Southcentral Alaska's first utility-scale wind project is expected to begin producing power this September, Ethan Schutt, Cook Inlet Region Inc. senior vice president, land and energy development, told the Anchorage Chamber of Commerce June 25.
The project, on Fire Island about three miles offshore Anchorage, is being built by Fire Island Wind LLC, a CIRI subsidiary, Schutt said. Thirty-three turbine locations have been permitted; the first phase has 11 turbines with nine running up the middle of the island and two along the southeast coast.
The additional 22 turbines could be built in later phases, he said, "if we can arrive at commercial offtake agreements with one or more additional Railbelt utilities."
Chugach Electric Association is the customer for Phase 1; a 25-year power purchase agreement, approved by the Regulatory Commission of Alaska in October, was executed in late 2011. Financing for the project closed late in 2011, Schutt said, and onshore transmission line construction began last year.
Construction on Fire Island began earlier this year and is close to completion with everything except logistics and erection of the large turbine components, Schutt said.
The 11 General Electric 1.6 megawatt XLE wind turbines will provide about 4 percent of CEA's power, "about 51,000 megawatt hours annually," Schutt said, roughly the power needed by about 6,000 households, displacing the need for about half a billion cubic feet of natural gas a year. He said payback depends on the cost of natural gas, but is estimated at between six to eight years.
And the effect on CEA rates?
Schutt said CEA customers are going to see increases in their rates, but "the vast majority of that has nothing to do with our project," which in the first years when it will cost the most won't even double the cost for the 4 percent of power it provides.
What will raise CEA bills, he said, is the new power plant that CEA is building (the Southcentral Power Project, a joint project between CEA and Municipal Light & Power), payment of principle on debt for which CEA has paid only interest in the past and replacement of expiring fuel contracts with contracts in which Cook Inlet natural gas is more expensive.
Most of the work on the onshore portion of the transmission line -- along Raspberry Road, Jewell Lake Road and across Connor's Bog to a new substation at the CEA plant at International and Minnesota -- was completed this winter.
The offshore portion of the transmission line is being laid currently from two barges and is two-thirds to three-quarters of the way across the mud flats to the island, Schutt said.
The 12.5 mile 34.5 kilovolt double-circuit transmission line was supported by the State of Alaska through a grant from the Alaska Energy Authority, and will be turned over to CEA when complete. The state grant covers $25 million, and Schutt said that is the majority of the transmission line cost, with CIRI picking up the remainder.
Schutt said the rest of the project cost is about $65 million, with about a third of that for equipment and logistics to get that equipment to Anchorage; about a third for civil construction and other island activities; and about a third for engineering, permitting, cost of money during construction and development fees.
Finished work on the island included upgrading some roads, the transmission system -- from the switchyard to the submarine transition -- an overnight crew facility and operations and maintenance facilities.
Foundation work for the turbines is complete, and what remains to be done is largely logistics and erection of the large turbine components.
"The wind turbines and all of their large components have been delivered to the Port of Anchorage," Schutt said and will be moved to the island in July and August and then erected.
The transmission interconnection will be finished later this summer, followed by project commissioning and commercial operation in late summer and early fall.
This isn't the only large wind project going up in Alaska this year. Schutt noted that turbines for a Golden Valley Electric Association wind project near Healy are being shipped north out of Anchorage.
By KRISTEN NELSON
Petroleum News