Ormat has a setback on geothermal project

Ormat Technologies has suffered a setback at its proposed Mount Spurr geothermal project 75 miles west of Anchorage. The company has disappointing results from drilling of a 4,000-foot test well and is now reevaluating the project, according to Paul Thomsen, Ormat’s director of business development.

“Drilling results are discouraging. The rock type found (conglomerate) is inferior for geothermal development than the rock type (volcanic) that we anticipated based on all available data, and the temperature gradient measured was lower than expected,” Thomsen said in an e-mail.

“Volcanic rock has a higher heat capacity, meaning it can hold heat better, thereby increasing reservoir temperature,” he added. “While this undoubtedly represents a setback to our planned exploration and development, we will continue to analyze the data, together with the data collected in 2010 and with other available data, and will file a report by the end of the year,” with state agencies.

Ormat has been working with the Alaska Energy Authority on the project. AEA has provided grants to help fund the exploration work, although Ormat has invested several million dollars of its own money in the project.

Ormat concluded its 2011 summer drilling and demobilized its drill rig in August. The company encountered some difficult drilling conditions as well as weather delays and was forced to stop slightly short of its target depth of 4,100 feet. The depth actually drilled was to 3,988 feet, Thomsen said.

Ormat was hoping to develop the state’s first commercial-scale geothermal project at Mount Spurr. The first phase would have provided 50 megawatts of power to the Southcentral Alaska power grid, but the plan was to eventually scale it up to 100 megawatts.

Thomsen told a state legislative committee last January that the shallow core holes drilled in 2010 showed evidence of water mixing with hot geothermal fluids, and evidence of multiple geologic faults that could accommodate geothermal resources. Ormat had also obtained geochemistry indicating higher temperature resources at depth. The deeper core test planned for 2011 was to confirm that resource, Thomsen told the state House and Senate Resources committees on Jan. 24. 

The final report on the 2011 drilling will, “summarize our conclusions and our recommendations moving forward,” Thomsen said. The Alaska Energy Authority has provided a $2.1 million grant to the Mount Spurr project, which was matched with $2.1 million by Ormat. Ormat’s own investment is substantially higher, though.

Additional state grants were approved for the 2012 program, which was to involve the drilling of test production wells.

Unlike wind power, which is intermittent, a geothermal project is steady. Because of this there are fewer problems with the integration of geothermal power into a power grid compared with wind.

This is the second setback this year with an Alaska geothermal project. Nannek Electric Association has had to terminate a planned geothermal project in its service area when drilling and financial problems developed with a test drilling program.

Tim Bradner can be reached at [email protected].

10/20/2011 - 12:21pm