HomeMy WebLinkAboutSeward Peninsula Geothermal App
Alaska Village Electric Cooperative
Application for Renewable Energy Fund Grant
Alaska Energy Authority
Seward Peninsula, Alaska
Geothermal Assessment Program
November 11, 2008
Table of Contents
Application
1
Resumes
2
Cost Worksheet 3
Budget Form
4
Authority
5
Supplemental
Materials 6
Tab 1
Grant Application
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Grant Application
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SECTION 1 – APPLICANT INFORMATION
Name (Name of utility, IPP, or government entity submitting proposal)
Alaska Village Electric Cooperative (AVEC)
Type of Entity:
Utility
Mailing Address
4831 Eagle Street, Anchorage, AK
99503
Physical Address
Same
Telephone
907-565-5358
Fax
907-562-4086
Email
BPetrie@avec.org
1.1 APPLICANT POINT OF CONTACT
Name
Brent Petrie
Title
Manager, Community Development Key Accounts
Mailing Address
4831 Eagle Street, Anchorage, AK 99503
Telephone
907-565-
5358
Fax
907-562-4086
Email
BPetrie@avec.org
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, 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 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.)
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SECTION 2 – PROJECT SUMMARY
Provide a brief 1-2 page overview of your project.
2.1 PROJECT TYPE
Describe the type of project you are proposing, (Reconnaissance; Resource Assessment/ Feasibility
Analysis/Conceptual Design; Final Design and Permitting; and/or Construction) as well as the kind of renewable
energy you intend to use. Refer to Section 1.5 of RFA.
The Alaska Village Electric Cooperative (AVEC) is proposing a Resource Assessment/Feasibility
Analysis/Conceptual Design project for a regional evaluation of potential geothermal sites and
associated transmission lines on the Seward Peninsula. The project is entitled the Seward Peninsula
Geothermal Assessment Program (SGAP)
2.2 PROJECT DESCRIPTION
Provide a one paragraph description of your project. At a minimum include the project location, communities to be
served, and who will be involved in the grant project.
AVEC proposes a resource assessment/feasibility analysis/conceptual design project of geothermal sites
on the Seward Peninsula region, simultaneously involving the NANA/NW Arctic Borough Regions and the
Kawerak/Bering Straights Native Corporation Regions.
Goal: The SGAP goal is to ascertain the feasibility of geothermal power generation for regional
communities and develop conceptual design documents/reports for geothermal generation on the
Seward Peninsula. The SGAP strategic objectives are as follows:
SO 1: Identify potential geothermal sites in the Seward Peninsula Region.
SO 2: Undertake a geological, geochemistry, and geophysical assessment of targeted
sites for geothermal power generation potential.
SO3: Undertake a geothermal drilling program to promote regional geothermal
interests
SO4: Develop conceptual design and business plan for follow‐on phases of the
projects.
SO5: Conduct an optimization phase in the conceptual design wherein how to supply
power either from one centrally located geothermal plant or from many smaller
geothermal plants, to the communities involved can be evaluated. Included will
be evaluating the use of transmission lines for power versus supplying hot water
via a pipeline to one or several geothermal power plant(s).
The SGAP program will include, at a minimum, the following sites:
1. Kwiniuk HS (~ 8 miles from Elim) Lat: 64.7 Long: 162.467
2. Lava Creek HS (50 miles S of Deering, 70 miles SW of Buckland) Lat: 65.217, Long: 162.9
3. Granite Mountain HS (40 miles S of Buckland, 60 miles S of Deering) Lat: 65.367, Long: 161.25
4. Division HS (40 miles S of Kobuk‐Shungnak area) Lat: 66.367, Long: 156.767
The scope of work has the potential to benefit multiple communities, including Golovin, Elim, White
Mountain, Koyuk, Deering, Buckland, Shungnak and Kobuk.
The geothermal potential of localized regions in the Seward Peninsula region, Alaska, based on available
literature and limited data, is well summarized in the review report for the NANA Geothermal Assessment
Project (Kolker, 2008). Based on this report and knowledge of this area, six local regions containing
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known/potential hot springs have been identified as targets for further exploration (Figure 1).
Figure 1. Location of hot springs on the Seward Peninsula, including Kwiniuk Hot Springs, Lava Creek Hot
Springs, Granite Mountain Hot Springs, Serpentine Hot Springs, South Hot Springs, Hawk Hot
Springs, Division Hot Springs, and Reed River Hot Springs. The City of Nome, Alaska, is marked
with a yellow square for reference.
In addition, Pilgrim Hot Springs, located 70km north/northeast of the city of Nome, Alaska, is the subject
of a companion investigation which, if funded, is scheduled to occur in the same timeframe. The Pilgrim
project proposes to perform an updated resource assessment to support the potential development of
the geothermal resource at Pilgrim for both power generation and direct use (space heating), including a
Controlled‐Source Audio‐Frequency Magneto‐Telluric (CSAMT) survey and aerial thermal infrared
imaging. If both the Pilgrim project and this greater regional assessment are both funded, equipment
sharing being the two projects will result in a cost savings of $278,000. In addition, the team is aware
of other complementary geothermal assessment proposals being submitted by the Aleutians East
Borough and the City of Akutan to Alaska Energy Authority. Efforts will be made to collaborate with these
entities.
Once the most promising sites have been established, the University will conduct further ground‐based
geophysical assessments in coordination with the geologic surveys to be conducted by Hattenburg, Dilley,
& Linnell. The study will also include a drilling program that would collaborate with the USGS/BLM Drill
rig and associated state drilling program, if in operation.
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Finally, AVEC is proposing conceptual designs and transmission routing studies for the proposed sites. As
a whole, this study will serve as an essential decision support tool for making policy decisions, planning
strategies for further exploration and development.
The proposed effort will involve the Tribal and City Councils of the above communities, Kawerak, village
corporations, and industrial interests in the area. Key partners in the project will include Bering Straights
Native Corporation, Kawerak, NANA Pacific/NANA Regional Corporation, the UAF/Alaska Center for
Energy and Power, Hattenburg Dilley & Linnell (HDL), and additional engineering/scientific consultants.
2.3 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. Include a project cost summary that includes an estimated total cost through
construction.
The total project cost for the Resource Assessment/Feasibility Analysis/Conceptual Design phase is
$4,446,950 of which $4,301,950 is requested in grant funds. The remaining $145,000 will be matched in‐
kind by AVEC, NANA Regional Corporation, and Kawerak. The total cost of pre‐construction phase of the
project is estimated to be $4.4‐4.7 million, of which this scope of work constitutes the Resource
Assessment/Feasibility Analysis/Conceptual Design portion. The total cost of construction will be
dependent upon the concept design and the optimization phase proposed in this project, but will likely be
in the $6‐7 million range.
2.4 PROJECT BENEFIT
Briefly discuss the financial benefits that will result from this project, including an estimate of economic benefits(such
as reduced fuel costs) and a description of other benefits to the Alaskan public.
The potential to displace diesel fuel used for village power generation and heating in the Seward
Peninsula has positive potential for the Seward Peninsula region. Currently, the targeted communities
import approximately 490,000 gallons of diesel fuel for power generation. The communities import a
significant amount for heating purposes as well. $3.5‐ $5 million.
The total annual cost for imported diesel fuel for heating and power generation for all communities is
estimated to be $3.5‐ $5 million (assuming $4 gallon) in 2008. Through a combined heat and power
system and the use of the available geothermal resources, there is potential for significant cost savings
over the long‐term for a geothermal power and heating system.
Other Benefits to the Alaskan Public:
The anticipated benefits of this program are many; primary among these are meeting the region’s
strategy and vision and reducing the negative impact of the cost of energy on the Seward Peninsula by
providing a renewable energy alternative. This project could help stabilize energy costs and provide long‐
term socio‐economic benefits to village households. Locally produced, affordable energy will empower
community residents and could help avert rural to urban migration. This project would have many
environmental benefits resulting from a reduction of hydrocarbon use. These benefits include:
• Reduced potential for fuel spills or contamination during transport, storage, or use (thus
protecting vital water and subsistence food sources)
• Improved air quality
• Decreased contribution to global climate change from fossil fuel use
• Decreased coastal erosion due to climate change
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2.5 PROJECT COST AND BENEFIT SUMARY
Include a summary of your project’s total costs and benefits below.
2.5.1 Total Project Cost
(Including estimates through construction.)
Development Costs: $4.6 million
Construction: $6‐7 million
Transmission Cost: $3‐$40 million
Depending on the scope of the
project.
2.5.2 Grant Funds Requested in this application. $4,301,950
2.5.3 Other Funds to be provided (Project match) $145,000
2.5.4 Total Grant Costs (sum of 2.5.2 and 2.5.3) $4,446,950
2.5.5 Estimated Benefit (Savings) $ 100 million (est) over a 30 year
lifecycle ($1.9 million annual
100% fuel displacement
in year 1, and 3.5% annual inflation )
2.5.6 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.)
$38,000,000 1 in avoided PCE costs.
avoided fuel costs, which is
$5,355,000 in avoided fuel spill costs
from 2008‐2030.
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.
Project Manager
Tell us who will be managing the project for the Grantee and include 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.
AVEC, the lead applicant, will provide contract/ project management and oversight. AVEC is the electric
utility serving the several of the communities in the target area.
NANA Pacific will serve as the prime contractor and will be responsible for coordination of all activities,
developing and managing sub‐contracts, providing technical assistance, and all project management.
Identified sub‐contractors at this time include HDL and the University of Alaska Fairbanks Center for
Energy and Power.
A subsidiary of NANA Regional Corporation, NANA Pacific is a project management, engineering, and
consulting company, with a specialty in energy. NANA Pacific provides energy related services, including
energy planning, bulk fuel conceptual design, power distribution/design, wind resource assessments,
financial and economic modeling, diesel power generation/distribution, rural infrastructure development,
and facilitation. NANA Pacific’s project/program management projects are handled by professionals with
industry experience in construction, engineering, consulting, and development. NANA Pacific was the
prime consultant for the NANA Region Geothermal Assessment Program funded by the Department of
1 The public benefit is calculated as the avoided cost of the “Required PCE Payment” as found in the FY 2007
Power Cost Equalization Cost report for Elim, White Mountain, Koyuk, Golovin, and Buckland. For FY2007, the
State of Alaska paid a combined $820,000 to the utilities responsible for those communities. The $38,000,000 was
calculated assuming an annual inflation rate of 3.5% over a 30 year life of the project.
IDTask NameDurationStartFinish1Start-up14 daysWed 7/1/09Mon 7/20/092Additional Data Analysis21 daysWed 7/15/09Wed 8/12/093Geological and Geochemical Reconnaissance128 daysWed 7/15/09Fri 1/8/104Phase 1: Literature Compilation 30 daysWed 7/15/09Tue 8/25/095Phase 2: Geochemical Survey. 45 daysMon 8/3/09Fri 10/2/096Phase 3: Shallow Temperature Probe Survey45 daysMon 8/3/09Fri 10/2/097Phase 4: Data Analysis, GIS Project & Reporting84 daysTue 9/15/09Fri 1/8/108Geophysical Assessment Studies. Geophysical Assessment Compon230 daysTue 9/1/09Mon 7/19/109Land Surface Composition Mapping230 daysTue 9/1/09Mon 7/19/1010Thermal Infrared Data Acquisition and Analysis230 daysTue 9/1/09Mon 7/19/1011Limited Field Validation of Thermal Infrared Imaging230 daysTue 9/1/09Mon 7/19/1012Controlled Source AMT Survey of Two Sites230 daysTue 9/1/09Mon 7/19/1013Integrated Analysis in a GIS Environment230 daysTue 9/1/09Mon 7/19/1014Optimization Modeling60 daysMon 3/15/10Fri 6/4/1015Environmental, Antiquities Analysis (EAA) & Permit Review/Submittal120 daysWed 5/12/10Tue 10/26/1016Geothermal Exploration/Drilling Program120 daysFri 10/1/10Thu 3/17/1117Conceptual Engineering Design of Geothermal Plants & Transmission Lin90 daysMon 1/3/11Fri 5/6/1118Business and Operations Plan45 daysTue 2/1/11Mon 4/4/1119Transition Planning to Final Design90 daysMon 1/10/11Fri 5/13/1120Project Close-Out30 daysMon 5/2/11Fri 6/10/114th Quar1st Quar2nd Qua3rd Quar4th Quar1st Quar2nd Qua3rd Quar4th Quar1st Quar2nd QuaTaskSplitProgressMilestoneSummaryProject SummaryExternal TasksExternal MilestoneDeadlinePage 1Project: Seward Peninsula GeothermaDate: Fri 11/7/08
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brackets following the description and is included in the Project Schedule described in part 3.2 above. Integral to
this process is a series of decisions at each milestone/task to decide upon next steps.
1. Project Start‐Up and Additional Data Analysis. (Q1‐ FY 2010) Following a Notice to Proceed (NTP) from AVEC,
the technical team will meet to establish project guidelines, assign responsibilities, develop an appropriate
communication plan, select sub‐contractors, and identify information gaps. The group will confirm which site
or combination of sites are most favorable and conduct any required additional inspection, evaluation, and
analysis for the pre‐construction activities.
2. Site Selection Prioritization Criteria Development‐ Process Development. (Q1‐ FY 2010) We have found that
there are many strong opinions about exploration and development of geothermal energy potential between
the many stakeholders involved in the proposed process. At the beginning stages of this process, it will be
important to develop an appropriate and transparent decision making process that prioritizes the site selection
and execution of the proposed scope of work. NANA Pacific will organize a scoping meeting with project
stakeholders to develop the site selection criteria and the methodology to prioritize the proposed scope of
work. The output of this step will be an appropriate decision matrix that can systematically prioritize selection
of the communities.
3. Community Outreach and Village Presentations. (Q1‐ FY 2010) An ongoing process of community outreach
will be initiated at the beginning of the project, including community meetings to seek public input for the
geothermal feasibility and exploration studies. Toward the end of the project, the NANA Pacific Project
Manager or other team representative will travel to targeted communities to present the Conceptual Design
Report and business plan to the villages.
4. Geological and Geochemical Reconnaissance. (Q1‐Q2 FY2010) HDL Engineering will be responsible for the
geological and geochemical component of this project and will entail the following steps. The geological and
geochemical reconnaissance of the project will be conducted in four phases: 1) Literature compilation; 2)
Geochemical Survey of soil, water and rock; 3) Shallow Temperature Probes; and 4) Data Analysis, GIS Project &
Reporting. The first phase will be to compile existing information on geothermal potential in the area into a
preliminary geological report and GIS project. Phase 2 will include collection of soil, water, and rock samples
via a systematic field program that will include HDL geologist and local village(s) support. Laboratory testing
will be conducted by qualified laboratories in Anchorage and by Energy and Geoscience Institute at the
University of Utah. Phase 3 consists of installing shallow temperature probes to identify and map hot spots.
The final phase includes the reporting of the results, interpretation of the results, and a GIS project that will be
used as a basis for the rest of the overall project. From the foregoing work, we hope to identify specific areas
of potential for geothermal development and develop a model for each hot springs area studied. This model
will be used to target drilling locations and estimate the geothermal potential of each hot springs. It should be
understood that confirmation of any geothermal resource is not achieved until it has been drilled into,
geothermal fluids are recovered, and flow rates of individual wells can be ascertained.
• Task 1: Literature Compilation We will gather existing geological, geochemical, and hydrological literature
on the area. The geology literature will include data from the USGS and DGGS. This data will serve as the
basis for understanding the nature of the geology and structural history of the area. In addition, available
magnetic data will be obtained and reviewed for anomalies that may indicate structures conducive to
geothermal areas. We will also obtain earthquake data on the area in order to infer locations of potential
faults or other structural features. We will develop a summary of the existing literature including
geological maps and cross‐sections of the area. The information collected in this phase will be organized
into a preliminary geological report in letter form and GIS project, and this will help determine regions of
concentration for the next two phases. Most of the information can be compiled into a GIS project in
which a series of maps with different parameters can be layered together to assist in understanding each
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system and developing a model of each system and the region.
• Task 2: Geochemical Survey. Areas of exploration will be identified during Phase 1. The areas will be near
the existing hot springs of interest and will by practical necessity be limited to 3 to 5 square miles near
each hot springs. Field geologists from HDL will travel to the region and be assisted by local help to
complete the field sampling. Soils, waters and rocks from the areas of interest will be sampled in the field.
A grid of locations will be constructed in the areas of known geothermal activity, and soil, waters and
rocks will be sampled along the nodes of this regular grid. Soils will be sampled using a portable auger
from one to three feet below the surface to avoid organic soils as much as possible, which can interfere
with interpretation of the data. The water and soil samples collected will be submitted for chemical
analysis. Selected water samples may also be submitted for isotope analysis. The isotope analysis can
indicate the origins of the water encountered as either meteoric (rain water) or geothermal. Elements,
such as arsenic and mercury, in soil and water can trace areas of geothermal activity. Silica and other
elements in water can give an indication of possible reservoir temperature. We have assumed a total of
150 to 200 water and soil samples per site or a total of about 1,200 samples. Additional water samples
will also be collected from local wells, springs, streams and other surface water in the region outside of
the soil and water survey areas. Outcrops in the study areas will also be studied. Rock samples will be
systematically collected from these outcrops for alteration and fluid inclusion analyses. These analyses
will indicate temperatures that the rocks have been exposed to and help to identify the extent of the
geothermal areas. This analysis will be undertaken with the assistance of the Energy and Geoscience
Institute at the University of Utah
• Task 3: Shallow Temperature Probe Survey. In this phase HDL will conduct a shallow temperature probe
survey. Two probes will be left in the ground for the entire survey to calibrate seasonal temperature
variation; daily temperature variation should not be apparent at this depth. Although the exact regions
that will be surveyed is to be refined with the results found above, is it is likely that up to four areas of
known geothermal activity in the region will first be surveyed by a line along the long axis of the region,
with probes inserted approximately every 2000 to 4000 feet. If warmer areas are noted, these will be
explored by a denser arrangement of probes around the area. Final locations will depend on field
conditions and results and the location of the soil survey. We anticipate emplacing approximately 60
probes in the initial transects of the areas, with an additional 20 probes placed to investigate areas that
appear to be warmer than normal, for a total of about 80 probes placed at each area of study during this
investigation. This number assumes the ability to place and measure an average of 20 probes every day
by two separate field teams. This number assumes reasonable 4‐wheeler or snow machine driving
conditions. The actual number of probes that can be placed in a day may vary greatly from this number
and will depend on site accessibility and other factors.
• Task 3: Data Analysis, GIS Project & Reporting. Once the data is compiled and reviewed, we will develop
a geological and feasibility report that will be used in subsequent stages. Much of the information can be
compiled into a GIS project in which a series of maps with different parameters can be layered together to
assist in identifying potential exploration areas. The maps may include chemical data, thermal imagery,
magnetic anomalies, temperature gradients, hydrological data, etc. By identifying on each layer the areas
favorable for geothermal reservoirs, and then by layering each map together, areas for future exploration
and/or confirmation can be identified. The report will include a description of the project, a summary of
the reviewed literature, an explanation of the geological, hydrological, and structural history of the area,
an explanation of the methods of data collection used, and a discussion of the results of the geochemical
and shallow temperature probe study, especially as it relates to potential areas for future exploration.
This will be supported by the data gathered and the GIS project.
5. Geophysics Component. (Q1‐Q4, FY 2010) Once the most promising sites have been established, UAF/ACEP
will conduct further ground‐based geophysical assessments in coordination with the geologic surveys to be
conducted by Hattenburg, Dilley, & Linnell. As a whole, this study will serve as an essential decision support
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tool for making policy decisions and planning strategies for further exploration and development. Specific
tasks to achieve this goal are outlined below.
• TASK 1: Land Surface Composition Mapping. Land surface composition serves as one of the principal
information layer to understand the general setting of the study area including, but not limited to,
surfacial geology, geomorphology, landuse practice, accessibility, proximity to existing infrastructures, and
geotechnical constraints for development. We will procure available optical and thermal infrared data
from several medium resolution Earth observing satellites, and from old airborne missions. This will
include data from:
• Thematic Mapper onboard Landsat 5 and Landsat 7 satellites, available for free from US Geological Survey;
• ASTER onboard Terra satellite, available to investigators Prakash, Dean and Dehn potentially at no cost (or
nominal cost), through personal contacts with the ASTER science team;
• AVNIR and PRISM onboard Japanese ALOS satellite. This data is acquired and distributed by the Alaska
Satellite Facility at UAF. The investigators are approved ALOS data users and may be able to request new
ALOS image acquisition over the study area at no additional cost to the project.
• Color Infrared photos from U2 plane acquired in the early 80s (Figure 2). This data is of sub meter
resolution and available at the Digital Data Center of Geophysical Institute, the host institution of the
investigators, and will be available for the project at minimal reproduction cost. This scanned image has no
geographic coordinates, and will be georeferenced by our team using either an IKONOS image, or alternate
best available satellite image.
• IKONOS imagery. IKONOS is a commercial remote sensing satellite that provides georectified data in four
spectral channels (including the infrared channel) at a 1 meter spatial resolution. We request purchase of
IKONOS imagery for some selected sites to serve as the ‘master image’ to which all other image data sets
will be georeferenced.
We will carry out visual and digital analysis of the multisensor data sets to generate thematic maps. Digital analysis
will include unsupervised and supervised image classification guided by field knowledge and tested by limited field
validation. The Landsat, ASTER and ALOS images will allow for regional scale mapping comfortably at 1:50,000, and
at best at 1:25,000 scale. Using airborne CIR image and the IKONOS image, for selected sites we will target to map
at 1:10,000 scale.
Figure 2.Color Infrared (CIR) image from late 70s showing two of the eight proposed test areas. Left: Kwiniuk Hot
Springs are (Roll 8, Line 73, frame 059) are located within the open circle area. Corresponding USGS
Solomon C‐2 quadrangle topographic map shows a trail along the Kwiniuk River. Right: Granite Mountain
area (Roll 3006, Line 66, frame 2595) shows mining operations, road access, and neighboring airstrip
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based on the coordinates provided. This area lies in the USGS Candle B‐5 quadrangle.
• TASK 2: Thermal Infrared Data Acquisition and Analysis. For geothermal resource exploration and
development, an analysis of the extent, nature and magnitude of the geothermal anomaly, and a
quantitative estimate of the heat flux beyond the natural radiative heat of the Earth and Sun is required.
We will acquire new airborne thermal infrared images over the selected study sites, at local
reconnaissance and detail survey scale, once during Summer 2009 and again during late Spring 2010. The
local reconnaissance scale survey will be carried out to provide thermal infrared images at approximately
4m spatial resolution and the detail survey will be carried out by flying a lower height of about 750m to
provide thermal infrared images at approximately 1m spatial resolution. Acquiring the data at two
different times will help to reduce uncertainties in analysis introduced due to seasonal effects. The
thermal infrared data will be acquired using a FLIR® Systems Automation Series ThermaCam A320
mounted on a Cesna Skywagon 185, flown by Tom George of Terra Terpret, Inc. Along with the thermal
images, a small optical camera will be mounted on the plane to acquire concurrent optical images that will
help to further characterize the terrain and help with thermal image interpretation. A similar setup used in
for a thermal survey over Chena Hot Springs, Alaska in 2004‐2005 gave excellent results (see Figure3
below). The airborne campaign will result in acquisition of hundreds of thermal infrared images, with each
image frame containing 320 x 240 pixels. The individual image frames will be georectified and mosaiced to
create a near seamless thermal mosaic of the study area. Again, the mosaic will be created for both the
local reconnaissance scale and the detail survey scale images. Pixel integrated temperatures over a broad
7.5‐13 m range (spectral range of the thermal instrument) will be calculated for each image pixel, after
correcting for atmospheric conditions (humidity and temperature) and range (distance to the target). A
similar mosaic will be created for the airborne optical images to facilitate direct comparison of thermal
data with the optical data. The image mosaics from summer will be compared with image mosaics from
late spring to account for seasonal affects in the data. Warm hot spring temperatures (thermally
anomalies) will be identified using statistical analysis and thresholding to distinguish from the background
pixels. For each thermally anomalous pixel the relative heat loss in watts will be calculated after correcting
for the background temperature, measuring only flux beyond the natural radiative heat of the Earth and
Sun. An error analysis will be carried out to account for errors introduced by the instrument, atmosphere,
aircraft orientation, and the general terrain.
• TASK 3. Limited Field Validation of Thermal Infrared Imaging. Field work is required to know first‐hand
the test sites; to collect ground control points for image rectification and potential future InSAR studies;
for ground based temperature data collections required for thermal calibration; for limited surfacial
mapping; and for ground validation of classified thematic maps generated from remote sensing data. Field
work, however limited, will be critical for a first order accuracy assessment of results. We plan to perform
field work at two selected sites that appear to have the greatest potential and best access, twice during
the one year life span of the project – once during Summer 2009 and a second time during late Spring
2010. Field data will be collected concurrent to the airborne data acquisition. Field data collection will
involve: (a) taking differential GPS measurements of specific targets to serve as ground control points for
georectifying airborne data. GPS measurements will also aid in any future InSAR studies (b) laying out new
calibrated ground control points, such as mounted space blankets (already available to the investigators,
and have been tested to give excellent results in previous studies) (c) field mapping of typical landcover
classes to assist in creating a training set for carrying out landcover classification of airborne and satellite
borne optical data (d) field based temperature and humidity measurements at selected locations and
times. We plan to install about 6 HOBO ™ probe thermistors per test site (for two test sites) to monitor
the ground temperature fluctuations over an annual cycle. This will help to calibrate airborne thermal data
and to account for seasonal variations in emperatures (e) field based thermal imagery collection using a
FLIR® Systems ThermaCam S40 (also available with the investigators).
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• TASK 4: Controlled Source AMT Survey of Two Sites. A ground‐based Controlled‐Source Audio‐Frequency
Magneto‐Telluric (CSAMT) will conducted at two sites selected for the greatest potential for future
development. These sites will be selected in coordination with other project participants. The purpose of
the CSAMT survey will be to image the subsurface in the chosen study area and identify permeable
features below the valley fill in the proximity of the hot springs. These data will be interpreted using 2‐
and 3‐dimensional inversion algorithms to image the subsurface and will be used to identify potential
drilling targets. A geothermal reservoir typically has a high level of porosity and permeability and exhibits
relatively high internal temperatures. These properties lower the electrical resistivity of the reservoir,
which is therefore detectable using electromagnetic geophysics methods. The primary purpose of the
CSAMT survey will be to pinpoint the upflow zone of the thermal fluids in conjunction with soil and
thermal probe surveys to be conducted by Hattenburg, Dilley, and Linnell. This will be accomplished using
a V8 Wireless Data Acquisition System SSEM from Phoenix Geophysics. The survey will require 3
individuals and 2 weeks field time at each site, plus data processing.
• TASK 5: Integrated Analysis in a GIS Environment. To understand geothermal processes and systems, no
one parameter can provide a complete picture. Integrated analysis in a GIS environment using, for
example a convergence of evidence approach or statistical approach, helps to identify the most promising
areas for further investigation. GIS serves as a powerful decision support tool. We do not claim to create
a full‐blown GIS database, or carry out detail GIS analysis. However, we will generate results from
individual tasks identified above in a geospatially consistent manner, so that they can be easily integrated
in a GIS environment, using an off the shelf commercial GIS software package such as ESRI’s ArcGIS
package.
6. Optimization Modeling. (Q3‐Q4, FY 2010) Upon completion of the geological and geophysical assessment
phase and assuming the geothermal potential is deemed feasible, the team will undertake a step that
optimizes transmission, power generation sites, infrastructure development, and alternative use options. The
technical team will assess the resource for direct use applications including space heating, power generation,
and greenhouse food production. The team will assess the technical and economic criteria for a greenhouse
growing operation utilizing the geothermal greenhouse operation at Chena Hot Springs as a model for potential
development.
7. Environmental, Antiquities Analysis (EAA) & Permit Review/Submittal. (Q4, FY2010) The team will coordinate
an EAA assessment for selected geothermal sites, identifying potential environmental and cultural impacts as
well as avoidance, minimization, or mitigation strategies for these impacts. A qualified environmental technical
lead will conduct the environmental review. For the proposed drilling program, permits will be completed and
submitted by the client.
8. Geothermal Exploration/Drilling Program. (Q1‐Q3 FY 2011) The drilling program will entail drilling a gradient
and confirmation hole drilling to be completed during winter of 2011. The first would be to drill two 500 ft
slim hole gradient holes based on results from the geological and geophysical studies to try and delineate the
upflow zone. The second task is to drill one 2000‐2500 ft confirmation hole based on the results from the slim‐
hole drilling program to try to verify the numerical model developed during the geophysical step/studies.
There are several options for drill a drill rig, including the CS1000 P6 core rig jointly owned by USGS and BLM.
In addition, there are some additional private sector initiatives occurring in the general area that will be
pursued for potential co‐mobilization and cost sharing.
9. Conceptual Engineering Design of Two Geothermal Plants & Transmission Lines. (Q2‐Q3, 2011) The technical
team will perform a conceptual civil, mechanical, and electrical design of the geothermal plants and associated
infrastructure for the appropriate number of generation plans. The actual number will be dependent on the
results of the feasibility section of this study. The technical team will perform a preliminary design of the
transmission lines needed to connect the proposed geothermal sites to communities and other possible load
centers in the Seward Peninsula region. Possible electrical connections between communities will also be
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evaluated. Electrical design will include conceptual electrical one‐line diagram, power systems, site‐layout plan,
conceptual transmission line routing, geotechnical engineering, and conceptual load study. Existing and
additional arctic grounding requirements will be evaluated to meet State of Alaska requirements. A
conceptual design report will be the result of this study. The team will also evaluate the transmission of hot
fluids to the geothermal plants via pipelines as oppose to transmission lines. Order‐of‐magnitude costs will be
developed for the comparison of these two options. Costs at the 35 percent concept level will also be
developed for the alternatives considered.
10. Development of Two Business and Operations Plan. (Q3, FY2011) The technical team will assess and clarify
financial and business issues related to ensuring efficiency in the ongoing operations of the utility such as
technician training, ongoing operation and maintenance (O&M) integration, and impacts on rate payers.
Existing RPSU business plans will be used as a foundation for this analysis. Within the operations plan will be a
delineation of the type of personnel needed to maintain the continual operation of one or more geothermal
power plants and the maintenance of the geothermal reservoir. Potential business partners consultants who
have the expertise will be evaluated during this phase of the project.
11. Transition Planning to Final Design and Construction. (Q3, FY2011) AVEC will coordinate the preparation of
final plans and design for future funding. This final step will ensure efficient execution of the proposed plan
and assure that roles and responsibilities are executed during the operations phase.
Project Resources
Describe the personnel, contractors, 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.
AVEC will manage all work completed by NANA Pacific. AVEC will provide Brent Petrie as Project
Manager to be the primary contact for NANA Pacific and the technical team. NANA Pacific will use its own
staff, including Jay Hermanson as project manager and Brian Yanity project engineer as well as
subcontract with a variety of consultants to implement this project. At this time, Lorie Dilley with HDL,
and Gwen Holdman with the UAF/Alaska Center for Energy and Power. UAF/ACEP has a very impressive
resources available to support the project.
Procurement for the drill rig team will be the object of a competitive procurement process between the
various drilling rig options, including the USGS/BLM and private sector options. Selection will be based on
best value procurement. A technical scoping of work that will allow a drilling company to bid on the
proposed drilling program will be undertaken.
Some of the tasks for which we will identify and utilize subcontractors include: conceptual engineering
design; drilling program; environmental and permitting review; studies; preliminary geotechnical
analyses; and surveying and mapping.
Selection Process for Contractors: To select contractors and consultants, the technical team will conduct
a rigorous scoping process to adequately define the project’s needs. Various stakeholders will have the
opportunity to develop and comment on the scoping document. The goal is to have the most qualified
contractor, engineer expertise, technology and existing best practices employed in the design and
installation. The resultant scoping document will be the basis for selection of subcontractors. Contractor
and consultant selection will be based upon technical competencies, past performance, written proposal
quality, cost, and general consensus from the technical steering committee. The selection will be based
on best value procurement methods.
Potential Subcontractors: AVEC and NANA Pacific have been in contact with NANA‐Colt, WH Pacific, and
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regarding the proposed scope of work. Vendors for field study materials will be identified through a bid
process.
Project Communications
Discuss how you plan to monitor the project and keep the Authority informed of the status.
AVEC will work closely with all subcontractors to ensure the project schedule is followed and high quality
products are delivered. NANA Pacific will provide quarterly reports to AVEC for finalization and
submission to the Alaska Energy Authority (AEA). NANA Pacific will provide additional reports to AVEC as
required by AEA. AVEC will submit reports directly to AEA. In addition, public presentations on the SGAP
will be given at community meetings and possibly conferences. Informational brochures and other
publications will be produced for the general public.
Project Risk
Discuss potential problems and how you would address them.
Logistical challenges and delays associated with fieldwork in our remote rural Alaskan communities
represent potential barriers to the success of the proposed project. The geothermal resources proposed
as sites for this project are remotely located from the nearest hub airport, and are reachable only by
helicopter, small airplane, snowmachine, or seasonally available barges which travel on local waterways
to bring supplies, fuel and other goods to the villages.
The very remote nature of the sites makes collection of topography, geology and geothermal data time
consuming and expensive. Because of changeable weather conditions and the complex logistics involved
in transporting materials to such remote locations, the season for barge transport is extremely limited,
and shipping delays are quite common.
However, AVEC and its sub‐contractors are accustomed to dealing with such limitations, and its proposed
partners also have extensive experience in addressing the difficulties associated with conducting business
in such challenging conditions.
Shipping arrangements for research equipment and supplies will be made with ample allowance for
possible delays, and sufficient flexibility will be included in fieldwork schedules to ensure on‐time and
successful completion of all project phases.
Cultural and social challenges such as public perception of geothermal power may also pose potential
problems for the project. We have included village presentations in our project to build awareness of and
support for these projects. These meetings will also seek input from residents about known cultural
resources on the land and any other information that would affect the project.
The construction and operation of geothermal plants in cold climates also presents the possibility of
special problems such as working in permafrost soils and icing problems in rivers and streams.
SECTION 4 – PROJECT DESCRIPTION AND TASKS
Tell us what the project is and how you will meet the requirements outlined in Section 2 of the RFA. The level of
information will vary according to phase of the project you propose to undertake with grant funds.
If you are applying for grant funding for more than one phase of a project provide a plan and grant budget for
completion of each phase.
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.
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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.
Currently, diesel‐fuel power generation is the only source of electricity for much of the Seward Peninsula
communities. Possible renewable energy resources known to exist in the area are wind and geothermal.
Wind energy resources for the region are already being assessed by AVEC, Kawerak, and NANA Pacific.
The obvious value of development of the geothermal resource vs others is the non‐intermittent nature of
geothermal vs wind.
Though the greater Seward Peninsula has been reported to hold some promise for geothermal resource
development, there is a general paucity of data and a lack of systematic and comprehensive scientific
investigation of this area using state‐of‐the‐art knowledge and techniques. For an area that is relatively
vast, remote, rugged, and challenging a practical, feasible and economical strategy is to first carry out a
reconnaissance level study based primarily on the analysis of remotely acquired data sets, validated by
limited field work. Because the overall purpose of this project is to determine whether the resources on
the Seward Peninsula can be economically developed for power generation and/or direct use, it is critical
to understand the temperature of the reservoir (determined through chemical geothermometers) and
total heat flow to the surface. These values can give an excellent indication of the size of power plant
which could potentially be sustainably developed off any one resource.
Hot springs on the Seward Peninsula are part of the Central Alaskan Hot Springs Belt (CAHSB). Chena Hot
Springs is the only location in this belt of over 30 hot springs that has been exploited for power
production. It is currently producing about 400 kW of power (www.yourownpower.com). The local
geology of most CAHSB sites is poorly defined, and the heat source driving the geothermal activity has not
been established. The geothermal potential of most of the CAHSB hot springs is unknown due to a lack of
geologic information (Miller and others, 1975; Economides and others, 1982). All CAHSB hot springs are
low‐temperature (<150 °C). Most of the hot springs are non‐volcanic (Miller, 1973); however the central
Seward Peninsula contains several young lava flows, and may be an active rift zone with abnormally high
crustal heat flow and the possible presence of shallow magma (Turner and Swanson, 1981). Hence, the
Seward peninsula could very likely be a high heat flow province, but there is insufficient data at this time
to know for certain. Hot springs in this region include Lava Creek, Serpentine, Granite Mountain and
several others. While the geologic setting of Chena and most eastern CAHSB hot springs suggests that the
reservoirs for CAHSB geothermal systems are not large (Kolker et al., in press); the geologic setting of the
Seward peninsula may permit larger, hotter and/or more extensive geothermal reservoirs. Further
exploration work is necessary in order to assess the geothermal resource capacity of most of the CAHSB
hot springs.
The Geothermal Resources of Alaska map identifies 7 hot springs in the targeted region. None of
them have been explored for geothermal potential beyond basic temperature and chemistry surveys. It is
possible that other geothermal sites exist in the targeted region, such as concealed hot springs or hot
springs that were otherwise overlooked by this map.
Using measured flow rates and “reservoir” estimates from chemical geothermometry, Kolker (in press)
made preliminary estimates of the potential power output of Seward peninsula hot springs. These
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estimates are found in the following table.
Hot Springs
Communities
within 45 miles
Est. Res. T. (°C)
Est. Res. T. (°F) Natural flow rate (GPM)
kW
capacity*
kW
capacity
required
Clear Creek
Elim, White
Mountain,
Golovin 92* 223* 232 400‐600
258,
178, 160
Division Kobuk‐Shungnak 92* 223* 547 600‐1000 485
Granite Mtn. Buckland, Koyuk 91 221 431 550‐750 325, 295
Kwiniuk”Elim” Elim, Golovin 67 178 22 <100 129, 80
4.2 Existing Energy System
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.
The existing energy system is a remote diesel power generation system deployed in various communities
managed by several different utilities in the targeted area for power generation. For home heating, the
primary source of fuel is imported diesel fuel, with the exception of Shungnak and Kobuk where a portion
of the home heating fuel is biomass. Shungnak and Kobuk are interconnected with an intertie.
Village Utility Provider Number Size (kw) Type of Generation
Elim AVEC 3 236,363,506 Diesel
White Mountain White Mountain
Utilities
2 150, 125 Diesel
Koyuk AVEC 3 363, 363,499 Diesel
Golovin Golovin Power Utilities 4
(new in
2004)
190, 150,115,115 Diesel
Deering Ipnatciaq Electric Utility 4 170,170,100, 125 Diesel
Buckland City of Buckland 3 455, 455,175 Diesel
Shungnak/Kobuk AVEC 3 202,335,314 Diesel
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.
While the targeted communities may have access to a viable wind resource, geothermal resource likely
remains perhaps the most promising renewable energy resources on the Seward Peninsula, especially for
these targeted communities. Despite the presence of these renewable resources, 100% of these
community’s existing energy resources comes from imported fossil fuels. The amount of fuel imported
fuel for power generation into each community is found below:
• Elim. 83,192 gallons.
• Golvin. 59,237 gallons.
• White Mountain. 65,676 gallons.
• Koyuk. 97,261 gallons.
• Deering. 62,878 gallons.
• Buckland. 118,708 gallons.
• Shungnak/Kobuk. 109,000 gallons.
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The total amount of imported fuel used for power generation in FY 2007 is 486, 952 gallons for the above
communities. Source. Statistical Report of the Power Cost Equalization Program, Fiscal Year 2007, Alaska
Energy Authority.
Existing Energy Market
Discuss existing energy use and its market. Discuss impacts your project may have on energy customers.
The load of the targeted villages listed above is highest during the winter months, with the bulk of
electricity consumed by residences and public facilities such as schools. Lower power rates are possible
from geothermal power displacing diesel generation.
The required PCE payment is the amount that the State of Alaska was required to pay in the power cost
equalization program in FY2007. It is assumed that this price will increase on average 3.5%.
With the direct use of geothermal heat energy, the displacement of heating fuel is also possible.
The heat fuel in the region is heating oil.
Source: Statistical Report of the Power Cost Equalization Program, Fiscal Year 2007, Alaska Energy
Authority
Village
Average Residential
Electrical Rate
Annual KWh
Generated
Gallons of fuel used
for power generation
Required PCE
Payment
($)
Elim 46.9 1,130,207 83,192 134,691
White Mountain 60.0 780,200 65,676 114,590
Koyuk 47.3 1,292,120 97,261 160,013
Golovin 54.0 699,111 59,237 250,824
Deering 49.0 709,559 62,878 83,324
Buckland 40.36 1,423,267 118,708 76,860
Kobuk/Shungnak 61.13 1433330 109,965 130,000
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
The Seward Peninsula Geothermal Assessment Program is based on the Chena Hot Springs
PowerPureCycle™ 200 geothermal power plant demonstration project that came online in late July 2006.
This particular technology is manufactured by UTC Power.
This concept differentiates from the Chena experience by being off road, village scale power generation.
Chena Hot Springs is the lowest temperature geothermal resource to be used for commercial power
production in the world at 165 degrees. This compares favorably with known temperatures in the Seward
Peninsula Region. Due to the demonstrated successful project and availability of lessons learned at
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Chena Hot Springs, the prospects for a successful project in the on the Seward Peninsula region are
encouraging.
The table below estimates the electrical generation capacity of the targeted hot springs vs. electrical
generation requirements of targeted communities (Kolker et al., in press).
Low‐temperature hydrothermal fluids (<150 ºC) must be run through a binary‐cycle system to produce
electrical power. In binary power systems, hydrothermal fluid and a secondary (“binary”) fluid pass
through a heat exchanger, vaporizing the binary fluid, which then drives a turbine. The temperature
requirements for binary systems depend on site characteristics (available condensing temperature,
volume of geothermal fluid, etc.). The binary system at Chena Hot Springs uses geothermal fluid at ~80 °C.
The binary‐cycle power generation system at Chena Hot Springs employs two Organic Rankine Cycle
(ORC) turbines manufactured by United Technologies. A similar system would most likely be the type
used to harness geothermal resources in the Seward Peninsula.
It is not yet known where the most economic sites are for geothermal power generation in the region,
but a variety of alternative configurations will be evaluated for the six communities in the study area.
These different alternatives will include various power plant and electric transmission line proposals.
While the distances between communities in the region are significant, geothermal power generation
may be more economic if more than one community is connected to the resource by electric interties.
Aside from electric power generation, other geothermal energy applications involving the direct use of
heat will be evaluated. These include geothermal space heating, greenhouses, water heating, and
refrigeration. The majority of the overall energy consumed in each of these six communities is in the form
of space heating, so direct‐use applications of geothermal heat could prove to be very practical.
Hot Springs
Communities within 45 miles
kW capacity of hot springs kW capacity required
Clear Creek Elim, White Mountain, Golovin 400‐600 258, 178, 160
Division Kobuk‐Shungnak 600‐1000 485
Granite Mtn. Buckland, Koyuk 550‐750 325, 295
Kwiniuk"Elim" Elim, Golovin <100 129, 80
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.
Due to the regional geographic scope and the intent to optimize the geothermal energy resource, the specific
surface and sub‐surface land owner is generally unknown or needs further clarification at this time. It is generally
assumed that within close proximity to the targeted communities, the city, tribal council, village corporation, or
private interest will own the land and some other entity (Regional Corporation, State, or Federal Government) will
own the sub‐surface rights. There is a higher likelihood that the Regional Native Corporation, State, or Federal
government will own both the surface and the sub‐surface rights as the geothermal resource becomes further
away from the community.
Known Land and Sub‐Surface Ownership . Most of the subsurface estate underlying village lands is
owned by BSNC for those communities in the Bering Straights Native Corporation and NANA Regional
Corporation for those communities in the NANA Region. AVEC will need to acquire a Land Use Permit
from BSNC to explore the subsurface estate, where BSNC is the landowner; and from the State DNR
where the state owns the land.
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Additionally, BSNC owns the surface and subsurface estate along Lava creek. The hot springs at Lava
Creek will be conveyed to BSNC within the next few months. However, this site is being conveyed as a
Historic Site so it may take some additional work to determine the extent of exploration that might be
conducted there (it's a very small tract of land containing the pools used by local people).
Granite Mountain Hot Springs was conveyed in error to the State of Alaska. It will eventually be conveyed
to BSNC as a historic site. However, its current status as state land may preclude some of the difficulties
associated with a BSNC owned Historic site.
It is understood that Division Hot Springs is owned by the State of Alaska.
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
As part of this study, past permitting process and applications will be reviewed and current requirements
together with a permitting timeline will be created. The team will identify the necessary permits from
both the environmental perspective, and the power plant(s) and transmission line. The environmental
issues are discussed in Section 4.3.4. Requirements necessary for obtaining permits and a timeline for the
permitting process will be determined. Established easement corridors, if any, will be identified.
Environmental concerns of early stages of the project, during surface geothermal investigations, appears
to be minimal. The team will seek land‐use permission for both the Geophysical and the Geological
portions of this scope of work.
The following permit requirements may apply to the drilling portion of this project. The Alaskan
Guidelines for Exploratory Operations is found in Article 3, Chapter 11 AAC 87.010 to AAC 87.290. This
section outlines guidelines for the exploration of geothermal systems and the drilling of all geothermal
wells in the state. However, resources with a temperature of less than 248 °F are not defined as
geothermal but rather permitted as a water resource under Alaska state statutes.
• Application for geothermal exploration drilling. As per Alaska Statutes Sec. 41.06.050, ‘an
operator shall file an application with the commissioner for permission to drill the well’.
• Drilling Permit. As per Article 3, Chapter 11 AAC 87.070 ‘a drilling permit is required before the
drilling, redrilling, or deepening of any well and before the reentry of an abandoned well’. This
permit must include plans for well identification, casing, cementing, and blowout prevention.
• Drilling Bond. As per Article 3, Chapter 11 AAC 87.080 ‘an applicant for a drilling permit shall file
an indemnity bond for each well drilled, redrilled, or deepened, or a statewide bond for the drilling,
redrilling, or deepening of one or more wells on the same lease or unit area. The bond must be in
the amount the commissioner determines necessary to ensure compliance with applicable
provisions of this chapter’.
• Plan for abandonment of geothermal exploration well. As per Article 3, Chapter 11 AAC 87.030,
the applicant must provide the state with a plan for exploration well abandonment done in ‘such a
manner that will protect freshwater aquifers and prevent subsurface interzonal migration of fluids
and surface leakage’.
• Survey Monument Requirement. As per Article 3, Chapter 11 AAC 82.640, ‘a survey or
monumentation of lease boundaries may be required by the commissioner to determine
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compliance with lease or to determine the extent of possible damage to adjacent properties from
lease operations’.
• Environmental Impact Assessment. It is not anticipated that this project would have significant
environmental impact, however an Environmental Assessment for the drilling phase of this
operation will be required (water discharge, total project footprint). The State of Alaska
Environmental Statute pertaining to exploration is AS 46.15.010. Assessment must be approved
by the Department of Environmental Conservation Permitting Office and/or the Commissioner’s
Office.
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
The team will conduct as part of the concept design phase a preliminary environmental analysis to
evaluate the potential effects of the project. Anticipated environmental issues to be addressed include
floodplains, wetlands, threatened and endangered species, fisheries, historical and cultural resources,
land development constraints, and construction impacts. Additional issues that will be fully addressed
include socioeconomic issues, and rights‐of‐way requirements. We will identify potential environmental
impacts and present mitigation measures as appropriate. These impacts may affect the siting of facilities
and the optimization phase
Surface geothermal exploration activities may involve small surface disturbances. Geophysical surface
measurements, including seismic surveys, should not leave any permanent disturbance to the landscape.
Geochemical analysis will likely consist of taking soil, rock and water samples, and the environmental
impacts of these activities should be negligible.
4.4 Proposed New System Costs (Total Estimated Costs and proposed Revenues)
The level of cost information provided will vary according to the phase of funding requested and any previous work
the applicant may have done on the project. Applicants must reference the source of their cost data. For example:
Applicants Records or Analysis, Industry Standards, Consultant or Manufacturer’s estimates.
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
Total Anticipated Project Costs.
The total anticipated cost for this phase is based upon the major milestones found in section 3.3.
1. Project Start‐Up and Additional Data Analysis. This is based upon the actual experiences of a
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project of this magnitude. $6250.00
2. Community Outreach and Village Presentations.
This includes travel to all 6 targeted communities to explain the objectives of the program and
expectations from the community and keep them in the loop throughout the program. $68,700
3. Site Selection Prioritization Criteria Development‐ Process Development. $10,000
4. Site Identification and Characterization Geology/Geochemistry Site Assessment & Survey. The
estimate for this step is based upon actual costs incurred during the NANA Region Geothermal
Assessment program and HDL’s Estimate. $320,000
5. Geophysical Assessment Studies. The geophysical study is based upon an estimate provided to
NANA Pacific from the University of Alaska Fairbanks. $965,000
6. Optimization Modelling. This step is based upon 3 FTE engineers/analysts and 50 hours of
billable time. $31,500
7. Environmental, Antiquities Analysis (EAA) & Permit Review/Submittal. This estimate is based
upon a quote provided by a private engineering company and experiences of NANA Pacific.
$65,000
8. Geothermal Exploration/Drilling Program. This estimate is based upon the assumptions
provided by USGS/BLM: CS1000 P6 core rig and crew $1,750,000; mobilization costs to two
targeted areas area $500,000; Total estimated costs: $2,712,500.
9. Conceptual Engineering Design of Geothermal Plants & Transmission Lines. The estimate is
based upon conceptual design costs experienced by NANA Pacific in several projects in rural
Alaska. The assumed cost is two separate conceptual designs and associated geotechnical studies.
$211,500
10. Business and Operations Plan. Estimate is based upon contractors actual experiences in
developing business plans. $47,500
11. Final Design/Construction/Installation Plan, O&M Plan transition planning. $9,000.
The total estimate cost for the Resource Assessment/Feasibility Analysis/Conceptual Design phase is
$4,446,950.
Requested Grant Funding
AVEC is requesting $4,301,950 for this grant request.
Applicant Match Funding.
The following applicants are able to provide the following match funding for this proposal in the amount
of $145,000.
• NANA Regional Corporation. As part of an existing contract with the Department of Energy Tribal
Program, NRC can contribute up to $80,000 on further exploration/development of geothermal
resources that benefit Deering/Buckland and Kobuk/Shungnak. The likely geothermal resource is
Granite Mountain which can also benefit the community of Koyuk. This would be managed in
strict conformity with the Department of Energy’s grant guidelines and directly by NANA Pacific.
• Kawerak. Kawerak is contributing $15,000 in staff and in‐kind resources.
• AVEC: AVEC is providing an estimated $50,000 in staffing and in‐kind travel and support over the
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life of the project.
Projected capital cost of proposed renewable energy system
The projected installed capital cost (rough order of magnitude) for the targeted communities (without
transmission) is highlighted in the table below. The total capital cost of geothermal plant installation in
the targeted communities is assumed to be $8,000/kW.
Hot Springs Communities
within 45 miles
kW capacity
required
Total Installed Cost
(Rough Order of
Magnitude)
Transmission
Requirements
Clear Creek Elim, White
Mountain, Golovin 258, 178, 160 $6‐7 million range
$7,000,000
Division Kobuk‐Shungnak 485 $5.5‐6.5million
$14,000,000
Granite Mtn. Buckland, Koyuk 325, 295 $6‐7 million $28,000,000
Identification of other project funds.
Due to the variety of partner types, including utilities, economic development organizations, tribal
entities, and others, there are a wide variety of funding options to consider, including the BIA, DOE/NREL,
and private sector options. The United States Airforce operates a remote air station at Granite Mountain‐
requiring a remote power supply. The US Airforce will be targeted for partnering opportunities at Granite
Mountain.
Finally, there are mining interests in close proximity to these targeted areas, such as Nova Gold, who have
significant load and power needs. Technical support and development will be sought in conjunction with
NOVA Gold.
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.
• Total anticipated project cost for this phase
• Requested grant funding
This phase of the project has no Operation and Maintenance (O&M) costs, and we are not requesting
grant funding for O&M. The O&M costs of the proposed geothermal plants will be projected as part of
the feasibility effort. Different sites are likely to have different costs to deal with roads, power lines, dam
or intake maintenance, and production pant maintenance. The table below highlights ROM estimates
on O&M for the targeted region, based upon 0.2 ¢/kWh for operation and maintenance over the
assumed lifetime of the project. (Kolker et al., in press,)
Geothermal Resources kW capacity required Calculated Operations and Maintenance
Clear Creek 596 $1,473,908
Division 485 $1,199,405
Granite Mtn. 620 $1,533,260
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 22 of 25 10/8/2008
4.4.3 Power Purchase/Sale
The power purchase/sale information should include the following:
• Identification of potential power buyer(s)/customer(s)
• Potential power purchase/sales price - at a minimum indicate a price range
• Proposed rate of return from grant-funded project
At this time, the development of a geothermal power generation system in the Seward Peninsula is
primarily for community use – there is minimal opportunity for an export market in the area. However,
there are commercial, mining, and utility interests in the area. The proposed approach will include the
feasibility of co‐development between regional stakeholders, the communities, electric utilities, AEA, and
commercial mining interests. The approach will analyze ownership scenarios, risk management,
operations, cost sharing, and potential power purchase agreements between these entities.
Of particular concern for the targeted communities is the availability of a reasonably priced energy
alternative. Project development and operation costs need to be scaled to assure reasonable priced
energy and power options for community use. It will be the intention of the proposed effort to fully
understand the costs associated with operations of a geothermal power generation system and propose a
pricing system based on a cost/cooperative methodology.
For power generation, there are 4 different utility providers, including AVEC (Elim, Koyuk, and Shungnak),
White Mountain Utilities, Golovin Power Utilities, City of Buckland, and Ipnatciaq Electric Utility. If
heating is incorporated into the project, there will be a corresponding increase in load demand for the
targeted communities. There exists an Air Force Station on Granite Mountain‐ the US Airforce remains a
potential buyer of the energy/power from a Granite Mountain Site.
Finally, there are several private sector mining interests in the targeted area, including NOVA Gold who
has interest in the Upper Kobuk area and the Seward Peninsula. The business plan will be developed,
targeting these mining interests.
The final element of the energy market is the heating market. Through geothermal energy, there is
potential to provide heat through a combined heat and power system.
4.4.4 Cost Worksheet
Complete the cost worksheet form which provides summary information that will be considered in evaluating the
project.
Please refer to attached.
4.4.5 Business Plan
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.
The technical team will incorporate information from the preliminary and conceptual design stages to
develop a draft Business Plan for AVEC’s Seward Peninsula geothermal development program. The
resulting plan will include the following topics:
• Executive summary
• Community information
• Management infrastructure
• Financial data
• Key assumptions
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 23 of 25 10/8/2008
• Capital replacement schedule
• Funding legal authority and issues
• Inter‐agency relationships.
4.4.6 Analysis and Recommendations
Provide information about the economic analysis and the proposed project. Discuss your recommendation for
additional project development work.
Several reports over the years have suggested geothermal sites in the Seward Peninsula region have
potential to serve the area. The possible addition of electric demand driven by mining activity, community
growth, along with the limited ability to deliver fuel by barge, and significant increases in the delivered
cost of diesel fuel make this local resource a timely candidate for evaluation for feasibility, design, and
permitting.
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 (gal and $) 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
avoided cost of ownership)
• 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
Some quantifiable external benefits from geothermal energy production include: 1) elimination of fuel‐
related subsidies for electricity generation; 2) savings on heating fuel and elimination of emergency
assistance for heating fuel costs; 3) benefits to the community from greenhouse production; 4) avoided
fuel spills; and 5) avoided CO2 emissions.
One public benefit in particular is the avoided cost of the “Required PCE Payments” as found in the Power
Cost Equalization Report. The public benefit is calculated as the avoided cost of the “Required PCE Payment” as
found in the FY 2007 Power Cost Equalization Cost report for 5 of the targeted communities. For FY2007, the State
of Alaska paid a combined $820,000 to the utilities responsible for those communities. This cost originates from the State
of Alaska operating budget. The $38,000,000 was calculated assuming an annual inflation rate of 3.5% over a 30
year life of the project.
Other economic benefits includes avoided fuel spill and contaminated costs, which is estimated to be $764,677/per
community between 2008‐2030. (Kolker, 2008) This would be $5,355,000 from the period of 2008‐2030 for the 7
targeted communities that could be served in the Granite Mountain/Lava Creek area.
SECTION 6 – GRANT BUDGET
Tell us how much your total project costs. Include any investments to date and funding sources, how much is
requested in grant funds, and additional investments you will make as an applicant.
Include an estimate of budget costs by tasks using the form - GrantBudget.xls
There is a paucity of actionable data available on the Seward Peninsula regarding geothermal energy and
power development. NANA Pacific/NANA Regional Corporation published an initial reconnaissance
study on the geothermal resource‐entitled the NANA GAP. NRC was the recipient of $150,000 in
funding from the Department of Energy Tribal Program to review and assess geothermal potential in the
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 24 of 25 10/8/2008
NANA region, including the Seward Peninsula. Much of the documented information referenced in this
proposal is a result of this initial study- entitled the NANA Geothermal Assessment Program.
The total proposed project value is found in the Grant Budget Section of this proposal.
Tab 2
Resumes
•
•
Tab 3
Cost Worksheet
Renewable Energy Fund
Application Cost Worksheet
Please note that some fields might not be applicable for all technologies or all project phases. Level of
information detail varies according to phase requirements.
1. Renewable Energy Source
The Applicant should demonstrate that the renewable energy resource is available on a sustainable
basis.
Annual average resource availability.
Hot Springs
Communities within 45 miles
kW capacity of hot
springs
kW capacity
required
Clear Creek Elim, White Mountain, Golovin 400‐600 258, 178, 160
Division Kobuk‐Shungnak 600‐1000 485
Granite Mtn. Buckland, Koyuk 550‐750 325, 295
Kwiniuk"Elim" Elim, Golovin <100 129, 80
2. Existing Energy Generation
a) Basic configuration (if system is part of the Railbelt 1 grid, leave this section blank)
Village Utility Provider Number Size (kw) Type of Generation
Elim AVEC 3 236,363,506 Diesel
White Mountain White Mountain
Utilities
2 150, 125 Diesel
Koyuk AVEC 3 363, 363,499 Diesel
Golovin Golovin Power
Utilities
4
(new in
2004)
190, 150,115,115 Diesel
Deering Ipnatciaq
Electric Utility
4 170,170,100, 125 Diesel
Buckland City of Buckland 3 455, 455,175 Diesel
Shungnak/Kobuk AVEC 3 202,335,314 Diesel
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.
RFA AEA 09-004 Application Cost Worksheet revised 9/26/08 Page 1
Renewable Energy Fund
b) Annual O&M cost (if system is part of the Railbelt grid, leave this section blank)
i. Annual O&M cost for labor
ii. Annual O&M cost for non‐labor
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]
ii. Fuel usage
Diesel [gal]
Other
iii. Peak Load
iv. Average Load
v. Minimum Load
vi. Efficiency[kwh/gal]
vii. Future trends
d) Annual heating fuel usage (fill in as applicable) At this time, we are assuming power generation only;
home heating will be analyzed for potential.
3. Proposed System Design
a) Installed capacity We have assumed an installed capacity of 550‐750 kw to
serve the combined needs of the targeted communities.
b) Annual renewable electricity generation
i. Diesel [gal or MMBtu]
ii. Electricity [kWh] • Granite Mountain has the potential of 550‐750 KW.
• Clear Creek has the capacity of 400‐600 KW
• Division Hot Springs has the potential of 600‐1000 kw.
iii. Propane [gal or MMBtu]
iv. Coal [tons or MMBtu]
v. Wood [cords, green tons, dry tons]
vi. Other
4. Project Cost
a) Total capital cost of new system • Construction: $6‐7 million
• Transmission Cost: $3‐$40,000 million Depending
on the scope of the project.
b) Development cost $4.5‐$5.0 million
c) Annual O&M cost of new system Average annual operations and maintenance is assumed
RFA AEA 09-004 Application Cost Worksheet revised 9/26/08 Page 2
Renewable Energy Fund
to be $130,000/year over a 30 year project lifecycle with
an annual cost inflation rate of 3.5%. The operations and
maintenance cost in FY2008 dollars is assumed to be
$75,000.
d) Annual fuel cost There is no annual fuel cost with geothermal energy.
5. Project Benefits
a) Amount of fuel displaced for
i. Electricity 14,400,000 gallons over a 30 year project lifecycle.
ii. Heat
iii. Transportation
b) Price of displaced fuel $99 million over a 30 year project lifecycle over a 30 year
lifecycle, assuming $4.00/gallon of diesel fuel 3.5% annual
inflation rate.
c) Other economic benefits Other economic benefits includes avoided fuel costs, which
is estimated to be $764,677/per community between 2008‐
2030. (Kolker, 2008) This would be $5,355,000 from the
period of 2008‐2030 for the 7 targetted communities that
could be served in the Granite Mountain/Lava Creek area.
d) Amount of Alaska public benefits The public benefit is calculated as the avoided cost of the
“Required PCE Payment” as found in the FY 2007 Power
Cost Equalization Cost report for Elim, White Mountain,
Koyuk, Golovin, and Buckland. For FY2007, the State of
Alaska paid a combined $736,000 to the utilities responsible
for those communities. This cost originates from the State
of Alaska operating budget. The $38,000,000 was
calculated assuming an annual inflation rate of 3.5% over a
30 year life of the project
6. Power Purchase/Sales Price
a) Price for power purchase/sale Assumed to be for village power generation and use.
Power purchase agreements will be pursued as appropriate.
7. Project Analysis
a) Basic Economic Analysis
Project benefit/cost ratio The following table highlights plausible cost benefit scenarios for
targeted communities. (Kolker, 2008)
RFA AEA 09-004 Application Cost Worksheet revised 9/26/08 Page 3
Renewable Energy Fund
RFA AEA 09-004 Application Cost Worksheet revised 9/26/08 Page 4
Community
Geothermal
heating costs
Avoided
heating
fuel HAP costs Savings CB ratio
Buckland $4.7 $8.4 $2.2 $3.7 1.78
Elim $2.2 $4.8 $1.7 $2.6 2.16
Golovin $3.7 $3.5 $1.6 ‐$0.2 0.95
Kobuk $4.7 $5.0 $2.3 $0.3 1.06
Koyuk $4.7 $5.6 $1.6 $0.9 1.18
Shungnak $5.2 $10.0 $2.3 $4.7 1.93
White Mtn. $3.7 $5.0 $1.8 $1.3 1.35
Payback Depending on the final design and scope, the project payback would
be anywhere from 12‐18 years.
Tab 4
Grant Budget Form
Alaska Energy Authority ‐ Renewable Energy FundBUDGET SUMMARYMilestone or TaskFederal Funds State FundsLocal Match Funds (Cash)Local Match Funds (In‐Kind)Other FundsTOTALS1. Project Start‐Up and Additional Data Analysis$3,750.002,500.00$6,250.002 Community Outreach and Village Presentations$52,200.001,500.00$15,000.00$68,700.003 Site Selection Prioritization Criteria Development‐ Process Development$8,500.001,500.00$10,000.004 Geological and Geochemical Reconnaissance$315,000.005,000.00$320,000.005 Geophysics Component$875,000.0010,000.00$80,000.00$965,000.006 Optimization Modeling$30,000.001,500.00$31,500.007. Environmental, Antiquities Analysis (EAA) & Permit Review/Submittal$55,000.0010,000.00$65,000.008. Geothermal Exploration/Drilling Program$2,700,000.0012,500.00$2,712,500.009. Conceptual Engineering Design of Two Geothermal Plants & Transmission Lines$210,000.001,500.00$211,500.0010. Development of Two Business and Operations Plan$45,000.002,500.00$47,500.0011. Transition Planning to Final Design and Construction$7,500.001,500.00$9,000.00$4,301,950.0050,000.0095,000.00$4,446,950.00Milestone # or Task #BUDGET CATAGORIES:123456 7891011TOTALSDirect Labor and Benefits$2,500.00$1,500.00$1,500.00$5,000.00$10,000.00$1,500.00$10,000.00$12,500.00$1,500.00$2,500.00$1,500.00$50,000.00Travel, Meals, or Per Diem$0.00Equipment$0.00Supplies$0.00Contractual Services$3,750.00$67,200.00$8,500.00$395,000.00$875,000.00$30,000.00$55,000.00$2,700,000.00$210,000.00$45,000.00$7,500.00$4,396,950.00Construction Services$0.00Other Direct Costs$0.00TOTAL DIRECT CHARGES$6,250.00$68,700.00$10,000.00$400,000.00$885,000.00$31,500.00$65,000.00$2,712,500.00$211,500.00$47,500.00$9,000.00$4,446,950.00NotesAVEC in‐kind match $50,000Kawerak in‐kind match: $15,000NANA Regional Corporation: $80,000BUDGET INFORMATIONRFA AEA09-004 Budget Form
Tab 5
Delegation of Authority
Tab 6
Supplemental Materials
NANA Regional Corporation Letter
of Support
Bering Straits Native Corporation
Letter of Support
City of White Mountain Letter of
Support
Kawerak, Inc Letter of Support
Native Village of Elim Letter of
Support
City of Elim and Native Village of
Elim Joint Resolution of Support