Hot springs gets half of funds sought for geothermal energy

14 September 2004 | 13:18 Code : 4249 Geoscience events
Chena Hot Springs Resort in Interior Alaska will be tapping its geothermal resource for electric generation by the end of next year, and it will evaluate in the next three years whether that natural energy source can pump 20 megawatts ...
Chena Hot Springs Resort in Interior Alaska will be tapping its geothermal resource for electric generation by the end of next year, and it will evaluate in the next three years whether that natural energy source can pump 20 megawatts of electricity into Alaska's Railbelt grid. The resort received approval for grant funding, announced in late August and early September, from both the Alaska Industrial Development and Export Authority and the U.S. Department of Energy. Chena Hot Springs received roughly half of what it requested from each agency for two separate geothermal research projects. The state grant from AIDEA of $246,288 will go toward the purchase and installation of a binary electric generation system that uses hot water at the resort to produce electricity, according to Gwen Holdmann, vice president of new development at Chena Hot Springs Resort. Estimated cost of that system, which will produce up to 400 kilowatts of power for the resort, is about $1.7 million. Chena Hot Springs requested $560,000 from AIDEA. "It's a little disappointing that we didn't receive everything we requested, but we're going to accomplish everything we want to do," she said. "We're going to make it as cost-effective and inexpensive as possible. It's just going to take a little longer to pay off." Resort managers and owners are now evaluating two different electric generation systems that use lower temperature geothermal sources, such as those at Chena Hot Springs. "On the existing wells we have, we will be self-sustaining here by the end of next year," said proprietor Bernie Karl in early September. "We will have a very viable model for other communities to model after." Currently the resort relies on diesel generators to produce the 200 kilowatts of power needed. Recent increases in those fuel costs mandate the switch to alternative energy, Karl said. "We're burning a lot of diesel fuel, so we have to go forward with this - we have no choice but to go forward," he said. "We have the resource here to make the energy, we just need to get the plant up and running." The resort already heats 40 buildings with its hot water, as well as using the hot springs for an indoor swimming pool and an outdoor rock pond. Karl and his wife, who own the resort, have contemplated installing a geothermal power system for some time and have conducted some limited drilling to test the potential. Those previous tests, which included drilling down to the 300-foot level, indicate a 400-kilowatt system could be supported, Holdmann said. Excess electric power could be used for greenhouses and other needs at Chena Hot Springs Resort, she said. The resort is already developing a small hydroelectric system, powered by a spring-fed creek nearby, to generate about 12 kilowatts of power used in research greenhouses on site, Holdmann said. The second grant from the U.S. Department of Energy will allow further research of the area's geothermal potential, to evaluate whether it can produce enough electricity to feed into the Fairbanks-area electric grid. DOE will award $1.8 million for the three-year research project. The cost of the project is shared among participants, including Chena Hot Springs, the University of Alaska Fairbanks and two other research institutes, bumping the total geothermal research project to $2.16 million, Karl said. Again, the government funding amount was roughly half of that requested by Chena Hot Springs and its research partners. With the reduction in funding, geothermal research will focus solely on the Chena Hot Springs area, to include drilling one 4,000-foot well near the resort. Drilling a second well has been dropped from the research project, as well as a regional reconnaissance evaluation of five other known hot springs sources in the Interior, Karl said. While the DOE-funded research is a three-phase project designed to evaluate the geothermal potential, one specific goal is to determine whether the energy source at Chena could produce up to 20 megawatts of electricity. During a recent geothermal conference held at the resort in August, the local power company, Golden Valley Electric Association, said it would consider connecting the resort to its power grid. Chena Hot Springs Resort is located about 60 miles northeast of Fairbanks and about 30 miles off of the local electric grid which, through Golden Valley's connection to the Alaska Intertie, is hooked to the state Railbelt grid. "Golden Valley has studied this. If we can provide 20 megawatts for 20 years, they can afford to put in a line," Karl said. "They're willing to do that if we can fulfill our end." Drilling deeper at Chena Hot Springs could locate a hotter water source, eliminating a binary power generation system and allowing electric production directly from steam. "Alaska contains more (geothermal resources) than all other states, and we have high energy costs here, some of the highest," Karl said. "The state of Alaska is not in the lead (for geothermal development). We're not even in the parade; we're not even following the parade. There's not one geothermal (power production) project in the state." Karl is confident that the trend will begin to reverse once Chena Hot Springs starts up its power production project. Geothermal power production could particularly assist rural areas of Alaska, where fuel costs are especially high, he said. "You have to build something, get it on the market, show it and demonstrate it." AIDEA and its subsidiary agency, the Alaska Energy Authority, also will receive a grant for geothermal development from DOE, announced at the August conference at Chena Hot Springs. Final negotiations for the funding amount and use of the money are still in the works, according to AIDEA's geothermal coordinator, Bernie Smith. AIDEA and AEA requested $100,000 to assist the state in continuing to evaluate and develop geothermal resources to produce electricity and to displace diesel fuel, he said. STORY>

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