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New energy sources discussed for rural Alaska Energy conference includes talks about alternative resources for remote villages Patricia Jones PNA Contributing Writer
Diesel reigns as the primary fuel source for creating electricity in Alaska’s rural communities, providing nearly 90 percent of electric power in remote areas throughout the state.
But it’s a costly source for electric power. About 300 people interested in rural electric issues gathered in Fairbanks Sept. 17-19 to discuss methods of increasing efficiencies of existing diesel-based power systems, as well as to share information about emerging alternative energy sources that could augment or eventually replace traditional diesel systems.
“Diesel technology is improving and its efficiency is going up,” said Dennis Witmer, acting director of the Arctic Energy Technology Development Laboratory and one of the conference organizers. “But wind is being demonstrated … there have been successes with hydro projects and other projects are in the development phase, such as fuel cells and small fossil fuel projects like natural gas and coalbed methane.
“The purpose of this conference is to get this group together networking and exchanging new ideas,” he added.
Alternative fuel sources discussed at the conference included existing and proposed hydro power projects, natural gas, coalbed methane, wind power, biomass energy, hybrid systems and batteries and fuel cells. Diesel plant efficiencies, bulk storage tank systems, transmission systems and financing were also discussed.
A 90-minute talk about the Healy Clean Coal Plant was also included. PNA will provide coverage of several of these topics in future issues.
Understanding rural electric sources and demands About 78,000 residents of Alaska receive electricity from rural generation sources, according to Steve Colt, associate professor of economics at the University of Alaska’s Institute of Social and Economic Research.
“Those users consume 5,400 kilowatt hours per person, per year, which translates to 360 gallons of diesel per person, per year,” he said. “That’s about $390 per person, per year in fuel costs.”
But fuel prices are just the tip of the iceberg for rural electric costs. Colt said that diesel fuel costs are only 25 percent of the total cost to produce electricity in rural villages.
Transportation and storage of fuel, combined with the purchase price and maintenance cost to maintain generator equipment at a remote location, also contributes to the high cost of rural electricity.
Rural residents pay anywhere from 39 cents to 49 cents per kilowatt hour for electricity, according to Meera Kohler, president and CEO of the Alaska Village Electric Cooperative, which oversees power generation facilities in 51 of Alaska’s villages.
State and federal funds funneled through the Power Cost Equalization program defray a portion of those costs, sometimes up to one-third of the utility system’s expenses.
“Without PCE, we’d be in a world of hurt,” she said.
Those expenses, coupled with temperamental diesel operations in cold weather, have motivated people who pay for, maintain and rely on such locally produced electric systems to look for ways to improve diesel power efficiency.
“In the last 15 years, we’ve doubled the energy received from each gallon of diesel,” Kohler said, a rate that has increased from six to12 kilowatts per gallon of fuel. “We think we can go another two or three kilowatts per hour, if we can capture the heat (created from the generator engine) and deliver it to customers.” Financial assistance secured by congressional delegation Jack Phelps, staff representative for Sen. Frank Murkowski, said in a speech at the conference on Sept. 18 that the U.S. Senate Energy and Natural Resources Committee has approved authorization of a $45 million lump sum payment to the PCE fund. That state program provides money to reduce monthly bills for rural electric utilities that apply and qualify for the funding.
“While that ($45 million payment) increases the viability of the endowment, it’s a longer term, short term solution for sustaining PCE until we can find a more permanent solution,” he said. “We should hope that we will someday be in a place where we don’t need PCE.”
Also included in the Senate energy bill conference discussions is additional financial assistance, through the U.S. Department of Agriculture’s Rural Utility Service, available to communities with high electric costs.
The standard of qualifying for that assistance is that electric costs must exceed the national average by 150 percent, Phelps said. “We couldn’t say, ‘This is for communities in Alaska,’ but by setting the standard at 150 percent, it did the same thing.”
Barrow will also benefit from creation of a new Arctic research station, with $35 million in federal funding to replace the old Navy research station, Phelps said. “Not only does that put money in the economy, but it encourages research activities that might provide additional economic activity.”
The Denali Commission, which has already paid for replacement of 25 bulk fuel storage facilities in rural Alaska, anticipates more spending on such electric power systems this year, said co-chair Jeff Staser.
In all, the commission should have about $100 million in funding this year for rural Alaska, and typically about two-thirds of the funding goes for energy projects, he said.
“We do not want to put money into projects if a loan is possible. Grants are dangerous, because they are not sustainable,” he said. “It’s grant scat — you see little piles of it around.”
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