HomeMy WebLinkAboutTenakee Renewable Energy Grant Application
Alaska Renewable Energy Fund
Grant Application Round 6
Inside Passage Electrical Cooperative
Feasibility Study and Conceptual Design of
Tenakee Inlet Geothermal Resource
Renewable Energy Fund Round 6
Grant Application
AEA 13-006 Application Page 1 of 32 7/3/2011
Application Forms and Instructions
This instruction page and the following grant application constitutes the Grant Application Form
for Round 6 of the Renewable Energy Fund. An electronic version of the Request for
Applications (RFA) and this form are available online at:
http://www.akenergyauthority.org/RE_Fund-6.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 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.
• 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.
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 6
Grant Application
AEA13-006 Grant Application Page 2 of 32 7/3//2012
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 or X non-profit ( check one)
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 its project by
its 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.
Yes
1.2.4 If awarded the grant, we can comply with all terms and conditions of the attached
grant form. (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 6
Grant Application
AEA13-006 Grant Application Page 3 of 32 7/3//2012
SECTION 2 – PROJECT SUMMARY
This is intended to be no more than a 1-2 page overview of your project.
The Reconnaissance Study of Tenakee Inlet Geothermal Resource funded by Alaska Energy Authority
Renewable Energy Grant # 7040073 is currently scheduled for completion in June 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 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 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.
The study has shown:
¾ The chalcedony geothermometer indicates that the hot spring fluids have encountered
temperatures on the order of 240 to 2600F.
¾ Hot spots occur 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.
¾ Lineations and tectonics suggest that the hot springs were developed due to wrenching of the
cross-cutting lineations.
¾ Earthquake data, Cretaceous igneous intrusive and high regional heat flow indicate that there is
permeability in the bedrock and there is high geothermal gradient.
The data suggest that the resource is viable and can produce power. The surface hot springs are hotter
than Chena Hot Springs, the geochemistry based temperature at depth are in the range of binary power
plant operations and the springs, seeps, and hot spot as well as tectonics of the area suggest
permeability at depth.
The purpose of this project is to continue our study by advancing one to two slim drill holes, conducting a
feasibility analysis, and developing a conceptual design of how best to develop the resource.
2.1 Project Title – (Provide a 4 to 5 word title for your project)
Feasibility Study and Conceptual Design 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.
The project is located at the head of Tenakee Inlet, Chichagof Island in Southeast Alaska. The location is
a rugged stream valley accessible via helicopter. The area of interest is approximately 4 to 5 acres in
size and occurs on both sides of the stream we have called Tenakee Creek.
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 at approximately at 57° 59’ 24” N, 135° 56’ 20” W in
Southeast Alaska.
Renewable Energy Fund Round 6
Grant Application
AEA13-006 Grant Application Page 4 of 32 7/3//2012
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, Tenakee Springs, and Pelican. IPEC currently provides
power for Hoonah, which is the largest community on Chichagof Island. The populations are: Hoonah -
860, Pelican - 163, and Tenakee Springs - 104. We anticipate that all 3 communities would benefit from
this project. Tourism, fishing, and hunting are main economic activities. Market analysis completed
during this phase of the project would more completely determine the extent to which these communities
will benefit from this project.
2.3 PROJECT TYPE
Put X in boxes as appropriate
2.3.1 Renewable Resource Type
Wind Biomass or Biofuels
Hydro, including run of river Transmission of Renewable Energy
X Geothermal, including Heat Pumps Small Natural Gas
Heat Recovery from existing sources Hydrokinetic
Solar Storage of Renewable
Other (Describe)
2.3.2 Proposed Grant Funded Phase(s) for this Request (Check all that apply)
Pre-Construction Construction
Reconnaissance Design and Permitting
X Feasibility Construction and Commissioning
X Conceptual Design
2.4 PROJECT DESCRIPTION
Provide a brief one paragraph description of your proposed project.
The purpose of this project is to further investigate the known geothermal resource at Tenakee Inlet and
evaluate its potential to produce power and to evaluate alternative uses of the source. Hot springs
encountered during our reconnaissance study have the highest recorded surface temperature (176° F) of
any of the numerous geothermal springs tested on Chichagof Island. The reconnaissance study has
indicated a viable resource with fluids having encountered subsurface temperatures of 260° F, and that
the resource is larger in size than originally anticipated. We request funding for a feasibility study and
conceptual design project with a timeline of approximately 28 months. We are currently completing a
reconnaissance study that included mapping, remote sensing, and geochemical sampling of water and
soils. A paper presented at the Geothermal Resource Council in October 2012 is attached. We also
submitted a draft interim report to AEA in December 2011 with all of the data collected at that point. We
propose for this feasibility study to continue our investigations by advancing one to two slim drill holes,
conducting a feasibility analysis and developing a conceptual design of how best to develop the resource.
Future work would include production level drilling, permitting, and power plant and infrastructure
construction.
Renewable Energy Fund Round 6
Grant Application
AEA13-006 Grant Application Page 5 of 32 7/3//2012
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, etc.)
Chichagof Island is a rural island with high electric and heating costs. According to the State’s FY 2011
PCE Statistical Report residential rates in Hoonah averaged $0.60/kWh and in Pelican averaged
$0.65/kWh. Fuel prices have been not been stable 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 $4.10/gallon in
2012. The springs at Tenakee Inlet are located approximately 10 miles from Pelican, 20 miles from
Hoonah, and 30 miles from Tenakee Springs. Geothermal power, as base load power, would offset
diesel fuel costs and emissions for the region; space heating fuel would also be avoided by conversion to
electric heating; and would stabilize and lower energy costs. As seen on the chart below, geothermal
power cost is comparable to hydro, which is relevant in this area where hydropower is utilized or being
investigated to be utilized to provide power to 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. Reinjection of production fluids
and air cooling protect the resource and minimize water needs. Public and environmental health is
enhanced. The project will offset 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 greatest challenge will be fully utilizing the potential benefits of geothermal in this area. The power
available from the resource may be greater than the current electric demand of the area. The solution to
this imbalance involves changes in the entire energy picture for the area and growth of certain industries
that would further the sustainability of the area.
Specifically, space heating from fossil fuel sources could be replaced by electric heating or perhaps by
Renewable Energy Fund Round 6
Grant Application
AEA13-006 Grant Application Page 6 of 32 7/3//2012
direct use of the geothermal fluids of the resource. A transition to electric or hybrid/electric vehicles could
further reduce the local dependence on expensive fossil fuels and more fully utilize the resource.
The importance of local food security is gaining increased attention. Otherwise unused geothermally
produced electricity or heat (even 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 fish processing industry in the
area. 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 tourist 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:
We have learned from our reconnaissance study a number of potential problems with current geothermal
exploration techniques particularly in a wet, rugged environment like southeast Alaska. Some of the
techniques require dry, arid soils and easier accessibility. In addition due to the lower temperatures of the
resource a number of exploration techniques have not been as useful as for higher temperature
resources. We analyzed a number of geophysical techniques that are commonly used and concluded
that they would not be useful in our exploration. 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).
This is valuable information to the exploration of low to moderate temperature resources which is
currently occurring in the industry as the higher temperature resources have been utilized. This phase of
the exploration would aid in furthering our understanding of moderate temperature resources and
resources located in similar tectonic environments. 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.
Total funds needed for this project is $3,485,000. 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 uncertainty of the
Renewable Energy Fund Round 6
Grant Application
AEA13-006 Grant Application Page 7 of 32 7/3//2012
nature of the resource, it is very difficult to acquire financing for this phase of an exploratory project.
However, if the project is successful, the experience could be used to leverage funding not only for follow-
on stages of this project, but also for others in Southeast Alaska.
A total development cost of the resource at Tenakee Inlet has yet to be estimated. We are currently
developing an estimated cost of the resource. However, following the methodology of Hattenburg Dilley
& Linnell’s 2008 Geothermal Cost Matrix for AEA, and the information obtained during the
reconnaissance study, total costs through construction, not including transmission, are estimated at
$27,000,000. These total costs assume 2 wells to less than 5000 feet; a 5 MW binary power plant; and
associated infrastructure. The transmission line costs would be dependent on routing and possible
construction of roads and interties planned between the communities.
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. $3,485,000
2.7.2 Cash match to be provided $0
2.7.3 In-kind match to be provided $0
2.7.4 Other grant applications not yet approved $0
2.7.5 Total Grant Costs (sum of 2.7.1 through 2.7.3) $3,485,000
Project Costs & Benefits
(Summary of total project costs including work to date and future cost estimates to get to a fully
operational project)
2.7.6 Total Project Cost (Summary from Cost Worksheet
including estimates through construction)
$27M
2.7.7 Estimated Direct Financial Benefit (Savings) $ fuel costs dependent
upon assumed increase –
first year: $1.3M
2.7.8 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 your application
(Section 5.)
$1.44 M / year carbon
credit @$33/MWhr for 5
MW plant; greenhouse
revenue @ $150,000 to
$200,000 / year crop
dependent.
Renewable Energy Fund Round 6
Grant Application
AEA13-006 Grant Application Page 8 of 32 7/3//2012
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). 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 will continue this throughout the phase of the project.
IPEC’s Tenakee Inlet Project Management Structure:
As part of the team, will be Geothermal Resource Group (GRG) which will be in charge of the drilling
operations. They have over 15 years of experience in geothermal drilling in many parts of the world
including Alaska. GRG provides engineering design of geothermal weels, onsite management, and
resource qualification. Bill Rickard owner of GRG has over 30 years experience in the gothermal
industry.
Renewable Energy Fund Round 6
Grant Application
AEA13-006 Grant Application Page 9 of 32 7/3//2012
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.
Milestones Tasks
Start
Date
End
Date
1. Project Scoping Team meetings, contractor solicitation 8/13 12/15
2. Detail Resource Assessment Drill first slim hole 6/14 7/14
Drill second slim hole 7/14 9/14
3. Identification of land &
regulatory issues
Discuss with Forest Service & Sealaska
Identify Regulatory issues, site control
requirements 8/13 8/15
4. Permitting & EA Permit drilling 8/13 6/14
Site specific environmental analysis 6/14 12/14
5. Energy & Market Analysis Fuel displacement, revenue from energy
sales, tax credits, other incentives 9/14 12/14
Preliminary energy purchase/sale
agreements, financing issues 10/14 2/15
6.Assessment of Alternatives Alternatives identify, assessed 9/14 12/14
7. Conceptual design & cost
estimate
35 % conceptual design – civil layout
9/14 3/15
35% conceptual design – electric,
transmission line 6/14 12/14
35% conceptual design – geothermal, wells,
power plant, pad sites, pipelines 6/14 3/15
Conceptual design and cost estimates 1/15 6/15
8. Economic & Financial Analysis Economic & Financial analysis 1/15 6/15
9. Conceptual Business &
Operations Plan
Business & operation plans with IPEC’s
structure 1/15 6/15
10. Final Report Draft Report 1/15 9/15
Final Report 9/15 12/15
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, contractors, and
suppliers as an attachment to your application.
Lorie Dilley of HDL has extensive experience with geothermal reconnaissance projects, in Alaska and
elsewhere. HDL geologists will work with GRG during the drilling phase, and will provide synthesis and
analysis of the resource data. 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 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. Lorie has ties to both University of Alaska Fairbanks, Alaska
Renewable Energy Fund Round 6
Grant Application
AEA13-006 Grant Application Page 10 of 32 7/3//2012
Center for Energy and Power, Energy and Geoscience Institute at 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. Firms specializing in market and economic analyses will be
subcontracted for these tasks.
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. 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 shown with our current reconnaissance study we try to maintain
communication with all team members as specific events occur and try to maintain the schedule.
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, due to surface expression and geothermometry of the springs, very little is known about the
fundamental characteristics of this resource including temperatures and perm abilities at depth. This is
the main reason we are asking the Alaska Renewable Energy Fund to completely fund this phase of the
project.
The known surface expression of the resource, and thus the targeted area of exploration, is located on
National Forest Service lands. 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 give us time to deal with access, permitting, and environmental issues.
Field work in this remote and rugged area will be challenging. We have shown through our
reconnaissance study that we can deliver the anticipated work on schedule and within budget. 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.
• 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
Renewable Energy Fund Round 6
Grant Application
AEA13-006 Grant Application Page 11 of 32 7/3//2012
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 energy resource 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 is probably over optimistic; however it suggests a shallower resource than a deep
resource.
Using a calculation from a DOE paper by Hanse from 2005, each well at this temperature may produce over a
megawatt of electricity. The exploratory wells in this phase of the project are planned to confirm the existence,
depth, temperature and flow rate of geothermal fluids, which is necessary to better constrain the size of the
resource. An estimate for the potential developable size of this resource is from 3 to 6 MW.
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
Renewable Energy Fund Round 6
Grant Application
AEA13-006 Grant Application Page 12 of 32 7/3//2012
Springs. Additional 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 and are relatively stable. As opposed to other energy sources,
geothermal has the potential for additional industries to flourish as a direct result of the development of the
geothermal resource 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: 2 at 1,000 kW
and 2 at 455 kW. Overall efficiency is 14.25 kWh/gallon of fuel. Pelican’s power is provided by Pelican Utility
Company, and consists of 2,660 kW capacity combined from hydro and diesel generation. The City of
Tenakee Springs provides electricity for that community from a 226 kW capacity diesel generation system.
More information on the existing energy systems would be gathered as part of this reconnaissance project.
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, Pelican and Tenakee Springs, and
hydro power generation at Pelican. Existing systems also rely on fossil fuels for heating, transportation, and
the importation of food. 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 to generate power in the area. Diesel fuel use would be less, by an amount to be
determined by the size of the resource - which will be investigated in this phase of the project.
4.2.3 Existing Energy Market
Discuss existing energy use and its market. Discuss impacts your project may have on energy
customers.
It is anticipated that geothermal power from this project would supply the electricity needs for the communities
of Hoonah, Pelican and Tenakee Springs. 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
oppose 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.
This question will be more fully answered by the analysis to be conducted for this project.
Renewable Energy Fund Round 6
Grant Application
AEA13-006 Grant Application Page 13 of 32 7/3//2012
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,
which at this point is speculative without
subsurface information. Low to moderately
heated geothermal fluid and a secondary
(hence, "binary") fluid with a much lower
boiling point that 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, for example, wind or solar, its
capacity factor can be quite large—up to 96% has been
demonstrated. The global average was 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 proven and known
technology.
The transmission line from the resource to Hoonah and
Pelican would be the biggest obstacle to providing power
to the region. The figure at left, developed during our
reconnaissance phase, indicates the routes that we are
currently researching. The transmission line would have
Renewable Energy Fund Round 6
Grant Application
AEA13-006 Grant Application Page 14 of 32 7/3//2012
to be approximately 20 miles long and would either be through mountain passes and underwater cable at the
mouth of the inlet or follow the stream and come out by the mouth of the inlet. Near the portage shown on the
eastern side of the figure, there are a series of forest service roads that could be improved all the way to
Hoonah. Approximately 3 to 6 miles of new access road would have to be constructed as shown in the figure.
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.
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 shallower holes with our
previous reconnaissance funds with the Forest Service and they provided timelines and the activities that would
be necessary before drilling were to take place.
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. This would
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.
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.
A Right-of-Way/Land Use Permit will be required from ADNR, Division of Mining, Land and Water, authorizing
Renewable Energy Fund Round 6
Grant Application
AEA13-006 Grant Application Page 15 of 32 7/3//2012
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 project.
United States Army Corps of Engineers
Renewable Energy Fund Round 6
Grant Application
AEA13-006 Grant Application Page 16 of 32 7/3//2012
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.
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)
• Sperm whale (Endangered)
Renewable Energy Fund Round 6
Grant Application
AEA13-006 Grant Application Page 17 of 32 7/3//2012
• 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
Renewable Energy Fund Round 6
Grant Application
AEA13-006 Grant Application Page 18 of 32 7/3//2012
their cost data. For example: Applicants records or analysis, industry standards, consultant or
manufacturer’s estimates.
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
This project is estimated to cost approximately $27,000,000 through construction, based on our preliminary
evaluation (using the same methodology used by HDL Engineering to construct the Geothermal Cost Matrix for
AEA, 2009). 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). In the case of Tenakee it would be the higher value due to
the remoteness of the resource. For a 5 MW plant the cost according to these standards would be about
$22.5M, which is in accordance with our previous estimate. Much of the costs will depend upon access and
transmission line costs. 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.
Total costs for this reconnaissance study is $3,485,000. We are requesting grant funding for the full amount.
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.
Capital and development costs of the resource will be further investigated as part of the scope of this phase of
the project. We are at the beginning of the preliminary cost analysis during the reconnaissance phase.
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, due to the economy of scale benefiting Mt. Spurr (assumed to be a much larger plant). Both plants
are relatively remote. Tenakee is in a less geologically hazardous area than Mt. Spurr and IPEC is use to
handling remote locations which may lower its relative operations costs. Current usage is 4,860,000 kWh and
using $0.06/kWh is approximately $292,000 as compared to current O&M costs of $400,000.
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
Renewable Energy Fund Round 6
Grant Application
AEA13-006 Grant Application Page 19 of 32 7/3//2012
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.
• 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.
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.
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
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 (2-1000KW and 2-455KW)
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
iii. Peak Load 800 KW
Renewable Energy Fund Round 6
Grant Application
AEA13-006 Grant Application Page 20 of 32 7/3//2012
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]
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 [cords, green tons, dry tons] None
iv. Other None
Project Cost
a) Total capital cost of new system $27,000,000 estimated depend upon transmission
b) Development cost Included above
c) Annual O&M cost of new system Assume $0.06 kWh (based on current usage
$292,000)
d) Annual fuel cost -0-
Project Benefits
a) Amount of fuel displaced for
i. Electricity 331,184 + gallons
ii. Heat
iii. Transportation
Renewable Energy Fund Round 6
Grant Application
AEA13-006 Grant Application Page 21 of 32 7/3//2012
b) Current price of displaced fuel $4.12 per gallon : $1,365,000 total
c) Other economic benefits Greenhouse - $150,000 to $200,000 /year depending upon
vegetables and production.
d) Alaska public benefits 10 to 20 full time jobs @ $50,000 / year = $500,000 (for 10
jobs), Carbon Credit at $33/MWh generates $1,445,400/yr
Power Purchase/Sales Price
a) Price for power purchase/sale
Project Analysis
a) Basic Economic Analysis
Project benefit/cost ratio 2.17
Payback (years) 18
See simplified cost benefit analysis: Assumes payment with 3% loan
Renewable Energy Fund Round 6
Grant Application
AEA13-006 Grant Application Page 22 of 32 7/3//2012
Renewable Energy Fund Round 6
Grant Application
AEA13-006 Grant Application Page 23 of 32 7/3//2012
4.4.5 Proposed Biomass System Information
Please address the following items, if know. (For Biomass Projects Only)
• What woody biomass technology will be installed (cord wood, pellets, chips, briquettes,
pucks).
• Efficiency of the biomass technology.
• Thermal or electric application.
• Boiler efficiency.
• Displaced fuel type and amount.
• Estimated tons of wood pellets or chips (specify) to be used per year, and average moisture
percentage.
• Estimated cords of wood to be used per year, specify whether dry or green and the moisture
percentage.
Renewable Energy Fund Round 6
Grant Application
AEA13-006 Grant Application Page 24 of 32 7/3//2012
• Ownership/Accessibility. Who owns the land and are their limitations and restrictions to
accessing the biomass resource?
• Inventory data. How much biomass is available on an annual basis and what types (species)
are there, if known?
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,
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
The simplified cost/benefit analysis in the worksheet is based on the $27 million capital costs spread out
across 18 years plus an annual O&M cost of $0.06/ kWh for a 5 MW plant. This analysis was based on
Hoonah only. A carbon offset based on $33/MWh was considered as a benefit. The fuel price was
projected to have a 5% increase each year, which given the past few years is low. In the past IPEC has
experienced anywhere from 5% to 50% increase in fuel prices. The first year offset in diesel would be
$1.3M. 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.
Geothermal development would also provide local jobs, both directly and indirectly (see section 2.5).
Based on the Geothermal Energy Association publication referenced in section 2.5, a 5 MW plant could
Renewable Energy Fund Round 6
Grant Application
AEA13-006 Grant Application Page 25 of 32 7/3//2012
provide and stimulate 10 to 21 full time local jobs, as well as 80 person-years of construction and
manufacturing work during construction. Geothermal provides more jobs than conventional power plants,
and these jobs are quality and long term. People with a variety of job skills from pipe fitters to geologists
to spa developers, with many in between, find long term local income potential from geothermal
development.
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 field
crews 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.
Our current grant was funded at $599,200 of which $208,766 remains at the end of August. In September
there was an additional field effort. Economic analysis and preliminary design remain to be conducted. A
final report will be prepared with recommendations by the end of the grant in June 2013.
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
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
Renewable Energy Fund Round 6
Grant Application
AEA13-006 Grant Application Page 26 of 32 7/3//2012
and plug-in hybrid cars are being released in general production. The importance of local food security is
becoming understood. 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 SUPORT
Discuss what local support or possible opposition there may be regarding your project. Include
letters of support from the community that would benefit from this project.
So far in our plan to investigate the development of geothermal at Tenakee Inlet we have encountered
nothing but support for this clean, reliable energy source.
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.
SECTION 9 – GRANT BUDGET
Tell us how much you want 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 sources and your financial commitment to the
project.
We have estimated that this phase of the project will require $3,485,000. The majority of the expenses
are in the resource evaluation task. The drilling will require approximately $3,110,000 for two slim holes.
It is anticipated that the holes will be 4,000 feet deep and take about 60 to 75 days for completion. We
have set a go/no go decision at the end of drilling the first hole. If the first hole comes up “dry” then we
will have to re-evaluate the project and the need for the second hole. Even if the hole is “dry” it may
provide enough information for the second hole to be successful. Conversely, the first hole may provide
all of the needed information and the second hole will not be needed. This is the risk of exploration. After
the first hole is complete, we will discuss the findings with team members including AEA and decide if the
second hole is warranted. 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.
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.
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.
Renewable Energy Fund Round 6
Grant Application
AEA13-006 Grant Application Page 27 of 32 7/3//2012
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 12/15 $ 9,200 $ $
2. Detailed Resource
Assessment 9/14 $ 3,110,000 $ $
3. Land & Regulatory Issues 8/15 $ 35,500 $ $
4. Permitting & EA 12/14 $ 30,000 $ $
5. Energy & Market Analysis 2/15 $ 35,500 $ $
6. Assessment of Alternatives 12/14 $ 12,000 $ $
7. Conceptual Design & Cost
Estimate 6/15 $ 105,000 $ $
8. Economic & Financial
Analysis 6/15 $ 51,500 $ $
9. Business & Operations Plan 9/15 $ 35,500 $ $
10. Final Report 12/15 $ 59,800 $ $
$ $ $
TOTALS $ 3,485,000 $ $
Budget Categories:
Direct Labor & Benefits $ 47,000 $ $
Travel & Per Diem $ $ $
Equipment $ $ $
Materials & Supplies $ $ $
Contractual Services $ 3,438,000 $ $
Construction Services $ $ $
Other $ $ $
TOTALS $ 3,485,000 $ $
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. )
$ $ $
$ $ $
$ $ $
$ $ $
$ $ $
$ $ $
$ $ $
$ $ $
$ $ $
$ $ $
TOTALS $ $ $
Renewable Energy Fund Round 6
Grant Application
AEA13-006 Grant Application Page 28 of 32 7/3//2012
Budget Categories:
Direct Labor & Benefits $ $ $
Travel & Per Diem $ $ $
Equipment $ $ $
Materials & Supplies $ $ $
Contractual Services $ $ $
Construction Services $ $ $
Other $ $ $
TOTALS $ $ $
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. )
$ $ $
$ $ $
$ $ $
$ $ $
$ $ $
$ $ $
$ $ $
$ $ $
$ $ $
$ $ $
TOTALS $ $ $
Budget Categories:
Direct Labor & Benefits $ $ $
Travel & Per Diem $ $ $
Equipment $ $ $
Materials & Supplies $ $ $
Contractual Services $ $ $
Construction Services $ $ $
Other $ $ $
TOTALS $ $ $
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. )
$ $ $
$ $ $
$ $ $
$ $ $
$ $ $
$ $ $
$ $ $
$ $ $
$ $ $
$ $ $
Renewable Energy Fund Round 6
Grant Application
AEA13-006 Grant Application Page 29 of 32 7/3//2012
TOTALS $ $ $
Budget Categories:
Direct Labor & Benefits $ $ $
Travel & Per Diem $ $ $
Equipment $ $ $
Materials & Supplies $ $ $
Contractual Services $ $ $
Construction Services $ $ $
Other $ $ $
TOTALS $ $ $
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. )
$ $ $
$ $ $
$ $ $
$ $ $
$ $ $
$ $ $
$ $ $
$ $ $
$ $ $
TOTALS $ $ $
Budget Categories:
Direct Labor & Benefits $ $ $
Travel & Per Diem $ $ $
Equipment $ $ $
Materials & Supplies $ $ $
Contractual Services $ $ $
Construction Services $ $ $
Other $ $ $
TOTALS $ $ $
Project Milestones that should be addressed in Budget Proposal
Reconnaissance Feasibility Design and
Permitting Construction
1. Project scoping and
contractor solicitation
2. Resource
identification and
analysis
3. Land use, permitting,
and environmental
analysis
4. Preliminary design
analysis and cost
5. Cost of energy and
market analysis
6. Simple economic
analysis
7. Final report and
1. Project scoping
and contractor
solicitation
2. Detailed energy
resource analysis
3. Identification of
land and regulatory
issues
4. Permitting and
environmental
analysis
5. Detailed analysis of
existing and future
energy costs and
markets
1. Project scoping
and contractor
solicitation for
planning and
design
2. Permit
applications (as
needed)
3. Final
environmental
assessment and
mitigation plans
(as needed)
4. Resolution of
land use, right of
way issues
1. Confirmation that all
design and feasibility
requirements are
complete
2. Completion of bid
documents
3. Contractor/vendor
selection and award
4. Construction Phases
Each project will have
unique construction
phases, limitations,
and schedule
constraints which
should be identified
Renewable Energy Fund Round 6
Grant Application
AEA13-006 Grant Application Page 30 of 32 7/3//2012
recommendations
6. Assessment of
alternatives
7. Conceptual design
analysis and cost
estimate
8. Detailed economic
and financial
analysis
9, Conceptual
business and
operations plans
10. Final report and
recommendations
5. Permit approvals
6. Final system
design
7. Engineer’s cost
estimate
8. Updated
economic and
financial analysis
9. Negotiated
power sales
agreements with
approved rates
10. Final business
and operational
plan
by the grantee
5. Integration and
testing
6. Decommissioning old
systems
7. Final Acceptance,
Commissioning and
Start-up
8. Operations Reporting
Renewable Energy Fund Round 6
Grant Application
AEA13-006 Grant Application Page 31 of 32 7/3//2012
SECTION 10 – AUTHORIZED SIGNERS FORM
Renewable Energy Fund Round 6
Grant Application
AEA13-006 Grant Application Page 32 of 32 7/3//2012
SECTION 11 – ADDITIONAL DOCUMENTATION AND CERTIFICATION
SUBMIT THE FOLLOWING DOCUMENTS WITH YOUR APPLICATION:
A. Contact information, resumes of Applicant’s Project Manager, key staff, partners,
consultants, and suppliers per application form Section 3.1 and 3.4. Applicants
are asked to separate resumes submitted with applications, if the individuals do
not want their resumes posted.
B. Letters demonstrating local support per application form Section 8.
C. An electronic version of the entire application on CD per RFA Section 1.7.
D. Governing Body Resolution or other formal action taken by the applicant’s
governing body or management per RFA Section 1.4 that:
- Commits the organization to provide the matching resources for project at the
match amounts indicated in the application.
- Authorizes the individual who signs the application has the authority to
commit the organization to the obligations under the grant.
- Provides as point of contact to represent the applicant for purposes of this
application.
- Certifies the applicant is in compliance with applicable federal, state, and local,
laws including existing credit and federal tax obligations.
E. CERTIFICATION
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.
12
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