The Potential Economic and Environmental Benefitsof
Geothermal Energy to The Anchorage Area
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.
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.
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:
o 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
Geologic Summary of Alaska
o 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.
o Evaluation of the economic effects to Anchorage if the potential utilization of geothermal
energy is implemented.
o Evaluation of the environmental effects on the utilization of 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
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
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 systemas 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 systemas 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 steampower plant, a combination of steamand hot water is pumped into a flash tank from
the well where steamis 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 steamplant 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 steamat 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
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
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.
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.
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
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
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
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:
Figure 6: Showsthe variabilityof the sample case studdiesbasedonthe cost/KWhthroguhthe standarddeviation when
comparedto the average cost/KWh.
1 2 3 4
SD = 0.208
Avg. = 0.267
Figure 7: Showsthe variabilityof the sample case studdiesbasedonthe ratedMWh throguhthe standard deviation
whencomparedtothe average of the ratedMWh.
Figure 8: Showsthe variabilityof the sample case studdiesbasedonthe average annual investmentandopperating
costs throguhthe standarddeviationwhencomparedtothe 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)
1 2 3 4 5 6 7 8
RatedMWh CaliforniaCase Studies
SD = 14.126
Avg. = 12.537
1 2 3 4
Annual Operating Cost
SD = 0.164
Avg. = 0.656
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.
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-steamand
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.
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.
Figure 9: Shows the comparison of average expenses to operating revenues of the Anchorage area over a ten
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.
MillionUSD 10 year average
Investment costs Average Annual
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.
1. Barbier, Enrico. Nature and technology of geothermal energy: A review. Renewable and Sustainable
Energy Reviews. 1. Piazza, Italy: Elsevier B.V., 1997. 69. Print.
2. Arnórsson, Stefán, and First International Atomic Energy Agency. Isotopic and chemical techniques in
geothermal exploration, development and use: sampling methods, data handling, interpretation.
Vienna, Austria: International Atomic Energy Agency, 2000. 351. Print.
3. Kolker, Amanda M. Geologic Setting of the Central Alaskan Hot Springs Belt: Implications for
Geothermal Resource Capacity and Sustainable Energy Production. ProQuest, University of Alaska
Fairbanks, 2008. 189. eBook. <http://books.google.com/books?id=J9f4KY95lBkC&pg=PP1&dq=Kolker,
Amanda M. A Thesis Presented to the Faculty of the University of Alaska Fairbanks in Partial Fulfillment
of the Requirements for the Degree of DOCTOR OF
4. Brown, P.R.L.. "Hydrothermal Alteration in Active Geothermal Fields.". Lower Hutt, New Zealand:
Annual Reviews Inc., 1978. 229-250. Print.
5. Gupta, Harsh, and Sukanta Roy. Geothermal energy: An alternative resource for the 21st century. First.
Amsterdam, The Netherlands: Elsevier, 2007. 427. Print.
6. Ueckermann I, Hermann. Geothermal Energy Research Trends. New York: Nova Science Publishers Inc,
2008. 211. Print.
7. Kaltschmitt, Martin, Wolfgang Streicher, et al. Renewable Energy: Technology, Economics and
Environment. Heidelberg, Berlin: Springer-Verlag, 2007. 596. Print.
8. DiPippo, Ronald. Geothermal Power Plants: Principles, Applications, Case Studies and Environmental
Impact. Second. Burlington, MA: Elsevier Ltd. Butterworth-Heinemann, 2008. 493. Print.
9. Huenges, Ernst, and Patrick Ledru. Geothermal Energy Systems: Exploration, Development, and
Utilization. First. Federal Republic of Germany: Wiley-VCH Verlag GmbH & Co. KGaA, Weinheim, 2010.
10. Wikipedia: The Free Encyclopedia. Inflation Rate (2012): Wikimedia Foundation Inc. Web. 15 March
11. H-Brothers. "Dollar Times.” HBrothers Inc., 2012. Web. 15 March 2012.
12. Google Inc. Google Finance. 2012. Inflation. www.google.com. Web. 09 Apr 2012.
13. Chugach Electric Association. "Annual Reports." Chugach, Powering Alaska's Future. Chugach Electric
Association Inc., 2011. Web. 1 Feb 2012. <http://www.chugachelectric.com/media-room/annual-
14. Municipal Light & Power. "About ML&P." ML&P. Anchorage Municipal Light & Power, 2012. Web. 1
Feb 2012. <http://www.mlandp.com/redesign/about_mlp.htm>.
15. Payne, Allison. "Mt. Spurr Project Information." Message to Harvey Britain. 27 Feb, 2012. E-mail.
16. Connor, Cathy, and Daniel O'Haire. Roadside Geology of Alaska. Series. Missoula, MT: Mountain Press
Publishing Co, 1988. 251. Print.
17. Plafker, George, and Henry C Berg. The Geology of North America: The Geology of Alaska. G-1. Boulder,
CO: The Geological Society of America Inc., 1994. 1055. Print.
18. Alaska energy data inventory. Renewable Energy Atlas of Alaska. 2012. Map. Alaska energy inventory.
Web. 11 Nov 2012. <http://akenergyinventory.org/>.