HomeMy WebLinkAboutTenakee Final Grant All
Alaska Renewable Energy Fund
Grant Application Round 7
Inside Passage Electrical Cooperative
Feasibility Study and Conceptual Design of
Tenakee Inlet Geothermal Resource
Renewable Energy Fund Round VII
Grant Application - Standard Form
AEA 2014-006 Application Page 1 of 27 7/2/2013
Application Forms and Instructions
This instruction page and the following grant application constitutes the Grant Application Form
for Round VII of the Renewable Energy Fund. A separate application form is available for
projects with a primary purpose of producing heat (see RFA section 1.5). This is the standard
form for all other projects, including projects that will produce heat and electricity. An electronic
version of the Request for Applications (RFA) and both application forms is available online at:
http://www.akenergyauthority.org/REFund7.html.
If you need technical assistance filling out this application, please contact Shawn Calfa,
the Alaska Energy Authority Grant Administrator at (907) 771-3031 or at
scalfa@aidea.org.
If you are applying for grants for more than one project, provide separate application
forms for each project.
Multiple phases for the same project may be submitted as one application.
If you are applying for grant funding for more than one phase of a project , provide
milestones and grant budget for each phase of the project.
In order to ensure that grants provide sufficient benefit to the public, AEA may limit
recommendations for grants to preliminary development phases in accordance with 3
ACC 107.605(1).
If some work has already been completed on your project and you are req uesting
funding for an advanced phase, submit information sufficient to demonstrate that the
preceding phases are completed and funding for an advanced phase is warranted.
If you have additional information or reports you would like the Authority to consider in
reviewing your application, either provide an electronic version of the document with
your submission or reference a web link where it can be downloaded or reviewed.
In the sections below, please enter responses in the spaces provided, often under the
section heading. You may add additional rows or space to the form to provide sufficient
space for the information, or attach additional sheets if needed.
REMINDER:
Alaska Energy Authority is subject to the Public Records Act AS 40.25, and materials
submitted to the Authority may be subject to disclosure requirements under the act if no
statutory exemptions apply.
All applications received will be posted on the Authority web site after final
recommendations are made to the legislature.
In accordance with 3 AAC 107.630 (b) Applicants may request trade secrets or
proprietary company data be kept confidential subject to review and approval by the
Authority. If you want information is to be kept confidential the applicant must:
o Request the information be kept confidential.
o Clearly identify the information that is the trade secret or proprietary in their
application.
o Receive concurrence from the Authority that the information will be kept
confidential. If the Authority determines it is not confidential it will be treated as a
public record in accordance with AS 40.25 or returned to the applicant upon
request.
Renewable Energy Fund Round VII
Grant Application - Standard Form
AEA 2014-006 Grant Application Page 2 of 27 7/1/2013
SECTION 1 – APPLICANT INFORMATION
Name (Name of utility, IPP, or government entity submitting proposal)
Inside Passage Electric Cooperative
Type of Entity: Electric Utility Fiscal Year End December 31
Tax ID # 43-1964262 Tax Status: For-profit X Non-profit Government ( check one)
Date of last financial statement audit: March 2013 for FY 2012
Mailing Address PO Box 210149
Auke Bay, AK 99821
Physical Address 12480 Mendenhall Loop Road
Juneau, AK
Telephone
907-789-3196
Fax
907-790-8517
Email
JMitchell@Alaska.com
1.1 APPLICANT POINT OF CONTACT / GRANTS MANAGER
Name
Jodi Mitchell
Title
CEO
Mailing Address
PO Box 210149
Auke Bay, AK 00821-0149
Telephone
907-789-3196
Fax
907-790-8517
Email
JMitchell@Alaska.com
1.2 APPLICANT MINIMUM REQUIREMENTS
Please check as appropriate. If you do not to meet the minimum applicant requirements, your
application will be rejected.
1.2.1 As an Applicant, we are: (put an X in the appropriate box)
X An electric utility holding a certificate of public convenience and necessity under AS
42.05, or
An independent power producer in accordance with 3 AAC 107.695 (a) (1), or
A local government, or
A governmental entity (which includes tribal councils and housing authorities);
Yes
1.2.2 Attached to this application is formal approval and endorsement for the project by
the applicant’s board of directors, executive management, or other governing
authority. If the applicant is a collaborative grouping, a formal approval from each
participant’s governing authority is necessary. (Indicate Yes or No in the box )
Yes
1.2.3 As an applicant, we have administrative and financial management systems and
follow procurement standards that comply with the standards set forth in the grant
agreement (Section 3 of the RFA).
Yes
1.2.4 If awarded the grant, we can comply with all terms and conditions of the award as
identified in the Standard Grant Agreement template at
http://www.akenergyauthority.org/veep/Grant-Template.pdf. (Any exceptions
should be clearly noted and submitted with the application.)
Yes
1.2.5 We intend to own and operate any project that may be constructed with grant
funds for the benefit of the general public. If no please describe the nature of the
project and who will be the primary beneficiaries.
Renewable Energy Fund Round VII
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SECTION 2 – PROJECT SUMMARY
This section is intended to be no more than a 2-3 page overview of your project.
2.1 Project Title – (Provide a 4 to 7 word title for your project). Type in space below.
Feasibility Study of Tenakee Inlet Geothermal Resource
2.2 Project Location –
Include the physical location of your project and name(s) of the community or communities that will
benefit from your project in the subsections below.
2.2.1 Location of Project – Latitude and longitude, street address, or community name.
Latitude and longitude coordinates may be obtained from Google Maps by finding you project’s location on the map
and then right clicking with the mouse and selecting “What is here? The coordinates will be displayed in the Google
search window above the map in a format as follows: 61.195676.-149.898663. If you would like assistance obtaining
this information please contact AEA at 907-771-3031.
The project is located at the head of Tenakee Inlet on Chichagof Island in Southeast Alaska. The location
is a rugged stream valley accessible via helicopter. The area of interest is approximately four to five
acres in size and occurs on both sides of the stream we have called Tenakee Creek. The project is
located at approximately at 57° 59’ 24” N, 135° 56’ 20” W.
2.2.2 Community benefiting – Name(s) of the community or communities that will be the
beneficiaries of the project.
Communities that may benefit include Hoonah and Pelican. IPEC currently provides power for Hoonah,
which is the largest community on Chichagof Island. The populations are: Hoonah - 860 and Pelican -
163. Tourism, fishing, and hunting are main economic activities. Based on our preliminary economic
analysis, several facilities (lodge, cold storage, restaurants) in Hoonah have limited or ceased activity due
to power costs. Reliable, affordable power would increase the economic activity in Hoonah.
2.3 PROJECT TYPE
Put X in boxes as appropriate
2.3.1 Renewable Resource Type
Wind Biomass or Biofuels (excluding heat-only)
Hydro, Including Run of River Hydrokinetic
X Geothermal, Excluding Heat Pumps Transmission of Renewable Energy
Solar Photovoltaic Storage of Renewable
Other (Describe) Small Natural Gas
2.3.2 Proposed Grant Funded Phase(s) for this Request (Check all that apply)
Pre-Construction Construction
Reconnaissance Final Design and Permitting
X Feasibility and Conceptual Design Construction and Commissioning
Renewable Energy Fund Round VII
Grant Application - Standard Form
AEA 2014-006 Grant Application Page 4 of 27 7/1/2013
2.4 PROJECT DESCRIPTION
Provide a brief one paragraph description of the proposed project.
The Reconnaissance Study of Tenakee Inlet Geothermal Resource funded by Alaska Energy Authority
Renewable Energy Grant #7040073 was completed in July 2013. The reconnaissance study was the
first time this geothermal resource had been significantly studied. The surface expression of the
resource is four hot springs that occur together near the base of a hill approximately 200 feet high in a
rugged, isolated, stream valley on Chichagof Island in southeast Alaska. During the field effort in
September 2011, the hot springs had surface water temperatures of between 1610F to 1760F.
Geochemical sampling of water and soil, a shallow temperature survey, and geological mapping
occurred in this first field effort. Later fieldwork in the spring and summer of 2012 included infrared
imaging of the area, additional shallow temperature survey, and CO2 gas survey. Table 1 presents the
various field efforts that were conducted as part of the reconnaissance study. A conceptual model of
the system, and several scenarios for development were completed. A preliminary environmental and
a preliminary economic analysis were also prepared for the reconnaissance phase.
TABLE 1: Reconnaissance Field Work and Purpose
The reconnaissance study concluded:
The chalcedony geothermometer indicates that the hot spring fluids have encountered
temperatures on the order of 2400F to 2600F.
Hot spots were identified across Tenakee Creek approximately 150 feet north of the hot springs
with shallow soil temperatures greater than 600F and up to 890F indicating a broader
geothermal zone than just the hot springs.
Lineations and tectonics suggest that the hot springs were developed due to wrenching of the
cross-cutting lineations.
Earthquake data, Cretaceous igneous intrusive and high regional heat flow indicate that there is
some permeability in the bedrock and potentially a high geothermal gradient.
Development scenarios ranged from $49M to $63M including transmission line and access
road.
Based on 2012 IPEC fuel prices and extrapolating to future fuel costs the benefit-cost ratio was
calculated as 0.93 for a 50-year life span. Using standard AEA fuel projections and a 50-year
life span the benefit-cost ratio was calculated as 0.73. These benefit-cost ratios include the
impact of energy produced by the proposed Gartina Falls hydropower project.
Renewable Energy Fund Round VII
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AEA 2014-006 Grant Application Page 5 of 27 7/1/2013
The data collected during the reconnaissance suggests that the geothermal resource is viable and can
produce base load power. The surface temperature of the hot springs is hotter than Chena Hot Springs
reservoir fluids. The calculated fluid temperature (based on chalcedony concentrations) at depth are in
the range of binary power plant operations. The discovered springs, seeps, and hot spots as well as the
tectonic regime of the area suggests adequate permeability at depth to support a geothermal power plant.
Further work is needed to verify the geothermal and economic viability of the project.
The purpose of this phase of the project is to further evaluate the viability of the geothermal resource by
1) obtaining Light Detection and Ranging (LiDAR) data to locate faults and obtain topographical
information for design; 2) drill two slim holes to about 2,500 feet each and conduct well testing; 3) conduct
an environmental assessment to address agency and environmental issues; 4) prepare a conceptual
design to develop the resource; and 5) refine the economic analysis based on the conceptual design and
more detailed economic parameters. The primary goal of the site work during this phase would be to
collect the information needed to verify resource viability and evaluate whether this project should be
considered for Phase 3 investigation and development. The drill holes will be approximately 10 inches in
diameter necking down to approximately 2.5 inch core hole. Each well will have a temperature/pressure
survey conducted and rock chip samples will be analyzed for fluid inclusions and alterations. If the wells
penetrate the reservoir we will conduct flow tests on the wells and collect water samples for chemical
analysis. The location, depth, size and flow characteristics are important parameters that determine the
viability of the geothermal resource. Evaluating those parameters was beyond the scope of the Phase 1
reconnaissance study. If found viable, the results of this Phase 2 investigation would provide information
necessary to support the development phase of the project.
2.5 PROJECT BENEFIT
Briefly discuss the financial and public benefits that will result from this project, (such as reduced fuel
costs, lower energy costs, local jobs created, etc.)
Chichagof Island is a rural island with high electric and heating costs. According to the State’s FY 2012
PCE Statistical Report residential rates in Hoonah averaged $0.60/kWh and in Pelican averaged
$0.65/kWh. Fuel prices have fluctuated with fuel increasing from $2.50/gallon in 2007 to $3.50/gallon in
2008, and then falling to $2.50/gallon in 2009 with subsequent increase to $4.12/gallon in 2012. The
springs at Tenakee Inlet are located approximately 10 miles from Pelican and 20 miles from Hoonah.
Geothermal power, as base load power, would offset diesel fuel costs and emissions for the region.
Conversion of space heating from fuel heating to electric heating would also lead to stable and lower
energy costs. The cost of generating power from geothermal energy is comparable to the cost from
hydropower projects, which is relevant in this area where hydropower is utilized or being investigated as
an alternative energy source for local communities.
Low environmental impact:
Geothermal power production produces almost no emissions, and has a low visual impact and small
surface occupancy comparative to other technologies per MW generated particularly hydropower.
Reinjection of production fluids and air cooling protect the resource and minimize water needs. The
project will offset carbon dioxide (CO2) and other greenhouse gas emissions from the existing fossil fuel
base plants. This offset could provide a significant offset credit to the project.
Local development and enhanced community sustainability:
The power available from the resource may be greater than the current electric demand of the area. This
would provide the opportunity to change the energy picture for the area and growth of certain industries
that would increase the sustainability of the area. For example, space heating from fossil fuel sources
could be replaced by electric heating. A transition to electric or hybrid/electric vehicles could further
reduce the local dependence on expensive fossil fuels and more fully utilize the resource.
Renewable Energy Fund Round VII
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AEA 2014-006 Grant Application Page 6 of 27 7/1/2013
The importance of local food security is gaining increased attention and development of the resource
could increase that security. Unused geothermal produced electricity or heat (even heat at temperatures
too low for economic power production) can be used to grow food. Greenhouses are a proven revenue
stream at several geothermal locations around the world including climates similar to Alaska. Chena Hot
Springs is a good model of this on a small scale in an even harsher climate. With Juneau readily
accessible there would be a market for fresh produce grown via the geothermal resource.
Stable and lower energy prices would stimulate the economy, and the geothermal resource could bring
new types of development to the island. Waste heat may be used for warming greenhouses or drying
food. Stable and low energy prices may stimulate growth in the troubled local fish processing industry,
which has been hindered by expensive and unreliable power. The development of the resource may also
help spur the building of a planned road between Hoonah and Pelican, a road which would pass within a
few miles of the resource. Since the reconnaissance project began, the Department of Transportation,
Southeast is again revisiting this proposed road (Pat Carroll). With lower energy costs, a more robust
power transmission system, and a more connective road system, the island would be able to draw and
support tourists to its spectacular scenery; and potentially generate additional economic resource bases.
As at Chena Hot Springs, the existence of geothermal power itself may be an attractant for tourism.
Geothermal power is a novelty without many of the negative connotations of hydropower among
environmental or ecotourists. Communities or on-site resorts could use this as a draw to generate a
significant income source particularly given the high influx of tourists into the immediate surrounding
areas each summer.
According to a 2006 Geothermal Energy Association publication, A Handbook on the Externalities,
Employment, and Economics of Geothermal Energy, geothermal power generates 4.25 full-time direct,
indirect and induced jobs per MW produced and 16 person-years of construction and manufacturing
employment per MW. A 5 MW plant at Tenakee Inlet would, by these figures, be expected to provide 21
full-time jobs in the area and 80 person-years of construction work for the plant alone in addition to the
other potential spin-off industries from the resource being developed.
Benefits from Exploration Phase:
The reconnaissance study has provided insight to a number of potential challenges with current
geothermal exploration techniques particularly in a wet, rugged environment like southeast Alaska. Some
of the common geothermal exploration techniques require dry, arid soils and easier accessibility. In
addition the moderate temperatures at Tenakee reduced the effectiveness of a number of exploration
techniques that are useful for higher temperature resources. We analyzed a number of geophysical
techniques that are commonly used and concluded that they would not be useful for evaluating the
source at Tenakee. These included magneotelluric studies (a recent cornerstone of geothermal
exploration but needs higher temperature resources), self-potential (effects of water and variability in the
hydrological regime affect the signal), and electromagnetic methods (lack of space for equipment use).
We have shared our exploration experience and conclusions with others in the geothermal community by
presenting a paper at the recent Geothermal Resource Council Annual Meeting. This presentation and
resulting discussion provided further information to the exploration of moderate temperature resources
which is currently occurring in the industry as the higher temperature resources have been utilized.
Our conclusions that drilling would provide the most economic and valuable information about the
resource were confirmed at the conference. The exploration from this phase of the project would aid in
evaluating the viability of the resource. As the adage goes “you only know as deep as you go”, - currently
we understand the surface expression of this resource and can make some assumptions about the
resource at depth. By conducting the drilling we would be able to confirm our hypotheses as to the size,
depth, temperature, flow rates and other assumed properties of the resource.
2.6 PROJECT BUDGET OVERVIEW
Briefly discuss the amount of funds needed, the anticipated sources of funds, and the nature and source
of other contributions to the project.
Renewable Energy Fund Round VII
Grant Application - Standard Form
AEA 2014-006 Grant Application Page 7 of 27 7/1/2013
Total funds needed for this project is $3,378,500. Since there has been very little basic research on the
geothermal resources of Southeast Alaska in general, and Tenakee Inlet in particular, we are asking for
this project to be fully funded by the Alaska Renewable Energy Grant Fund. Given the information that
the reconnaissance level investigation can provide, it is very difficult to acquire financing from outside
agencies for this phase of an exploratory project. However, if the phase is successful, the information
could be used to leverage funding not only for follow-on stages of this project, but also for other
geothermal projects in Alaska.
We have developed several scenarios that included construction of a transmission line, access road, and
geothermal facilities. The conceptual scenarios are presented in the preliminary economic analysis
prepared for the reconnaissance phase. The costs for the various scenarios range from $49M to $63M.
Based on information obtained during the proposed feasibility study, the costs for the various scenarios
can be refined to accurately reflect the proposed location of the well field, temperature of the fluids and
flow rates which affect fluid transmission, and length of access road and transmission line.
2.7 COST AND BENEFIT SUMARY
Include a summary of grant request and your project’s total costs and benefits below.
Grant Costs
(Summary of funds requested)
2.7.1 Grant Funds Requested in this application $3,378,500
2.7.2 Cash match to be provided $
2.7.3 In-kind match to be provided $
2.7.4 Other grant funds to be provided $
2.7.5 Other grant applications not yet approved $
2.7.6 Total Grant Costs (sum of 2.7.1 through 2.7.4) $3,378,500
Project Costs & Benefits
(Summary of total project costs including work to date and future cost estimates to get to a fully
operational project)
2.7.7 Total Project Cost Summary from Cost Worksheet, Section
4.4.4, including estimates through construction.
$49 M
2.7.8 Additional Performance Monitoring Equipment not covered
by the project but required for the Grant Only applicable to
construction phase projects.
$
2.7.9 Estimated Direct Financial Benefit (Savings) $1,229,000/year
2.7.10 Other Public Benefit If you can calculate the benefit in terms
of dollars please provide that number here and explain how you
calculated that number in Section 5 below.
$ 150,000/year
(greenhouses) and 10 to
20 full time jobs ~
$500,000/year in wages
SECTION 3 – PROJECT MANAGEMENT PLAN
Describe who will be responsible for managing the project and provide a plan for successfully
completing the project within the scope, schedule and budget proposed in the application.
3.1 Project Manager
Tell us who will be managing the project for the Grantee and include contact information, a
resume and references for the manager(s). In the electronic submittal, please submit resumes
Renewable Energy Fund Round VII
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AEA 2014-006 Grant Application Page 8 of 27 7/1/2013
as separate PDFs if the applicant would like those excluded from the web posting of this
application. If the applicant does not have a project manager indicate how you intend to solicit
project management support. If the applicant expects project management assistance from
AEA or another government entity, state that in this section.
Inside Passage Electric Cooperative (IPEC) has chosen an experienced team to manage the project.
Jodi Mitchell, CEO of IPEC will be the grant manager and the main point of contact for AEA. Lorie Dilley,
a principal of Hattenburg Dilley & Linnell (HDL) Engineering, will manage the technical aspects of the
project. She will organize the consultants and vendors to ensure the success of the project. She will also
interact with the AEA Grant Manager on technical aspects of the project. Resumes for both are attached.
Lorie has conducted numerous projects throughout Alaska and is the technical manager for the
reconnaissance study. Jodi and Lorie have developed a great working relationship throughout the
reconnaissance study and this relationship will facilitate efficient and successful execution of this project.
IPEC’s Tenakee Inlet Project Management Structure:
Geothermal Resource Group (GRG) will be part of the team and be responsible for drilling the slim holes.
They have over 15 years of experience in geothermal drilling in many parts of the world including Alaska.
GRG provides engineering design of geothermal wells, onsite management, and resource qualification.
Bill Rickard owner of GRG has over 30 years experience in the geothermal industry.
3.2 Project Schedule and Milestones
Please fill out the schedule below. Be sure to identify key tasks and decision points in in your
project along with estimated start and end dates for each of the milestones and tasks. Please
clearly identify the beginning and ending of all phases of your proposed project.
Please fill out form provided below. You may add additional rows as needed.
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Milestones Tasks
Start
Date
End
Date
1. Project Scoping Team meetings, contractor solicitation 8/14 9/16
2. Detail Resource Assessment Drill holes 6/15 9/15
3. Identification of land &
regulatory issues
Discuss with Forest Service & Sealaska
Identify Regulatory issues, site control
requirements 8/14 8/15
4. Permitting & EA Permit drilling 8/14 6/15
Site specific environmental analysis 6/15 12/15
5. Energy & Market Analysis Fuel displacement, revenue from energy
sales, tax credits, other incentives 9/15 12/15
Preliminary energy purchase/sale
agreements, financing issues 10/15 2/16
6. Conceptual design & cost
estimate
35 % conceptual design – civil layout
9/15 3/16
35% conceptual design – electric,
transmission line 6/15 12/15
35% conceptual design – geothermal, wells,
power plant, pad sites, pipelines 9/15 3/16
Conceptual design and cost estimates 1/16 6/16
7. Economic & Financial Analysis Economic & Financial analysis 1/16 8/16
8. Conceptual Business &
Operations Plan
Business & operation plans with IPEC’s
structure 1/16 8/16
9. Final Report Draft Report 1/16 6/16
Final Report 6/16 9/16
3.3 Project Resources
Describe the personnel, contractors, accounting or bookkeeping personnel or firms, equipment,
and services you will use to accomplish the project. Include any partnerships or commitments
with other entities you have or anticipate will be needed to complete your project. Describe any
existing contracts and the selection process you may use for major equipment purchases or
contracts. Include brief resumes and references for known, key personnel, contra ctors, and
suppliers as an attachment to your application.
Lorie Dilley of HDL has extensive experience with geothermal reconnaissance projects, in Alaska and
elsewhere. HDL’s environmental group will lead the permitting and environmental analysis for the project.
HDL has selected an experienced industry vendor to drill and test the exploratory wells; Geothermal
Resource Group (GRG), a well-known firm in the geothermal drilling industry in the western United States
and Alaska. HDL geologists will work with GRG during the drilling phase, and will provide synthesis and
analysis of the resource data. HDL has experience in performing conceptual level designs, costs and
economic analyses of geothermal systems for AEA, and has in-house environmental, surveying and
engineering teams to complete the tasks. As a thriving engineering business, HDL has the necessary
personnel, equipment, and project management skills necessary to complete this project. Lorie has ties
to both University of Alaska Fairbanks, Alaska Center for Energy and Power, Energy and Geoscience
Institute at the University of Utah and other academic and industry leaders in exploring and developing
geothermal resources. IPEC can provide data for the cost of energy and market analysis. IPEC has
received several AEA grants and understands the importance of tracking, reporting, and maintaining
accounting systems. Firms specializing in market and economic analyses will be subcontracted for these
tasks. Northern Economics provided the preliminary economic analyses.
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AEA 2014-006 Grant Application Page 10 of 27 7/1/2013
3.4 Project Communications
Discuss how you plan to monitor the project and keep the Authority informed of the status.
Please provide an alternative contact person and their contact information.
The project team, including IPEC, HDL, and GRG plan to communicate regularly (at least weekly) with
each other via phone and email to coordinate all aspects of the project. Lorie at HDL will be the primary
point of contact for AEA on technical issues and reporting. Trevor Crosby, at HDL, will assist Lorie in all
aspects of the project and can be reached as a secondary point of contact. The team will prepare monthly
progress reports for AEA, and also welcomes AEA’s contact at any time to resolve questions on
scheduling, budget, scope, or other issues. As demonstrated during the reconnaissance study we
maintain communication with all team members as specific events occur and updated team members on
the project as different tasks are completed.
3.5 Project Risk
Discuss potential problems and how you would address them.
Geothermal exploration carries significant risk of financial expenditure without success, even in areas of a
known geothermal resource. Sufficiently hot fluids as well as permeability of the source rock are both
necessary for conventional geothermal development. Although the resource at Tenakee Inlet is known to
exist little is known about the fundamental characteristics of this resource. Calculated geothermometers
indicate that the fluids have experienced 240-260o F, however the nature of subsurface thermal regime is
unknown. Permeability characteristics are also unknown at this time. Despite the potential unknowns
and risk, there is sufficient data to indicate that the geothermal resource is worth further evaluation to
determine its viability.
The known surface expression of the resource, and thus the targeted area of exploration, is located on
National Forest Service lands that will require management of access, permitting, and environmental
challenges. Given the recent PEIS and work by the federal agencies to streamline geothermal
development on certain federal lands (including USFS lands) as well as our preliminary discussions, we
anticipate that permitting this phase of the project can be accomplished within the timeframe given. Our
budget and timeline for this activity, with drilling taking place the second summer after the grant is
awarded, should provide adequate time to deal with access, permitting, and environmental issues and
maintain project schedule.
Drilling a geothermal system in a remote Alaska location carries a number of inherit risks: safety of
personnel, rig accessibility, subsurface risks, and potential for not finding a viable resource. Many of
these challenges were faced and addressed by HDL during the reconnaissance phase or through our
experience on other projects. Our safety program will be updated and will include the helicopter support
protocols. Our team will receive updated survival and first aid training. The subsurface risks will be
minimized by understanding the rock types that may be encountered, having flexibility in drilling location
and depth, and using qualified geothermal drillers. Identifying a viable resource is the main objective of
this phase of the project. We will only know about the resource if drilling is accomplished. We have set a
budget which will allow for two slim holes to be advanced to a depth of a couple of thousand feet each.
We will manage the time and expenditures to obtain the necessary information from each hole. By
setting the allotted time for each hole as opposed to the exact number and depth of the holes, we can
maximize the information for the money spent. Decisions on the depth and sequencing of each well will
be made in collaboration with the project team with the final decision made by the project manager, Lorie
Dilley. The members of the team have experience working in remote Alaskan locations, delivering
projects to AEA, and are well prepared to deal with the challenges of keeping a project of this nature on
budget and on schedule, and dealing with contingencies.
SECTION 4 – PROJECT DESCRIPTION AND TASKS
The level of information will vary according to phase(s) of the project you propose to
undertake with grant funds.
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Grant Application - Standard Form
AEA 2014-006 Grant Application Page 11 of 27 7/1/2013
If some work has already been completed on your project and you are requesting funding for
an advanced phase, submit information sufficient to demonstrate that the preceding phases
are satisfied and funding for an advanced phase is warranted.
4.1 Proposed Energy Resource
Describe the potential extent/amount of the energy resource that is available.
Discuss the pros and cons of your proposed energy resource vs. other alternatives that may be
available for the market to be served by your project. For pre-construction applications, describe
the resource to the extent known. For design and permitting or construction projects, please
provide feasibility documents, design documents, and permitting documents (if applicable) as
attachments to this application.
The location, depth, size and flow characteristics of the geothermal energy available are the main targets of
this phase of the project. The geochemical analysis of the spring conducted has yielded a possible
maximum temperature of the source water at a depth of 260° F (127° C). Based on our reconnaissance
efforts we have developed the conceptual model of the resource shown below. A high angle fault has
allowed for the hotter, deeper waters to move upward creating the hot springs. The hot spots occur due to
splays in the primary fault that either reach the surface (the case of the seeps) or come close to the surface
(the hot zone across the creek).
Tenakee Creek as a source of
cold water may cool the system
near the surface but does not
appear at this point to cool the
overall system. There does not
seem to be a significant change
in the flow regime of Tenakee
Creek downstream of the
resource compared to upstream
of the resource. The outflow of
the system is downstream
towards the north following the
general strike of the lineaments
in the region and along the
creek. The heat source is not a
typical magma body as seen in
places like Akutan or Mount
Spurr but rather hotter deeper
fluids associated with deep
crustal materials. The Queen
Charlotte/Fairweather fault
system is a major transform
plate boundary with high angle
faults that cut through the crust.
The Cretaceous igneous rocks
provided heat during their
emplacements and are still
cooling as indicated by high
heat flows in the region (SMU
maps)
A temperature gradient reported by Economides in 1982 for the separate resource (investigated by shallow
wells) approximately 30 miles away at Tenakee Springs indicates a temperature gradient of 13° C/100 feet.
If we assume a similar gradient with surface temperatures at about 45° F (7° C), then at the same gradient,
the temperature of 260° F (127° C) would be reached in less than 1,000 feet. This gradient may not
represent conditions at Tenkaee; however, it suggests that geothermal resource may be relatively shallow
rather than a deep resource.
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Using a calculation from a DOE paper by Hanse from 2005, each well at temperatures expected at
Tenakee, may produce over a megawatt of electricity. The exploratory slim holes planned for this phase of
the project are designed to confirm the viability of the resource. Although flow rates have a large impact on
well production and thus energy output, the estimated potential developable size of this resource is three to
six MWs.
Other alternatives to the market may include other geothermal resources on the Island, such as those at
Tenakee Springs. The springs at Tenakee Inlet, however, have a much higher surface temperature and
thus are a better prospect to produce power for the region. They are also closer to Hoonah, which is the
major population center on the island. Hydro power exists in Pelican and is being explored for Hoonah and
Tenakee Springs. Additionally, hydro power is considered for Hoonah however it will only account for about
30 percent of the needed capacity over time. Biomass generation may be possible as well, with fish oil and
trees being regionally available, though accessible quantities and USFS protections may be prohibitive.
The economic and market analysis of this project would compare the potential benefits of and cost
effectiveness of the alternatives. It is of note that the cost of geothermal power can compare favorably even
with hydro power (see section 2.5 of this application), while being a clean, low impact, reliable, mature
technology capable of delivering base load power with no fuel costs. This makes it the only renewable
resource that would get remote communities completely off diesel.
Geothermal energy is a mature industry with the majority of risk in the exploration phase (which is this
project). The major drawback with geothermal development is capital costs, however once in place these
systems and power plants operate for 30 to 50 years providing stable power. As opposed to other energy
sources, geothermal has the potential to provide additional energy needed for additional industries to
flourish such as greenhouse agriculture, fish-farming, and tourism.
4.2 Existing Energy System
4.2.1 Basic configuration of Existing Energy System
Briefly discuss the basic configuration of the existing energy system. Include information about
the number, size, age, efficiency, and type of generation.
IPEC operates four diesel-powered generators in Hoonah with combined capacity of 3,060 kW. Overall
efficiency is 14.25 kWh/gallon of fuel. Annual electricity usage in Hoonah is 4,860,380 kWhr. Pelican’s
power is provided by Pelican Utility Company, and consists of 2,660 kW capacity combined from hydro and
diesel generation.
4.2.2 Existing Energy Resources Used
Briefly discuss your understanding of the existing energy resources. Include a brief discussion of
any impact the project may have on existing energy infrastructure and resources.
Existing energy resources include diesel electricity generation at Hoonah and Pelican, and hydro power
generation at Pelican. Existing systems also rely on fossil fuels for heating, transportation, and the
importation of food. A new hydropower project, Gartina Falls, is being constructed and will supply about 30
percent of the current energy demands in Hoonah. If built, a geothermal power plant at Tenakee Inlet
would serve to displace power generation by some or all of these sources. The resource would likely be
adequate to displace fossil fuel use beyond that currently used and could support additional development.
Diesel fuel use would be less, by an amount to be determined by the size of the resource. In 2012, IPEC
used 331,184 gallons of diesel per year generating electricity at Hoonah.
4.2.3 Existing Energy Market
Discuss existing energy use and its market. Discuss impacts your project may have on energy
customers.
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It is anticipated that geothermal power from this project would supply the electricity needs for the
communities of Hoonah and Pelican. Power costs would be more stable than relying on diesel fuel for
generation, and would be cheaper over the long run as well. The current system for Hoonah provides about
3 MW of power for the town. Due to high energy prices many businesses in the town have economic
difficulty. The geothermal power produced would provide a stable energy source and pricing structure over
the years as opposed to the fluctuations currently seen in the price of diesel. The additional power that the
geothermal resource has the potential to produce would also be available for future economic expansion.
Hoonah currently is on the cruise ship route and with stable, reasonable power prices could further develop
their tourism industry. Fishing and tourism are part of the overall economy. The cold storage facility was
closed due to the high energy costs. Tourist facilities also have to deal with high energy costs. By proving
a reliable, stable, cost effective energy, these industries could flourish.
4.3 Proposed System
Include information necessary to describe the system you are intending to develop and address
potential system design, land ownership, permits, and environmental issues.
4.3.1 System Design
Provide the following information for the proposed renewable energy system:
A description of renewable energy technology specific to project location
Optimum installed capacity
Anticipated capacity factor
Anticipated annual generation
Anticipated barriers
Basic integration concept
Delivery methods
Based on the information obtained during
the reconnaissance study and previous
literature it is anticipated that a binary
geothermal power plant could be used at
this resource. We estimate that the
resource has the potential to produce
between 3 to 6 MW, but subsurface
information is needed to further define the
capacity. Low to moderately heated
geothermal fluid and a secondary (hence,
"binary") fluid with a much lower boiling
point than water passes through a heat
exchanger. Heat from the geothermal
fluid causes the secondary fluid to flash
to vapor, which then drives the turbines
and subsequently, the generators. Binary
cycle power plants are closed-loop
systems and virtually nothing (except
water vapor) is emitted to the
atmosphere. Because geothermal power does not rely on variable sources of energy, unlike, wind or solar,
its capacity factor can be quite large—up to 96% has been demonstrated, and the global average is 73%.
Geothermal power producing technology is tried and reliable. Ormat’s binary power plants are guaranteed
at 95% reliability, and are proven to be 99% reliable. United Technology (UTC) plants have been field
tested and proven in the harsh climate of Chena Hot Springs. Most other forms of renewable energy do not
offer base load power. Geothermal provides base load generation with a capacity factor of over 90 percent.
These systems are efficient and have been used in a variety of locations throughout the world. It is a
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proven and known technology.
The transmission line from the resource to Hoonah and Pelican would be the biggest logistical challenge to
providing power to the region. Several routes were evaluated during the reconnaissance phase. IPEC
chose to keep the transmission line above ground rather than have undersea transmission cables. The
transmission line would have to be constructed in the stream valley and then continue near the head of
Tenakee Inlet along several forest service roads that could be connected for an access road and
transmission line corridor. Approximately three to six miles of new access road would have to be
constructed to support the transmission line and provide access from the potential power plant to one of the
existing forest service roads on the east side of Tenakee Inlet. There also have been discussions with the
Department of Transportation and residents about the road from Hoonah to Pelican. The development of
the road and the geothermal resource would benefit both projects. The Hoonah Indian Tribe has indicated
that their BIA road funding could be used over the next few years to increase accessibility to the resource
and thus reduce the overall cost of the project.
4.3.2 Land Ownership
Identify potential land ownership issues, including whether site owners have agreed to the project
or how you intend to approach land ownership and access issues.
The geothermal spring at Tenakee Inlet is on USFS lands. Permits and leases will have to be obtained
from the Forest Service and any other land owners impacted by development. During the reconnaissance
study we worked closely with the Forest Service to ensure that our exploration activities were acceptable.
We obtained the necessary permits and filed the required reports. We have discussed drilling holes with
the Forest Service and they provided timelines and the activities that would be necessary before drilling
would be permitted.
We understand that Sealaska is in discussion with the USFS about obtaining rights to this resource as part
of their land selections. At this point the discussion is stalled until the resource is better understood. A
transfer could benefit the project in that the land would be in private hands. Sealaska has been a strong
proponent of this project and could derive benefit from the resource as a tourist spot. Several native
allotments and historical sites exist between the resource and Hoonah. These allotments and sites will be
further identified and avoided in the alignments for the transmission line and access road.
4.3.3 Permits
Provide the following information as it may relate to permitting and how you intend to address
outstanding permit issues.
List of applicable permits
Anticipated permitting timeline
Identify and discussion of potential barriers
The following summarizes permitting and consultation requirements for the proposed project. IPEC and
HDL will work closely together to obtain all necessary authorizations from relevant permitting authorities.
STATE OF ALASKA PERMITS
Alaska Department of Natural Resources
A Geophysical Exploration Permit will be required from the Alaska Department of Natural Resources
(ADNR), Division of Oil and Gas, prior to conducting drilling activities. Submittal of this permit requires a
detailed Plan of Exploration and takes between 50 and 90 days to process. A Well Data Submittal is also
required, in association with the Geophysical Exploration Permit, documenting geological, geophysical, and
engineering data obtained within 30 days of completion, abandonment, or suspension of the well.
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A Right-of-Way/Land Use Permit will be required from ADNR, Division of Mining, Land and Water,
authorizing temporary, non-permanent use of the project area for the purposed research.
A Temporary Water Use Permit is required from ADNR, Division of Mining, Land and Water for proposed
water withdrawal, impoundment, or diversions.
In the event that a barge landing site is needed to transport people and equipment to the project site a
Barge Landing Permit from ADNR for the lease of tidelands will be required.
A Field Archaeology Permit will be requested from the ADNR, Office of History and Archaeology, if an
archaeological investigation is required on state land. Formal Section 106 consultation with the Office of
History and Archaeology will be completed in accordance with the National Historic Preservation Act, if
required.
Alaska Department of Fish and Game
An Alaska Department of Fish and Game (ADF&G) Title 16 Fish Habitat Permit will be required for work
that will take place below the ordinary high water mark of any anadromous water body. In addition, ADF&G
provides guidance on when in-water work should occur in order to protect anadromous fish species. In-
water work timing guidance is specific to regions within the state. If work below the ordinary high water
mark of an anadromous stream is proposed, HDL and IPEC will consult with ADF&G.
A Fish Resource Permit will be obtained from ADF&G if fish trapping or studies are required for baseline
NEPA analysis with regard to the overall project.
Alaska Department of Environmental Conservation
In accordance with Section 401 of the Clean Water Act (CWA) the project will require certification from the
Alaska Department of Environmental Conservation (ADEC) that discharge will comply with the CWA and
the Alaska Water Quality Standards (18 Alaska Administrative Code [AAC] 70).
ADEC’s authorization will be obtained for planned temporary storage of drilling waste in accordance with
the requirements outlined in Alaska Administrative Code, 18 AAC 60.430.
Activities involving discharge of wastewater or fill material into waters of the United States require a
Certificate of Reasonable Assurance from ADEC. To obtain the certification, the proposed project must
comply with applicable state water quality standards.
Construction, modification, and operation of mining facilities that produce air contaminant emissions require
a state Air Quality Control Permit to construct and a separate Air Quality Control Permit to operate.
Consultation with ADEC will be necessary to determine if this permit is required for the proposed project.
FEDERAL PERMITS
United States Forest Service
The United States Forest Service (USFS) will perform an in-house NEPA analysis of the proposed Surface
Drilling Plan. Once the proposed project is authorized by the Forest Supervisor a 75-day public process
period will follow, which includes a 30-day public comment period followed by a 45-day appeal period.
A Special Use Permit from the USFS, Department of Agriculture will be required for activities within the
National Forest.
The Roadless Rule of 2001 establishes prohibitions on road construction, road reconstruction, and timber
harvesting within inventoried roadless areas on National Forest System lands. The proposed project area
is located within an inventoried roadless area and may require tree cutting to establish the drill site. The
project will require consultation with the Chief of the Forest Service, requesting approval of the proposed
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project.
United States Army Corps of Engineers
Should the proposed project involve dredging of or placement of fill within wetlands or waters of the United
States, an Individual Permit (404) will be obtained from the United States Army Corps of Engineers
(USACE).
The permitting effort for the proposed project will begin as soon as possible after Notice -to-Proceed is
issued. Three to four months time will be required to obtain all necessary permits from the time the permit
applications are received by the regulatory agency responsible for reviewing and authorizing the proposed
action. We will start the permitting as soon as the contract is approved. This will give us a window of
approximately 8 to 9 months to obtain the necessary permits for the drilling phase.
No major regulatory barriers have been identified that would affect progress of the proposed project. We
intend to consult with regulatory agencies, Native Corporations and Tribes, early in the project to ensure
permits are obtained in a timely manner.
4.3.4 Environmental
Address whether the following environmental and land use issues apply, and if so how they will be
addressed:
Threatened or endangered species
Habitat issues
Wetlands and other protected areas
Archaeological and historical resources
Land development constraints
Telecommunications interference
Aviation considerations
Visual, aesthetics impacts
Identify and discuss other potential barriers
Environmental resource and regulatory agency scoping will take place to identify special environmental and
land use issues that apply to the project area. We have completed a preliminary review of the following
categories:
Threatened and Endangered Species
The Endangered Species Act requires federal agencies to consult with USFWS and/or the National Oceanic
and Atmospheric Administration (NOAA) Fisheries Service to ensure proposed actions are not likely to
adversely impact listed threatened, endangered, or candidate species or result in the destruction or adverse
modification of designated critical habitat.
The following threatened, endangered, and candidate species are located in the Gulf of Alaska and will
require consultation with the appropriate jurisdictional regulatory agency:
United States Fish and Wildlife Service
Short-tailed albatross (Endangered)
Yellow-billed Loon (Candidate)
Kittlitz’s murrelet (Candidate)
National Marine Fisheries Service
Fin whale (Endangered)
Humpback whale (Endangered)
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Sperm whale (Endangered)
Leatherback sea turtle (Endangered)
Blue whale (Endangered)
North Pacific right whale (Endangered)
Sei whale (Endangered)
Steller sea lion (Threatened)
Green sea turtle (Threatened)
Pacific herring (Candidate)
Habitat Issues
Northeast Chichagof has been designated a Controlled Use Area by ADF&G. The area is closed to the
use of any motorized land vehicle for brown bear hunting, except as provided under terms of a registration
hunt permit. The area consists of a portion of Chichagof Island north of Tenakee Inlet and east of the
drainage divide from the northwest point of Gull Cove to the Port Frederick Portage, including all drainages
into Port Frederick and Mud Bay.
According to ADF&G’s Catalog of Waters Important for the Spawning, Rearing, or Migration of Anadromous
Fishes, there are three anadromous water bodies located within the project area: unnamed stream
draining into Tenakee Inlet (AWC: 112-48-10350); Trail River (AWC: 114-40-10350); and an unnamed
tributary to Trail River (AWC: 114-40-10350-2017). Chum, Coho, and Pink Salmon, and Dolly Varden are
present in the cataloged anadromous waters.
Wetlands and Waters of the United States
According to the USFWS National Wetlands Inventory (NWI) database, wetlands and waters of the United
States have been identified in and adjacent to the project area. A wetlands delineation is recommended to
ground truth the information presented in the NWI.
Archaeological and Historical Resources
Section 106 of the National Historic Preservation Act requires any project funded, licensed, permitted, or
assisted by the federal government be reviewed for impacts on significant historic properties. HDL will
subcontract with professionals who meet the Secretary of the Interiors Professional Qualifications to
conduct Section 106 consultation with the State Historic Preservation officer and assess or survey for
historic properties, should additional research be required.
Land Development Constraints
Land development constraints are not anticipated in association with the proposed project. IPEC and HDL
will consult with stakeholders in the area to ensure that the project is consistent with existing land
management plans.
Telecommunications interference and incompatibility with aviation operations are not anticipated.
Visual and aesthetic impacts will be considered during the full environmental review process and Section
106 consultation.
Our preliminary environmental resource review effort has not revealed any potential barriers in association
with the proposed development.
4.4 Proposed New System Costs and Projected Revenues
(Total Estimated Costs and Projected Revenues)
The level of cost information provided will vary according to the phase of funding requested and
any previous work the applicant may have done on the project. Applicants must reference the
source of their cost data. For example: Applicants records or analysis, industry standards,
consultant or manufacturer’s estimates.
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4.4.1 Project Development Cost
Provide detailed project cost information based on your current knowledge and understanding of
the project. Cost information should include the following:
Total anticipated project cost, and cost for this phase
Requested grant funding
Applicant matching funds – loans, capital contributions, in-kind
Identification of other funding sources
Projected capital cost of proposed renewable energy system
Projected development cost of proposed renewable energy system
Based on our preliminary scenarios for development the capital costs for the entire project including
transmission line, access road, power plant, four production wells, site development and associated piping,
pumping stations, substations, and culverts would range from $49M to $63.3M. The industry standard cost
for geothermal field development and power plant is around $2500 to $4500 per installed kW in the US
(Dept. of Energy). For a 5 MW plant the cost according to these standards would be about $22.5M, which
is in accordance with our estimate for the well field and power plant. Capital costs for five different sites
ranged from $21.4M to $35.2M. Much of the costs will depend upon access and transmission line costs.
We evaluated two scenarios - one with a transmission line from Tenakee Creek valley sites and a second
scenario with fluid transmission out of Tenakee Creek valley to one of two possible locations nearer Hoonah
and then a transmission line to Hoonah. Transmission costs (including both an electrical transmission line
and fluid transmission pipeline) ranged from $20.7M to $28.1M. If forest service roads can be used and
improved with minimal construction of additional access then the transmission line and access costs would
be greatly reduced. The proposed road between Hoonah and Pelican would also provide access to the
resource and the existence of this resource and its ability to produce power may provide the necessary
impetuous for the road project to become a priority. Hoonah Indian Tribe has proposed to use their existing
and future BIA road funding to extend the forest service roads towards the geothermal resource. This
indicates the level of commitment and participation from the community for this project to move forward.
Total cost for this phase is $3,378,500. We are requesting grant funding for the full amount. The previous
reconnaissance study was funded at $599,200. We learned a great deal about the resource and the
surrounding area. We anticipate that with the proposed drilling and economic studies we can truly
determine the viability of this resource. As a member cooperative, IPEC has limited resources to invest in
alternative energy although we are in need of alternative sources to diesel to provide the necessary power
to our members.
4.4.2 Project Operating and Maintenance Costs
Include anticipated O&M costs for new facilities constructed and how these would be funded by
the applicant.
(Note: Operational costs are not eligible for grant funds however grantees are required to meet
ongoing reporting requirements for the purpose of reporting impacts of projects on the
communities they serve.)
O&M costs for a geothermal power plant include routine oversight of plant operation and visual inspections
by plant operators and maintenance to clean, repair and replace parts as needed. Routine calibration and
resupply of consumables is also needed. Ormat estimates the O&M costs for Mt. Spurr to lie in the range of
$0.03 to $0.06 / kWh, which is in the expected range for geothermal power plants. Akutan estimates O&M
costs at about $0.08 / kWh. A plant at Tenakee would likely have O&M costs at the high end of this range
much like Akutan, Tenakee is in a less geologically hazardous area than Mt. Spurr and IPEC is used to
handling remote locations which may lower its relative operations costs. Given an electrical demand of 5
MW and assuming 8,000 working hours annually, at $0.06/kWh, this is approximately $2.5M annual O&M
costs. These expenses would be covered by the cost of electricity.
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4.4.3 Power Purchase/Sale
The power purchase/sale information should include the following:
Identification of potential power buyer(s)/customer(s)
Potential power purchase/sales price - at a minimum indicate a price range
Proposed rate of return from grant-funded project
IPEC as the primary producer of power in the area would be the main buyer of the power. Pelican Electric
provides power to Pelican and would be a secondary purchaser. During this phase of the project, we
would develop preliminary power purchase agreements between IPEC and Pelican Electric as well as have
discussions with Sealaska depending upon their acquisition of the land.
4.4.4 Project Cost Worksheet
Complete the cost worksheet form which provides summary information that will be considered in
evaluating the project.
Please fill out the form provided below.
Renewable Energy Source
The Applicant should demonstrate that the renewable energy resource is available on a
sustainable basis.
Annual average resource availability. 100% Geothermal
Unit depends on project type (e.g. windspeed, hydropower output, biomasss fuel)
Existing Energy Generation and Usage
a) Basic configuration (if system is part of the Railbelt1 grid, leave this section blank)
i. Number of generators/boilers/other 4
ii. Rated capacity of generators/boilers/other Combined 3,060 kW (2 - 1000 kW & 2 - 455 kW)
iii. Generator/boilers/other type Diesel Generators
iv. Age of generators/boilers/other Installed 2005 - 2010
v. Efficiency of generators/boilers/other 14.25 kWh/gallon
b) Annual O&M cost (if system is part of the Railbelt grid, leave this section blank)
i. Annual O&M cost for labor $100,000
ii. Annual O&M cost for non-labor $400,000
c) Annual electricity production and fuel usage (fill in as applicable) (if system is part of the
Railbelt grid, leave this section blank)
i. Electricity [kWh] 4,860,308
ii. Fuel usage
Diesel [gal] 331,184
Other
1 The Railbelt grid connects all customers of Chugach Electric Association, Homer Electric Association, Golden Valley Electric
Association, the City of Seward Electric Department, Matanuska Electric Association and Anchorage Municipal Light and Power.
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iii. Peak Load 800 KW
iv. Average Load 600 KW
v. Minimum Load 475 KW
vi. Efficiency 14.25 kWh/gallon
vii. Future trends Maintain current load with small growth factor (1--2%)
d) Annual heating fuel usage (fill in as applicable)
i. Diesel [gal or MMBtu] 238,235 gallons
ii. Electricity [kWh]
iii. Propane [gal or MMBtu]
iv. Coal [tons or MMBtu]
v. Wood [cords, green tons, dry tons]
vi. Other
Proposed System Design Capacity and Fuel Usage
(Include any projections for continued use of non-renewable fuels)
a) Proposed renewable capacity
(Wind, Hydro, Biomass, other)
[kW or MMBtu/hr]
Assume 5 MW of geothermal energy
b) Proposed annual electricity or heat production (fill in as applicable)
i. Electricity [kWh] 41,610,000 kWh (@95% capacity)
ii. Heat [MMBtu] Unknown
c) Proposed annual fuel usage (fill in as applicable)
i. Propane [gal or MMBtu] None
ii. Coal [tons or MMBtu] None
iii. Wood or pellets [cords, green tons,
dry tons]
None
iv. Other None
Project Cost
a) Total capital cost of new system $49M
b) Development cost Included above
c) Annual O&M cost of new system Assume $0.06 kWh
d) Annual fuel cost -0-
Project Benefits
a) Amount of fuel displaced for
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i. Electricity 331,184 gallons
ii. Heat 25% of current usage - 59,559 gallons
iii. Transportation
b) Current price of displaced fuel $4.12 per gallon - $1,638,000 or $1,229,000 (Gartina Falls
power available)
c) Other economic benefits Potential greenhouses - $150,000 to $200,000 / year
depending upon vegetables and production
d) Alaska public benefits 10 to 20 full time jobs @ $50,000/year. Carbon credit at
$33/MWh generates $1,445,400/yr
Power Purchase/Sales Price
a) Price for power purchase/sale Unknown
Project Analysis
a) Basic Economic Analysis - see preliminary economic analysis for reconnaissance project
Project benefit/cost ratio 0.31 to 0.93 depending upon design life and fuel projections.
Payback (years)
4.4.5 Impact on Rates
Briefly explain what if any effect your project will have on electrical rates in the proposed benefit
area. If the is for a PCE eligible utility please discus what the expected impact would be for both
pre and post PCE.
Rates would be set based upon current rates and rate of return to be determined. The US standard cost
per kilowatt-hour at active geothermal power generation projects is $0.03 to $0.08. By taking the high end
and doubling it for Tenakee, which would be $0.16/kWh; add to it the O&M costs of another $0.06 / kWh;
the costs would be $0.22/kWh, which is less than half of the $0.60/kWh that Hoonah residents pay
currently for electricity. IPEC uses set rates across all of their communities. If this rate structure were to
remain, the development of the geothermal field would reduce rates for all of the communities in the IPEC
system as opposed just for Hoonah. IPEC is currently reviewing rates and applicability to the communities
they serve. Once we understand the capability of the resource from the data collected during this phase,
we can better estimate the potential impact to the rate structure not only for Hoonah but for the IPEC
communities.
SECTION 5– PROJECT BENEFIT
Explain the economic and public benefits of your project. Include direct cost savings,
and how the people of Alaska will benefit from the project.
The benefits information should include the following:
Potential annual fuel displacement (gallons and dollars) over the lifetime of the evaluated
renewable energy project
Anticipated annual revenue (based on i.e. a Proposed Power Purchase Agreement price,
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RCA tariff, or cost based rate)
Potential additional annual incentives (i.e. tax credits)
Potential additional annual revenue streams (i.e. green tag sales or other renewable
energy subsidies or programs that might be available)
Discuss the non-economic public benefits to Alaskans over the lifetime of the project
Hoonah's purchased power was 4,361,553 kWh in 2011, based on Power Cost Equalization data
submitted to the State. The proposed geothermal system is expected to displace this entire amount. A 3
to 5 MW system will displace 4,860,308 kWh (2012 IPEC) of conventionally generated energy annually.
A diesel generation efficiency of 14.25 kWh per gallon and expected heating fuel savings of 25 percent
are anticipated to displace 331,200 gallons of diesel and 59,500 gallons of heating fuel annually for a total
of 390,700 gallons of fuel or $1,638,000. With the addition of Gartina Falls reducing the amount of diesel
by 30% the total diesel displace cost would be $1,229,000. Our preliminary economic analysis
calculated three different benefit-cost ratios (BCR): 0.93, 0.47 and 0.31. The BCR of 0.93 was calculated
based on using IPEC's actual fuel prices from 2012 ($4.12/gallon) and extrapolating to future fuel costs
based on compound annual growth rate derived from ISER fuel projects and using a 50 year time span
with repair and replacement costs of $3.5 M in operating years 20 and 40. Using AEA standards (20
years versus 50 years) and ISER fuel projects the BCR is 0.31, which includes the impact from Gartina
Falls. By increasing the design life to 30 years in the AEA approach the BCR is 0.47. Several geothermal
power plants in the US have produced for 50 years. A sensitivity analysis was conducted for the
preliminary economic analysis and depending upon the costs of the project there was approximately 12
percent of the time that the BCR was above one. This indicates that this project is needed to further
refine the resource and the conceptual designs in order to fully prepare an economic analysis. In
addition, several sources of revenue and impact to the community will be more fully accounted for in this
project's economic analysis.
A carbon offset credit based on $33/MWh was not considered in the preliminary economic analysis but
may be considered as an added benefit to the project. In the past IPEC has experienced anywhere from
5% to 50% increase in fuel prices. The first year offset in diesel would be $1.229M. Not included in the
analysis are the other benefits that may be derived from this project including
Greenhouses ($150,000 to $200,000 depending upon crop and production facilities)
Ecotourism/Resorts
10 to 20 full time jobs created at annual average salary $50,000 which would provide $500,000 to
$1,000,000 in the local economy
Substantially reduce the cost of power and eliminate State power cost equalization (PCE) and
other subsidies for Hoonah and Pelican
There are several non-economic benefits of this project:
This feasibility study has several benefits to the people of Alaska, including a greater knowledge of the
geothermal resources of Southeast Alaska, which are generally poorly understood and characterized at
this time. It will also help determine which industry approved geothermal exploration techniques are most
effective in prospecting for geothermal in the wet, vegetated, and harsh conditions of much of Alaska.
The development of geothermal at promising sites in Alaska would provide stable, base load power which
could spur economic development in fishing, canning, tourism and other industries. Energy costs would
also be more stable for local communities, and waste heat and excess power generation could be used in
various ways such as in greenhouses to establish greater local food security. By offsetting diesel fuel
generation and the resulting emissions, geothermal development would also lead to cleaner air and
reduced greenhouse gas emissions. In combination with electric/plug-in vehicles, clean geothermal
power could be used to offset the need for petroleum transportation fuels, which could enhance national
security, protect the environment from the effects of oil exploration, drilling, spills, and carbon emissions
and other pollutants from combustion.
Renewable Energy Fund Round VII
Grant Application - Standard Form
AEA 2014-006 Grant Application Page 23 of 27 7/1/2013
5.1.1 Public Benefit for Projects with Private Sector Sales
Projects that include sales of power to private sector businesses (sawmills, cruise ships, mines,
etc.), please provide a brief description of the direct and indirect public benefits derived from the
project as well as the private sector benefits and complete the table below. See section 1.6 in
the Request for Applications for more information.
This will be further investigated during this feasibility study.
Renewable energy resource availability (kWh per month)
Estimated sales (kWh)
Revenue for displacing diesel generation for use at privet
sector businesses ($)
Estimated sales (kWh)
Revenue for displacing diesel generation for use by the
Alaskan public ($)
SECTION 6– SUSTAINABILITY
Discuss your plan for operating the completed project so that it will be sustainable.
Include at a minimum:
Proposed business structure(s) and concepts that may be considered.
How you propose to finance the maintenance and operations for the life of the project
Identification of operational issues that could arise.
A description of operational costs including on-going support for any back-up or existing
systems that may be require to continue operation
Commitment to reporting the savings and benefits
IPEC proposes to own and operate the geothermal plant per agreements developed with Sealaska if
needed. Maintenance and operations would be funded by customer utility payments. IPEC has been a
stable utility and was formed in the 1970’s as the Tlingit and Haida Regional Electrical Authority (THREA).
In 2004 THREA was reorganized as a member-owned electric cooperative. IPEC would certainly commit to
reporting savings and benefits. Operational issues and costs would be addressed by this phase of the
project. The evaluation of strategies will also include examination of available tax credits, loan guarantees
and other incentives that could benefit the long-term sustainability of the project.
SECTION 7 – READINESS & COMPLIANCE WITH OTHER GRANTS
Discuss what you have done to prepare for this award and how quickly you intend to proceed
with work once your grant is approved.
Tell us what you may have already accomplished on the project to date and identify other grants
that may have been previously awarded for this project and the degree you have been able to
meet the requirements of previous grants.
A team has been assembled that would be able to begin immediately upon award with this project.
Permitting and field work planning activities could begin immediately, and we anticipate mobilizing the
drilling crew and rig the following summer thereby giving us enough time to work out the permits and
specific issues with the agencies. The same team associated with the reconnaissance study would still be
used for this phase of the project with the addition of GRG.
The only significant research that has been done at this site has been the reconnaissance study
conducted by IPEC/HDL under our grant. Resources such as Makushin and Mt. Spurr have benefited
from state and university funded and led research in the 1980’s. Smaller resources or those with smaller
Renewable Energy Fund Round VII
Grant Application - Standard Form
AEA 2014-006 Grant Application Page 24 of 27 7/1/2013
nearby communities have in general only been further investigated due to the existence of a highly
motivated interested owner, such as at Chena. Despite favorable signs of a developable local resource
and the existence of nearby communities, Tenakee has no self-interested owner and is small and remote
enough to have been neglected in the past. This is a perfect point in history to begin a more in-depth look
at this resource. Fuel costs are high and likely to increase in the future. The world and governments are
gaining awareness of the negative effects of carbon and the exploitation and importation of oil. Electric
and plug-in hybrid cars are more common with several manufacturers providing models. The importance
of local food security is becoming better understood and more important All of these factors make it more
likely that this resource could be effectively utilized to provide maximum benefit to the local communities
than at any time in the past.
SECTION 8 – LOCAL SUPPORT AND OPPOSITION
Discuss local support and opposition, known or anticipated, for the project. Include letters of
support or other documentation of local support from the community that would benefit from this
project. The Documentation of support must be dated within one year of the RFA date of July 2,
2013.
So far in our plan to investigate the development of geothermal at Tenakee Inlet we have encountered
nothing but support in the communities of Hoonah and Pelican for this clean, reliable energy source.
Tenkaee Springs has voiced concerns about the potential for the hot spring development to affect their
existing resource. It is over 30 miles away and different valleys indicating different hydrological regimes.
IPEC is the member-owned electrical cooperative providing power to Hoonah, which is by far the largest
community that would benefit from this project. Attached are letters of support from Sealaska-Southeast
Alaska Native regional corporation; Huna Totem Corporation – Village Native Corporation for Hoonah; and
the Central Council Tlingit and Haida Indian Tribes of Alaska and citizens of Hoonah.
SECTION 9 – GRANT BUDGET
Tell us how much you are seeking in grant funds. Include any investments to date and funding
sources, how much is being requested in grant funds, and additional investments you will make
as an applicant.
Provide a narrative summary regarding funding source and your financial commitment to the
project
We have estimated that this phase of the project will require $3,378,500. The majority of the expenses
are in the resource evaluation task. The drilling will require approximately $3,000,000 for two slim holes.
It is anticipated that the holes will be 2,500 feet deep and take about 50 days for completion. After the
first hole is complete, we will discuss the findings with team members including AEA and decide the
placement of the second hole. We anticipate that we will drill based on funding available in order to avoid
cost overruns. By allowing for the depth and number of holes to be flexible, we can take advantage of the
funding level available. We have included in the resource evaluation task the acquisition of LiDAR data
which will assist us not only in understanding the structural nature of the rocks in the area but also in the
design process by providing topographical data necessary for accurate site design. The remaining funds
are for the conceptual design, economical analysis, environmental analysis and the other tasks necessary
to bring the project to a design phase. As part of the engineering tasks we have included funding for
electrical engineers to design a preliminary transmission line route. Since the transmission line costs are
a large part of the development costs, this is essential to developing an accurate cost estimate for the
project.
IPEC is committed to this project and making the development of this geothermal resource a reality. As a
member cooperative, we have limited resources to fund a project of this size. Grant funding helps us in
controlling residential rates.
Renewable Energy Fund Round VII
Grant Application - Standard Form
AEA 2014-006 Grant Application Page 25 of 27 7/1/2013
Applications should include a separate worksheet for each project phase that was identified in
section 2.3.2 of this application, (Reconnaissance, Feasibility, Conceptual Design, Design and
Permitting, and Construction). Please use the tables provided below to detail your proposed
project’s budget. Be sure to use one table for each phase of your project.
If you have any question regarding how to prepare these tables or if you need assistance preparing the
application please feel free to contact AEA at 907-771-3031 or by emailing the Grant Administrator,
Shawn Calfa, at scalfa@aidea.org.
Milestone or Task
Anticipated
Completion
Date
RE- Fund
Grant Funds
Grantee
Matching
Funds
Source of
Matching
Funds:
Cash/In-
kind/Federal
Grants/Other
State
Grants/Other
TOTALS
(List milestones based on
phase and type of project.
See Milestone list below. )
$ $ $
1. Project Scoping 9/16 $ 7,200 $ $
2. Detailed Resource
Assessment 9/15 $3,050,000 $ $
3. Land & Regulatory Issues 8/15 $ 21,000 $ $
4. Permitting & EA 6/15 $ 35,000 $ $
5. Energy & Market Analysis 12/15 $ 31,500 $ $
6. Conceptual Design & Cost
Estimate 6/16 $ 115,000 $ $
7. Economic & Financial
Analysis 8/16 $ 43,000 $ $
8. Business & Operations Plan 8/16 $ 30,000 $ $
9. Final Report 9/16 $ 45,800 $ $
$ $ $
TOTALS $ 3,378,500 $ $
Budget Categories:
Direct Labor & Benefits $ 37,000 $ $
Travel & Per Diem $ $ $
Equipment $ $ $
Materials & Supplies $ $ $
Contractual Services $ 3,341,500 $ $
Construction Services $ $ $
Other $ $ $
TOTALS $ 3,378,500 $ $
Please provide a short narrative, and cost estimate, identifying the metering equipment, and its
related use to comply with the operations reporting requirement identified in Section 3.15 of the
Request for Applications.
Page 26 of 27
Inside Passage Electric Cooperative
Page 27 of 27
Additional Documentation
Letters of Support
Resumes
Reconnaissance Study Documents
1
Reconnaissance of a Low-temperature Geothermal Resource,
Tenakee Inlet, Alaska
By
Lorie M. Dilley, Trevor Crosby, and Ryan Norkoli
Hattenburg Dilley & Linnell, LLC
3335 Arctic Blvd., Ste 100
Anchorage, Alaska 99503, USA
E-mail: ldilley@hdlalaska.com
KEYWORDS: reconnaissance, shallow temperature survey, low temperature resource, Alaska,
soil sampling, water chemistry, binary power plant
ABSTRACT
A reconnaissance study of the Tenakee Inlet geothermal resource was conducted in order to
evaluate its nature and determine if there is potential for power generation. The resource is in a
remote, rugged area of southeastern Alaska, accessible via helicopter. A prior hot spring
temperature measurement was 176 0F. Tenakee Creek is located to the immediate northeast of
the hot springs. The Queen Charlotte Fairweather fault system lies to the west of the resource
and is part of a transform plate boundary with associated earthquakes and linements aligned
north to south. Fieldwork consisted of a shallow soil temperature survey and collection of soil,
water, and rock samples. The shallow soil temperature survey indicated a broader thermal area
than just around the hot springs and includes portions across Tenakee Creek. Soil samples had
chemical species that were anomalous near the hot springs as well as across the creek in the same
areas as the higher temperature readings. Water samples from the hot springs indicated fluids
low in chlorine and bicarbonate but high in sulfate. The hot springs waters are most likely
associated with volcanic waters and perhaps heated by steam from a deeper reservoir. Surface
temperatures of the hot springs ranged from 161 to 1770F over the course of the 15-day long
field effort. Based on the chalcedony geothermometry the hot springs fluids may have been
heated to 2600F. The surface and subsurface temperatures are in the range appropriate for a
binary geothermal power plant.
INTRODUCTION
The purpose of the reconnaissance study was to evaluate the nature of the resource and
determine if there was potential for power generation to serve the communities of Pelican and
Hoonah. The resource is located near the head of Tenakee Inlet on northern Chichagof Island, in
southeast Alaska. The Tenakee Inlet Geothermal Resource is located approximately 19 air miles
southwest of Hoonah Alaska along an un-named river we have called Tenakee Creek. Figure 1
presents a location map for the hot springs. The area is characterized by rugged, steep terrain
covered with thick vegetation typical of the southeastern Alaska rainforest. Topography limited
the exploration area to the valley floors and to the first bench above the river valley.
The resource is characterized at the surface by at least four small hot springs that occur together
on the southeast side of the Tenakee Creek located at approximately 570 59’ 24” N and 1350 56’
20” W. An aerial photograph of the vicinity of the hot springs is presented in Figure 2. The
focus of the study was the immediate hot springs area and approximately ¼ to ½ square mile
2
surrounding the hot springs. There are two streams that bound the study area on its southwestern
and northeastern sides.
Figure 1: Location map for Tenakee Inlet hot springs. Hot springs located approximately 19
miles southwest of Hoonah Alaska in southeast Alaska. There is a number of hot springs on
Chichagof Island as shown by black circles on the vicinity map.
The hot springs shown in Figure 1 have been documented and tested for minerals and
temperature. The reported surface temperature of the Tenakee Inlet hot springs is 1760F with
geochemistry of the waters indicating a maximum subsurface temperature of 2430F (Motyka et
al, 1983). The other hot springs in the region have lower surface temperatures.
3
Figure 2: Aerial photograph of vicinity. Note location of the hot springs on the southeast side of
Tenakee Creek. Flow as indicated by blue arrow is to the northeast and then near the top of the
photograph, Tenakee Creek turns to the southeast and flows into Tenakee Inlet. Boundary
streams occur to the northeast and southwest of the hot springs.
The Tenakee Inlet springs are comprised of four small springs that flow from the base of a rock
cliff approximately 40 to 50 feet in height. The hot springs area is small about 50 feet long by 20
feet wide occurring on a gravel bar that is heavily vegetated with alders, willows, and spruce
trees. The gravel bar is approximately 800 feet long and 100 feet wide. The hot spring site and
the location of the four hot springs are shown in Figure 3. There is an outflow creek from the
spring site that leads to Tenakee Creek. A stream named the Stairway to Heaven Creek cascades
down the slope and mixes with the outflow near the spring sites. Seeps occur along the shore of
the gravel bar and are periodically inundated by Tenakee Creek.
4
Figure 3: Site map of hot springs area. Note the location of the four hot springs, the seeps at the
edge of Tenakee Creek and the outflow from the hot springs. The first bench located above the
hot springs is approximately 40 to 50 feet higher than the base of the slope. The sampling grid is
partially drawn for reference. The hot springs occur at grid point A4.
Fieldwork consisted of collecting shallow soil temperature data, as well as soil, water and rock
samples from various locations surrounding the hot springs and the immediate vicinity. A grid
was established to systematically collect temperature data and soil samples. Water and rock
samples were more varied and were dependent upon their location with respect to the hot spring.
REGIONAL CHARACTERISTICS
General Geology
The Tenakee Inlet area is composed of Devonian argillite, graywackes and limestones that were
subsequently intruded by a wide variety of igneous rocks (Loney, et al 1975). These rocks
outcrop near the study area and north of it. The intrusives vary in age, but are primarily
Cretaceous in the study area and are mainly diorite to granodiorite in nature. These rocks are
5
widely distributed on Chichagof Island. To the south of the study area there is a large body of
Tertiary intrusives consisting of hornblende leuoconorite and troctolite. The Devonian
sedimentary rocks have undergone extensive regional and contact metamorphism. The intrusives
have metamorphosed them into hornfels, and marbles. The rocks are intensely folded and
faulted. The fold axes trend northwest.
Structural Geology
The geologic structure of the area is dominated by the Queen Charlotte-Fairweather (QCF) fault
system and the Chatham Strait Fault. The QCF fault system lies to the immediate west of
Chichagof Island and the Chatham Strait Fault defines the Chatham strait between Chichagof
Island and Admiralty Island to the east. The faults of the QCF system are active right-lateral
structures with large displacements. The Chatham Strait Fault offsets rocks as young as middle
Tertiary and by as much as 90 miles. (Gehrels and Berg 1994).
The QCF fault system defines the boundary between the Pacific and North American plates. In
the middle Mesozoic prior and/or concurrent with the intrusion of the igneous rocks in the study
area, southeast Alaska was involved in the subduction of the Pacific Plate beneath the North
American Plate, which over time evolved into the dominant transform plate boundary seen
today. This tectonic activity has resulted in a complicated pattern of thrust, oblique slip, and
strike-slip faults on Chichagof Island. The rocks in the study area are part of the Alexander
Terrane, which is inferred to have continental origins (Karl, 1999). The rocks are interpreted to
represent intermittent volcanic arc activity.
Modern earthquake activity occurs along the QCF fault system. The most recent large
magnitude earthquakes in the area of the hot springs occurred in 1927 and 1939. The epicenter
of the 1927 magnitude 7.1 event occurred at latitude 57.69 and longitude -136.07. The 1939
magnitude 6 event occurred at latitude 58.00 and longitude -136.0. The hot springs are located at
latitude 57.99 and longitude -135.939.
Climate
Climate in the region is maritime characterized by cool summers and mild winters. Foggy
periods typically occur in the spring and fall. Summer temperatures in Hoonah average from 52
to 63 0F, and winter temperatures from 26 to 39 0F. Precipitation in Hoonah averages 100 inches
annually, with 71 inches of snowfall.
During our fieldwork we established a small weather station at the base camp near the hot
springs. The temperatures in late September – early October ranged from 36 to 48 0F.
Precipitation occurred on six of the 15 field days and ranged from 0.04 inches to 1.02 inches.
METHODOLOGY
Fieldwork began on September 21, 2011 and was completed on October 9, 2011. The
Hattenburg Dilley & Linnell six-man field team was based out of Hoonah and supported with
full-time helicopter transport provided by Coastal Helicopters. A grid was developed based on
300 feet by 300 feet squares prior to the fieldwork. This grid and the study area proposed were
limited due to topography, vegetation, and subsurface temperature information. Three survey
control points were established (two near the hot springs and one on the east side hill) in order to
maintain accurate survey control for future fieldwork and development. A rectangular grid was
6
then established from the base line onto the surrounding hot springs area. GPS coordinates were
collected at grid points. These points were used as the locations to collect the soil samples and
install shallow temperature probes. The field crew started from the hot spring location and
worked outward in a spiraling pattern to gather the data, with tightly-defined 100 foot spacing
nearest the hot spring, then expanding to 300 ft spacing. At the conclusion of the 15 day field
work, the team had established over 120 grid points. Eighty-four temperature readings were
obtained; and 37 water, 63 soil and 7 rock samples were collected. Rock outcrops were difficult
to find, therefore only a few samples were collected for petrographic analysis.
Field Work
Shallow Soil Temperature Survey
The shallow soil temperature survey used steel pipes as probes inserted into the ground and a
thermistor was installed. The equipment included 5-1/2 foot long sections of 3/4” steel pipe for
probes, RTD (Resistance Temperature Detector) temperature measuring devices, demolition
hammers for driving probes up to 5 feet into the ground, and data loggers/meters to record the
temperature measured by the RTD. The steel pipe was fabricated into a probe by welding one
end closed and hard facing it to allow it to penetrate hard ground. Forty probes were fabricated
and reused during the study. The field work involved inserting the steel probes in the ground,
waiting for thermal equilibration, installing thermistors, and measuring the temperature at the
bottom of the probe, then moving the probes to a new location and repeating the operation.
Readings that indicated higher temperatures were remeasured. It took approximately 1 to 2
hours for the thermistors and ground disturbance to equilibrate.
Selective Extraction Geochemical Analysis
We conducted a selective extraction geochemical study consisting of obtaining samples from the
B soil horizon and conducting enzyme leach and terrasol selective digestion on the soil sample.
The method relies on the fact that geothermal systems, like mineral deposits, have at the surface
a number of chemical elements that get distributed around their margins. Trace elements can be
trapped in amorphous oxide coatings on sand and silt grains in soil near the surface. Enzyme
leach and Terrasol digest these coatings and releases the trapped trace elements. An analysis of
the sample is conducted for up to 68 trace and major elements by ICP-Mass Spectrometry. The
concentrations of these elements are mapped and distinct patterns indicate areas of interest.
Sampling consisted of using a clean spoon to obtain soil from a hole excavated below the organic
layers. Care was taken to maintain clean spoons and sampling equipment. An approximately 25
gram sample collected using a stainless steel table spoon was placed in a 50 ml plastic tube that
was supplied by the laboratory. The samples were t ypically fine-grained. Care was taken to
avoid and/or eliminate particles larger than about coarse sand.
Water Sampling
Water samples were collected for chemical analysis from the hot springs, and Tenakee Creek.
Additional samples were taken upstream and downstream of the hot spring location and from the
two boundary streams. Temperature, pH, and conductivity were collected on-site at each
location. Sampling consisted of collecting approximately 800 ml of water in several bottles
supplied by the laboratory. The bottles were washed using the fluid to be collected. The water
was filtered if it appeared to be cloudy. The majority of the samples were not filtered due to the
clear nature of the water. In addition to the water samples collected for chemical analysis,
additional 25 ml samples were gathered at select locations for isotope analysis.
7
Laboratory Analysis
Skyline/Actlabs of Tucson Arizona analyzed the soil samples. The water samples were
submitted to WetLab of Nevada for cations/anions analyses, and geothermometer components,
and to Southern Methodist University in Texas for isotope analysis. A selective extraction
process (enhanced enzyme leach) was used at Skyline Laboratories on the soil samples. The
extraction process leaches amorphous MnO2 and analyzes 68 trace and major elements by ICP-
Mass Spectrometry. The detection limits are typically on ppb levels with a few elements at the
ppm level. Water samples were analyzed for silica, metals, and various anions and cations.
DATA
Soil Temperature
The shallow soil temperature data obtained are presented in Figure 4. The hottest temperatures
occurred near the hot springs and at the seeps found at the edge of Tenakee Creek. Temperatures
near the hot spring range from 81.2 to 108.9 0F. The hot springs outflow had soil temperatures
of between 58.3 and 86.10F. Seeps were observed when the water level in Tenakee Creek was
lowered during a few days of no rain. The one seep had a nearby soil temperature of 130.5 0F.
Temperatures on the hillside above the spring ranged from 49.9 to 46.4 0F. A relatively cool
temperature of 44.3 0F was measured upstream of the hot springs located near the edge of the
gravel bar that hosts the hot springs. The temperature readings in the 40’s were considered
background soil temperatures.
Additional temperatures above background were encountered at several spots across Tenakee
Creek at the base of the slope. The hottest shallow soil temperatures across the creek from the
hot springs were 88.8 0F and 59.50F. There were several points across the creek above 50 0F
with one (56.5 0F) occurring about 1,200 feet downstream of the hot springs. These temperatures
do not appear to be the result of outflow from the hot springs. The temperature of the water in
Tenakee Creek was approximately 400F.
8
Figure 4: Shallow soil temperature survey results. Note the higher than background temperatures
on the north side of Tenakee Creek.
Water Data
The average chemical concentrations for the hot spring, seep, and surface water samples were
calculated. A location map of these features is presented in Figure 3. The temperature of the hot
spring waters averaged 1700F with Hot Spring #1 having the hottest temperature of 177 0F on
two sampling events and Hot Spring #4 having the coldest at 1610F. The average water
temperature for hot springs #1 through #3 was 1720F. The average surface water temperature
was 400F.
A spreadsheet developed by Powell and Cummings (2010) was used to evaluate the chemistry of
the water samples. Laboratory data were entered into the spreadsheet and a series of standard
geothermal plots were developed. Geothermometers were calculated and ternary plots were
produced. The CL-F-B plot shown in Figure 4 indicates that the collected hot spring waters (HS)
and the surface water (SW) samples are from different populations. This is important in that the
two waters clearly represent separate types of fluids. The often used Cl-SO4-HCO3 ternary plot
illustrates the amounts of major anions present in the geothermal waters (Figure 5). This plot
indicates that the hot spring waters are low in chlorine (Cl) and bicarbonate (HCO3) and high in
sulfate (SO4). It also indicates that the hot spring waters are associated with volcanic waters and
perhaps heated by steam from a deeper reservoir. A high sulfate spring is typically associated
with deeper boiling zones.
9 6080100120140160180200220240260Quartz SolubilityChalcedony Solubility
HS1HS2HS3HS4
SW21
SW22
SW23
HS1D
HS5HS6HS7HS8HS2DHS9
HS10
HS11
HS12
HS3D
0
100
200
300
400
500
600
0 1 2 3 4 5 6
log (K2/Mg)SiO2 mg/kgM eteoric Trend LineAndesitic
Water
M i x i n g L i n e
100 C
120 C
140 C
160 C
180 C
200 C
220 C240 C260 C
280 C
Water
300 C
Steam
HS5HS6HS7HS8
SW24
SW25SW26DSW29D
-160
-140
-120
-100
-80
-60
-40
-20
0
-22 -20 -18 -16 -14 -12 -10 -8 -6 -4 -2 0 2 4 6 8 10
Delta Oxygen 18 - per milDelta Deuterium - per mil
Figure 5: Plots of water chemistry data. The hot springs water (HS) is clearly different from the
surface water (SW) samples collected. The hot springs waters are high in SO4 and low in HCO3
and Cl indicating possibly waters associated with volcanic waters.
The isotope plot (Figure 6) indicates that both the hot springs and surface waters are primarily
meteoric and have not mixed with other fluids. The chalcedony geothermometer provides a
more accurate temperature for the hot spring fluid at depth based on the concentrations of silica
and potassium/magnesium (Figure 6); it shows that the hot spring fluids have been heated to
2600F.
Figure 6: Isotope plot on the left indicates that the hot springs waters are primarily meteoric. The
geothermetry was based on the chalcedony geothermetry due to the concentrations of silica and
potassium/magnesium as shown in the plot on the right.
Soil Data
The soil chemistry was plotted for six elements; i.e., Arsenic (As); Cobalt (Co); Gold (Au);
Manganese (Mn); Titanium (Ti); and Vanadium (V). These chemical species had orders of
magnitude changes in concentrations across the sampling area. Data were contoured using
roughly the standard deviation in a particular elements concentration. Mercury is usually used in
10
geothermal exploration; however, the results did not indicate a large variation in mercury
concentration.
The species plotted indicated anomalous concentrations generally near the hot springs and along
the outflow but also across Tenakee Creek where the concentrations were higher in areas of
elevated soil temperatures. The highest concentration of gold was near the confluence of the hot
spring outflow and Tenakee Creek. The highest concentration for arsenic was across the river
from the hot springs at the grid point that recorded the highest temperature on that side of the
river. In addition, vanadium had higher concentrations along the ridge above the hot springs
perhaps indicating a fracture or fault.
Lineations
Lineations were determined from stereographic aerial photographs and may represent faults or
joints. The lineations were not observed on the ground due to the dense vegetation, however
during the helicopter flights over the area, many of the lineations could be seen on a regional
scale. Figure 7 presents the more notable lineations and the course of Tenakee Creek. The
lineations are typically aligned northwesterly with some cross lineations. This alignment is
typical over the entire southeast region and is due to the large QCF fault system and regional
tectonics. Particularly interesting is the offset in Tenakee Creek near the hot springs. There is a
set of lineations that occur northwest and the creek is offset on east-west lineations. The
measurements obtained from geological maps indicated steeply dipping lineations.
Figure 7: Major
lineations in the study
area. Note the offset of
Tenakee Creek near the
hot springs possibly
indicating a wrenching
effect creating
permeability for the
springs.
PRELIMINARY INTERPRETATIONS
In the Tenakee Inlet Area, based on shallow temperature probe and soil analysis data there
appears to be additional thermal areas across Tenakee Creek from the known four hot springs.
These thermal areas would suggest that the geothermal source is larger than just the known four
11
hot springs. The occurrence of chemical anomalies in the soil in the hotter areas across Tenakee
Creek also suggests that the hot fluids are circulating near the surface indicating permeability.
The lineations and general tectonics of the region suggest that the hot springs were developed
due to the wrenching of the cross cutting lineations near the hot springs which led to the
fracturing of the rocks. Also given the high angle nature of many of the lineations, it is
reasonable to assume that high angle faults bring the geothermal fluid to/near the surface. The
earthquake data suggest that the study area is tectonically active and that the igneous intrusives
are permeable.
Based on the water chemistry, the hot springs fluids are most likely associated with volcanic
waters and perhaps heated by steam from a deeper reservoir. The chalcedony geothermometer
indicates that the hot spring fluids have encountered temperatures on the order of 2600F. The
average surface temperature of the hot spring waters is 1700F. These surface and subsurface
temperatures are in the range that binary geothermal power plants operate. Much like Chena the
site benefits from having cool waters at approximately 400F as a sink.
ADDITIONAL WORK
A conceptual model of the area still needs to be developed. In addition, the hydrology of the
study area should be evaluated. Geophysical studies such as self potential (SP) would assist in
characterizing the area and provide additional subsurface information. We will be conducting
additional fieldwork in the summer of 2012. The following presents some of the fieldwork that
still needs to be done:
1) Fly overs with an infrared camera in the spring to evaluate potential other “hot” areas.
During the summer of 2012 we will collect surface water temperatures and estimate
the flow of Tenakee Creek (Does it freeze, does it still flow, partially frozen during
the early spring?).
2) Conduct a SP geophysical survey in order to evaluate the hydrology of the area and
provide additional subsurface information.
3) Conduct additional studies of the area across Tenakee Creek from the hot springs
where we measured high temperatures and obtained anomalous soil data.
4) Investigate further the seeps near the edge of Tenakee Creek to determine if they are
related to the known or other hot springs. Excavate holes along the gravel bar to
collect groundwater samples and to evaluate possible flow from the hot springs to the
seeps.
5) Collect flow data from the hot springs, creek, and outflow areas.
ACKNOWLEGMENTS
The project was funded through a renewable energy grant administered by the Alaska Energy
Authority (AEA). Hattenburg Dilley & Linnell (HDL) was contracted by Inside Passage Electric
Cooperative (IPEC) to manage the project and conduct the field studies and evaluation of the
geothermal resource.
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REFERENCES
Gehrels G.E. and H.C. Berg (1994) Geology of Southeastern Alaska. The Geology of North
America Vol. G-1. The Geological Society of America.
Karl, S.M. (1999). Preliminary Geologic Map of Northeast Chichagof Island, Alaska. US
Geological Survey Open File Report 96-53.
Loney, R.A, D.A. Brew, L.J.P. Muffler and J.S. Pomeroy. (1975) Reconnaissance Geology of
Chichagof, Baranof, and Kruzof Islands, Southeastern Alaska. US Geological Survey
Professional Paper 792.
Motyka, R.J., M.A. Moorman, and S.A. Liss, (1983), Geothermal Resources of Alaska: Alaska
Department of Geology and Geophysical Survey, Miscellaneous Publication 8, 1 sheet scale
1:2,500,000.
Powell, T and W. Cummings, (2010). Spreadsheets for Geothermal Water and Gas
Geochemistry. Proceedings Thirty-fifth Workshop on Geothermal Reservoir Engineering
Stanford University. Stanford California.
RECONNAISSANCE OF LOWRECONNAISSANCE OF LOW-- TEMPERATURE GEOTHERMAL TEMPERATURE GEOTHERMAL RESOURCERESOURCE TENAKEE INLET, ALASKATENAKEE INLET, ALASKAByByLorie M. DilleyLorie M. DilleyTrevor Crosby & Ryan NorkoliTrevor Crosby & Ryan NorkoliSupport Provided BySupport Provided ByAlaska Energy AuthorityAlaska Energy AuthorityRenewable Energy Grant #7040073Renewable Energy Grant #7040073And Inside Passage Electric Cooperative And Inside Passage Electric Cooperative
Hot springs are located 19 miles southwest of Hoonah, AKAnd 10 miles east of PelicanRugged, isolated stream valley1983 minimal research – 176FAll other hot springs – lower temperature
PurposePurpose Evaluate the nature of the resource and Evaluate the nature of the resource and determine power production potential.determine power production potential. Residential rates in Hoonah $0.60/kWh and Residential rates in Hoonah $0.60/kWh and Pelican are $0.65/kWh Pelican are $0.65/kWh –– both on diesel and both on diesel and small hydroelectric damssmall hydroelectric dams Could it produce 3 to 5 MW powerCould it produce 3 to 5 MW power Specific goals were: Specific goals were: Collect water, soil, shallow temperatures, and Collect water, soil, shallow temperatures, and geophysical data to evaluate the reservoirgeophysical data to evaluate the reservoir Evaluate exploration techniques in cold, wet, Evaluate exploration techniques in cold, wet, lowlow--temperature environment.temperature environment.
FIELD WORKSeptember 2011 for 15 daysMarch 2012 to install stream gageApril 2012 for visitMay 2012 conducted FLIR imagingAugust/September 2012 additionaltemperature probes and CO2 gas survey
SITE MAPSITE MAP
4 small springs occur at the base of a hill with temperatures ranged from 161 to 177 F over the 15- day field effort in September 2011Climate is maritime – air temperatures – 26 – 63 F, precipitation averages 100 inches with 71 inches snowMarch – 7-8 feet of snow near the hot springs
Additional Springs or SeepsAdditional Springs or SeepsSeveral springs/seeps observed at edge of Tenakee Creek during lower water levelsTemps: 100 to 130 F
FIELDWORK IN SEPTEMBER 2011:Established grid – 300 X 300 ft Collect water samples – springs, seeps, and creeksSoil geochemistry samplesShallow Temperature Survey
Surface Water ChemistrySurface Water ChemistryTwo separate populationsSulfate rich fluid – volcanic waters – deeper boiling zonesAll waters – meteoric in natureChalcedony Geothermometer is more accurate than silica or K-Mg
Shallow Temperature ProbesShallow Temperature ProbesInstalled 5-6 foot long steel pipe to depths of 3 to 5 feet. Installed single point thermistor and allowed to equilibrate for 1 to 2 hours
Shallow Temperature Shallow Temperature
Soil ChemistrySoil ChemistryArsenic GoldManganeseCobaltVanadiumTitanium
Structural GeologyStructural GeologyRocks are igneous intrusivesQueen Charlotte-Fairweather Fault – active right-lateral system – define Pacific & NA plateEarthquake near hot springsOffset near the hot springsSteeply dipping – NW with some cross lineations
Conceptual ModelConceptual ModelHigh-angle transform faultsHorse-tail structure – seeps and hot spots across the riverChalcendony geothermometry 260 FRecharge from topographic highsWrenching of cross- cutting lineations – fracturing – hot springs
MagnetoMagneto--telluric telluric –– not hot enough for clay capnot hot enough for clay cap Self Potential Self Potential –– babbling brookbabbling brook FLIR Camera FLIR Camera –– some information some information –– lots of vegetation and limited lots of vegetation and limited useuse ElectroElectro--magnetic magnetic –– heavy vegetation for useheavy vegetation for use Soil Sampling Soil Sampling –– worked well worked well –– difficult in difficult in cobblycobbly soils to obtain soils to obtain samplesample Water Chemistry Water Chemistry –– easy to obtain and usefuleasy to obtain and useful Shallow Temperature probes Shallow Temperature probes –– moderately difficult but useful in new moderately difficult but useful in new areaareaAssessment of TechniquesAssessment of Techniques
ConclusionsConclusions System is larger than anticipated.System is larger than anticipated. LineationsLineations & tectonics suggest high angle fault and & tectonics suggest high angle fault and permeabilitypermeability There is a reservoir @ 260 F capable of producing There is a reservoir @ 260 F capable of producing power using binary systempower using binary system Do Not Know permeability, depth, amount of flow,Do Not Know permeability, depth, amount of flow, Next step Next step –– slim hole drilling and economic analysisslim hole drilling and economic analysis