Work Product:
Unalaska's Makushin Volcano

Note:  Any statements or opinions about the Makushin Geothermal Project (MGP) are from Chena Power, the minority shareholder in the project and tapped with the MGP project management role (2019 - 2024.)  The majority shareholder has decided to pause the project while they explore their options on how to best move forward. Once the project resumes, Chena Power will continue its role as a minority shareholder with great encouragement and optimism.  Chena Power's efforts have been significant including attracting investors to the project and we continue to maintain this a financially viable and promising economic development project that could serve as a model for Alaska and beyond. 

​Overview: The Makushin Geothermal Project (MGP) aims to develop a renewable energy source by tapping into the Makushin Geothermal Resource (MGR) on Unalaska Island, Alaska, about 14 miles from the city of Unalaska.

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Timeline/Benchmarks ​

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Year 1 (2019) : Project Pre-Sanctioning and Feasibility Phase

• Identified and established team members. 

• Established and launched communication mechanisms for public and partnership stakeholders

• Development of preliminary implementation schedule for project delivery

• Commissioned literature review / desktop study for the project area.

• Developed construction and logistic plan scenario’s

• Prepare a high-level class 4 quality estimate for preliminary financial feasibility screening

• As a result:

• A project development plan was selected

• Meaningful engagement of industry sources took place for means and methods verification and cost cross checking.

• Pro forma financial support documents were developed proving project feasibility.

• Power Purchase Negotiations (PPA) negotiations with the City of Unalaska could begin

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Year 2 (2020) : Permits & Legal Processes

• Conducted environmental studies assess project development corridor and space requirements.

• Used contracted services for:

  • Survey of utility access corridor in lower valley

  • Aerial drone survey

  • Wet land mapping

  • Archeological and historical surveys

  • Mapping and identification of biological presence

• Hired an owner Engineering firm to develop project design criteria and specifications to guide project development and to support various bid documents

• Developed preliminary design concepts for the infrastructure needed for the project, including power lines, roads, and plant facilities.

• Created construction and logistical plans to guide the project’s development.

• Developed drawings and reports for various permit applications.

• Initiate Feasibility study for conversion of homes and business to Air Source Heat Pumps (ASHP)

• Participated in engineering study for Safety/integrity upgrades required for the existing Unalaska power grid.

• Negotiated a Power purchase agreement with City of Unalaska as the sole off taker for the electrical energy produced.

• Establish Permitting Zones

  • Zone 1 – Makushin valley from tidewater in Broad Bay to power plant site

  • Zone 2 – Subsea power and communication cable route and East Substation

• Compile and submit for major construction permits associated with the Makushin valley portion of the development, Zone 1.

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Year 3 (2021): Design & Infrastructure Development

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• Conduct desk top and physical marine survey for 4.1-mile subsea transmission and fiber optic cables.

• Receive permit from USACE for Nation Wide Permit. 14 – utility corridor for Zone 1.

• Develop the engineering design and routing selection for the subsea transmission and fiber optic cables.

• Submit Zone 2 permit requirements to USACE, under NWP 57 for the subsea transmission cable

• Acquire Alaska Department of fish and game permits for river crossings

• Installed a 20-man camp at permitted locations near Broad Bay

• Pioneer /Construction of 2.3 miles of the utility access corridor and required pads

• Designed the electrical power plant to be resilient and reliable for customers based on analysis of existing facilities performance and demand for power.

• Initiate and conclude Request for Proposal (RFP) process for power plant technology providers resulting in award of an Engineering Procurement Contract (EPC) for main power plant and resource gathering field to Ormat Technologies.

• Engagement of Industry partners for price quotes and means and methods

• Created a detailed project budget to estimate costs and allocate resources to a Class 3 level.

• Refine the construction and logistic plan and resulting target financial proforma’s

• Assemble a financial deck, proforma’s, and project model.

• Hire national accounting firm to model Investment Tax Credit / Tax equity potential

• Submit Part 1 application to Department of Energy (DOE) for long term financing commitment.

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Year 4 (2022): Negotiations & Financial Planning

• Performed chemical analysis of geothermal fluids to include results in design

• Designed the 14-mile power distribution system to deliver energy from the plant to customers and developed specifications for the permanent materials.

• Collected bids for different parts of the project to ensure cost-effectiveness and pro-forma validation.

• Negotiated preliminary contracts for

  • Subsea transmission line installation

  • Substation and terrestrial transmission line installation

  • Geotechnical engineering analysis

  • Drill rig operation and well field engineering for well field development.

• Submitted a design and integration plan for the project with the city power grid.

• Due diligence interviews and presentations to over 30 groups for potential investments in the MGP development.

• Invited by DOE to submit Part 2 application to advance long term financing commitment.

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Year 5 (2023): Financial Modeling & Fundraising

• Constructed an additional 3.4 miles of the utility access corridor.

• Developed financial models to predict potential outcomes under different funding scenarios.

• Analyzed geophysical and geological data to identify the best drilling locations to tap the geofluid.

• Hired independent third-party engineering firm to verify / comment on means and methods of the project development plan.

• Invited by DOE to enter into due diligence negotiation and term sheet negotiations for long term financing commitment.

• Secured loan from Alaska Energy Authority for advancement of front-end development of the MGP

• Received tentative conditional loan commitment from Alaska Import and Export Authority for advancement of front-end development

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​ Year 6 (2024):

• Started the Environmental Assessment (EA) to assess and address environmental risks per DOE requirements

• The majority shareholder of the developer decided to pause the project to explore future development options. In response, Chena Power facilitated:

  • The hiring of independent appraisers to determine company valuation

  • Advanced an offer to purchase company from a private qualified third party.