Legislature(2013 - 2014)BARNES 124
03/12/2014 08:00 AM House ENERGY
| Audio | Topic |
|---|---|
| Start | |
| Presentation: Chena Power/chena Hot Springs | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
HOUSE SPECIAL COMMITTEE ON ENERGY
March 12, 2014
8:09 a.m.
MEMBERS PRESENT
Representative Doug Isaacson, Co-Chair
Representative Pete Higgins
Representative Shelley Hughes
Representative Benjamin Nageak
Representative Andy Josephson
MEMBERS ABSENT
Representative Charisse Millett, Co-Chair
Representative Neal Foster
COMMITTEE CALENDAR
PRESENTATION: CHENA POWER/CHENA HOT SPRINGS
- HEARD
PREVIOUS COMMITTEE ACTION
No previous action to record
WITNESS REGISTER
BERNIE KARL, Proprietor
Chena Hot Springs Resort LLC
Fairbanks, Alaska
POSITION STATEMENT: Provided a presentation on the renewable
energy programs and sustainable properties of the Chena Hot
Springs Resort, Chena Power, and K & K Recycling.
ACTION NARRATIVE
8:09:48 AM
CO-CHAIR DOUG ISAACSON called the House Special Committee on
Energy meeting to order at 8:09 a.m. Representatives Higgins,
Hughes, Nageak, Josephson, and Isaacson were present at the call
to order.
^PRESENTATION: CHENA POWER/CHENA HOT SPRINGS
PRESENTATION: CHENA POWER/CHENA HOT SPRINGS
8:10:56 AM
CO-CHAIR ISAACSON announced that the only order of business
would be a presentation by Mr. Bernie Karl of Chena Power/Chena
Hot Springs Resort and K & K Recycling.
8:11:49 AM
BERNIE KARL, Proprietor, Chena Hot Springs Resort LLC, provided
a brief personal history. Mr. Karl said Alaska should have the
cheapest energy and the best food in the world, but Alaska only
grows 2 percent of the food consumed and pays the highest cost
of energy because of a lack of passion and vision. He directed
attention to the PowerPoint presentation entitled, "Chena Hot
Springs Resort Renewable Energy and Sustainable communities."
Mr. Karl provided a short history of the resort which was
purchased from the state and has become a community [slides 1-
4]. The vision statement of Chena Hot Springs is the following:
We strive to become a self-sustaining, self-reliant community
that can produce the energy, food, and fuel to meet our needs
while being environmentally responsible [slide 5]. He
encouraged other communities in the state to become sustainable
and urged all to use an "energy pie" to chart the energy use of
electricity, transportation, refrigeration, supplemental heating
and base load heating [slide 7]. The biggest cost of energy in
Alaska is for heat. In response to Co-Chair Isaacson, he
explained that the supplemental heating for Chena Hot Springs is
for remote sites that are not connected to the geothermal
heating system, but are heated with wood or fuel pellets. He
described a gasification system that uses wood products or fuel
pellets that can power vehicles, noting that aviation fuel at
Barter Island costs $18 per gallon and diesel fuel costs $12 per
gallon [slide 8].
8:22:16 AM
REPRESENTATIVE NAGEAK observed that the high cost of fuel is the
same in all of the villages in rural Alaska.
MR. KARL explained that the gasification system is not new
technology and can be built for $3,500. He displayed examples
of steam-powered equipment from the industrial revolution
[slides 9-12]. The machines are on display with the hope of
sparking the imaginations of the younger generation. In
operation at Chena Hot Springs is the first geothermal plant in
the world that runs off of 165 degrees Fahrenheit (F.) water
[slide 13]. In partnership with United Technology, Chena Hot
Springs has installed a screw expander that will "change the way
you look at doing things." After drilling two new wells the
resort produced water at 179.8 degrees F. [slide 14]. Mr. Karl
described the drilling process [slide 15].
8:27:51 AM
CO-CHAIR ISAACSON asked how much more geothermal production is
possible from water 15 degrees hotter.
MR. KARL answered that the well pumps 1,000 gallons per minute
which produces electricity that grows food and heats 54
buildings. The goal is to produce five megawatts of power from
a new, bigger well. He informed the committee that 2 percent of
the world's geothermal energy is 1,000 times more than what the
world consumes.
REPRESENTATIVE HIGGINS asked for the indicators that predicted
drilling for hot water would be successful.
8:29:46 AM
MR. KARL said exploration wells were drilled and geochemistry
tests were done on water samples, which indicated 200 degrees F.
water would be found at 4,000 feet. Future plans include
drilling a deeper well and running 69,000 volts of direct
current (DC), by a single cable, to a power plant that will be
equipped with four one-megawatt units. The technology is
currently being tested in New Mexico.
CO-CHAIR ISAACSON suggested Mr. Karl could advise those who are
looking for a geothermal source near Anchorage.
8:32:04 AM
MR. KARL described his past experience visiting Akutan and the
hot springs there. Returning to the project at Chena, he said
it was necessary to purchase a Wassara water hammer to drill
through the granite using 2,000-2,500 psi cold water. Mr. Karl
learned in Iceland about a drilling process using cold water
instead of drilling mud. He also visited geothermal projects,
farms, and greenhouses in Iceland. Mr. Karl explained that his
joint venture with Kaishan Compressor Co., Ltd. has produced the
first 300 kilowatt (kW) screw expander, with a synchronous
generator, which is currently operating at Chena Hot Springs
[slides 16-22]. A synchronous generator is one with a rotating
field so that as soon as it begins to spin, it generates
electricity without the need for diesel fuel to power an
electrical grid. The design of the generator incorporates a
unique shape of screw expander. There are now four one-megawatt
units running in New Mexico that were fabricated and built in
four months.
CO-CHAIR ISAACSON asked how the generator operates without using
any diesel fuel or without a grid.
8:38:01 AM
MR. KARL explained that the screw generator can be powered by a
liquid or a gas vapor and uses geothermal at Chena Hot Springs.
The compressors built by the Chena Power/Kaishan Compressors
joint venture are for sale in the U.S. and Canada, and are
portable. The units are affordable, do not have a gear box,
make electricity as soon as the screw begins to turn, and
"instantly syncs with your grid." In response to Co-Chair
Isaacson, he explained that the water running through the
generator boils into a vapor which spins the screw at a low
pressure. The system is low-tech, but produces 300 kW; the
average amount of power needed for a village is only 50 kW. He
advised that the average cost of power in Alaska's villages is
$0.59, and the screw generator can produce power for $0.10.
REPRESENTATIVE HIGGINS asked how the pump is powered.
8:41:25 AM
MR. KARL responded that the parasitic load required to produce
300 kW is 100 kW; however, the 100 kW used also grows all the
food and heats the buildings in Chena Hot Springs, saving much
more in heating oil. He pointed out that the only communities
that will ever have cheap natural gas are those located near a
gas field, as are Nuiqsut and Barrow. Mr. Karl further
described the construction of the screw expander generator.
Also available next year will be a small 2.5 kW unit for home
use that can run from a wood stove or any source of 180 degree
F. water [slide 23]. In response to Representative Nageak, he
said the unit can heat cabins by burning biomass or using the
heat from the sun.
8:45:23 AM
CO-CHAIR ISAACSON surmised the home unit would be connected to a
furnace that burns biomass.
MR. KARL described a portable unit mounted on two trailers with
its own cooling system that is operating in Utah [slides 25-27].
The unit is designed to work at oil well sites and has an oil
separator that supplies 25 gallons of water, otherwise, oil and
water can stream through the system. The unit produces over 200
kW of electricity and has proven its technology, although he
estimated there will be six additional months of testing before
the units are marketed.
REPRESENTATIVE HIGGINS asked for the cost of the unit.
8:48:13 AM
MR. KARL answered $375,000, and the portable unit requires an
investment of $500,000. The payback is 18-24 months in savings
from not burning oil. He turned attention to the value of
biomass and informed the committee that residents need to be
responsible for their waste products. Burying and burning waste
creates a mess for future generations, but in Fairbanks pellets
are made from wastepaper and cardboard which produce 7,600
British thermal units (Btu) per pound of pellets [slides 28-31].
A briquetting machine will be integrated into the recycling
program at Chena Hot Springs to make wastepaper and cardboard
into bricks [slides 32 and 33].
REPRESENTATIVE NAGEAK asked whether the briquetting machines
were available for individual use.
MR. KARL recommended installing a briquetting machine in each
community to be run as a small business turning wastepaper and
wood into pellets or briquettes that can be packaged and shipped
for use, instead of burying wastepaper in landfills.
8:53:49 AM
REPRESENTATIVE HIGGINS added that landfills are required to use
layers of dirt.
MR. KARL restated that biomass is a resource that should not be
buried and a market for pellets and wastepaper bricks should be
developed. He described the briquetting machine that was
purchased from a company in Germany at a cost of $240,000, and
which will produce two tons of briquettes and fuel pellets per
hour for use in home woodstoves.
CO-CHAIR ISAACSON asked for the Btu equivalent.
8:56:13 AM
MR. KARL stated, when made out of solid wood, the Btu equivalent
is 8,000 per pound and the briquettes will sell for the
equivalent of $2 per gallon [of heating oil]. The pellets sell
for the equivalent of $0.89 per gallon of heating oil. In
response to Representative Higgins, he said the equivalent for a
cord of wood would be $150 per cord, and a split cord in
Fairbanks now costs $275. Subsequently, the ash is collected
and used for other products. Mr. Karl observed thousands of
dollars have been spent for studies, but the information is
never used; however, all of the equipment he has reviewed will
be available for perusal at the Renewable Energy Fair in August.
In response to Co-Chair Isaacson, he related that customers
return ash when they come to pick up more pellets or briquettes.
Mr. Karl turned to the common problem of the disposal of scrap
metal and informed the committee his business, K & K Recycling,
collects scrap metal for shipping to a steel mill in Seattle, to
sell in Anchorage, and to sell overseas [slides 35-38]. The
business also collects wood, glass, and other metals for
recycling, grinds glass with ash to make blocks, and has 400
dumpsters in the Fairbanks North Star Borough for the collection
of recyclable waste products. K & K Recycling has a glass
processing system that can process recycled glass into sand,
crushed glass, and concrete products [slide 39]. Chena Power
also has an air burner heat recovery system in Fairbanks which
burns at 2,000 degrees F. The burner will be connected to a
screw expander that will generate electricity from the heat.
After testing, this system will be one solution for villages in
Alaska. The unit is approved for use in a Class II landfill, so
a village in Bush Alaska can burn its trash, generate
electricity and possibly heat a greenhouse nearby [slide 40].
Mr. Karl informed the committee Chena Power is working with
Matanuska Electric Association, Inc. (MEA) on generation
systems. Using MEA's waste hot water, Chena Power can generate
an additional 20 megawatts of power through a "bottoming cycle"
at no additional cost. He explained that large diesel
generators use one-third of a gallon of fuel to generate
electricity, one-third for heat rejection, and one-third is
exhaust. Chena Power will run hot water through its power plant
and then cool the water. This eliminates the cooling system and
the parasitic load, and the byproduct is electricity.
Therefore, he recommended the use of a bottoming cycle which
utilizes the wasted heat. He advised that the power plant in
Fairbanks powered by the Usibelli Coal Mine needs 39,000 gallons
of "make-up" water per day, and 46,000 gallons of water per day
are exhausted through the smokestack, but the water could be
cleaned and used, and an additional 900 kW per day could be
produced from the heat exhausted through the smokestack. The
pollutants that are exhausted into the air could also be used
instead. He expressed his belief that new coal plants are
possible without smokestacks if there is encouragement from the
government; in fact, with incentives from the government,
industry will respond with great ideas.
MR. KARL continued to explain that Chena Power sells biomass
heating systems that are gasification units, and coal-fired
modular heating systems. The systems are clean-burning, and
because coal is available in some areas, and Alaska coal has the
lowest sulphur content, he listed some advantages of coal
[slides 44-48]. Furthermore, coal is available, efficient,
clean, affordable, and can be easily transported, and he
predicted coal could be delivered to Kotzebue and Bethel at the
equivalent of $2 per gallon of heating oil.
9:16:59 AM
REPRESENTATIVE NAGEAK stated that rural Alaska does not have the
infrastructure to produce and transport coal to market.
MR. KARL said his plan is to bring coal in bags to Kotzebue and
Bethel, and their surrounding villages, to be sold in the
stores. Two thousand pounds of coal will last all winter for a
cabin, and it is easier to handle than diesel fuel.
REPRESENTATIVE NAGEAK recalled coal for heat was tried in the
North Slope Borough but it was unsuccessful, although it could
have been due to old technology. He agreed that Alaska has
plenty of coal; in the '80s it was shipped to villages on barges
and stoves were supplied for the residents.
CO-CHAIR ISAACSON suggested that using coal for heat may have
failed because the price of oil in the '80s was very low.
REPRESENTATIVE NAGEAK observed that the existing monopoly on
transportation limits the possibilities in Bush Alaska.
MR. KARL was encouraged that the villages are equipped with coal
stoves.
CO-CHAIR ISAACSON pointed out that the circumstances of
supplying fuel and energy to the Bush will change if efforts
continue to be made.
REPRESENTATIVE NAGEAK cautioned that other efforts have failed.
9:22:56 AM
MR. KARL related his personal experience with the difficulties
of starting a new business. He then described how his coal
supply business would use the existing barge infrastructure in
Bethel and Kotzebue to deliver coal loaded at the railroad dock
in Seward. By using existing infrastructure, there would be no
cost to the state or the communities, and prices will be low.
He estimated the cost of coal, including transportation, will be
$2 equivalent. The past experience was with coal that was mined
in Wainwright, but doing that requires building new
infrastructure. At this time, using the available
transportation on water, for a volume of 15,000 tons of coal per
shipment, is cost-effective.
9:27:33 AM
REPRESENTATIVE HIGGINS was supportive of the efforts of private
industry.
REPRESENTATIVE NAGEAK said he would not discourage the proposal,
but noted that a successful project would have to be adapted to
the needs of the small villages in rural areas, as well as
larger towns.
MR. KARL said many of the 44 villages near Bethel are served by
Alaska Marine Line (AML) barges, whose crews know the rivers.
He agreed that air transportation is a problem, but moving large
loads on water has possibilities. Also, coal can be transported
on trailers towed by snow machines. He returned to the
presentation and called attention to slide 43, which illustrated
a biomass heating system that can operate for $1.12 per gallon
equivalent. Slide 49 illustrated the three greenhouses at Chena
Hot Springs Resort where grape, beefsteak, cherry, and Roma
tomatoes are grown by grafting onto wild tomato plants. Light-
emitting diode (LED) lighting is used in the greenhouse to mimic
the sun. The greenhouse system uses no soil, herbicides, or
pesticides [slide 50].
9:34:46 AM
REPRESENTATIVE NAGEAK agreed the price for produce in Bethel is
very high.
REPRESENTATIVE HIGGINS said on his recent trip to Washington
D.C. he learned that "they" don't care about the price of food
and energy in Alaska, and that the problems must be addressed
locally. Alaska must stop relying on the federal government.
REPRESENTATIVE NAGEAK cautioned that most of Bush Alaska is
taken care of by the federal government with federal money that
flows through tribal governments. Support for rural areas does
not come from the state.
CO-CHAIR ISAACSON returned attention to the topic of the meeting
and suggested that any space that is available in rural areas
could be converted to greenhouses to allow the local production
of vegetables thus saving on transportation costs.
REPRESENTATIVE NAGEAK restated the difficulties of living a long
distance from medical care and other services.
CO-CHAIR ISAACSON asked if the technology previously discussed
was applicable in Bush Alaska, whether residents would benefit
and have more money for other uses.
9:38:24 AM
MR. KARL warned that the success of every project depends on the
cost of the initial investment, which in this case is to obtain
the buildings. He promised the success of the greenhouses
because a crop can be grown in 23 days. The LED lights used in
the greenhouse burn 90 percent less electricity, which reduces
the cost of power. Peppers and eggplant are also grafted to
tomato roots to defeat aphids [slide 51].
REPRESENTATIVE HIGGINS asked for the purpose of high tunnels.
MR. KARL explained that high tunnels increase the length of the
season. High tunnels are available from the U.S. Department of
Agriculture (USDA) to farmers who grow, sell, or consume $1,000
worth of agricultural products per year. In the Kenai area
there are 98 high tunnels in use, and about 20 are in use in
Fairbanks. At Chena Hot Springs, one tunnel has shade cloths
for plants that need dark periods for optimum growth. Mr. Karl
described how to grow barley using horse manure [slides 64-65].
REPRESENTATIVE HUGHES inquired as to the difference between a
high tunnel and a greenhouse.
9:44:00 AM
MR. KARL responded that a high tunnel has no heat or interior
walls. He described how a refrigerated trailer van was
transformed into the C-GRO production system that raises lettuce
from a wood-burning heat source to supply the school lunch
program at Glennallen School. The growing system can be built
almost anywhere or moved in a van. The greenhouse grows grapes,
bananas, and berries, and he assured the committee this could
also be successful in Bethel.
REPRESENTATIVE HIGGINS asked how the school lunch program in
Glennallen is faring.
MR. KARL said the program is in its infancy.
9:49:37 AM
REPRESENTATIVE NAGEAK recalled there used to be a greenhouse in
Nome; however, land is scarce and is owned by the Native
corporation.
CO-CHAIR ISAACSON encouraged the committee to research these
possibilities and return to the committee with more information.
9:51:19 AM
MR. KARL returned to the activities at Chena Hot Springs:
30,000 flowers are grown and bees are kept for honey [slide 58];
there is working livestock [slide 59]; there is a developing
reindeer herd [slide 60]; there is meat production [slide 61];
there is a goat and chicken house heated by a geothermal source
[slides 62-63]; there is a barley grow-chamber, and under
controlled conditions the barley grows in six days and is fed to
the livestock and fish [slides 64-66]. He closed by inviting
all to the Renewable Energy Fair, held on August 17, 2014, at
Chena Hot Springs Resort [slide 67].
9:56:21 AM
ADJOURNMENT
There being no further business before the committee, the House
Special Committee on Energy meeting was adjourned at 9:56 a.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| ENE - PRESENTATION - Chena Power and Hot Springs (03-12-14).pptx |
HENE 3/12/2014 8:00:00 AM |
|
| ENE - AGENDA - Committee Meeting (03-12-14).pdf |
HENE 3/12/2014 8:00:00 AM |