Railbelt renewables?
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NREL report indicates that increased wind & solar power could be cost effective
Alan Bailey for Petroleum News
The National Renewable Energy Laboratory has published a report evaluating potential costs associated with the expanded use of renewable energy for power generation in the Alaska Railbelt. The report indicates that a significant increase in the use of renewable energy, in particular wind power, could prove substantially cheaper than continuing the current high dependence on natural gas fueled power generation.
NREL's study considered three scenarios: no additional renewable energy capacity; a least cost mix of energy resources, including renewables; and a resource mix driven by a renewable portfolio standard, with a requirement for 80% of power generation from renewables by 2040. The Alaska Legislature has been considering bills that would impose an RPS with that 80% renewables target.
Least cost with 76% renewables The study found that the least cost scenario would involve growing the renewable portfolio to around 76% of power generation by 2040, with wind energy providing about 51% of the total power. Adding further renewables to meet the RPS standard would have little impact on the overall cost savings, the study found. However, the study did not consider the possibility of adding any major new hydropower facilities to the power supplies. The study also excluded the possibility of implementing tidal power systems. However, the possibility of the development of a geothermal power system was included in the evaluation.
NREL used weather conditions and power generation profiles from 2018 to conduct its modeling for the scenarios. However, the study took account of possible increased electricity demand relating to the potential increase in the use of electric vehicles.
As part of their power supply modeling the researchers also evaluated possible sites for renewable energy facilities, in particular wind farms. Solar farms are feasible but are unlikely to be as productive as wind farms in Alaska's environment, the researchers found.
Gas fueled power generation still needed Both scenarios involving the increased use of renewables assumed that the existing gas fueled power generation plants would remain in operation, to ensure adequate power supplies when renewable energy generation drops, because, for example, of a lack of wind power. The study also assumed that Golden Valley Electric Association's Healy Unit 1 coal fired plant would continue to operate, while Healy Unit 2 would close.
The buildup of renewable energy production would, on average, significantly reduce the usage of the gas fueled plants, thus increasing the unit cost of power from the plants. However, this increased unit cost of gas fueled generation would be more than offset by the relatively low cost of the renewable generation, the study found. Existing hydropower would also be used to ensure the reliability of power supplies.
Important assumptions During a presentation about the study to the Regulatory Commission of Alaska on March 13 Paul Denholm, a power system engineer from NREL, commented that the study had made a number of assumptions. For example, the researchers assumed that some form of centralized management of power planning and dispatch would be required for the entire Railbelt, with power being shipped across the transmission lines as necessary to ensure maximum efficiency in power generation. The use of major amounts of renewable energy would dramatically change the manner in which the Railbelt transmission system is used, given potentially rapid fluctuations in the amount of wind and solar power generation, Denholm commented.
The study assumed that a planned second electricity transmission line between the Kenai Peninsula and load centers in the Anchorage region would be built. However, the study also assumed that no upgrades would be made to the northerly transmission intertie between Willow and Healy.
But the manner in which the system is operated needs to take account of the possibility of either of the major transmission interties between the south, central and northern sectors of the system going out of action, Denholm cautioned.
Federal investment tax credits A key assumption in estimates of the cost of renewable energy is that the construction of new renewable energy facilities would qualify for federal investment tax credits of 40%. The study also assumed that the cost of natural gas for Southcentral Alaska would continue to increase -- there would be a need to import liquefied natural gas, starting at around 2028 or 2029, at a cost at around $12 per million Btu. And, in estimating the cost of renewable energy, the study had factored in the additional cost relative to the Lower 48 likely to be involved in building renewable power plants in Alaska.
One question relating to the need for gas fueled power to underpin power supply reliability revolves around the need for sufficient gas storage, to ensure adequate gas deliverability during periods of high gas fueled power demand. The analysis factored in the cost of additional gas storage as part of the cost of implementing the renewables, but it is very uncertain how much additional storage would actually be needed, Denholm said.
The study also assumed a need for additional battery storage of electrical power, to help stabilize the system, he said.
The likelihood of cost savings Given the projected cost of imported LNG, signing a long-term contract for the delivery of renewable power at $100 per megawatt hour or less would likely save money, Denholm said. Thus, given the high and increasing cost of LNG coupled with the declining cost of renewables, the study found that renewables would be a cost effective means of reducing gas consumption in the gas fueled power plants -- the bottom line is that cumulative savings could amount to more than $1 billion over the timeframe of the least cost scenario.
Essentially, assuming the use of the federal investment tax credits, around $3 billion would be invested in renewable and other infrastructure, to avoid $4.3 billion in fuel and other costs, Denholm said.
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