Energy an issue in coming year: Plenty of sources available, but harnessing them a challenge for Peninsula

Posted: Friday, February 18, 2011

No one denies that energy abounds on the Kenai Peninsula.

There's sun above, gas and heat below and wind all around. There's coal in the ground, and the ocean crashes in the west.

But harnessing all that energy is another matter. Private and public entities alike are working to develop those resources.

Joe Gallagher, from Homer Electric Association, said the company is moving forward on their Independent Light project.

Currently, the association purchases most of their power from Chugach Electric Association. That contract ends in 2013. Instead of renewing it, HEA plans to produce its own power for Peninsula consumers.

Phase one of the project -- bids for construction work -- are on schedule, and expected to be done in March, Gallagher said. The first phase will add a steam turbine at HEA's Nikiski Generation Plant, which should increase the plant's production from 40 megawatts to 77. Gallagher said the extra megawatts will be created without much of an increase in the natural gas used, because the energy will come from heat that is already being produced.

In phase two, the utility will upgrade the Soldotna substation.

Nadia Daggett, of Alaska Wind Industries, said Peninsula consumers are also increasing their individual energy production.

"We are seeing more Alaskans looking at larger systems this year ... as a way to really reduce their energy costs and increase their own economically stable production," Daggett said. Larger systems are those producing more than 5 kilowatt hours, she said.

In December, Daggett said her company was already filling its schedule with people ready to install turbines in 2011.

An extension on a grant means that businesses are still eager to get on the list as installation season approaches.

Daggett said that the grant, which expires Dec. 31, gives businesses 30 percent of the cost in cash after they commission a wind turbine.

Wind isn't the only source of energy that's allowing people to be less dependent on the grid.

Over at Ionia, a community near Kasilof, the focus is on living in tune with the earth. Changing their energy sources also makes economic sense.

Ted Eller said the community has worked on making wood boilers work, as well as some wind production and other alternative energies.

"The main motivation on our part was to have lower fuel bills and lower electric bills, but also because we love working with straw and clay and rocks and natural products," he said.

The community is also trying to share what it learns by building a renewable energy training building and offering workshops about various technologies.

Despite all the development going on, the immediate future doesn't look all good.

Enstar is facing shortages because people across southcentral Alaska use more natural gas than the company has firm contracts to buy.

The recent announcement that Conoco Phillips and Marathon Oil are closing the liquefied natural gas plant in Nikiski means that one gas back-up is gone.

Natalie Lowman, a representative of Conoco Phillips, has said the closure will happen in April or May. The company will still be producing natural gas to meet their contracts, but she said it was possible that without the LNG arm, they wouldn't be producing as much from their Cook Inlet wells.

Lowman did say that the plant will be mothballed so that it could be used for importing LNG or another new use in the future.

Two projects would help alleviate the shortages, but until then, Enstar may buy gas daily to meet demand.

Anchor Point Energy on the south Peninsula is trying to supply Enstar as early as March. They're in the process of getting approval from the Regulatory Commission of Alaska to send gas through a short pipeline to an Enstar subsidiary in the area.

And farther down the road, Cook Inlet Natural Gas Storage Alaska is trying to become the first major gas storage facility in the area. That project, which is also working through the regulatory process, would convert a mostly depleted field into storage. When producers were extracting more gas than consumers needed, the extra gas could be injected into the storage field. When consumers needed more natural gas than producers were pumping out, they could draw on those reserves.

HEA and Enstar would both benefit from the project.

But more projects are in the works.

The Alaska Energy Authority has funded stages of geothermal, tidal and other alternative energy projects on the Peninsula. If they progress to become realities, they could help counter the diminished gas supply.

In the most recent round of funding, Chugach Electric and a geothermal project on Mount Spurr are on track to get connected via a new transmission line.

An Outside producer, Ormat Nevada, Inc., would develop geothermal leases on the west side of Cook Inlet, and railbelt consumers would purchase the power through Chugach. Both sides are the project are up for funding.

A Grant Lake hydro project is also on the list of those that may receive funding.

And farther north, the state is looking at a large-scale hydro project that would help supply the railbelt with electricity. A public meeting on that project is scheduled or 5:30 p.m. on March 15 in Kenai at the Challenger Learning Center.

Molly Dischner can be reached at

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