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Renewables: an opportunity for Alaska REAP director reviews in-state renewable energy projects and argues for leveraging renewable resources as new business opportunities Alan Bailey Petroleum News
Having, for example, more high-quality wind power sites than any other region of the U.S. and 90 percent of the nation’s tidal power potential, Alaska is in a unique position to be able to spearhead new and emerging renewable energy technologies, both to diversify the state’s energy supplies and to find new business opportunities in burgeoning renewable energy industries, Chris Rose, executive director of Renewable Energy Alaska Project, told the Alaska Chamber of Commerce Make it Monday Forum on April 25.
The Renewable Energy Alaska Project is a coalition of Alaska utilities and other entities with an interest in developing renewable energy resources.
Rural opportunities Rural Alaska, with energy costs so high that even a small, pilot-scale renewable energy project can save money, makes an ideal test bed for new technologies that, once proven, can be brought to market, helping make inroads into the task of bringing electricity to the approximately 1.6 billion people worldwide who lack power supplies, Rose said.
“We actually have this huge opportunity … in Alaska to be inviting people from all around the world to test energy technologies here,” he said.
And, within Alaska, renewable energy sources can reduce fossil fuel needs; keep more energy-supply dollars in the state; diversify energy supplies; and maintain Alaska’s position as an energy producing state, Rose said.
A big advantage of renewable energy over traditional fuels is stable energy pricing, thanks to the fact that a renewable energy power plant requires no fuel. The Bradley Lake hydropower system on the Kenai Peninsula, for example, has become the cheapest source of power on the Railbelt power grid, with its pricing remaining stable over the years while the cost of gas-fired power generation has steadily increased. And stable energy pricing can attract businesses into a region by reducing the risk of future power-price shocks, Rose said.
“If a city like Anchorage is 90 percent reliant on one commodity (natural gas), it’s not the most attractive place for people to bring in new business because they’ve no idea what (energy costs), one of the biggest costs of doing business is going to be,” he said.
Renewable energy sources also enjoy the advantages of being clean, locally produced and inexhaustible, Rose said.
Renewable policies In the United States, 29 states and the District of Columbia have already established renewable energy policies, he said. And in 2010 the Alaska Legislature enacted a policy requiring 50 percent of Alaska’s electricity to be generated from renewable sources by 2025, and requiring a 15 percent reduction in energy use by 2050.
“These are really important goals and it’s exciting to see that the Legislature is actually thinking about this,” Rose said.
Rose commented that energy efficiency and energy conservation are always simpler and cheaper to achieve than new energy production. Energy efficiency involves the implementation of energy-saving technologies while energy conservation involves lifestyle changes that reduce energy usage, he said. A state appropriation in 2008 of $360 million for a weatherization and energy efficiency rebate system, administered by the Alaska Housing Finance Corp., has proved to be a huge boon to Alaska energy efficiency programs, he said.
In fact, 50 percent of the lifetime cost of a building relates to the operation of the building rather than the building construction costs, with much of that operational cost appearing in the form of utility bills. Energy efficiency retrofitting results in a positive cash flow, he said.
Hydro and wind power Of the various possible renewable energy sources — hydropower, wind, geothermal energy, tidal/wave power, biomass and solar energy — Alaska already has several hydropower systems in operation, including Bradley Lake. A proposed Watana Dam on the Susitna River, with a 600-megawatt capacity and a projected average output of 50 percent of capacity, should be capable of supporting half of the Railbelt’s annual average 600-megawatt load, Rose said.
Alaska’s main wind resources occur around the coast and in mountain passes. Rural villages have developed a particular expertise in hybrid wind/diesel systems, in which a diesel generator fills in shortfalls in the variable output from wind turbines. There are now about 30 of these systems in operation around the state, Rose said.
And residents of Kodiak Island now obtain about 88 percent of their electricity from renewable sources, from a hybrid of wind power, hydropower and diesel generation, including a large wind farm that went into operation in 2009.
“They have a lot of (power generation) certainty in their future now because they have this resource that they’ve tapped into,” Rose said.
There are three wind power projects currently under consideration for the Railbelt power grid: a project at Delta Junction in the Interior; another project near Healy, on the north side of the Alaska Range; and Cook Inlet Region Inc.’s proposed Fire Island wind farm, offshore Anchorage, Rose said. Being offshore but also close to Anchorage, the Fire Island project is very appealing, he said.
“I think eventually that project will be built,” Rose said.
Mount Spurr geothermal From the perspective of geothermal power, for the past couple of years Ormat Technologies, a major U.S. geothermal company, has been exploring for a geothermal resource on the flanks of Mount Spurr, an active volcano on the west side of Cook Inlet, just 40 miles from Beluga, the nearest point on the Southcentral Alaska electricity grid.
Geothermal energy enjoys the advantage of being available almost 100 percent of the time, thus making it a valuable baseload resource, Rose said.
Ormat has identified a potential resource at Mount Spurr and wants to proceed to the next phase of its project, the drilling of some relatively deep wells to test the quantity and temperature of subsurface geothermal water, with that testing being an essential precursor to any decision on whether to proceed further. However, not having been able to obtain agreements with Railbelt utilities for the purchase of possible future Mount Spurr power supplies, Ormat is seeking funding assistance from the state, Rose said.
Tidal possibilities Rose said that with Alaska’s huge tidal power resources he feels particularly excited about the potential for bringing some tidal power systems into operation. Tidal power generators operate in tidal currents and look a bit like underwater wind turbines.
“This is one of the areas where I really feel that we should be leaders,” Rose said.
In a similar manner to the coming of age of wind turbine technology in the 1980s, the cost of in-current tidal systems should drop dramatically with economies of scale in manufacture, with the technologies becoming commercial in the next five to seven years, he said. A number of tidal power permits have been issued for sites around the Alaska coast. In the Railbelt region, Ocean Renewable Power Co. has signed a letter of interest with Homer Electric to build a pilot project at East Foreland, on the west coast of the Kenai Peninsula, in the next couple of years, Rose said.
Keys to success Keys to success in renewable energy development are effective public policy, good technology and having the required financing capacity, Rose said. People in Alaska have been working the public policy issues; there is plenty of good technology available; and, with the most money per capita of any state in the union, Alaska enjoys the financial wherewithal to develop its resources.
On the other hand with limits on how much political capital political leaders are generally willing to expend; with limits on the availability of financial capital; and with a need for an appropriately trained workforce, coupled with limits on the time available to pursue projects, there are also constraints on what can be achieved.
But with the price of steel, concrete and other materials on the rise, and with fuel costs also increasing, now is the time to move ahead with renewable energy development, Rose said.
“The best time to build these projects is really today because the cost of the capital is only going to be going up,” he said.
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