffett is a typical andesitic stratovolcano which appears to be younger than 250,000 years. Adagdak was active between 100,000 and 350,000 years ago, while the Andrew Bay volcano appears to have been active at least 827,000 years ago (Miller and Smith, 1977). None of the exposed flows from either Mount Adagdak or Mount Moffett are coincident; consequently, analyses of their relative eruptive history cannot be made. 3.1 Geology The rock units of northern Adak Island are comprised of volcanic and intrusive rocks of Paleozoic (?) age in the southern part of the area; Tertiary or Quaternary volcanic rocks, most of which make up the cones in the northern part of the area; and Quaternary rocks, largely glacial drift and other unconsolidated materials (Figure 6). The southern portion of Adak Island is composed of Tertiary (?) Finger Bay volcanics, an altered andesitic and basaltic sequence of marine pyroclastic deposits and Java flows with minor argillite and graywacke beds, intruded by composite granodiorite, quartzdiorite, diorite, and gabbro plutons of probable middle to late Tertiary age; many aphanitic dikes and sills, generally altered, which cut plutonic rocks and Finger Bay volcanics; and surficial deposits, mostly volcanic ash and soil, which obscure much of the bedrock below elevations of 460 m. Numerous steeply dipping normal faults of relatively small displacement have been identified and mapped. These faults generally strike N 60 degrees E to N 60 degrees W and from N 20 degrees E to N 10 degrees W (Coates, 1956). A microseismic survey conducted in 1974 identified two centers of seismic events, one 30 to 40 kilometers southeast of Adak and the other located within Andrew Bay. During the ten days of the survey, 26 events were recorded within the Andrew Bay area on the west side of Mount Adagdak. Based on the survey, a major fault plane striking N 70 degrees E with a northwest dip of 75 degrees was theorized. The fault trends across the northwest flank of Mount Adagdak and through Andrew Bay (Butler and Keller, 1975). 3.2 Hot Springs Waring (1917) mentioned the occurrence of hot springs on Adak Island in his compilation of hot springs in Alaska, and Fraser and Snyder (1959) reported hot springs occurring on the east side of Andrew Bay. During the Miller and Smith (1977) study, hot springs were noted at two principal localities about 60 meters apart on the east side of Andrew Bay about two kilometers north of Andrew Lake (Figure 6). 3-1 Interbedded Basalt & Tuffaceous Sandstone | Andesite Porphyry Domes Basalt Domes YW Older Composite Cone Composite Cone Marine Terrace Boulder Gravel Unconsolidated Alluvial Deposits Tuff - Breccia Cone Moffett Composite Cone Basalt & Andesite Domes Bouldery Conglomerate Olivine Gabbro Plug Finger Bay Volcanics Glacial Drift Sand Dunes Younger Composite Cone Marine Terrace Gravel Sa Sy2\, LAGOON MOFFETT FIGURE 6 GEOLOGIC MAP OF NORTHERN ADAK ISLAND MORRISON (After Coates, 1956) KNUDSEN The host rock at both localities appears to be strongly fractured and altered andesite dome rock. Numerous oxidized and altered zones along the fractures attest to a long period of hot spring activity. The southernmost spring has been identified as a tidal discharge at the base of the sea cliffs. The temperature was measured at 71 degrees C with no estimate of flow. The next discharge point, located approximately 10 meters away, had a measured temperature of 35 degrees C. The other principal hot spring area is 60 meters north of the first spring. These springs issue from steeply dipping (60 degrees S) fractures striking N 50-90 degrees W. Measured temperatures ranged from 50-63 degrees C. The waters are essentially sodium chloride brine with a total dissolved solids content of 21,000 to 23,000 mg/L. 3.3 Geothermal Reservoir Estimates The geothermal resources of Adak Island have been extensively evaluated and preliminary estimates of potential geothermal reservoir characteristics have been made. The characterization studies have included petrologic sampling, geochemical analyses, and potassium-argon age dating. Geophysical studies, including gravity, audiomagnetotelluric, telluric traverse, self-potential, and EM-16R electromagnetic techniques, were used to identify potential high level Magma chambers. The audiomagnetotelluric survey indicated zones of very low resistivity at depths of 600 meters and 575 meters in the region just south of Mount Adagdak. The low resistivity in these zones may indicate the presence of geothermal brine. A thermal anomaly of some sort probably underlies all or part of Mount Adagdak. The temperature of this anomaly, however, may be relatively low (i.e., much less than 300 degrees C). The chemical analyses of thermal waters indicated the following reservoir temperature estimates: Quartz Na-K-Ca 186 degrees C 187 degrees C 175 degrees C 182 degrees C 143 degrees C The indicated subsurface temperatures are relatively high for Alaskan hot springs (Miller and Barnes, 1976) but similar to those reported for some other Aleutian Island hot springs. On the basis of these surveys, the Navy drilled two heat flow holes on Mount Adagdak (Figure 7). The holes were drilled to depths of 320 meters and 620 meters. The average thermal gradient of 76 degrees C/km indicate a deeper thermal anomaly (150 degrees C at 1,800 m) than predicted by the previous geophysical studies (180 degrees C at 1,200 to 1,800 m) (Bruce, 1979). 3-3 NAVAL STATION er : Kuluk North Spit \7 vl HRY S58 Gannet B SS. ¢F sessile se n jit NX et Rocks ay Shagak\\ ’ ie ‘Bay : com South Spit a nah \ ordi: a gh» Wee weed ° 5 Km FIGURE 7 cRON LOCATION OF HEAT FLOW HOLES KNUDSEN The situation at Mount Moffett is somewhat different than at Mount Adagdak in that Mount Moffett is a large andesitic stratocone with no known silicic vent. A potential thermal anomaly beneath Mt. Moffett is possible although the original magma chamber has probably crystallized. Initial production capability from the geothermal reservoir near Mount Adagdak is estimated at 10-30 megawatts electric. Although geothermometry indicates a reservoir temperature of approximately 18C degrees C, a deeper magma reservoir is believed capable of a greater production temperature. 3-5 4. GEOTHERMAL DEVELOPMENT POTENTIAL Geothermal resources in Alaska have not been developed to any significant extent. Much of the lack of interest in geothermal development is related to little available data on the resource, high development risk, and scattered energy demand centers. Data from the existing hot springs on Adak Island indicate that there may be a geothermal resource present that could be developed economically. The Adak Naval Station represents a reliable "captive" energy demand center whose energy requirements could be supplied primarily by geothermal development. Three primary applications are evaluated in this report: 1) a 10 MW power plant, 2) a space heating system using power plant effluent, and 3) space heating without power generation. 4.1 Power Generation Geothermometers of the thermal springs indicate a geothermal resource temperature of about 150 to 180 degrees C at depth. At this temperature, the resource could be developed for power production. Although a flashed steam system could be employed, a binary system (Figure 8) is generally more appropriate at temperatures of 180 degrees C and below. Initial production capability from the Adak resource is estimated to be as high as 30 megawatts. A 10 MWe power plant has been selected for this analysis based on the current electricity consumption at the base. This size plant would meet the average loads at 75% capacity, which is typical of geothermal plants of this type. The economic analysis (see Section 5) is based on the following assumed design factors: Resource Temperature - 160 degrees C Flow - 900,000 kg/hr Number of Production Wells - 4 Plant Outlet Temperature - 90-105 degrees C Well Depth - 1800 meters The facility should be designed to be a closed-cycle system, and the geothermal fluids should be maintained under pressure to reduce the potential for corrosion and scaling. The costs of the power plant used in Section 5 do include a brine treatment system and are based on systems developed for similar resources in the Imperial Valley, California. The economic analysis does not include the costs of an injection system. If surface discharge is not acceptable from an environmental or resource Management standpoint, a series of injection wells (approximately the same number as the number of production wells) would have to be drilled. If injection is required, an evaluation of the most feasible location should take into consideration the potential for breakthrough in the production reservoir, drilling costs versus depth, migration of the injected fluids, fluid compatibility, and pumping requirements. Although similar assumptions have been made in the past, the use of poor or unsuccessful production wells for injection is generally not feasible due to low permeability. 4-1 TURBINE-GENERATOR COOLING TOWER 5] MAKEUP CIRCULATING WATER PUMP BLOWDOWN PUMP c, GEOTHERMAL FLUID PRODUCTION CASCADED —_———_ WORKING FLUID WELLS USES sue __ COOLING WATER FIGURE 8 SCHEMATIC OF BINARY POWER CYCLE @ wee 4.2 The detailed economic analysis for this facility is summarized in Section 5. The total investment for the plant, including transmission line, is $52.7 million (1981 $). Previous experience with geothermal power developments indicates that it would take an average of seven years to bring a 10 MW plant on line from the initial field development (Figure 9). Si the earliest that geothermal power could be available on Adak is Space Heating System (Cascaded) Space heating using geothermal fluids is being conducted at several locations in the United States. Resource temperatures of 70 degrees C and above are suitable and water quality criteria are generally not too restrictive. The capital costs of space heating systems are controlled by the production and distribution systems. Pipelines can be either buried or aboveground, depending on economics, heat Joss considerations, and regulatory requirements. The analysis used in this report is based on buried, insulated carbon steel pipe. The costs for this pipe are escalated to 1981 dollars from costs developed for Adak by Escamilla (1978): Diameter (cm) Installed Cost ($/m) 15 230 20 260 30 350 40 440 These costs include insulation, shipping, and installation, but not engineering design costs. If a 10 MWe power plant is constructed on Adak, the plant effluent could be used in a space heating system. At a flow rate of 250 L/sec and a temperature of 100 degrees C, a maximum of 1 x 108 Btu/hr would be available, assuming a temperature loss in the pipe of 6 degrees C and a temperature drop at the heat exchange point of 30 degrees Cc. The estimated energy requirements for the Adak heating facilities (Escamilla, 1978) are: COMSTA 1.56 x 107 Btu/hr NAVSTA Plant #3 4.96 x 107 Btu/hr NAVSTA Plant #4 1.51 x 107 Btu/hr Individual housing 1.74 x 107 Btu/hr The energy available from the geothermal power plant would be adequate to meet these demands. However, the costs of retrofits and distribution requirements for the individual housing units are high enough that it may be more feasible to continue those systems using aviation fuel. The heating system analysis included in this report assumes that only the COMSTA and NAVSTA facilities (the equivalent of 80% of the total heat load) would be converted to geothermal. This would reduce the total annual consumption of aviation fuel by an estimated 10,600,000 to 12,300,000 liters. 4-3 EXPLORATION FIELD DEVELOPMENT CONSTRUCTION LONGLEAD PROCUREMENT PERMITS CHECK - OUT, SHAKEDOWN FIGURE 9 TYPICAL SCHEDULE FOR GEOTHERMAL POWER DEVELOPMENT @ xe 4.3 Assuming a power plant location just northeast of Andrew Lake (Figure 10), a total of 16 kilometers of main pipeline would be required to deliver the geothermal fluids to the heating plants. If a 40-cm diameter pipeline is installed, the total cost would be approximately $7,000,000. Total estimated system costs, including retrofitting the existing heating system, are $10.9 million. The results of the economic analysis for this system are discussed in Section 5. Space Heating without Power Generation If a geothermal resource is encountered with insufficient temperature to support power generation, it may be possible to develop the resource for a space heating system. The design criteria assumed for analysis of such a system are: Production Temperature 120 degrees C Production Wells 2 Flow 140 L/sec Heat Available 80 x 106 Btu/hr (40°C AT) Main Pipeline (30 cm) 20 km The total estimated system costs for this alternative are $19.7 million, including nearly $9 million for well drilling and field development. A comparison of the economics for these two systems is summarized in Section 5. A fourth energy alternative which has been analyzed for Adak is a 25 MWe power plant which would supply all power needs at the base, including conversion of existing space heating systems to electric resistance heaters. An analysis of this alternative is presented in a report for the Naval Weapons Center by J. L. Bruce (1979). Bruce estimates an investment for a 25 MW(e) power plant of $8,500/installed kilowatt (1981 $). PLANT LOCATION 7 ADAK NAVAL STATION why PER ST Kuluk North Spit \OSLe © Bae ee Bay Jit \\ bw eg BIZ os Sy ‘naga =| pean sy au Ww 4 ; Pit Rock gs \r Cas : : FIGURE 10 ASSUMED POWER PLANT LOCATION 5. ECONOMIC ANALYSIS The economic analysis for Adak Island includes a 10 MW geothermal power plant and a geothermal space heating system. The analysis assumes that the U.S. Government will issue bonds to raise the required investment. 5.1 Assumptions The following assumptions apply to the analysis: 1. Methodology - Discounted Cost - Breakeven Analysis The analysis develops the required mill rate per kilowatt hour of electricity sold to recover operating costs, loan principal payments and interest payment for a 10 MW geothermal power plant. The mill rate per kilowatt hour of supplying the same amount of electricity using jet fuel is calculated in answer to the following question: "Assuming the average cost of tax exempt bonds is 10.0% annually (this implies an annual discount rate of 10.0% during production); at what rate must the annual price of aviation fuel escalate to make investment in a geothermal power plant economically feasible?" This allows a determination of the "breakeven" escalation rate of aviation fuel. The economic feasibility of a geothermal power plant can be determined for any assumed fuel escalation rate by comparing it to the breakeven rate. Escalation Rates Investment and operating costs are escalated at the following rates: Year Escalation Rate 1982 10.5% 1983 10.0% 1984 9.5% 1985 9.0% 1986 8.5% 1987 8.0% 1988 and all future years 7.5% Investment The total capital investment in 1981 dollars for the power plant is estimated to be $52.7 million (Table 1). This cost includes: Wellfield (4 wells) $20,000,000 Plant and Engineering 17,800,000 Permitting and Miscellaneous 9,100,000 Brine System 5,300,000 Transmission Lines 500,000 $52, 700,000 These costs include a construction cost location adjustment factor of 2.0 over construction costs in the lower 48 states. This factor is based on the costs of recent construction activities on Adak Island. The installed cost for the power plant (without wellfield) jis $3220/kw, which is the equivalent of $1610/kw in the lower 48 states. This is within the cost range of geothermal power plants currently in the design phase or under construction. Permitting, wellfield development, engineering, and plant construction are estimated to require seven years beginning in 1982. The plant begins production in 1989 and has a production life of 25 years. The assumption is made that the geothermal resources prove adequate in temperature and flow to support the plant. Space Heating System (Cascaded): A space heating system developed in conjunction with the power plant requires one year for development and the estimated cost in 1981 dollars for 16 kilometers of insulated pipe and retrofitting of the existing heating system is $10.89 million. Development of the space heating system occurs in 1988 in conjunction with the final year of power plant construction (Table 1). Space Heating System Without Power Plant: An analysis is conducted on the space heating system assuming that a resource exists with sufficient heat and flow to support this system but is inadequate for the development of a geothermal power plant. Investment in 1981 dollars for two wells, 20 kilometers of insulated pipe and retrofitting of the existing system is estimated to be $19.73 million. The primary difference between the two systems is the additional required investment in the wells, which is estimated to be $8.84 million in 1981. The system requires two years for construction with well development occurring in 1982 and the remaining development occurring in 1983 (Table 3). The system begins production in 1984 and has a total project life of 25 years. 6. Annual Power Production Power production begins in 1989 with the plant producing 68 gigawatt hours of electricity annually. Power production is calculated according to the following formula: Net Production = 10 MW x 91% net x 8760 hours x 0.001 GWH/MWH x 85% efficiency with brine filtration. Annual Operating Costs Geothermal Power Plant: Annual operating costs in 1981 dollars are estimated to be $2.48 million. Operating costs are escalated at the rates listed above. A breakdown of operating costs in 1981 dollars is as follows: Item Expenditure Operating and Maintenance Expense $ 420,000 General and Administrative Expense (10% of 0 & M) 42,000 Insurance 318,600 Royalty (25 mills/KWH)* $1,700,000 Total $2,480,600 Space Heating Systems: The assumption is made that annual operating costs of the two space heating systems are similar to those of the existing heating system, without fuel costs. As such they are not considered in the analysis. Loan Principal and Interest Geothermal Power Plant: The assumption is made that the plant is financed during construction through the issuance of government bonds at an assumed average annual interest rate of 10%. Interest on debt is rolled over during construction and becomes part of the cumulative debt owed on the plant. Repayment of debt commences in 1989 during the first year of production. Debt is repaid over a 20 year term in annual installments of level principal plus declining interest at a rate of 10.0%. Space Heating System (Cascaded): The space heating system financing is identical to the financing for the geothermal power plant. Space Heating System Without Power Plant: The space heating system financing is identical to the financing for the geothermal power plant except that construction requires two years (1982 - 1983), and repayment of Joan principal and interest commences when the system begins production in 1984. *May or may not be applicable on Adak 5-3 7. Total Expenses Geothermal Power Plant: Total annual expenses for the geothermal power plant consist of the sum of annual operating costs and annual principal and interest payments. Space Heating Systems: Total annual expenses consist of the sum of annual principal and interest payments (operating expenses are assumed to be identical to the existing system and therefore are not considered). 8. Fuel Savings Geothermal Power Plant: The estimated fuel requirement to produce one gigawatt hour of electricity with the existing system is 269,400 liters. The cost of fuel in 1981 dollars is estimated to be $0.34 per liter. The annual savings in fuel of producing one gigawatt hour of electricity using geothermal power is computed in 1981 dollars as 90.4 mills/KWH. Annual fuel costs are escalated at an assumed rate of 7.59% per year beginning in 1982. Space Heating Systems: The estimated annual fuel requirement to provide the same amount of heat with the existing system is 11,472,000 liters. The cost of fuel in 1981 dollars is $0.34 per liter. Consequently, the annual savings in fuel attributable to the geothermal space leating system are $3.85 million per year in 1981 dollars. Annual fuel costs are escalated at 7.59% per year beginning in 1982. 5.2 Results of Analysis Geothermal Power Plant: The total annual costs of providing geothermal power in mills/KWH are subtracted from the annual savings in fuel in mills/KWH. The results show the net annual (costs) or savings of providing geothermal power over the existing system (Table 2). The annual (costs) or savings are discounted at a rate of 10% beginning in 1982. The discounted values are then added together to yield a NPV. Results of the analysis show that if fuel escalates at an annual rate above 7.59% then the discounted savings of providing geothermal power are greater than the discounted costs (NPV is positive). Therefore, the costs of providing geothermal power over the production life of 25 years would be less than providing the equivalent amount of power with aviation fuel. If aviation fuel escalates at an annual rate below 7.59%, then the discounted costs of providing geothermal power over the 25 year production life are greater than the discounted savings (NPV is negative). Space Heating System (Cascaded): Assuming that the price of fuel escalates at the breakeven rate of 7.59% calculated above, the discounted savings of providing geothermal space heat are greater than the discounted costs (NPV is positive). The NPV at a 10.0% discount rate over the entire project life is $51.3 million, indicating substantially large savings from the geothermal space heating system. Space Heating System Without Geothermal Power Plant: Assuming that the price of fuel escalates at the breakeven rate of 7.59% calculated above, the discounted savings of providing geothermal space heat are larger than the discounted costs (NPV is positive). The NPV at a 10.0% discount rate over the entire project life is $49.0 million, indicating substantially large savings from the space heating system (Table 4). The analysis shows that the use of the space heating system generates savings in all years of production, indicating that aviation fuel would have to decline in price from its present level before investment in the space heating system would not be justified. 9-S AUGUST 6, 1981 ESCALATED PLANT INVESTMENT WELL SYSTEMS PLANT AND ENGINEERING PERMITTING AND MISCELLANEOUS TRANSMISSION LINES : 8 km BRINE SYSTEM TOTAL INVESTMENT SCHEDULE OF DEBT ANNUAL LOAN DRAW CUMULATIVE DRAWDOWN ANNUAL INTEREST CUMULATIVE INTEREST INTEREST ON INTEREST ANNUAL DEBT AND INTEREST CUMULATIVE DEBT SPACE HEATING SYSTEM INVESTMENT INSULATED PIPE RETROFITTING TOTAL INVESTMENT SCHEDULE OF DEBT ANNUAL LOAN DRAW ANNUAL INTEREST CUMULATIVE DEBT TABLE 1 ALEUTIAN ISLANDS RESOURCE ANALYSIS 4 WELLS 10 MEGAWATT POWER PLANT WITH SPACE HEATING SYSTEM STATEMENT OF INVESTMENT - $000 1982 1983 1984 1985 1986 1987 1988 TOTAL 2,210.0 4,862.0 13,309.7 0.0 26,184.8 0.0 0.0 0.0 6,579.0 30,043.7 1,243.1 1,504.8 1,197.9 3,084.8 13,494.8 0.0 0.0 0.0 548.3 888.3 0.0 0.0 0.0 1,900.6 3,453.1 6,366.8 14,507.6 10,638.4 11,254.6 20,957.6 12,112.7 79,290.9 3,453.1 9,819.9 24,327.5 34,965.9 46,220.6 67,178.2 79,290.9 79,290.9 345.3 982.0 2,432.8 3,496.6 4,622.1 6,717.8 7,929.1 26,525.6 345.3 1,327.3 3,760.1 7,256.6 11,878.7 18,596.5 26,525.6 26,525.6 0.0 34.5 7 76.0 725.7 1,187.9 1,859.7 4,316.5 3,798.4 7,383.3 4 110, 132.9 3,798.4 0.0 0.0 13,005.0 13,005.0 0.0 0.0 6,896.5 6,896.5 0.0 0.0 0.0 0.0 0.0 19,901.5 19,901.5 0.0 0.0 0.0 7 1,990.1 21,891.6 L£-S TABLE 2 AUGUST 6, 1981 ALEUTIAN ISLANDS RESOURCE ANALYSIS 4 WELLS 10 MEGAWATT POWER PLANT WITH SPACE HEATING SYSTEM STATEMENT OF EXPENSES - $000 1982 1983 1984 1985 1986 1987 1988 1989 1990 PRODUCTION : GWH PER YEAR 0 0 0 0 0 0 0 68 68 EXPENSES OPERATING AND MAINTENANCE 0 0 0 0 0 0 0 825 887 GENERAL AND ADMINISTRATIVE 0 0 0 0 0 0 0 83 89 INSURANCE 0 0 0 0 0 0 0 623 670 ROYALTY 0 0 0 0 0 0 0 3,340 3,590 DIRECT EXPENSES 0 0 0 0 0 0 0 4,870 5,236 OTHER EXPENSES LOAN PRINCIPAL 0 0 5,507 5,507 INTEREST 0 0 172013 10463 TOTAL EXPENSES 0 0 21,390 21,205 TOTAL EXPENSES : MILLS / KWH 0.0 0 314.6 311.8 BREAKEVEN ANALYSIS FUEL ESCALATION RATE : 7.5873% COST IN MILLS/KWH : FUEL 0.0 0.0 0.0 0.0 0.0 162.3 174.6 COST IN MILLS/ kKwH : GEOTHERMAL 0.0 0.0 0.0 0.0 0.0 314.6 311.8 SAVINGS OF GEOTHERMAL PLANT 0.0 0.0 0.0 (152.3) SAVINGS DISCOUNTED AT 10% 0.0 0.0 (71.0) NET PRESENT VALUE OF SAVINGS 0.0 0.0 (71.0) SPACE HEATING SYSTEM ESCAL, FUEL SAVINGS : 7.5873% 0 0 0 0 0 0 0 6,911 7,435 EXPENSES LOAN PRINCIPAL 0 0 0 0 0 0 0 1,095 INTEREST 0 0 0 0 0 0 0 2/189 SAVINGS : SPACE HEATING SYSTEM 0 0 0 0 0 0 3,627 SAVINGS DISCOUNTED AT 10% 0 0 1,692 NET PRESENT VALUE OF SAVINGS 0 0 1,692 8-S TABLE 2, Cont. AUGUST 6, 1981 ALEUTIAN ISLANDS RESOURCE ANALYSIS 4 WELLS 10 MEGAWATT POWER PLANT WITH SPACE HEATING SYSTEM STATEMENT OF EXPENSES - $000 1991 1992 1993 1994 1995 1996 1997 1998 1999 PRODUCTION : GWH PER YEAR 68 68 68 68 68 68 68 68 68 EXPENSES OPERATING AND MAINTENANCE 954 1,025 1,102 1,185 1,273 1,369 1,472 1,582 1,701 GENERAL AND ADMINISTRATIVE 95 103 110 118 127 137 47 158 170 INSURANCE 720 774 832 895 962 1,034 1,111 1,195 1,284 ROYALTY 3,860 4,149 4,460 4,795 5,154 5,541 5,956 6,403 6,883 DIRECT EXPENSES 5,628 6,051 6,504 6,992 7,517 8,080 8,686 9,338 10,038 OTHER EXPENSES LOAN PRINCIPAL a INTEREST 5-907 TOTAL EXPENSES aT TOTAL EXPENSES : MILLS / KWH a BREAKEVEN ANALYSIS FUEL ESCALATION RATE : 7.5873% COST IN MILLS/KWH ; FUEL COST IN MILLS/KWH : GEOTHERMAL SAVINGS OF GEOTHERMAL PLANT SAVINGS DISCOUNTED AT 10% (28.2) (20.6) (13.9) (8.1) (3.0) 1.4 5.1 NET PRESENT VALUE OF SAVINGS SPACE HEATING SYSTEM ESCAL, FUEL SAVINGS : 7.5873% 8,000 8,607 9,260 9,962 10,718 11,531 12,406 13,347 14, 360 EXPENSES LOAN PRINCIPAL 1,095 1,095 1,095 1,095 1,095 1,095 INTEREST 1,970 1,861 1,423 1,313 1,204 1,095 SAVINGS : SPACE HEATING SYSTEM 4,935 5,651 9,014 9,998 __11,049 __12,171 SAVINGS DISCOUNTED AT 10% 1,981 2,158 2,176 2,186 2,189 NET PRESENT VALUE OF SAVINGS 7,383 15,808 17,984 20,170 22,359 wo AUGUST 6, 1981 PRODUCTION : GWH PER YEAR EXPENSES OPERATING AND MAINTENANCE GENERAL AND ADMINISTRATIVE INSURANCE ROYALTY DIRECT EXPENSES OTHER EXPENSES LOAN PRINCIPAL INTEREST TOTAL EXPENSES TOTAL EXPENSES : MILLS / KWH BREAKEVEN ANALYSIS FUEL ESCALATION RATE : 7.5873% COST IN MILLS/KWH : FUEL COST IN MILLS/ KWH : GEOTHERMAL SAVINGS OF GEOTHERMAL PLANT SAVINGS DISCOUNTED AT 10% NET PRESENT VALUE OF SAVINGS SPACE HEATING SYSTEM ESCAL., FUEL SAVINGS : 7.5873% EXPENSES LOAN PRINCIPAL INTEREST SAVINGS : SPACE HEATING SYSTEM SAVINGS DISCOUNTED AT 10% NET PRESENT VALUE OF SAVINGS TABLE 2, Cont. ALEUTIAN ISLANDS RESOURCE ANALYSIS 4 WELLS 10 MEGAWATT POWER PLANT WITH SPACE HEATING SYSTEM STATEMENT OF EXPENSES - $000 2000 2001 2002 2003 2004 2005 2006 2007 2008 68 68 68 68 68 68 68 68 1,828 1,965 2,113 2,271 2,441 2,625 2,821 3,033 3,260 183 197 211 227 244 262 282 303 326 1,381 1,484 1,595 1,715 1,844 1,982 2,131 2,290 2,462 7,400 7,955 8,551 9,192 9,882 10,623 11,420 12,276 13,197 10,791 11,600 12,470 13,406 14,411 15,492 16,654 17,903 19,246 364.0 525.5 565.5 608.6 655.0 312.6 341.2 350.2 360.5 372.1 51.4 248.1 8.4 11.2 13.6 15.6 17.3 18.7 19. 20.8 21 15,450 16,622 17,883 19,240 20,700 22,270 23,960 25,778 27,734 1,095 1,095 985 876 13,370 14,652 2,186 2,178 24,545 26,723 OI-S AUGUST 6, 1981 PRODUCTION : GWH PER YEAR EXPENSES OPERATING AND MAINTENANCE GENERAL AND ADMINISTRATIVE INSURANCE ROYALTY DIRECT EXPENSES OTHER EXPENSES LOAN PRINCIPAL INTEREST TOTAL EXPENSES TOTAL EXPENSES : MILLS / KWH BREAKEVEN ANALYSIS FUEL ESCALATION RATE : 7.5873% COST IN MILLS/KWH : FUEL COST IN MILLS/KWH ; GEOTHERMAL SAVINGS OF GEOTHERMAL PLANT SAVINGS DISCOUNTED AT 10% NET PRESENT VALUE OF SAVINGS SPACE HEATING SYSTEM ESCAL. FUEL SAVINGS : 7.5873% EXPENSES LOAN PRINCIPAL INTEREST SAVINGS : SPACE HEATING SYSTEM SAVINGS DISCOUNTED AT 10% NET PRESENT VALUE OF SAVINGS TABLE 2, Cont. ALEUTIAN ISLANDS RESOURCE ANALYSIS 10 MEGAWATT POWER PLANT WITH SPACE HEATING SYSTEM STATEMENT OF EXPENSES - $000 2009 2010 2011 2012 2013 TOTAL / 1000 68 68 68 68 68 2 3,505 3,768 4,050 4,354 4,681 56 350 377 4O5 435 468 6 2,647 2,845 3,059 3,288 3,535 42 14,187 15,251 16,395 17,624 18,946 227 20,689 22,241 23,909 25,702 27,630 331 4 WELLS IT-S TABLE 3 ALEUTIAN ISLANDS RESOURCE ANALYSIS STATEMENT OF INVESTMENT - SPACE HEATING SYSTEM ESCALATED ORIGINAL INVESTMENT 2 WELL SYSTEMS INSULATED PIPE RETROFITTING TOTAL INVESTMENT SCHEDULE OF DEBT ANNUAL LOAN DRAW CUMULATIVE DRAWDOWN ANNUAL INTEREST CUMULATIVE INTEREST INTEREST ON INTEREST ANNUAL DEBT AND INTEREST CUMULATIVE DEBT $000 1982 1983 TOTAL 8.840.0 8,588.8 0 8,840 22,076 22,076 884.0 2,207.7 3,091.7 884.0 3,091.7 3,091.7 0.0 88.4 88.4 9,724.0 15,532.9 9 0 9 er-S AUGUST 6, 1981 ESCALATED FUEL SAVINGS : 7.5873% EXPENSES LOAN PRINCIPLE INTEREST SAVINGS OF SPACE HEATING SYSTEM SAVINGS DISCOUNTED AT 10% NET PRESENT VALUE OF SAVINGS TABLE 4 ALEUTIAN ISLANDS RESOURCE ANALYSIS STATEMENT OF EXPENSES - SPACE HEATING SYSTEM $000 1982 1983 1984 1985 1986 0 0 4,795 5,158 5,550 0 0 1,263 0 0 2,526 10% DEBT £T-S TABLE 4, Cont. AUGUST 6, 1981 ALEUTIAN ISLANDS RESOURCE ANALYSIS 10% DEBT STATEMENT OF EXPENSES - SPACE HEATING SYSTEM $000 1991 1992 1993 1994 1995 1996 1997 1998 1999 ESCALATED FUEL SAVINGS : 7.5873% 8,000 8,607 9,260 9,962 10,718 11,531 12,406 13,347 14, 360 EXPENSES LOAN PRINCIPLE 1,263 1,263 1,263 1,263 1,263 1,263 1,263 1,263 1,263 INTEREST 1,642 1,515 1,389 1,263 1,137 1,010 884 758 631 SAVINGS OF SPACE HEATING SYSTEM SAVINGS DISCOUNTED AT 10% 2,105 NET PRESENT VALUE OF SAVINGS 15,817 vI-S TABLE 4, Cont. AUGUST 6, 1981 ALEUTIAN ISLANDS RESOURCE ANALYSIS. 10% DEBT STATEMENT OF EXPENSES - SPACE HEATING SYSTEM $000 2000 2001 2002 2003 2004 2005 2006 2007 2008 ESCALATED FUEL SAVINGS : 7.5873% 15,450 16,622 17,883 19,240 20,700 22,270 23,960 25,778 27,734 EXPENSES LOAN PRINCIPLE 1,263 INTEREST SAVINGS OF SPACE HEATING SYSTEM SAVINGS DISCOUNTED AT 10% NET PRESENT VALUE OF SAVINGS 6. CONCLUSIONS Adak Island presents one of the most attractive geothermal development prospects in the Aleutian Islands. Initial analyses indicate a good match between the resource potential and the energy requirements at the Adak Naval Station. The geothermal resource potential appears to be best on the west side of Mount Adagdak, just north of Andrew Bay Lake. Initial geologic evaluations indicated a thermal and resistivity anomaly in this area, and two heat flow holes were drilled to refine estimates of reservoir thermal conditions. Although the thermal gradient in these holes was lower than expected, it is still high enough to indicate a resource of approximately 150 to 160 degrees C at a depth of 1800 meters. Three resource applications were analyzed for economic feasibility: a 10 MWe binary power plant, a cascaded space heating system using power plant effluent, and a space heating system using a lower temperature geothermal resource. The analysis for the power plant indicates that geothermal power generation is more economic than continuing to generate power with aviation fuel, assuming the price of fuel escalates at an annual rate of at least 7.6%. Both space heating systems analyzed appear to be very economic. The net present value over the project life of the discounted savings of providing space heating in a cascaded system is over $51 million. The analysis for a geothermal space heating system without a power plant indicates a net present value of $49 million. Both systems generated a savings over the existing fossil fuel system from the first year of operation. Additional resource exploration, including deep drilling, is needed to prove the geothermal resource potential on Adak. With continued Navy support and expressions of interest by private developers, it is apparent that Adak Island may have the first geothermal development in the Aleutians. 6-1 7. REFERENCES Anderson, D. N. and J. W. Lund, eds., 1979. Direct Utilization of Geothermal Energy: A Technical Handbook, Geothermal Resources Council Special Report No. 7. Brown, R. E., Commander, Public Works Officer, Adak Naval Station, communication with S. G. Spencer, 7/81. Bruce, J. L., 1979. Economic Feasibility Study of the Geothermal Project for the Naval Station Adak, Alaska, China Lake Naval Weapons Center Technical Memorandum 3750. Butler, D. L. and G. V. Keller, 1975. Exploration on Adak Island, Alaska, in Geothermal Energy in the Pacific Region, by L. T. Grose and G. V. Keller. Coates, R. R., 1956. Geology of Northern Adak Island, Alaska, U.S. Geological Survey Bulletin 1028-C. Escamilla, J. J., 1978. Adak Geothermal Feasibility Study, China Lake Naval Weapons Center Memorandum 3427. Fraser, G. D. and G. L. Snyder, 1959. Geology of Southern Adak Island and Kagalaska Island, Alaska, U.S. Geological Survey Bulletin 1028-M. Miller, T. P. and I. Barnes, 1976. Potential for Geothermal Energy Development in Alaska: Summary, in Circum-Pacific Energy and Mineral Resources, M. T. Halbouty, J. C. Maher, and M. L. Harold, eds., American Association of Petroleum Geologists, Memoir 25. Miller, T. P. and R. L. Smith, 1977. Geological Techniques Applied to the Evaluation of the Geothermal Potential of Adak Island, Alaska, U.S. Geological Survey. Morgan, L., editor, 1980. The Aleutians, Alaska Geographic, V. 7, No. 3. Waring, G. A., 1917. Mineral Springs of Alaska, U.S. Geological Survey Water Supply Paper 418. Cover design based on a photograph by Bob Bennett