Rural energy meeting focuses on renewables

GIRDWOOD – More than 450 agency and utility officials, researchers, and local leaders gathered in Girdwood this week to share their experiences and brainstorm solutions to the crippling cost of energy in rural Alaska.

“We have to solve this energy-cost issue for the long-term success of Alaska,” Alaska Energy Authority executive director Steven Haagenson told attendees of the Alaska Rural Energy Conference Sept. 16.

The focus of the conference, which was sponsored by AEA, the U.S. Department of Energy, the University of Alaska Fairbanks, and the Denali Commission, was developing “local and renewable” energy sources.

Haagenson said the focus reflected the economic benefits of getting communities off expensive fossil fuels.

“We’ve had cheap and convenient oil,” he said. “Today it’s just convenient.”

Dennis Witmer, director of the Arctic Energy Technology Development Laboratory at UAF and a conference organizer, said the conference has always highlighted renewables, but added that the interest was much greater now because of high diesel prices.

The first conference was held in 2002 and has been convened every 18 months since. Conference workshops focused on the state’s new renewable energy fund, diesel efficiency, energy economics, and wind, hydro, biomass, geothermal and other projects. Conferees also discussed some railbelt energy issues.

In an address Sept. 16, Haagenson, who is also the state energy coordinator, spelled out his vision for rural Alaska. He described the problem as multi-faceted, with rural residents often spending a large percentage of their income on energy, and with large amounts of money flowing out of communities through the purchase of fossil fuels.

Haagenson promoted a shift toward sustainable, local energy solutions, and he called on local leaders to play an active role.

“This is not just about the state coming to rescue you,” he said. “I want Alaskans to be engaged in the solution.”

Haagenson said he hoped to complete a statewide energy plan by Dec. 1. The plan will include estimates of energy use in individual communities, lists of potential energy alternatives, and per-unit cost estimates for existing and potential energy projects, he said.

He added that if the state energy plan works as envisioned, the state’s Power Cost Equalization program, which subsidizes rural electricity, will no longer be needed.

“That would be my goal,” he said.

Wind in the works

Kodiak Electric Association has already ordered three 1.5-megawatt GE wind turbines and done site work for a 4.5-megawatt wind project on Pillar Mountain.

“Hopefully by about this time next year, we should be into operation,” said utility president Darron Scott.

The largest wind installation to date is in Kotzebue and has a nominal capacity of roughly 1 megawatt.

According to Scott, the Kodiak project was developed in response to a board directive calling for 95 percent of the utility’s energy to come from cost-effective renewables by 2020. Kodiak already gets about 80 percent of its electricity from hydro, he said. The three turbines will provide an additional 9 percent of the community’s needs and offset about 800,000 gallons of diesel fuel per year.

The $23 million project received a $1 million state grant and took advantage of a $12 million federal loan. According to Scott, the turbines will create local jobs and produce power at a cost of about 14 to 16 cents per kilowatt-hour, compared with 28 to 30 cents for diesel.

“It’s half the price of diesel,” he said, “so it’s a win-win all around.”

Developers are also pushing ahead with a 30–megawatt wind project on Fire Island near Anchorage. Alaska Native corporation CIRI and wind power developer enXco Development, Inc. are pursuing the project through a joint venture called Wind Energy Alaska.

Steve Gilbert, enXco’s Alaska projects manager, said the new company is currently evaluating design-build bids from three contractors and hope to pick one by the end of the year. The company also is working on a power purchase and sale agreement with Chugach Electric Association, Anchorage Municipal Light and Power, Homer Electric Association, and Golden Valley Electric Association, he said.

Various entities have pursued the project since 2000, but the project stalled in 2005 after the Federal Aviation Administration raised concerns about interference with radar and other equipment. Gilbert said developers got the go-ahead from the FAA in May after reducing the scope of the project and commissioning new radar software to eliminate interference.

Current plans call for 20 wind turbines with a nominal capacity of 30 megawatts. The project is expected to cost $130 million, including underwater transmission lines to Anchorage. The state provided $25 million in this year’s budget for the construction of transmission lines. Gilbert said he was aiming for a construction date of 2010.

Golden Valley Electric Association is pursuing its own 24-megawatt project near Healy.

“Wind at Golden Valley is attractive economically right now because it will offset oil-fired power plants,” said Kate Lamal, GVEA’s vice president of power supply.

But Lamal added that the utility would need to back up its wind generation with other generation to ensure an adequate power supply in times of low wind. The utility will need financial help to make the project a money-saver for consumers, she said.

ACEP takes over at UAF

The Arctic Energy Technology Development Laboratory will become part of the Alaska Center for Energy and Power, a university program formed earlier this year. AETDL relied on federal funding received through the National Energy Technology Laboratory’s Arctic Energy Office. That funding will dry up at the end of the federal fiscal year on Sept. 30.

While both university entities conduct energy research and development, AETDL is focused on fossil fuel resources while ACEP also looks at renewable resources, according to AETDL director Dennis Witmer.

ACEP is still without steady funding after Gov. Sarah Palin vetoed $1.5 million in state and federal funds from the budget earlier this year. Gwen Holdmann, the group’s organizational director, said she has applied for $10 million in state, federal, and private grant money and has already secured about half that much. Funded projects involve geothermal, in-stream hydro, waste heat recovery, biomass, and other energy resources.Holdmann said she is still looking for steady funding for research staff.

On Tuesday, University of Alaska President Mark Hamilton told conference attendees the university system is ready to help develop energy solutions.

“We can do anything that you and the state want us to do,” he said.

— Stefan Milkowski