State funding pursued for Unalaska geothermal project, Alaska

Makushin project site, Unalaska/ Alaska, U.S. (source: Ounalashka Corp., Chena Power)

Representatives from the Makushin geothermal project recently met with a delegation from the Alaska Energy Authority and the Alaska Industrial Development and Export Authority during a visit to Unalaska, Alaska. The agenda for the meeting was to provide updates on the project and gain support from the two public corporations that finance energy projects around the state.

The Makushin geothermal project in Unalaska is being developed by Ounalashka Corp. / Chena Power (OCCP), a joint venture between  Chena Power  and the Qawalangin Tribe of Unalaska. The project aims to build a 30-MW geothermal power plant extracting geothermal energy from the Makushin Volcano. In 2020, OCCP signed a 30-year Power Purchase Agreement with the City of Unalaska.

Dave Matthews, Program Manager for the project, addressed the delegation during the meeting. “I want to let you know we’ve been working every week, every day, since we last spoke. We’ve been sending reports to city management, and we’re still on track to completing the project by late 2027.”

As Matthews said, financing for the project has been challenging because the return on investment does not easily attract capital. Due to this, the company hopes to secure government financing at low interest rates. In early 2022, the project secured USD 2.5 million in federal funding. However, this is a small fraction of the total estimated project costs, which is at around USD 235 million.

In April 2022, OCCP selected Ormat Technologies Inc. as EPC contractor for the project with a total contract cost of USD 90 million.

Various entities have attempted to develop the geothermal resource in Alaska since the 1980s, and the Unalaska project is the closest that this ambition can become reality. Financial support from the Alaska Energy Authority and the Alaska Industrial Development and Export Authority can provide an important boost to the project.

Source: KYUK