State investment and energy authorities show interest in Makushin Geothermal Project
A delegation of Alaska energy officials on Tuesday visited Unalaska, where representatives from the Makushin Geothermal Project made their case for what could prove one of the biggest geothermal projects in Alaska history.
Ounalashka Corp./Chena Power (OCCP), the joint-venture between the private energy company Chena Power and Unalaska’s Native corporation, has taken major steps in recent years to develop a renewable energy source from Makushin Volcano, approximately 14 miles from the city center. Various entities have attempted to develop the renewable energy source since a test-well was drilled in the 1980s, but this is the closest anyone has come to making it a reality.
Dave Matthews is the program manager for the project. He addressed the city council at a meeting Tuesday — the first update to the council in more than a year.
“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,” Matthews said.
The Alaska Energy Authority and the Alaska Industrial Development and Export Authority are public corporations that finance energy projects around the state. Getting their support could provide a boost to the project, which has hit funding snags since the company signed a power purchase agreement with the city in 2020.
“There’s been a lot of challenges with financing,” Matthews said. The return on investment … does not attract capital. So we’re back down to government finances, where we can get low interest rates over the long term.”
Representatives from both state authorities, OCCP, and local seafood processors visited the 6,000-foot volcano by helicopter Wednesday to see the proposed location for the power plant.
Matthews said OCCP expects to complete an access road and to begin drilling a well at the site by the end of the year. OCCP recently finalized a $90 million agreement with Ormat Technologies to engineer and construct the project — about one third of the total project costs, which come in at around $235 million.