HomeMy WebLinkAboutFeasibility Study of Coal Fired Cogeneration, District Heating and Other Energy Alternatives for Kotzebue Findings and Recommendations 1981FEASIBILITY STUDY
OF
COAL-FIRED COGENERATION, DISTRICT HEATING
AND OTHER ENERGY ALTERNATIVES
FOR
KOTZEBUE
FINDINGS AND RECOMMENDATIONS
This document summarizes the study project, and the consultants I
approach and findings, and recommends the next appropriate step to
provide the lowest possible cost of electricity for Kotzebue.
BACKGROUND
Kotzebue, an economic, administrative and cultural center for
Northwest Alaska, has been almost totally dependent upon fuel oil
for space heating and power generation. With an annual mean
temperature of 20.7°F, electric and space heating costs are high
for its 2,850 residents. Dependence upon fuel oil (delivered by
barge and lightering vessels during the only three ice-free months
of the year) requires the community to pay increasing prices for
fuel oil and electricity. These costs have a significant impact
upon the cost of 1 iving in Kotzebue and have lead to numerous
studies to examine alternative power and heating supply options.
One previous study assessed power generation alternatives with
special attention to hydropower and coal resources; another inves-
tigated geothermal district heating. The studies were informative
but did not determine the best alternative to meet the electricity
and space heati ng needs of Kotzebue. The Alaska Power Authority
contracted with a joint venture of three firms (VECO, Stefano &
Associates, and Arctic Slope Technical Services, Inc.) to assess
coal, geothermal and other viable systems in detail and compare
combinations of these alternatives with respect to costs, impacts,
public reaction, and overall feasibility. In addition to present-
ing the above findings, the final report produced by the consultant
recommended what the consultant considered to be most viable
alternatives and outlined subsequent work requirements.
The Report addressed:
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current and projected population,
current and projected electric load and demand (for all
end use sectors except industry whi ch had no immedi ate
potential at the time of the study),
community reactions and goals,
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* community energy balance,
* energy resources and appropriate conversion technologies.
The consultant i dentifi ed appropri ate energy resources and gen-
eration facilities from the above information and prepared alterna-
tive supply plans. The plans were than taken through the following
steps:
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technical, economic, social, cultural, and environmental
analysis,
final assessment,
agency and public review,
preparation of a final report which incorporated review
comments and the consultant's responses to comments.
Numerous energy resources were considered and compared to the base
case (continuation of current diesel generation and fuel oil space
heating systems). Options considered unrealistic (e.g. peat,
active/passive solar, coal gasification, refuse, wood, etc.,) were
eliminated from detailed consideration. Appropriate supply plans
included:
1. Base Case --diesel electric generation with individual
oil stoves and waste heat recovery for space heating.
2. Cogeneration --coal-fired steam electric generation with
hot water district heating (Alternative A).
3. Coat or oil-fired district heating with electrical
generation from other sources (Alternative B).
4. Hydroelectric generation with and without electric space
heating (Alternative C).
5. Geothermal district heating with electrical power gen-
eration from other sources (Alternative D).
6. Wind turbine electric generation to supplement diesel
electric generation with fuel oil space heating (Alterna-
tive E).
FINDINGS
Of the 18 alternatives considered, two alternatives to the Base
Case emerge as the most advantageous to Kotzebue over the 1982-2002
planning period. Both alternatives were shown to have a
cost/benefit ratio of 1.47 (the base case is 1.00).
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The two alternatives consist of the following components:
1. Cogeneration (Alternative A).
The central plant would be coal-fired and use a waste
heat recovery system for district heating. While the
technology is well known, several potential problems are
exist:
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If the coal from Northwest Alaska is to be used, the
coa 1 mi ne woul d have to be developed. Coal from
outside sources would have to be shipped ...
Water requi red as a heat carri er in the di stri ct
heating system is subject to freeze-up despite
insulation measures.
Air quality could degenerate; impacts could include
genera 1 health and parti cul arly respi ratory prob-
lems, "black snow", and acid water conditions. Acid
rain is gaining a great deal of regional global
attention because of the potential for negative
impacts on ecosystems. Potential for acid rain
varies depending upon the source of coal to be used.
Necessary storage and handling methods could allow
coal seepage into the surface water and aquifers.
2. Hydropower (Alternative C)
The dam and powerhouse woul d be sited at Buckl and (the most
feasible ~ite) with approximately 90 miles of transmission
line to -Kotzebue. The preliminary analysis considered a
geothermal heating district in combination with hydroelectric
generation; this alternative provided a 1.10 cost/benefit
ratio. Hydroelectric generation used for both power and
electrical space heating showed a 1.47 cost/benefit ratio and
thus became the alternative considered in more detail.
An alternative transmission line plan (which saved 13 percent
of the line cost) was considered in a preliminary study by
Retherford & Associates but was not considered in this report.
In this plan, single-phase, low frequency lines and generation
equipment were assured instead of three-phase lines and
equ i pment.
Hydropower is extremely reliable, has two to three times the
operational life of a fossil fuel plant, has few
Operational/Maintenance (0/~1) costs, no fuel costs, and is a
clean source of energy; however, several potential problems
exist:
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TECHNICAL
A maximum site output of 30 MW; the output may have to be
supplemented with electricity from another generation
source during winter peak periods (late in the planning
period after the demand increases).
Environmental impacts are not well-defined without
further study.
Geotechnical conditions are unknown at this time.
Further investigations are required to see if a dam can
even be built.
The impacts of a large shallow reservoir on overall
system operations at this northern latitude are unknown.
A single, long transmission line is not highly reliable.
Both alternatives appear technically feasible. The coal-fired
plant uses a well-known technology and, in many ways, is a
well-suited to the Kotzebue situation. The plant would be local
and easily accessible for any needed repair, and additional back-up
system would not be necessary. The waste heat recovery system is
beneficial but the dependence on the proposed water medium as a
heat carrier could be a serious liability. Also, coal supply and
delivery could be undependable if a coal source outside the region
is used.
Hydropower is known to be extremely reliable and uses a well-known
technology. Arctic conditions pose additional complications, but
northern applications have been tested and proven. The vast
inundation arei may be unacceptable to residents of the region and
the landowners. The 90 miles of overland transmission line is a
potential weak link because of unknown wind and ice stresses, and
the consul tant recommends keeping a 100 percent back-up diesel
system. In addition, diesel generation is expected to be needed in
later years to supplement winter peak loads.
While these factors are potential liabilities, the reliability of
the resource and the technology could offset negative consid-
erations. More careful analysis of geotechnical conditions and
stream flow are necessary before the feasibility of the hydroelec-
tric alternative could be confirmed.
ENVIRONMENTAL
Both alternatives present numerous environmental concerns. The
impacts of coal extraction from potential resource sites in the
regi on (which requi res stri ppi ng of overburden, overburden
stockpiling, degradation of water quality due to erosion, and
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revegetation) are concerns associated with any surface mlnlng
operation. In addition, it would be necessary to transport the
coal for storage at Kotzebue. Fugitive dust from coal handling and
preparation for burning could have significant and, possibly
uncontrollable, air quality impacts.
Another concern is that of coal combustion emissions. Products of
coal combustion are airborne sulfur, nitrogen oxides, carbon
monoxide, particulates, radioactive trace minerals, and fluorides,
all of which can cause health problems. Such health problems can
be in the form of specific (e.g., lung dieases) or general health
impacts (e.g., more colds, flu, etc.). The amount and type of coal
bu rned and the effectiveness of emi ss i on control measures wou 1 d
determine the p1ant l s effect on air quality.
Contamination of drinki ng water sources (i. e., snow and surface
runoff) is another possible environmental impact. Other concerns
are disposal of ask (with extremely high mineral content) and
hazardous wastes (PCBls, solvents, strong acids and bases), dis-
posal of plant cooling water, and the aesthetic impacts of a large
facility, tall stacks, and coal piles.
Hydropower projects have a different set of environmental concerns.
While construction may cause dust and surficial disruption,
long-term air quality, water pollution and waste disposal impacts
are negligible or non-existent.
The reconunended diesel back-up and peak load generation facil ity
would be used only on a sporadic basis and would cause much less
impact than the current diesel generator plant.
~1ajor potential impacts are predictable and in most cases can be
mitigated. Cha'nges in aquatic and terrestrial habitat are the most
curcial. In the case of the proposed Buckland River project, the
degree of damage to anadromous fish runs, grazing land for moose,
caribou and reindeer, and to the Village of Buckland are likely to
lead to unacceptable impacts.
ECONOMIC
For the Buckland Hydroelectric Project, detailed investigations
concerning environmental impacts, geotechnical and arctic ice
conditions would extend the project development schedule and are
likely to pose new problems to be resolved. Considering these
concerns, the present cost estimate may be low (one reviewing
agency thought the cost estimate to be low).
Unpredicted costs associated with the coal-fired plant could
include unusual geotechnical foundations (on permafrost), coal and
shipping cost variations, mine development costs, and increasingly
stringent environmental impact mitigation measures. The unusual
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geographic conditions in an area such as Kotzebue (e.g., permafrost
and extreme cold), use of surface water as a drinking water source,
and possible disadvantageous surface wind patterns could also make
the facility more costly to build and operate than expected.
RECOMMENDATIONS
The major emphasis for the coal-fired plant option would be:
1. Review C.C. Hawley report to DGGS on Chicago Creek coal.
2. Determine cost to mine Chicago Creek coal and deliver to
Kotzebue (by land, by sea, over ice).
3. Update feasibility net present value analysis using
Chicago Creek coal. Incorporate any increased costs
resul ting from the "doubl ing of all transportation and
handling facilities" referred to in the consultant's
Task 12 report. Re-evaluate transmission to Villages
within the NANA region.
4. Evaluate mine mouth generation and transmission to
Kotzebue and any other villages which could be included.
5. Present these fi nd i ngs to the res i dents of Kotzebue and
the region, the legislators representing the region and
to NANA. Obtain publ ic input to determine whether to
continuing pursuing the coal-fired cogeneration alterna-
tive, to pursue the Buckland River hydroelectric alterna-
tive, or to do more detailed analysis of both alterna-
tives. If coal plan is favored, do detailed feasibility
study of that alternative and take to Board of Directors
and dffice Management & Budget when completed.
If hydroelectric alternative is the subject of further
study, perform an interim analysis consisting of stream
gaging and environmental analysis prior to committing to
detailed feasibility study.
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FINAL REPORT--KOTZEBUE PROJECT
Sumoacy of Project Tasks and Findings
PREPARED FOR THE STATE OF ALASKA
DIVISION OF EUERGY AND PO\'lER DEVELOPHENT
FEBRUARY 1981
ENERGY SYSTEMS, INC.
BOX 6065
N~CHORAGE, ALASKA 99502
907-243-1942
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CONTENTS
Page
SUfiUilary of 1"lork on Project Tasks •.•.•.•.•.•...•.•.••••••• 1
Findings and Reco@mendations .•.••••••.••••.•...•.........• 5
Appendices (Under Separate Cover)
Appendix A: Geological Data, Kotzebue-Selawik Basin
Appendix B: Kotzebue Geothermal Project--Analysis of
Currently Available Information and Re-
port of Advisory Group Meeting
Appendix C: Geologic Analysis of Geothermal Energy
at Kotzebue
Appendix D: Proposal to Assess the Feasibility of
District Heat at Kotzebue, submitted
to US Department of Housing and Urban
Development
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FIN/\L REPORT--KOTZEnUE PROJECf
Introduction
This report summarizes work done by Energy Systems Inc. on the
Kotzebue GeotherQal Project for the State of Alaska Department of
Commerce and EconoQic Development, Division of Energy and Power
Development. The work reported covers the period July 1, 1980 to Feb
1, 1981. The work was done in fulfillment of two contracts, BRU
Kotzebue GeotherQal, 08-71-7-500 and ATN 81-525, CC 08-1582.
The first section of this report lists the tasks contracted for
item by item and sumnarizes the work done. Reference is made to four
items that were cOwpleted as part of the contract tasks: geological and
geophysical data for the Kotzebue Selawik Basin, "Kotzebue Geothermal
Project:Currently Available Information and Report of the Advisory
Group Meeting-, "Geologic Analysis of Geothermal Energy at Kotzebue ft
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and a proposal to the Department of Housing and Urban Development on
behalf of the City of Kotzebue to study the district heat prospects at
Kotzebue. These four items are bound separately and are referred to as
appendices A,B,C and D respectively. Reference should be made to them
for a more detailed description of the results of the tasks performed,
and described below.
The second section gives a summary of findings and
recommendations.
Summary Qf Work Qll Project Tasks
Task 1
An energy needs analysis for the City of Kotzebue including
electrical power and fuel demands to the year 2000. This task
will take existing projections from a recent needs analysis by
the Alaska Powe~ Authority and put it in a form for presenta-
tion at the geothermal meeting in Task 3. Potential local use
geothermal applications will be projected under the assumption
that if the geothermal resources were developed geothermal
energy availability would stimulate commercial development to
some degree.
Three independent estimates of energy use at Kotzebue were
located, analyzed, and compared. No significant commercial uses of
geotherQal energy were identified, either in the literature or in
discussion. The most beneficial application was determined to be space
heat. The possibility of space heat was further examined by
conceptually designing a district heat system, with a geothermal heat
source, and estimating the cost of heat obtained from it. The
estimated cost of the geothermal heat was too high, but the district
heat portion of the system looked moderately promising. A summary of
this work can be found on pp. 34 to 42 of Appendix B.
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Task 2
Research currently available geological and geophysical
information for the Kotzebue-Selawik Basin. This infor-
mation shall be put in a form for oral, visual and written
presentations on the geological possibility of developing
geothermal resources.
Hr. Arlen Ehrn, consulting geologist, was hired to carry out this
task. The raw infor@ation is included in Appendix A, and a summary of
it with some analysis is given on pp. 24-28 of Appendix B. A
bibiliography is on pp. 45-46 of Appendix B. A more detailed, and
up-to-date, analysis of this data is given in Appendix C. Appendix A
was supplied to the Department of COQIDerce and Economic Development,
Division of Energy and Power Develop@ent, in only one copy because of
its volu@inous nature.
Task 3
Organize and host an interdisciplinary meeting of geothermal experts
to develop a work plan for the development of the Kotzebue project
and the expenditure of the State appropriation. This meeting will
be held at or around the Geothermal Resource Council Annual Heeting
in mid-September 1980 unless otherwise agreed upon.
A list of geothermal experts and people involved in the Kotzebue
geothermal project was compiled by Energy Systems Inc. with the help of
the Division of Energy and Power Development. The people contacted
included representatives of the City of Kotzebue, the NANA Corporation,
the University of Alaska Geophysical Institute, the State Division of
Geological and Geophysical Surveys, the Alaska State Legislature, the
Alaska Power Authority, Universities with relevant geothermal programs,
National Laboratories with Geothermal Programs, and the US Geological
Survey. These people were contacted by phone and it was determined that
a meeting on September 12, 1980, immediately following the meeting of
the Geothermal Res,ources Council would be feasible. In many cases
people on the list could not attend, and it was necessary to find
alternates. In the end a suitable advisory group was assembled, with
Dr. William Ogle of Energy Systems Inc. as chairman. It also proved
advantageous to hold a preliminary meeting in Anchorage to allow more
local experts to attend.
Arrangements were made for the meeting in Salt Lake City.
Information that had been uncovered in Tasks 1 and 2 and at the meeting
in Anchorage was mailed to the advisory group for their review prior to
the meeting. It was also organized into viewgraphs suitable for
presentation to the group. The members of the advisory group
generously donated their time at no cost to the State of Alaska. Their
advice and aid was quite helpful. The final composition of the
advisory group is on p.lO of Appendix B. Notes of this f.1eeting are on
pp.11-33 of Appendix B.
The basic conclusion from the f.1eeting was that the geothermal
prospects did not look as promising as first thought, but also that the
possiblility of direct use or use through heat pumps could not be ruled
out. The district heat portion of the project looked moderately
promising. Specific recommendations were to get additional
(proprietary) geological data from NNJA and Chevron, and to apply to
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the Depurtment of Housing und Urban Development for funds to look at
district heat in grcater dctail.
Task 4
A written final report detailing the task findings, the
preliminary ideas broached at the meeting in Task 3 and
possible cost and impacts of the different elements of
the work plan will be required. The state geothermal
development plan Kotzebue section is the preliminary plan
to be critiqued at this meeting.
Appendix B is the ~lritten report. Pages 4-8 summarize the ideas
presented at the Qeeting. Page 9 gives some conclusions and
recomQendations for future work. On pp. 28 and 29 is a critique, by
Hr. John Reeder, of the Kotzebue section of the State's geothermal
impleillentation plan. Pages 11-44 contain a lot of information relevant
to developing a plan for further geothermal work at Kotzebue, including
drilling costs and estimates of the cost of a district heat system.
After the advisory group meeting, and acting on conclusions and
recommendations coming from that meeting, the Division of Energy and
Power Development extended its contract with Energy Systems Inc. to
perform tasks 5 to 10, outlined below.
Task 5
Request from Northwest Alaska Native Association information
pertinent to determining depths at Kotzebue equivalent to
depths observed in the Nimiuk Point and Cape Espenberg wells,
and to the salinity, specific gravity, and dissolved solids
in the water from these wells.
Arlen Ehm wrote a letter to the NANA corporation requesting the
required inforIilation and detailing the need for that information. NAl'IA
forwarded the request to the Chevron Resources Company, which
generously allowed Hr. Ehm to view the requested material in San
Francisco. The fornation water cheIilistry information is shown in
Fig.l7 of Appendix C and the equivalent depths to basement at Kotzebue
is Fig.19 of Appendix C.
This infornation is crucial to determining the feasibility of
geothermal energy at Kotzebue.
Task 6
Obtain further information on Hhat data and information could
be obtained by electrical geophysical Iilethods at Kotzebue. Design
same and cost out.
The results of Task 5 were such that Task 6 was no longer
relevant. The seismic depth to basement obtained in Task 6 is far more
reliable than what could be obtained by any electrical method, and the
2000 ft. depth to basement obviates the need for the informa-tion on
salinity. Thus it was decided to determine the cost of drilling a 2000
ft. well at Kotzebue.
Battelle Pacific Northwest Laboratories was drilling similar wells
at Bethel. tle asked their contractor and Battelle theIilselves to
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csti~~te the cost of a 2000 ft well at Kotzebue. noth estim~t~d that
the cost would be about $350,000, including mobilization and .
dCr.lObil iZi.ltion. Jlov/ever, the contractor cont~cted would only do the
job on a tiQe and materials basis, and he has never drilled that deep
with the rig he anticipated using on the job. He did not think the
anticipated depth \-Iould be a problem, hov/ever, as long as a slim-hole
is used.
Task 7
Integrate information obtained in tasks 5 and 6 with previously
obtained gravity surveys, well logs, surface geology maps, and
other pertinent information to formulate the best estimate
presently obtainable of subsurface temperature, permeability,
pressure, and porosity at Kotzebue.
The information requested in the above task is given in the report
that is Task 8. The geological information gives a fairly complete
picture of the subsurface geology at Kotzebue relevant to determining
the feasiblity of using geothermal energy there. Of course, no amount
of inforQation could ever be sufficient for answering every conceivable
question.
The depth to impermeable basement at Kotzebue is about 2000 ft.
The probability of finding sufficiently permeable rocks below 2000 ft.
is very low. The temperature at 2000 ft. depth is predicted to be low
(105F to 135F). Above the basement, the rocks would have permeable
zones that would produce adequate volumes of water. Of course, this
water \-Iould be at a temperature below 135F. The do\omhole pressures
would not be sufficient to bring the water to the surface. In general,
the only feasible way to determine pumping requirements is to drill a
well and test it. The water would have a lot of dissolved solids.
Drilling costs would be low in comparison to the costs usually quoted
for petroleum wells in the area because there is little point in
drilling below 2000 ft, and the formations are easy to drill, both
because of the sedimentary rocks and because no extraordinary downhole
pressures are ant~cipated. A truck mounted rig could be used.
Task 8
Write a report on the geology of the Kotzebue Selawik basin
as it applies to the utilization of geothermal energy,
including figures that summarize the surface geology (rocks
and faults), regional geology, temperature profiles from
the Cape Espenberg and Nimiuk Point wells, lithologic sections,
electric logs, etc.
Hr. Arlen Ehm compiled the requested information in the report.
titled "Geologic Analysis of Geothermal Energy at Kotzebue", which is
Appendix C to this document.
Task 9
Answer H.V.D. solicitation for district heating for the village of
Kotzebue. The work plan for this solicitation will be an economic
scoping study considering wind, coal, 'vIood, geotherQal, and waste
heat separately and in conjuction with each other for the Qost
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economical district heating system for the village.
~n outline of the proposal was constructed by Energy Systelns Inc.
John Beebee of Energy Systems and Don Markle of the Division of Energy
and Power Development traveled to Kotzebue and discussed the draft of
the proposal with as many people who would partici-pate in it as
possible. In particular, Gene Hoore, the City Manager of Kotzebue, was
most helpful in setting up the District Heat Working Group, suggesting
changes in the management plan of the proposal, and getting background
information and letters of support. The proposal was sent to HUD on
January 16, 1981. Appendix D is a partial copy of the proposal.
Conplete copies were sent to HUD, the City Manager of Kotzebue, and the
Division of Energy and Power Development. Hissing from the copy given
in Appendix D is "Appendix B" of the proposal, which is essentially the
sane as Appendix B attached to this report. Also not included is
"Appendix D" of the proposal, which is a copy of "llorthwest Alaska
Co~unity Profiles--Kotzebue" by the University of Alaska, Arctic
Environmental Information and Data Center for the Alaska Department of
Co~unity and Regional Affairs, Dec, 1976.
Task 10
\'lork in conjunction with the City of Kotzebue and the Hauneluk
Hative Association to form a District Heating System Association
for Kotzebue.
After some discussion, it was decided that the City Manager's
suggestion of using the City Council as the core of the District Heat
Horking Group called for in the HUD proposal was most satisfactory.
The composition and duties of this group can be found in Appendix D of
this report, p.3. Since the Department of Commerce and Economic
Development contemplated participating financially in the project,
representa-tives of the Alaska Power Authority and the Division of
Energy and Power Development were added. This should be a useful
advisory group in beneficially expending the remainder of the
geothermal projec~ appropriation.
£iDdings and RecoIilr.lendations
The general conclusion of the geothermal advisory group meeting
was that geothermal energy was not likely to be an economical source of
heat for Kotzebue, but that district heat might be feasible. The
specific recommendations were that further data be sought from Chevron
and NNJA and that HUD should be approached for funds for a more
detailed study of district heat. The Division of Energy and Power
Development followed these reco@ffiendations. The geological information
obtained from Chevron clearly reinfor~ed the conclusion that geothermal
energy would not be feasible at Kotzebue. The conclusion is based on
several interrelated facts that are described in greater detail in
Appendix C. (1) The depth to impermeable basement at Kotzebue is only
about 2000 ft. (2) The temperature at 2000 ft. will be too low
(10SF-13SF) for direct use. (3) The forIJation pressures are too low to
push the water to the surface (4) pumping will be required to get
adequate volumes of water to the surface, and this pumping will be
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expensive. (5) The water is so saline that it Dust be passed through a
beat exchanger and reinjected. (6) Higher telt1perature water cannot be
economically produced from the IJimiuk point well and transported to
Kotzebue, both because of the pumping cost and because of the pipeline
cost. (7) Because of the high cost of diesel generated electricity at
Kotzebue heat pumps would not be Lldvantageous, either if used
individually or in a central installation. (8) The hot dry rock
technique of energy extraction would require drilling wells that WOuld
be too expensive to deliver energy at a cost competitive with the
anticipLlted cost of oil.
Of course, the geological parameters are predictions, based on
dLlta and assumptions that are explained in detail in Appendix C. The
best method for verifying these predictions of tenperature,
permeability, porosity, and formation pressure is to drill a well at
Kotzebue, and test it. Such a well, to a depth of 2000 ft, would
probably not cost less thLln $350,000. The $350,000 cost is based on
using a rig that has not drilled to 2000 ft, must drill a 4 in. or less
diameter hole, and it assumes that there are no hole problems. To be
certain of getting the results desired, it would be necessary to
anticipate expenses that would be much greater than $350,000. Other
than verifying the geological predictions, such a hole could be used to
locate aquifers suitable for thermal energy storage, to gather
subsurface water quality data, and would be of interest simply as a
source of subsurface information at Kotzebue.
The reco~endation that district heat be examined more closely is
based on a feasiblity study done in preparation for the advisory group
meeting. This study, which used general costs for components of
district heat systems and experience by the Public Health Service in
constructing the present water and sewer system, predicted that the
cost of delivering 1.16 X 10 Btu per year was $1.1 million per year,
or $9.48 per million Btu. (This cost includes an allowance for
retrofitting house heating systems, but does not include the cost of
heating the water.) This estimate was based on using low temperature
geo-thermal water, which resulted in mains that were larger than
necessary for higher temperature water. Also, due to the danger of
subsidence around the geothermal wells it was necessary to transport
the water from o~er a mile out of town, which added considerably to the
cost. The present cost of fuel for oil heat is about $14.80 per
million Btu.
Since Kotzebue presents some rather difficult engineering problems
for a district heat system, both in soil conditions and the need for
extreme system reliability, it is felt that pursuing the district heat
option will require a detailed feasibility study, as outlined in the
proposal, Appendix D. The total cost of this study was estimated to be
$185,500, of which the City of Kotzebue would provide $10,500, the
State of Alaska \vould provide $120,000, and HUD would supply $55,000.
The cost of the contract for a detailed study of the district heat
system is $135,000. The remaining costs ~lere for administration and to
fulfill HUD goals.
In fulfilling this contract, Energy Systems Inc and the Division
of Energy and Power Development had considerable contact with the City
of Kotzebue. In particular, the City Council agreed to serve as an
advisory group on the proposed district heat study. This group could
be asked to help direct how the remaining funds in the Kotzebue
geothermal appropriation should be spent.
Further study of the district heat option, as outlined in Appendix
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D, IJP. 1-18, would be a useful application for the funds.
The proposed district heat study, and the geothermal study .
reported in Appendices Band C, could be considered parts of an
integrated space heat study for Kotzebue. Other possible sources of
heat that might be examined as part of such an integrated study are the
direct use of coal in home furnaces and distributing low Btu gas from
coal to the city •
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