No bids in first state timber sale for Tok power
Sep 05, 2013 (Menafn - Alaska Journal of Commerce - McClatchy-Tribune Information Services via COMTEX) --The state's first long-term timber sale went without a bid and a prospective renewable energy project in Tok has been put on hold for further evaluation.
Open bidding on a 25-year woody biomass contract with the Division of Forestry ended Aug. 20. Both of the parties with expressed interest in the contract -- area power supplier Alaska Power and Telephone and local sawmill Young's Timber -- reported they were not ready to make a commitment, Tok Region State Forester Jeff Hermanns said.
The timber sale would have allowed for the harvest of up to 35,000 green tons of woody biomass from 700 to 900 acres of state land for the life of the contract. It calls for a minimum "stumpage" fee of 2.50 per ton of newly harvested biomass.
"Within the next few years it could be bought off-the-shelf for the base minimum stumpage price and away we go," Hermanns said.
Alaska Power and Telephone showed interest in using woody biomass as fuel for a combined heat and power, or CHP, plant in Tok about three years ago in a letter to the Forestry Division, Hermanns said.
Residents in the area currently pay about 50 cents per kilowatt-hour for electricity produced by a diesel-fired power plant. By comparison, Anchorage residents pay between 10 cents and 13 cents per kilowatt.
The utility, or APT, received a 400,000 grant from the Alaska Energy Authority to study ways to best harness heat generated during power production to maximize plant efficiency, APT Project Manager Ben Beste said. The money came after the energy agency evaluated APT's power plant feasibility study.
"At this time we're just not ready to go ahead with any kind of an agreement," Beste said.
A biomass plant capable of producing the two megawatts of power needed for Tok and the surrounding area would cost about 13 million, he said. Adding a district heat loop to serve commercial entities near the plant, as was originally proposed, would drive total project cost to around 30 million.
Beste said APT is going to look into using harvested biomass for wood pellets to be burned in small, residential heating loops.
"We're thinking that one of the opportunities out there is to follow the European model of installing community heat plants with much smaller distribution systems," he said. "That way, we can get the penetrations to the most potential users of the heat resource."
Most area residents heat their homes with either wood or ever-expensive fuel oil, at upwards of 4 per gallon.
Beste said the heat-use study is expected to take another 12 to 18 months.
He added that APT continues to look for other alternatives to diesel power generation in Tok. The state's plan to truck liquefied natural gas from the North Slope to the Fairbanks area could provide a fuel source for Tok -- 200 miles down the Alaska Highway.
While a biomass power plant in Tok is feasible, the relatively inexpensive conversion from diesel to LNG power generation would allow the wood to be used for heat, Beste said.
"We think that there's great opportunity in LNG and the potential of propane being manufactured in Fairbanks is of interest to us as well," he said.
From the state's perspective, the biomass sale is seen as a way to mitigate wildfires around Tok. A vast majority of the timber that would be harvested is stunted, fire-prone black spruce, according to Hermanns. The contract calls for harvest areas to be within a 40-mile radius of the town. Roughly 40 percent of the timber on harvest sites would be left intact for wildlife corridors and aesthetic purposes.
A lack of state and federal money for fire control makes the biomass sale a potential win-win, he said.
Management for forest regeneration of aspens, which make for prime wildlife habitat and are more resistant to fire than spruce, would be easy as the deciduous trees typically sprout first after an area burns or is cut on their own, Hermanns said.
Over the time state Forestry spent evaluating the 25-year timber sale, input from literally hundreds of groups and individuals was sought, he said. The effort put into public meetings produced broad support for the first-time proposal.
"We didn't have a single appeal to the sale and I think that's because of the amount of work we put into it over the last three years," Hermanns said.
Even if the contract is never purchased the work on this project provides an outline for something that hadn't been done before and will help expedite the process in the future, he said.
Elwood Brehmer can be reached at email@example.com.
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