The Potential Economic and Environmental Benefits of

Geothermal Energy to The Anchorage Area

Harvey Brittain

2/23/2012

Email: hbrittain@alaskapacific.edu

Abstract

Diminishing oil resources are a major concern for the near future. With renewable energies emerging

as a necessity for our persistence, geothermal energy surfaces as a potential replacement for carbon based

fossil fuels as an energy resource. This project examines what geothermal energy is, what causes it, and what

it can provide with the aid of a geothermal power plant to the city of Anchorage. Four Geothermal research

drilling sites located in California will be studied in an attempt to assemble data for this evaluation.

Geothermal energy is one of the renewable energy resources of the future; however, further research is still

needed in the progression of its uses.

This project will contribute to the understanding of geothermal processes for the general public not

actively involved in the topic of renewable energies, and develop a thesis for the benefits of the utilization of

geothermal energy. The overall goal of this project is to better understand geothermal processes, and to

better inform the community of the potential environmental and economic benefits of utilizing geothermal

processes in the Anchorage area. This will allow for the potential aid in development of geothermal resources

surrounding the Anchorage area.

Introduction

In today’s society, renewable energies are currently a secondary importance with regard to overall

energy generation. With the utilization of fossil fuels as our primary source of energy, there are some

undesirable side effects that are becoming less and less tolerated by industrialized societies. These side effects

would include, but are not limited to, undesired effects on the environment, our health, and the prospect of

reducing availability within about 150 years (Ueckermann 2008). Due to these factors, and an increase in

energy demands caused by an increasing population, the demand for the development of renewable energies

to reduce our dependency on fossil fuels has significantly increased. A potential source of energy that, if

advanced, could provide much of the world’s energy needs is geothermal energy.

However there are some factors influencing the utilizing of this resource. These factors include a lack

of technology development, tectonic activity, access to the energy source, stable temperatures, and lack of

“useable” (based on power plant use, a minimum of 72ᵒ C) temperatures (DiPippo 2008). The lack of

technology could be considered the main inhibitor as other factors; such as accessibility to the energy source,

stable temperatures, and an absence of useable temperatures, can be overcome providing some

advancement. Volcanically active tectonic margins however cannot yet be overcome by technology, only

avoided based on location. Despite these inhibiting factors, an increased drive to further development this

energy source is leading to the progression of advanced technologies that will allow us to successfully utilize it.

Project Goal

What is geothermal energy and how might it benefit the city of Anchorage both economically and

environmentally? Here, I answer these questions with a goal of providing the public with a better

understanding of this potentially valuable resource. The economic evaluation compare 10 years of energy

production and expense data (from 2001-2010) for the city of Anchorage with production and expense

statistics from four operating geothermal power plants. I will use this comparison to evaluate the potential

economic benefit to Anchorage of a binary geothermal power plant, using Mt. Spurr as a power source. The

environmental evaluation will compare basic information, such as the annual weight of emissions, from

geothermal power plants and petroleum oriented power plants, and then I describe the pros and cons of each.

Below, I list specific objectives of this paper:

Geothermal Energyo Review of literature and case studies that summarize our current understanding of geothermal

processes. This information will be used to gain a basic understanding of what geothermal processes are.

Geologic Summary of Alaskao Compiled evidence of the geology of Alaska will be used to describe the geologic evolution of

Alaska. This evidence will be used to gain a basic understanding of the existing geologic structure of Alaska to better understand the origins of the geothermal potential of Alaska.

o Summary of Alaska’s geothermal formation will be provided to explain the basis for the geothermal potential near the Anchorage area.

Economic Evaluationo Evaluation of the economic effects to Anchorage if the potential utilization of geothermal

energy is implemented. Environmental Evaluation

o Evaluation of the environmental effects on the utilization of geothermal energy.

Geothermal Energy

The word ‘geothermal’ comes from Greek roots; the combination of the words “geo” (earth), and

“thermos” (hot) (DiPippo 2008). Geothermal energy has been in use in the form of hot springs as a form of

bathing, and relaxation since before civilizations were conceived. It is a form of renewable energy derived

from heat found within the earth’s crust, and resources vary widely from one location to the next, depending

upon the temperature and depth of the resource, the rock chemistry and the abundance of groundwater. This

source of heat is caused by thermal energy that is continuously generated by the decay of radioactive isotopes

of underground rocks that are stored within the globes interior (Ueckermann 2008), or is created by the

thermal conduction of magmatic intrusions. This heat source is as inexhaustible and renewable as solar

energy. When it comes to comparing the two energy sources, solar energy is the cleanest and most efficient

when available; however the fact that solar energy can only be utilized to its fullest extent when the solar

panels are facing the sun gives rise to geothermal energies advantage in consistency. The always changing tilt

of the earth’s axis can also have an effect on how efficient solar panels are.

There are 4 types of known geothermal systems: hydrothermal, hot dry rock, geopressured, and

magmatic systems; of which only one is being utilized due to technological restrictions. The system presently

being exploited is the hydrothermal system. To become available for energy conversion, heat is brought to or

near the crust’s surface by thermal conduction, and by intrusion into the earth’s crust by molten magma

originating from below the crustal layer. When this heat source comes into contact with groundwater, the

ground water becomes heated resulting in the production of geothermal energy produced in the form of hot

water and steam. Figure 1 and Figure 2 depict this process:

Figure 1: Shows the approximate thicknes and structure of the earth’s lyers.

Figure 2: Shows the process of geothermal activity.

This heated ground water can be applied for the direct use of heating homes, greenhouses, public

buildings, streets, sidewalks, and other structures or appliances that may require heat to be functional. These

are known as direct uses of geothermal energy (Huenges and Ledru 2010). Geothermal energy is also and in

most cases a source for the production of electricity.

Utilization of this heat source as a means of energy production has however only been engaged since

the early 20th century. The first know occurrence of this energy conversion of geothermal heat to electricity

occurred at Larderello, Italy in 1904 (Gupta and Roy 2007). With geothermal energy being a cleaner renewable

energy source, the continually diminishing petroleum and fossil fuel reserves, has allowed for it to become

sought after. Today more than 20 countries generate electricity, about 60 countries make direct use of

geothermal energy, and about 15,000 GW are being deployed worldwide (Gupta and Roy 2007). With the

utilization of geothermal energy on the rise, the search for this renewable energy source is also increasing.

Since we know that geothermal energy is brought to or near the crust’s surface through thermal

conduction by intrusion into the earth’s crust via molten magma, it can be assumed that geothermal potential

exists near areas of active tectonic margins, and volcanic regions. As active tectonic margins and volcanic

regions are highly correlated, and commonly share a link with the same aspects as occurrences of geothermal

energy, this assumption can be deemed as an educated guess. This can also be backed by research that shows

high correlations between tectonic activity and an increase in the sub-surface temperature gradients of the

surrounding areas (Ueckermann 2008).

An example of this can be found surrounding the pacific plate, commonly known as the ring of fire.

With the presence of tectonic activity, the presence of volcanic activity is common dependent upon the

intensity of said tectonic activity; the higher/more frequent the activity, the more probability of the presence

of volcanic activity. When the temperature gradient averaging 30ᵒ C/1 K, or 3 C/100 m, becomes shallower

closer to the crust’s surface (DiPippo 2008); depending upon the circumstances of the area, namely the

structural formation of the rocks, water originating from the water table is heated through thermal

conduction, and either stored underground or pushed toward the crust’s surface through cracks, fractures, or

faults in the rock. When this hot water becomes exposed (depending upon the available pressure and flow of

the water, permeability of the ground structure, and other components), it is known as a hot spring, geyser, or

fumarole.

There are several methods that can be used to locate geothermal prospects, finding these prospects

can be as easy as visually observing the activity; however not all such activity is located within the vicinity of a

population. Other methods of finding the geothermal potential for economic utilization can be used. As

mentioned, one of the most common methods is observation, but when that fails, the utilization of seismic,

electrical surveys and test drilling in areas with known potential for geothermal activity is implemented. These

methods are however only used to confirm the presence of geothermal activity, rather than a means of initial

discovery.

When seismic and electrical surveys are conducted, data can be collected by using the principles of

seismology to estimate the earth’s sub-surface profile from reflected seismic waves, in other words, the way

this technology is used to collect data is similar to that of sonar. When test drilling is conducted, a drill rig is

placed at a desired location and used to cut into the earth’s surface to extract a sample. From this sample,

information such as rock type, mineralization, depth, heat, bedding structure, bedding direction, bedding

angle, and many other things depending on what the exploratory drilling is being conducted for, are used to

determine the level of potential. When looking for geothermal activity, some common things that are looked

for can and generally include temperature, hydrothermal alteration to the rocks, rock type, and geothermal-

fluid (heated water with chemical alterations). In this process, the activity is either observed, or looked for in

areas that generally correlate well with the occurrence of geothermal energy (Huenges and Ledru 2010).

The last common method used for finding geothermal potential is through airborne surveys. There are

two implemented methods to date, the first is thermal inferred imaging, and the second is aeromagnetic

surveys. When using an inferred imaging system as a means of surveying, you are using the technology to

simply look for anomalous surface temperatures that would signify the occurrence of geothermal activity.

When using an aeromagnetic system as a means of surveying, the technology is similar to that of some seismic

surveying in that it utilizes magnetics to recover data, and with high-precision, it in a sense accounts for

vegetation on the surface when taking a snapshot of the ground. This allows for the detection of geological

features important in geothermal exploration. Both of these methods are highly accurate, and are very useful

when trying to survey inaccessible areas (Gupta and Roy 2007).

Once the geothermal energy is found, there are multiple ways that it can be harvested. To date, the

available four known geothermal systems can be utilized by 4 types of plants: flash steam (single and double),

dry-steam, binary cycle, and advanced geothermal energy conversion systems, that are able to effectively

convert the heat energy into electrical or heating energy. The type of plant is determined by the nature of the

geothermal resource at the site. The following will be a description of how each of these plants operates:

In a flash steam power plant, a combination of steam and hot water is pumped into a flash tank from

the well where steam is separated from a portion of the water in a separator. Steam is first utilized to power a

turbine, the remaining water then flashes into steam due to high temperatures and pressures to power a

turbine. The residual water is then re-injected back into the reservoir, or used in a condenser depending if the

plant has a condenser. Depending upon the temperature levels of the resource, you can potentially use a

second stage flash tank were the process is the same as the first flash tank. Known as a double-flash steam

plant, it can only be used when high temperatures are present. A single-flash steam plant is normally utilized

when temperatures of the reservoir are lower (in excess of 180ᵒ C) (DiPippo 2008).

In a dry-steam power plant, steam (such as obtained from geysers) is piped directly in to the plant to

provide power for the turbines. The used steam is then condensed and run through the plant’s cooling system

before being injected back into the reservoir to replenish the water and pressure levels. Though higher

temperatures are generally sought, utilization were water beings to turn to steam at 100ᵒ C (212ᵒ F), is

possible (DiPippo 2008).

In a binary power plant, lower temperatures may be used down to 85ᵒ C. Although this plant has the

ability to use higher temperatures, it is normally used in the place of other plants that cannot utilize lower

temperatures. Through this system, geothermal fluids are passed through a heat exchanger were the heat is

transferred into a low-boiling point binary liquid such as propane, isobutene, isopentane, or ammonia. When

heated to a high enough temperature, the binary liquid flashes into vapor to power the turbines. The vapor is

then re-condensed through the cooled geothermal fluids in the condenser, and used repeatedly (DiPippo

2008). Figure 3 depicts this process.

Figure 3: Depicts the process of a binary geothermal power plant.

In the final type of power plant known as advanced systems, a variant of the binary cycle technology is

used to potentially yield higher thermal efficiency. The process of extracting the geothermal energy is the

same as a binary plant, however the difference is that it uses a combination of 2 binary fluids rather than 1,

this process is known as the Kalina thermodynamic cycle (Gupta and Roy 2007). There is also an integration of

hybrid singe-flash and double-flash systems, a hybrid of flash and binary systems, a combination of fossil fuel

and geothermal energy systems, and a combination of heat and power plant systems technology available

that are in some cases currently being utilized.

Today, there are about 25 countries that generate electricity from the use of geothermal energies, and

about 72 countries that make direct use of available geothermal energy. In 2000, the geothermal electrical

installed capacity of the world was 7,974 MW with an annual electrical generation of 49,300 GWh,

representing 0.3% of the world’s total electrical power generated. Many of the geothermal power plants have

been in operation since the 1970’s; however, due to an average life expectance of 22years, renovations have

been necessary to maintain the plants in economic working order. Most plants are able to operate at an

efficiency rate between 5.5% and 12% when using geothermal fluid temperatures approximately between 80ᵒ

C and 180ᵒ C. Up to about 135ᵒ C net power generation efficiencies are below 10%; however at about 200ᵒ C

efficiencies amounts to between 13 and 14% depending upon if the geothermal fluid is exploited exhaustively

and the desired cooling temperature is reached. In general, the higher the available temperature of the

geothermal resource, the higher the efficiency rate of the plant. These percentages are high in comparison to

older generation plants, although low when compared to conventional power plants and fossil fuel energy

generation. The trade of is that this energy source is more environmentally friendly and renewable

(Kaltschmitt, Streicher, and et al 2007).

With the knowledge that geothermal power plants emit little to no harmful emissions such as CO, CO2,

NO2, or SO2, it is easy to see why geothermal energy is cleaner than fossil fuels. To look at what is

environmentally damaging by the presence of geothermal plants, we will look at the beginning. Before the

actual construction of the plant occurs, exploration needs to happen. When geothermal exploration takes

place, test drilling is almost always utilized as a means of confirmation that a geothermal resource is present,

and when this process is completed, very few environmental effects remain, the only thing left is a well head

(used to protect the chemistry and function of the water table, and to keep life forms from stepping into the

hole), and effects comparable to those of natural gas exploration; it is also possible to re-cultivate the drill site,

therefore little damage remains at the drill site.

Under normal operation, due to the circulation of geothermal fluid within the heat exchanger, small

concentrations of salts and minerals may be dissolved below the earth’s surface; this however has no known

detrimental effects on the environment. Also during normal operations, it is known that a geothermal plant is

not very efficient. This results in high quantities of waste heat to be released. From these factors current

viewpoints suggest that no significant detrimental effects on humans and the natural environment are likely to

occur. When compared to observed volcanic areas of the earth, malfunctions that result in the release of

geothermal fluid onto the earth’s surface have a low environmental impact. In all, the most environmentally

harmful aspect of a geothermal plant is the disposal of the plant when operation ceases (Kaltschmitt,

Streicher, and et al 2007).

When considering the utilization of a geothermal power plant, it is safe to assume that it is one of the

most environmentally friendly methods of producing energy effectively for the consumption of society. When

economically considering the use of geothermal energy, there are many factors that need to be deliberated.

Geologic Summary of Alaska

Alaska’s Geologic history is very long, and complicated. To date there are many competing studies and

theories that sometimes contradict one another, accompanied by a lack of data that leads to an unstable

conclusion of the processes that formed Alaska’s current geologic structure. The following will be a short list of

one theory that describes the overview of the geologic and tectonic evolution of Alaska. This process is stated

in ‘The Geology of Alaska’ as a model for ‘Tectonic Evolution’ (Plafker and Berg 1994). This model is presented

to try and map out the structure of Alaska in chronological order of formation. The dates of this model will be

used to try and track this formation.

Even though there are geologic processes known to have occurred before 570 Ma that formed parts of

Alaska existing today, the evidence is too fragmented to try and map. The following is a list of major building

events, in respect to the geologic time line, as similarly described in ‘The Geology of Alaska’ (Plafker and Berg

1994); followed by Figure 4 that depicts known magmatic belts:

Cambrian to late Devonian (570-360 Ma) - Inferred configuration of continental margin composition

terranes (CT’s), ultramafic rocks of the Livengood terrane, and Wrangellia intra-oceanic CT’s.

Early Mississippian to Middle Triassic (360-230 Ma) - Passive margin sedimentation occurred on the

Artic and central CT’s, opening of the Cache Creek sea, rifting of the continental fragment of the Yukon

CT’s, magmatic arcs developed on the southern Yukon CT’s, and east(?) dipping subduction zones of the

Wrangellia CT’s.

Late Triassic to Late Jurassic (230-160 Ma) – Passive margin sedimentation on the Arctic CT, arc

volcanism and subduction took place on the intra-oceanic Togiak-Koyukuk CT, Quesnellia arc and its

accretionary prism (Cache Creek terrane) were active along the continental margin above an east dipping

subduction zone, the Yukon CT closed the Cache Creek Sea during the time that Stikine arc was active

above a probable west dipping subduction zone, the Yukon CT collapsed against inboard terrane that

overrode part of the Central CT and North American craton margin, fragments of oceanic crust were

obducted onto terranes along the eastern margin of the Yukon CT (Slide Mountain terrane) and were locally

emplaced onto the Yukon CT in Alaska (Seventymile terrane), the Wrangellia CT was characterized by

eruptions of tholeiitic basalt in the Wrangellia terrane, eruption of bimodal volcanic rocks in the Alexander

and Peninsular terranes, arc volcanism and formation of the accretionary prism of the Southern Margin CT

above an east dipping subduction zone, Limestone with Tethyan faunas was scraped into accretionary

prisms of the Cache Creek terrane and Southern Margin CT, and probable major northward movement of

Wrangellia CT.

Late Jurassic to Aptian (160-120 Ma) – Incipient rifting occurred in the Canadian basin, Togiak-Koyukuk

CT collided with the Artic CT resulting in 150+ km overriding of the Artic CT by the oceanic crust of the

closed Kobuk basin, major contractional deformation and regional high pressure metamorphism in lower

plate rocks and probable flip in the subduction zone, arc magmatism and accretion occurred above the east

dipping subduction zones in the Wrangellia and Southern margin CT’s, Wrangellia terrane in Alaska offset

by 600+ km from Wrangellia in British Columbia, and deformation of flysch basins along the continent-

ward margin of the Wrangellia CT.

Aptain to Campanian (120-84 Ma) – The Canada Basin opened driving counterclockwise rotation of the

Arctic CT and attached parts of the Togiak-Koyukuk and Oceanic CT’s, clockwise rotation of the Ruby

terrane and attached parts of the Oceanic CT, placement of the Wranellia CT against continental margin

terranes with the collapse of flysch basins, a major magmatic belt overprinted all major terranes in Alaska

and is inferred to be related to east dipping subduction along continental margin, and thermal metamorphism

throughout much of Alaska.

Campanian to Paleocene (84-66 Ma) – Dextral transpression along the continental margin resulted in

northwest movement of the Yukon CT along the Tintina, further clockwise rotation of the Ruby terrane,

attachment of Oceanic CT to close the Yukon-Koyukuk basin, Kluane arc magmatism was active above the

landward dipping subduction zone, and large accretion of arc derived sediments in the Southern Margin.

Paleocene to M. Eocene (66-50 Ma) – Large scale counterclockwise rotation of western Alaska and

displacement of the western Arctic CT (Seward Peninsula), dextral displacement on the Denali fault formed

the proto-Yakutat terrane, continued Kluane arc magmatism above landward dipping subduction zones,

major volumes of acr derived sediment were scrapped into western part of the Southern Margin CT

accretionary prism, and wide spread anatectic magmatism along the southern Alaska margin.

Eocene to Present (50-0 Ma) - Onset of northward Pacific plate resulting in formation of the Aleutian-

Alaskan Peninsula arc, displacements on the intra-plate faults, formation of basins on land and contiguous

continental shelves, Fairweather-Queen Charlotte transform boundary stepped northward, and Yakutat

combined western Yakutat terrane and Pacific plate resulted in arc volcanism in the Wrangell Mountains

and major uplift of eastern Chugach and saint Elias mountains.

Figure 4: Shows the known locations of magmatic belts in Alaska. (Plafker and Berg 1994).

The purpose of this overview was to not only understand the geologic formation of Alaska, but to also

understand the background processes of Alaska’s geothermal resources. This is important when trying to

understand the reasons for the location of geothermal processes at Mt. Spurr’s. The following will be an

overview of the geothermal resources of Alaska, in effect explaining the reason for geothermal activity at Mt.

Spurr.

Today, there are 108 known geothermal hot springs throughout Alaska, and about half of these are

located primarily along the Aleutian volcanic arc. The rest of these hot springs are located along the Wrangell

Mountain’s volcanic pile, Southeastern, central, and Northern Alaska; sometimes referred to as the Central

Alaskan Hot Springs Belt (CAHSB), as shown in Figure 5.

Figure 5: Shows the known locations of hot springs (Blue), volcanic vents (Red), and the geothermal potential (Purple) within Alaska. (Alaska energy inventory 2012).

Geothermal activity found along the Aleutian volcanic arc is generally found to be highly variable. This

is due to the recent (Quaternary) magmatic processes known to the area. However not all geothermal energy

is found only within regions of recent shallow magmatic intrusions. As described in the above geologic

overview, Central and Northern (interior Alaska) geological activity mostly stopped pre-Quaternary. This

means as commonly known, that these geothermal processes are caused by isotopic decay from plutonic

granite known to the area, and believed to have formed during the late Triassic, Jurassic Periods. This allows

for respectively rare stable temperatures to occur with respect to the temperature gradient.

With all the known active geothermal areas, Alaska probable has the greatest potential for large scale

geothermal energy development out of any other single North American region. The majority of this energy

potential is also located close to populated areas. This only provides a greater likelihood of potential

utilization. When considering this information for the potential utilization for the Anchorage area, knowing

that the Anchorage area is located near geothermal potential, though not on any, is important. Understanding

this information allows us to know that the closest geothermal resource for potential utilization to the

Anchorage area is Mt. Spurr.

Economic Evaluation

In this economic evaluation, four cases studies located in California will be representative of a

Proposed Binary Geothermal Power Plant (PBGPP) to be installed for the use of the two companies that supply

energy to the city of Anchorage; Chugach electric and Municipality of Light & Power (ML&P). The purpose of

choosing a Binary Geothermal Power Plant (BGPP) over another type of geothermal power plant is due to the

temperatures available at Mt. Spurr. No useable temperatures have been found yet, however the potential for

temperatures that could be used by a BGPP is relatively high. The purpose of choosing Mt. Spurr as a potential

source of energy is that it is the closest known geothermal energy resource being explored for utilization near

the Anchorage area.

For the purpose of maintaining accuracy, I have inflated all currency values to 2011 USD currency

values. Concerning the values from ML&P and Chugach electric power companies, they have been based on 10

year weighted averages calculated from data for 2001 to 2010. For the comparisons for the evaluation, I have

used 4 sample case studies from California. The averages created represent a potential binary geothermal

power plant. These averages were then compared to evaluate an economic potential for the Anchorage area.

Standard Deviations were also calculated for my sample cases studies to show accuracy through the

variability.

With the accuracy of this evaluation defined, I will look next at the affordability of a PBGPP for the City

of Anchorage based on the average overall operating revenue of Chugach electric and ML&P. This will be

accomplished through a comparison of average investment costs of a PBGPP to a 10 year average of the

overall operating revenue and expenses of Chugach and ML&P. Next I will compare the average operating

costs of a PBGPP to a 10 year average of the overall operating revenue and expenses of Chugach and ML&P.

This information will be used to evaluate if the two companies can afford a BGPP based on the 10 year

average; the potential values of a BGPP are acquired through averages of the four case studies mentioned

above, this will allow for the functionality of this economic evaluation.

Next a comparison of a PBGPP’s cost/KWh to the operating cost/KWh for Anchorage, based on

weighted averages, will be used to determine economic competitiveness. This is very important to the

evaluation as it determines whether or not a BGPP can compete with other power plants that service the

Anchorage area, economically. Lastly a comparison will be conducted between a PBGPP’s rated energy output

in MW’s to the residential power sales for the Anchorage area from Chugach and ML&P. This comparison will

determine how much a BGPP will be able to add to the overall energy output, in effect measuring its level of

benefit.

As of 2010, the city of Anchorage was supplied energy through two companies; Chugach electric, and

the Municipality of Light and Power. Chugach sold 2,594,493,383 KWh (2,594.49 MW), and ML&P sold

1,186,628,608 KWh (1,186.82 MW) of overall energy on average individually. This brought an average overall

operating revenue of $260,372,065.4 to Chugach, and $108,867,087 to ML&P. With an overall average

expense of $229,022,869.5 for Chugach and $66,658,840.98 for ML&P; a profit of $31,349,195.9 remains for

Chugach and $42,208,246.02 for ML&P. Due to restrictions on accessibility to this profit margin, the majority

of this profit is not available for the direct use by the companies; however there is more than enough available

to each company for either company to be able to individually fund the construction of a BGPP that has an

average investment (construction) cost of $2,636,089.13, and an average annual operating cost of

$656,432.62.

Now that the question of affordability has been answered, a determination of whether or not a BGPP

will be economically competitive compared to other power plants, needs to be reached. On average when it

comes to how much is financially gained and how much energy is utilized from the Anchorage area for each

company, weighted averages need to be instituted to account for the percent difference in energy sales to the

Anchorage area between the two companies Chugach and ML&P. A weighted 10 year average operating

revenue of $17,784,348.60 for ML&P and $79,226,119.70 for Chugach, compared to the overall operating

revenue average of $108,867,087 for ML&P and $260,372,065.4 for Chugach, yields that Anchorage accounts

for 16.34% of the ML&P total operating revenue and 30.43% of the Chugach electric total operating revenue.

When considering the utilization of a BGPP for the Anchorage area, understanding the percent of the

revenue that will be affected due to the implementation of the plant, is important. To compare the average

operation costs/KWh of $0.073 for the Anchorage area; with respect to the percent of the average operating

revenue, to the average cost/KWh of $0.27 for the PBGPP, the conclusion that the PBGPP is more expensive to

run than the current methods of the two companies that provide energy to the Anchorage area is reached.

This means that the PBGPP is not economically competitive with other types of power plants used by the two

companies. This conclusion however is inaccurate as the values used to create an average cost/KWh for the

PBGPP are to variable to be statistically accurate.

Statistically looking at the sample size of the PBGPP, there are four samples/case studies. This is a low

number when trying to get the most accurate numbers possible. In general the larger the sample size, the

better the results are going to be. However in this case, only four samples are available, a statistically strong

result is unlikely. Knowing that on average, a geothermal plant can produce energy at lower costs than other

sources of energy like coal, oil and gas; than what was not represented in my findings, I calculated the

Standard Deviations to measure the variability of my data to resolve this issue. My results are as shown in

Figure 6, Figure 7, and Figure 8:

1 2 3 40

0.1

0.2

0.3

0.4

0.5

0.6

California Case Studies

USD/

KWh

SD = 0.208Avg. = 0.267

Figure 6: Shows the variability of the sample case studdies based on the cost/KWh throguh the standard deviation when compared to the average cost/KWh.

1 2 3 4 5 6 7 805

101520253035404550

California Case StudiesRa

ted

MW

h

SD = 14.126Avg. = 12.537

Figure 7: Shows the variability of the sample case studdies based on the rated MWh throguh the standard deviation when compared to the average of the rated MWh.

1 2 3 40

0.5

1

1.5

2

2.5

3

3.5

California Case Studies

Investment CostAnnual Operating Cost

Mill

ion

USD

SD = 0.164Avg. = 0.656

Figure 8: Shows the variability of the sample case studdies based on the average annual investment and opperating costs throguh the standard deviation when compared to the average of these values.

These standard deviation values mean that the data has a high variability, and are inconsistent with

known averages. With the range between the cost/KWh of the PBGPP to significantly variable to be

considered statistically strong when compared to the average cost/KWh of Anchorage. This means the null

hypothesis that the data are highly variable is accepted, making the evaluation with the average PBGPP

cost/KWh statistically weak when comparing it to the average cost/KWh of Anchorage.

Finally we will look at what a BGPP can off in percent of MW compared to an existing average of MW

available to the anchorage area. On average, Anchorage is supplied with 551,140,567.4 KWh (551.14MW)

from Chugach and 147,764,346.6 KWh (147.76 MW) from ML&P; the combination these amounts, yields a

residential average of 698,904,914 KWh (698.90 MW). The PBGPP on average produces a rated output of 5.7

MW, equaling 0.82% of the average power consumption for the Anchorage area. This is not a significant

number, meaning that the PBGPP is not very beneficial when it comes to providing energy.

With this knowledge based on the averaged values of the PBGPP compared to the 10 year averages of

Chugach electric and ML&P; the installation of a BGPP at Mt. Spurr, while assuming an average temperature of

130ᵒ C (the average temperature utilized by the case studies used for the averages of a PBGPP), for the

utilization of the Anchorage area would not be economically feasible.

The PBGPP would however not be able to compete economically with other power plants based on

cost/KWh, and energy output in MW. While this study showed that using the PBGPP averages was statistically

strong, it also showed that the data is to variable. Taking into consideration that the bigger the geothermal

power plant is, the more energy (MW) it is able to produce, and the cheaper it becomes to produce this

energy; a bigger BGPP would be more economically competitive. Increasing the size of the plant dose in effect

cost more; however, the revenue produced form the Anchorage area would still be able to cover a significant

amount allowing for the PBGPP to be a reality.

Environmental Evaluation

In this environmental evaluation, a comparison of gaseous emissions evaluating a study conducted by

Ronald DiPippo (2008) will be conducted between various binary geothermal, coal-fired, oil-fired power

plants, and gas turbines. Emissions will include the following gases: CO2, SO2, and NO. Other environmental

aspects described in this evaluation include: noise pollution in decibels, biological effects, thermal effects, and

chemical pollution. These effects will represent the effects of binary geothermal power plant that could

potential be utilized for the Anchorage area.

In his study, DiPippo states that binary geothermal power plants emit zero CO2, SO2, or NO, as they are

closed systems. In comparison coal-fired power plants emit 994 kg/MWh of CO2, 4.71 kg/MWh of SO2, and

1.955 kg/MWh NO; oil-fired power plants emit 758 kg/MWh of CO2, 5.44 kg/MWh of SO2, and 1.814 kg/MWh

of NO; and gas turbines emit 550 kg/MWh of CO2, 0.0998 kg/MWh of SO2, and 1.343 kg/MWh of NO. Other

hydrothermal power plants emit either little or no emissions. This means that binary geothermal power plants

are the most environmentally friendly concerning air pollutants (DiPippo 2008).

Another environmental aspect that concerns air pollution is noise pollution. Depending upon the

distance from the source and whether or not the source is muffled, a geothermal air drilling rig can produce 84

to 114 decibels (db); in comparison, free-way traffic is 90 db, and a vacuum cleaner is 70 db. The human

threshold of pain is only 120 db, this means that the noise level is tolerable; however the range signifies that a

geothermal power plant can be fairly noisy.

Other environmental aspects are thermal effects, chemical pollution, and biological effects. Though no

cases have occurred that would be considered significant, however the potential still exists. Thermal effects

are caused by reinjection of brine from the geothermal plant into the reservoir. As the temperature of the

brine is colder going in then when it was extracted, this can cause a decrease in the temperature of the

reservoir. Reinjection of brine back into the reservoir leads to chemical pollution of the ground, and

potentially the water table. In the brine, gases constitute primarily of CO2 (up to 90% by weight), H2S, and

smaller amounts of NH3, CH4, N2, H2, Hg, B, and Rn; with the total accounting for only 5% of the brine (Gupta

and Roy 2007). This application of chemical pollution can also be attributed to air pollution for flash-steam and

dry-steam power plants. Concerning biological effects, no environmentally damaging effects have been

observed. This can be seen in the following table.

CO2 kg/MWh SO2 kg/MWh NO kg/MWh

Binary Power Plant 0 0 0

Coal Power Plant 994 4.71 1.955

Oil Power Plant 758 5.44 1.814

Gas Turbines 550 0.0998 1.343

Table 1: Compares the average annual emissions by kg/MWh of four types of power plants.

In conclusion, there are some environmental effects from the utilization of binary geothermal power

plants, though none are significant when compared to the environmental effects of other types of power

plants. This includes other types of hydrothermal plants that are still less environmentally harmful than coal,

gas, or other fossil fuel driven power plant. This means that if a binary geothermal power plant were to be

installed within the Anchorage area, it would be environmentally beneficial if replacing an alternative fossil

fuel power plant, as it provides cleaner effects from energy production.

Summary

After comparing the average investment and annual costs of the 4 samples case studies to the 10 year

averages from the municipal light and power, and Chugach electric power companies for revenues and

expenditures, I have determined that a Binary geothermal power plant can be easily invested in within the

range of available profit margin from the Anchorage area. This can be seen through the comparisons in Figure

9 and Figure 10.

20012003

20052007

20090

50100150200250300350400450

10 year average

ExpensesOperating Revenue

Mill

ion

USD

Figure 9: Shows the comparison of average expenses to operating revenues of the Anchorage area over a ten year period.

020406080

Affordability

Mill

ion

USD

Figure 10: Shows the comparison of the ten year average annual profit margin for the Anchorage area to the average investment and annual operating costs of a binary geothermal power plant.

In conclusion, a binary geothermal power plant, based off my averages, is affordable in comparison to

the combined profit margin of the Anchorage area from the ML&P and Chugach electric power

companies. From my results, even though a binary geothermal power plant cannot add much power to

the Anchorage power grid, geothermal energy is a far cleaner energy source than fossil fuels. At this

time, the investment in a binary geothermal power plant does not make economic sense, however

geothermal energy will not go up in cost over time when compared to fossil fuels. This is something to

keep in mind when considering alternative renewable energy resources.

As shown earlier, my cost/KWh data for my sample case studies was to variable to provide an accurate

representation. This was a result of inefficient sample plants. Newer technologies allow plants to be more

efficient; however I was unable to attain the data that represented this due to proprietary reasons.

Citations

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