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Geothermal could be key to figuring out Nome's costly power problem

Sean Doogan
Nome, that old gold rush community in Western Alaska, is betting big on geothermal in hopes of finally figuring out the riddle of high energy costs that plagues many off-the-road-system communities in the state. Photo courtesy ACEP

Scientists and drillers are searching for hot water -- and lots of it -- at Pilgrim Hot Springs, 60 miles northeast of Nome on Alaska’s western coast. A drill rig is currently chewing away at the earth, and has passed 750 feet in depth. Once it reaches 1,000 feet, groups interested in a geothermal power plant there may have their answer: can the hot springs supply enough geothermal energy to make it a worthwhile endeavor?

If it can, Nome -- a once and present gold rush town of 3,600 people at the end of the Iditarod Trail -- may become the first Alaska city to fulfill most of its energy needs with wind and geothermal resources.

Nome already has 3 megawatts of wind power generated by two turbine farms at Banner Peak.  But that’s not enough to handle the peak electric loads for the summer (4.5mw) or winter (6.5mw). And wind power is not guaranteed -- if there is too little wind, or if it gusts too high, the turbines have to be shut down.

18 mw of diesel power -- which includes back-up generators needed if one of the main power plants goes offline -- handles most of the city’s electric generation. It is an expensive solution to Nome’s power needs. The price of the fuel -- barged to the city through the Bering Sea -- has risen to $3.50 per gallon this summer. As a result, the going rate for electricity in Nome is 36 cents per kilowatt hour. By contrast, people in the state’s largest city of Anchorage pay less than half that, just 14 cents per kilowatt hour.

Drilling crews are currently working their way toward bedrock at Pilgrim Hot Springs. Once they hit that bedrock, a wellhead will be installed so engineers can test the temperature and quantity of the water that comes up. 

If enough of a resource is found for an average of 2 megawatts of production, it may be economical enough to make Pilgrim Hot Springs the state’s second-ever working geothermal power plant. Add that to the current wind power the city utilizes, and there may be times when the city can rely entirely on Mother Nature, not Papa Petroleum for generating its electricity.

“It could push the idea of the possible even farther in the area,” said Matt Ganley, resource manager for Bering Straits Native Corporation, one of several groups that have an interest in the 320-acre hot springs property.

Pilgrim Hot Springs has a long history with the people of Nome. It was a mining camp and homestead in the early 1900s. In 1917, the land was given to the Catholic Diocese of Alaska, so it could build a mission there, 60 miles away from the rowdiness of gold-rush-era Nome. But as construction materials were being brought up, in 1919, the worldwide Spanish flu epidemic swept through the area and killed between one-third and one-half of the mostly Alaska Native population.

Church officials quickly turned the Hot Springs into an orphanage. Many people living in the area today can trace at least one relative back to the orphanage -- which stopped operating in 1941, just before the land was converted into a military base. Pilgrim Hot Springs is on the National Register of Historic Places. But it may soon become a large part of Nome’s present: as a potential source of cheap, renewable power.

But in Nome, as elsewhere, when it comes to electricity, cost is king.

The full price of bringing a geothermal power plant online at the hot springs is estimated to be about $40 million. The plant itself would likely only run about $10 million. The majority of the expense associated with the project, however, will be in stringing up 60 miles of power lines from Pilgrim Hot Springs to Nome. That is estimated to cost about $500,000 per mile.  

But that’s only part of the story. The Nome Joint Utility System -- which manages the city’s power, water and sewer systems -- said it can’t afford to pay a premium for geothermal power.

“We want to get out of the cyclical diesel market, and are very definitely interested in (the Pilgrim Hot Springs geothermal project), but only if it can come in at a cost-competitive rate,” said John Handeland, the utility’s general manager. Handeland said that rate would be about 22 cents per kilowatt hour.

Current estimates for the project show a cost to the Nome utility of between 22 and 25 cents per kilowatt hour.

The money to fund the current work at Pilgrim Hot Springs came from the Alaska Center for Energy and Power (ACEP). The center added $2.2 million to an existing $3.8 million from the U.S. Department of Energy to study the idea of creating power from the earth at the site. The DOE money was originally slated for a geothermal power project in Naknek -- 496 miles southeast of Nome -- but that project didn’t pan out.

“The people of Naknek really stepped up,” said Gwen Holdmann, director of ACEP. “Although they were disappointed a proposed geothermal plant didn’t work out in their community, the residents insisted on sending the money to Nome.”

For seven years, Holdmann was the lead engineer on a smaller geothermal power project at Chena Hot Springs Resort -- 60 miles east of Fairbanks in Alaska’s Interior. That geothermal plant currently can provide up to about 400 kilowatts of electricity -- enough for most of the resort’s needs. Like at Chena Hot Springs, Pilgrim Hot Springs will be a binary geothermal power plant, a type driven by heating liquid contained in a closed-loop system.

As with any other power plant, geothermal produces electricity by turning large turbines with magnets inside them. But like at Chena Hot Springs, the water in the ground at Pilgrim Hot Springs isn’t quite hot enough to directly drive the turbines with steam. It doesn’t come out of the ground as vapor or boiling water, but instead as just really hot water.

Holdmann said Pilgrim’s temperature is just below the boiling point, at about 200 degrees Fahrenheit. That hot water would be used to boil a refrigerant with a lower boiling point than water. The resulting vapor from the secondary fluid would spin the turbines, providing power, and then condense and return to be heated again. The then-cooled water would be pumped back into the ground to be reheated by the earth.

Theoretically, at least, if the water reservoir under Pilgrim Hot Springs is large enough, it could provide as much as 2 megawatts of electricity indefinitely. But time will tell if the area can live up to its potential.

“We are expecting to breach bedrock within the next few days, and we should know if the project is feasible within two weeks,” said Holdmann, who predicted that if everything goes well, Pilgrim Hot Springs might be generating power for Nome by the end of next summer.

Contact Sean Doogan at sean(at)alaskadispatch.com